10 April 1998

Biotechnology? We

aint seen nothing yet

If you think todays biotech

seeds sound high-tech and

revolutionary, wait till you

see what agricultural

biotechnologists have up

their sleeves, says

Alan Guebert (below)

ACCORDING to many of the speakers at the Ninth Annual National Forum on Agriculture, mere words cannot describe the imagination-shattering impact biotechnology will have on global agriculture.

But several presenters at the early March meeting gave it their

breathless best when addressing the Forums 1998 theme: Hello Dolly: The Biotechnology Revolution for Agriculture Has Arrived. Although Dollys cellular origins are somewhat in doubt, that fact did not keep these bio-believers from heaping hyperbole on biotechs future.

A California investment banker, Sano Shimoda, president of BioScience Securities Inc, got off the best boast. Ag biotech, Shimoda preached to the gathered choir of more than 400 industry leaders, will "rank on the commercial Richter scale alongside major transforming technologies such as the steam engine, the transistor and the computer."

Maybe; but todays facts suggest thats tall talk for an industry yet in its infancy.

To date, most ag biotech has been applied to just one side of the genetic equation: On "input traits," or genes that control specific plant functions like herbicide tolerance or insect and disease resistance. The major benefit – and derived value – of the input technology has accrued directly to American farmers.

As such, US farmers have flocked to the magic seeds. In 1995, farmers planted zero acres of genetically enhanced seeds like Roundup Ready maize and soyabeans or biotech maize and cotton. In 1999, reckons Carrol Bolen, vice-president of Pioneer Hi-Bred, US farmers will plant about 30m hectares (75m acres) with them, or nearly one in five of all major crop acres.

As expensive and high-tech as todays biotech seeds are, however, developing single gene input traits is cheap and simple compared to where the future big money and inestimable value lies in ag biotech – output traits. These farm products, be they crops or livestock, will be designed and produced for specific end-use customers. Examples include high oil maize for poultry feed ingredients, milk which contains flu vaccine and hogs that produce insulin.

But theres an ocean of difference – and billions of dollars – between input trait and output trait biotech, explains Bonnie Wittenburg, a highly respected securities analyst who specialises in ag technology.

"Input trait technology has costs and benefits that are easy to quantify," notes Wittenburg. "A single herbicide resistant gene replaces chemicals. Simple, right? Also, it fits the produce-it-first, worry-about-selling-it-later approach to many farm markets."

Output trait technology, however, "is much more complicated," she continues. "First you have to find a market for the genetically enhanced crop before you even grow it. Then you must genetically build the seed, an extremely complex process because there are hundreds of thousands of genes in the plant genome and we know very little how these genes work together."

These enormous uncertainties – finding the right genes, fitting them together, producing a crop, finding a market – have turned the ag biotech game into one "that only the biggest of the big boys can play," she notes.

Those big boys, according to investment banker Shimoda, include Monsanto, DeKalb Genetics, Dow AgroSciences, DuPont, AgrEvo, Mycogen, Novartis, and Pioneer Hi-Bred. All are hustling to carve out their share of the not-yet certain "phuture pharm" market.

And they are stacking pieces of the farm-to-food chain together faster than they are stacking genes. DuPont, for example, spent £1.8bn to form a joint venture with Pioneer Hi-Bred called Optimum Quality Grains LLC. DuPont also dropped £900m last August to acquire Protein Technologies Intl, the soyabean processing division of Ralston Purina.

Given DuPonts global markets, deep pockets, research ability, link to seed giant Pioneer, and now a food processing arm, the companys clear design is to have its hand in every aspect of food production from the farmgate to the dinner plate. And to create value – and capture a portion of that value for itself – at every step in the process.

At least thats the plan, suggests Wittenburg. "It all sounds very good and quite interesting," offers Wittenburg, "but the tricky part – gene identification and application – is yet to come. And sometimes its hard to fool Mother Nature," she cautions. Not to mention consumers and farmers.

Many Forum speakers addressed the European reluctance to readily accept bio-farm crops. Most, however, viewed it as a public relations problem: Once consumers saw the enormous benefits of such technology, opposition will wilt.

"If we develop a maize that will alleviate, say, arthritis," asked Carrol Bolen, of Pioneer Hi-Bred Intl, "will consumers find it acceptable? Yes," he noted emphatically.

Perhaps, cautioned Noel Devisch, president of the Belgian Farmers Union, in a later presentation – but not without labelling the product as a genetically modified organism. "Europe is not afraid of biotech foods," he explained, "but we very much are in favour of at least letting consumers decide."

Part of that decision, Devisch added, includes the deep connection European consumers have with European farmers. "Labelling GMOs and giving consumers choices includes the idea that our consumers want the choice to see their neighbouring farmers survive. If GMOs threaten the farmers, I would expect consumers to take that into account."

One American farmer at the Forum – one of the very few – echoed the Belgian farm leader. LaVonn Griffeon, a fifth generation farmer from central Iowa, suggested "pharmings" new age may threaten the most important biological agent in agriculture – people. People, she suggested, could fast become a very small cog in the

massive global biotech machine.

Before American agriculture

either plunges or is pulled into biotech farming, Griffeon warned: "Lets be sure all our technologies serve man. Lets have them put small and mid-sized farms on

the cutting edge, not just the bleeding edge."