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28–562 2018

RESTORING RURAL AMERICA: HOW AGRITECH 

IS REVITALIZING THE HEARTLAND 

HEARING 

BEFORE THE

SUBCOMMITTEE ON AGRICULTURE, 

ENERGY, AND TRADE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

FEBRUARY 15, 2018 

Small Business Committee Document Number 115–055 

Available via the GPO Website: www.fdsys.gov 

SBREP-219A with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

TRENT KELLY, Mississippi 

ROD BLUM, Iowa 

JAMES COMER, Kentucky 

JENNIFFER GONZA ́ LEZ-COLO ́ N, Puerto Rico 

BRIAN FITZPATRICK, Pennsylvania 

ROGER MARSHALL, Kansas 

RALPH NORMAN, South Carolina 

JOHN CURTIS, Utah 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

DWIGHT EVANS, Pennsylvania 

STEPHANIE MURPHY, Florida 

AL LAWSON, JR., Florida 

YVETTE CLARK, New York 

JUDY CHU, California 

ALMA ADAMS, North Carolina 

ADRIANO ESPAILLAT, New York 

BRAD SCHNEIDER, Illinois 

VACANT 

KEVIN FITZPATRICK, Majority Staff Director 

JAN OLIVER, Majority Deputy Staff Director and Chief Counsel 

ADAM MINEHARDT, Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Rod Blum ......................................................................................................... 1 

Hon. Brad Schneider ............................................................................................... 2 

WITNESSES 

Mr. Kevin Kimle, Director, Agricultural Entrepreneurship Initiative, Iowa 

State University, Ames, IA ................................................................................. 4 

Mr. Sam J. Fiorello, Chief Operating Officer, Donald Danforth Plant Science 

Center, St. Louis, MO .......................................................................................... 5 

Mr. Pete Nelson, President, AgLaunch, Vice President, Ag Innovation, Memphis Bioworks Foundation, Memphis, TN .......................................................... 7 

Michael Fernandez, Ph.D., Senior Fellow, Food Institute, George Washington 

University, Washington, DC ............................................................................... 9 

APPENDIX 

Prepared Statements: 

Mr. Kevin Kimle, Director, Agricultural Entrepreneurship Initiative, Iowa 

State University, Ames, IA .......................................................................... 29 

Mr. Sam J. Fiorello, Chief Operating Officer, Donald Danforth Plant 

Science Center, St. Louis, MO ..................................................................... 41 

Mr. Pete Nelson, President, AgLaunch, Vice President, Ag Innovation, 

Memphis Bioworks Foundation, Memphis, TN .......................................... 45 

Michael Fernandez, Ph.D., Senior Fellow, Food Institute, George Washington University, Washington, DC ............................................................ 50 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

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(1) 

RESTORING RURAL AMERICA: HOW 

AGRITECH IS REVITALIZING THE HEARTLAND 

THURSDAY, FEBRUARY 15, 2018 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON AGRICULTURE, ENERGY, AND TRADE

Washington, DC. 

The Committee met, pursuant to call, at 9:30 a.m., in Room 

2360, Rayburn House Office Building. Hon. Rod Blum [chairman of 

the Subcommittee] presiding. 

Present: Representatives Blum, King, Radewagen, Comer, Curtis, 

and Schneider. 

Chairman BLUM. Good morning. I call this hearing to order. 

Thank you to the panelists for being here this morning. We already had our mini hearing in front of this hearing. This is going 

to be a great hearing. 

I consistently hear from family farmers back in Iowa about the 

many challenges America’s small farmers are facing, including burdensome and confusing regulations and excessive taxation. Agricultural innovations and technologies have the ability to increase farm 

productivity, reduce resource use, which is a good thing. We have 

runoff issues I know in Iowa that are of concern. And boost profits, 

which are also a good thing. 

At last October’s Subcommittee hearing, witnesses emphasized 

the importance of agritech entrepreneurs and farmers working together so that small businesses and small family farms will benefit 

from the emerging technology and innovations. Agritech entrepreneurship activity is also spurring rural revitalization with agritech 

initiatives in America’s Heartland and other regions, attracting talent, dollars, and jobs to those communities. 

Corporate and angel investors, trade associations, land grant universities, and state and local governments are partnering not only 

to connect entrepreneurs and innovators with startup capital which 

is so important, but also to mentor those entrepreneurs and set 

them up for success in the marketplace. 

These organizations can also facilitate relationships between entrepreneurs and farmers so that the risk of farmers trialing new 

innovation is minimized or even monetized, best case scenario. 

Our witnesses today will discuss how these diverse stakeholders 

are working together to attract startup activity to the Heartland 

and how creating a strong, local support system providing talent, 

infrastructure, and capital is vital. They will also discuss their efforts, including training workers for skilled tech jobs, to keep the 

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2 

startups local so that we may bring additional jobs and investment 

to their local communities. 

I want to thank all of you again for being here today, and we 

really look forward to this hearing today and to your testimony. 

I now yield to the Ranking Member, Mr. Schneider, for his opening statement. 

Mr. SCHNEIDER. Thank you, Mr. Chairman. And thank you for 

holding the hearing today. 

The agriculture industry plays a critical role in our personal lives 

and the United States economy. Unfortunately, we do not spend 

enough time thinking about the current state of affairs of the industry and how it can, and should, and must, move forward. It is, 

therefore, noteworthy that this is the second hearing of this Congress discussing something as important as agricultural technology, 

also known as agritech. This sector offers an opportunity to combine the newest technology and ideas with agriculture in a way 

that has the potential to revitalize our economy and our future. 

Most importantly, this hearing focuses on rural America, and I 

am lucky to have constituents who are working hard to sustain our 

food supply. Our rural economy has shown an ability to adapt and 

change with the development of new technologies. It has created 

opportunities by adding different uses for their products, from investing in renewable energy, to identifying foreign markets for 

their products, farmers have been resilient, and our local economies 

and the country have benefitted from it. 

Farmers have been investing more in technology to disrupt the 

industry, reverse stagnating prices from oversupply, and combat 

extreme and unpredictable weather patterns. In fact, we saw a 

jump in agritech startups in 2017 as more than $700 million was 

invested compared to just $332 million in 2016. 

As we have seen in the past year, there is no denying that our 

planet is experiencing more frequent and more damaging, natural 

disasters. We saw it with Hurricanes Harvey, Irma, Maria, and 

Jose, just to name a few. We also saw how wildfires and California’s 5-year long drought have devastated farms, ranches, and forests. 

Extreme weather continues to impact our country. These often 

result in scarce supplies, decreasing nutrient levels, and other factors that threaten the continuing success of the agriculture industry. As the planet warms, weeds, pests, and fungi that thrive in 

warmer temperatures are expected to force farmers to spend more 

than $11 billion to combat them. 

Meanwhile, there is a real epidemic among our Nation’s most important commodity, farmers. In recent years, it has been concluded 

that the suicide rate for farmers is among the highest of any profession. Much of their distress comes from lagging prices from oversupply and low prices. This is where agritech can truly make a difference by streamlining operations and protecting farmers and 

ranchers from low commodity pricing. 

American has always been a country of innovation, creativity, 

and invention. We must harness these skills today and find the 

balance between government oversight and technological advancements without hindering business opportunity. The promise of 

agritech can change lives and positively disrupt an entire industry, 

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3 

which is why I am hopeful we can find a way to grow investment 

in this area. 

I am thankful to all the witnesses for being here today and look 

forward to your insights on the industry and how technology is 

really a valuable investment for the Ag industry. 

Thank you, and I yield back. 

Chairman BLUM. Thank you for those comments, Brad. 

If Committee members have an opening statement prepared, I 

ask that it be submitted for the record. 

I would also like to take a moment now to explain the timing 

lights that are somewhere there in front of you. You will have 5 

minutes to deliver your opening testimony. The light will start out 

as green. When you have 1 minute remaining, the light will turn 

yellow. And finally, at the end of your 5 minutes it will turn red. 

And we would like to have you try to adhere to that time limit. 

I would now like to introduce our witnesses. Our first witness is 

Mr. Kevin Kimle—I think I pronounced that right—the Director of 

Agricultural Entrepreneurship Initiative at Iowa State University 

in Ames, Iowa. Mr. Kimle is also a cofounder of the Ag Startup Engine, a program to fund and to help agtech entrepreneurs and to 

increase startup creation at Iowa State. I have heard a lot of good 

things about that program. Thank you for being with us today. 

Our next witness is Mr. Sam Fiorello. And I did a double take. 

I went to Loras College, a small school in Iowa back in the 1970s, 

and we had a young man from the Southside of Chicago that ended 

up being the National Wrestling Champion Division III, and his 

name was Sam Fiorello. So I was wondering if that was—— 

Mr. FIORELLO. It was not me. 

Chairman BLUM. It was not you. Okay. All right. 

The Chief Operating Officer of the Donald Danforth Plant 

Science Center in St. Louis, Missouri. He is also a cofounder of the 

Ag Innovation Showcase, a gathering for the agricultural innovation community. Welcome, and we appreciate your testimony today. 

Our next witness is Mr. Pete Nelson. Welcome. Vice President of 

Agricultural Innovation at the Memphis Bioworks Foundation in 

Memphis, Tennessee. Mr. Nelson is also the President of 

AgLaunch, a joint initiative with the Tennessee Department of Agriculture to create agricultural innovation opportunities in the 

Midsouth. Welcome. We appreciate your testimony. 

And I now yield to our Ranking Member, Mr. Schneider, for the 

introduction of our final witness. 

Mr. SCHNEIDER. It is my pleasure to introduce Dr. Michael 

Fernandez, a Senior Fellow at the George Washington University’s 

Food Institute and Sustainability Collaborative. Prior to GW, he 

was the senior director of Global Public Policy for Mars, Inc., and 

served as executive director of the Pugh Initiative on Food and Biotechnology. He has also held leadership roles as USDA, EPA, and 

on the Senate Committee on Agriculture, Nutrition, and Forestry. 

Dr. Fernandez holds a degree from Princeton University, and Ph.D. 

in Biochemistry and Molecular Biology from the University of Chicago. Welcome, Dr. Fernandez, and thank you for testifying today. 

Chairman BLUM. And I would now like to recognize our first 

witness, Mr. Kimle, for 5 minutes. 

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STATEMENTS OF KEVIN KIMLE, DIRECTOR, AGRICULTURAL 

ENTREPRENEURSHIP INITIATIVE, IOWA STATE UNIVERSITY; 

SAM J. FIORELLO, CHIEF OPERATING OFFICER, DONALD 

DANFORTH PLANT SCIENCE CENTER; PETE NELSON, PRESIDENT, AGLAUNCH, VICE PRESIDENT, AG INNOVATION, MEMPHIS BIOWORKS FOUNDATION; MICHAEL FERNANDEZ, SENIOR FELLOW, FOOD INSTITUTE, GEORGE WASHINGTON UNIVERSITY 

STATEMENT OF KEVIN KIMLE 

Mr. KIMLE. Thank you, Congressman. Good to be with you this 

morning. 

