A few weeks ago, the Irish Farmers Journal met Marc Reichardt, global director of agricultural business operations at Bayer. He is also a member of the executive committee of crop science and head of commercial operations with Bayer.

Asked why Bayer wanted to purchase Monsanto, Marc said the move was strategic. Bayer has a strong chemically focused solution base and a relatively small seed business while Monsanto is a seeds giant with a small genetic chemical presence.

Together the combined companies will have a much stronger presence in the chemical, seeds, digital and biologicals arena. Bayer alone invested 11.7% of its turnover in R&D in the past year and Marc expects a similar level of investment to continue into the future. However, he acknowledged that the focus of this investment will now spread across all four major market sectors, rather than mainly chemicals, which was the case in the past.

Looking to the future, Marc said the major focus of the company is expected to be for biological/genetic solutions. This is becoming increasingly important around the globe as resistance and registration constraints limit product availability and lifespan.

Opening doors

The change from the traditional chemical focus of the Bayer business will bring other changes also. The focus on areas and solution arenas which are broadly new is likely to result in many new companies coming into the crops protection arena with very different approaches to plant protection and crop productivity. Indeed, Bayer personnel also told us the company is very open to co-operation with third parties to help target specific end results, so increased interaction with universities, research institutes and private companies can be expected.

Resistance development

One of the main challenges to the continued use of plant protection products is the development of resistance, both in plants such as weeds and in organisms that cause disease. While problems with active efficacy might seem big for those of us in Ireland or Europe, problems are seen as considerably bigger when or if they occur in the Americas or central Europe, regions from which much of the world’s traded grain is exported.

In this regard there are real worries about the efficacy of some families of fungicide active against Asian rust in Brazil. A few years ago, genetics supplied a control for this problem but since the varieties became susceptible the challenge to fungicides has increased considerably. Marc said there has been a huge reliance on fungicides to control this disease and he suggested that they could run out of control products in the short term.

For this reason, Bayer is studying the mechanisms of resistance development and how it might best be prevented in the future. We all know that having a number of chemical families with activity against a specific disease is a great starting point but this is now more of an issue in many parts of the globe where plant protection products are used and where actives are being lost from the market for either resistance or regulatory reasons.

This research is also looking to find new target sites in plants to achieve control with very different chemistry to what is available today. If new sites can be found in plants, pests or fungi then it may be possible to find new actives that will more successfully control crop problems. Finding totally new mechanisms for control would effectively mean a fresh start for the whole plant protection process.

Business in other countries

At the time of our visit, Argentina was introducing new laws that would affect plant breeders’ rights and intellectual property in GM varieties. Asked what the company would do if new laws did not protect the rights of companies, Marc said Bayer would most likely withdraw from that market.

Interestingly, at the time of the interview in mid-September, Marc said there were 10m hectares of wheat under water in Argentina.

Asked about the way the company does business in other countries, especially developing countries, Marc said many deals, especially those with vulnerable farmers, are done on the basis of barter rather than cash. This is partly to secure payment but it is also an anti-inflationary measure due to the falling value of currency in some such countries. So it helps to take out much of the currency risk.

As much as 30% of farm business could be done in this way in some countries, Marc said.

Digital offerings

During the event, Bayer announced digital products were to be among the solutions it would sell to its customers in the future. Asked if there are a number of these already being sold to customers, Marc said most are still only in the development stage. He was unsure as to how many of these might be commercialised, ie would it be the product itself or the service that supports it that would be commercialised?

The concept is that the company will sell less chemical active in future than it did in the past and the hope is that it can sell the digital services that enable this to happen via more effective application timing and targeted location for application.

At the moment most of these products are being developed, piloted or evaluated, Marc said. One of these projects involves the use of digital farms – ForwardFarming – which it is trialling in a number of countries in an attempt to produce more economically sustainable farms.