TheCropSite.com- news, features, articles and disease information for the crop industry

News

DuPont Pioneer: Global Opportunities, China Poised for Yield Boost

DuPont Pioneer: Global Opportunities, China Poised for Yield Boost

23 July 2012

ANALYSIS - The expectation for 9+ billion people to inhabit the planet by 2050 is pushing DuPont Pioneer to look at opportunities for growth around the world, writes Sarah Mikesell, TheCropSite senior editor.


Dan Jacobi, DuPont Pioneer VP for ACEA (Asia Pacific, China, Europe, Africa)

Dan Jacobi, DuPont Pioneer VP for ACEA (Asia Pacific, China, Europe, Africa), said 90 per cent of the population growth is expected to occur in Africa and Asia. But food production doesn't match that.

"Populations are moving east, but food production has not," Jacobi said. "That's the prime challenge and opportunity we have in front of us."

Global Growth Opportunities

China's opportunity is easy to recognize since it is the second-biggest corn market in the world, and is almost completely planting hybrid seed. In addition, its population landscape is changing.

According to McKinsey Global Institute, by 2015 more than 52 per cent of China's population will live in urban centers marking the first time in history that less than half of the Chinese population was involved in farming, he said. The demand for high quality diets is increasing while man-power to produce crops is decreasing.


A Pioneer dealer in China showcases their summer corn area.

Ukraine and Russia have ambitious plans to increase agricultural productivity and Pioneer intends to work with them to achieve their goals. For example, Ukraine intends to significantly increase grain production and subsequent exports in the next 5 years, mainly through an increase of corn production of up to 5 million hectares, and of soybean production of up to 2-2.5 million hectares.

Russia is targeting 80 per cent of its meat consumed to be produced locally by 2020, and both countries are encouraging hybrid adoption, said Jacobi. In addition, the Russian government approved earlier this year the Complex Program of Biotechnology Development in Russia. Until 2020, 1.18 trillion Russian rubles (USD $37 billion) will be spent for further developing a globally competitive biotech sector, including ag biotech in Russia.

And Africa has not enjoyed its own green revolution, unlike Asia and Latin America.

China Poised for Yield Boost


A Pioneer customer in the Jilin Province of China shows an ear of Pioneer® brand XY335 corn hybrid.

China averages about 90-91 bushels per acre, and DuPont Pioneer sees growth coming from bumps in productivity by very, very small farms continuing to improve yields and individual farm productivity.

It will also improve yields as those small farms aggregate into larger operations over time, as the current generation of farmers age and people move to urban areas. This aggregation will allow for more mechanization, more efficient planting of seed and harvesting of grain, and then behind that will come advances in biotechnology.

"The dynamics that we've seen in the US are happening on an accelerated basis in China," he said. "China has gone from 800 million people out of 1.2 billion being rural and basically engaged in agriculture - to very quickly being under 50 per cent of people being involved in agriculture. And the government is driving the move of people into these instant cities of millions of people."

As this occurs, the math is pretty straightforward. There are fewer and fewer people to work the land. Farmers have to mechanize and become more efficient - and the government is pushing the process, he said.

But it also says a lot about the opportunity in China.

"Think about how the industry will change as they commoditize," he said. "As China uses commodity corn to produce food for people in cities, rather than for consumption within a few hundred yards of where it's produced, it's going to be dramatic."

Jacobi said DuPont Pioneer knows from their experience in China that the effect of insect pressure in some of the main growing regions can mean a 20-30 per cent crop loss, noting that's only the loss with corn borer infestations.

"If they had an effective Bt product in some of those regions, the reduction in harvest loss would probably more than compensate for the amount of corn China imports today. They'll get there," he said.

China is different than Eastern Europe and Africa because of the integrated nature of the government and the agricultural economy. He expects production increases will happen on a much more direct path than you'll see in a collection of countries like Eastern Europe or in Africa.

Technology Supports Growth

The smart phone has no doubt changed the world - in developed and developing counties alike - and is being used to influence agricultural purchases.

"Even in China, we can put a little bar code or QR codes on the bag, and a farmer can shoot that with his camera, or he can just read the number, punch it in, and we can send him a note that tells him where he should be finding that bag of seed," he said.

The level of adoption of digital technology by farmers is just incredible in the developing world and that includes Africa, he said.

Pacific Rim Driven By Global Prices

While Japan and Korea are grain import markets, the Philippines, Indonesia, India and Vietnam are countries that produce more corn than you might think, Jacobi noted. There are more and more farmers in these countries, and they are being driven by global commodity prices.

The Philippines has already adopted biotech and continues to be a leading-edge technology country. Vietnam is just starting to grow corn in a big way and is becoming a strong market for DuPont Pioneer that is 90 per cent hybrid.

"I was in Vietnam last year and I had a farmer at his place telling me - well, practically scolding me -- for not having Bt corn for them," Jacobi said. "He asked 'Why can't we have it?' He'd been in the Philippines, had seen what their corn looked like and he wanted it."

Jacobi said he explained to the farmer, who farmed about three hours outside of Ho Chi Minh City, that DuPont Pioneer could sell only where those products are approved. He expects the Vietnamese government will approve Herculex planting sometime in the next few years, but he did encourage the farmer to talk to his neighbors and government officials.

Vietnam is a very young country, with a median age of 25. Jacobi noted that the Vietnamese people are very smart, well-educated and technologically sophisticated. Vietnam's socialist government is open to hearing what its farmers need, he said, and to enabling the introduction of technologies that solve their particular challenges.

This is the second article is a series on DuPont Pioneer's global seed business. Watch for future articles discussing DuPont Pioneer's opportunities in Africa, global biotech acceptance and business challenges.

Click here to read the first article in the series - DuPont Pioneer: Megatrend Is Driving Global Business.

Sarah Mikesell, Senior Editor

Sarah Mikesell, Senior Editor



Our Sponsors

Partners


Seasonal Picks

Country Dance