Bot Platform Battles Could Differ From Those in the App Wars

By Keith Good | Published: April 13, 2016

Washington Post writer  Elizabeth Dwoskin reported yesterday that, “Last month, Microsoft launched the Microsoft Bot Framework, a set of software tools that let companies create their own conversational bots.”

The article went on to explain that, “On Tuesday, Facebook dropped its own mic in this increasingly noisy room. At its annual developer conference in San Francisco, the social network announced it would enable third-parties to build chat bots into its highly popular Messenger service. Chief executive Mark Zuckerberg demonstrated a CNN bot that could send personalized news stories as well as another one from 1-800-FLOWERS that could carry on a conversation with a customer who wanted to order flowers.”

“Facebook’s embrace of a bot platform is likely to set off an arms race, as major tech companies try to define how bots will be built and how they will interact with ordinary consumers. The tech giants know that whoever controls the most popular platforms for bots has the ability to dictate to — and profit from — an entire generation of retailers, taxi services, movie ticket firms and others that build for that technology,” the Post article said.

Ms. Dwoskin indicated that, “The chatbot explosion bears a resemblance to the fledgling app economy, circa 2009.”

“‘The same set of drivers that propelled apps to be really new exist with bots,’ said Phil Libin, managing director of venture capital firm Catalyst Partners. ‘The next version of that is going to be bots.’

“The bot battle lines will look very different from those in the app wars. While it’s relatively easy to build an app, getting computers to actually understand language and hold real conversations is much harder, said Forrester analyst Jeffrey Hammond. The adoption curve could be slower as a result.”

The Post article added that, “Even the developers of these artificial intelligence technologies acknowledge that mistakes — potentially big ones that could deflate consumer interest — will be associated with this technology for quite some time.”

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U.K. Will Allow Limited Roll Out of FinTech Products With Reduced Regulations

By Keith Good | Published: April 13, 2016

Max Colchester and Rachel Witkowski reported this week at The Wall Street Journal Online that, “A U.K. regulator is breaking new ground in its quest to help nurture financial-technology projects.

“The Financial Conduct Authority on Monday outlined the structure and other details of its regulatory ‘sandbox,’ scheduled to launch May 9. The project, which regulators around the world will be watching closely, will allow both fintech startups and established companies to roll out a new product or business model on a limited basis without having to wade through the process of getting full authorization. The FCA hopes this will reduce the time and cost of getting new ideas to market.

“The move comes as the fintech sector, ranging from online lending to digital currencies, continues to grow quickly, with regulators trying to keep pace.”

The Journal writers explained that, “The British regulator is in a good position to undertake this type of experiment because one of its mandates is to promote competition in the U.K. financial sector. It has been exploring ways to promote innovation and foster the U.K.’s fintech scene since 2014, having worked with more than 200 companies.

“Another reason the FCA is well suited to the sandbox approach: It has a ‘principles-based’ approach to regulation, meaning that it enforces ideas rather than just holding companies accountable to a set of rules.

“In the U.S., for instance, fintech startups have to contend with a multitude of state and federal regulators. ‘Often, if we see something that is new and we don’t necessarily have a framework for analyzing it, the reaction might be either to say ‘no’ or to let it languish,’ said Amy Friend, chief counsel at the U.S. Office of the Comptroller of the Currency, in a recent interview.”

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Seed Theft Exposes Vulnerability

By Keith Good | Published: April 13, 2016

Reuters writer Julia Edwards reported this week that, “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 U.S. 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.”

The article noted that, “Citing that case and others as evidence of a growing economic and national security threat to America’s farm sector, U.S. 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.”

Ms. Edwards added that, “The FBI and the U.S. 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, U.S. companies, government research facilities and universities have all been targeted, according to the FBI.”

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Sen. Grassley Not Budging on U.S. Supreme Court Vacancy

By Keith Good | Published: April 13, 2016

Mike DeBonis reported yesterday at The Washington Post Online that, “The man standing between Supreme Court nominee Merrick B. Garland and a Senate hearing on his confirmation said Tuesday that an hourlong meeting with Garland had done nothing to change his mind.

