Panelists from leftJoshua Hofheimer panel moderator ag sector partner Sidley AustinBrook Porter partner Kleiner Perkins Caufield amp Byers dedicated to growth funds and macro trends in agricultureJohn Sorenson president and CEO Vestaron Corp a biopesticides companyLaura Shenkar founder and principal of Artemis Water Strategy a water techshynology and strategy firm that helps clishyents protect against shortages Clients have included WalMart Intel and IBMPhilippe Herve vice president and global head of Ramp

Panelists (from left)

Joshua Hofheimer (panel moderator), ag sector partner, Sidley Austin

Brook Porter, partner, Kleiner Perkins Caufield & Byers, dedicated to growth funds and macro trends in agriculture

John Sorenson, president and CEO, Vestaron Corp., a biopesticides company

Laura Shenkar, founder and principal of Artemis Water Strategy, a water tech­nology and strategy firm that helps cli­ents protect against shortages (Clients have included Wal-Mart, Intel and IBM.)

Philippe Herve, vice president and global head of R&D Alliance Manage­ment, Bayer CropScience

Harry Stine, Iowa farmer and president and founder of Stine Seed Co., the larg­est independent seed company in the U.S. (Stine was the conference’s keynote speaker, and was an impromptu addition to the panel.)

The future of farming

Industry leaders have a no-holds-barred discussion on agriculture’s major challenges, and what farmers and corporations need to do to feed the coming groundswell of people. Plus: Don't miss this gallery of new innovations showcased at the event.

Executives from big-name ag companies like Bayer Crop Science and investment firms with an eye on agriculture recently participated in a panel discussion on the “Future of Farming,” at the Donald Danforth Plant Science Center in St. Louis.

The six-person panel was part of the 2014 Ag Innovation Showcase, hosted jointly by the Larta Institute, the Bio-Research & Development Growth Park and the Donald Danforth Plant Science Center.

The question of the day: How can farmers produce enough food to feed more than 9 billion people by 2050, up from around 7 billion today, given the challenges facing agriculture? Among them are climate change, water shortages, resistant weeds, new insect pressures, and an increased demand for meat in countries like China and India.

“It’s a broad and formidable topic,” says Joshua Hofheimer, panel moderator and ag sector partner with Sidley Austin. “How do we produce more with less, waste less, and do things in a sustainable way? What are the great ideas that will come out to really shake things up in agribusiness the way some of our other industries have been shaken up in earlier years?”

Show organizers set out to find a balanced panel, choosing representatives from farming, big business and technology invest­ment firms (see list of panelists). Here’s what they had to say.

Don't miss this gallery of new innovations showcased at the event.

With the unpredictable weather patterns we’ve been seeing, what impact will climate change have on farmers in the future, Brook, given your focus on sustainability?

Brook: I’m fortunate to be able to work alongside Al Gore, so I hear a lot about these issues on the front lines. The way I view it, is that homogenous applications that are based on specific or predictable weather patterns are just no longer feasible. Weather patterns have become more variable, and the solutions and practices need to adapt to these ever-changing conditions. Things like weather prediction and more specifi­cally tailored traits are going to create a lot of value. One of the challenges is getting farmers the right information at the right time to make decisions, so that is a place that we see data playing a big role. You need some underlying technological innovations in combination with better data and decision-making tools to really solve those issues. Climate change is a mega-challenge, but it is an opportunity for companies that can deliver innovative solutions to farmers. 

Laura, how do you see climate change affecting resource scarcity such as water use and access?

Laura: The first thing you talk about is water efficiency. But you also talk about water logging as part of the precision piece of ag. You talk about frost tolerance and farmers having a stronger connection through the supply chain to retailers and to customers where you start to develop brands. And you talk about making a premium product by reducing the water and the perishability of products. Creating juice concentrates, for example, or preprocessing wheat so that by the time it goes through the value change, there is much less of it, but it also is less perishable. These things could bring dramatic improve­ments in profitability, which farmers could get a bigger piece of because they are moving forward much

Harry, you made a comment today about biodiversity in cropping. Do you think climate change will force us away from large cropping monoculture systems? Will we see larger areas of con­centration based on what the local resources are?

Harry: I don’t pretend to be po­litically correct. “Diversity” is a buzz word that is supposed to be a posi­tive thing, but it is one that drives me crazy. To give you an example, let’s say we each are going to have basketball teams. I am going to get a bunch of tall, fast guys from a certain ethnic background. And you are going to get some short, fat red-headed guys, or what have you, because you want diversity. Who’s going to win?

Where is Bayer Crop Science focusing its efforts to battle cli­mate change? How is it chang­ing your product offerings?

Philippe: Farmers always talk about weather, but with weather, there is little that you can do. You can buy crop insurance or use predictive modeling for weather patterns. But these things can only help so much. So for me, rather than being impacted by the weather, the farming community needs to focus on land management. Not all areas of the globe will experience the same weather at the same time. So, for exam­ple, if some areas are having water management issues, maybe farmers need to adapt their crops like they do in parts of India. They will automatically shift from one crop to another based on the weather. But farmers can’t make that decision alone. There needs to be a policy change that makes it economically feasible for farmers to make those decisions. Otherwise, it can’t happen.

