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resistant
Antibiotics and r bacteria
esistant bacteria
The widespread use of antimicrobial drugs accompanies our country’s production of
livestock. Sometimes, producers use these drugs at low levels for therapeutic disease
treatments.1 In other situations, low levels of antimicrobial drugs improve feed
efficiency and increase daily rates of weight gain.2 These drugs may also enhance
carcass quality in cattle. The benefits accruing from the use of antimicrobial drugs
accord producers significant financial incentives to administer them to their
animals.
Opposed to these advantages are risks that bacterial will develop antimicrobial
INSIDE resistance. Resistance means the bacteria can block the killing effects of a particular
drug so that we need another method of control. This generally involves the
development of a new antibiotic, an expensive and costly process. Experts estimate
that we spend $30 billion per year due to the cumulative effects of antimicrobial
• Battles and skirmishes resistance.3
Scientists have estimated that about 26.6 million pounds of antibiotics are
in the biotech patent administered to domestic livestock each year.4 This compares with three million
arena pounds used for humans. Less than 8% of the antibiotics administered to animals
are to treat active infections.5 The remaining quantities of drugs are to enhance
• FCIC Standard animal growth and producers’ profits. About 70% of the large swine operations in the
Reinsurance United States administer antibiotics via injection, feed, water, and orally; for cattle,
57% receive antibiotics.6
Agreement Drugs administered to livestock help control animal infections that they may
transfer to humans.7 Given the ability of bacteria to develop antimicrobial resis-
tance, concern exists whether the widespread use of antibiotics in animals exacer-
bates the rising incidence in human pathogens. Experts believe that resistant
strains of organisms cause illness or disease in humans. Salmonella,Campylobacter,
and E. coli are linked to the use of antibiotics in animals.8 To respond to antimicrobial
resistance, scientists and governments are proposing to limit antibiotics approved
for use in livestock production.
Several European countries have taken action to preclude the use of antimicrobial
Solicitation of articles: All AALA drugs in feed to enhance growth or feed efficiency.9 The American Medical Associa-
members are invited to submit tion passed a resolution in 2001 opposing nontherapeutic uses of antibiotics in
articles to the Update. Please in- agriculture.10 Federal agencies have considered further regulation of antibiotics
clude copies of decisions and leg- used in agriculture. The Department of Health and Human Services believes that
islation with the article. To avoid
Continued on page 2
duplication of effort, please no-
tify the Editor of your proposed
article.
stays
Seventh Circuit sta USDA’
ys USDA ’s immediate
indefinite
and indef PA
inite suspension of PACA
IN FUTURE dealer’
dealer ’s license
I SSUES The Seventh Circuit has stayed, pending plenary adjudication of the dispute by the
court, the USDA’s immediate and indefinite suspension of a license held by a dealer
under the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. §§ 499a-499s.
Finer Foods, Inc. v. United States Department of Agriculture, 274 F.3d 1137, 1141
(7th Cir. 2001). Rejecting the USDA’s claim that it lacked subject matter jurisdiction
• Farm Bill as “frivolous,” the court ruled that the USDA’s suspension order was both an “order”
as that term is defined in section 551(6) the Administrative Procedure Act (APA), 5
U.S.C. § 551(6), and a “final order” for purposes of section 2344 of the Hobbs
Administrative Orders Review Act, 28 U.S.C. §§ 2341-2351. Id. at 1138-39. In
granting petitioner Finer Food’s request for a stay of the suspension order, which
was unaccompanied by an opportunity for a hearing and purported to be indefinite
in duration, the court ruled that Finer Foods “was entitled to some hearing before
its license was yanked.” Id. at 1141 (citations omitted). In part, the court grounded
Continued on page 3
2 8
the scientific evidence justifies taking Ibid.7. General Accounting Office, Food Safety: The Agricul-
3
steps to decrease use of antibiotics in American College of Physicians-American Societiy of tural Use of Antibiotics and Its Implications for Human
agriculture while the USDA believes more InternalMedicine,"EmergingAntimicrobialResistanceFacts Health 4 (Washington: GAO/RCED-99-74, April 1999).
9
research is needed before implementing and Figures," http://www.acponline.org/ear/index.html Matthews, supra note 1, at 3.
