Tech companies are raising hundreds of millions of dollars, including leaning on agricultural heavyweights like Bayer AG, to develop agricultural products that use living things like microbes and algae to feed crops and reduce the need for synthetic fertilizers.
Microbes, including fungi and viruses, have been available for decades as treatments to protect plants from insects and disease, with mixed results. But developers are increasingly deploying them as natural ways to nurture crops while maintaining crop production levels.
Such products could help farmers reduce nitrogen applications that can pollute waterways and generate nitrous oxide, at a time when agricultural emissions are coming under greater scrutiny. Canada wants to reduce fertilizer emissions by 2030, while the European Union aims to reduce fertilizer use.
Tech companies are attracting funding because commercial nitrogen and potash fertilizers are in short supply, inflating food production costs.
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Investment bank Rabobank sees the $3 billion biostimulant industry growing 12-15% annually over the next five years. Global investment in biostimulants and crop control products more than doubled in 2021 from a year earlier, to $777 million, according to preliminary data from venture capital firm AgFunder.
But microbial fertilizers are largely unregulated, with few studies on their effectiveness in increasing crop yields. Only a few US states require companies to provide product efficacy data. The European Union will impose its first efficacy requirement for biostimulants in July 2022, and the US Environmental Protection Agency has released draft guidelines for public review.
“Unfortunately, there is an element of buyer beware there,” said Jon Treloar, agronomist at Denmark-based Novozymes, one of the biggest sellers of organic produce. One contains a fungus that grows along plant roots and releases phosphate, a crop nutrient, from the soil.
Unlike some companies, Novozymes shares field test results with farmers, Treloar said.
“If producers have a bad experience, it can really hurt the whole industry.”
Still, Iowa farmer Jeff Taylor likes what he’s seen of biostimulants.
Taylor applied a new product from Pivot Bio, a Silicon Valley-based start-up, and reduced fertilizer application to a corn field last year, while applying a full rate of fertilizer to a other field.
He said the field with Pivot’s product produced slightly more corn per acre.
“I was skeptical that there was an organic product that would help the crop,” Taylor said. “This is one that I personally feel works for me.”
Pivot, a private company whose investors include St. Louis AG giant Bunge Ltd., launched commercial sales of its microbial fertilizer in 2019 and says farmers are using it on more than a million acres. It raised $430 million last year from venture capital firm DCVC and Singaporean investment firm Temasek.
The microbes in Pivot’s Proven 40 consume the sugar in the roots of a corn, wheat or sorghum plant, producing an enzyme that converts nitrogen in the air into ammonia, a crop nutrient.
“Microbes that can fix nitrogen from the air into ammonia have been the holy grail of agriculture for 100 years,” said Pivot CEO Karsten Temme.
Pivot’s products do not generate the high emissions associated with nitrogen fertilizer manufacturing, nor the nitrous oxide emissions created when synthetic fertilizers break down over time, Temme said.
Boston-based Joyn Bio, a joint venture of Bayer and biotech company Ginkgo Bioworks, expects commercial sales of a microbial seed treatment in three to four years, CEO Mike Miille said. Joyn designs microbes in his Boston lab that fix nitrogen from the air and deliver it to corn plants in a form they can use.
Field trials in the Midwest began last year with the treatment, which aims to allow farmers to reduce conventional fertilizer use by 50% while maintaining yields.
Privately held Locus Agricultural Solutions, headquartered in Ohio, says its microbial soil treatments help crops take up more nutrients and less water and capture and store more climate-warming carbon under earth, generating carbon credits. Credits, generated when carbon capture claims are verified, can be sold to buyers seeking to offset their emissions.
The company, which sells its products in the United States and is expanding in Europe, has seen revenue jump 50% or more year-over-year, a growth rate that CEO Chad Pawlak says is expected to continue. continue for the next two to three years due to soaring agricultural input costs.
“When you see the double-digit percentage increases in (fertilizer) costs, the conversation around microbes changes significantly,” Pawlak said. “We are able to unlock some of these nutrients that have been bound in the soil over decades.”
Or snake oil?
Fertilizer and seed companies are on board.
The Canadian company Nutrien Ltd. sells biostimulants in its agricultural supply stores and the Norwegian company Yara International produces biosimulants based on algae and soil substances.
Seed company Corteva, formerly the agricultural division of DowDuPont, is launching a biologic this spring that it says captures nitrogen from the atmosphere and converts it to ammonium, a fertilizer that plants can use, a carrier said. word.
Bayer’s venture capital investment unit, Leaps by Bayer, funded microbe-focused Silicon Valley startups Andes and Sound Agriculture.
But not everyone is convinced that biostimulants work.
University of Minnesota soil scientist Daniel Kaiser tested Pivot’s Proven product at six sites over the past two seasons with less than optimal nitrogen fertilizer applications and only one site showed improved yield.
“With a lot of these (biostimulant products), the science is sound. But taking it from a concept to something that will work in the field is where they tend to break down,” said he declared.
Europe accounts for half of the global market, according to the European Biostimulants Industry Council. Farmers there initially used mainly for organic production and on high-value fruit and vegetable crops, but are now increasingly deploying them in conventional crops in response to the European Union’s drive to make the more sustainable agricultural production.
Plants can also support crop growth. Nova Scotia-based Acadian Plant Health harvests seaweed from the Atlantic Ocean and uses extracts of its active molecules in products to improve crop nutrient utilization.
The global focus on reducing emissions and consumers’ attention to how food is produced has given momentum to the biostimulant sector, said James Maude, senior vice president of Acadian.
“It had a bad connotation of being snake oil. (Now) it’s like the stars are aligned.”