Syngenta stymied by “Golden Power”, Cover Crops in the Spotlight
Italy Pushes Back on Seed Consolidation
Italy has recently blocked Syngenta’s acquisition of Verisem, an Italian vegetable seed producer. Using its special “golden power,” a law that gives the government the right to intervene in foreign and corporate transactions involving strategic interests of the State, the Italian government stepped in to veto the sale of the vegetable seed company to Chinese-owned Syngenta. Italian agricultural interests warned that the sale of Verisem to China-owned Syngenta would shift the strategic balance over control of the world’s vegetable and herb seed production to Asia. Syngenta is appealing the veto to an administrative court.
Verisem itself is a fairly new creation, the result of a number of seed company purchases beginning in 2005 up through 2018 which saw the acquisition of such seed companies as Brotherton Seeds and Franchi Sementi. Verisem’s acquisition by Syngenta would have continued a 20-year trend of consolidation of seed brands and companies into major multi-national seed conglomerates.
Cover Crops becoming a Champion of Climate Smart Ag
The USDA is embarking on an ambitious goal of doubling the acreage planted with cover crops by 2030. Secretary of Ag Tom Vilsack recently announced a targeted Cover Crop Initiative with funding up to $38 million to advance the adoption of cover crops in 11 States: Arkansas, California, Colorado, Georgia, Iowa, Michigan, Mississippi, Ohio, Pennsylvania, South Carolina, and South Dakota. Along with this targeted program, USDA’s National Resources Conservation Service has entered into a partnership with and a group called Farmers for Soil Health, an initiative by the United Soybean Board, National Corn Growers Association, and National Pork Board. Farmers for Soil Health aims to double the number of corn and soybean acres that utilize cover crops up to 30 million acres by 2030.
National ag policymakers have embraced cover crops as a key component of climate change policy, and also a tool for improving farm quality, from soil health to improving water quality. Cover crops also present an opportunity for seedsmen to identify and supply smart varieties that make good companions with commodity crops, and provide soil-building attributes.
U.S. Ag’s China Conundrum
A recent Wall Street Journal report detailed China’s shift in economic and security policies that seeks to make the country more self-sufficient, and less dependent on major trading partners. Part of China’s new agenda is to increase its domestic production of food and staple crops such as soybeans and rice. For decades, U.S. agriculture has been one of the biggest suppliers of commodities to China, a trading relationship that has powered U.S. crop production to global leadership. A common refrain in soybean circles is that one out of every three rows of soybeans grown in the U.S. is shipped to China. Leadership in Beijing is now looking for ways to wean China from its dependence on other countries for technology, energy, and food. Soybeans are a particular focus where China plans to increase domestic production. Many factors are driving the policy change, such as the Covid pandemic, faltering trade relations, disputes concerning Taiwan’s sovereignty, and human rights abuses, to name a few. Concerning ag commodities, it remains to be seen how far China can push self-sufficiency. A significant portion of the country is not suitable for growing crops, and some believe that all of China’s arable land is already in use. Even so, U.S. ag should take stock of a potentially smaller export market and examine whether its own focus on a few major row crops should be shifted to a more diversified mix.
Cape Law Firm’s Frequently (or Randomly) Asked Questions
What does it mean to have an “Exclusive Use” in a commercial lease?
Many commercial leases involve multi-space property aimed at a mix of business tenants – a shopping mall, for example. Tenants in these types of properties often request “exclusive use” provisions in their lease in order to prevent the landlord from leasing to a competing business in the same property. For example, an ice cream shop tenant might ask for the right to be the only ice cream shop in the property in order to prevent the landlord from leasing space to another ice cream store (and the direct competition it would bring). Exclusive use provisions are enforceable (if carefully drafted), and each side gains some benefit. The tenant gets protection from competitors opening up on their doorstep, and the landlord gains the loyalty and trust of a good tenant.