Issue Date: August 29, 2016
Transforming agriculture, again
A new day is dawning for agriculture. When asked to describe the magnitude of the coming change, experts harken back to seminal advances such as the rise of mechanization, the invention of synthetic fertilizers and crop protection chemicals, and the advent of transgenic crops.
Within the next five years—less time than it takes to discover and commercialize a new agricultural chemical—gene editing will transform seed and trait development across a wide variety of crops. A new generation of plants will be equipped to thrive in the face of yield-eating climate stress. And all-seeing eyes in the sky will pinpoint problems in the field before the first leaf droops.
These tools will not be as obvious as when tractors replaced mules, but they are poised to make a difference where it counts: helping farmers profitably increase yields.
At the same time, the business of bringing new tools to market is changing, thanks to consolidation among major agriculture firms that traditionally are the big investors in innovation. For better or worse, Dow Chemical’s planned merger with DuPont, ChemChina’s pending acquisition of Syngenta, and Bayer’s attempt to acquire Monsanto are reshaping the agricultural landscape.
Increasing the productivity of agriculture is critical to feeding a growing population. But in the past decade, the per-acre rate of output growth in the U.S. averaged a mere 1.0% per year for corn and 1.6% for soybeans, according to figures from the consulting firm Bain & Co.
It’s too early to tell which innovations will make the most difference for yields—or who will control them. Big players such as DuPont, Bayer, and Monsanto point to new partnerships and their backing of a burgeoning start-up ecosystem as proof that they are capable of bringing powerful new ideas to fruition. But just as in industries such as pharmaceuticals and information technology, many start-ups are convinced that the future belongs to the small and nimble.
The gene-editing revolution
Starting about two decades ago, plant breeders working on major food crops got a boost from genomics tools and insights. Although transgenic traits for herbicide tolerance and insect control grabbed headlines, scientists also created hundreds of new elite hybrids using gene prediction models and advanced breeding techniques such as marker-assisted selection.
These superseeds have helped sustain growth in yields, albeit sometimes modest growth, around the globe. For example, seed producers identified traits and hybridization techniques for corn that resulted in plants that can be grown at higher density, resist disease, and produce more ethanol.
All of these advances came from harnessing the native variety of the corn genome. Now, the new gene-editing technique CRISPR/Cas9 promises to greatly increase the precision and speed of inserting traits into crops or dialing gene expression up or down. Its ease of use will also expand the variety of crops and traits that plant scientists can work with.
DuPont calls itself an early adopter of CRISPR/Cas9 and considers the technique to be “one of the most exciting breakthroughs of the 21st century,” according to James C. Collins Jr., head of DuPont’s agriculture business.
In March, Collins told analysts at an investor conference that DuPont’s Pioneer seed business is exploring CRISPR for “improved yield potential, drought tolerance, improved hybridization methods, disease resistance, and soybean output traits.” He said new products made from gene editing will be on the market as early as five years from now.
Pioneer and rival Monsanto, though giants in the seed business, must seek out licensing deals with the various start-ups that own gene-editing intellectual property. What they do bring to the table are huge databases of traits—a giant backlog of ideas that can now be tested.
“The value is created by what you choose to edit—that comes from the knowledge you already have about what you want to do,” observes Camille Scott, manager for scientific communications at Monsanto. “Gene editing can speed up improvements for any crop with the genetic variation for qualities from disease resistance to flavor—so the question is, ‘What to prioritize?’ ”
At the Donald Danforth Plant Science Center outside St. Louis, Thomas Brutnell, director of the Enterprise Institute for Renewable Fuels, is looking for traits that govern how efficiently plants use sunlight, water, and nutrients. Improving efficiency can help farmers reduce inputs or improve yields even as plants compete with each other in a densely seeded field.
The research is “getting us closer and closer to the actual genes underlying efficiency traits,” Brutnell says. “Where we are stuck is trying to manipulate these genes quickly. That’s where CRISPR/Cas9 comes in. It allows us to precisely engineer the genome. It’s probably the biggest revolution in plant science ever.”
