By Andy Doyle
There are still many growers who believe that new solutions will continue to appear as kinks develop in our existing plant protection armoury.
Unfortunately, this is unlikely to be the case, given that the development of new products is scaled back and that the greater part of the modern research spend is now devoted to finding genetic solutions – seeds and traits.
Our big worry in the EU is that this research is more likely to be focused on the rest of the world, given that the EU remains set against so many new biotech potential solutions due to their association with GM.
The type of traits that may be considered in the future include disease resistance, salt tolerance, heat tolerance, drought tolerance, cold resistance, etc., and other traits that influence grain characteristics as indicated in the article on pages 30 to 33 by Prof Jimmy Burke.
Increasing spend but
changing focus
At the turn of the century, overall R&D spend on agchem products globally was approximately $2.2bn. In the same year, the R&D expenditure on seeds and traits was just over half this figure at roughly $1.1bn.
By the end of 2009, the R&D spend was about equal at $2.7bn each. And in 2012, the expenditure on agchem R&D was roughly $3.15bn, while just over $3.5bn was being invested in seeds and traits.
These figures are contained in a recent report for the agchem industry called R&D Trends for chemical crop protection products and the position of the European market. It was produced by Phillips McDougall.
The report makes grim reading for EU and especially Irish tillage farmers. We have lost many actives over the past few decades and we know we are likely to lose many more in the years ahead, arising mainly from recent pesticide legislation.
But perhaps it is even more significant that there are very few new actives in the pipeline at the moment for use in the European market.
Why things change
There are three major factors that are responsible for this change in focus:
1. Increasing development costs.2. The lack of certainty re existing products.3. Opening up of new markets for older chemistry.
1 The first is the increasing cost of new product development in the EU. The report indicates that the average cost of bringing a new product to market in 1995 was $152m (€110m) and that this had increased to $256m (€185m) by 2005.
Much of the additional cost is expenditure at the development rather than research stage and is made up of field trials, toxicology research and investigations into the fate of the chemistry.
But the decreasing number of new actives is not just a matter of the cost. New requirements are frequently put in place, in combination with new thresholds for metabolites, that exist mainly because they can be measured.
And when the stroke of a pen can add millions to the development cost of a new product, and possibly even prevent its commercial release late in the development phase, this is not seen as the place where the best return can be achieved for corporate shareholders.
2 Recent product bans and withdrawals do nothing to instil investor confidence. The bottom line is that the total level of research and development expenditure continues to increase but more of it is being focused on markets outside of the EU, and it is also being diverted more and more away from chemical actives towards seeds and trait technologies.
Over the past two years, we have witnessed the suspension of most uses of the neonicotinoid insecticides, pending a further study of their environmental impact on bees specifically. If this is real, then no one would want such risk, but how could such a concern go untested during the evaluation process? Since then, we have seen the banning of methiocarb as a mollusicide pellet and yet its use as a seed dressing continues to be allowed.
3 With an ever-increasing development cost associated with new actives, the companies are looking more towards other markets where access is less complex.
The need to spray much of the world’s soyabean crops for Asian Rust has opened up a huge additional market for fungicide and even for actives that have not been widely used in the EU market for a decade or two.
This effectively means that turnover and profit can be generated at almost zero development cost and this represents a better return for the companies involved and their shareholders.
The changing Agchem sector
Most farmers will be aware that the overall number of agchem companies in the world has decreased considerably over the past three decades.
This mainly happened through acquisitions and mergers, but the net result is that there are fewer agchem companies now. In 1995, there were 34 agchem companies involved in R&D globally. By 2012, this had fallen to 17.
But it’s not just about the number of companies. The total agchem R&D spend continues to increase. The report states that there were 123 and 128 new active ingredients either introduced or in development in the 1980s and 1990s, respectively.
And, of these, roughly one third were targeted at the European market. In 2000, there were a total of 70 new actives in the pipeline and this had fallen to 28 by 2012.
Parallel to this is changing market positioning. The McDougall report shows that Europe was the largest agchem market between 2003 and 2011. But since 2012, it has been overtaken by Asia.
