Op-Ed: Here's Why Bayer-Monsanto Combo is Good For Everyone

06:20PM Jan 10, 2017
Robb Fraley
( Monsanto )

The following is guest commentary from Robb Fraley, Ph.D., Monsanto Chief Technology Officer

Our food and how it is grown is experiencing an unprecedented evolution thanks to incredible advances in science. Breakthroughs in biology, data science and its applications have opened up a whole new world of crop improvement possibilities for farmers, for the crops they grow, for the land they farm as well as for the people they serve – for all of us as consumers.

At the same time, agriculture is starting a much-needed transformation that is being powered by a wave of new start-ups as well as a number of existing company mergers and new business combinations. The combination of these is bringing new, innovative thinking to the industry – expanding and diversifying R&D projects and increasing the resources available to fund these R&D projects.

These changes are good for the industry, good for farmers, and good for consumers – and are absolutely necessary for meeting the rapidly- expanding food needs of our growing population.

Simply put, here’s why the Bayer-Monsanto combination in particular means more agricultural innovation that brings benefits to all of us:

  • Our two companies have complementary products: Monsanto’s business is focused on seed, biotech and data science while Bayer has a major focus on crop protection tools. Combined, Bayer and Monsanto will help growers large and small to optimize integrated solutions and improve on-farm profitability and sustainability by offering an expanded variety of more precisely-targeted seed and crop inputs. Further, there is very minimal overlap across the portfolios of the two companies and these can be readily addressed through divestment.
  • Together, we can improve the pace and scope of new innovation: Combining seed and biotech innovations from Monsanto with new crop protection tools from Bayer will also improve the pace of innovations for the farm. Currently, we develop these technologies separately, which means that one company might spend on average 10 years for development of a new herbicide product and then, only after it has been developed, would the other company begin to develop a new compatible biotech herbicide tolerant trait and breed it into commercial seed, which would likely take another 10-12 years to develop. Working together as one company, in parallel, means developing both products at the same time, and cutting the development time. This type of coordinated R&D effort will bring better, more sustainable products to farmer’s fields faster than ever before while also helping them improve the use of natural resources on their farms.
  • We’re both focused forward – helping identify new solutions for the farm: The new combined company will be focused on investing in, discovering and delivering innovations for millions of farmers around the planet. The combination itself will create opportunities that will allow us to increase R&D investments in new categories of data science and enhanced biological solutions and deliver these solutions to farmers’ fields faster than either of us could do alone. Monsanto’s business strength lies in the Americas, while Bayer has stronger presence in Europe and Asia. The combination will help ensure all farmers around the world have access to new and much-needed agricultural productivity tools in crops such as wheat, which is sorely needed.

A recent survey of 500 U.S. farmers found that they overwhelmingly believe that business combinations that enhance innovation should be approved by regulators. As I talk with growers and farm organizations around the country and the world, it’s clear they understand and appreciate the important role that innovation has played in improving their sustainability, productivity and profitability.

Inspiring Innovation

I’ve experienced first-hand how tremendous innovation leads to the development of new, unique products that improve sustainability, productivity and profitability on the farm. And innovation is contagious – once a few companies start innovating it encourages other companies to increase their R&D funding to stay competitive. This was exactly what happened when GMO crops – a technology that I’m proud to say I played a role in developing – were introduced. 

Since the introduction of GMO crops, there has been a steady increase in public and private agricultural R&D investments, and in recent years, overall investment has skyrocketed. In 2010, venture capital investments in agricultural technologies totaled about $400 million, but as of 2015, the level of investment jumped to $4.6 billion. As of 2016, more than 1,300 start-up companies were involved in the agricultural ecosystem, the survey said, including more than 130 different entities that have submitted advanced biology products for regulatory approval in just the last three years. And it isn’t just the investment community that is excited about agricultural investment. In the last two years more than 1,000 scientific publications from private and public institutions have highlighted the exciting breakthrough products that new gene editing tools, like CRISPR, can create across the healthcare and agricultural industries.

While this indeed is incredible progress, our industry is not where it needs to be. Agriculture remains highly fragmented – it is comprised of nearly 4,000 companies – which means that relatively few ag-food companies have the scale, the R&D expertise and financial resources to significantly invest in advanced technologies.

A comparison of the 2015 annual R&D budgets of some of the top companies in different industrial sectors makes this abundantly clear:

While other sectors have upped their R&D investments to spur innovation, agriculture has the societal responsibility to do the same, especially if we want to ensure that our children, grandchildren and the more than 9 billion people who will inhabit our planet in 2050 will have the opportunity to enjoy the safest and most affordable food supply in our planet’s history.

I’m convinced that the dynamic changes underway in the agriculture industry are the key to driving the innovation that farmers will need – and frankly deserve – to farm more efficiently and sustainably in order to meet the demands of a growing global population.