Biotech companies race for drought-tolerant crops

By Carey Gillam

JOHNSTON, Iowa (Reuters)- Outside the headquarters of Pioneer Hi-Bred International Inc, the pavement is iced over and workers arriving for the day are bundled up against the cold.

But inside a laboratory, a warm, man-made drought is in force, curling the leaves of rows of fledgling corn plants as million-dollar machines and scientists in white coats monitor their distress.

This work is part of a global race pitting Pioneer, Monsanto Co and other biotech companies against each other in a race to develop new strains of corn and other crops that can thrive when water is in short supply.

"Equipping plants to be able to maintain productivity in the driest years is of critical importance," said Bill Niebur, global vice president for research and development at Pioneer, a division of DuPont. "Drought is a global problem and we recognize the threat that comes with climate change. We've got our top talent in our organization working on this."

This line of research has been underway for years, but it has taken on added urgency as scientists predict a trend of worsening drought and hotter temperatures around the globe.

Water shortages are already costing billions of dollars a year in crop shortfalls around the world, and are likely to grow more costly, according to academic and government forecasters.

Two years ago, drought ate into corn production in France and Spain so severely that analysts pegged it as the worst in fifty years.

U.S. corn production was down 5 percent because of drought in 2006.

In Australia, where drought has persistent since 2002, some wheat farmers last year reported failing to harvest a crop for the first time in 40 years.

And in Argentina, which grows about 22 million tonnes of corn a year, drought has delayed planting of the current crop.

Last December, Jacques Diouf, the head of the U.N. Food and Agriculture Organization, warned that people were already starting to go hungry in poor countries because hotter weather was shrinking the food supply and pushing up prices.

MARKET OPPORTUNITY

Biotechnology companies are using both conventional breeding and genetic engineering to mold climate change into a market opportunity.

Monsanto, the world leader in genetically engineered crops, is doing field trials in dry parts of Kansas, Nebraska and South Dakota. Switzerland's Syngenta AG has a variety of research sites across the United States.

Corn is the first focus for all the companies because not only is it a key raw material for a multitude of processed foods, but also it is a major animal feed and it is in growing demand to make ethanol for use in alternative fuels.