Nunhems breeders

Seed breeders at Nunhems, Bayer's seed arm 

When two of the biggest players in the farm supply chain reached a deal to join forces in August last year, there was understandable concern around the proposed merger.

Both Bayer and Monsanto have in the past had to fend off allegations around health risks associated with certain products, while the mooted $57 billion (£47bn) buyout prompted fears that the elimination of direct competition between the companies would result in less choice and higher prices for growers and consumers.

One key issue, highlighted in an Antitrust Review of the merger by the Washington DC-based Konkurrenz Group, surrounds Monsanto’s RoundUp herbicide, whose only viable competitor at present is Bayer’s Liberty Link. “Not only will a merger end the head-to-head competition between Bayer and Monsanto,” the report states, “it significantly reduces the incentives to further develop herbicides and herbicide-tolerant traits.”

In response to such concerns, Monsanto tells FPJ that the deal is based on providing “greater innovation and more sustainable solutions” to farmers as they try to feed a growing population. “Growers are the real winners here as they will benefit from the next wave of innovative products and solutions, which will be developed at an accelerated pace,” says Brian Carroll, a spokesperson for Monsanto in Europe.

Bayer’s response was similar, with the German firm arguing that “the efficiency gains generated by innovation will increase returns for farmers” and deliver more choice, quality and food security.

Bayer will only succeed with its pricing and sales if its value proposition is better than that of its competitors, says Bayer’s spokesperson for crop science, Richard Breum – and consolidation appears to be the answer. If the Bayer-Monsanto deal – which remains firmly on track – gets regulatory clearance and closes, it will create a company that accounts for more than a quarter of the combined global market for seeds and crop protection products.

Its impact will not only be felt by the merging companies – and their customers – but also by smaller seed businesses, which some fear could be squeezed out as Monsanto’s already significant market power is increased. As the main international developer of patented seed traits, according to the Konkurrenz report, Monsanto already exerts significant market power through its cross-licensing agreements. The report also raises concerns that “more traits, seeds and herbicides could be foreclosed and squeezed out of the market due to licensing restrictions.”

Despite such worries, some UK industry insiders believe the merger could in fact be positive for small seed suppliers and plant breeders by helping to set them apart from the dominant market forces. Whereas the major players have a relatively narrow product range that is profit-driven and dictated by their shareholders, smaller companies tend to be more flexible and run by people with a real passion for plant breeding, sources say. This is why they continue to produce more niche varieties on a smaller scale – even when returns are modest.

Bayer’s seed brand Nunhems is keen to highlight the flexibility that its varieties offer growers as they face a reduction in labour availability and a rise in production costs, mentioning a new iceberg lettuce called Elsol, which has an “exceptionally long harvesting window”.

David Rogers, sales director at vegetable breeder Tozer Seeds claims that, as a relatively small company, Tozer is “more able to react and innovate when compared to our larger rivals”. One of Tozer’s recent innovations is a new wholehead kale variant called Buttonhole kale. Launched a couple of years ago, the product is one of the flagship varieties in the company’s range of speciality kales, which have become increasingly important to the business in recent years.

In addition, the breeder is working to add disease resistance to its wild rocket breeding as mildew becomes increasingly problematic for growers. And in runner beans Tozer is developing varieties that are better suited to shorter day production in Kenya, enabling growers to cope without artificial light in the field.

Ely-based supplier CN Seeds, meanwhile, has been dealing with the opposite challenge – developing varieties that are suited to long daylight hours. Wild rocket Sorrento is a new introduction to the baby leaf sector and since it is target-bred for southern European production, the variety is tolerant to high temperatures and long days. According to commercial director Craig Thomas, its characteristics include “slightly reduced speed of growth, which translates into a good harvest window, and thicker leaves that stand against processing very well.”

Similarly, a new green pak choi from CN Seeds called Goku F1 is very slow to bolt and therefore well suited to spring production when the days grow longer. “It gets to specification quickly but once there, it holds well to provide good harvest continuity,” says Thomas.

But while good progress is being made in plant breeding, seed production is proving increasingly difficult due to changing weather patterns. The company reports that traditional seed production areas that once had reliable dry climates are becoming wetter. This has prompted CN Seeds to explore new parts of the world for its seed production. The company develops seeds in both the northern and southern hemispheres – a strategy that helps the business achieve continuity of supply in its key products, says Thomas.

“Producing high volumes of seed is not simply a case of selecting an area of the world with suitable climate, however,” says Robin Wood, MD of Elsoms Seeds. “It is a hugely complex issue for plant breeders.” Isolation between seed production of the same species is paramount to avoid cross-contamination, and in order to avoid problems relating to biosecurity, some countries do not allow the import of seed produced in certain regions. Seed companies must consider where their product will ultimately be used.”

It is becoming a major goal for seed companies to increase seed yield, as well as maintaining, or improving, quality and hygiene, as the opportunities to use new regions to produce seed become more scarce.

Plant breeders like Elsoms will be hoping that as the big boys consolidate and grow, they too can cement their place in Britain’s seed sector.