10
(viewed February 14, 2002). Robbin Marks, Cesspools of Shame: How Factory
new regulations reducing the use of anti- 4
Jane E. Brody, "Studies Find Resistant Bacteria in Farm Lagoons and Sprayfields Threaten Environmental and
biotics.11 Meats," The New York Times, A12, October 8, 2001. Public Health (Washington: Natural Resources Defense
Placing the problem of antimicrobial 5
Id. Council and Clean Water Network, July 2001) 24.
resistance into the context of animal pro- 6
Animal and Plant Health Inspection service, Antimicro- 11
General Accounting Office, supra note 8, at 2.
duction, evidence suggests that the use of bial Resistance Issues in Animal Agriculture 24 (Washing- 12
Animal and Plant Health Inspection Service, supra
antibiotics increases with larger produc- ton: U.S. Department of Agriculture, December 1999). note 6, at 24.
7 13
tion facilities. Large swine CAFOs are Id.at17. Id.at24.
three times as likely to use antibiotics in
feed and water compared with small op-
erations.12 large cattle operations are
twice as likely to administer antibiotics biotech
Battles and skirmishes in the biotech
to animals in their feed and water. 13
Thus, many believe that concentrations arena
patent ar ena
of animals are exacerbating the problem 2001 saw a worldwide escalation in ap- Waging the patent battle at the source
of antimicrobial resistance. prehensions about biotech patents. Gene One popular battlefield is a patent’s
— Terence J. Centner, Professor, The patents appeared to have been viewed birthplace—the patent office. In the Eu-
University of Georgia with a particularly jaundiced eye. In ropean Patent Office (EPO), a third party
October, for instance, the International can challenge the validity of a European
Bioethics Committee of the United Na- patent within nine months of the publi-
1
Kenneth H. Matthews, Jr., Antimicrobial Resistance tions Educational, Scientific and Cul- cation of the notice to grant the patent.
and Veterinary Costs in U.S. Livestock Production (Wash- tural Organization called upon UNESCO An Opposition proceeding may result in
ington: U.S. Department of Agriculture, Economic Research
Service, December, 2000).
to promote the adoption of an interna- the patent being upheld in an unchanged
tional moratorium on the granting of or amended form, or the Opposition Divi-
gene patents until any ethical ramifica- sion may decide to revoke the patent.
tions could be explored. During a 60 Claiming bio-piracy, the Mexican gov-
Minutes show, Morley Safer warned that ernment reportedly filed a request for an
“chances are, your genetic structure and Opposition last summer to halt DuPont’s
mine, our most private property, may European patent on a maize variety called
well belong to someone else.” Although OPTIMUM HOC/HO, which the govern-
ludicrous, this statement undoubtedly ment claims originated in Mexico.
VOL. 20, NO. 3, WHOLE NO. 220 February 2002 made an impression on many viewers. Although the US does not offer an
AALA Editor..........................Linda Grim McCormick
According to 60 Minutes, one of the major Opposition mechanism, a third party can
2816 C.R. 16, Alvin, TX 77511 concerns about gene patenting is that it challenge a patent by initiating a reex-
Phone: (281) 388-0155 hinders research. Yet in response to a amination proceeding with the US Patent
FAX: (281) 388-0155
E-mail: lgmccormick@teacher.esc4.com questionnaire issued by the European and Trademark Office (USPTO). The
Parliament, Gugerell Christian, Direc- International Center for Tropical Agri-
Contributing Editors: Terence J. Centner, The
University of Georgia, Athens, GA; Monica M. Clark, tor of the European Patent Office, stated culture filed such a request for reexami-
Fayetteville, AR; Scott Fancher, Harrison, AR; Phillip that, in spite of the large number of gene nation of a patent owned by Pod-ners
B.C. Jones, Seattle, WA.
patents, he is not aware of a single inci- LLC, which claims a Phaseolus vulgaris
For AALA membership information, contact Donna dence where gene patents hampered re- field bean. In January 2001, the USPTO
French Dunn, Executive Director, 4115 South Duff search. Still, the perception persists that published its intent to reconsider the
Avenue, Suite C, Ames, IA 50010-6600. Phone: (515)
956-4255. patents have a chilling effect on basic patent. In yet another case of alleged bio-
Agricultural Law Update is published by the research. piracy, India’s Agricultural and Processed
American Agricultural Law Association, Publication
office: Maynard Printing, Inc., 219 New York Ave., Des Agbiotech patents did not escape mis- Food Exports Authority challenged three
Moines, IA 50313. All rights reserved. First class postage givings. In early November, the Interna- US patent claims held by RiceTech, Inc.
paid at Des Moines, IA 50313.
tional Treaty on Plant Genetic Resources (Alvin, TX). In August, following reex-
This publication is designed to provide accurate and for Food and Agriculture was adopted amination, the USPTO reduced the origi-
authoritative information in regard to the subject matter with two abstentions (the U.S. and Ja- nal twenty claims to five.
