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Syngenta CEO Michael Mack | Can farming be sustainable and productive at the same time?
By Kim Da-ye
Floods in Thailand, which is claimed to be the worst in half a century, devastated part of the rich farmland, instigating fear for possible food shortages in the region as the Southeast Asian country is the world’s largest rice exporter.
In the mean time, the world celebrated on Oct. 31 the birth of the world’s “7 billionth” baby. Different countries claimed their citizens as the special one, and their photos ― most notably the Filipina in the red knitted hat ― garnered the front pages of major newspapers across the globe.
And the world continues to witness a decrease in farmland. The size of arable land on Earth increased from 1.28 billion hectare in 1961, peaking at 1.41 billion hectare in 1992, according the statistics by Food and Agricultural Organization (FAO) of the United Nations. But it gradually climbed down to 1.38 billion hectare in 2009, the latest year the FAO data is available.
The combination of climate-change-related disasters, more people to feed and shrinking farmland sounds like a doomsday scenario. The stability of a society hinges on food security ― some attribute the cause of political unrest in the Middle East to the soaring food prices as the region has increasingly become dependent on imports of wheat whose price soared 75 percent worldwide between June and December 2010.
So it comes as a surprise when Syngenta CEO Michael Mack said on the prospect of food security that the world is heading toward a better place.
“I mean, many senior politicians and agricultural ministers around the world understand the nature of these challenges. People care a big deal about health and nutrition. I am optimistic that some of the progresses are underway,” Mack said in an interview with Business Focus during his two-day trip to Korea.
Considering that Syngenta, the world’s largest agrochemicals maker and the third largest seed supplier based in Basel, Switzerland, makes pesticides and owns a vast portfolio of seeds including genetically modified organisms (GMOs), Mack’s optimism may not be free of his firm’s interests.
Mack said, “Yes,” when asked if pesticides and GMOs are necessary to feed the world’s population in the future. At the same time, he stressed on sustainability, saying, “We are likely to see using less pesticide all together.”
Global agricultural companies do not enjoy good publicity as their products are perceived to endanger biodiversity and to have been designed to control the market.
The trend of preference over organically grown food and fear against GMOs in some part of the world, especially in Europe, apparently undermines not only the business model of those agricultural companies but also their ambition to make farming more modern and productive.
The two vital values in farming ― productivity and sustainability ― are clashing. Can the world achieve both?
Different sides of sustainability
The way of the sustainable farming Syngenta advocates is a near-perfect scenario.
Under the slogan of “Grow more from less,” the firm says that technology improves farmers’ productivity within a given space, reducing the need to create more farmland by removing natural habitats like forests and to consume other types of resources like water. It says that would eventually protect biodiversity.
In its 2010 annual report, the firm quoted a study by Stanford University that found land larger than Russia has been saved from cultivation in the last 50 years because of farmers’ use of modern technology.
Syngenta’s space-saving technology involves use of pesticides and GMOs.
For instance, the company’s annual report says that herbicides can help saving water by killing weeds and lower the need to till the land, explaining that agriculture uses 70 percent of the world’s all available fresh water and 40 percent of that goes wasted. The soil of the non-tilled land absorbs water better, and is protected against erosion, the firm says.
The technology, however, isn’t perfect. A type of a herbicide would kill all kinds of plants with the common trait the herbicide is targeting. The crops the farmers are actually cultivating would be no exception. As a result, herbicide makers had to genetically engineer the seeds to have resistance against the herbicide. Now, the herbicide and the GM seeds come in one package.
Take the case of Roundup, a signature glyphosate-based herbicide made by Monsanto, the world’s top producer of genetically-engineered seeds and herbicides based in the U.S. The agricultural giant is the major rival of Syngenta with a much worse reputation.
Monsanto’s Roundup accompanies seeds with “Roundup-ready” traits which the company patented.
While some criticize such practices as vile attempts to control the market, weed resistance to glyphosate emerged as an annoying problem.
