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Ag research sees investment boom

By Jennifer M. Latzke

The quest to improve efficiency on the farm for the producer and ultimately on the plate for the consumer can be a profitable one. In recent decades, there's been a boom in agricultural research investment from the private sector. A team from the U.S. Department of Agriculture Economic Research Service found that in 2010, global private-sector investments in research and development of agricultural inputs topped $11 billion--nearly double the $5.6 billion from 1994.

With advancements in biotechnology, stronger intellectual property rights protections, and a growing global marketplace for agricultural advancements, private companies are seeing bigger benefits to investing in agricultural research on their own and in public-private collaborations.

And the results are benefiting farmers in the field.

Booming population

It's a number that has received a lot of press in recent years--the world population is estimated to reach 9 billion by 2050, which means food production will have to be increased by up to 70 percent in order to feed those new mouths. That factoid is what keeps many companies in the business of agricultural research.

Whether it's the race for the first commercially available biotech wheat, an answer to agronomic production challenges, or the search to improve sustainability, there's a plethora of growth markets for private investment into agricultural research, and not just in the United States. According to the report "Research Investments and Market Structure in the Food Processing, Agriculture Input, and Biofuel Industries Worldwide" by Keith O. Fuglie, et. al., in 2007, "...the private sector spent $19.7 billion on food and agricultural research (56 percent in food manufacturing and 44 percent in agricultural input sectors) and accounted for about half of total public and private spending on food and agricultural R&D in high-income countries."

Many companies cite the rising population and its correlated rising demand for food, fiber and fuel around the world as a prime example of why it's important to literally put their money where the mouths are.

"If you look at a 20-year timeframe, ag research has moved exponentially," said Rick Turner, global market head of Wheat & Oilseeds for Bayer CropScience. "Looking to the future, we are rapidly becoming more sophisticated, especially in the ability to manage and analyze large amounts of data to help make plant innovations work better and faster in our challenging environment."

"We have made an incredible amount of progress," explained John Combest, media communications manager for Monsanto Company. "However we believe we've only scratched the surface of what is possible and what will be needed to meet growing demand. Agricultural innovation has and will continue to have a major impact around the world."

Growth markets

From 1994 to 2010, the world saw a boom in the research and commercial viability of biotech crops and crop inputs. Across sectors, the most rapid growth in agricultural research and development from 1994 to 2010, according to the USDA-ERS report, was for crop seed and biotechnology. Spending in that sector went from $1.5 billion in the mid-1990s to nearly $3.5 billion by 2010.

This was at the start of the commercialization of genetically modified crops. It was an era that brought farmers Bt corn, Roundup Ready soybeans and cotton and more. And in that same period the United States led private investment, accounting for more than one-third of all global agricultural research investments.

Today, while there's still a lot of investment in corn, soybean and cotton research, companies are starting to look to cereals--specifically wheat.

"Wheat is the second most-produced cereal crop after corn with more than 650 million tons produced every year," Turner said. "However, wheat productivity is increasing at less than 1 percent annually, while global demand is growing at approximately twice that rate."

Historically, the gains in wheat variety development have come out of the public sector. Universities have spent millions on breeding programs and personnel, so we now are seeing a new boom in collaborations between public researchers and private companies.

Working together

According to the USDA-ERS report from the late 1970s to 2007, private spending on food and agricultural research and development in the United States reached an average of $4.95 billion per year, while federal and state governments invested about $4.40 billion per year. Recent debate over the 2012 farm bill in Congress touched on the need for more federal research spending.

For their parts, Monsanto and Bayer, and many more private agricultural companies--both large and small--are starting to look to collaborations with public institutions for research.

Monsanto has been a leader in supporting universities through research, scholarships, collaborations and monetary donations, Combest said. "Within wheat, Monsanto has announced several collaborations with universities, including partnerships with North Dakota State University, Kansas State University and Virginia Tech," he said. "Monsanto is working closely with the universities' breeding programs to exchange germplasm and breeding research to develop improved wheat varieties."

"Bayer CropScience is working collaboratively in public and private partnerships around the world in order to find and deliver the best solutions to today's food, feed and fiber production challenges--sooner," Turner said. "Ultimately, we need the breeding and trait innovations to come together to deliver sustainable solutions to the world's wheat farmers." Bayer will establish its first North American wheat breeding station near Lincoln, Neb., and has a collaborative agreements with the University of Nebraska, South Dakota State University and Texas A&M University to work on wheat research.

"Our public-private partnerships, like the one with the University of Nebraska, provide resources to support research that addresses important social, economic and environmental needs," Turner said. "That agreement in particular ensures that wheat remains a research focus in Nebraska for years to come, providing farmers with improved wheat varieties adapted to local climatic conditions." For UNL, and its NUTech Ventures, the collaboration means sustained employment, student internships, summer work programs and brings opportunities for external grants, Turner added.

These partnerships also encourage the next generation of scientific minds, added Sara Miller, Monsanto corporate communications manager. Recruitment into the sciences is helped when companies and universities can show that agriculture is "cool."


All of these research dollars boil down to one thing--sustainability for farmers and consumers. Miller explained that while higher yields are one thing, ag research at Monsanto ultimately means developing innovations that also reduce input use. As a company that often gets cited by anti-biotech groups, Monsanto aims for a holistic approach to research, Combest added.

"We really try to say that we bring all the tools out of the toolbox so that farmers have a choice to use the tool that meets their needs on their individual farm," Miller added. She said the most recent example of how far agricultural research has come in the past 25 years could be seen in the fields in this most recent drought.

"I had many conversations with farmers as this drought was happening and then after their harvests," she said. "Many told me that if they had had the germplasms they had 10 years ago they wouldn't have had a harvest this year."

In the end, it's the cumulative investment that helps producers, whether it's from a company or a public university. Scientific advancements take years to develop. Just like those research dollars of yesterday helped farmers in this year's drought, the investments of today's private corporations and public universities will help the farmers--and the growing number of hungry consumers--of tomorrow.

"2050 might be decades away, but if we want to feed a hungry planet tomorrow, we need to accelerate our sense of urgency today," Turner said.

Jennifer M. Latzke can be reached at 620-227-1807 or

Date: 11/12/2012


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