Western Producer reporter Sean Pratt is in San Antonio, Texas attending the Bayer AgVocacy Forum and the 2017 Commodity Classic. He is filing a blog touching on some of the daily highlights from those two events. Look for full stories about some of those topics in upcoming issues of The Western Producer.
SAN ANTONIO, Texas — Vikram Mansharamani, lecturer at Harvard University and Yale University, kicked off day one of the Bayer AgVocacy Forum with his global economic outlook.
He started out painting a grim picture of an over-supplied global economy.
“China underwent an investment bubble that has burst. It’s over. They overbuilt,” he said.
There is too much capacity and not enough demand in China and that has lead to falling commodity prices.
That oversupply scenario has been exacerbated by a technology revolution that is allowing manufacturers to produce more product with fewer inputs.
The good news is that population growth, primarily in Africa and India, two of the world’s fastest growing economies, is going to eventually take care of the oversupply situation by creating a burgeoning middle class.
“Fundamentally we’re going to see a demand shock that results in higher prices for food,” Mansharamani told his agriculture audience.
Adrian Percy, global head of research and development with Bayer, said the world is in the midst of the fourth industrial revolution.
He said the speed of innovation is dizzying but it is going to result in a huge increase in agricultural production.
The Food and Agriculture Organization of the United Nations estimates crop production will rise 70 percent by 2050.
Percy is excited about the new innovation that will take place if Bayer is successful in its attempt to acquire Monsanto.
That will create a 10,000 person research and development organization with an annual budget of US$2.6 billion. It will marry Bayer’s expertise in chemistry with Monsanto’s seed technology and data management strengths.
“We still remain confident that we will close the deal by the end of 2017,” he said.
Percy said the battle to gain approval for cultivation of genetically modified crops in the European Union is lost.
He hopes the industry has learned from its mistakes and will engage with consumers and politicians in paving the way for the next round of breeding technologies, such as gene editing.
The industry is already explaining to people how the technology will allow farmers to produce more crops on less land.
Louisa Burwood-Taylor, chief editor of AgFunder news, said investor interest in agriculture is exploding.
Investment levels in the sector have increased to US$4.6 billion in 2015 from $500 million in 2013.
“I’ve seen it completely blow up as a sector of interest for investors.”
Investment in agricultural biotechnology was up 150 percent in 2016 compared to 2015 due in a large part to the hype surrounding gene editing.
Meanwhile, investment in drones was down 68 percent due to farmer dissatisfaction with the technology.
Burwood-Taylor thinks that is a temporary setback as drone manufacturers are busy bolstering their products with more useful features for farmers.