DuPont pushing new ag spending, seeds

By Carey Gillam

Source: Reuters

checkbiotech.org

Wednesday, March 17, 2010

A new genetically modified soybean seed engineered by DuPont is making fast inroads with farmers and comes as the company is increasing spending on new seed development, a top DuPont official said on Tuesday.

The Y Series soybean will likely account for two-thirds of the company's North American soybean sales this year, up from one-third in 2009, DuPont Executive Vice President James Borel said at the Reuters Food and Agriculture Summit in Chicago. Borel oversees DuPont's production agriculture businesses, including corn and soybean seed developer Pioneer Hi-Bred.

"Y Series is really ramping up rapidly," Borel said.

The new soybeans, which have shown to out-yield competitive varieties by as much as 10 percent, marked the largest product launch in Pioneer's 83-year history, and are part of a new product lineup that DuPont hopes will help boost soybean yields by 40 percent by 2018.

DuPont's market share in soybeans in North America stands at roughly 26 percent, Borel said, and was projected to edge up this year.

Borel said seed price increases this year would be modest, held to the "mid-single digits" on average, though he declined to provide specifics.

He said the company was focusing on building volume over price for the Y Series soybean seed.

"The price of the Y Series isn't going up this year, but we will sell probably double the number," he said.

DuPont, which is battling Monsanto Co (MON.N) for market share in specialized genetically engineered seeds, will increase its research and development spending between now and 2012 by "a couple of percentage points" above the expected 10 percent rate of sales growth, Borel said. This year, DuPont spent more than half of its $1.4 billion R&D budget on agriculture and nutrition.

ANTITRUST ISSUES

Borel said DuPont was largely receptive to a U.S. probe into concentration and antitrust issues in the seed industry, though any efforts to weaken patent protection for biotech seeds would be a concern.

Several consumer and farm groups have been calling for changes in patent law that allows DuPont, Monsanto and others to patent seed germplasm. The critics say this is a key factor reducing competition in the seed market and driving high prices and few seed choices.

But Borel said such efforts could hinder innovation.

"As a science company, intellectual property protection is important. To make a significant investment in new technology there is an opportunity that should be provided to get a fair return for that," Borel said.

Still, DuPont is among those complaining about antitrust issues, alleging in litigation and in complaints to regulators that Monsanto engages in illegal monopolistic activities.

The two companies have been battling over DuPont's efforts to stack its own trait technology with what it licenses from Monsanto.

Last week U.S. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack met with farmers and other industry players to discuss antitrust concerns and pledged to take action to rein in any such activities.

"The enforcement agencies were very clear around the standard they are expecting," Borel said. "We came away encouraged that there was attention and focus."

EYE ON AFRICA, CHINA

Borel said DuPont was seeking out additional collaborations in Africa, the Philippines, China and elsewhere to be a leader in rapidly expanding food production around the world as the population soars.

DuPont announced in February an alliance in sub-Saharan Africa to collaborate on development of higher-yielding maize varieties that need less fertilizer. That follows a similar program aimed at developing healthier biotech African sorghum.

The company has rice partnerships in Indonesia and the Philippines and is looking for more.

China is of particular interest as a growing market.

"We are doing a lot of work in China. The Chinese government and various institutes are investing heavily in the ag area," said Borel. "It is so important to China's development that I am sure there will be continued opportunity."

Source: Reuters

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