“Sen. Charles E. Grassley (R-Iowa), the Judiciary Committee chairman, hosted Garland for breakfast in the private Senate Dining Room in what was the most anticipated meeting yet between a GOP senator and President Obama’s choice for the high court.

“Garland kept silent upon leaving, as is customary for Supreme Court nominees, and Grassley left through a back door without speaking to reporters. His office later issued a statement calling the meeting ‘cordial and pleasant’ but one that did not change Grassley’s determination not to act.”

For more on the dynamics of an eight member U.S. Supreme Court, see this blog update from earlier this month.

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GMO Acres Down 1% From Record, While Monsanto Prefers Federal Law Over State on Labeling

By Keith Good | Published: April 13, 2016

Bloomberg writer Jack Kaskey reported today that, “Plantings of genetically modified crops fell for the first time last year as a commodity slump did what decades of activism couldn’t: slow the spread of biotech foods.

“About 179.7 million hectares (444 million acres) of so-called GMO crops were grown last year, down 1 percent from a record in 2014, the International Service for the Acquisition of Agri-Biotech Applications said in a report Wednesday. North America led the decline.

“Low commodity prices prompted U.S. farmers to plant less corn and cotton, two of the most frequently engineered crops. Biotech plantings fell 3 percent in the U.S., the largest market for GMO seeds, which are produced by companies such as Monsanto Co. Cultivation also declined in Canada and Europe, where some nations opted to ban the planting of such crops last year.”

Today’s article added that, “Aside from low commodity prices, which have cut U.S. farmer incomes in half, biotech plantings also face challenges from a rapidly growing organic food industry and a Vermont food law that will require labeling products that contain GMOs starting in July.”

Andrew Pollack noted in today’s New York Times that, “With Vermont now set to require labeling of foods containing genetically modified crops, some big food companies like Campbell, General Mills and Mars have said they will start labeling all their foods nationwide. Del Monte Foods went even further, saying it would eliminate ingredients from genetically modified crops in many of its products.”

Meanwhile, Bloomberg writers Jen Skerritt and Alan Bjerga reported yesterday that, “Monsanto Co., the world’s largest seed company, says it would rather have mandatory federal labeling standards for genetically modified organisms instead of a patchwork of state rules that it says will raise food costs and disrupt trade.

“‘I think a federal standard would be the right path to bring that certainty for consumers and certainty for food companies,’ Jesus Madrazo, global corporate engagement lead for Monsanto, said in an interview at an industry conference in Winnipeg, Manitoba. ‘We need to strive for a reasonable approach that provides consumers what they need, but also doesn’t increase the cost of food or disruption on trade.'”

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Start-Ups in India, Tenacity May Trump Underlying Technology

By Keith Good | Published: April 12, 2016

Anita Raghavan reported on the front page of the business section in today’s New York Times that,”…[u]ntil now the Indian start-up market has been more about great execution than cutting-edge technology.

“‘In Silicon Valley, the general investment thesis for a technology investor tends to be around how strong a company’s underlying technology is and how defensible it will be over time,’ Will Poole, Unitus Seed’s co-founder [a venture capital fund started out of Seattle that invests in Indian companies], explained later. ‘Very rarely does a venture capital investor invest in an operating business that does not have an intellectual property moat.’

“In emerging markets like India, however, ‘you can build very large and profitable businesses on an operating basis without having a fundamental or long-term technological advantage because you are building in greenfield areas with little or no competition,’ he said.”

Today’s article noted that, “Last year was a heady one for venture investing in India; investments rose 61 percent, to $1.9 billion, from $1.2 billion in 2014, according to Venture Intelligence, a Chennai-based company that tracks Indian venture activity. About $95 million of the total represented investments and co-investments in the social impact space by traditional V.C.s and specialist firms like Unitus Seed.

“Most of the capital flowing into India comes from offshoots of American venture firms. This has led to a generation of homegrown versions of United States companies like Flipkart, the Amazon of India, getting funded.”

The Times article added that, “But that may be changing. Speaking in Bangalore last summer, Chamath Palihapitiya, the founder of the Palo Alto-based venture fund now known as Social Capital, said he would like ‘to put a billion dollars to work in the next 10 years here, plus or minus.’

