The Role of 21st Century Agriculture: Beyond Food and Fuel

Keynote address by Hugh Grant, Monsanto Chairman and CEO, at the World Food Prize Norman E. Borlaug International Symposium, Des Moines, Iowa, Oct. 18, 2007

Over the next two days this august group – the World Food Prize group – will have a rare opportunity to look at the challenges of meeting the ever-growing demands of food and fuel.

It’s a time for listening. It’s a time for discussion. It’s a time for dialogue. Every time I open a newspaper, it seems there’s this conversation about the demands in agriculture. The demand lines continue to surge.

This is driven to a large extent by China. China looking for more calories.  China looking for more protein.  And increasingly the Americas – from Canada all the way to the Southern Cone – are becoming the garden states trying to meet the increasing demand from China.

But it isn’t just food. It’s food and fuel. So we have a hungry world but an increasingly a thirsty world that’s looking for more fuel.

Conventional wisdom says that by 2030, energy demands will have doubled. And unless we apply every resource and become more stringent in conservation, we will face a crunch. So the incentives around continued research in the area of biofuels are prudent.

There’s this kind of dueling banjos thing at the moment on what crop is more appropriate for biofuels. But it’s way early to call this.

If you look to Europe today, it’s canola/oilseed rape. If you look to Asia, it’s palm oil. If you look to Brazil, it’s obviously sugarcane. And here in the United States it’s corn, but it’s also soybeans for biodiesel. I wouldn’t select any of these as my favorite child. I think research on all of them is the right direction.

There’s a bunch of talk about switchgrass. There’s a whole lot of conversation about celluloses and alcohol from celluloses. I don’t think anyone has it figured out yet, and based on what I’m hearing at Monsanto, it’s probably five to 10 years before we get it figured out.

So I think we’ll be looking in this country at corn for a while. Its production costs are favorable if you take the long view. Its environmental profile is still more favorable than petroleum. 

So energy demand increases. If we were facing this problem pre-1996, it would be a real imponderable because the technologies available today weren’t there then. It would have been almost an impossible task.

If you take a step back and look at the golden years of the 1950s, there were about two and a half billion people on the planet and there was 20 percent more land farmed.

Today, there are two and a half billion more people, and agricultural area is decreasing. And if you fast forward another 20 years, there’ll be another two billion citizens in this little world that we inhabit, and food demand will double.

So the squeeze is on. As a community involved in agriculture, how do we make more with less? How do we squeeze more food out of every little patch of soil? How do we optimize every gallon of water – because water concerns are growing – as we look at food and fuel?

There’s escalating pressure between urban land competing with agricultural land and that squeeze is increasingly focused on water.

This year, for the first time, there will be more than half the population worldwide living in urban areas. So the equation has flipped.

If you look at the United States, it’s a weird kind of democracy. Two percent of the population farms, and agriculture consumes 70 percent of the water. If you go to some of the developing economies, that 70 becomes 95 percent. So it’s clearly not sustainable.

So in the next minutes, I’ll talk about some of these conundrums. I don’t profess to have the solutions.

I’d like to focus on two of them. 

First, if you look at today’s agriculture, how do we increase yield and reduce the environmental footprint?

Secondly, how do we build partnerships especially as they apply to Africa and sustainability in global agriculture?

There are two tools that look promising based on 12 years of experience. One is molecular breeding, and the other is biotechnology. I think they might be part of the answer as we look forward.

We’re already seeing yields increasing worldwide and that’s happening because we’re compressing research cycles. We’re also gaining more insight into what makes plants tick.

If you look at the last 40 years, yields have doubled … now we’re yielding about 150 bushels per acre in corn.

And a few miles from here, farmers are now regularly yielding 200 bushels per acre. There are many who believe that the opportunity to double this average yield will take less than 40 years, so the prediction is that we’ll move from 200 to 300 bushels per acre well within the next 40 years.

But as we look at increasing yield, we have to face the fact that agriculture has been hard on the environment. As we look at today’s agriculture, we’re beginning to see the opportunity of increasing yield with a potential decrease in the impact on the environment.

The first decade of captured data suggests that about half a billion pounds of pesticides disappeared with the introduction of these new technologies. And with the increased use of no-till and minimum-tillage systems, we’re seeing more carbon being tied up in the ground.