This is also reflected in the fact that in 1995, 19 of the 35 global companies involved in research for new active ingredients were based in Europe and the US, with the balance in Japan.
But by 2012, the balance had swung to seven in Europe and the US, and 11 in Japan.
Despite the decreasing number of companies, the overspend on R&D continues to increase. In 2000, the total spend was put at roughly $3.3bn (€2.4bn) and, in 2012, this was put at just over $6.7bn (€4.84bn).
So the overall spend is substantial, but what it is being spent on is changing dramatically. In 2000, roughly two-thirds of the spend was directed towards agchem R&D but, by 2012, 53% of the larger R&D spend was focused on seeds and traits – ultimately, new variety development with new traits to meet new and evolving variety requirements.
As well as these facts, Europe has had the lowest annual growth in the size of its crop protection market in recent years.
This adds to the reduced interest in developing new actives and products for this market and we in Ireland are among the most intensive users in field-crop production.
But the attractiveness of the European market for multinational companies continues to decrease, as does the spend on crop protection R&D targeted specifically at our market.
In the mid ’80s, when the development of new crop protection active ingredients was at its peak, almost 35% of the global R&D spend was targeted at the European market.
At that time, the European farmer was getting about 4.1 new agrochemicals introduced per annum but this has now fallen to 1.2 per annum and these may only be relevant to some specific crops and countries.
Under 8% of the R&D spend is now being focused on the European market and its farmers also do not have access to the range of GM crop technology available elsewhere on the globe.
Decreased interest in
EU R&D focus
The McDougall report highlights the following reasons for the fall-off in R&D investment focused on the European market:
The mature nature of EU-15 markets.The greater attraction of the developing markets, which are driven by volume growth.The non-acceptance of GM seeds and crops.The shift in overall R&D investment to seeds and traits for non-European markets.The investment in agrochemical R&D is being used to support the GM seeds sector.The harsh regulatory environment in the EU.A very challenging re-registration procedure in place since 1991.The hazard-based assessment protocol since 2011.A challenging future
For those who grew up in an agchem-driven world of crop production products, the future will be quite different to the past.
But then for those who grew up in the world prior to crop protection products, the past three decades represented an enormous change. The need for plant protection will not go away but some of the target uses may be replaced by seed traits in future.
However, as the need for new actives and new families of products grows due to the increasing challenges from resistance in all markets, the likelihood of new agchem solutions is decreasing.
This is not a sudden phenomenon and it has been behind changing policies governing how we use our existing actives and is behind the imposition of the sustainable use directive and integrated pest management on the European farming system.
For a long time now, the need to protect the products we have has been increasingly evident and this responsibility falls back to the individual grower and adviser. That said, nature will still win out in the end. Unlike in the past, there may well be no replacements for the products we have lost, or are about to lose, because the search for new replacements for the European farmer continues to lessen.
The overall impact of these developments is that European farmers now have far less new technology to drive agricultural production and competitiveness compared with our competitors from other areas of the world.
As well as this, the European farmer has very little access to GM seed technology. But the greatest long-term risk now comes from the fact that the currently increasing investment in new seeds and traits may also bypass Europe.
Much of this technology may depend on GM techniques and, in time, some may not. For this reason, we have seen large R&D companies exit the EU market in recent years, which means that the focus of their investment money is more likely to be on markets and market requirements outside of Europe, which may require totally different traits.
The fact that the majority of the research effort will be focused on markets outside of the EU will lessen the chance of useful traits being developed for the EU market and for our farmers.
This is perhaps the biggest long-term risk to crop production in the EU as our competitors come to enjoy more and more yield enhancement capability, added value or cost saving traits.
And, while the production of some of these new crop traits may remain prohibited in the EU, there is nothing to suggest that the EU will now allow importation while preventing cultivation.
The hypocrisy of regulation is more likely to continue than not, but we must acknowledge that recent events in the GM arena may help precipitate some useful changes in the years ahead.
But until such change is definite, focused seed trait investment for the EU market that use technologies related to GM seems unlikely.
