Can technology feed the world’s population?

Syngenta’s Michael Mack says the need to grow more food on the same amount of land is pressing, and that organic farming is not the answer; technology is.

Based in Basel, Switzerland, Syngenta AG is a $12 billion agribusiness involved in the discovery, development and manufacture of products designed to improve crop yields and food quality.

Formed in November 2000 in an agreement between Swiss drug maker Novartis, which spun off its crop protection and seeds business, and AstraZeneca, which spun off its agrochemical business, Syngenta has become a competitor to the US giant Monsanto in the at times contentious world of agricultural technology.

It employs 24,000 people in more than 90 countries and earned $16.26 a share in 2008. The writer talked with Mack about the challenges facing ag-tech.

How will the race for better agricultural productivity versus the demand for more affordable food play out?

We are exclusively focused on improving crop yield. And the reason is that the world’s population is expected to go from 6.5 billion to perhaps 9.2 billion, a 50 per cent increase, over the next 30 to 40 years.

If we’re going to be able to grow food on the same amount of land, which is really primarily the objective, then we’re going to have to invest in more technology to help raise the yields of crop on existing land.

I must dispute the point about making food more affordable. That’s not a key objective today in many parts of the world. In North America and Western Europe, for example, food as a percentage of gross domestic product-or more specifically, food as a percentage of consumer disposable income-is actually quite low. In Europe, it’s about eight or nine per cent.

Having said that, there are many places in the world where food as a percentage of consumer disposable income is 60 to 75 percent.

There, of course, lowering the cost of food would enable communities to enjoy higher productivity and better education. But it’s not the volume of food. It’s about making sure that agriculture can be a more prosperous industry to be in.

Better agricultural productivity allows local growers to generate a surplus so they can feed themselves and generate income by feeding others. In some cases, low-priced food is what’s standing between a subsistence grower and a grower that would be a commercially viable.

What’s the best way to improve productivity yields, and in which parts of the world is this most needed?

Every crop is different. But by and large, growers need basic fundamentals in place to get beyond subsistence farming. For example, access to credit in order to buy ag inputs. Access to markets to be able to sell the produce that comes off their land.

In theory, one can have access to credit and inputs, but if the infrastructure’s not there roads and bridges, stores and facilities to take care of grain or produce when it gets off the farm the grower won’t be enabled.

So once this framework is in place for a grower to be productive, they need the best inputs. This means high quality commercial seed, fertilizer and water in some cases, irrigation. And they need some good products that we offer, such as crop protection chemicals, to be sure that productivity can be advanced up to four times.

What is the biggest single competitive issue in your world today?

We are a research and development company in a heavily regulated industry. When you do R&D, it’s only about the science and the math, the data and the facts.

A world that doesn’t respect science or real facts but instead worries about the politics and hyperbole concerns me. When I hear someone say, “Oh, it’s healthier because I think I read somewhere that somebody said these sorts of things are good for me,” I cringe.

Those “sorts of things” tend to cleave against science. I worry what our world will be like in a regulated industry where science and facts don’t prevail. If regulators somehow become over pressurized by advocacy groups, then our currency, our freedom to operate, is diminished.

What’s the score between ag-tech and the alarmists so far?

If I want to be optimistic, I can show you 40 years’ worth of new products that have come down the pipeline and are in the hands of growers. The productivity of the agriculture industry has substantially advanced over this time. So we’ve made progress despite this environment.

By the way, having opponents is a good thing. It’s important for this industry, to have people say, “OK, I want to check on this. I want to be able to see the quality of these studies.” I’m not suggesting that people shouldn’t have a role in understanding the quality of the science. It ought to be transparent.

But in the end, where is everyone’s collective responsibility to say, “If we want a sustainable planet and if we’re prepared to follow the facts, we should do so”?

Everybody seems to agree with the math: Population by 2050 will increase from 6.5 billion to 9.2 billion.

Once you start down this avenue of, “Let me prescribe what’s best for the planet,” the debate soon comes around to the question of how many people are best for the planet. But I don’t see anybody suggesting that we cap and trade world population.

My point is that you can’t get that done without technology, whatever that word “technology” means. And you can’t have new technology if you’re not willing to invest in R&D.

Backing up a little further and I’ve said this to politicians and regulatory (agencies), and in some cases senior people in major countries around the world you can’t expect us to invest in R&D if on the other side of this, the outcomes are arbitrary and it looks like it’s just about politics and horse-trading.

What will advances in agricultural technology mean for the price of food in the future?

We’re in the industry of helping to produce grains such as corn, soybeans, wheat, rice and then oil seed canola, for example. Each is different. In some cases they’re a food crop and in others they’re used to crush oils to be used for food processing.

Corn in the main is grown to feed livestock. Soybean is mainly grown to be crushed for oils, where the residual soybean meal is used to feed livestock. So a lot of corn and soybean is directed to livestock, which, of course, means meat.

Wheat and rice, on the other hand, are dietary grains that are used for food. Some people conflate these, but they are not the same, which creates confusion when discussing rising food costs and rising food prices.

For example, in 2008 it was widely reported that the price of rice had gone up by 300 per cent, and that rice, typically sold at $200 or $250 per metric tonne, had soared to more than $1,000.

To the uninformed that sounds like rice went up by a factor of four. It does to me. Wouldn’t it to you? What was underreported was that the amount of rice that is traded globally is only about six or seven per cent of the total rice crop.

So 90 plus per cent of the rice crop was grown and distributed and sold for $250 per metric ton. But if you had to buy it on the open market, in some cases you were looking at $700 to $900.

So for whom did the price of that grain go up for? Was it for a few, say, five per cent of the market, or was it for 95 per cent of the market? And when it came to food, if you were trying to eat rice at $1,000 a metric tonne, that was a very different outcome than the many, many millions of people who grow their regular rice crop the way they normally do and consume it locally. Nothing changed for them.

Where I’m headed with all this is that there’s nothing simple about food costs, because depending on who you’re talking about, and whether you’re talking about grain or whether you’re talking about food and who consumes it, (it) tends to have a different story behind it. There are a few generalisations one can make.

Adapted from Chief Executive Magazine