The elimination of fuel associated with less spraying and plowing is yielding somewhere in the neighborhood of 20 billion pounds of carbon sequestration, which is about the same as four million automobiles taken off the road for a year.

So these technologies can do a lot, but more is needed, particularly around reducing water use. At Monsanto, I think we have the beginning of a partial solution.

In the last five growing seasons we’ve been testing drought-tolerant corn – corn that uses less water and yields about 10 percent more. And we anticipate that it will be commercialized early in the next decade in the United States. So there’s the prospect of having plants that sip instead of gulp water.

In agriculture around the world, this becomes an important tool in the next 10 years. But in rain-fed agriculture in Africa, they have the possibility of stabilizing yield and when you stabilize yield, you generate surplus.

As technologies like these become more and more complex, the importance of relationships grows. That might sound fluffy in a room filled with scientists. But the more complex this business becomes – and I think it will become more complex – the more important cooperation, linkages and trust become. Sometimes I hear people say, ‘Yeah, you talk about fluffy stuff, but you’re a big corporation.’  

At Monsanto, we’re finding that our business is driven more and more by the importance of relationships. We announced this year a new venture, a relationship with BASF, a German company. We’re working together on eight research projects that focus on things like yield, drought, stress and nitrogen utilization.

The scientists knew each other. But today they’re learning to work with each other and they’re learning to trust each other. I’ve been watching this relationship slowly build. I believe that better relationships have the possibility to yield better products to meet farmers’ needs worldwide.

But when you look at sustainability – everybody believes that they have a piece of the sustainability argument. Sustainability goes beyond quarterly profits. And as we look at this, there’s a piece of our mission to serve all our stakeholders worldwide beyond simply producing profits.

Dr. Borlaug wrote a Wall Street Journal essay about “pro-poor” biotechnology and the need to develop “pro-poor” biotechnology which some call the democratization of technology.

I applaud and I agree with his sentiments, and I believe that Monsanto and companies like ours in this industry have a responsibility, as we make these advancements in science, to work more aggressively in how we share them worldwide and how we open up access to a broader global agricultural community beyond our traditional commercial customers.

So expanding partnerships with NGOs and moving technology to the poorest farmers is something that we have been looking at. If you look at the variety of partnerships that we’ve started in this gene revolution, in almost every region we’re seeing yields increase. In India, in China, in Southeast Asia, we’re seeing yield and quality improving every year.

The conundrum is that in that same time frame, Africa has gone backwards. It hasn’t even stood still, it has retreated. So why has that happened and what can be done about it?

We’ve done some work in Malawi and I’d like to take a minute and look at that work in Malawi as an indication of what some of the answers might be.

Many of you know that Malawi is one of 49 countries that the United Nations lists as least developed. Life expectancy is around 40 years. If you have $2 in your pocket you would be on the upper end of earnings per day. There are 12 million people in the country and over 80 percent of their calorific intake depends on corn. So corn is a big deal.

I talked about 150 bushels as the average U.S. corn yield. In Malawi, it’s a different story. They’re yielding a fraction of what U.S. farmers do. Yields there have increased to a national average of 32 bushels per acre in corn – about a fifth of the U.S. average yield.

Women till, women plant, and women manage the farms. And a farm is a little bit smaller than a Midwest yard. And the women are almost always the last to eat.

There’s a drought in Malawi about every eight years. The most recent one was in 2004. And food aid poured in, including a Monsanto donation of a million dollars. It was the first time we’d done something like this, and grain was delivered.

A ton of grain delivered to a Malawian village in 2004 cost $400 a ton end-to-end. A ton of grain feeds a family of six for a year and a million dollars fed about 16,000 family members for a year.

It worked, but it isn’t sustainable. The team that led this effort at Monsanto sat down and we talked to the Malawian government, we talked to the Millennium Village Projects, we talked to UNDP. We got our heads together and in 2005 we donated seed and sent 700 metric tons of corn seed to Malawi. We sent not biotech, but regular hybrid corn.

When you take that corn and add a splash of fertilizer, the amount of seed that you need to grow a ton of grain in country costs about $40 – so $400 versus $40. We worked with the Millennium Village and UNDP, who provided training and the fertilizer, and we got lucky with weather.