Harry: How many of you remember the summers of 1934 and 36? Those were record-high temps across a good share of the Midwest, as well as other parts of the U.S. and Southwest.

Radical changes have been with us for quite some time. And now we are getting 10 times as much yield for the same amount of water than we did during that decade. So yes, climate is changing; yes, farmers will adapt. But we are making too big a deal out of it.

Water management strategies will play a key role in future food production and could provide companies with a busi­ness opportunity. But how do you monetize that? Where can you build a business around a water shortage?

Brook: Seventy-eight percent of our water usage goes to agriculture, so if you are talking about water issues, you have to look at the ag sector as part of the answer. Our company has invested in several areas in water, from the tech side to the low-cost produc­tion side to vertical integration. It has been tough space.

One of the challenges is: Do you have a market mechanism that enables fair pricing? And with so many regulatory issues intertwined, it makes it difficult for a company to come in with a better solution and better business model, and find rapid growth. We’ve looked at some really interesting technologies, and are sort of waiting and watching and hoping that some of them can get adopted. But water shortage is a problem that is growing. And as the problem grows, policy awareness grows, and regulations, hopefully, get fixed. Then, fair-price mecha­nisms can come into play, and technology can play a bigger role. But a lot of steps have to take place before that market becomes ready for venture-type investing.

Laura: What I do for a living is to find out where water is priced correctly or is very, very expensive. It does have a bit to do with regulations, but if farmers look at the Ogallala [Aqui­fer] and California, and the status of the Colorado River, if you don’t talk about climate change, you need to look at water in terms of scarcity. There is a fixed amount on earth, and we are using it in more places. This is just a fact. There are opportuni­ties to think ahead and look at where the market is going to value that, not the least of which is food safety.

As you run out of water, contaminants are going to get more significant. So food safety will be a big issue. And there is a segment of customers who will pay for that safety. If you can get twice as much for your crop because you are work­ing with General Mills, who is working with Wal-Mart, you start to deserve a higher premium. You are seeing that al­ready with General Mills and Anheuser-Busch. So you are beginning to see that some farmers are moving forward and some are not.

John: I think water is the leading concern with climate change in the near term. But there are many other concerns that will affect ag, and the degree of risk in producing a crop, no matter what crop, is going up. Volatility in weather is one aspect of that. But there are other things. For example, insects and dis­eases that previously have thrived in tropics are moving north. So it is a very complex matrix of risk, and every element of that matrix is being accentuated by climate change. I don’t know how it will turn out. But I do know that the innovation and ex­posure we have seen in the ag sector in the last five years bodes very well for our ability to cope. I welcome the challenges.

Philippe: I, too, am very optimistic about climate change. I think we will cope with it and we will produce food, just as we have done in the past with enhanced genetics, mechanization and optimized chemistries. We now have the choice in what crops we plant, and we have the technologies to farm the crops we have chosen. So, I don’t see climate as being the big issue in regard to global food production.

Where I see big pressure is about the food we want to have and the big change in diet in the growing populations, which is the westernization of the diet and growing need for meat. So feedstock like corn and soybeans are in big demand, and again, we have chosen technologies to produce those crops. The question will be, are we able to produce enough to meet that change in diet? We always say it is a $9 billion question. But nutritionists say it is more like a $12 billion question be­cause of the change of diet. If everyone wants to eat in India and China and those parts of the world as they do in the Mid­west, that’s a challenge.

I’d like to shift to a new topic that is relevant to the fu­ture of farming, which is the consumer role. Philippe, as you said, the demands for food in the developing world are shifting as they start to grow their middle class. We know that people are going to want to eat more meat protein given the opportunity, as we’ve seen historically with the westernized model. Can we meet that demand with our existing resources, or will we need to do something different?

Philippe: Again, I remain optimistic. I think we can [meet that demand]. We have already invested in technology to sustain that diet in the U.S. and in Europe. So we are well-equipped with the technology needed to sustain the same diet in other countries. The question is more about feedstock. If you want to consume that amount of meat and dairy products, then the crops that we have chosen to grow, like corn and soy­beans, will, at one point in time, be the limiting factor. Even if we can extend the region where we can grow corn by eliminat­ing stresses, at one point in time, we still may not have enough land to grow those crops. In that case, you need to change the raw material so you could produce, for example, more fish. Fish farming is a great opportunity for innovation.

Or cultured meat? If we have the fickle consumer who wants protein but doesn’t want concentrated animal feedlots, and may not want grain-fed beef, can we do cultured meat? Or, John, in the case of your company that is using biologicals to control insects without hurting birds, animals or people, would consumers ever want to buy a product that comes from crops treated with spider venom? Con­sumers are fickle, and consumer demand is a real is­sue when it comes to commercialization.

