In Iowa corn fields, Chinese national's seed theft exposes vulnerability

US officials urge agriculture executives and security officers to increase vigilance, report any suspicious activity

Reuters April 11, 2016
US and Iowa state flags are seen next to a corn field in Grand Mound, Iowa, United States, in this August 16, 2015 file photo. PHOTO: REUTERS

ARLINGTON, IOWA: Tim Burrack, a northern Iowa farmer in his 44th growing season, has taken to keeping a wary eye out for unfamiliar vehicles around his 300 acres of genetically modified corn seeds.

Along with other farmers in this vast agricultural region, he has upped his vigilance ever since Mo Hailong and six other Chinese nationals were accused by US authorities in 2013 of digging up seeds from Iowa farms and planning to send them back to China.

The case, in which Mo pleaded guilty in January, has laid bare the value -- and vulnerability -- of advanced food technology in a world with 7 billion mouths to feed, 1.36 billion of them Chinese.

Citing that case and others as evidence of a growing economic and national security threat to America's farm sector, US law enforcement officials are urging agriculture executives and security officers to increase their vigilance and report any suspicious activity.

But on a March 30 visit to Iowa, Justice Department officials could offer little advice to ensure against similar thefts, underlining how agricultural technology lying in open fields can be more vulnerable than a computer network or a factory floor.

"It may range down to traditional barriers like a fence and doing human patrols to making sure you get good visuals on what's occurring," Assistant Attorney General John Carlin, head of the Justice Department's national security division, said when touring Iowa State University.

But agriculture sector executives say fences and guards are not feasible, due to the high cost and impracticality of guarding hundreds of thousands of acres.

Tom McBride, intellectual property attorney at Monsanto -- one of the firms whose seeds were targeted by Mo -- said it safeguards its genetically modified organism (GMO) technology by protecting its computers, patenting seeds and keeping fields like Burrack's unmarked. Monsanto says it is not considering physical barriers like fences or guards.

The FBI and the US Justice Department say cases of espionage in the agriculture sector have been growing since Mo was first discovered digging in an Iowan field in May 2011. Over the past two years, US companies, government research facilities and universities have all been targeted, according to the FBI.

Although prosecutors were unable to establish a Chinese government link to Mo's group, the case adds to US-China frictions over what Washington says is increasing economic espionage and trade secret theft by Beijing and its proxies.

A US law enforcement official told Reuters the agency looked for a connection between the Chinese government and the conspiracy carried out by Mo.

"In cases like this, we can see connections, but proving to the threshold needed in court requires that we have documents that the government has directed this," the official said. "It's almost impossible to get."

A Chinese embassy spokesman in Washington, Zhu Haiquan, said he did not have detailed information on the Mo case but that China "stands firm" on the protection of intellectual property and maintains "constant communication and cooperation" with the US government on the issue.

On his visit to Washington last September, President Xi Jinping reiterated China's denial of any government role in the hacking of US corporate secrets. Mo, an employee of Chinese firm Kings Nower Seed, pleaded guilty to stealing seed grown by US firms Monsanto, Dupont Pioneer and LG Seeds.

Prosecutors say he specifically targeted fields that grow the parent seeds needed to replicate GMO corn. The FBI says it suspects he was given the location by workers for the seed companies, but did not charge any employees. DuPont Pioneer and LG Seeds declined to comment for this story.

Mo, whose case was prosecuted by the Justice Department as a national security matter rather than a simple criminal case, now faces a sentence of up to five years in prison. Five others charged in the case are still wanted by the FBI and are believed to have fled to China or Argentina. Charges were dropped against a sixth Chinese suspect.

National security

The number of international economic espionage cases referred to the FBI is rising, up 15 per cent each year between 2009 and 2014 and up 53 per cent in 2015. The majority of cases reported involve Chinese nationals, the US law enforcement official told Reuters. In the agriculture sector, organic insecticide, irrigation equipment and rice, along with corn, are all suspected to have been targeted, including by Chinese nationals, the official said.

Mo Hongjian, vice president of Kings Nower Seed's parent company, Beijing Dabeinong Technology Group, declined to comment on the case or on the company's connection with the Chinese government.

The parent firm is privately owned, but says it receives government money for research in "science and technology."

China bans commercial growing of GMO grains due to public opposition to the technology and imports of GMO corn have to be approved by the agriculture ministry. Still, President Xi called in 2014 for China to innovate and dominate the technique, which promises high yields through resistance to drought, pests and disease.

In January, a Greenpeace report found some Chinese farmers are illegally growing GMO corn whose strains belong to companies including Monsanto, Syngenta and DuPont Pioneer.

Monsanto, which supplies Burrack's seed, said it can block foreign groups who request to tour their lab and learning centre in Huxley, Iowa. For the past few years, Monsanto says it has run its own background checks on Chinese delegations that ask for a tour, and, if they are approved, boosts security to be sure they do not steal anything or take pictures.

In Washington, US senators have called for a review of the $43 billion deal by state-owned ChemChina to buy Swiss seed group Syngenta, which generates nearly a quarter of its revenue from North America.

Acquiring GMO seed and successfully recreating a corn plant would allow Chinese companies to skip over roughly eight years of research and $1.5 billion spent annually by Monsanto to develop the corn, the company says.

Burrack's farm itself was not targeted by Mo, though he grows the Monsanto parent seed that the Chinese national was digging for. Burrack grows the corn in two fields in front of and behind his house where he can watch them, a small part of his 2,800-acre farm.

He said he is told by Monsanto where and when to plant the parent seed, but has never been told to keep what he is planting a secret. "What no one seems to understand is that they're stealing from people like me," Burrack said. "They're stealing the research that farmers pay for when they buy Monsanto seed."


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