I serve as director of a program, as the congressman mentioned, 

called the Agricultural Entrepreneurship Initiative at Iowa State 

University. The program was founded in 2005 to be one of the foremost programs for training and developing agricultural entrepreneurs inspirationally in the world. Our activities really have 

their foundation in the land grant university mission of teaching, 

of research, and of outreach. So from a classroom perspective, as 

an example, a class that I teach, Entrepreneurship and Agriculture, this semester has 108 students. Starting next week, they 

will begin the process of developing three concepts for new businesses, and in May, instead of a final exam, their final will be to 

present their favorite of those three business concepts to panels of 

bankers, investors, entrepreneurs, and so on. And that class has 

become a primary feeder for agtech business development activities. 

We do a lot of things out of the classroom, experiential learning 

activities, business plan competitions, and so forth. We place students as interns with startup companies, many of which now are 

founded by former students who had their own startup companies 

in the agtech arena. 

As the congressman mentioned, one of our initiatives is called 

the Ag Startup Engine. It is an investment platform in the Iowa 

State University Research Park intended to provide early stage 

funding and mentoring for agtech entrepreneurs. We currently 

have five companies that are part of our portfolio. Just as one brief 

example, there is a company called Smart Ag. They have a software platform for self-driving tractors. Their first program is for a 

self-driving tractor that pulls a grain cart. So there were two farmers in Iowa last fall who had tractors that were driving themselves, 

pulling a grain cart between the combine and the truck harvester. 

Just a brief question. Can Iowa, can the Midwest be a hub for 

agricultural entrepreneurship? Well, a lot of the activity that we 

have seen and what we do is really based on animal protein supply 

chains. And so the technology that we have developed to create 

more sustainable, more productive agriculture is really what it is 

about. And so we have a lot of new and exciting things that are 

happening, a lot of new initiatives, certainly not just in Iowa but 

across the Midwest, but we still have a lot of work to do. Most certainly, the environment today is a lot better than it was when I 

founded my first agtech company back in 1996. So many more 

sources of funding, support, and mentoring than there were, but we 

still lag. The Midwest, at least in the way that I count the MidSBREP-219A with DISTILLER

5 

west, last year got about 4.7 percent of venture capital dollars in 

the United States while we have about 20 percent of the U.S. population, so we are not kind of punching up to our weight in terms 

of gathering venture capital funding. 

In terms of ecosystems for agricultural entrepreneurs, some of 

our challenges, you know, funding always is a challenge, but again, 

the sort of shark tankification of our culture created a lot of new 

contests, kind of a new language for startups for competitions and 

so on. 

Mentoring is a really big deal. As a former founder of an agtech 

business when I was younger myself, finding somebody else who 

has done that before is a really key part of it. So finding the right 

mentor at the right time is a key part of the challenges that we 

try to address. 

Creating what I would call a change-making culture is a big part 

of it as well. The Iowa nice culture that we have I think is certainly 

a good thing but there are some parts of that that may not work 

when it comes to celebrating entrepreneurship. There is an old saying in the Midwest, you know, nothing is punished in small towns 

like success. And that may not work so well when it comes to entrepreneurship. 

Finally, economists talk about a concept of agglomeration; right? 

When a lot of people come together in one place who do the same 

thing, and some of the benefits for talent, for money, for expertise. 

The congressman was talking about that in Utah when we were 

visiting out front before. Agriculture by its nature is spread out in 

a lot of different places, and so finding ways to get together to exchange information is a big deal. 

So for agtech ecosystems in the Midwest to become more vibrant 

I think three things are critical to conclude. I think exposing more 

young people to the concept of entrepreneurship and that being an 

option as part of their career is a big deal. So certainly, university 

programs like we run at Iowa State University I think are big, but 

even high school programs. Fewer young people today grow up on 

farms and small businesses, in entrepreneurial families, and so exposing them to that, I think, is a big deal. We need to continue to 

develop more parts of early stage funding. Those things are so key 

to getting things off the ground. And then finally, from an agtech 

perspective, you know, I think we need more venture funds in the 

Midwest. We have some new ones that have been formed but I 

think having home-based funding will be a big part of continuing 

to develop the agtech ecosystem in the Midwest. Thank you. 

Chairman BLUM. Thank you, Mr. Kimle. 

Mr. Fiorello, you are now recognized for 5 minutes. 

STATEMENT OF SAM J. FIORELLO 

Mr. FIORELLO. Thank you very much. 

Good morning, Chairman Blum, Ranking Member Schneider, and 

also good morning to you, Congressman Comer and Congressman 

Curtis. 

My name is Sam Fiorello, and I am the COO of the not-for-profit 

Donald Danforth Plant Science Center in St. Louis, Missouri. It is 

the center’s largest institute of its kind with over 240 scientists and 

staff working to improve the human condition and strengthen the 

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economy of the region. I am also president of the Bioresearch and 

Development Growth Park, BRDG Park for short. It is a research 

park on our campus. 

Fifteen years ago, a farmer would tell me with great pride that 

he could fix anything on his farm with baling wire and a blow 

torch. Today, the nearly million dollar tractor he drives has more 

computing power than the Apollo 11 spacecraft that went to the 

moon and back. That is progress, but that progress comes with 

challenges. Today, the average farmer in the U.S. is over 58 years 

old. Tech savvy young people are leaving rural communities for 

urban centers where 21st century jobs are more readily available. 

We believe that Ag innovation is a crucial component to help reverse this trend and is one of the few undertakings that can help 

bridge our Nation’s urban versus rural divide. Our discoveries are 

the basis for creating products and services that meet critical needs 

of farmers and ranchers, food processors and manufacturers, distributors and grocers. Because of the growth of ag-focused innovation, young people now have an outlet to put that interest and 

technology to use in their local communities. Imagine if you will a 

kind of a Geek Squad in rural America that would go across and 

be deployed to help get a tech-heavy piece of equipment up and 

running in hours versus days. 

Conducting best in class research is not the only way the center 

contributes to the creation of the region’s agtech innovation system. 

We also provide open access to our core facilities, facilities like 

greenhouses and growth rooms and chambers and Biocomputing. 

These are valuable pieces of infrastructure for small companies. 

They could not simply advance their businesses or build something 

like this on their own, so access to ours makes it a critical way to 

advance businesses. 

As I mentioned in my opening, in addition to our research center, 

the Danforth campus is also home to the BRDG Park, an agtechfocused research park. BRDG Park is home to 14 companies that 

employ nearly 300 people. Of these companies, six are from our region and eight moved to St. Louis from Germany, Israel, India, and 

across the U.S. BRDG Park companies and the Danforth Center 

spinoffs account for close to $200 million of invested capital in our 

region. 

In 2009, BRDG Park partnered with the St. Louis Community 

College to create a workforce training program. This 2-year training program boasted a 95 percent placement rate with graduates 

hired to work at companies throughout our region at salaries upwards of $45,000 a year. Program trainees are young people who 

come from disadvantaged neighborhoods or older workers who have 

retooled to start completely new careers. One example of such a 

trainee is a gentleman named Dave Busby. Dave worked for more 

than 15 years making truck seats at a Chrysler plant in St. Louis. 

When the plant closed, Dave, who was in his mid-30s, needed to 

start a new chapter in his working life. In 2011, Dave enrolled in 

the community college’s Plant and Life Science technician training 

program, and upon graduation was hired by the Danforth Center. 

Today, Dave is the assistant director of the center’s tissue transformation facility. 

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In part because of our success, this innovative training model is 

being deployed at community colleges throughout the state. One example includes the precision Ag and robotics training programs at 

Three Rivers Community College in Saxton, Missouri. For the last 

10 years, our center has held an agtech-focused investor conference, the Ag Innovation Showcase. This event brings the agtech 

community from more than 25 countries together to advance the 

industry. Central to the event is a segment called ‘‘Voice of the 

Farmer,’’ which features farmers from across the U.S. sharing their 

challenges with innovators and investors to help ensure a direct 

path to useful solutions. Since inception, companies involved in our 

agtech business plan competition have raised more than half a billion dollars in investment capital to grow their businesses. 

The Ag Showcase is not alone in the rise of popularity and 

agtech entrepreneurship and investing. According to the publication Ag Funder, venture capitalists invested over $6.9 billion in 

2015 in a rage of agricultural-related innovations. Last year, invested capital approached $9 billion. To give you context, when I 

started the Ag Showcase in 2009, that figure was less than half a 

billion dollars. 

We hope to build on our early success. In 2016, with the help of 

a EDA planning grant, the center and its partners launched a 600- 

acre innovation district called the 39 North District. The district is 

designed to attract talent, ideas, and capital to our region. 

We are building on our regional strengths. Today, St. Louis is already home to nearly 1,000 plant Ph.D.s and hundreds of companies employ close to 100,000 people and contributing over $4.6 billion to our regional economy. 

If I can leave you with three things that I think are vital to help 

keep this going, one is rural broadband. We need to have access. 

We cannot use these technologies if farmers do not have 

broadband. Two is an educated and trained workforce. And three, 

we need to continue to fund ag research, basic Ag research, because 

it is the beginning of the virtuous cycle. Thank you very much. 

Chairman BLUM. Thank you, Mr. Fiorello, for your testimony. 

I would like to recognize the Chairman of the Full Small Business Committee that just walked in, Chairman Chabot. Thanks for 

being with us today, Chairman. 

Mr. Nelson, you are now recognized for 5 minutes. 

STATEMENT OF PETE NELSON 

Mr. NELSON. Good morning. And thank you, Chairman, and 

Ranking Member Schneider, and members of the Subcommittee for 

the opportunity to share with you some thoughts regarding this important topic. 

My name is Pete Nelson. I am the vice president of Ag Innovation, Memphis Bioworks Foundation, which is an economic development nonprofit focused on life sciences, including agriculture. In 

this role, I get to serve in a unique public-private partnership as 

the president of AgLaunch, which is a joint initiative between 

Bioworks and the Tennessee Department of Agriculture. 

AgLaunch envisions a transformed regional agriculture and food 

economy centered around farmers, innovation, and equity. It was 

conceived as part of the Tennessee Governor Bill Haslam’s Rural 

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Challenge in 2012, and specifically named in 2016’s Governor’s 

Rural Taskforce. The initiative is supported by a broad and diverse 

group of partners, including Farm Bureau, USDA, Launch Tennessee, and our agriculture universities. Although our work is anchored in Tennessee, our agricultural leadership supports the regional collaborations we are developing. This includes a particular 

focus on Memphis and the Mid-South Delta Region, a five-state 

area that includes Arkansas, Kentucky, Mississippi, Missouri, and 

Tennessee, as well as other regions that have distressed counties 

or food access areas, such as the Appalachian Region. 

The Delta Region is characterized by its highly-productive agricultural systems, first-class logistics capabilities, and a large number of food and agricultural companies. This region is also home to 

chronic poverty, population decline, health disparities, and limited 

opportunity. 

The agtech revolution is offering the ability to rethink how Tennessee and the surrounding region can become a leading innovation 

hub for food and agriculture. This means jobs, new business opportunities, improved food access, and new opportunities for our farmers. 

Farmers have traditionally been at the forefront of developing 

and implementing new innovations and technologies. Over time, 

the role of the farmer in adopting new technologies, and this is key, 

has become one of ‘‘customer’’ rather than one as ‘‘partner’’. Currently, there is a large amount of new technology that gets presented to the farmer, but the value is not always clear. There is 

also an increasing disconnect between those creating new innovations and the farming community. This fact was outlined in the 

memo presented here last year on the topic and in the hearing 

itself. 