Nine types of weeds in the U.S. and 12 worldwide including horseweed and Johnson grass have been identified to be resistant to glyphosate herbicides and many more, and showing more tolerance to them, Syngenta says in its website. The Swiss counterpart also developed its own version of Roundup called Touchdown Total as well as the NK-Brand crops with the “Roundup Ready” trait that has been genetically engineered under a license from Monsanto.
Syngenta may be shifting its attention from the business that is as much controversial as it is lucrative.
In addition to mentioning less use of pesticides in the future, Syngenta CEO Mack said, “We are in an industry that has traditionally come up through targeting really specific pests… A big area of science we are now working on is how to improve the productivity in absence of pests.”
Mack indicates to corn hybrids with the “Agrisure Artesian” technology, which Syngenta calls the industry’s first water-optimized technology.
The company claims that by using available moisture more efficiently, the corn hybrids could preserve 15 percent of the yield from being lost to draught. Hybrids are seeds or plants produced from controlled cross-pollination.
Interestingly, Agrisure Artesian technology did not involve genetic engineering but conventional breeding techniques.
As a leading agricultural research and development body with a $1 billion annual investment, Syngenta identified multiple genes responsible for drought protection mechanisms. Those genes were then combined into the hybrids through cross breeding.
The hybrids with native water-efficient features, however, won’t stay entirely natural as the artificial herbicide-resistant trait will be incorporated to make corn more marketable.
With Syngenta’s heavy emphasis on biotechnology, what does Mack think of organic farming and anti-GM sentiments? Europe’s banning of GM crops, for instance, has long frustrated multinational agricultural giants.
“Either organic or not organic, it’s not a religion in Syngenta. We are not against it,” Mack said, adding that Syngenta sells both organic and synthetic chemicals.
He explained that whether it is synthetic or organic, a product needs to satisfy three conditions ― safe, working and affordable ― and that some organic chemicals are less safe than their synthetic counterparts.
“The first use of crop protection technology dates back to several thousand years ago. This is an old industry that has gotten better and better and safer and safer,” Mack said.
On GMO, the CEO is firmer, saying that it is a tool to help improve productivity.
Some may strongly protest against such a notion, but others may agree.
Bill Gates, the founder of Microsoft and Bill & Melinda Gates Foundation, wrote last year in a note that the ideological divides between productivity and sustainability could hinder the fight against hunger and poverty.
“Some have tried to restrict the spread of biotechnology regardless of its potential to increase productivity. They act as if there is no emergency, even though there are already 1 billion hungry people in the world…” Gates said.
“We simply won’t be able to meet that goal without using all the scientific tools at our disposal.”
Food security in Korea
Korea is one of the least self-sufficient countries in terms of food among developed countries.
Korea’s food self-sufficiency ratio ― the portion of domestic production against total consumption ― dropped down to 51.4 percent in 2009 from 56.8 percent in 2002. The reliance on imported grains is particularly severe with the self-sufficiency ratio being merely 26.7 percent in 2009, this year’s report by the Samsung Economic Research Institute (SERI) showed.
The country, however, does not grow GM crops locally. A policy paper by the Korea Rural Economic Institute (KREI) says that Korea approved 60 kinds of GM crops as edible and 44 as suitable for animal feed as of March 2008. None has been permitted for cultivation. Instead it imports GM crops ― 1.03 million tons of soybeans and 0.99 million tons of corn in 2007 mainly as animal feed.
Korea does not cultivate GM crops for several reasons. Firstly, the local agricultural industry is rather small, so GM seed providers simply do not see adequate profit for their investment.
The KREI’s policy paper shows that 52 countries were permitting cultivation of GM crops in 2007 and the total area of the GMO-planted farmland reached 114.30 million hectares ― a 67-fold increase from 1996.
