Brazil is the largest soybean growing country in South America at 54.3 million acres harvested according to USDA estimates, but accounts for only half the soybean acres in South America. Argentina has 44.5 million acres, Paraguay 6.3 million acres, Bolivia 1.8 million acres and Uruguay at 1.3 million acres. Together the five countries have 108.2 million acres harvested, compared to 75.0 million acres expected to be harvested in the U.S. this year, and account for 44 percent of the world’s soybean acreage.
The regulatory submissions in Brazil are not the end of the process. The National Biosafety Council under the Office of the President formulates and implements the biosafety policy for Brazil. The National Technical Commission of Biosafety under the Ministry of Science and Technology debates the related technical issues and approves or rejects submissions. Once approved the Ministry of Agriculture, Livestock, and Food Supply, the Ministry of Health and the Ministry of Environment are involved in the registration process.
Monsanto has also submitted information in the U.S. to USDA and the Food and Drug Administration. Next will come submissions to the Environmental Protection Agency. Over the coming few months Monsanto will submit information to regulators in key export markets. The soybeans seeds are in stage three of Monsanto’s four stage development process which includes trait integration, field testing and regulatory data generation. The Lepidoptera order of insect protection will be stacked with the Roundup Ready 2 Yield trait with commercialization in Brazil targeted for 2012-14.
Brazilian and other South American producers are familiar with crop biotechnology. Herbicide tolerant Roundup Ready soybeans have been officially grown in Brazil since 2003 and used on 65 percent of the acres. Bolivia has the same adoption rate, while Argentina, Paraguay and Uruguay are at 95 percent. Biotech cotton accounts for 25 percent of the cotton acreage in Brazil. Additional cotton varieties have been approved and others are currently waiting for regulatory approval. More biotech cotton is expected to be grown in northeast Brazil where acreage has declined because of insect pressures. Three biotech corn varieties were approved in Brazil in early 2008 and planted on 10 percent of the 2008/09 corn acreage.
Acceptance of the new soybean varieties by soybean importers is critical. Roughly 30 percent of the soybeans produced worldwide enter trade as whole beans and 25 percent is traded as oil and meal. For Brazil, 40 percent of soybean production is exported as whole beans and another 25 percent as oil and meal. In March of 2006 China authorized imports of soybeans from Brazil for five years. With that agreement expiring in March of 2011, it would be good timing to include the latest biotech varieties as part of a new authorization to import. Chinese officials estimate that 30 percent of its total soybean imports come from Brazil. The European Union and Japan are the other two largest importers of soybeans and soybean products. Mexico is also a major importer, but most of those soybeans come from the U.S.
In 2008 over 300 million acres of biotech crops were planted worldwide, an increase of 9.4 percent over 2007 and plantings in 2009 are expected to be up again. Most of those acres were for traits that were first created for the North American market and then applied to similar conditions in the rest of the world. Biotech companies have been criticized for not targeting conditions present in areas outside of North America. Given the ten years of time and $100 million needed to move a trait from concept to commercialization, it is not surprising that companies focused first on large, established markets for seed. The decision to commercialize insect-protected soybeans in Brazil is an extension of that approach. Brazil alone is a major soybean seed market were Monsanto is established. Adding in the neighboring countries doubles the potential market if they have the same insect pressures as Brazil.
Monsanto may achieve some cost savings by using the existing lepidopteron control Bt traits used in corn and cotton. Stacking that trait with the Roundup Ready 2 Yield trait may push yields higher than expected with the yield trait alone. Doing all of this without risking disruptions of trade flows for soybeans and products is a critical part of this expansion of biotech soybeans. The next extension is to look for other areas of the world where pests are prevalent over a wide enough area to make commercial development of new biotech traits feasible. If traits are applied that have been used in other crops with no problems, an issue to be addressed is how to streamline the regulatory process to reduce costs and speed up the commercialization phase.
Breaking new technological ground is important given the concerns raised about doubling world food supplies over the next 40 years. There is general agreement that achieving that production increase though enhanced yields on existing crop land is preferable to relying on farming more land. Using biotechnology to control insects that rob yields is one way to do that without increasing insecticide use.
As biotech crops complete their fourteenth year of commercial use and future food production challenges are seen more clearly, now is the time to gain more efficiency from research and development lessons in biotech crops. Crops like drought tolerant corn for the western edge of the U.S. corn belt are in the development pipeline with about the same timeline as the insect-protected Roundup Ready 2 Yield soybeans. Nitrogen efficient biotech corn is further back in the research pipeline. Some wheat producers want to have biotech wheat. Great opportunities lie ahead for meeting the crop production challenges faced around the world.