Agriculture R&D goes multinational, global

Agricultural research is going global. It enables multinational companies to develop new technologies that are site-specific.

Worldwide, seeds and biotechnology are the most  researched farming inputs.

The intensity of research and development (R&D) was particularly high in the late 1990s and early 2000s when many new Gene Modified or GM crop varieties were being commercialized, according to a new study on research investments in food, agriculture and biofuels conducted by the US Department of Agriculture’s Economic Research Service.

More recently, research intensity has declined somewhat but was still over 10 percent of the value of annual seed sales in 2009.

That is money spent on research as a percentage of market sales to make seeds and biotechnology the most research and development-intensive agricultural input industries worldwide.

“Discovery” companies invest heavily in screening new chemical, biological, and pharmaceutical compounds for useful traits that can be patented and developed commercially. These are often large companies with hundreds of millions of dollars in annual product sales. 

The largest of these companies in the crop chemical, seed and trait and animal health industries invest 9 percent or more of their annual product sales in research. 

“Second-tier” or midsized companies in these industries typically invest somewhat less in research, around 7 to 8 percent of annual sales. 

Smaller companies spend an average of 2 to 4 percent of annual sales on formal research. Rather than new product discovery, much of the research cover regulatory and testing costs of bringing new off-patent products and product formulations to the market,. 

Small agricultural biotechnology companies are an exception, often heavily focused on research despite their size. These highly research-intensive, “startup” companies seek to commercialize new scientific discoveries or provide larger firms with specialized technical services. Funded through venture capital, “angel investors”, equity investments by large firms and initial stock market offerings, many of these high-risk ventures fail. Successful startups are often subsequently acquired by larger firms. 

While their overall R&D spending is relatively small, these firms are an important source of new innovations. 

With the exception of small and medium-size biotechnology companies, larger firms invest a greater share of sales in research.

The more than $2 billion spent by large discovery crop chemicals companies on research is 9 percent of their sales. Second-tier discovery companies spend about 7 percent of sales on research, or less than $2 billion. Other manufacturers allocate about 2.3 percent of sales to R&D. 

Several of the large crop chemical companies (BASF, Bayer, Syngenta, Dupont and Dow) are also large seed and biotechnology trait discovery companies. 

Crop protection chemicals and animal health are the next sectors with the highest R&D, although somewhat lower at about 8 percent per year. 

The crop protection chemicals sector has been heavily affected by changes in government regulations governing the health, safety and environmental impacts of new and existing pesticide formulations. Instead, a rising share of R&D spending has gone toward meeting these regulatory requirements and, as a result, a smaller share has gone to new chemical discovery. 

“Advances in molecular genetics and stronger intellectual property protection over biological discoveries have increased incentives for the private sector to invest in crop and animal breeding and genetics research,” the study observes. 

Rising wages and the migration of farm labor to cities in many parts of the world have increased demand for farm mechanization, strengthening incentives for private R&D into new kinds of farm machinery. 

Even though the markets for fertilizer and animal nutrition are relatively large, profit margins are low and manufacturers lack incentives to invest much in research and innovation in these products.

An exception is animal nutritional supplements; manufacturers of these products typically spend around 2-4 percent of sales revenues on research. 

Global R&D

Because the performance of agricultural technologies tends to be site specific due to variations in weather, soil type and other environmental conditions, many of the leading agricultural input firms have located R&D facilities around the world. 

They may operate experimental and testing stations in many other subsidiary locations and countries. 

This global R&D presence not only enables firms to develop and adapt new technologies to regional conditions and more easily meet local regulatory requirements, but it may also allow them to achieve cost economies in some R&D activities.

That is, the services of highly trained personnel or specialized R&D services can be hired more cheaply by conducting certain kinds of research in other countries.

All of the leading firms and many of the second-tier firms in the agricultural input industries are multinational, marketing products across several continents. 

In 2006, member countries of the North American Free Trade Agreement (NAFTA, which groups the United States, Canada, and Mexico) accounted for about 23 percent of the global seed market and 30-36 percent of global sales of crop protection chemicals, farm machinery, animal feed and animal health pharmaceuticals (including those for nonfood animals). 

The Europe-Middle East-Africa market (which is mostly Europe) had the largest aggregate seed sales in 2006.

Asia-Pacific countries used the most fertilizers and bought the most farm machinery. 

Together, the shares of Asia-Pacific and Latin America give a rough estimate of the developing-country share of global agricultural input markets (sales in Africa, also a developing region, are relatively small and not reported separately). 

In 2006, these regions accounted for 37-51 percent of global sales of crop seed and chemicals, farm machinery, fertilizers and animal feed. 

Global trade in agricultural inputs has also grown rapidly over the past two decades. Between 1990 and 2007, international trade in animal breeding material grew by 260 percent, and trade in farm machinery grew by 190 percent. Trade in crop protection chemicals and crop seed also grew over the period.

