Dow AgroSciences and the Holy Grail

October 7, 2009
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Dow AgroSciences is crowing about its recent deal with seed giant Monsanto to introduce corn with eight genetically modified traits—more than any other on the market. Talk about anti-insect.

But, Dow AgroSciences, which is based in Indianapolis and is the agricultural arm of Dow Chemical, is straining to catch up in the burgeoning world of genetically modified seed. The farm chemical maker has snagged only about 5 percent of the market, though the share is growing.

What if Dow AgroSciences wanted to go for the Holy Grail? What if it designed a corn seed that sprouted a perennial plant that could produce grain year after year and eliminate the expense, hassle and soil erosion that accompany the planting of seeds every spring? The company suddenly would dominate the market, assuming productivity and other key traits were competitive with conventional varieties.

The notion of a perennial corn is still largely a pipe dream, but someone is bound to figure it out. So why shouldn’t Dow AgroSciences get there first and make the killing?

The reason, believes one of the world’s leaders in perennial corn research, is that the company has little incentive to try.

Wes Jackson, who leads The Land Institute in Salina, Kan., says Dow investors wouldn’t have the patience. And the company ultimately would shoot itself in the foot because long-term demand for seed ultimately would shrivel.

Jackson has been working on the idea for decades to try to improve the environment, and he’s still a long way from the goal. One might think a perennial gene could be inserted and presto, corn no longer would die every fall. But Jackson says the technology is so complex that it would be like trying to turn a human into a monkey.

Jackson is about to ask a West Coast foundation for $50 million to help his institute achieve the dream. His time frame? Fifty years.

However, it’s hard to believe that a company with a profit motive and armies of scientists couldn’t do it much quicker.

If Dow AgroSciences has given perennial corn any thought, it wasn’t apparent to spokesman Garry Hamlin, who ran the idea past internal brass. It’s so far off their radar that none of the leaders had even heard of it.

However, Hamlin certainly agrees with Jackson that such an undertaking would be expensive and time-consuming.

How do you think earth-shaking technological advances should be pursued? Is Jackson right, that only not-for-profits like his have the staying power to get the job done? Or should the private sector and its profit motives, which have long rocked the world with change, be encouraged to follow its nose?

If you ran Dow Chemical, would you launch a search for a perennial corn?
 

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  • While I suppose the idea for perennial corn is technically feasible, it isn't practical. It's a regulated industry, so you would first need to define "perennial". Is that 5 years? 10? Forever? Then you would need to run a trial for at least as long as that time frame to support your claim, and run it in multiple parts of the country to confirm its yield potential in different environments. It would be horrendously expensive...and what happens if at the end of, say, two or three years you have to re-plant? Your pricing model implodes, even if it's only a portion of the seed that fails. A small percentage of non-regrowth would drive yields down and the whole field would be replanted. What if you want to launch after a two-year study so you get to market quicker? Then you can only make a two-year claim for a product that might last 20, but of course you don't know that. You wouldn't get much of a price premium for that and might not sell that customer more seed for decades. But you would get some unhappy shareholders.

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