Road to GMO?

Swiss agricultural firm Syngenta is testing the effectiveness of its crop protection chemicals in the cornfield in Baria, southern Vietnam. / Korea Times photo by Kim Da-ye

Biotech giants find opportunity in food insecurity

The severe drought in the United States this year is set to take its toll on Korean households’ dining tables.

The U.S. accounted for some 40 percent of global corn production in 2010 while the U.S., Argentina and Brazil together produced more than 80 percent of the world’s soybeans, according to data from the U.S. Department of Agriculture. The U.S. is also the world’s largest exporter and third largest producer of wheat after China and India.

The drought, which has and will further cut the output of those key crops, has driven up prices globally, causing a massive chain reaction to the cost of what we eat.
In Korea, Lotte Confectionery announced in October that it would raise the prices of popular snacks by up to 20 percent because of hikes in ingredient costs. As animal feed accounts for about 70 percent of Korea’s cereal imports, meat is expected to become more expensive in the near future.

Agflation ― inflation led by an increase in the prices of agricultural products ― isn’t just a problem this year. It is increasingly repeated, either caused by nature, such as the drought in Russia in 2010 and the following ban on exports of wheat or by man, for example the use of corn-based ethanol.

Every crisis comes with losers and opportunities. For agriculture companies, agflation can provide chances. It boosts a sense of urgency over food security and creates a favorable environment for them to market products they have developed to improve their yield.

For Swiss agrochemical and biotechnology giant Syngenta, the environment is ripe for it to expand its operations in Asia, where many countries are yet to embrace genetically modified crops for cultivation. Asia Pacific, where farming is mostly done on a small-scale generates a relatively small portion of the firm’s total revenue at $2 billion in 2011, compared to North America’s contribution at $3.67 billion and Latin America’s at $3.36 billion.

Asia, especially Southeast Asia, is a potentially lucrative market, considering the vast areas of fertile land with a friendly climate.

The region’s adoption of biotechnology ― the refined word for genetic modification ― can benefit both the region and the company.

Asia’s meat consumption is soaring fast, as is the demand for animal feed, for which the region relies on imports.

For businesses, genetically modified (GM) seeds are more profitable than non-genetically modified hybrids not only because they have yield-boosting traits but also because they can be sold in packages with matching herbicides and chemicals.

Syngenta held a workshop for Asia-based journalists in Ho Chi Minh City last week. The firm’s message throughout the three-day event was clear _ the adoption of biotechnology is necessary for the region’s food security, which is a very complex issue.

Small-scale farmers

Biotechnology has so far been adopted mostly by large farms. One of the most common genetic modification traits is resistance against the herbicide glyphosate. It is disseminated by helicopters over a large area, making farming in hundreds of acres with a small number of people possible.

Syngenta says that GM crops suit small-scale famers amid the shrinking and aging of the rural population across Asia.

The central idea of the argument is that the seeds get to have more and more traits through genetic engineering and cross breeding. They are now not only resistant to certain herbicides and insects but also contain more nutrition and survive drought better.

Small-scale farmers would actually reap greater benefits from biotechnology than large-scale farmers because seeds alone increasingly provide comprehensive solutions to those with less resources, said Paul Teng, a leading scholar on food security at Nanyang Technological University in Singapore. The pro-genetic modification professor attended the workshop in Ho Chi Minh City.

Take the case of corn, a best seller for Syngenta. The “triple corn stack,” which has been approved in Brazil and Argentina, means three biotechnology traits have been put together in one seed.

One comes from the gene bacillus thuringiensis, which generates a substance that is toxic for the larvae of borers but has so far been safe for vertebrates. Another is resistance against glyphosate. The other is the newly developed Agrisure Viptera, protection against 14 pests found above ground.

Syngenta launched several new traits last year that can be added to corn in the future.

The Agrisure Artesian trait helps the crop survive drought better, and was discovered through the cross-breeding of different kinds of corn. Another called Enogen accelerates the conversion of starch to sugar in plants, speeding up the process of making ethanol out of corn.

On a trip to a test field in Baria, southern Vietnam, Andrew Guthrie, regional director of Syngenta Asia Pacific, examined a corn stalk that grew little above knee level. Inside the gap between the stalk and leaves, he found a tiny worm.

Guthrie says that the borer-resistant trait would help in this case because worms often live deep inside those gaps and pesticides do not reach there properly.

Complexity behind being food-secure

Better productivity via the use of GM seeds cannot alone solve food insecurity. Yield is actually a very small part of the whole picture.

The Rice Bowl index developed by Teng and Syngenta shows the complexities of food security. The index largely considers four areas _ farm-level factors, environmental factors, policy and trade, and demand and price. Each area has a string of metrics, which indicates that it is a complex issue.

Cereal yield by kilogram per hectare, among the farm-level factors, weighs only five percent on the index. Other equally or more heavily weighed factors include water resources, ease of doing business, population and inflation.

Those complexities lead the evolution of the agriculture businesses. Syngenta says that the firm differentiates itself from others by providing more integrated solutions.

The Nucoffee program in Brazil is one example. Farmers pay Syngenta in coffee beans for a crop protection program that includes chemicals, training and advice. The Swiss company then sells the beans to roaster and shares the premium gained for better quality with the farmers.

But in Asia, the adoption of GM crops for cultivation will still take time.

Biotechnology still suffers an unfavorable public reputation with opponents arguing that their long-term harm to nature is yet to be proven.

And the fact that a few multinational firms control the genetically modified organism (GMO) markets does not help. Their practices of selling the GM seeds and matching herbicides and pesticides in a package are regarded as attempts to dominate the market.

The opponents of GM crops also say that the expensive biotechnolgy seeds do not benefit small-scale farmers because better yields alone cannot improve their living. Advocacy group Friends of the Earth International said in a 2008 statement that small-scale farmers in India still suffer from “water scarcity, low crop prices, poor infrastructure, poor access to credit and a lack of rural employment.”

Much of Syngenta’s efforts go to evangelizing the use of biotechnology. Korea, for instance, isn’t likely to become a grower of GM corn or soybeans but the company still needs to convince the government to approve imports of biotechnology crops for both food and feed.

The Korean government does not allow cultivation of GM crops but has authorized imports of several kinds, mainly for animal feed.

Simon Barber, head of regulatory affairs for Syngenta’s Asia Pacific operation, quoted a 2011 study in his presentation that says it takes 13.1 years on average to initiate a discovery project for a new biotechnology trait and develop and launch it commercially. Companies spent an estimate of 5.5 years on registration and regulatory affairs as of 2011.

The whole process from discovering a new GM trait and getting it authorized is also expensive. It cost $136 million per trait on average between 2008 and 2012.
At the end of the day, convincing farmers of the benefits of planting GM crops will matter most.

Tran Kim Tuyet, a 44-year-old farmer in Baria runs a three-hectare corn farm as a test field for Syngenta.

Before working with the Swiss firm two years ago, he grew hybrid corn on a four-hectare plot and produced 23 tons of corn. Using Syngenta’s crop protection, he now produces 18 tons. His yield has improved by 0.25 ton per hectare.

While the pilot program is funded by Syngenta, Tran who manages the farm with another man says he is willing to pay for the crop protection in the future.

When asked if he would also be interested in GM crops, however, Trans said he does not know what they are. <The Korea Times/Kim Da-ye>