To address this disconnect, AgLaunch has initiated a three phase 

startup program called AgLaunch 365, which provides participating 

startups with direct access to AgLaunch’s network of innovative 

farmers to actually ground-truth these products or services. The 

program allows the startup founders to acquire unbiased feedback 

and incorporate these observations into the development of their 

product. Participating farmers get access to new technology and the 

opportunity to participate in the upside of the business. 

Since the creation of the program, dozens of companies have received support. A good example of the power of this farmer network 

is a startup company called Ag Voice, which has a voice recognition 

technology for agriculture that simplifies crop scouting and other 

recordkeeping efforts and was validated through the network. The 

validation process included answering simple questions like ‘‘Will 

the technology work in the cab of the tractor or combine when it 

gets noisy? Will the ear piece stay on your ear when you are in the 

middle of scouting a hot soybean field? And will the lexicon be robust enough to record all the farm practices necessary, and will the 

records be accurate?’’ 

The results of this real-world field trial generated data and farmer testimonials used to raise further investment and attract additional customers. The participating farmers were rewarded with 

opportunities for equity and ability to get favorable terms for accessing the technology. 

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AgLaunch has worked to assemble several tools that can be leveraged and replicated specifically in the agtech opportunity to provide early-stage capital to companies in the program. These are included in our written testimony. One that I would like to highlight 

is our work with the Tennessee Department of Agriculture to pilot 

a cost-share program for farmers to incentivize participation in 

trials of pre-commercial startups. 

AgLaunch and its partners are positioning Tennessee and the 

surrounding region to be a leading innovation hub while also sharing key learnings to other states and regions. We believe in the role 

of the farmer as a partner in innovation and that our approach will 

change the current agricultural investment thesis. This will create 

more successful startups and bring forth solutions that more efficiently address real-world agricultural problems. Ultimately, and 

this is important to us, this will mean job creation, increased food 

access, and new opportunities in rural areas and urban areas. 

Mr. Chairman, I would like to thank you again for inviting Memphis Bioworks Foundation to share with you the AgLaunch story 

and look forward to any questions. 

Chairman BLUM. Thank you for your testimony, Mr. Nelson. 

Dr. Fernandez, you are recognized for 5 minutes. 

STATEMENT OF MICHAEL FERNANDEZ 

Mr. FERNANDEZ. First of all, thank you, Mr. Chairman, and 

Ranking Member Schneider, and all the members of the Subcommittee for giving me the opportunity to be here today. 

I am Michael Fernandez. I am a senior fellow with the Food Institute at George Washington University. 

This morning I would like to briefly offer three general observations and three points to consider as you are thinking about the 

role of technology in rural development. 

So the first observation is that agritechnology is critical to sustaining vibrant rural communities. Food and agriculture is the bedrock of most rural economies and the entire food sector is really already being transformed by new technology. How we grow our food, 

how we manage complex supply chains, how we buy food, how it 

gets to our homes all are being transformed by new technology. 

And these changes present exciting new opportunities for capturing 

added value in rural communities both on and off the farm, but we 

need to be thinking about the infrastructure, education, and the 

training necessary to take advantage of them. If we want vital 

rural communities, we cannot let this technological revolution pass 

us by. 

So my second observation is that we need to think about Ag 

science and technology as a critical part of the public infrastructure 

supporting rural America. Public funding for food and Ag R&D is 

really what supports the basic science underpinning this technological innovation and revolution that we are seeing, and it is critical to sustaining the science talent pipeline necessary for longterm success. I know that infrastructure is an important topic right 

now and it is great to see rural infrastructure being part of that 

conversation. I just hope that we do not lose sight of this important 

component of rural infrastructure. 

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My third observation is we are on the cusp, actually, of what I 

think is a new agritech revolution, which is gene editing of plants 

and animals. Now, what makes this new form of genetic engineering potentially so transformative is that it gives scientists the ability to go in, find specific DNA sequences within a plant or animal 

genome, and make targeted changes. So you can kind of think of 

it as a search-and-replace function in a word processor. You go in 

and can find the one word in the whole document you are looking 

for and change just a few letters. It is fundamentally different from 

the first generation of genetic engineering techniques, and it potentially opens up a whole new range of applications. 

And in addition to being more precise, gene editing technology 

also promises to be relatively easier and cheaper, making it more 

accessible. So that means there is a real possibility that a whole 

ecosystem of scientists and small businesses will spring up in rural 

communities around this technology, and you have already heard 

from the witnesses this morning about how that is happening. It 

also means that there may be more incentive for developers to 

work on kinds of crops and trades that would not be economically 

viable otherwise, and therefore bring benefit to a wider array of 

farmers. 

So as you are looking at how new agritechnologies, including 

gene editing, could help revitalize rural America, I would like to 

offer three points. First, we want to make sure that these new 

technologies actually benefit farmers of all kinds. So we have heard 

we have an aging farm population. We have a new generation of 

farmers that will be taking over and it is going to change the rural 

landscape. These younger farmers will be more tech savvy than 

their predecessors, and they are probably also likely to be working 

more on smaller operations and be more dependent on a mix of 

farm and off-farm income. So we need to make sure that new technology meets the needs of these new farmers and the rural economies around them. 

Second is that new agrifood technologies must be acceptable to 

consumers. The first generation of genetically engineered products 

was geared more toward farmers than to end-consumers. American 

consumers are ever more focused on food, what is in it, where it 

comes from, how it is produced, and that trend is not going away. 

So the best way to build acceptance is to offer products that provide tangible benefits that consumers can embrace and to be transparent about it to build consumer trust. 

Which really leads me to my last point which is that consumers 

will not have trust if they do not have confidence in the underlying 

regulatory system. The products of gene editing will be different 

from earlier GMOs, and we are going to need to tailor our regulatory approach accordingly. But a robust, scientifically justifiable, 

and transparent system is absolutely critical to ensuring success at 

home and to accessing markets abroad. New product developers are 

already starting to knock on regulators’ doors and there really is 

not a clear system in place. 

So I know that talking about the benefits of regulation is counter 

to the current trend, but the window to craft a clear, credible pathway to market that gives developers some certainty on the one 

hand and consumers confidence on the other is narrowing rapidly. 

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We cannot let this opportunity go to waste and risk killing this 

technology before it even starts to deliver on its real promises. 

So with that, thank you again, Mr. Chairman, and I am happy 

to answer any questions. 

Chairman BLUM. Thank you, Dr. Fernandez. 

I will now recognize myself for 5 minutes of questioning. 

I think almost everyone today mentioned funding, so I would just 

like to chat a little bit about funding. Someone, maybe Mr. Kimle, 

mentioned a 4 percent number, retracting just 4 percent of I think 

the venture capital in the country, and I would just like to have 

your thoughts on why is it only 4 percent? Why are venture capitalists not viewing the agricultural marketplace as someplace they 

want to put their investors’ money? I know a few years ago when 

farm prices skyrocketed, Warren Buffet and lots of capitalists, investors were talking about investing in venture capital in the Ag 

sector. Now, I do not know if since the downturn in farmland prices 

has coincided with may be the 4 percent number. So if you could 

address that. 

And then also, it is kind of an interesting industry because we 

have these startups but they, unlike other types of businesses, they 

need to get farmers to try a lot of these things. And so what incentives are you seeing for farmers? Do they want to be paid to try 

or is it enough to say, well, the promise is you are probably going 

to get better yields out of this acre of land? If you could discuss 

that as well. So funding I am sure is an issue. 

Mr. KIMLE. Well, I will give it a start. Yeah, funding is a big 

deal. Why? Kind of disproportionate performance in the Midwest. 

Probably a combination of things. You know, funding is kind of a 

chicken and egg sort of a thing to use an agriculture metaphor. You 

know, you need deals to invest in and then you need money to invest in it. So both need to rise at the same point. And at some 

point it all improves and it definitely is, so I think programs that 

produce more quality new businesses is part of it, and we definitely 

see that going on. And then at the same time, more localized 

money for that to happen. So just have not had a tradition of venture capital funding. You know, we have built things in Iowa, at 

least, like the ethanol industry with a lot of investment and money 

but the models for that are a little bit different from venture funding, I guess. So it is probably a matter of some of our capital in 

places like Iowa learning kind of how they might want to participate, if at all, in venture capital, as well as bringing some new talent. And we see some of that. 

Chairman BLUM. How important is projected rate of return? If 

you are an investor out in Silicon Valley and you say, I can invest 

in this Ag startup, but the Ag income is not that great and that 

can negatively impact the marketplace for product A, or I can invest in the next Amazon, perhaps. Okay, I can see that. Is that 

part of the issue? Part of the problem is farm income? 

Mr. KIMLE. It can be. Certainly. Yeah. 

Chairman BLUM. The ability of farmers to afford maybe this 

new technology? 

Mr. KIMLE. Certainly for solutions for the crop industry, which 

has been under economic stress. You know, I think that can be part 

of it. And part of it, too, is probably just having some deals that 

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succeed that are more localized in the Midwest. You know, so we 

have had deals in agtech that have certainly, from an entrepreneur 

and investor perspective, been successful. Climate Corp. being purchased by Monsanto, Granular being purchased by DuPont Pioneer 

in 2017. Those are sort of big deals. We have not had anything like 

that yet out of our program. That sort of things happen and other 

people see investors and entrepreneurs having success and I think 

it sets a precedent that is important. But certainly, underlying economics in the industry affect it too, to your point. 

Chairman BLUM. Anyone else want to have a thought on the 

funding in general? 

Mr. FIORELLO. A couple points. I totally agree with Mr. Kimle. 

I would also add that investors tend to invest near where they live, 

and so you have this concentration of investors in Silicon Valley 

and in Boston, so we need to get them into the Heartland. So 

things like our investor conferences that we hold in St. Louis, part 

of our goal is just to get them here and to say this 12:38:58xxx and 

see how this works. Two, investors look for big exits, big sales. We 

have had a few of those but not many, and investors look for a 

path, a many-pronged path to an exit. And early on, a lot of these 

deals happened to be in the seed space, for example, and there 

were just a handful of paths. There were four, five, six companies 

that could acquire business. I think as you have seen this stretch 

out into more technology across the spectrum, you are going to see 

more exits because there are more paths for this technology to go. 

So I am quite optimistic the trend is going to change. 

Chairman BLUM. Good to hear. 

Mr. NELSON. Just a couple comments. One, agriculture is fundamentally different. The investors have not understood the industry, so the timing, how we think about interfacing with the customer, the farmer, has been different. And so, we have spent a lot 

of time thinking about how we align the capital sources, both regionally, but also tactically with what we are doing. So, for example, our cost-share program allows the farmer to be a first customer, have skin in the game, but also not bear full risk to get 

started, which allows you to prove and validate to get to the next 

step. We are also working with farm organizations, Iowa Corn 

Growers would be an example. There are actually farmers that 

have investment funds that understand the space, and so that 

knowledge is building. But that is sort of a big key part of that. 

I would love at some point to also address the farmer issue. I am 

not sure if we are out of time. 

Chairman BLUM. I will come back in a second round. 

Mr. NELSON. Okay. 

Chairman BLUM. Dr. Fernandez, you are anxious to jump in. 

Mr. FERNANDEZ. Yeah, I am not sure that I have a whole lot 

more to add other than to say that I think it is interesting we are 

seeing a lot of what have been the traditional tech investors in Silicon Valley starting to be more interested in food and Ag, and I 

think that is a great thing to provide additional money. But as we 

just heard, they do not understand food so well, so I think there 

is going to be a learning process. And the time-lines in terms of the 

rate of return I think may be a challenge for some of those investors. But having the investment funds based in the Midwest and 

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by people who really understand how food and Ag work I think is 

where we are going to really see the most success. 

