Chinese charged for agricultural spying

Kansas City: The case of the missing corn seeds first broke in May 2011 when a manager at a DuPont research farm in east-central Iowa noticed a man on his knees, digging up the field. When confronted, the man, Mo Hailong, who was with his colleague Wang Lei, appeared flushed. Mr Mo told the manager that he worked for the University of Iowa and was travelling to a conference nearby. When the manager paused to answered his cellphone, the two men sped off in a car, racing through a ditch to get away, federal authorities said.

What ensued was about a year of FBI surveillance of Mr Mo and his associates, all but one of whom worked for the Beijing Dabeinong Technology Group or its subsidiary Kings Nower Seed. The result was the arrest of Mr Mo last December and the indictment of five other Chinese citizens on charges of stealing trade secrets in what the authorities and agriculture experts have called an unusual and brazen scheme to undercut expensive, time-consuming research.

China has long been implicated in economic espionage efforts involving aviation technology, paint formulas and financial data. Chinese knockoffs of fashion accessories have long held a place in the mainstream. But the case of Mr Mo, and a separate one in Kansas last year suggest that the agriculture sector is becoming a greater target, something that industry analysts fear could hurt the competitive advantage of farmers and big agriculture alike.

“Agriculture is an emerging trend that we’re seeing,” said Robert Anderson Jr., assistant director of counterintelligence at the FBI., adding that the trend has developed internationally in the last two years. “It’s pretty clear cut. Before then, the majority of the countries and hostile intelligence services within those countries were stealing the other stuff.”

The defendants in the Mo case visited numerous seed testing fields in Iowa and Illinois that were used by the big agriculture companies Pioneer, Monsanto and LG Seeds, the authorities said. They bought a test plot of their own in Illinois, according to the complaint, and concealed stolen seeds in, among other things, microwave popcorn boxes and napkins from Subway restaurants.

The seeds that they were after are called inbreds, meaning they come from self-pollinating corn plants. Inbreds are eventually crossed with other inbreds to create hybrid seeds that are then sold to farmers, and they are bred to be durable in the face of drought and pests. One inbred line takes five to eight years of research and can cost $US30 million to $US40 million to develop, federal prosecutors said.


A company or farmer can replant a stolen inbred seed and eventually use the new seeds to cross with a separate inbred to produce a hybrid — a shortcut that avoids years of costly research.

“These are quite brazen facts,” said Jay P. Kesan, a professor at the University of Illinois who specialises in intellectual property and technology law. “What makes this different, I guess, is really the extent to which these entities seem to have gone to try to get at these trade secrets.”

Mr Mo, 44, was arrested at his home in Boca Raton, Florida, but the other defendants are not in custody, and the authorities have declined to comment on their status. Mr Mo’s lawyer denies that his client, a seed dealer and permanent resident who he said moved to the United States 15 years ago, did anything wrong. Mr Mo, who was arraigned last Wednesday in Des Moines and pleaded not guilty, remains in custody.

In the other seed case, Zhang Weiqiang, of Manhattan, Kansas, a rice breeder for Ventria Bioscience, a Colorado-based biopharmaceutical company, and Yan Wengui, of Stuttgart, Arkansas, a research geneticist for the federal Agriculture Department, are accused of giving proprietary rice seeds that contained medicinal qualities to crop researchers in their native China.

In 2012, Mr Zhang, 47, a permanent resident, and Mr Yan, 63, a naturalised citizen, both made trips to China, where the authorities said they discussed research they had performed in the United States with Chinese scientists. The men then arranged for a group from the Chinese Academy of Agricultural Science and the Crop Research Institute in China to travel to the United States last year. They brought the group to the Ventria facility in Kansas where Mr Zhang worked and to his home, and to the federal agriculture facility in Arkansas where Mr Yan worked.

The proprietary rice seeds were found in the luggage of members of the Chinese delegation as they tried to leave the country, according to the indictment, and at the home of Mr Zhang, who, along with Mr Yan, was arrested in December.

As seed technology has become more costly and time consuming to develop, “in some people’s eyes, it makes it more advantageous for them” to try to steal it because it “enables them to get a jump on three to five years of research on the back of somebody else’s time and effort that was put in,” said Andrew W. LaVigne, the president and chief executive of the American Seed Trade Association.

American farmers are concerned that stolen seeds could give their Chinese counterparts an unfair advantage because they could get access to the technologically advanced hybrids at lower prices, said Dave Miller, the research director for the Iowa Farm Bureau.

Foreign vegetable seeds make up 80 percent of the Chinese market, said Guo Ming, a consultant specialising in corn breeds for a Beijing-based agribusiness firm. Multinational corporations’ share of the corn seed market in China grew from a tenth of a percent just over a decade ago to 11 percent in 2011, according to an article published last year in People’s Daily, the Communist Party’s official newspaper. Although China’s domestic corn output has been growing over the years, the yield per corn plant has not grown significantly.

The Chinese have not developed a major corn hybrid since 2001, though the country’s second most popular corn, which debuted in 2007, was a collaboration between Pioneer and a Chinese company.

New York Times