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Development of new biotech traits is hampered by a mishmash of rules regulations and often politically driven roadblocks that hinder innovation according to Nicholas Kalaitzandonakes director Economics and Management of Agrobiotechnology Center University of Missouri
<p> Development of new biotech traits is hampered by a mish-mash of rules, regulations and often politically driven roadblocks that hinder innovation, according to Nicholas Kalaitzandonakes, director, Economics and Management of Agrobiotechnology Center, University of Missouri.</p>

Measuring the cost of the biotech challenge

* Lack of alignment in global biotech regulation slows innovation. * Stakeholders need to get behind systems that move proven tech to market more efficiently. * Sustained innovation is key to meeting rising food demand.

Sustained innovation comes with sustained effort. That's a mantra that Nicholas Kalaitzandonakes, director, Economics and Management of Agrobiotechnology Center, University of Missouri, discusses as he looks at the challenge of getting biotechnology through the global regulatory process. During the International Biotechnology Symposium held in Champaign, Ill., this week, Kalaitzandonakes explored the issue and the cost of that process.

The challenge is what the industry calls "asynchronous approval" where one country approves a product but another country, or region, does the same only on a different time period. For example, a new biotech trait might clear China, Japan and Korea but be locked up in the process - perhaps never to see the light of day - in Europe. To explore the issue, Kalaitzandonakes looked backwards at global crop yields.

"We looked at 150 years of data and it's easy to see with corn that yield did nothing until the 1930s, and after that there was sustained yield growth," he notes. It's easy to point to the advent of hybrid corn as a driver for yield growth. And while Kalaitzandonakes credits that innovation with some of the boost, he adds that during this time farmers adopted mechanization, synthetic fertilizers and the use of new crop protection products that made control of weeds easier than ever.

"You can look at any crop, wheat, barley, cotton, and clearly when you get innovation in place there is an impact," he says. And the benefit of that rising production is clear as you look at land use. Up until the 1930s farmers increased land use three-fold, which meant the only way to increase the number of bushels was farm more land. Since the 1930s as the new tech kicked in, land use declined. He notes that all that added food supply came from productivity growth, creating for the time what he calls the closest thing to a free lunch.

That land use change, which amounts to freeing up 100 million acres for forest, wetlands and recreational use is astounding because at the same time farmers boosted output four-fold from the 1930s on. And labor hours fell too. For a bushel of corn it went from 180 labor hours to nearly nothing in that time period. "In addition to that we've done all this by not only putting food on the plate but there has been an eight-fold decrease in commodity prices over the same period," he says. "All this has come because we have had innovation outpace demand...these benefits have come at the heels of sustained innovation."

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For biotech, which has been around since the 1970s, but caught traction with the first commercialized ag products in the mid-1990s also came at the heels of sustained investment and innovation. And while it's easy to look at individual traits as drivers of productivity, Kalaitzandonakes says other genetic innovations have had an impact as well.

"We have seen an increase in the number of new hybrids increase and the product life cycle has decreased," he says. "The number of  years a new hybrid is in the market has fallen from 4.5 to 3.5 years." Marker-assisted breeding and other techniques have sped up development not only of biotech traits but the underlying crop genetics as well.

Regulation challenge

However, Kalaitzandonakes that the challenge of the biotech regulatory process around the world is significant and has economic impacts and the leading problem is that asynchronous approval process - things just don't line up. "Asynchronicity is about a lot of things," he notes. "It's about the benefits we don't get, the innovation that doesn’t happen, the products that don't show up on time. If the regulatory system is not predictable, it does not reduce, but increases, uncertainty."

He showed examples where regulatory issues impacted the markets. The biggest example being corn gluten imports to Europe. When there was a hiccup in EU approval of a trait for import, gluten imports fell dramatically. They rose again after approval, then dropped again when another trait had a regulatory hiccup.

"What is the price impact of that on the importer?" Kalaitzandonakes asks. He showed that when corn prices were low and corn was abundant the price premium Europeans paid for corn gluten imports was about 4.7%, but when corn prices rose the premium jumped to 23%. That's a cost to the livestock industry all because of an unclear regulatory path.

Soybeans are an even bigger issue since Europe must import most of the protein it feeds animals. When a new soybean trait didn't get approved and prices spiked the tone in Europe changed. "The last two soybean events cleared the approval process in 21 and 23 months respectively. They saw the cost of soybean access," he says.

The challenge is that for ag to meet the rising demand there is a need for sustained innovation. "The key word is sustained. Innovation is like riding a tiger. You can't come on and off the tiger at your own pace, you have to ride it a long time to make innovation flow," he notes.

He notes that for the system will require all stakeholders to come up with practical solutions to move the process along at an even pace. "At the end of the day, not all systems, not all laws, not all biosafety committees are going to be structured the same, but having a regulatory system in place [that works] is important. It's the closest thing we have to a free lunch," he concludes.

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