24 March 2003 00:00 [Source: ICB Americas]Major agricultural chemical/ biotechnology (bt) companies continue to shift their focus from crop protection chemicals to the faster growing seeds and traits market. Growth of chemicals used in agriculture is said to be in decline as genetically modified (GM) seeds with pest control traits and other value-added inputs continue to pour into the market. Global acceptance of biotechnology of crops is also accelerating despite opposition worldwide.
"The big impact on the market is on the crop protection chemicals side, where we are seeing a decline essentially in revenues around the world as new biotech traits are coming in. That means we have to be flexible and adjust accordingly as market dynamics shift from the chemical side to the seed side," said Tony Arnold, vice president marketing, DuPont Agriculture & Nutrition, at a recent agriculture conference.
Growing acceptance of GM seeds as alternatives to crop protection chemicals is revealed by the increase in the acreage of biotech crops worldwide last year. According to a study from the International Service for the Acquisitions of Agri-biotech Applications (ISAAA), farmers worldwide adopted biotech crops at a double-digit pace, with 2002 global biotech acreage reaching 145 million acres, a 12 percent increase from 2001.
"Biotech crops are contributing to a reduction in pesticide usage," says Clive James, chairman and founder of ISAAA. "Bt cotton alone is estimated to eliminate the need for 33,000 tons of insecticide globally, or 40 percent of the current global use." Mr. James adds that in the US, six biotech crops planted in 2001 reduced pesticide use by 23,000 tons.
Aggregate growth of crop protection chemicals as well as conventional seeds is declining at 2 percent while the biotech seed and traits sector is growing at 16 percent, says Hugh Grant, chief operating officer at Monsanto Company. "The industry is going through a significant change mostly motivated by the farmer's needs to deliver higher crop yields and reduce production costs. As a technology provider, we're continually developing products that can make the critical difference for them in this challenging agricultural economy."
Initially focusing on crop protection, long-term growth for GM seeds is now also riding on the wave of new potential applications, which could increase biotechnology's presence around the world.
"The industry is poised to introduce a host of new genetically modified organisms with remarkable attributes ranging from crops with enhanced pest protection and nutritional value, to plant-based materials, biotech crop-derived industrial products and pharmaceuticals," says Stephen Aldrich, CEO and founder of Bio Economic Research Associates or bio-era, an independent research and advisory firm. "This portends a new wave of biotechnological innovations that will move toward commercialization in the years ahead."
However, even as the agbiotech industry embarks on a "third wave" of innovations, it continues to face ongoing concerns about genetically modified organism products, according to bio-era. In the US, the most recent concern is the contamination of food crops with genetic material designed to produce pharmaceuticals or other materials. Last month, several food industry groups urged the government to halt "bio-pharm" crops until stricter regulations can be put in place to prevent accidental contamination of other crops.
"The food industry must have a 100-percent protection standard against any contamination of the food supply. If this standard cannot be met, we will vigorously oppose the use of food or feed crops as 'factories' for pharmaceutical and industrial chemical products," says Rhona Applebaum, the National Food Processors Association's executive vice president and chief science officer.
In a recent response, the US Depart-ment of Agriculture (USDA) told the agbiotech industry that it is strengthening its inspection requirements for genetically engineered crops for pharmaceutical and industrial use, as part of an effort to protect food crops from contamination. "The Department takes these issues of biotechnology very, very seriously and we continue to work to ensure stringent regulations and the integrity of our system. We are working with the other federal agencies to ensure coordination, planning, enforcement, and to make sure that strong regulations are in place," says the USDA Secretary Ann Veneman.
According to bio-era, if concerns about contamination of food supplies could be overcome, plant-based products would present a multibillion dollar market opportunity. "One producer estimated biopharming could be a $200 billion industry within 10 years. Meanwhile, plant-based plastics, polymers, and films may begin to make inroads into a $60 billion US market dominated by petrochemical companies," the research firm reports.
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