Chairman BLUM. Thank you. 

And I will recognize Mr. Schneider, the Ranking Member, for 5 

minutes. 

Mr. SCHNEIDER. Thank you. I have a lot of questions. But I am 

going to start with a quick story that kind of links to what you are 

talking about. 

Ag is different. Maybe not so much. I want to go back, Mr. 

Fiorello, you said 15 years. I am going to take us back 32 years. 

A personal story. 

I was working and developing oil and gas software. This links 

our Committee, Energy and Trade. And we finished. It was accounting software that ran on the old Compaq computers. We finished in 1985, which was the peak of a boom and became a bust, 

so we had to find new markets. And in the Spring of 1986, our new 

market we found, I was in Irrigon, Oregon, installing our accounting system onto a farm—and this fits to everything—a former consultant had moved out to Oregon. He wanted to be a farmer and 

he was at the cutting edge of technology. And I just remember 

being in his office with a lot of green CRTs. But he was there. And 

at that time it was a 286 chip, less technology than was on the 

moon. We now have more technology in our pockets on our phone, 

so we have come a long way. But it is important I think how far 

we have come really matters. 

And maybe this is a segue to my question for Dr. Fernandez, because in your testimony you said the United States is falling behind. What is the implications of the United States falling behind 

in technology long-term? 

And I will ask a second question. What recommendations to us 

as policymakers do you have that we can get back to where we 

should be leading? 

And then I will come back and talk about the Heartland in a second. 

Mr. FERNANDEZ. Thank you very much. Yes, this was in the 

staff memo. This is not new to you all that in terms of basic R&D 

investment, the United States public funding has dropped something like 20 percent in real-term dollars in roughly the last 10 

years. So we have gone from being the world’s leader to where now 

China is spending almost twice as much in terms of public investment in R&D. We have seen a huge increase in private investment 

in R&D, which is great, but I think that the overall levels are still 

below where we have been. 

I think the challenge here is that support for underlying basic 

science is the engine for the technological innovation that is coming 

next. What is the next big thing? What is the next new technology? 

And we need to really be supporting that. And thinking about that 

as part of, as I said, part of the public infrastructure that will support rural America. And the danger is that we fall behind clearly, 

you know, in the long term. 

Mr. SCHNEIDER. I will take it a step further in the broader 

economy. We are a fraction of the global population. We are still 

the breadbasket for the world in many cases, but other countries 

are getting to self-sustaining agriculture. But they are only going 

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to sustain that with technology. If we can be at the cutting edge 

of technology, we can export that to the world. Again, it is jobs here 

in the United States and hopefully jobs in the Heartland. 

Mr. Kimle, if I can ask you, you are at Iowa State in Ames. You 

have got these startups. Have you faced the issue of, as they start 

to get funding, your startups move either from Ames to the big city 

or out of the Midwest and to the Coast? How many companies have 

done that? 

Mr. KIMLE. No, we have not as yet. We have had some success 

at attracting companies to come to Ames, fortunately, but we have 

not lost any. 

Mr. SCHNEIDER. Fantastic. 

Mr. KIMLE. And that is part of the thing that is different from 

when I started my first company in 1996. So I have my own history 

as well. We had a company doing electronic commerce on the Internet starting in 1997. It was new then. Hard to believe now. And 

we had revenue to begin with but we thought, well, we will go out 

and look for some money. Anyway, to make a long story short, we 

went out looking for a million and a half dollars but people in Iowa, 

some of the prospective investors were like, well, the Internet, I do 

not know if it is really going to be that big. And you guys have DuPont as a customer and Dow, but gosh, I do not know if you have 

really proven, you know, that you can get customers. And so, anyway, we had money from Silicon Valley, New York, and Atlanta 

that came in. Money that said if you are happy being in Ames 

where we were headquartered, that is fine, but you really should 

consider moving to Silicon Valley. We made the choice not to do 

that. I am happy to say that in 2018, sometimes the money is not 

developed but the issue of moving to be someplace else, especially 

for things that face the industry that we are surrounded by in the 

Midwest has not been that big of a challenge. 

Mr. SCHNEIDER. I think one of the issues, you want to be close 

to your customer. I mean, this is my segue to you, Mr. Nelson, because I think you said it very well. The industry has treated farmers as customers only, not as partners. And if you would elaborate 

on what does it mean to treat the farmers as partners in the development of ag-tech? 

Mr. NELSON. There is a perception in agriculture that the farmer is kind of, you think about the overalls and the pitchfork, and 

we do not have that perception. My entire career has been 

partnering with farmers to innovate technologies earlier. That was, 

for us, the first call we ever would make when we would try a new 

idea. So, what we are doing is institutionalizing that idea and also 

supporting other groups that are doing that. So, the way we do 

that is we work with farmers to screen technology. Without that 

part in place you would have basically farmers getting hit with, 

you know, if you get the reputation as a first mover farmer you are 

going to get hit with hundreds of things every year to try, so we 

work through screening that process, working with the growers, 

bringing technology, and making sure that the farmer has a combination of things that give them an advantage besides the rights 

to, oh, great, if this works you get to buy it later. So that is participation in the deal flow, equity, potential to invest at a favorable 

valuation rate, distribution rights, and a portfolio of options that 

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are organized between the company and the farmer to make sure 

that they have got a favorable advantage for their time. And that 

is all tied back to their time and energy. And we are now replicating that in other places. We have started that with row crops 

but have found dairy and beef and other sectors also want that 

service and to pull that piece together. There are great models out 

there right now if you are already further along in the pipeline to 

pay cash for those kinds of services. What was missing was the 

ability to do that early with the really early-stage technologies like 

Dr. Kimle and others are working with and to match that with the 

farmer. So, we are doing that. 

And I love your farm shop analogy. What we believe, where the 

deals get done, and I am in this every day, is on a farm shop in 

Ripley, Tennessee, or in Savannah, Tennessee. Typically, a lot of 

technology and computers that you referenced earlier, but also 

some muddy boots and the ability to get in and out on the field, 

and it is that combination of what really anchors these technologies 

in the rural areas, you know, the theme of today. 

Mr. SCHNEIDER. I am way over my time. I will close with this. 

Mr. Fiorello, you raised the issue of broadband, rural broadband. 

And we are talking infrastructure, and others have talked about it. 

We did have a hearing on this Committee on rural broadband. We 

understand the impotence. If we are going to connect our communities in the Heartland to markets, to opportunities across the 

globe, that rural infrastructure, that rural broadband has to be a 

piece of it. 

So with that I yield back, and thank you for the extra time. 

Chairman BLUM. Thank you, Mr. Schneider. 

Now the gentleman from Kentucky, Mr. Comer, is recognized for 

5 minutes. 

Mr. COMER. Thank you, Mr. Chairman. My questions are going 

to all go to Mr. Nelson. I appreciate the long-working relationship 

you have with my flagship agricultural university in my district, 

Murray State University. 

So my first question, can you elaborate on how Memphis 

Bioworks has used the agritech industry to stimulate regional revitalization? 

Mr. NELSON. Yeah. We realized early that even for Bioworks’s 

original vision of stimulating life sciences in Memphis without 

reaching out and building a collaboration, and so we have now 

morphed that into the AgLaunch vision, which again starts with 

that five-state vision. 

We have to mention our mutual friend, Tony Brannon, who 

helped bring that together and had the vision. It is not easy to collaborate across state lines or to think regionally, but we think it 

is important both for the food access area—that is where we grow 

the crops—the commonality, and then also the ability, when we 

think about how we are positioning our region, we are going to Tel 

Aviv, London, all over the world and saying ‘‘Here is a place to implement your technology with real farmers, and that we can do rice 

in Arkansas. We can do tobacco and corn and soy in the Purchase 

area of Kentucky.’’ So that is part of it. 

We also, back to your district, thinking about places like Hopkinsville that are already models of value-added agriculture with 

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the ethanol facility and the flour mill there, how do we implement 

tech into that? And so, we see tech as a way of bringing the farmer 

along in the process and then being able to build more businesses 

like you guys are already creating in your area. And the collaboration really is centered. Bioworks gets small, and Arkansas State 

University and Mississippi State University, Murray State, our 

university partners, and then our development districts and Farm 

Bureau get large in this partnership as we sort of really continue 

to mobilize on the rural side. 

Mr. COMER. What is the biggest challenge facing agritech entrepreneurs in your region? 

Mr. NELSON. Well, this would be broader than the region. In 

fact, you will see this common theme with the Farmer Network. 

When we talk to venture capitalists in agriculture, and these are 

knowledgeable Ag venture capitalists, they say that there is a 90 

percent failure rate for deals that have all the right elements. The 

intellectual property is good, the market is huge, and the people 

who run the company have already had exits in other industries, 

a 90 percent failure from this lack of connecting with the grower. 

As you know from your background, the grower on the other end 

of that typically gets hit with a bunch of sort of crazy ideas without 

a way to incentivize them and build them in. So, we really, the 

lynchpin of all this is how we connect those two pieces together. So, 

and for us in Tennessee, building out this cost-share program and 

then building out an actual organized Farmer Network, as you 

know, we have done that with alternative crops before. We are now 

expanding that work into the agtech work. For you all, that is 

probably interaction with KAIDF and some of the other sources to 

help farmers get in and work early. We should also comment, we 

have got some great stories like Ag Connections and others that 

are already great leaders there in the purchase area. 

Mr. COMER. We hear not just in agriculture but every industry, 

especially small business, about the shortage of skilled workers. 

What is Memphis Bioworks doing to address the problem so that 

companies can find the workers they need and that they can keep 

those jobs in the community? 

Mr. NELSON. I am going to address Memphis Bioworks, and if 

you do not mind, I may pass this to Sam as well because they are 

leading some programs. So, we run DOL programs targeting specific industry sectors, including agriculture, and have had over 

1,000 people come through those programs that are getting training, certificate training or entry level into 2- or 4-year colleges. We 

are expanding that into this agtech arena pretty dramatically, and 

the number we like to hold up—there is a big dispute whether it 

is 20,000 to 60,000, but we have a gap in the ag industry of anybody that is opposed to an associate degree and try to sort of address that logically with getting feedback. And I love Sam’s comments on Geek Squad and others. 

Is that okay to pass and let them also comment on that? 

Mr. COMER. Absolutely. Absolutely. 

Mr. FIORELLO. Yeah, I think there is a tremendous amount we 

have to do. We have to, if I start backwards, like I said, we partner 

with community colleges in areas to try to get them to customize 

programs that will help, gift certificates and training programs 

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that will directly impact precision ag and the modern farm. But we 

have to move backward a step and make sure that in high school 

and elementary school these kids have some exposure to computing 

and computers and what data means and robust mathematics. 

Also, I am lucky to live in a suburb near a university, and so my 

daughter is exposed to things like classes on innovation and entrepreneurship not when she gets to Iowa State level but in fifth 

grade they have business plan competitions. 

And we were talking before the meeting, there was a terrific program that Warren Buffett’s son, Howard, launched a couple years 

ago, a national Ag entrepreneur contest. We saw high schoolers 

from across the state get involved and great excitement. Unfortunately, that plan fell off but those kinds of things to, first of all, 

give these kids a view, a path towards what it can be, and then 

give them the tools to get there I think are critical. 