John: I am a scientist first and foremost. And I believe science will prevail in leading society to make more rational decisions about these things. Right now, a number of decisions — GMOs are a great example — are being made in the face of overwhelming scientific evidence that GMOs are safe. The same is true for vaccinations, and there are other examples. We have to do a better job of educating and explaining, and in the end, I think science will prevail.

Do we have to do a better job of educating, or do we have to find a technology that consumers will accept?

Brook: I’ll take a step back before we talk about GMOs. I think the consumer question is really important, and there are a few elements to that, which I want to highlight. One is the changing plate, a major issue. Statistically, if China consumes the same amount of meat per capita, there will be no more meat for the rest of the world. It is not a question of “if”; it is a question of “when.” The demand will put enormous strain on global food supply. But there are things we can do on the supply side through increased crop yields and the proper use of technology. The other element is that consumer demand is shifting as we learn more about the health issues related to the overconsumption of meat in the developed world. So you have these two different issues. The developing world is aspiring to eat more meat, and the developed world is aspiring to eat less meat. So that presents a different set of opportunities.

We have invested in something called “beyond meat,” which involves taking regular plant protein, as­sembling it, and then, through a very simple extrusion process, producing a better veggie meat. We believe that consumers would like to take a day or two a week and replace a meal of meat with a vegetable-based protein alternative. If it tastes just as good, is healthier, and has lower hormone content and lower fat content, we think consumers will vote. And we are seeing that happen today in Whole Foods stores across the country, where it is selling pretty well. So you are seeing a shift in food technology to address consumer demand, and you also are seeing a demand for transparency in the supply chain. Organics is a great example. Annie’s [Homegrown Inc.] was just acquired [recently] for almost a billion dollars, showing there is a contin­ued push for organic, healthy alternatives.

My view is that data can play a big role in provid­ing transparency in how and where food is grown. The more we ignore the issue of transparency, the more consumers will push back. So rather than fighting and saying consumers don’t understand, companies will need to embrace transparency in their supply chain. Farmers markets are a great ex­ample. If you can look a farmer in eye and ask how they grew that tomato, there is a greater likelihood that the tomato was grown in a healthy, sustainable way. But if there are five or six middlemen in be­tween, you don’t always know what you’ve bought. You are seeing the same issue in the developing world as it relates to food safety. So there are some unifying themes here, and technology can play a role in solving these problems.

You raise a good point, when you talk about future farms. The relationship be­tween the grower and the ultimate con­sumer or retailer is something we will see more of. With potentially scarce resources and the growing desire of the consumer to understand traceability and safety, we also are seeing a growth in local markets.

By that I mean “urban production,” or what some people are calling “farm-replacement technology.” In other words, growing produce in containers and hydro­ponics or aquaponics systems, making use of urban lofts and rooftop space. When we think about the future farmer, is there a role for urban production, or is it just a prod­uct for wealthy communities and high-end organics?

Philippe: For me, I think the ag sector and the food sector have been innovating separately. The food companies do their innovation, and the ag companies do their innovation. It is rare that they innovate together. But demand for sustainability and transparency, then I think we need to shift a bit in both the ag and food sectors to develop combined technologies.

Brook: We have a great example of that with a company that has developed a tomato after talking with chefs. They wanted to make a tomato sauce that didn’t turn brown. So they developed a tomato that holds a brighter red color. And it commands a huge premium. So chefs want it to make great to­mato sauce that consumers love.

Harry, what do you see as the succession plan for farmers? Someone gave me a quote that the average age of farmers in Japan is 60 to 65. What kind of farmer do you see as the next generation?

Harry: Frankly, historically some farmers have been perceived as [a little slow to adapt to change and not always super-competent.] That is part of reason why some people like to call them growers instead of farmers to avoid the negative connota­tions. Naturally, as you narrow down the number of farmers, the competency goes up, and operations become larger. Some farm families will say there is no one left to succeed them in farming. Yes, that is correct. So yes, the number of farmers will go down, and farmers that remain will become larger and more [business savvy].

Audience: Going back to water issues, how much focus has been put on weather devices?

Laura: One of the more exciting developments on the farm is the access to information. Farmers can command so much information on site as they are driving a truck. It provides a much stronger ca­pability and starts to change their role in the value chain. If you want to do precision farming, you need to have a bigger picture of your farm opera­tion. Having weather predictions within 24 hours can make a big difference in terms of turning on drips or fine-tuning your irrigation schedule.

Audience: How about weather control devices such as seeding clouds?

Laura: This is something that some small, nonaligned countries have looked into. I don’t think we can define how unpopular that would be in a lot of situations. The technology has existed for a long time. That would be good subject for a revo­lution I think.

To learn more about the next Ag Innovation Show­case on Sept. 14-16 in St. Louis, visit aginnovationshowcase.com.

Don't miss this gallery of new innovations showcased at the event.

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