Germany's chems see need for more EU farm land, higher yields

21 May 2010 19:00  [Source: ICIS news]

TORONTO (ICIS news)--Europe will need more farm land and much higher yields as it shifts to a bio-based economy with agriculture at its centre, Germany’s chemical industry trade group VCI said on Friday.

Agriculture faced three challenges, namely to provide food, biofuels for energy, as well as bio-based raw materials for chemicals, plastics and other industries, said BASF executive board member Stefan Marcinowski in an update. Marcinowski heads VCI’s biotechnology portfolio.

This meant that crop output and yields needed to rise “dramatically,” he said.

The EU’s “land set aside” policies - which has promoted the idling of agricultural lands to reduce surplus production - would quickly become a thing of the past, he said.

“Industrial countries are poised for a ‘renaissance’ in term of agricultural lands, with a need for more arable land,” he said.

For Germany’s chemical industry, the move towards a bio-based economy was a big opportunity, with plant-based biomass providing renewable feedstocks for producers, he said.

However, in order to achieve a bio-based economy, Germany needed to better utilise genetically modified plant technologies, Marcinowski said.

The bio-economy would only work if it used and integrated all applications of biotechnology - an objective that had not yet been reached in Germany, he said.

Marcinowski called on the country's government to push for EU-wide comprehensive regulation to create a legally reliable framework for genetically modified products throughout the supply chain - including seeds, food products, animal feed and renewable raw materials.

As it stood, “zero tolerance” for the development of genetically modified products came at a heavy cost and created competitive disadvantages for Germany and EU firms vis-à-vis overseas producers.

As one example, Marcinowski pointed to Europe’s imports of soybeans from North America to meet the need for protein-rich animal feed. Over 95% of North American soybean crops were genetically modified, he noted.

Still, the EU commission’s recent approval for BASF’s genetically modified Amfora potato should be an encouraging signal for innovation in Europe, he said.

Meanwhile, Germany's biotech firms had successfully withstood last year’s recession and were on a “moderate growth path," he said.

Going forward, the majority of firms expected to increase their sales in the first half of 2010, he said, citing a VCI survey of 212 German bio-based firms.

About half of firms surveyed planned to increase their research and development budgets, the survey found.

Despite the eventual move toward a bio-based economy, the German biotech sector was currently facing problems raising capital, mainly because private venture firms had reduced their engagement in  biotech and agriculture, he said.

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By: Stefan Baumgarten
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