Original article here

USDA: US farmers planting most corn since 1937

By DAVID PITT

The Associated Press

DES MOINES, Iowa —

Farmers nationwide are anticipating more profit from corn than other crops this year and planted 96.4 million acres of it this spring, the most in nearly eight decades, the U.S. Department of Agriculture said Friday.

The new acreage number, based on farm surveys from early June, reflects a 5 percent increase from last year and is the largest amount of planted acres since 1937, when the nation's farmers planted 97 million acres of the crop.

The push is coming from higher corn prices and the expectation that corn demand will remain high thanks to exports, livestock feed and ethanol production, said Garry Niemeyer, president of the National Corn Growers board.

Farmers each fall review the prices of fertilizer, seed and other chemicals, and the price they're projected to receive from selling the grain. Many concluded that corn would be a better bet than other crops, such as soybeans, he said.

"They felt like they would probably make more money on corn," said Niemeyer, a corn and soybean farmer in Auburn, Ill.

And if the heat and lack of rain continue in corn-growing states, the increased planting could help offset losses due to the weather. A significant drought would drive up prices since demand for corn would remain strong despite a diminished supply.

However, higher corn prices mean livestock farmers have to pay more to feed their hogs and cattle, which means meat prices could climb at the grocery store. Higher prices also could impact the cost of other food that contains corn products, such as breakfast cereal, bread, salad dressing and chips.

"The good news is we did plant a lot more corn acreage this year. Because of the dry and the heat, we're losing yield by the day," said Paul Bertels, an agricultural economist with the National Corn Growers in St. Louis. "I don't think the corn supply is going to grow tremendously this year and there is potential for it to get smaller."

According to the USDA, the nation has 3.15 billion bushels of corn in storage, down 14 percent from last year's June estimate.

Iowa — the nation's top corn producer — has the most acreage devoted to corn at 14 million, compared to 14.1 million in June 2011. Illinois increased to 13 million this month from 12.6 million last year, while Nebraska inched up to 9.9 million from 9.85 million, according to the USDA.

Record amounts of planted acreage are expected in Idaho, Minnesota, Nevada, North Dakota, Oregon and South Dakota.

The benchmark that analysts use is the price for corn that gets delivered by farmers in December, following the year's harvest. On Friday, corn for December delivery rose 1 cent to $6.33 a bushel, which is where corn has been trading this week and is significantly better than $5 to $5.50 price range the market has seen since April.

Copyright The Associated Press

Greening India’s agricultural economy

Pro-farmer, eco-freindly: Natural manure
from vermi-compost avoiding use of chemical
 fertiliser adds to food safety initiatives.

G. CHANDRASHEKHAR

Pro-farmer, eco-freindly: Natural manure from vermi-compost avoiding use of chemical fertiliser adds to food safety initiatives.

hat India faces the daunting challenge of feeding its large and growing population with rising purchasing power amid current low level of per capita food availability has by now become a clichéd statement.

With a population of over 120 crores (1.2 billion) expanding at about 1.5 per cent a year and, thereby, adding roughly 1.8 crore (18 million) mouths to be fed year after year, the demand for food can only keep rising. Even as food and nutrition security remains under stress, it is imperative that the poor are lifted out of their poverty soon. The vantage position of agriculture to deliver ‘growth with equity’ is by now well recognised.

At the same time, demands on resources are set to propel higher, driven by demographic pressure and emerging constraints in the availability of natural resources such as water and land. So, can we have a ‘Green economy’ that pursues growth while also promoting sustainable development through more efficient use of resources?

In a recent policy brief titled ‘Ensuring Food and Nutrition Security in a Green Economy ’, the International Food Policy Research Institute (IFPRI), has pointed out that the objective of a green economy is to simultaneously work toward economic development, environmental protection and greater social welfare.

In particular, it can be achieved by reducing reliance on fossil fuel and non-renewable resources. Like many emerging economies, India is already facing the serious challenge of satisfying the basic needs of people - provision of adequate and nutritious food, water, energy and housing at affordable prices.

FOOD PRICES RISE

While population growth and rising incomes drive demand for food higher, rapidly changing food habits especially among the burgeoning middleclass are set to transform the composition of the traditional food basket. Importantly, with supply growth trailing demand growth and production costs escalating, food prices will rise significantly. This is sure to have adverse consequences for the poor, whose food and nutrition intake already stands diluted. With higher incomes, the emerging middleclass can afford to consume more fruits and vegetables, and more meat which requires much more water and land to produce.

FOOD SAFETY RISKS

In addition, as people demand more perishable and processed foods, food safety risks along the supply chain increase. These risks may also increase with more intensive crop and livestock farming through contamination with chemicals or pathogens, the IFPRI report pointed out. Interestingly, while intensifying food production can boost the country’s food security and serve the poor, it can also cause land degradation, water pollution, depletion of water resources, and new pest problems.

MONO-CROPPING IMPACT

Under Indian conditions, the frontline States of Punjab and Haryana are classic examples of how grain mono-cropping over long years has resulted in soil degradation and alarming decline in water table. Indeed, experts assert, an ecological disaster is waiting to happen. The unintended consequences highlight the need for adequate agricultural extension, effective regulation, careful pricing policies, the correction of inappropriate incentives, and policy responses that make intensive agriculture compatible with sustainable management of natural resources and the environment, the policy brief has asserted.