Mr. COMER. Thank you, Mr. Chairman. 

Chairman BLUM. Thank you, Mr. Comer. Good questions. 

The gentleman from Utah, Mr. Curtis, is now recognized for 5 

minutes. 

Mr. CURTIS. Thank you very much. 

I would like to express my appreciation to the witnesses for coming today. I found this conversation very interesting and stimulating. I would like to return to the rural broadband issue. 

Much of my rural area is owned by the federal government. Some 

of my companies have as much as 90 percent of the property is 

owned by the federal government. And we are struggling with permitting across those federal lands. I have joined with Senator 

Hatch to introduce a bill called the Rural Broadband Permitting 

Efficiency Act of 2018, to hopefully break that log jam. 

Mr. Fiorello, you brought it up, and any of you are welcome to 

jump in on this. Can you comment? Do you have any experience 

with federal lands? And is this bill helpful and the type of thing 

that we need? 

Mr. FIORELLO. Congressman Curtis, I do not have specific experience with federal lands, but I do know that there are enormous 

swaths of rural America where intensive farming happens where it 

is just dark. There is no Internet connection at all. We are creating 

all this innovation. We are creating this high end Ferrari and putting it on a gravel road. We cannot utilize the fruits of these innovations without broadband. I think it is a critical issue and until 

we fix that underpinning, that access to the broadband technology, 

we are really going to hold back rural America. 

Mr. CURTIS. I had a unique opportunity to bring Google Fiber 

to my city in Provo, Utah, and learned that density is critical. How 

do we deal with that? The infrastructure, the cost of bringing 

broadband to these rural communities? Do you have some thoughts 

on that, on how we get past that? 

Mr. FIORELLO. I know that folks talk about the cost. As technology advances, the cost is coming down. The problem is we cannot afford to wait because it is not just the deployment of technology; it is the kids in the classroom that do not have access to 

the tools. And you cannot be a fourth and fifth grader again; right? 

You could lose an entire generation. So I think we are going to 

have to really move in any sort of infrastructure funding that 

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comes from the federal government, this has got to be moved to 

high up on the list because I think it is a critical shortcoming and 

we are just going to have to invest in it. 

Mr. CURTIS. So you bring up a good point. I have watched 

President Trump’s plan for infrastructure and an emphasis on 

rural, and I would like to use this bully pulpit for a minute to say 

rural structure is not just roads. Or infrastructure is not just roads. 

And this clearly has to be a topic. 

I do not know if any of the others want to jump in on the importance of this and how we get past this problem of just the cost. The 

number of users per mile makes this very difficult. 

Mr. Kimle, you look like you are ready to give me the answer. 

Mr. KIMLE. Not an answer but just to reinforce the importance. 

You know, the startup that I mentioned earlier, Smart Ag with the 

self-driving tractor relies on wireless to get that done and they 

have had to have some workarounds to get that done. And so they 

can be creative in getting it done, but clearly, a solution, whether 

it is a self-driving tractor or just information passing from one node 

to the next is an important part. And almost any part of rural 

America that you go to you are going to find challenges. 

Mr. CURTIS. So you are telling me the hot spot on their phone 

may not drive that tractor? 

Mr. KIMLE. Not quite enough. 

Mr. CURTIS. I am also curious about the culture. I am listening 

to you thinking on the one hand our farmers really are the first 

entrepreneurs in our country; right? The risk takers. They fit all 

the characteristics. But in many ways they are not your 

stereotypical entrepreneur. And do you have some suggestions on 

how we bridge the cultural gap between our traditional entrepreneurs and our farmers and get them thinking along an entrepreneurial line? And then the second part of that question is are 

we in danger of leaving people behind? As technology becomes successful, how do we deal with those who do not adapt to technology 

and love the baling wire and torches? 

I will throw that open to whoever feels best qualified to answer 

that. 

Mr. NELSON. The interaction with the farmers, I would argue 

that generally the ones that are in business and are growing viable 

farm operations are fully entrepreneurs. They have the culture you 

described, Creating ways, Sam is doing it with his event that they 

do in September. We are doing it by actually getting investors and 

other kinds of techno entrepreneurs on the farm and actually going 

out and seeing. This phenomenon is just amazing. Like I said, in 

a farm shop is where this work actually gets done, and it is now 

a highly technical place with a lot of interesting innovation. So, 

making, creating those matchmaking environments is really, really 

important. There is also, and this touches I think a little bit on 

what Dr. Fernandez was getting to on technology, there also are a 

lot of new farmers that are coming in that are tech savvy in other 

things beyond technology and agriculture. So typically, they are 

small farmers that are interested in only organic or certain types 

of production, and so helping them get connected in with the larger 

farmers and overall community to understand some of the really 

interesting ramifications with gene editing, CRISPR, and some of 

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these other technologies. So, there is the problem of the outside 

people connecting in, and then within agriculture, really building 

a common vision on how we feed the world and create these new 

types of innovations and entrepreneurship. 

I also want to comment that typically, the industry has not—a 

lot of folks say ‘‘Are you trying to build the next Silicon Valley?’’ 

And we say, ‘‘No, we are trying to build an innovation hub but also 

that has women and minority participants in a meaningful way.’’ 

And that is another part of this culture. It really is a new culture 

that has to be created around the best of the innovators, the tech 

people, folks from the West Coast, with the growers and then with 

new entrants into the space. 

Mr. CURTIS. Thank you. I am out of time, Mr. Chairman. 

Chairman BLUM. Thank you, Mr. Curtis. 

In Iowa, we do not call it Silicon Valley. We call it Silicorn Valley. 

It is my pleasure now to recognize the lady with the beautiful 

flowers in her hair from American Samoa, Ms. Radewagen, for 5 

minutes. 

Ms. RADEWAGEN. Talofa. Good morning. 

I want to thank the Chairman and Ranking Member for holding 

this hearing today, and I want to thank all of you for testifying. 

My first set of questions is for all of you. You are aware of the 

Rural Prosperity Taskforce led by Agriculture Secretary Purdue. 

Can you respond, each of you? Yes? 

Mr. KIMLE. Yes. 

Mr. FIORELLO. Yes. 

Mr. NELSON. Yes. 

Mr. FERNANDEZ. Yes. 

Ms. RADEWAGEN. Okay. Well, so as a follow up, if Secretary 

Purdue reached out to you for advice, what would be your number 

one recommendation? Mr. Kimle? 

Mr. KIMLE. Good question. What would be my number one advice? You know, I have always had this notion that prosperity is— 

and I am economist, right, but it is more than just economics. So 

a notion of really flourishing. And so certainly, as we have done 

outreach work with rural communities around startups and that 

sort of thing, is tried to bring that idea of real flourishing, of engaging people in creative and impactful work, and hopefully, you 

know, higher incomes, improve training as part of it. But what we 

are trying to do as part of our programs at the Agricultural Entrepreneurship Initiative is to train people to have careers of impact. 

And that means something different for everybody but it is kind of 

this idea of flourishing. And we can see it in the Midwest as we 

go from one community to the next. Some that seem to have all the 

pieces in place—the leadership, the people for flourishing, and others that clearly have work to do to get that done. 

Ms. RADEWAGEN. Next? 

Mr. FIORELLO. I think, Madam Congressman, if you asked me 

to pick one, I, again, access to rural broadband would be there because it addresses a number of important needs. One, of course, access to technology, but also ability to deliver mentoring and education remotely. I mean, some of these kids, a lot of these kids have 

never really seen a successful entrepreneur. If you had the ability 

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to do a live broadcast and connect an entrepreneur and have him 

or her tell their story of how they got to where they are. And again, 

I am talking about fifth and sixth graders, not college kids. So if 

you asked me to pick one, my pick would be, again, the critical 

need for access to real broadband for all. 

Mr. NELSON. Mine is a two-parter. Expand the existing programs that affect farmers’ ability to innovate or get involved in 

value-adds. That would be value-added producer grants with 

USDA, innovation grants within NRCS, and other programs that 

directly stimulate the farmer getting involved in new innovation. 

And then the second part of that would be adding programs that 

allow farmers to be incentivized to connect in with some of these 

early-stage entrepreneurs, building the networks and other things 

that we described about in the hearing. And make sure that that 

is front and center. Again, repositioning the farmer as sort of the 

middle man. But this is what we did to stimulate the ethanol industry when farmers said we do not want to deal with the bases. 

We do not want to haul our grain. We want to make products here. 

Doing that in this tech sector is well where the farmers have an 

advantage to participating. And when we say farmers, a lot of 

times you get the view of a large, huge soybean, corn, or cotton 

farm. When we think farmer, we mean everything from the urban 

small farmer to the one doing a specialty vegetable crop to the 

large farmer. We view that there are programs that can cross all 

those but stimulate the technology early adoption and testing. 

Mr. FERNANDEZ. Thank you for the question. I think what I 

would say is that we really need to make sure we are supporting 

a diversity of farms and a diversity of types of kinds of farms and 

the coexistence of all these farming operations. 

I am a biologist originally, and we all know that diverse biosystems are the strongest and have the most resilience and are the 

longest lasting. And so I think about it in that way, making sure 

that we can support all of the farmers in whatever their endeavors. 

Ms. RADEWAGEN. So my second question is especially important to the people of American Samoa as our telecommunications 

are severely lacking and it is of vital importance that it is developed, especially after Hurricane Gita devastated American Samoa 

last weekend. This Committee and the Rural Prosperity Taskforce 

have advocated for a Federal Government regulatory regime that 

supports and fosters growth in the telecommunications industry. 

How will greater access stimulate rural economic growth? All of 

you? 

Mr. NELSON. Let me make sure I understand your question. 

You are saying stimulating more rural telecom access, how will 

that stimulate rural growth? 

Ms. RADEWAGEN. So for a lot of the reasons we talked about 

here all the way down to something as simple as a small farmer 

in your district that is trying to figure out a market price. If they 

cannot communicate the use of cell phones across the world, especially in smaller farms have allowed them to actually look at markets and understand their markets better. So even things that 

would seem simple like that. 

I also should have said I am sorry for what happened over the 

last couple of days and for the loss there. 

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But so the simplicity of those kinds of things, as well as some 

of the larger scale innovations that we have talked about that just 

require connectivity in order to do business. There are also a lot 

of innovations in our pipeline. I know Sam is a little bit well with 

some of the different specialty crops, but things, cold storage, the 

way solar interacts. So you have got off-grid power and other 

things that are in this pipeline. So again, we end up talking a lot 

about corn and soybeans and big crops, but a lot of the innovation 

efforts we are involved in go across that for, again, different scales 

and different circumstances. 

Ms. RADEWAGEN. Anybody else? 

If not, thank you, Mr. Chairman. I yield back the balance of my 

time. 

Chairman BLUM. Thank you, Ms. Radewagen. 

I would like to recognize the gentleman from Iowa, a fellow colleague of mine, Mr. King, for 5 minutes. 

Mr. KING. Thank you, Mr. Chairman. I appreciate you holding 

this hearing. I hope you accept my apologies for showing up. We 

have other duties around this Hill, too, so I am glad I got here in 

time. And I reviewed some of this testimony. 

My background is in the construction business, and I have always been fascinated by where technology takes the next generation of humanity. And I regret that none of us are going to live long 

enough to see where its destination is, but we are watching it accelerate at a really fast rate. 

