Tax Idea Concerns Seed Trade

Border Tax Could Disrupt Flow of Seeds Between U.S. and Mexico

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
Seeds for some crops are moved back and forth from the U.S. to Mexico. That raises concern from the American Seed Trade Association about the impact of a possible border tax. (Photo is courtesy of the Agriculture Research Service)

ORLANDO (DTN)-- The American Seed Trade Association does not yet have a position on Republican proposals to establish a border tax on goods coming in from Mexico, but the industry is concerned about it because U.S. companies send seed to Mexico to be "multiplied" and then imported into the United States, Andy Lavigne, the ASTA president and CEO said in an interview here.

"A great deal of seed is multiplied in Mexico," Lavigne said, referring to the industry practice of developing seed in the United States and then sending it to Mexico to be grown in the quantities that are then sold to American farmers.

He said the main reason American firms grow seed in Mexico is the climate. A lot of seed is grown near Yuma, Ariz., but if weather events interfere with production in Arizona the industry needs another source of seed. He also noted that many ASTA American customers grow fruits and vegetables in Mexico and import them into the United States.

ASTA is still trying to "determine" its position on the proposed border tax, Lavigne said on the sidelines of ASTA's annual Vegetables & Flower Seed Conference, which has attracted more than 900 people representing more than 325 companies from 31 countries.

The prospect of a border tax has been developed by congressional Republicans and endorsed by President Donald Trump as one way to pay for a border wall. Yet it also is one example of a barrier that could be created in an industry that needs open borders for the movement of seed, said Lavigne and Bernice Slutsky, ASTA's senior vice president for domestic and international policy.

"We often talk about the movement of seed, not just trade in seed," Slutsky said, noting that seed has a "global nature" and that a vegetable seed may cross five or six borders from development and production to processing, packing and selling before it is planted.

Border rules can also affect the movement of seed for research, and the industry needs regulations that work across borders so that improved seeds can be developed to feed the expected 9 billion people in the world by 2050, they added.

If officials talk about "pulling out" of a trade agreement as Trump has, that is "a major concern" for companies that have already made research arrangements in several countries and for the industry general, Slutsky said.

"Regulatory consistency is important," Slutsky said, adding that "trade agreements can facilitate that."

Mark Herrmann, the president of AgReliant Genetics, an Indiana seed company, and chairman of ASTA, also noted that the industry sees Cuba as a market opportunity and that there will be several sessions at the meeting discussing Cuba. President Barack Obama re-established diplomatic relations with Cuba, but key Republicans have objected to the Obama policies and it is still unclear what position the Trump administration will take.

Besides trade issues, ASTA will focus on the farm bill and plant breeding regulations in the coming year, the ASTA officials said.

The farm bill is important, Lavigne said, because it determines how ASTA's farmer customers "will be able to operate" and "our members have to know what the demand will be."

ASTA is particularly interested in the development of gene editing, a scientific process under which unwanted characteristics are removed from a plant and its members hope it will not generate the controversy and regulations that biotech seed have gone through, Slutsky said.

Lavigne noted that climate variation has also resulted in the need for seeds that can produce food in hotter, drier climates.

ASTA also sees the farm bill as a key source of support for agricultural research, particularly the land grant colleges and the new public-private research foundation that was set up under the 2014 farm bill.

Hermann noted that ASTA has launched a major communications effort to try educate the public about seeds and the role they play in producing food. The biggest challenge, he said, is that the number of farmers involved in production is small and the number of consumers is vast.

Plant breeding goes back to the Mayans, Herrmann said, but many consumers don't understand that.

"Better seed [means] better life and supporting life on the planet starts with a seed, he said.

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Jerry Hagstrom