Bayer leader: Consolidation provides resources for agriculture innovation

by Susan Reidy
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Bayer Crop Science_James Blome_ president
James Blome, president of Bayer CropScience, speaks during the Canadian Global Crops Symposium in Calgary, Alberta, Canada.
Photo by Susan Reidy.
 
CALGARY, ALBERTA, CANADA – Consolidation in the agriculture industry happened in the past and will continue in the future because more resources are needed to bring technological innovations to the market, said James Blome, president of Bayer CropScience.

Blome addressed what the future holds in crop development during the Canadian Global Crops Symposium in Calgary, Alberta, Canada. The event, which this year is focusing on planning for the future, concludes Wednesday, April 12.

It takes 10 to 12 years and more than $150 million to bring new products to the marketplace, Blome said. In addition, he noted the company is spending more on defending older products. The science, analytics and knowledge has improved in the decades since some products were first approved,  so regulatory agencies are asking for products to be re-registered based on the new science, he said.

“I agree with that,” Blome said. “We’re choosing to invest in that product to keep it up to date; that’s the right thing to do. The result of that though is we’re spending more of discovery R&D on defense of older products. That’s stealing from future innovation.”

Last year, Bayer announced plans to acquire Monsanto Co. in a $6 billion transaction that Blome said is on track to close by the end of 2017. The deal brings together two highly complementary businesses, he said. Bayer is a crop protection company while Monsanto is a seed trait business.

“There is very little overlap but we will make changes if needed in the regulatory approval process,” he said. “It brings together two innovation powerhouses that perhaps have the size and scale to go forward and to bring the new technology, innovation and tools to growers.

“We’re excited by the opportunity to do this. The predictable, stable environment is a way to bring more people into this marketplace with a different point of view.”

Small companies may have difficulty traversing the regulatory pathways, which have become less predictable, Blome said.

“You have to prepare for surprises,” he said. Smaller companies may not be able to survive a 6- to 7-year delay in bringing a new product to market.

Bayer spends about $1 billion on research and development, but the companies that are really innovative in the world today, like Google, are spending 13 times as much, Blome said. Combining the research and development spending of Bayer, Monsanto and John Deere is still equal to only half of what one pharmaceutical company spends and one-third of a company like Google.

“It takes more to invest in these newer solutions,” he said. “This is the new scale, this is the trend we are seeing in other industries around the world.”

Agriculture is on the verge of a series of breakthroughs, he said. Just as electric cars are quickly becoming just cars, he believes digital farming will just be farming by 2025.

But agriculture will need a predictable and stable platform to unleash the new technologies, he said. Apple created the app store, which provided a platform for people to build a business around.

“This predictable, stable environment has allowed many single entrepreneurs to get their technology to the market,” Blome said. “We see the same thing in ag. We see a need for a predictable platform or highway.”

Innovation is necessary because more grain will be needed to feed the growing population, he said. There are challenges ahead to feed this world because while the same amount of land, water and regulatory processes are in place, yields have to increase by at least 70%.

“How are we going to do it? We’re going to trust in modern agriculture, trust in the innovation system that’s out there, and we’re going to bring new technology to the marketplace,” Blome said. 
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