By Andy Doyle
There are still many growers who believe that new solutions will continue to appear as kinks develop in our existing plant protection armoury.
Unfortunately, this is unlikely to be the case, given that the development of new products is scaled back and that the greater part of the modern research spend is now devoted to finding genetic solutions – seeds and traits.
Our big worry in the EU is that this research is more likely to be focused on the rest of the world, given that the EU remains set against so many new biotech potential solutions due to their association with GM.
The type of traits that may be considered in the future include disease resistance, salt tolerance, heat tolerance, drought tolerance, cold resistance, etc., and other traits that influence grain characteristics as indicated in the article on pages 30 to 33 by Prof Jimmy Burke.
Increasing spend but
changing focus
At the turn of the century, overall R&D spend on agchem products globally was approximately $2.2bn. In the same year, the R&D expenditure on seeds and traits was just over half this figure at roughly $1.1bn.
By the end of 2009, the R&D spend was about equal at $2.7bn each. And in 2012, the expenditure on agchem R&D was roughly $3.15bn, while just over $3.5bn was being invested in seeds and traits.
These figures are contained in a recent report for the agchem industry called R&D Trends for chemical crop protection products and the position of the European market. It was produced by Phillips McDougall.
The report makes grim reading for EU and especially Irish tillage farmers. We have lost many actives over the past few decades and we know we are likely to lose many more in the years ahead, arising mainly from recent pesticide legislation.
But perhaps it is even more significant that there are very few new actives in the pipeline at the moment for use in the European market.
Why things change
There are three major factors that are responsible for this change in focus:
1. Increasing development costs.2. The lack of certainty re existing products.3. Opening up of new markets for older chemistry.
1 The first is the increasing cost of new product development in the EU. The report indicates that the average cost of bringing a new product to market in 1995 was $152m (€110m) and that this had increased to $256m (€185m) by 2005.
Much of the additional cost is expenditure at the development rather than research stage and is made up of field trials, toxicology research and investigations into the fate of the chemistry.
But the decreasing number of new actives is not just a matter of the cost. New requirements are frequently put in place, in combination with new thresholds for metabolites, that exist mainly because they can be measured.
And when the stroke of a pen can add millions to the development cost of a new product, and possibly even prevent its commercial release late in the development phase, this is not seen as the place where the best return can be achieved for corporate shareholders.
2 Recent product bans and withdrawals do nothing to instil investor confidence. The bottom line is that the total level of research and development expenditure continues to increase but more of it is being focused on markets outside of the EU, and it is also being diverted more and more away from chemical actives towards seeds and trait technologies.
Over the past two years, we have witnessed the suspension of most uses of the neonicotinoid insecticides, pending a further study of their environmental impact on bees specifically. If this is real, then no one would want such risk, but how could such a concern go untested during the evaluation process? Since then, we have seen the banning of methiocarb as a mollusicide pellet and yet its use as a seed dressing continues to be allowed.
3 With an ever-increasing development cost associated with new actives, the companies are looking more towards other markets where access is less complex.
The need to spray much of the world’s soyabean crops for Asian Rust has opened up a huge additional market for fungicide and even for actives that have not been widely used in the EU market for a decade or two.
This effectively means that turnover and profit can be generated at almost zero development cost and this represents a better return for the companies involved and their shareholders.
The changing Agchem sector
Most farmers will be aware that the overall number of agchem companies in the world has decreased considerably over the past three decades.
This mainly happened through acquisitions and mergers, but the net result is that there are fewer agchem companies now. In 1995, there were 34 agchem companies involved in R&D globally. By 2012, this had fallen to 17.
But it’s not just about the number of companies. The total agchem R&D spend continues to increase. The report states that there were 123 and 128 new active ingredients either introduced or in development in the 1980s and 1990s, respectively.
And, of these, roughly one third were targeted at the European market. In 2000, there were a total of 70 new actives in the pipeline and this had fallen to 28 by 2012.
Parallel to this is changing market positioning. The McDougall report shows that Europe was the largest agchem market between 2003 and 2011. But since 2012, it has been overtaken by Asia.
