Agricultural yields are increasing – the record world grains
harvest, most lately boosted by all-time high Australian barley and wheat
production, attests to that.
But are they rising fast enough?
Dr David Jones is worried that relentless demand growth, rising
by 1.5-2% a year for the big crops, is still more than agricultural production can cope with.
At least, without a bit of help to farmers from the products
offers by a new wave of businesses such as crop enhancement groups - such as
Plant Impact, of which he is chairman - or big data providers or precision
Replace, not enhance
Sure, the big players such as BASF, Bayer, Monsanto and
Syngenta, where Mr Jones was head of business development from 2000-07, have
plenty of products to aim at the issue.
David Jones CV
2011- : chairman, Plant Impact
2008-10: chairman, Arysta Life Science,
2000–07: head of business development, Syngenta
2000–03: led merger and integration of Zeneca Agrochemicals and Novartis
1997–2000: regional director, Asia, Africa and Australia, Zeneca Agrochemicals
1992–97: chairman, Zeneca China
1999–92: business manager, Zeneca Europe
But there are two problems.
The first is that many of these products are aimed as a
substitute for sprays deemed unsuitable for reasons such as environmental
concerns, rather than efficacy.
"Rather than producing yield increases, these are
replacement technologies," Mr Jones tells Agrimoney.com.
"Big research is being undertaken to find replacement products
in areas such as fungicides and insecticides," rather than in spurring "technical
efficiency, and the kind of big yield improvements which the likes of the US
saw up to this century".
Such comments may find an echo, for instance, with European
Union rapeseed farmers, barred from using neonicotinoid insecticides over
worries of damage to – invaluable - bee populations, whose protection has come
at the expense of rapeseed yields.
In the UK, where flea beetle infestations on rapeseed are
particularly injurious, farmers have cut sowings of the oilseed to a 13-year
Chemicals vs GMOs
The second challenge is the focus by the big farm seed and
spray companies on genetically modified crops, a technology which Mr Jones says,
while representing a "brilliant piece of science", has not lived up to many of
the expectations claimed of it.
"GMOs took over from chemical sprays. But by and large they
not matched them in increasing yields."
"A lot of funding is going to replace something which is
beginning to fade in performance, or extends herbicide tolerance because weeds
have become resistant to glyphosate" - which many of the current biotech seeds
are engineered to be impervious to, to allow weeds to be sprayed off without
"A lot of effort is in essence going into making sure we
stand still, or go forward slowly."
'Still around the
Considerable funding it is too, with Mr Jones estimating
that the big six crop input giants spend roughly half of their research and
development budgets on GM technology, which provides roughly 25-33% of
Yet genetically modified crops are not achieving much of
what was initially claimed for them, including for example the development of
so-called "output traits", offering exotic outputs from crop production – say, engineering
corn to make plastics.
"What was around the corner in 2000 is still around the
'We could increase
Gene editing - which works on enhancing the genetic material
within a species, as opposed to the more ambitious technology involved in GM – offers
one potential route for the next stage of yield enhancement.
Mr Jones - praising the technique as "elegant", and noting
that it had thus far escaped the controversy which GM has attracted – said that
this "could be a more productive way forward" for the big ag groups.
The big 6 ag input groups, by ag sector sales
1: Monsanto, $19bn
2: Syngenta, $14bn
3: Bayer, $12bn
4: DuPont, $11bn
5=: Dow, $7bn
5=: BASF, %7bn
Data for 2014. Source: Dow/DuPont
However, it would take time – unlike the potential for
raising yields immediately using existing technologies, including those being
championed by "boutique" agricultural technology companies.
"We certainly could increase yields dramatically being using
all the inputs available."
Besides the crop enhancement products championed by the likes
of Plant Impact, which aim to stimulate plants' own abilities for example to
take up nutrients or fend off pathogens, Mr Jones flagged the likes of groups promoting "microbial soil
conditioner", which aim to use microorganisms to improve soils.
There are companies which improve seed germination rates by
coating them protective films, or help plants prepare better for dry conditions.
Yet these technologies are often overlooked because farmers
are not used to using them.
What the drive to boost yields also requires "an open mind
as to what technologies to use in the field", Mr Jones says.
Still, if such technologies are so effective, why aren't the
likes of Arysta LifeScience, of which he was chairman from 2008-10, and
Syngenta leaping for acquisitions in the sector?
Besides their fascination for GMOs, "the big companies are
in cost-conservation mode," undertaking mergers between themselves to squeeze
out costs rather than looking for potential revenue growth engines, Mr Jones
Unlike the situation some five years ago, when boutique companies,
were viewed more enthusiastically as takeover targets, now they "will be in
charge of the whole process of taking their product to market".
And what they may need to rely on for success, if not championed
by a big partner, is a rise in crop prices which spurs farmers to call on every
trick to boost yields, and cash in on the bull market.
Mr Jones flags the development in the bull ag market late in
the last decade of the use of fungicides on corn as a largely preventative measure,
"for controlling diseases not observed.
"Many farmers, having seen benefits from this practice, still use
fungicides that way."
Looking ahead too, "certainly, a price spike would recruit new technology in to
Maybe agriculture investors should look to the farm inputs
sector, as well as to prices of crops themselves, as a way of exploiting the next
bull market in agricultural commodities.
Dr Jones will be delivering the keynote address on the Agri Tech day of Agrimoney Live 23 - 25 May. He will be outlining his vision for Agriculture in 2025.