Green Biotech vs Agri-Tech: what future ahead?
Author: Erica De Zan
Green Biotech vs Agri-Tech: what future ahead?
According to a recent report from the United Nations Food and Agricultural Organization (FAO), by 2050 the demand for agricultural products will increase by 50% (1). According to McKinsey analysts, the current value of the food and agribusiness is $5 trillion. In the period 2004–2015, investments in food and agribusiness have grown 3 folds and investors are racing to capture value from tech innovation in the field which will help raise productivity even in challenging climate conditions and faced with raising resources constraints, e.g. water shortage (2).
The main potential disrupting technologies in the field can be categorized as:
- Green Biotech, focusing on crop innovation from the genetic angle and
- Agri-Tech, which offers software-based solutions, harnessing the power of data and AI to ease and make the farming method more functional.
Recent EU policy changes might have shifted the investor interest towards the Agri-Tech, with strong implications for the future of agribusiness in UK and Europe.
Green Biotech and the European Court Justice (ECJ) ruling
Genetically modified (GM) crops, obtained through the introduction of a foreign gene carrying desirable traits into the host have been tightly regulated by EU law since 2001. Yet modified crops carrying precise deletions obtained using CRISPR/Cas9 are classified as genome engineered (GE) plants and were exempt from the lengthy and costly approval process of the European Union making it a more attractive investment proposition. In fact, the estimated cost for a transgenic plant to go through the regulatory process is around 35$ million (3) effectively allowing only large companies to pay for it. And even so, after jumping all the regulatory hurdles, EU countries can ban them. Compared to their GM counterpart, in GE crops containing a silenced gene are much more similar to species obtained through radiation and chemical- induced mutagenesis, processes which the EU has defined as “non-hazardous”.
The Norwich-based company TropicBioscience raised $10m last summer for its work on improvement of tropical varieties using a combination of CRISPR/Cas9 technology and selective breeding techniques. Intensive farming of a selected variety of bananas, known as the Cavendish, has led to very little genetic variation and, as a result, made the world supply susceptible to virulent attacks from fusarium wilt, or Panama disease, which is currently decimating world stocks.
Despite last July, the ECJ has bundled together GE and GM organisms, de facto chilling the market.
The promise of Agri-Tech
If court rulings have set back the biotech field at European level, parallelly, new UK-based start-ups are bringing the agricultural sector in the era of Big Data with software allowing digital mapping of fields and collection of relevant data.
Deep Planet, a London-based start-up with the backing of the European Space Agency Incubation Centre, has developed software using highly detailed satellite images to monitor and forecast environmental factors like crop stress and changing water levels to forecast yield. A navigation system that automatically detects crop rows and hazards in the environment is the aim of Dyinium Robot, a deep-tech Oxford-based start-up with the long term goal of developing driverless off-road agricultural vehicles.
Such examples of Agri-Tech solutions require initial investments and infrastructures that limit the market to the developed world in contrast to the global problem-oriented proposition of the Green Biotech. However the technology they offer is extremely attractive to investors and has the potential to improve the robotization of the agricultural field, lowering operating costs and boosting productivity. In this scenario, is there still an opening for Green Biotech? The UK food and farming policy has historically aligned with the European guidelines, however under the current uncertain political climate it is not clear how the policy will be shaped after Brexit. UK could decide to take a different stand on the matter, becoming the European leader in GE crops (4).
Regardless, business can still grow on trees.
References:
- The Food and Agriculture Organization. (2009). Global agriculture towards 2050.
- Goedde, L., Horii, M. and Sanghvi, S. (2015). Pursuing the global opportunity in food and agribusiness. McKinsey & Company Chemicals Insights.
- Stokstad, E. (2018). European court ruling raises hurdles for CRISPR crops. Science Magazine.
- Brookes, G. (2018). UK urged to ‘bring back’ sound science as the basis for regulating crop genetic innovations post-Brexit. PG Economics.
About the author:
Erica De Zan, Event Lead, PanaceaStars, Panacea Innovation.
Erica De Zan is the Event Lead at PanaceaStars. She is involved in setting up events for startups in the Develop cohorts to network and learn. She has also supported some of the portfolio companies, particularly those within her interest area of agri-tech.
Erica has extensive experience with biotechnology, having spent more than five years in academic and industrial research across Europe. She is currently a DPhil student at the Ludwig Cancer Research at the University of Oxford.