Yields increased five-to-10 times when farmers used this seed. Cash was generated through the surplus, and an estimated 140,000 people were fed. Forty dollars versus $400, and 140,000 people versus 16,000.

It was the first time in years that some of these farmers had broken out of subsistence farming. For me, it was a lesson in working together. It was a lesson in sharing. And there was another big change that I saw. Instead of waiting on the grain harvest coming out the back of a truck, there was a dignity in growing your own harvest in your own village.

We’ve committed to five years in this program with the Millennium Village and we enjoy working with them and with UNDP. They’re linking new seed with local knowledge and local applications – things we can’t do.  But we can provide good seed.

We’ve also shared our virus-resistance technology in non-core crops like cassava and sweet potato. Skeptics might say, ‘That’s easy for you because those are non-profit crops. You make it look like a big deal but it means nothing to you.’

But corn does. And corn is the heart of this in many of these villages. It’s a major food staple but it’s a big commercial crop. I don’t have all the answers, but it’s an area that’s ripe for creative thinking. And there’s an opportunity for new partnership models.

We’re spending $2.5 million dollars in R&D every day in agriculture with a 10-year horizon. And we are looking for a profit in that. We’re looking for a return on that investment. But there’s a social responsibility that goes with this and there’s a societal impact, and companies like mine can’t do that on our own.

I believe that corporations, research institutes, governments, NGOs and foundations getting their heads together have the opportunity to build better partnership models. And these partnerships, if they take root, have the opportunity to improve lives.

These speeches that talk of Africa always use the urgency word. It’s kind of worn out. But there is urgency in this because there are 200 million people there who are malnourished. We – the collective we in this room – have another level of urgency because commodity prices are increasing. And as commodity prices increase, food aid becomes more and more challenged. So the status quo becomes less sustainable.

The tools exist today that drive yield in food and fuel. There’s biotech and many developing countries are beginning to see that benefit. I hope that in Africa we can start to build a regulatory framework that allows the field trials to take place so that a seed can be planted and scientific evaluation can begin. Until that step is made, Africa will fall further behind. 

The funny thing is that it’s not as if African farmers don’t realize this. 

There was a meeting earlier this year in South Africa and it was the usual pros and cons of biotech, an educated debate. Halfway through it there’s a little guy, a farmer with a sun-battered face, who asks the speaker, “Do you have a refrigerator?” She says, “Yeah, I do.” And he says, “How long have you had that refrigerator?” And she says, “There’s been a fridge in our house ever since I can remember.” He says, “You know, I want a refrigerator, too.”

So it’s not just about filling bellies, it’s way, way beyond that. I think it’s the question of, “Why do you have one and I don’t?” He believed, and I agree, they should have the freedom to choose.

My question for you is how can we ensure that they at least have the freedom to choose? We all have roles to play. As an agricultural company, today we have technologies that could make a difference, and perhaps more importantly, tomorrow we'll have more of these technologies – drought tolerance and nitrogen utilization – that could start the move from subsistence agriculture to sustainable agriculture.

We cannot do this on our own. NGOs have local knowledge, local contacts, local connections, and can connect best practices with needy farmers. And governments need to step up the infrastructure and look at policies that support agriculture in Africa.

So I’d ask you to imagine, I’d ask you dream for a little bit about a Malawian proverb that says, “One head doesn’t carry the roof.” 

What this means is it takes many heads to make progress. Imagine what we could do as a World Food Prize community if we could work together, if we left our baggage at the door.

Skepticism is a corrosive commodity and it’s an expensive commodity that Africa can’t afford.

I’d ask you to imagine a day when a sub-Saharan African farmer can choose to plant drought-tolerant corn or a seed that yields more on his little patch of land but do it in four or five or six seasons from now – at the same time when an Iowa farmer is doing it – rather than 15 years later, which is the model we have today.

Imagine having relationships amongst ourselves in rooms like this that we could engage in that discussion and do it sooner rather than later.

We need to work together and we need to do this more often and more effectively. These relationships, that fluffy stuff, are the keys linked to the technology to drive this discussion forward. And working together, we can and we will do much more than if we go alone in agriculture.

Thank you very much for your attention.

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