This is significant for India in that our farm policies must discourage sustained mono-cropping of grains and encourage crop rotation, enforce water use efficiency by pricing it appropriately and more efficient nutrient use as also have a more rational, well-dispersed national procurement policy for fine cereals.

PRO-POOR, AGRICULTURE

Experts argue that agriculture in a green economy has immense potential to address the unsustainable use of natural resources for food production; and a strategy to develop a green economy can support poverty reduction as well as food and nutrition security, if it is both pro-poor and pro-agriculture because, in low-income countries, the agriculture sector employs almost two-thirds of the labour force and generates about a third of the gross domestic product. As for India, nearly 55 per cent of the population is said to be dependent directly or indirectly on agriculture and allied activities for a living and the contribution of this sector to GDP is about 16 per cent.

Smallholders represent the bulk of the poor and half of the world’s hungry; they also depend on natural resources and ecosystem service for their livelihoods; and so a sustainable management through a green economy is bound to directly benefit them, experts point out. According to IFPRI, an integrated approach to economic development, sustainable use of natural resources and food production will avoid solutions with adverse consequences for any one sector.

TRIPLE-WIN SITUATIONS

In agriculture, such ‘triple-win’ situations can be achieved through practices that reduce negative environmental effects while increasing productivity and smallholder income. Important technologies include plant breeding and slow-release fertilisers that increase nutrient-use efficiency, integrated soil fertility management, precision agriculture, integrated pest management, and further expansion of alternative wet and dry irrigation for rice production (particularly in Asia). For a green economy, there are additional factors to be considered. To fully reflect the value of natural resources and set appropriate incentives, the full cost of environmental degradation as well as all benefits of ecosystem services should be taken into account by decision makers. New indicators to evaluate cross-sectoral impacts - food and nutrition, agriculture and natural resources - are necessary. Multiple stakeholders, especially smallholders, consultations are critical. The transition to a green economy is an opportunity to reconcile economic needs with environmental concerns while promoting food and nutrition security for poor and vulnerable people in one coherent policy framework. By giving agriculture a central role in the green economy and managing this transition effectively, the nation can accelerate its efforts directed at hunger eradication and lifting people out of poverty.

Original Article Here

Agriculture Is Solution To Unemployem

The Global Centre For  Transformational Leadership (GCFTL), an international organization  has  confirmed  an Honorary Doctorate  on the  Managing Director of the Benntronic  Company, a  leading   Kumasi   based   dealers in agro   chemicals  and    other farming inputs, Mr. Benard Kwasi Dwomo   for his  contribution  towards the development of  agriculture in the  country.

 In a citation the Vice President of the GCFTL, Rev.  Dr. Mrs. Comfort  Drusilla  Adu,  indicated  that , Mr. Dwomo  among  a few Ghanaians have played  a  lead  role to propel  the agricultural sector which is the main pivot on which  the national economy revolves.

She  noted that   part  from his  contribution to  sustain agriculture,  he has  equally dotted  branches of his company  in many parts  of the country by which  large number  of the  youth  are  making  their  living.

Speaking to this paper in  a post award interview, Mr. Dwomo  explained that  the new title confirmed on him  would  spur him up  to  do a lot more ,“ I’m very  elated by the   honour  done me  by  this great institution, the award would definitely be a motivational factor  for me  to  go  step  further,” he  remarked.

According to him,  if the vast number of  the graduate jobless persons  could  have ventured into  agriculture, the  situation of the  high rate  of unemployment among them  could  be  reduced if not  eradicated completely.

“The efforts  to eliminate  the  problem of unemployment  among  our university graduates  could be  a thing  of the  past if  they  go into  farming,’’ he said.

He  averred that  country  could boost her agricultural  sector  if such graduates  could  erase   the  notion that  portrays  farming  as the solely  reserved   job  for   the uneducated  and   rather  venture into it.

“The country stands to benefit significantly from the agric sector if those graduates would go into Agriculture,” he added.

He believed  that  the involvement of  graduates  in  farming  would be a good omen for the country  to enhance the process of  modernizing agriculture  in the sense  that  if  vast   percent  of them  were into  agriculture  it would witness  a tremendous  transformation as  technology  and modern  innovations would be  injected into the sector   to make  very attractive.

“I wonder why the country is  endowed  with  vast arable  land  yet  most   graduates  are refusing to  go into the land ,  the over dependency  on the  government to create  white  collar  for them has compounded the situation of  unemployment  among them in recent  times,” he observed.

Mr. Dwomo called   his  client farmers  to always  read and  carefully follow  the  instructions on  the chemicals  they  use  on  their crops  , “as  dealers in agro chemicals  , my humble  advice  to our cherished  farmers out  there is , they should always read and carefully follow the instructions on the chemicals  in  order to avoid over  usage which in  turn could  destroy their crops,” he advised.

From: Samuel Mensah Torbizo, Kumasi