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October 09, 2009

Monsanto forecasts Africa to increase biotech crop planting

by Aya Takada

Monsanto Co., the world’s biggest seed producer, expects African countries to increase planting of genetically-modified crops to boost food security and economic development as the region is affected by climate change.

Burkina Faso plans to double the area planted with the company’s insect-resistant cotton next year from 129,000 hectares (318,766 acres) this year, said Natalie DiNicola, director at Monsanto’s public policy and sustainable yield division. Maize modified to tolerate drought may be introduced to the sub-Saharan region by 2017, she said.

Farming in developing countries needs $83 billion of annual investment for production to feed the world in 2050, the United Nations’ Food and Agriculture Organization said in a paper this week.

Monsanto is introducing new modified seeds to boost yields as part of a plan to double gross profit from 2007 to 2012. Africa is affected by climate change as more than 95 percent of sub-Sahara cropland is rain-fed, DiNicola said. Africa is the only continent where per-capita food output is falling, as a lack of investment and technology curbs yields, she said.

“Genetic modification technology will be increasingly accepted by developing countries as they face the problem of how to feed rapidly growing populations,” said Takaki Shigemoto, a commodity analyst at research and investment company TOS in Tokyo. “Crops modified to produce better yields under limited water supply will be attractive to them.”

Developing countries may experience a drop of between 9 and 21 percent in overall potential agricultural productivity as a result of global warming, the FAO said in a Sept. 30 report. Poorest regions with the highest levels of chronic hunger are likely to be among the worst affected by climate change, according to the report.

St. Louis-based Monsanto is the largest producer of GMO crop varieties. Area planted with GMO crops, including corn, soybeans and cotton, topped 1.8 million hectares in Africa last year as Egypt and Burkina Faso began production of modified corn and cotton respectively, according to the International Service for the Acquisition of Agri-Biotech Applications.

In the western African country, less than 50,000 hectares were planted with modified cotton in 2008, the industry group estimates. Area planted with GMO cotton rose by more than 158 percent this year, covering about 25 percent of Burkina Faso’s cotton acreage, as the biotechnology is forecast to boost yield by 35 to 45 percent, DiNicola said. “Cotton is a very important income-generating crop for smallholder farmers,” she said. Increased yield makes “a very big impact on their livelihood,” she added.

Monsanto’s earnings will fall in fiscal 2010, the company has forecast, ending eight consecutive years of gains as U.S. farmers spend less and Chinese competitors sell cheaper generic versions of its Roundup herbicide. The shares have rallied 6.6 percent this year, closing at $74.97 in New York yesterday.

Monsanto is conducting field tests on corn modified to increase yield under drought conditions for commercialization in 2012 in the U.S., the world’s largest exporter of the grain. The new varieties will help achieve a goal of doubling the crop yield to 300 bushels per acre by 2030, DiNicola said. The company is cooperating with government and non-profit organizations to develop drought-tolerant corn suitable for Africa and may release varieties in the region five years after the U.S. introduction, she said.

Corn yield in sub-Saharan Africa is about one metric ton per hectare, compared with eight tons in the U.S. and the global average of five tons, according to Monsanto. Drought-tolerant crops could boost African yields by 20 to 35 percent in 10 years, DiNicola said. “Water is definitely a very serious challenge for agriculture today, and that’s likely to get even more challenging going forward,” DiNicola said.

About 218 million people in Africa, or around 30 percent of the total population, are estimated to be suffering from chronic hunger and malnutrition, according to the FAO report last week.

Bloomberg


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