Ag Secretary Perdue Hears Startups Call for More Research Support

Xconomy Raleigh-Durham — 

U.S. Secretary of Agriculture Sonny Perdue’s visit to North Carolina this week put him on stage among entrepreneurs and academics that his office chose for the occasion, and they used the opportunity to bend his ear.

Joy Parr Drach, a farmer who is also CEO of Advanced Animal Diagnostics, told him about the challenges facing her agtech startup in Research Triangle Park, NC. She explained that her company has developed diagnostic technology that helps reduce antibiotics use—an outcome that both consumers and farmers want. Though AAD has commercialized a test for dairy cows, and landed a partnership with a global animal health company, Drach said technology for chickens and pigs remains undeveloped because the startup can’t find funding. What can be done to bring such innovations to the market faster, she asked Perdue.

Perdue, a veterinarian and former Georgia governor, listened to Drach, who was seated next to him on stage in a North Carolina State University auditorium.

“So you want to talk about money,” Perdue said with a smile, drawing audience laughter. “Let’s go to the next panel.”

The exchange between Perdue and Drach wasn’t the only time the topic of startup funding was broached during Perdue’s visit Thursday. But it’s an example of the comments he’s been getting in “listening sessions” he’s been holding throughout the country on behalf of the Rural Prosperity Task Force, an advisory body created to make policy recommendations to boost the economy in rural America. As chair of the task force, Perdue said his goal is to hear what is happening throughout the country and bring to President Trump actionable recommendations that will make agriculture thrive in the future.

During one session in Charleston, WV, late last month, participants expressed concern about topics such as immigration reform. Some worried about the shortage of farm labor and asked Perdue for policy changes that would include migrant and seasonal workers, according to the Charleston Gazette. The flavor of the North Carolina discussion was different, and Perdue said he expected it would be, noting the hundreds of life science companies in the Research Triangle, many of them focused on agriculture. The North Carolina Biotechnology Center lists more than 100 companies in the state working in agricultural biotechnology.

Perdue told the invited audience that President Trump understands what agriculture means to the economy and his administration is committed to removing barriers holding the sector back. To that end, Perdue said the U.S. Department of Agriculture is submitting 250 deregulatory items for government officials to consider to “help liberate some of the things you’re doing.”

But regulation did not appear to be a major concern, at least not to the panelists the USDA selected to appear alongside Perdue. Rodolphe Barrangou, an NC State food science professor whose research focuses on CRISPR gene editing, said he is actually pleased with how the USDA regulates genome editing. As an example, he noted the agency’s decision last year that it would not regulate button mushrooms genetically engineered to resist browning. The agency has been communicating in a more vocal and visible manner, he said.

Eric Ward, co-CEO of AgBiome, said the USDA has done a good job regulating his RTP company’s agricultural microbes, though he added that that doesn’t mean there isn’t room for improvement. Big companies are risk averse, so they tend to do more than what regulators ask them to do, said Ward, whose experience includes posts at large companies such as Ciba-Geigy and Novartis (NYSE: NVS). But for startups, the goal is to get a product to the market as fast as possible, Ward said. When AgBiome evaluates a microbe in a field test, the company faces more regulations than a field test for a genetically engineered crop. Perdue said the Animal and Plant Health Inspection Service (APHIS), a USDA division charged with protecting animal health and welfare, and plant health, is receptive to such concerns.

“We want early startups to be risk takers,” Perdue said. “APHIS’ responsibility, from a federal perspective, is to make sure that happens in a safe environment.”

One topic where the panelists were in near universal agreement was the need to improve the way agtech innovation is communicated to consumers. The public’s mistrust of agriculture stems from the failure to understand the science behind it, Barrangou said. Industry, academia, and the government must work together to communicate the science, he added.

But the two startup representatives kept circling back to federal support for research. Drach said her company would not exist if not for an $80,000 Small Business Innovation Research grant. Ward said research dollars, which help improve the understanding of how crops develop and grow, are important to supporting innovation. But he added that there is a great disparity in the dollars available from the National Institutes of Health to support health research, and the grant funding available through the USDA. The NIH pours more than $32 billion annually into medical research. By comparison, the Agriculture and Food Research Initiative, under USDA’s National Institute of Food and Agriculture, is authorized for $700 million in annual funding.

After the panel, I tracked down Drach to ask what more the USDA can do to support startups. She acknowledged that federal dollars are scarce, but suggested, for example, that tax incentives for investing in agriculture or using a new technology could help speed up adoption of new agtech products.

“When you’re an unknown company, it’s a little bit harder, because boy it sounds good, but I’ve never heard of that company before,” she said. “If they could get a tax incentive for it, that might push them over the edge.”

Drach also said that more research dollars are needed to help early agtech ideas get off the ground in the first place. One idea is shifting some of NIH’s grant funding to food and ag research. After all, many ag technologies promote human health, she said. This grant funding is crucial. For many startups, this funding helps prove a technological concept, a key step toward securing additional funding from private investors, she sad. I asked Drach if anyone has formally proposed these ideas to the USDA.

“I don’t know, but as soon as I leave you, I’m going to make sure that I do,” she said.

And with that, the farmer-turned-entrepreneur walked briskly from the auditorium to chase down the top government official overseeing U.S. agricultural policy.

Photo courtesy of Flickr user U.S. Department of Agriculture via a Creative Commons license.