New business models: how Bayer wants to get to the technology of the glyphosate crisis 2

New business models: how Bayer wants to get to the technology of the glyphosate crisis

Leverkusen / Cologne –

Growing agriculture, while not insignificant, has been a long-standing business: agricultural companies have developed seeds and pesticides that they called crop protection products and sell them to farmers in the largest quantities possible. Farmers were buying from agribusiness those products that would provide them with the highest possible return – and hoped the promises were true.

But agriculture is radically changing, and with it business models. Bayer relies on a completely redesigned model that should be rolled out in the coming years: the Leverkusen-based company uses field data analytics to predict its expected yield and how it can be increased by targeted pesticide use.

Bayer takes entrepreneurial risk from clients

Bayer then provides its customers with the means to increase their profits. If the forecasts are wrong and the harvest is less, the amount Bayer charges the farmer will also be reduced. If the harvest exceeds the forecast, Bayer and the farmer share the surplus.

Agriculture New technologies 1

An employee is standing in a field next to a Bonirob agricultural robot.

photo:

alliance alliance / Daniel Maurer

Leverkusen moved away from the classic business where the company was fine if it brought large quantities of its produce to farmers. Now entrepreneurial risk bears the shoulders of its customers and wants to contribute to the use of pesticides only when needed.

Climate change is creating problems for farmers around the world

Climate change is affecting agriculture, affecting farmers across the globe in the form of increasing extreme weather, scarce resources and a growing global population that needs to be nourished in these circumstances. Both from the development of digital technologies and robots, as well as from public opinion, which is increasingly targeting plant toxins such as glyphosate.

On the one hand, there is a negative impact of glyphosate on biodiversity, as evidenced by studies – critics blame plant poison for bee death. Glyphosate, on the other hand, is suspected to cause cancer. Regulators around the world see no reason to follow the unfair evidence of that claim, instead pointing to hundreds of studies that lead to the opposite conclusion – but acceptance of weed killings and the massive use of other pesticides are diminishing.

Bayer is the world's leading manufacturer of crop protection chemicals

Constantine Kockerols also notes this when he sprays pesticides in his fields at Baesweiler near Aachen. A critically demanding walker, he had to reassure time and time again that pesticides were not harmful to health, a farmer said at a Bayer conference "The Future of Agriculture" last week. With Monsanto taking over € 57 billion in the summer of 2018, the Leverkusen-based company is a market leader in crop protection chemicals.

Drones in agriculture

A drone flies in front of a tractor above a corn field. With smart agriculture, the latest technology in agriculture should increase yields and improve sustainability.

EU approval for glyphosate expires at the end of 2022 and is unlikely to renew. Even Agriculture Minister Julia Klöckner (CDU) does not expect a majority for the extension, the Ministry of the Environment at Svenja Schulze (SPD) welcomes this.

Bayer: Glyphosate helps to avoid exhaust

Bayer likes to point out in the discussion that glyphosate – a plant dying agent it comes into contact with – helps prevent exhaust emissions. Finally, after treatment with glyphosate, the soil should no longer be plowed with the help of diesel machines. Agricultural scientist Horst-Henning Steinmann, who researches at the Center for Biological Diversity and Sustainable Land Use at the University of Göttingen, agrees: "Without glyphosate, farmers will have to work harder on their soils." And cultivating the soil through plowing will cause "significantly higher energy consumption," says Steinmann,

For a long time, corporations neglected the negative impact of plant protection products on biodiversity because they neglected the resistance to their chemical agents. Matthias Berninger, a former member of the Greens' Bundestag and Bayern's top lobbyist since the beginning of the year, puts it this way: "The entire agricultural industry – and Bayer is a leading company here – helped increase yields, but did not focus sufficiently on planetary boundaries."

Bayer expects loss of revenue

Berninger referred to the scientific construct of Sweden's "planetary borders" by Johan Rockström at Bayer's international conference "The Future of Agriculture." It describes the boundaries of an ecosystem whose transition threatens the life span of humans.

Agriculture New technologies 2

A tractor with a prototype of a plant protection robot drives in a salad field.

photo:

annex annex /

Using the example of glyphosate, the changes that companies like Bayer and their customers increasingly have to endure can be well illustrated: Leverkusen not only struggles with the fact that they do not have a similarly efficient and inexpensive alternative product on offer, but also with the expected loss of revenue. With plant protection products, the Group accounts for about half of the agrochemicals department's turnover – in 2018 it amounted to EUR 14.27 billion.

Data analysis and electric shocks

In the future, sustainability will count how much Bayer earns, promises Matthias Berninger. Digital technology, robots and drones should play a major role in this. In addition to Monsanto, Bayer also acquired a subsidiary of Climate Corporation, which has been collecting data on weather, land, climate and yields since 2006. Drone and satellite data give farmers a whole new perspective on their fields. For example, from the chlorophyll content they can detect which plants are healthy and then draw conclusions that help maximize the yield of the plants as much as possible.

The first step is to spray equipment that only uses pesticides where the computer deems it necessary. Such machines are already in use. Bob Reiter, who is responsible for research and development at Bayer's Agrochemical Products Division, also talks about drones in "The Future of Agriculture," which are able to determine the size of plants per second and are able to accurately apply chemicals to individual spraying plants instead of to process entire portions of the field. According to Smithsonian Magazine, agricultural drones are able to analyze up to 400 acres of arable land in a single day. It would take people all day for a small portion of the crowd.

Agricultural researcher doubts "idyllic future"

Numerous companies and research institutes are also working to replace plant protection products with mechanical methods: robots such as "Etarob", which is being developed at FH Aachen, should make chemical solutions as outdated as plowing. He drives around the fields autonomously, cameras analyze plants and uses electric shocks to destroy weeds. Bosch's Bonirob uses excavator weapons to lift weeds from the ground. Farmwise, a US weed harvester, has been trained with millions of images to learn to differentiate between crops and weeds.

Agronomist Steinmann does not recognize panacea in new methods: "In the end, it depends on the implementation of the farmer," says the professor. Instead of more sustainable ecosystems, technologies could also lead to further intensification of the breeding system: "I'm still not convinced that this technological path will automatically lead to an idyllic future."