The Danforth researchers are using CRISPR/Cas9 to add traits to the model plant Setaria viridis. This small, wild relative of corn, sugarcane, and sorghum is easy to modify and quick to mature. Setaria and its better-known relatives are efficient at fixing carbon because they have a two-stage pathway that keeps internal CO2 levels high and limits oxygen, which can damage plants. This circuitry has helped these so-called C4 plants adapt to warmer, drier climates.
But there is a great deal of diversity in how C4 plants shuttle carbon from the first to the second pathway to accomplish this feat. “We exploit that natural variation to get insights into the biochemistry and gene regulation of photosynthesis,” Brutnell explains.
A Danforth team member first uses gene editing to precisely knock out specific genes—up to 10 at a time—in model plants. To find out if those genes do what the researcher suspects, she uses automated phenotyping tools to gather data on the growth rate, water use, and nutrient uptake of up to 1,000 plants per day. What used to take years of work, Brutnell says, is now in the purview of a summer undergraduate researcher.
The data make it possible for computer models to associate various sets of plant virtues with genes and gene regulatory traits. The models can then suggest how to breed C4 plants to be even more efficient.
Combating climate stress
In 2015, David Hula was a top winner in the National Corn Growers Association’s National Corn Yield Contest when he harvested an astounding 532 bushels per acre on his farm in Charles City, Va. The annual contest helps agronomists track increases in the theoretical yield potential of corn. Hula’s irrigated acres grew three times as much corn as the average acre in Iowa, a major corn-producing state where farmers rely on Mother Nature to water crops.
For generations, farmers have chased yield growth with fertilizers, crop protection chemicals, and hybrid seeds. But that growth line is squiggly because losses caused by poor weather conditions are unavoidable. And the weather is getting more unpredictable.
“What we see is an unmet need for crop enhancement,” says Steven Adams, R&D director at England-based Plant Impact, which develops sprays and seed treatments that help crops withstand heat, drought, and salinity. “There is a gap in the market in the ability to control the way a plant responds to stress.”
In recent years, advances in plant genomics and phenotyping have helped elucidate how plants respond to stress. The first widespread commercial products to come out of that research were corn hybrids—DuPont Pioneer’s Optimum AquaMax and Monsanto’s Genuity DroughtGard. Both were rolled out in 2012 as the U.S. Midwest suffered from severe drought and unusually warm nighttime temperatures that impacted yields.
AquaMax takes advantage of a selection of the many native genetic traits that control corn’s uptake and use of water. The hybrid has roots that efficiently get water from the soil as well as leaves that release less moisture during respiration. In contrast, DroughtGard contains a trait from the soil bacterium Bacillus subtilis. The trait prevents drought-stressed corn from shutting down protein production with an RNA chaperone that keeps messenger RNA strands from folding.
But it is unclear if drought-tolerant crops will meaningfully increase overall yield. So far, they have been marketed only as a way to protect against yield losses—and only in corn.
Insights into stress response can also be used to develop products that are applied to plants directly, Plant Impact’s Adams says. Stress causes changes in a plant’s biochemical pathways, creating reactive oxygen species that can damage cell membranes and reduce photosynthesis, he explains. One pathway that creates reactive oxygen species is the photorespiration that happens when C3 plants such as soybeans struggle to capture CO2 in hot, dry weather.
To combat the damage, plants increase their production of antioxidants. But the goal of plants is merely to survive. Adams’s team works on the principle that more antioxidants will help plants maintain yield even under stress. They are developing chemical biostimulants to further boost antioxidant production for yield improvements of 5% or more.
“We screen libraries of compounds and analogs that we think will trigger that activity,” Adams says. “We are looking for consistency so you know that when you apply that chemical you will get a more robust response to stress.”
Big data down on the farm
Even when the yield benefits of fancy new hybrids or other crop products have been extensively tested in field trials, it’s hard for a farmer to know which combinations of seeds and chemicals will work best on his fields—and whether he will get his money’s worth.
