Agriculture co's see business opportunity in food aid

(Adds comments from industry executives on partnership)

WASHINGTON, Sept 22 (Reuters) - U.S. agricultural business giants said on Tuesday that working to create sustainable production around the world will not only bring food to millions of starving people, but it's ultimately a lucrative source of revenue for their companies.

"I wouldn't want to hide that at all. Definitely (it's a business opportunity)," Sam Allen, chief executive of Deere & Co


, said in an interview. "If we don't create a sustainable solution then the health of the farmer down the road deteriorates ... and that's not good for us."

Deere, along with Archer Daniels Midland Co


, DuPont Co


and Monsanto Co


, competitors in the agricultural industry, have founded The Global Harvest Initiative with the goal of doubling agricultural output by 2050 to meet rising world demand. They met in Washington on Tuesday along with lawmakers, researchers, food hunger experts and other officials.

While expanding output and finding ways to help farmers produce their own food more efficiently is a goal all four companies say will make it easier to work together, the unique partnership will create business challenges that are yet unforeseen.

"Relationships are hard to do when you love somebody. Relationships in the business community are much, much harder," said Monsanto CEO Hugh Grant. "The challenge I don't think is going to be blindingly brilliant science but how do you build relationships in a difficult environment."

Already the four companies spend an estimated $9 million a day on research and development. But they say developing sustainable agriculture production will create hurdles including producing more on nearly the same amount of land and minimizing the environmental impact.

More than 1 billion people will be chronically hungry this year, the United Nations' World Food Program estimates, up from 963 million in 2008 when food prices spiked, causing hoarding and riots over food in some nations.


The public outcry has sparked efforts among world leaders to reduce the rate of hunger.

Members of the G8 countries pledged $20 billion in July to impoverished farmers to tackle chronic hunger. Instead of counting on food donations, they want to focus on helping small farmers feed themselves and neighbors through research such as creating seeds better suited to local conditions, boosting production and infrastructure to get crops to market.

The issue will take center stage when Secretary of State Hillary Clinton and UN Secretary-General Ban Ki-moon discuss food security on Saturday in New York.

A U.S. official, who spoke on condition that he not be identified, confirmed the Obama administration plans to unveil a food security plan at or around the time of the Saturday food security event.

Sen. Richard Lugar, an Indiana Republican, told reporters at the hunger conference that according to notes from Secretary Clinton, she will discuss "a multi-sectoral approach" promoting the development of infrastructure, education and research along with increasing farming productivity for local producers.

The Obama administration is "on the right track," said Lugar, who has introduced a bill with similar food aid reform measures. However, he was not optimistic that his plan, awaiting vote in the full Senate, would move forward this year.

"Until voters and politicians are motivated, very little can often be accomplished," he said.

Much of the blame on the failure to combat global hunger is because U.S. politicians, business leaders and others have not made it a priority, said Dan Glickman, former U.S. Secretary of Agriculture who is vice chairman of the Friends of the World Food Program.

Representative Jim McGovern, a Massachusetts Democrat, said reaction to the Obama administration's plan will be crucial to determine if the United States is committed to trying something new.

"What we don't have is political will," said McGovern. "Leadership is going to have to come from the White House." (Additional reporting by Arshad Mohammed; Editing by Christian Wiessner)