One of the things that I have been impressed by with 

agritechnology, let’s see, if I just look back about 3 years ago I finally got over the shock of watching a planter go through the field 

with the markers folded up and now I am wondering why the 

markers are on some of them. They are not on all of them anymore. 

A lot of them took them off. That says a lot. 

And I received a briefing I recall at the Farm Progress Show a 

few years ago from Monsanto and they said at that time that they 

were going to team up with a Google operation out of San Francisco to be able to tie together their weather surveillance technology with the technology developed by Monsanto. And so when 

I began to put that all together and watch it take place and they 

have since made that merger, it is pretty fascinating to see that I 

have neighbors that are monitoring their fields every 2-1/2 acres I 

think it is in a grid pattern, and they get a little text on their 

phone that says you had better side dress 20 pounds in because 

you are going to get about an inch of rain soon. You will not be 

able to get back in the field and the corn needs it. And here is your 

green days and your temperatures and it is such a fascinating 

thing, so much different. And also, I think I go down into my man 

cave most every day I am at home. There are millions of them in 

America for domestic reasons I will not enter into right now, but 

I have got two ears of corn down there. And those ears, one of them 

is from an 1848 open pollinated variety that is preserved by Iowa 

State University, and that ear yielded between 15 and 25 bushel 

to the acre. And then the next ear, the ear next to it is an ear from 

a triple stack hybrid that is a 2015 crop that went across the scales 

not at 15 to 25 bushel but at 232 bushel. And so that shows me 

what technology has done for our Ag production. 

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And I wonder if I could ask Mr. Kimle, what is your view on the 

GPS components of this and what it is doing for efficiency and 

where yields are going to go? What am I not observing that is on 

the horizon? 

Mr. KIMLE. Good to see you, Congressman King. 

I think you are seeing a lot. And the story of corn, I think, is emblematic of a lot of agriculture. It has been the process of developing plants that can survive at higher populations, but the management requirements to do that effectively are what ag technology 

will ultimately help with. When you think about the career of a 

crop farmer, at least in a temperate climate, you know you get 

about 40 shots at figuring out how to do what you do. And you 

build on probably what your dad knew and maybe your grandfather knew, what you learned from other people, what you pick up 

through agronomists, anyway, and that sort of thing. But what 

technology will allow to accelerate, is that learning? When I look 

at machine learning and artificial intelligence, and when we think 

of those technologies, I think we think of things oftentimes outside 

of agriculture, but it is going to be a really big deal because it will 

allow us to compress kind of our learning and to getting more out 

of each season and figuring out is it nitrogen or is it phosphorous 

or is it some other micronutrient, or is it bacteria in the soil? And 

so I think absolutely, you know, the trend from the 25 bushel corn 

to the 225 is there, but what I see and what I think you will see 

is 300 to 400 bushel being much more common, at least during decent years. And that is exciting, although certainly challenging 

with what are we going to do with all those bushels? 

Mr. KING. I have a picture in my iPhone from an individual that 

I broke some bread with last Saturday night and the picture is the 

license plate on his brand new Corvette. It was new in 2008, and 

the license plate is $8CORN. Now, they said what paid for that 

Corvette completely is $8 corn, but now it is $3.40 cent corn or less. 

So I would say, Mr. Fiorello, do you have any comments you 

would make on that question? 

Mr. FIORELLO. Yeah, I think, Congressman, the paradox is if 

you overlay the increase in farm productivity, the bushel, let’s look 

at corn as an example, 1975 to today, you have at the same time 

a declining rural America. There are less jobs, less people, less 

young people. So the challenge before us is not how to keep producing more because I know we will get there, but how to push 

some of those benefits of that technology to rural American so that 

young men and women can see a path to staying in their communities. We talk a lot about urban food deserts. There are plenty of 

rural food deserts. They are in plenty of communities. We have to 

get in the car and drive 30 miles to Walmart to get your fresh 

fruits and vegetables. So I know we will get to 300 bushel corn. 

The question is how can we recreate the urban landscape so that 

there is economic opportunity and jobs for all so those men and 

women can stay there and stay in their communities. That is a 

tougher one. 

Mr. KING. If the chairman would indulge me in a final question. 

I thank him for his own entrepreneurship, too, by the way. This 

brings to mind when you address that, I sat in on a little private 

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23 

ponics growth of multiple vegetables. And I have seen the pictures 

of his prototype operation that he set up. He can grow about anything in vertical hydroponics and it is only with the water and the 

nutrients put in the water that they pump up and it trickles down, 

and so all of it is used and reused until it is consumed and it is 

all in there with lights. It only projects the frequency, the spectrum 

of lights that stimulate photosynthesis. He says that he can raise 

in one acre inside a building the equivalent of 150 acres of crops 

that would be raised in the outdoors. Are you seeing anything like 

that coming along? 

Mr. FIORELLO. Sure. We are seeing great trends like that. I 

think Dr. Fernandez made a great point earlier about we need to 

have more diversity of farming. We need the entrepreneurs who 

can think of aquaculture, aquaponics, indoor farming as well as the 

farmer aspiring to 300 acre corn. But again, we will not get there 

until we start to address how to inspire young kids in a school and 

how to give them a path to say I can start my own company. I go 

to these rural communities. You will not see one kid who will say 

I have met an entrepreneur and I have gotten to know them. In 

our worlds, those are folks we meet with every day. So how do we 

start to change the culture and exposure, and even something as 

simple as celebrating farmers who have been successful entrepreneurs in our community? So it is culture. It is mindset. It is infrastructure. It is a lot of things. 

Mr. KING. I would suggest as I conclude here that we look at 

some of the models of the successful entrepreneurs, such as the 

Chairman of this Subcommittee, and ask him to continue to illuminate his life story. And I would yield back to the Chairman. 

Thank you. 

Chairman BLUM. Thank you, Mr. King. 

We have about 10 minutes remaining so I am going to be a little 

less formal. If you want to stay, Mr. King, we are just going to do 

like a lightning round. I am going to fire a question and then 

Ranking Member Schneider will. And if Congressman King wants 

to. So maybe try to keep your answers short and concise because 

we have about 10 minutes left. 

My question is, I am back to the funding again and paying to try 

the technology with the farmers. What comes to my mind is co-ops. 

Co-ops in my district are huge companies owned by the farmers. A 

kind of interesting relationship there. Are any of you in the startup 

business? Are they looking to partner with co-ops? Because there 

is money there. The funding of co-ops, which in essence is funding 

from farmers out of profits. Anybody have experience with working 

with the co-ops, and are they involved in the startup entrepreneurship? 

Mr. FIORELLO. Yes, one quick one. The company that won last 

year’s business plan competition, our event, is a company called 

NanoGuard. They have a technology to help clean grain. And so the 

rice millers are partnering with them now, investing early on and 

letting them set up beta test sites and prototypes. So it is the partnership that Mr. Nelson talked about before that is vital and winwin. 

Chairman BLUM. So they are getting involved? 

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Mr. NELSON. Yes. The co-ops are, and the check off organizations, and the farm organizations, like Farm Bureau, which in essence make, when Dr. Kimle was talking about the cluster and how 

hard that is, they become sort of the cluster because they have 

these relationships, as well as capital that you mentioned. So, 

yeah, and we are fully endorsing any of those kinds of ways. 

Chairman BLUM. Good to hear. Good to hear. 

Mr. Schneider? 

Mr. SCHNEIDER. Thank you. I want to go back to the idea of 

how do we create the ecosystem within these rural communities, 

because as you create tech companies, it raises productivity as you 

touched on. But that raising productivity as farms get larger, technology replaces it, driverless truck, driverless tractors, it lowers the 

employment opportunities on the farms. If we keep these tech companies within these communities, that creates some jobs but tech 

companies can grow to scale without a whole lot of jobs. So we need 

other ancillary jobs around that. How do we create broader ecosystems with the community? 

And on another topic, Mr. Kimle, you talked about the fact, and 

I will use the example of back to 1985, that farmer that I was 

working with probably was making less than his job in San Francisco financially but there was a whole psychic income of working 

on the land and waking up and seeing the sun rise and all the 

things that go with being in agriculture that go with that. But how 

do we create these ecosystems in these communities that inspire 

young people to come home, stay home, and create the opportunities for them to succeed? 

Mr. KIMLE. I think a lot of the models that were used in larger 

communities can work in the rural communities as well. Just as 

one simple example, our program, we have started a larger program. The Ag Startup Engine at Iowa State University is called 

the Startup Factory. So kind of a training mentoring program, 6 

to 12 months and beyond. They started this year a pilot program 

to work with smaller communities in essentially kind of a train the 

trainer sort of a thing to take that model, work closely with people 

in that community, pull in a cohort of startups and work. And so 

the clear idea is to plant a seed there so that they have kind of 

the startup support and mentoring that happens there just as it 

happens. So Spencer is one of those communities and Ossam, Minnesota is the other one that is participating in that. So I think sort 

of a matter of identifying those communities that have at least a 

core of kind of leadership and the want-to to get it done and then 

transferring some of those models and just experimenting and trying things. 

Mr. FERNANDEZ. You know, you talked about young people 

coming back, and I think an interesting observation is that we are 

seeing a lot of young people who have never been on the farm before; people who actually want to go into farming. And so I think 

part of what we need to be thinking about is how do we create that 

ecosystem with those people who did not come from the farm but 

have that interest, and how do we provide them with the training 

and the education necessary so they can enjoy the benefits of that 

lifestyle? 

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Mr. SCHNEIDER. And that is something—and I will yield back 

with this comment—veterans coming home are a great opportunity 

do that. 

Mr. KIMLE. And I might, if I can just take one moment, you 

know, what is different between 1986 and now or when I got my 

bachelor’s degree in 1988 and now, and corn prices may not be 

good, but it is so different now. You know, moms and dads in the 

1980s, telling their sons and daughters, whatever you do, do not 

come back to the farm. Whatever you do, do not work in agriculture. And we have people coming to Iowa State University from 

the Coast, from around the world, because they want careers in agriculture. Two, 3 years ago there was one of our ag business students on the cover or the second page of the Wall Street Journal, 

and the headline—I am going to forget exactly what it was, was 

about agriculture careers being sexy. I never thought I would see 

that, but that is a good thing for us. 

Mr. NELSON. Can I make one more comment on your question? 

What Dr. Fernandez talked about with gene editing, if you think 

about what drove Silicon Valley, it was that Moore’s law line that 

gave investors, you got the dream, but because of the line you knew 

this is worth keeping on investing and it would weather it. With 

the cost of genomic sequencing falling faster than the line of 

Moore’s law, what Dr. Fernandez was describing is we can tap in 

not just corn or soybeans but a huge subset of the other 56,000 

identified nutritional plants and start to commercialize those. So, 

when I started my career, you could not work with a new trait or 

a new type of breeding unless it had 5, 6 million acres. Now we 

can do that with this whole realm of new crops. So that is what 

is going to drive the whole rural change. As you look at these communities, they are going to have all kinds of value-add opportunities, a lot of different kinds of crops, and unlike other industries, 

the automation, so agriculture at its most efficient—you talked 

about the corn plan earlier—it is 20 percent efficient compared to 

a 95 percent efficient indoor factor. So, any automation of everything we do only brings efficiencies to get us up to par with other 

industries and actually will stimulate in ways that automation robotics do not do. So, the vision is really this compelling rebuild of 

agriculture to take advantage of these tools that Dr. Fernandez 

talked about and it will stimulate a whole host of new innovations. 