“Yet he told the crowd of entrepreneurs that the kinds of start-ups he would be investing in were companies that were ‘so unique and unexplainable in a Harvard Business case to a bunch of Americans.'”

Recall also that The Wall Street Journal reported last month that, ” “Lured by a flood of venture-capital funding, relatively inexpensive labor and the size of the potential market in the world’s second-most-populous country, entrepreneurs and technology workers with Indian roots have been coming home in increasing numbers.”

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Battle for Talent, Tech Companies Look to Women Returning to the Workforce

By Keith Good | Published: April 12, 2016

Wall Street Journal writer Georgia Wells reported this week that, “As tech firms compete in an escalating battle for talent, some are targeting what they consider an undervalued source: women returning to the workforce.

“Companies including International Business Machines Corp., Google parent Alphabet Inc. and PayPal Holdings Inc., as well as smaller startups, are using internships and other programs to help women get back to work and up to speed on the latest technology they need to be competitive in the workplace.”

The Journal article explained that, “The tech industry has a shortage of qualified job candidates. The unemployment rate in Silicon Valley is less than 4%, lower than the California and national rates, according to the Silicon Valley Institute for Regional Studies.

“‘Every company today is dealing with how to bring in good talent,’ says John Donahoe, chairman of the board of PayPal and former chief executive of eBay Inc. Hiring women returning to the workforce ‘is a source of competitive advantage.'”

Ms. Wells added that, “Tech lags behind other industries in welcoming women back. In financial services, Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley formed midcareer re-entry programs years ago. Consulting firm McKinsey & Co. contacts former female employees to see whether they are interested in returning.

“By targeting this population, tech companies also are trying to fix a weakness in the industry: the under-representation of women. Tech companies have among the lowest participation of women of any sector, according to data from LeanIn.Org and McKinsey.”

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A Look at Key Variables in the U.S. Ag Economy: Land Prices, Input Costs, and Government Payments

By Keith Good | Published: April 12, 2016

DTN Executive Editor Marcia Zarley Taylor reported yesterday that: “Average Illinois farmland tumbled 8% in calendar 2015, according to the Illinois Society of Professional Farm Managers and Rural Appraisers, the second year in a row of a decline.

“According to the most recent Iowa Realtors Land Institute survey, Iowa’s average tillable farmland has fallen 22% from its peak in March 2013. That’s a plunge from $8,690/acre three years ago to $6,732/acre on March 1, 2016. Prices in the past year slipped an average of 8.7%, the realtors estimate.

“The Peak Soil Iowa Farmland Index published by DTN shows a smoother glide path. It is based on a 30-day moving average of actual sales transactions, adjusted for a Corn Suitability Rating of 60 for average land quality. Through the end of March, it pegged CSR 60 land at $8,055/acre, a mere 12% reduction from the 2013 all-time peak, but virtually no change from a year ago. (DTN subscribers see the Farm Finance page for the weekly rotating charts of the six Midwest states we monitor.)”

The DTN update added that, “Appraisers contend that ‘hot’ land markets will be quickest to cool when corrections occur. But outside that bellwether corn states of Iowa, Illinois and perhaps Indiana, many Midwest locales are holding their own, other land experts contend.

“A study by Louisville-based Farm Credit Mid-America appraisers recently analyzed 4,000 land sales from 2015 and compared them to over 100,000 land sales in their proprietary historical database. The study’s timeframe focused on calendar 2015, so wasn’t as recent as the Iowa Land Institute study.

“Three of the four states in Mid-America’s territory actually showed slight gains in calendar 2015; only Indiana showed a decline of 3%. Gains were 3% for Kentucky, 2% for Tennessee and 0.2% for Ohio.”

Meanwhile, in a separate DTN article from last week, Ms. Taylor pointed out that, “Landlords won round one in cash rent negotiations for 2016 with minimal concessions. Unfortunately for growers struggling to lower break evens, savings on inputs like seed, fertilizer and crop protection chemicals also faltered, if real-time data from Granular and other data management companies is any indication.