covered. It is sold with the understanding that the
publisher is not engaged in rendering legal, accounting, pan). An objective of this treaty is to When reexamination fails, a party can
or other professional service. If legal advice or other discourage patents on food crops. During turn to the courts. In 1999, Brassica
expert assistance is required, the services of a competent
professional should be sought. the same month, the Canadian Biotech- Protection Products LLC (Baltimore, MD)
nology Advisory Committee released its and Johns Hopkins University sued
Views expressed herein are those of the individual
authors and should not be interpreted as statements of
interim report, which recommended the Sproutman, Inc. (Upper Black Eddy, PA)
policy by the American Agricultural Law Association. creation of a farmer’s privilege within for infringement of patents relating to
the Patent Act. A concern here is that a the production and consumption of cru-
Letters and editorial contributions are welcome and
should be directed to Linda Grim McCormick, Editor, patent owner could have rights to seed ciferous seed sprouts. While the litiga-
2816 C.R. 163, Alvin, TX 77511. produced in farmers’ fields, an issue that tion was proceeding, Sproutman initi-
Copyright 2002 by American Agricultural Law US Supreme Court Justices raised dur- ated a reexamination proceeding, and
Association. No part of this newsletter may be ing the recent oral hearing of Pioneer Hi- the USPTO ultimately reaffirmed the
reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopying,
Bred International Inc. v. J.E.M. AG validity of the claims. Last summer, how-
recording, or by any information storage or retrieval Supply Inc.[Editor’s note: This case was ever, the court heard arguments in the
system, without permission in writing from the reported on in the January 2002 Agricul- infringement action and decided that the
publisher.
tural Law Update, pp. 4-6.] patents are invalid due to a lack of nov-
Many found current patent law ad- elty.
equate for fighting or circumventing par- Cont. on p.3
ticular patents.
67
See id. “A&O subsidy for eligible crop insurance existing policies. See id. ¶¶ J.1.-J.3. participating companies during this same period increased
77
contracts...will be paid to the Company on the monthly See id. ¶M. from $747 million in 1990 to $1.6 billion in 1996.”).
78 92
summary report after the Company submits, and FCIC Seeid.¶W.“Liabilityincurred,totheextentitiscaused See United States Gen. Accounting Office, supra note
accepts, the information needed to accurately establish the byagentorlossadjustererrororomission,orfailuretofollow 90, at 137.
93
premium for such ... contracts.” Id. A&O subsidies are paid FCICapprovedpolicyorprocedure,isthesoleresponsibility Seeid.
94
on a “net book premium” basis which is defined by the SRA of the Company.” Id. Seeid. at 23 (“The number of companies selling and
79
as: “The total premium calculated for all eligible crop insur- Seeid. ¶ L. The relevant appeal procedures are set out servicing crop insurance for FCIC has decreased from 27 in
ance contracts, less A&O subsidy, cancellations, and ad- in 7 C.F.R. § 400.169. 1990 to 16 in 1996 because of business acquisitions and
80
justments.” See 1999 Standard Reinsurance Agreement See 7 C.F.R. § 400.169 (a). changing business relations.”).
81 95
(SRA)–Section I ¶ N. See id. § 400.169 (b). Seeid. at 68 - 69. Appendix II of GAO’s report reflects
68 82
Seeid. ¶ A.2.b. GRP policies key coverage to expected See id. that in 1994-95, American Agrisurance was the managing
83
county yields based on National Agricultural Statistics Ser- See id. § 400.169 (a) - (c). general agency for SRA holder Redland Insurance Com-
84
vice (NASS) data rather than individual yields. See RMA See 1999 Standard Reinsurance Agreement (SRA)– pany and that Blakely Crop Hail, Inc. was the managing
Online, Group Risk Plan (GRP), available at http:// Section V ¶ L.2., available at http://www.rma.usda.gov/ general agency for SRA holder Farmers Alliance Mutual
www.rma.usda.gov/pubs/rme/fsh_4.html (last visited Feb. tools/agents/sra99_b.html (last visited Feb. 20, 2002). Insurance Company. See id.