I just wanted to add that. 

Mr. SCHNEIDER. And then just to link it all together, projected 

global population of 9 billion or more in 2050, the rest of the world 

ahead of us right now, we need to invest in the R&D to make sure 

we are there because this is a growth market that could really lead 

to growth in our communities. 

Chairman BLUM. Mr. King? 

Mr. KING. Thank you, Mr. Chairman. 

Mr. Kimle, you kind of lit of a memory for me when you talked 

about what it was like in the 1980s. And, of course, we struggled 

through that entire decade. And what you said is something I do 

not remember anybody saying before, at least in a hearing here, is 

that our children in rural—I will call it Corn Belt, but Ag—our 

children were raised throughout the 1980s to leave home, go get an 

education, take your degree, do not look back. And now my neighSBREP-219A with DISTILLER

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borhood is full of grandparents that buy plane tickets to fly to the 

Coast to see their grandchildren. And I always wanted to see that 

changed. I have a little vignette in my memory though of being at 

the Tulip Festival in Orange City, Iowa, back in the 1980s, and 

there were the queen and her court, and there was a corded microphone, which is hard to imagine today, and they passed that 

around and they said, what are you going to do when you graduate 

from high school? I am going to go to Northwestern College. That 

is in Orange City, Iowa. And four of them said Orange City. And 

the fifth one said, I am going up to Bethel and then I am coming 

home. Those kids in that county at the same time were raised to 

have a future there, and they had competition in education. They 

have entrepreneurs, they have Trans Ova, the very first cloned bovine, anywhere successfully in the world. Now you have got about 

eight or more spinoff companies off of that. I see what is happening 

with the technology, the genetic technology that you addressed, Mr. 

Nelson, and I think also in that same community, about 15 years 

later, around the year 2000, 2001, I met a family on the street that 

had 1,300 acres of crop, all corn, except for one acre. And that corn 

grossed only at $300 an acre that year, I recall, but they took 

$28,000 off of that single acre, which was a glorified garden. And 

they had irrigated. They did a great job of marketing, and they 

probably had $50,000 worth of child labor invested in that one acre. 

But I bring this up because when you draw the distinction between 

$300 an acre corn here and $28,000 specialty crops out of the same 

soil, and then you add to that the technology that you addressed 

especially, Mr. Nelson, it tells me that 7 billion people, 9 billion 

people, they can be well fed, and we should never worry about 

being able to feed the planet if we employ the technology we have. 

We have got the skillsets. We have got the technology. It is a matter now of implementing it. 

Does anybody want to comment on those comments? 

Mr. NELSON. I will comment first. And you mentioned this a 

minute ago with the business model of seed company, then traits, 

and then now selling data. And so, the first comment I will just say 

is this information in this technology revolution, you are right, but 

it has to be laid out with the right partners. So, farmers now do 

not probably want to be you just give me the prescription and just 

tell me what to do. They want to think, and they want to analyze 

data. And so, as we think about how we bring these other technologies in, we just need to be thoughtful in how to build the right 

partnerships. Part of the theme of this one was having the right 

public and private partners at the table and how we stimulate it. 

But there is no question that the technology, plus implementation 

in the field, plus good soil management practices, can lead to solving some of these global problems. 

Mr. KING. Anyone else? 

Mr. KIMLE. I think your comments about Orange City in Sioux 

County, just the stuff going on there, I mean it is just a very interesting case study. I absolutely agree that more of that spread 

around other rural communities is a big deal. When I first came 

back to Iowa State, I had my own businesses, colleagues did a survey of Iowa State alumni who graduated with our bachelor’s degrees between the years 1982 and 2006. For the entire sample, 15.1 

SBREP-219A with DISTILLER

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percent had started at least one for-profit business. And when you 

got back to the 1980s graduates, the old people like me, it was upwards of 30 percent. So a really good record of entrepreneurship. 

The jobs that their businesses had created was like 225,000 that 

did $64 billion in revenue. 84 percent of the jobs created, however, 

were outside of the state of Iowa. You know, so you take a student 

body that is 70 percent Iowa and they created jobs someplace else. 

Now, that is okay, but we have not, in Iowa, at least done a good 

enough job trading our young people who go someplace else and 

importing somebody else. But what I see that is fundamentally different today is that we are bringing people in to agriculture no 

matter where it is at. And if we do our jobs as a community, as 

policy leaders, and so forth, we are going to keep people there and 

have, you know, and just engage imagination to create a better tomorrow than what we have ever had and how we did things in the 

past. 

Mr. KING. I would like to conclude with a point here that I think 

came out of the data you quoted, and that is, this is a reference 

to a theory I cannot find anymore, but it is Coltieve’s theory. But 

what it is, it calculates that the economy goes into a cycle, and 

when everything is down at the bottom, where we were in the 

1980s, flat at bottom, that is when you have your innovation and 

your entrepreneurs because you do not have anything else going. 

You do not have capital. You do not have cash flow, so you sit 

around the kitchen table and say what are we going to do? Are we 

going to move or are we going to come up with a better idea? And 

that is where the innovation is rooted. And then you start plugging 

those ideas together and you look for capital, you look for technology, match that together, work your way up. That happened in 

the 1980s in Iowa and across the Ag community in the country. 

And as we came out of the 1980s, I saw that capital start to get 

formed and pulled together and that capital became productivity 

and efficiency and competition. So that is a cycle I wanted to reference that I think showed up in the data that you quoted, Mr. 

Kimle. 

And I appreciate all your testimony. 

I yield back, Mr. Chairman. 

Chairman BLUM. Thank you, Mr. King. 

As Mr. King said when he sat down, we have other responsibilities. So unfortunately, I want to draw this hearing to a conclusion. 

I would like to thank all of our witnesses for their excellent testimony. This was a great hearing I thought. 

As we heard today from our excellent panel, agritech investment 

is driving rural revitalization with various initiatives using 

agritech entrepreneurship to bring jobs and dollars into our local 

rural communities. Today’s witnesses represent a diverse group of 

stakeholders who are partnering to attract startup activity to the 

Heartland and other regions. They are also creating ecosystems 

that set up these small businesses to thrive and compete in the 

marketplace. We are also reminded importantly that all stakeholders must work together to make sure that the most important 

stakeholder, small family farms, can benefit from the many exciting technologies and innovations America’s brightest entrepreneurs 

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are developing. This will ensure that family farms, a vital part of 

Iowa and America’s economy and food supply, continue to succeed. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

We are adjourned. Thank you, gentlemen. 

[Whereupon, at 10:52 a.m., the Subcommittee was adjourned.] 

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House Committee on Small Business Committee, Subcommittee Agriculture, Energy and Trade 

Remarks by San Fiorello, Chief Operating Officer, Donald 

Danforth Plant Science Center and President, BRDG Park 

February 15, 2018 

Good morning Chairman Blum, Ranking Member Schneider, and 

members of the subcommittee. My name is Sam Fiorello and I am 

the Chief Operating Officer of the not-for-profit Donald Danforth 

Plant Science Center in St. Louis, Missouri. Since I began working 

with Dr. Danforth to establish the Center 20 years ago, we have 

grown to the world’s largest institute of its kind with over 240 scientists and staff working to improve the human condition. I am 

also President of the BioResearch and Development Growth Park 

a research park on our campus that is home to 14 for profit enterprises and a bioscience workforce training program. Thank you for 

the invitation to discuss the importance of agricultural research 

and innovation, a key driver in strengthening family farms and 

growing the small business sector of our economy. 

Fifteen years ago, a farmer would proudly tell me that he could 

fix anything with a handful of baling wire and a blowtorch. Today, 

the three quarter of a million-dollar tractor he drives has more 

computing power than the Apollo 11 that went to the moon and 

back. That’s progress. But that progress has also come with challenges. The average farmer is 58 years old. Tech savvy young people are leaving rural communities for urban centers where 21st 

century jobs are more readily available. 

Our economy has changed. Big business, manufacturing and the 

like are not the economic engines they once were. According to the 

Kauffman Foundation in Kansas City, MO, ‘‘Without startups there 

would be no net job growth in the U.S. economy.’’ Entrepreneurs 

who are now household names like Steve Jobs, Bill Gates and Jeff 

Bezos, developed ideas and produced new products and services 

that improved the quality of life for people around the world. In the 

process, they improved our position in the global economy by creating employment opportunities for communities and served as engines of wealth creation. Newly created wealth, in turn, is re-invested in new economic enterprises that further enrich our communities. 

Why is someone who helped establish a plant science research institute, research park and an ag investor conference here to talk 

to the small business committee you might ask? I am here because 

plant science and ag innovation are impacting both of the trends 

I just described. 

According to the Report to the President of the United States 

from the Task Force on Agriculture and Rural Prosperity, prospects 

for innovation in agricultural and food industries are evidenced by 

their attractiveness to private-sector venture capital. Recent years 

have seen a sharp increase in venture capital directed at these sectors, especially for information technology and biotechnology innovations. According to AgFunder, during 2014-15, venture capital 

SBREP-219A with DISTILLER

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funds invested at least $6.9 billion in a range of agriculture-related 

innovations, including precision agriculture and e-commerce food 

marketing. Most of these venture capital investments have been directed at U.S. firms, but some have involved major investments 

with firms located in Europe, Israel, China, and elsewhere. Last 

year that figure approached $9 Billion. To give you context, when 

I started the Ag Innovation Showcase in 2009, that figure was less 

than half a billion dollars. 

Federal and state research institutes use a variety of means to 

collaborate with the private sector as does the Danforth Plant 

Science Center. Some of the venture capital startups are spinoffs 

from innovations developed in these laboratories or through joint 

research efforts with private firms. Other major contributors are 

the more than 100 federally-funded U.S. Land Grant Colleges and 

Universities, which are key providers of STEM training as well as 

innovators across many sectors, and have contributed to U.S. world 

leadership in many high-technology fields. Innovations emanating 

from these institutions find their way into industries through scientific publications, patents, direct university-industry partnerships, and STEM-trained graduates. Furthermore, these institutions help create internationally-competitive firms and industries. 

Now I would like to tell you more about how the Danforth Center 

has contributed to the creation of a vibrant innovation ecosystem 

which is anchored by some of the best and brightest scientists in 

the field, world class facilities; greenhouses, growth rooms, tissue 

transformation, computational genomics and more. In the last 20 

years, we have established networks of individuals and organizations that help strengthen the ecosystem; inventors, investors, 

business development experts, key industry players who become 

acquirers of technologies and/or companies, thought leaders, and 

more. 

A sub point of our mission statement is to, strengthen the economy of the St. Louis region. This seems a noble goal, but again, 

why should we, a research institute, care so much about building 

an ecosystem that supports innovation and entrepreneurship? 

In addition to addressing the need to feed and fuel 10 Billion 

people by 2050 without choking our planet, what is really special 

about the agtech and food tech innovation is that it is one of the 

few undertakings today that help bridge our nation’s urban vs 

rural divide. Our discoveries are the basis for creating products 

and services that meet critical needs of farmers and ranchers, food 

processors, food manufactures, distributors and grocers. Young people who are tech savvy now have an outlet to put that love and understanding of technology to use in their communities. Imagine a 

kind of ‘‘Geek Squad’’ in rural communities across America that 

can be deployed to help get a tech heavy piece of equipment up and 

running again in minutes or hours rather than days. 

