TLV Insider caught up with Assaf Oron, the Company’s EVP Strategy and Business Development for a chat:
Can you give us a bit of background on the phenomenal growth of the agbio industry and describe the trends that are currently driving the market?
The agbio market emerged over a decade ago, when Monsanto, one of the world’s foremost agriculture companies, introduced the first genetically modified soybean and corn seeds that were herbicide resistant. Farmers traditionally would spray their fields with herbicides prior to planting and hope that its effect held since the growing crops were themselves sensitive to the effects of agrochemicals. The new seed was transformational; it enabled farmers to continue spraying their fields throughout the cycle all the way to harvest without damaging the target crops, and thus maximize on their considerable investments.
All of this was a precursor to what has since mushroomed into a market that today accounts for 25% of the seeds market – a $7.5 billion industry in 2008 with a healthy and impressive growth curve. If in the first years of the agbio market we saw a tendency towards “input traits” – genetic modifications that help the farmer to save resources in protecting crops, today’s focus has migrated to “output traits”; helping to make seeds more robust and improve yield in times of drought, and in lieu of global warming, climate change and soil deterioration.
Is there a tradeoff between quality improvement and crop yield, or resiliency and nutrition – or are they independent of one another?
Not at all. Farmers will not agree to compromise on any of the quality parameters the market is accustomed to – not on taste, crop resiliency, yield or nutritional value. Any potential improvement that comes at the expense of an established natural trait would simply not be acceptable.
Genetic modification can sound like a scary prospect when it comes to the basic food staples we ingest on a daily basis. Is there any reason for the public to fear eating a genetically altered banana or tomato? Can this potentially be a barrier of entry to the technology’s widespread acceptance in different parts of the world?
Gene modified seeds have existed since ’96 and to this day no product has been found to be even remotely problematic and none have been nullified by the American FDA or other regulatory bodies in various locations of the world. Having said that, the European market is still showing reluctance in embracing genetically modified seeds – not the farmers, mind you, who are in favor, but the public. I suppose the somewhat antagonistic attitude stems from ideological reasons of not wanting to alter nature.
The term “genetically modified” might really be somewhat off putting, but in essence it’s all about identifying genetic traits responsible for influencing a specific characteristic in a plant and cultivating it. This is no different than what farmers, without the aid of modern technology, have been trying to do on a trial and error basis for thousands of years in developing better tasting fruits and vegetables or more robust grain crops.
The bottom line is that agbio has been widely accepted in North and South America, China, India, and Australia – all huge markets. I’m confident the Europeans will follow suit in due time. The reality is that we simply cannot meet the challenges of feeding the world in the 21st century without it.
Where is Evogene positioned in the agriculture-focused computational gene discovery arena? Who are your competitors?
Evogene leverages three extremely strong foundations that Israel is recognized for all over the world: Groundbreaking biological research, advanced methods in agriculture and hi-tech innovation. Currently, we are the world leading computational biology player in the agbio field . That’s why companies like Monsanto and Syngenta with scores of new products in development have come to utilize our technology in detecting genes that can help them make better seeds. We are currently responsible for feeding the pipelines of some of the industry’s biggest players with substantial quantities of genes. Our competitors are the internal R&D departments in the leading seed companies – who are actually also our partners – and a few agbio companies that utilize different technologies for plant gene discovery.
Does your contribution in any way stand to lessen the dependency that farmers currently have on agrochemicals?
Certainly there are genetic traits that may lessen the dependency on some traditional crop protection products, but they aren’t going to disappear anytime soon. If anything, most of the agrochemical giants have diversified over the years and moved into the agbio market as well – DuPont purchased Pioneer, and Syngenta and Monsanto engage in both activities. In this manner, they can help develop better crops and contribute on the agrochemical side by focusing their efforts on staple crops that have not as yet been addressed by the agbio sector.
Describe your involvement in the bio-diesel sector. Can your efforts potentially end the debate between dedicating crops to fuel vs. food that we hear so much about?
It’s now clear that there has to be a clear separation between crops grown for food and those grown for biofuel. Consequently, we are seeing a shift from edible first-generation feedstocks – soybean and canola – to the non-edible second-generation feedstocks such as castor beans and jatropha. By focusing on crops that are grown on arid or semi-arid land and aren’t designated for food production the debate will disappear. At Evogene, we are moving in parallel, with a clear separation between our agbio R&D for food and our efforts in biodiesel. Gene discovery brings a lot to the table in terms of developing robust seeds that can produce abundant fuel crops in desert-like conditions and we are confident that this will be a very lucrative market.
Where do you see this industry heading over the next decade and how will it impact agriculture for the long run in the wake of climate change and global warming?
The agbio market is growing at a rate of 10-15% a year and isn’t about to slow down; people have to eat and finding alternative fuel solutions have taken a prominent place on the global agenda. Climate change is no longer a threat on the distant horizon – it’s an unfortunate reality that is going to have a lot of impact on global agriculture. It is almost impossible to address challenges of drought, dwindling natural resources, and a growing global population, without harnessing the power of biology and technology in helping to ensure a more resilient and bountiful agriculture.
Why is Evogene an attractive investment target?
We are at the forefront of what’s happening. We are currently involved in every seed development pipeline for most of the major players and we address the two main needs of the industry – food crops and biofuel. Our computational gene discovery technology and the discoveries we have already made through its application, including demonstration of successful results of our yield genes in tomatoes and corn, are truly groundbreaking. Significantly, we have entered into several royalty agreements that should be exceptionally lucrative; a single successful seed product that is approved for marketing should result in tens of millions of dollars in royalties’ revenue for Evogene on an annual basis.
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