“Granular benchmarked actual expenses for its customer base on more than 1 million crop acres this spring, comparing costs for specific products and seed hybrids to 2015 spending. By that measure, chemical costs fell a modest 9%, fertilizer only 8% and seed a mere 1% for Granular customers. Individual items like Roundup PowerMAX tumbled 12% compared to 2015, somewhat steeper than the industry average, Granular Co-Founder Mike Preiner told DTN.”

And Bloomberg writer Alan Bjerga reported yesterday that, “The agriculture slump is getting so bad in the U.S. that farmers are about to get more government aid than at any time in the past decade, signaling the rising public cost of crop surpluses and cheap food.

“About $13.9 billion of net farm income this year will be federal payments, or about 25 percent of total profit estimated at $54.8 billion, according to estimates by the U.S. Department of Agriculture. That’s the biggest payout and highest ratio since 2006, as programs authorized by Congress two years ago cost more than originally forecast.”

The Bloomberg article noted that, “‘This is a sign of a weak farm economy that is much weaker than even a couple years ago,’ said Patrick Westhoff, director of the Food & Agricultural Policy Research Institute at the University of Missouri in Columbia.”

Mr. Bjerga added that, “Lawmakers in agricultural states are still looking for ways to provide a safety net for farmers. One such request is to have the USDA allow cottonseed, which is used for oil or meal rather than fiber, to be added to the list of commodities covered under new farm programs. Agriculture Secretary Tom Vilsack has said such a move isn’t legally possible.”

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GMO Food Labeling Law, Constitutional Considerations

By Keith Good | Published: April 12, 2016

Henry I. Miller,  a fellow at Stanford University’s Hoover Institution and the founding director of the FDA’s Office of Biotechnology, penned an opinion column in today’s Los Angeles Times which stated that, “The push for labels on ‘genetically modified’ or engineered food is one of those social movements that sounds unimpeachable — like ‘Free the Whales’ or ‘Save the Planet’

“What could be wrong with empowering consumers with knowledge about their food?

“Plenty.”

After discussing some technical aspects of plant biology, Mr. Miller explained that, “It is not the source of genetic material, or whether DNA from different organisms are mixed, that should concern us. What is important is the function of the genetic change. Could it, for example, make a plant produce a toxin or become more weedlike? Vermont’s labels don’t make such distinctions. Legislators, regulators, activists and ordinary consumers have had difficulty grasping that ‘GMO’ or ‘genetically engineered’ labels convey nothing useful — or ‘material,‘ in the jargon of Food and Drug Administration regulators.

“And that raises the question of whether Vermont’s labeling requirement is even constitutional. In a 2015 decision, the U.S. Supreme Court ruled that labeling requirements like Vermont’s are ‘compelled commercial speech‘ and subject to ‘strict scrutiny‘ to ensure they don’t run afoul of the free speech guarantees of the 1st Amendment.

“Without some compelling state interest, such as consumer safety or proper usage, Vermont’s requirement to label foods that contain ‘genetically engineered’ ingredients is unlikely to survive the strict scrutiny standard. The Vermont law already has been challenged by a variety of food industry groups, and a decision from the U.S. 2nd Circuit Court of Appeals could come at any time.”

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Number of Farmer Market, Roadside Vendors Accepting SNAP on the Rise

By Keith Good | Published: April 8, 2016

Recall that back in February, a House Agriculture Subcommittee explored issues associated with the direct marketing of specialty crops; a brief overview of that hearing is available here.

Also in February, the House Agriculture Subcommittee on Nutrition took a more specific look at federal programs that are aimed at increasing low-income families’ purchasing power for fruits and vegetables.

The topics of these back-to-back hearings illustrate that lawmakers are paying acute attention to the emerging sector of specialty agriculture and that some policy ideas can serve multiple goals simultaneously: The direct marketing of specialty crops, tied with federal incentives to consume them, can serve a dual public interest aim of reducing hunger and improving nutrition for low income households, while adding support to local farmers.

This week, the USDA indicated in a tweet that, “The # of SNAP-authorized farmers, roadside farm stands & farmers markets accepting SNAP have grown dramatically!”

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