Contract law is interesting. Most farmers are well-versed in the nuances of "offer" and "acceptance," or what is and isn't "valid consideration" for a contract. At the very least, we are able to toss basic contract law terms around and sound like we know what we are saying.
It's that time of year when farmers are thinking of planting intentions, so we are looking at our Farm Service Agency maps and thinking of which crop to plant on which acres. And we are analyzing our rotations and even thinking of perhaps trying a different rotation. And of course seed varieties are a hard choice to make this early in the year.
With the different varieties of crops carrying the "Roundup Ready," "LibertyLink" or other genetically modified organism characteristics, I'm often surprised at how many farmers don't blink an eye at the contract terms of the "TUGs" they enter into when they plant a GMO commodity.
A technology use agreement — or TUG — is entered into by any farmer who plants a GMO commodity. These agreements, also simply known as "technology agreements," contain the terms under which a farmer may plant the seed of the company selling the seed.
But the agreement also contains the limitations for which the grown seed — the crop produced by the seed — may be used and how and where the crop may be sold. And the agreement also contains several other conditions that most farmers wouldn't agree to if they were on a level playing field with the seed company.
You see, it all started several years ago with the lawyers. Sound familiar? Seed companies selling GMO seed decided to enforce their intellectual property — also known as "IP" — rights to their genetically modified seed. So they came up with the legal concept of a technology agreement. Farmers who want to plant, say, Roundup Ready soybeans are able to do so only by acquiescing to terms of the technology agreement.
The biggest immediate ramification of the TUG is that "brown bagging" the crop is strictly prohibited. Unlike the good old days, a farmer can't sock away a few bushels of seed in a bin and use it for seed the next year. Instead, the TUG dictates that the entire crop must be harvested and sold at the elevator, absent other arrangements made with a seed dealer.
However, there are other terms that apply simply during the growing season. Farmers typically agree to grow the crop only for a single crop, and during the growing season the farmer waives his right to object to a representative of the seed company coming onto the farmers land to inspect the crop. That's right; seed company reps are generally permitted to trespass onto the farmer's land to inspect the crop or to investigate to ensure compliance with the TUG.
Most technology agreements also permit the seed company to review any FSA acreage maps or "578" forms of the farmer, so long as the review concerns verification of compliance with the technology agreement. The same holds true for bins holding the crops or other recordkeeping the farmer utilizes in producing the crop, including internet records.
Most technology agreements dictate the forum and venue of any litigation that may arise from a technology agreement dispute. For example, if you are accused of violating a Monsanto TUG, you stipulate that any action arising out of a TUG dispute shall be in federal or state court in Missouri, and nowhere else.
A farmer growing a GMO crop does not need to "sign off" on a technology agreement. In fact, by merely opening the bag of seed you are subject to the terms of the technology agreement. And if you are desirous to get away from the terms of the technology agreement, then you must immediately return the seed you bought, usually unopened.
Farmers who are concerned about the terms of their technology agreement should consult their attorney before proceeding with their concerns unaddressed.