85 96
20, 2002). See id. See 1999 Standard Reinsurance Agreement (SRA)–
69 86
See 1999 Standard Reinsurance Agreement (SRA)– See 7 C.F.R. § 400.169 (d). The Board of Contract Section V ¶ G.3., available at http://www.rma.usda.gov/
Section III ¶ A.2.c. - 2.d., available at http:// Appeals is an agency within USDA composed of licensed tools/agents/sra99_b.html (last visited Feb. 20, 2002). The
www.rma.usda.gov/tools/agents/sra99_b.html (lastvisited attorneys who are designated to act as Administrative SRA holder must certify that managing general agents are
Feb. 20, 2002). Judges. See 7 C.F.R. §§ 24.1 - 24.2. Generally, Board “infullcompliancewiththelawsandregulationsoftheState”
70
See id. ¶ A.2.e. decisions constitute a majority decision of a three-judge where incorporated. See id.
71 97
See id. ¶ A.2.a. panel. See 7 C.F.R. § 24.2. See Federal Crop Insurance - Insuring the Farm
72 87
See id. at Section IV. CAT loss adjustment expense See 7 C.F.R. § 400.169 (c). Bureau’s Future, Rural Community Updates (Defenders of
was reduced from 11 percent to 8 percent effective with the A company may also request reconsideration by the Wildlife, Grass Roots Environmental Effectiveness Network
2001cropyear. See Pub.L.No.106-224,tit.I,sec.103,114 Deputy Administrator of Insurance Services of a decision of Project, Albuquerque, N.M.), Sept. 2, 1999 at 1.
98
Stat.358,365(codifiedasamendedat7U.S.C.§1508(b)(11) the Corporation rendered under any Corporation bulletin or See 5 U.S.C. § 552 (b)(4).
99
(2000). directivewhichbulletinordirectivedoesnotinterpret,explan See United States Gen. Accounting Office, Crop
73
See id. ¶ B. Reinsured companies are required to [sic] or restrict the terms of the reinsurance agreement.... Insurance - USDA Needs A Better Estimate Of Improper
collect administrative fees from eligible producers as fol- The determinations of the Deputy Administrator will be final Payments To Strengthen Controls Over Claims, GAO/
lows: For CAT policies, the greater of $100 per crop per and binding on the company. Such determinations will not RCED-99-266 at 3 (1999) (“From 1981 through 1998, FCIC
county or 10% of the imputed premium. See 7 U.S.C. § be appealable to the Board of Contract Appeals. paid farmers $14.1 billion for insured crop losses, and in
1508(b)(5)(A). The administrative fee for additional cover- Id. 1998 alone, FCIC paid $1.7 billion.).
88 100
age policies is $30 per crop per county. See 7 U.S.C. § See 7 C.F.R. § 24.5. See United States Gen. Accounting Office, supra note
89
1508(c)(10)(A). See 7 U.S.C. § 6912(e); See also Farmers Alliance 90, at 96 (“NCIS is an association composed, among others,
74
See 1999 Standard Reinsurance Agreement (SRA)– Mutual Ins. Co. v. FCIC, 2001 WL 30443 (D.Kan.) (dismiss- of all of the current holders of Standard Reinsurance Agree-
SectionIII¶F., availableat http://www.rma.usda.gov/tools/ ing action brought in district court against FCIC because ments (‘SRA”).
101
agents/sra99_b.html (last visited Feb. 20, 2002). reinsured had not appealed to USDA’s Board of Contract Seee.g., United States Gen. Accounting Office, supra
75
See id. ¶ G. FCIC reduces A&O subsidies in 1.5% Appeals). note 90, at 34 (“Despite this prohibition [on reporting lobby-
90
increments up to a maximum of 4.5% for data received more See United States Gen. Accounting Office, Crop ing expense as crop insurance delivery expense], we found
than twelve weeks after the final acreage reporting date for Insurance - Opportunities Exist To Reduce Government in our sample of company transactions that the companies
thecropwherethedelayisthefaultofthereinsurer. Seeid. Costs For Private-Sector Delivery, GAO/RCED-97-70 at included a total of $418,400 for lobbying and related ex-
76
Seeid. Section V ¶ J. A company has 45 days from its 137 (1997). penses in their expense reporting for 1994 and 1995.”).
91 102
date of notification to correct deficiencies or the SRA See generally, Barry K. Goodwin & Vincent H. Smith, See generally United States Department Of Agricul-
automatically terminates at the end of the reinsurance year. The Economics Of Crop Insurance And Disaster Aid, 34, 48 ture Office Of Inspector General - Report To The Secretary
While suspended, a company may not sell new policies, (1995); See also United States Gen. Accounting Office, On Federal Crop Insurance Reform, No. 05801-2-At (1999).
however, FCIC may require that it continue to service supra note 86, at 23 (“Insurance premiums written by