“Farmers are trying to produce more and have more profitability on their farm. To do that, they have to make a lot of decisions—well over 40 per year,” says Sam Eathington, a former farmer and now chief scientist at Climate Corp., a Monsanto subsidiary. Climate Corp.’s line of precision agriculture products, called FieldView, presents information about weather and other conditions on the farm for segments as small as 1 m2.
In many cases, farmers already have a lot of raw data about activity on the farm—whether from their own notes or from planters, sprayers, and combines that log digital data. But rarely do they pull it all together.
The promise of precision agriculture is to roll up those on-farm numbers and add information such as hyperlocal weather forecasts, topography, historical yields, and soil conditions to guide seed selection, make yield predictions, and alert growers about water or fertilizer needs.
The most sophisticated—and expensive—of Climate Corp.’s tools, FieldView Pro, was launched just over a year ago. It comes with advisory tools to help farmers and their agronomists design a fertility program, monitor plant health, or plan where and how closely to plant.
Earlier this month, Climate Corp. announced it will offer an in-field network of sensors for additional real-time soil measurements. Sensors can track the amount of nitrate in the soil, along with soil texture, organic matter, and pH. Precipitation sensors—a step up from old-fashioned rain gauges—are on the way.
Monsanto isn’t the only agriculture company that sees promise in big data. In May, Bayer signed an agreement with Planetary Resources to develop applications using the start-up’s network of Earth-observing satellites. Possibilities include providing irrigation and planting date recommendations and assessing the water-holding capacity of soil.
Although companies may charge subscription fees for these services, it’s not the main way they expect to profit, says Scott Duncan, head of Bain’s North American agriculture practice. “They see big data solutions as the most effective means to demonstrate the efficacy of their seed variety or molecule,” he explains.
But farmers may be skeptical, and they may not wish to share their data, Duncan adds. Some are likely to be concerned that seed and chemical providers will use the information they gather to price their products as high as possible.
Consolidation meets innovation
Monsanto acquired Climate Corp. in 2013 for close to $1 billion. That figure pales in comparison with the $62 billion that Bayer bid for Monsanto in May in its attempt to create a seeds, traits, and crop protection giant hefty enough to compete with DowDuPont. Monsanto has so far rejected the approach.
“There seems to be a 20-year cycle that drives adoption, penetration, and yield, and we have reached the end of the current cycle. The important question is, ‘What’s the next big thing?’ ”
—Peter Guarraia, head of North American chemicals, Bain & Co.
Figures Bayer released with its proposal show that the six biggest agriculture companies, combined, spend about $6.8 billion per year on R&D—more than 10% of their sales. Part of the rationale for such acquisitions is cost savings, and that generally includes savings on R&D, according to Peter Guarraia, Bain’s U.S. chemicals lead.
“If something is not a core capability of the combined business, what you are going to see is the R&D for one company getting rationalized or, frankly, just cut,” Guarraia says.
Regulators are now deciding under what conditions they will allow the Dow-DuPont merger to go forward. The European Commission has said it will rule by Dec. 20. Meanwhile, in the U.S., some farming groups strongly oppose the deal, saying it will reduce competition, raise prices, and dampen innovation.
“Already, DuPont has announced layoffs of scientists, and reports have noted that some of the cost synergies would be from eliminating duplicate R&D programs, including breeding, traits, and chemical discovery,” says Barbara Patterson, director of government relations for the National Farmers Union. Even before the spate of mergers, cost-cutting had caused the industry’s research intensity to drop, Patterson says.
But directors of research say their teams are working as hard as ever to discover and develop new products. If new solutions for some problems are coming slowly, it’s because crop protection active ingredient discovery is hard.
“There hasn’t been a really-new-mode-of-action herbicide in more than 30 years,” acknowledges William Barnette, technology manager for discovery chemistry at DuPont crop protection. On the other hand, fungicides and insecticides with new modes of action have been discovered. “Why are herbicides different? We don’t have a good answer for that,” Barnette says. “It’s not because people aren’t looking.”
