Wednesday, August 19, 2015

Corn Wars: China Can't Feed Itself, Therefore It Must Steal

From the New Republic:

Corn Wars
The farm-by-farm fight between China and the United States to dominate the global food supply.

On September 30, 2012, agents from the FBI contacted U.S. Customs and Border Protection at O’Hare International Airport in Chicago with an urgent request. They wanted bags from two passengers on an outbound flight to Beijing pulled for immediate inspection. The passengers didn’t track as dangerous criminals: Li Shaoming, president of Beijing Kings Nower Seed Science & Technology, a large Chinese agricultural company that develops corn, rice, cotton, and canola seeds, and Ye Jian, the company’s crop research manager.

In Li’s luggage, agents found two large Pop Weaver microwave popcorn boxes. Buried under the bags of unpopped snack kernels were roughly 300 tiny manila envelopes, all cryptically numbered—2155, 2403, 20362. Inside each envelope was a single corn seed. In Ye’s luggage, agents found more corn seeds hidden amid his clothes, each one individually wrapped in napkins from a Subway restaurant. Customs officers were dispatched to the gate area for the Beijing flight, where they found the two men and conducted body searches. Still more corn seeds, also folded into napkins, were discovered in Ye’s pockets.
Meanwhile, at a different gate, Wang Hongwei, another Chinese national believed to be in the employ of Kings Nower (agents never learned if he worked for the company or was related to someone who did), boarded a separate flight for Burlington, Vermont, where he had a car waiting for him to drive to Canada. FBI agents were there to follow him—though Wang, after leaving the airport parking garage, made a series of abrupt turns and managed to give his surveillance team the slip. It didn’t matter. Border patrol officers were waiting when Wang pulled up to the Highgate Springs port of entry along the U.S.-Canadian border. He was selected out for a search, which turned up 44 bags of corn seeds under his seat and in his suitcases, as well as a notebook filled with GPS coordinates and a digital camera containing hundreds of pictures of cornfields. Questioned by agents, Wang would say only that he had purchased the seeds from a man named Mo Hailong, the director of international business at the Beijing Dabeinong Technology Group (DBN Group), the parent company of Kings Nower Seed.
Not wanting to alert Mo, agents allowed all three men to leave the country, but their corn seeds were confiscated. Special Agent Mark E. Betten, a 16-year veteran of the FBI specializing in the investigation of intellectual property theft, had the seeds sent to an independent bio-diagnostic testing laboratory, which confirmed that they were proprietary, genetically modified hybrids. Eventually, their genetic sequencing was matched to seeds under development by Monsanto, DuPont Pioneer, and LG Seeds, which, including LG’s parent company, Groupe Limagrain, comprise three of the four largest seed companies in the world. The GPS coordinates were found to correspond with farms in Iowa and Illinois, where those companies were testing the performance of new hybrids.
In December 2013, after collecting this evidence, U.S. marshals arrived at Mo’s home in Boca Raton, Florida. He was taken into custody and extradited to Iowa, where he has been under house arrest in Des Moines ever since. The FBI also brought charges against five alleged co-conspirators, all Chinese, who remain at large, including the three men stopped by customs agents, and eventually against Mo’s sister, Mo Yun, as well. Mo and his sister are scheduled to stand trial before a federal court in Iowa in September on charges of conspiracy to steal trade secrets. If convicted, they face up to ten years in prison and a $5 million fine.
This may seem like a lot of post-September 11 cloak-and-dagger for a few corn seeds, but the U.S. government believes that something much larger is going on. This theft, they argue, stems from an undeniable and dangerous fact: Despite its remarkable landmass, China simply can’t grow enough food to feed itself, particularly now that the country’s burgeoning middle class has acquired an appetite for meat. (Most corn in China is used as feed for livestock.) Water shortages and lack of arable terrain have forced their government to buy between two and five million metric tons of American corn annually, approximately 94 percent of all corn imported into China each year.

If China hopes to feed (and pacify) its growing population while also loosening the very real stranglehold that America has on its national food supply, its farmers have to start producing a lot more corn—not just enough to meet their domestic demand in good years but enough to maintain a stockpile to offset their global market impact during bad ones. For decades, China has increased corn yields by putting more acres into production, but they’re running out of arable land, and the USDA now estimates that Chinese corn consumption will rise by 41 percent by 2023, far outpacing production increases. The only tenable way for China to meet its own demand, then, is by planting high-performance hybrids, which can single-handedly double or potentially even triple per-acre corn production. Chinese scientists haven’t developed a significant corn hybrid in years. But Monsanto and DuPont Pioneer, the two American seed giants, have produced so many successful hybrids that they now control 45 percent of all the seed sold in the world.
The Department of Justice maintains that China is quietly permitting and even encouraging companies to steal American agricultural secrets right out of the ground. Acquiring the technology behind these next-generation hybrids could save companies like DBN Group—and the country—as much as a decade, and many millions of dollars, in research. And, plant geneticists familiar with the case told me, the very fact that Kings Nower Seed has brought to market—and intended to bring more—products with stolen genetics hints that the Chinese government is complicit. The theft is not hard to detect or prove; the only way that DBN Group could hope to get away with this scheme is if China were pushing such spying as a matter of policy....MORE