Let me share briefly some of the measurable outcomes that we 

have achieved. In 2008 the Danforth Center partnered with a leading real estate developer to build the first leg of our research park; 

The BioResearch & Development Growth Park, BRDG Park for 

short. Although still in its early phase of development, we can 

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point to some tangible results. Today the BRDG Park is home to 

14 companies that employ nearly three hundred people. Of these 

14 companies, six are from our region and eight are transplants 

from; Germany, Israel, India, and across the U.S. Furthermore, 

BRDG Park companies and Danforth Center spinoffs account for 

close to $200 million dollars of investment capital drawn to our region. Since 2013 two of our BRDG Park companies have been sold, 

offering financial rewards to their investors. 

When we built BRDG park we partnered with the Saint Louis 

Community College to create a workforce training program to provide skilled hands at the bench, a key element of any bioscience 

talent pool. This two year post high school training program boasts 

a 95 percent placement rate and graduates have been hired to 

work in institutions like the Danforth Center, Monsanto, Washington University and companies throughout our region at salaries 

upwards of $45,000 per year. The majority of trainees are young 

people who come from disadvantaged neighborhoods or are older 

workers who have retooled to start completely new careers. One example of such a trainee is a gentleman named Dave Busby. Dave 

worked for more than 15 years making truck seats for the Chrysler 

plant in St. Louis. When the plant closed Dave, who was in his 

mid-thirties, needed to start a new chapter in his working life. He 

typed the words auto plant technician into a job search program on 

his computer and stumbled upon the community college’s ‘‘Plant 

and Life Science Technician Training Program.’’ He had not taken 

a math or biology class since his sophomore year in high school and 

wondered if this training program was really for him. But he took 

a chance and enrolled, graduated in two years and was hired by 

Danforth Center. Dave has been with the Center for over five years 

and today he is the assistant director of our tissue transformation 

core facility. 

For the last ten years the Danforth Center has partnered with 

the Larta Institute to host an annual investor conference, the Ag 

Innovation Showcase. This event brings the agtech community 

from more than 25 countries together to create synergy between 

the multitude of products and projects that are contributing to the 

explosive growth of the industry. Central to the event is the ‘‘Voice 

of the Farmer’’ featuring farmers from across the U.S. who share 

their challenges with innovators who can address them in cost effective, environmentally sustainable ways. Since inception, these 

entrepreneurs have raised more than half a billion dollars in investment capital. Several of the companies have chosen to locate in 

our region. 

In 2016, with the help of an EDA planning grant, we launched 

a 600-acre innovation district called 39 North, home to the Danforth Center, BRDG Park, Helix Center Incubator, Yield Lab accelerator and Monsanto Company. The district is designed to attract 

talent, ideas and capital. Today St. Louis is home to nearly 1000 

plant science Ph.D.s, and nearly 45 companies have formed as 

startups or migrated from other regions because the ecosystem enables the path from discovery to commercial product with remarkable speed. Current operations of the Danforth Center, BRDG Park 

and Helix Center are estimated to generate a total annual output 

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impact of more than $250 million on the St. Louis regional economy. 

That’s Agtech, and that’s real progress. 

Thank you for inviting these comments, I am happy to answer 

any questions. 

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Good morning and thank you Chairman Blum, Ranking Member 

Schneider, and members of the Subcommittee for the opportunity 

to share with you some thoughts regarding this important topic. 

My name is Peter Nelson, and I am the Vice President of Agricultural Innovation at Memphis Bioworks Foundation, a nonprofit organization focused on assisting early-stage life science companies 

grow their businesses by supporting and funding entrepreneurs 

and building critical components missing in a region’s entrepreneurial ecosystem. This work as included incubating and supporting agricultural ventures for over a decade and providing 

thought leadership in the sector. My entire career has been focused 

on creating new ways for farmers to connect with technology and 

value-added opportunities and this is my passion. In my role at 

Memphis Bioworks, I am fortunate to have the opportunity to serve 

as President of AgLaunch, a joint initiative with Tennessee Department of Agriculture. 

By creating the AgLaunch partnership, we have matched a regional player in life science technology commercialization with an 

extensive food and agriculture network, ensuring AgLaunch’s work 

is substantiated by farmers and provides benefit to both the urban 

and rural communities. 

AgLaunch envisions a transformed regional agriculture and food 

economy centered around farmers, innovation, and equity. It was 

conceived as part of Tennessee Governor Bill Haslam’s Rural Challenge in 2012 and specifically named in the 2016 Governor’s Rural 

Task Force recommendations focused on economic development. 

Supported by a diverse group of partners including Tennessee 

Farm Bureau and land grant universities, AgLaunch’s mission is to 

attract, create, and grow agtech startups, facilitate the development of new agriculture and food value-chains, and build collaborative farmer networks, with a commitment to intentional inclusion. 

While AgLaunch is anchored in western Tennessee, the agricultural leadership in the state understand that the problems and opportunities in this area are simply too important to not consider 

the regional impact of AgLaunch’s work. This includes a particular 

focus on Memphis and the Mid-South Mississippi River Delta region, a five-state area that includes counties in Arkansas, Kentucky, Mississippi, Missouri, and Tennessee. 

The Memphis and Mid-South Mississippi River Delta region is 

characterized by its highly productive agricultural system, firstclass logistics capabilities, and a large number of food and agricultural companies. This region is also a home to chronic poverty, population decline, health disparities, and limited opportunity. The 

global agricultural innovation revolution is offering the ability to 

rethink how Tennessee and its surrounding region organizes assets 

to create a leading innovation ecosystem for food and agriculture. 

As this Subcommittee addressed in its last hearing on this topic 

in October 2017, there is increasing interest and investment in the 

development of new agricultural technologies and the creation of 

new startup companies to bring innovations to market. This interest is driven by the need to feed a growing population, changing 

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food consumption patterns, increased pressure on natural resources, and the dramatic reduction of the cost of enabling technologies such as genomic sequencing and big data. 

Farmers have traditionally been at the forefront of developing & 

implementing new innovations and technologies. These early innovations addressed direct needs on the farm and created solutions 

that could worked economically and efficiently. Over time, the role 

of the farmer in adopting new technologies for their farms has been 

one of ‘‘customer’’ rather than ‘‘partner.’’ Currently, there is a large 

amount of new technology, much of it unproven, that gets presented to the farmer, and an increasing disconnect between those 

creating new innovations and the farming community. As was stated in the October 2, 2017 Memorandum to the Members of this 

Committee, ‘‘The most important player in the agtech industry is 

the most likely to be ignored as new technologies are developed, 

which has led to extraordinarily low rates of technology adoption 

by farmers.’’ 

It is this disconnect between those who are creating new innovations and farmers that is dramatically lowering the probability of 

success for new agricultural ventures, which is in turn giving investors pause and slowing down the rate of adoption of these new 

innovations on the farm. The ‘‘Farm Centric Innovation Model’’ 

championed by AgLaunch is changing the agricultural investment 

thesis into new ventures and ensuring that farmers are part of the 

development process much earlier. 

AgLaunch has initiated a 3-phase startup program called 

AgLaunch365, which leverages the farm-centric philosophy developed to propel agtech firms. Phase I concentrates upon developing 

the company’s business model and initiates the customer discovery 

process. Phase II allows teams to complete their minimal viable 

product and prepare for spring field trial plans with designated 

farmer partners through the AgLaunch Farmer Network. Phase III 

provides the participating startups with direct access to 

AgLaunch’s network of innovative farmers to actually ‘‘groundtruth’’ those products or services. 

The value proposition for the startup to participate in AgLaunch 

programming is access to technology-embracing and curious farmers through the AgLaunch Farmer Network, which allows the 

startup founders to acquire direct, unbiased feedback and incorporate those observations, ideas, or modifications into the development of their product. Participating farmers get access to new technology and an opportunity to participate in way in the growth of 

the new innovation. The AgLaunch approach provides better alignment between those innovative firms and their potential to become 

a commercial success. 

Since the creation of the program, dozens of companies have received support some of which are featured on our website at: http:// 

aglaunch.com/aglaunch-portfolio. All of the AgLaunch startups 

have received valuable insights and feedback from members of the 

Farmer Network and many are pursuing active partnerships with 

those producers. 

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A good example of the power of the AgLaunch Farmer Network 

is a startup company called AgVoice, which has a voice recognition 

technology for agriculture that simplifies crop scouting and other 

recordkeeping efforts and was validated through the AgLaunch 

Farmer Network. The validation process included answering simple 

questions like: ‘‘Will the technology work in the cab of a tractor or 

combine when it gets noisy?’’, ‘‘Will the ear piece stay on your ear 

when you’re in the middle of scouting a hot cotton field?’’, and ‘‘Will 

the lexicon be robust enough to record all the farm practices necessary and will the records be accurate?’’ The results of this realworld field trial generated data and farmer testimonials used to 

raise further investment and attract additional customers. The participating farmers were rewarded with opportunities for equity and 

distribution rights in the company, furthering engaging the farmer 

in the success of the startup. 

The AgLaunch Farm Centric Innovation model and Farmer Network does not work without early stage capital sources that are 

aligned with AgLaunch’s approach. AgLaunch has worked to assemble several tools that can be leveraged and replicated in order 

to provide early-stage capital to agtech companies in the program. 

These include: 

1. Working with Tennessee Department of Agriculture, 

AgLaunch is piloting a cost share program for farmers to get 

reimbursed for hard costs associated with on-farm trials of precommercial technology vetted and assisted through the 

AgLaunch program. 

2. Supporting Memphis Bioworks’ venture capital firm, 

Innova Memphis with an AgTech fund specifically focused on 

early stage investments in rural-based innovative agricultural 

startups. 

3. Encouraging the efforts in Tennessee of Launch Tennessee, a statewide entrepreneurial organization, and Life 

Science Tennessee to create an SBIR/STTR cost share program, as well as support applicants in the surrounding states 

that have similar programs. 

4. Creating a network of other agricultural venture investors 

that have an interest in agricultural innovation and connecting 

them directly with farmers and the field trial network to better 

understand the AgLaunch pipeline. 

AgLaunch programs are scalable to other regions, and key 

learnings are distributed through various initiatives to ensure that 

the Farm Centric Innovation Model has maximum impact. 

The October 2, 2017 memorandum states that ‘‘agricultural regions are competing to be the next great innovation hub, which has 

spurred rural revitalization.’’ In many cases, agtech startups directly benefit from being located in regions closer to their customer 

base: the farmer. In so doing, they are building small businesses 

in rural areas and delivering innovation and technology solutions 

to a sector that needs it to remain competitive in a global marketplace. AgLaunch is positioning Tennessee and the surrounding region to be a leading innovation hub, while also sharing key 

learnings to other states and regions through various initiatives to 

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ensure that the Farm Centric Innovation Model has maximum impact towards changing the investment thesis for agtech and accelerated adoption rates of technology. 

We believe in the role of a farmer as a partner in innovation, not 

just a first customer and this philosophy will change the current 

agricultural investment thesis. This will create more successful 

startups and bring forward solutions that more efficiently address 

real-world agricultural problems. Mr. Chairman, I would like to 

thank you again for inviting Memphis Bioworks Foundation to 

share with you the AgLaunch story and the work we have undertaken and look forward to addressing any questions that the committee members may have. 

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