But the company doubled down on its search efforts and has discovered a broad-spectrum herbicide with a new mode of action, Barnette says. Although it will be several years before the molecule gets to farmers, it could be an important tool to combat herbicide resistance in weeds.
Barnette is enthusiastic about another new molecule, oxathiapiprolin, launching soon. To be marketed as Zorvec, it controls a group of fungal diseases that can quickly devastate fruit and vegetable crops. The most famous example is the late blight that hit Irish potato farmers in the mid-1800s.
A DuPont researcher found a Zorvec precursor in a hit he turned up during a high-throughput screening of a small-molecule library. “The chemist noticed two things—a little activity and a structure he really liked because he didn’t recognize it as similar to anything commercial. It also had useful analogs,” Barnette relates. A team of chemists worked with the analogs for several years to find one that increased blight-killing activity by a factor of 10,000.
Leaders at big agriculture firms are happy to boast about the work that happens in their companies’ labs and greenhouses, but they say they are also combing the planet for new ideas and technologies from start-ups, universities, research institutions, and even rivals.
One big partnership is already bearing fruit. In early 2014, Monsanto formed the BioAg Alliance with enzyme giant Novozymes to find beneficial microbes that improve plant health. Monsanto will soon begin marketing the first product from the collaboration—a corn inoculant seed coating.
“The microbe goes in on the seed and colonizes the soil where it is planted. It works on bound phosphorus to make it available to the corn plant so farmers get an increased yield,” explains Mark Miller, Monsanto’s U.S. seed treatment lead.
Miller says the two companies had to find the beneficial microbe and then figure out how to make a product with it. “Does it go in as a living organism? A dormant spore? How can we formulate, store, and deliver it to customers?” were questions Miller says they had to answer.
Not surprisingly, the hottest tickets in agriculture are partnerships with the start-ups developing gene-editing techniques. DuPont made a major move last year with its CRISPR/Cas9 licensing agreement with Caribou Biosciences. Caribou was cofounded in 2011 by Jennifer Doudna, who was a discoverer of the gene-editing process and is now at the University of California, Berkeley.
Earlier this summer, Monsanto struck deals with the Israeli firm TargetGene Biotechnologies and Germany’s Nomad Biosciences. TargetGene developed an RNA-guided gene-editing technique that, although different from CRISPR/Cas9, allows for precise placement of specific genes. Meanwhile, Nomad’s technology “increases the efficiency of genome-editing techniques for speed and scale,” Monsanto’s Scott explains.
Bayer is taking a different approach to connecting with start-ups by partnering with the venture capital firms Finistere Ventures, Flagship Ventures, and Anterra Capital. Though the outreach to start-ups is indirect, the results will be just as valuable, according to Geoff Kneen, new ventures manager at Bayer. “It is very important that they have access to our knowledge and experience and we have access to their technology,” Kneen says.
One way to do that is to get involved with start-ups at a very early stage. Bayer, along with DuPont Pioneer, has pitched in to a $15 million virtual accelerator and seed-stage venture fund called Radicle. Finistere was also a cofounder.
The idea of the incubator is to be on the scene when discoveries emerge from research institutions around the world. “It’s very important to build a high-quality pipeline of young start-ups,” says Finistere cofounder Arama Kukutai. Raising the funds required to prove a concept can take three years—a long time in the competitive world of agriculture. “We want to accelerate that process,” he says.
Massive consolidation in the agriculture industry and continued growth in the world’s population have together put a premium on external innovation, Kukutai says. “But agriculture is about 25 years behind the pharmaceutical industry in its business model evolution.”
Bain’s Guarraia points out that farmers still expect to get better seeds and new crop protection chemicals from the big agriculture firms. But he agrees that the industry needs to figure out where the next big innovations will come from.
“There seems to be a 20-year cycle that drives adoption, penetration, and yield, and we have reached the end of the current cycle,” Guarraia says. “The important question is, ‘What is the next big thing?’ It could be precision agriculture—I suspect it will be a combination of things. But it is a big, big issue.”
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