This is also reflected in the fact that in 1995, 19 of the 35 global companies involved in research for new active ingredients were based in Europe and the US, with the balance in Japan.
But by 2012, the balance had swung to seven in Europe and the US, and 11 in Japan.
Despite the decreasing number of companies, the overspend on R&D continues to increase. In 2000, the total spend was put at roughly $3.3bn (€2.4bn) and, in 2012, this was put at just over $6.7bn (€4.84bn).
So the overall spend is substantial, but what it is being spent on is changing dramatically. In 2000, roughly two-thirds of the spend was directed towards agchem R&D but, by 2012, 53% of the larger R&D spend was focused on seeds and traits – ultimately, new variety development with new traits to meet new and evolving variety requirements.
As well as these facts, Europe has had the lowest annual growth in the size of its crop protection market in recent years.
This adds to the reduced interest in developing new actives and products for this market and we in Ireland are among the most intensive users in field-crop production.
But the attractiveness of the European market for multinational companies continues to decrease, as does the spend on crop protection R&D targeted specifically at our market.
In the mid ’80s, when the development of new crop protection active ingredients was at its peak, almost 35% of the global R&D spend was targeted at the European market.
At that time, the European farmer was getting about 4.1 new agrochemicals introduced per annum but this has now fallen to 1.2 per annum and these may only be relevant to some specific crops and countries.
Under 8% of the R&D spend is now being focused on the European market and its farmers also do not have access to the range of GM crop technology available elsewhere on the globe.
Decreased interest in
EU R&D focus
The McDougall report highlights the following reasons for the fall-off in R&D investment focused on the European market:
The mature nature of EU-15 markets.The greater attraction of the developing markets, which are driven by volume growth.The non-acceptance of GM seeds and crops.The shift in overall R&D investment to seeds and traits for non-European markets.The investment in agrochemical R&D is being used to support the GM seeds sector.The harsh regulatory environment in the EU.A very challenging re-registration procedure in place since 1991.The hazard-based assessment protocol since 2011.A challenging future
For those who grew up in an agchem-driven world of crop production products, the future will be quite different to the past.
But then for those who grew up in the world prior to crop protection products, the past three decades represented an enormous change. The need for plant protection will not go away but some of the target uses may be replaced by seed traits in future.
However, as the need for new actives and new families of products grows due to the increasing challenges from resistance in all markets, the likelihood of new agchem solutions is decreasing.
This is not a sudden phenomenon and it has been behind changing policies governing how we use our existing actives and is behind the imposition of the sustainable use directive and integrated pest management on the European farming system.
For a long time now, the need to protect the products we have has been increasingly evident and this responsibility falls back to the individual grower and adviser. That said, nature will still win out in the end. Unlike in the past, there may well be no replacements for the products we have lost, or are about to lose, because the search for new replacements for the European farmer continues to lessen.
The overall impact of these developments is that European farmers now have far less new technology to drive agricultural production and competitiveness compared with our competitors from other areas of the world.
As well as this, the European farmer has very little access to GM seed technology. But the greatest long-term risk now comes from the fact that the currently increasing investment in new seeds and traits may also bypass Europe.
Much of this technology may depend on GM techniques and, in time, some may not. For this reason, we have seen large R&D companies exit the EU market in recent years, which means that the focus of their investment money is more likely to be on markets and market requirements outside of Europe, which may require totally different traits.
The fact that the majority of the research effort will be focused on markets outside of the EU will lessen the chance of useful traits being developed for the EU market and for our farmers.
This is perhaps the biggest long-term risk to crop production in the EU as our competitors come to enjoy more and more yield enhancement capability, added value or cost saving traits.
And, while the production of some of these new crop traits may remain prohibited in the EU, there is nothing to suggest that the EU will now allow importation while preventing cultivation.
The hypocrisy of regulation is more likely to continue than not, but we must acknowledge that recent events in the GM arena may help precipitate some useful changes in the years ahead.
But until such change is definite, focused seed trait investment for the EU market that use technologies related to GM seems unlikely.
SHARING OPTIONS