The U.S. accounts for 50.5 percent of the area, followed by Argentina with 16.7 percent and Brazil, 13.1 percent. While those countries’ agricultural industry consists of large-scale corporations, most Korean farmers work individually on a small scale because legally, they need to directly cultivate the land to own it.
In addition, one government researcher who did not want to be named said GM crops don’t suit Koreans’ common characteristic _ impatience. Herbicides that come in a set with GM crops tend to kill weeds slowly over a few weeks while Korean farmers prefer to see pests killed instantly.
And importantly, Korean farmers and consumers, in general, fear GMOs. Research by the KREI found that 71.5 percent of surveyed consumers felt uneasy about GM food while just 5 percent didn’t. More than 53 percent of the former said that the safety of GMOs hasn’t been fully proven. Some 37 percent said that GMOs may result in something unexpected happening to mankind and the environment in the future.
Without the aid of biotechnology, how can Korea ensure food security amid the worldwide agflation, an increase in food prices?
One official of the Rural Development Administration (RDA), which belongs to the agricultural ministry, said that the country will make sure maintaining its near-100 percent self-sufficiency for rice because not only is it Koreans’ staple food, but also it grows well in the Korean climate and soil.
One challenge is the soaring domestic demand for meat and, therefore, animal feed. Livestock should ideally consume more grass than grain, but the shortage of grass has forced farmers feed animals more grain, boosting dependency on imports, the official said.
To solve the imbalance, farmers increasingly plant crops on the resting rice paddy in winter.
But in the long term, the government doesn’t rule out the cultivation of GM crops.
“We are approaching this issue conservatively. We are getting ready because we don’t want to be left behind in 20 or 30 years when everybody does GM. It will be more of a government-led initiative than one run by corporations with commercial interests. It’s like arming in an emergency,” one government official said.
Despite the absence of the GMO sector, the Korean agricultural industry has close ties to Syngenta whose pesticides make up about 10 percent of the domestic market.
It also supplies seeds. The Swiss firm, in fact, entered the country when Novartis acquired Seoul Seeds in 1997. Syngenta was formed when pharmaceutical juggernauts Novartis and AstraZeneca merged their agribusinesses.
The seed business isn’t entirely free of controversy. Vegetables, fruits and flowers we consume come from seeds and saplings that large agribusinesses have patented. Those companies invest in developing improved seeds, and farmers pay royalties for their intellectual property.
The Korean agricultural ministry projected in October that farmers would have to pay up to 290 billion won in royalties over the next ten years if the country doesn’t develop its own seeds.
Agricultural juggernauts’ expansion of their seed portfolio is seen largely as predatory here with news reports claiming foreign firms took seeds native to Korea and patented them.
Mack highlights the brighter side of the “plant variety protection” royalties.
“Think about it. If you are a farmer, some of the costs include your labor, mechanization and fertilizer. If you get free seeds that aren’t very good, you waste them,” he said. He lists resistance to diseases and viruses and uniformity in color, appearance, taste and aroma as good qualities.
“There is an expression, ‘You get what you pay for.’”
Korean farmers may not prioritize productivity but moan about global agribusinesses. When asked about the strengths and weaknesses of the Korean agriculture sector, however, Mack would only applaud them.
He mentioned the productivity at five metric tons of rice per hectare, the high quality of the rice and its consistent taste. He added Korean farmers have a high bar for food safety and constantly meet it.
“Farmers are very entrepreneurial and very smart ― they know their land. They are good risk managers. People in Wall Street could learn a lot from farmers,” Mack said and laughed.
Syngenta’s earnings
at a glance
Syngenta recently posted its third quarter earnings — sales were up 21 percent from a year ago at $2.66 billion partly due to growth in Latin America. Mack refused to forecast next year’s performance but said he will look forward to it
“with confidence.” Syngenta is apparently optimistic on the future of the agriculture market it has come to control to an extent, and has no plans to diversify its business model outside the industry.
“It will be a terrible loss to lose our focus. The growth opportunity for us is really significant in the area we are already in,” Mack said.
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