Ag Biotechnology Needs to Heed that Big Flashing Red Light

RRGRPhil510     Sometimes we get it right and sometimes we get it very wrong. About 1 and half inches of rain kept me out of my fields this past week, otherwise I would have been planting corn.  I like to think that I get it right by planting the very latest hybrids.  In fact, I prefer not to plant the hybrids that I planted the year before even if they were good performers.  With genetic modification yield in Ontario corn is improving exponentially.  So getting it right to me always means more profit on my farm.

I don’t have a monopoly on being right, far from it.  I have watched very closely over the last 20 years as agricultural biotechnology has been introduced to southwestern Ontario fields.  For the most part, in corn this has meant a huge boost in productivity.  Sure, along the way there was some snake oil, but Bt corn was so much better than what we used to grow.  It has done a lot of good for the Ontario economy.

The difficult issue is talking about how agricultural biotechnology gets it wrong and continues down that path.  Most most of you know that I look at almost any agricultural production issue through an agricultural economic lens.   So when I saw agricultural biotechnology being introduced to southwestern Ontario 20 years ago, I just assumed seed prices would go through the roof.  In other words, I simply looked at biotech traits as a way to segment any market and to increase revenues for the big agricultural companies.  In a perfect world everybody wins, but we are so far from that.

In 2014 we now have an agricultural biotech market completely segmented into different niches with different price tags.  For instance when you order corn seed, you can choose from a myriad of traits to fight a myriad of possibilities, which you might face in your cornfield.   In my mind it has little to do about science and so much more to do about price discrimination and increasing revenues and profits for big agricultural companies.  With seed corn over $300 a bag and climbing what do you think?

So last week when I was told by some Ontario corn buyers to be careful what corn hybrids I would be planting this spring I asked why?  I thought the vestiges of Starlink corn were gone.   That was a hybrid corn approved in the United States for animal feed but not human consumption.  However, it got into the food chain and caused quite a media storm.  Now our Chinese friends continue to resist corn with the Viptera trait and our European friends don’t like the new corn with the Duracade trait.   So I was told I better not be growing corn with those traits.

This is where agricultural biotechnology goes so wrong. This is where our agricultural scientists don’t understand agricultural economics.  Just because you can add some new trait to a corn hybrid scientifically doesn’t mean it should be done if the market doesn’t want it.  However, in the case of both the Viptera and Duracade example these products were released on the market when end-users had not approved them.  It is irresponsible and is just flat out stupid agricultural economics.  Ruining and compromising markets and opening up them to your competition is the end result.

At the end of the day it is about increasing agricultural production incrementally for every farmer.   We all do that because we face a perfectly elastic demand curve for our products.  In other words, our production has no effect on the prices that we get because we are price takers.  So we work on our cost efficiency and agricultural biotechnology despite the problems is a very large part of that.  How else can I expect 200 bushel corn this year.  20 years ago that was a dream, now in southwestern Ontario it’s more than common.  Good agricultural biotechnology got that right.

In this discussion I haven’t even mentioned soybeans mainly because in my opinion herbicide tolerance never made sense.  Agricultural biotechnology and soybeans has had everything to do with selling more glyphosate.  Now we have a potpourri of weeds that resist that chemistry and farmers like myself use triple modes of chemical action to kill weeds in soybeans.   In my own case, I have never grown Roundup Ready soybeans, but I’ve got the problems despite that.  I don’t even want to mention wheat, so far the biotech gods have left it alone and that does me fine.

I’m not against good agricultural biotechnology, in fact far from it.  The great challenge though is getting it right.   It means giving me yield versus all these other biotech traits that sometimes can get in the way.  The latest examples of some of our markets that don’t want them should be seen as a big flashing red light.    The science sometimes doesn’t get it right.  An agricultural economic litmus test should always serve as a filter.