Dow Chemical and Monsanto Could Hold the Solution to This Accelerating GMO Problem

By Markets Fool.com

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Herbicide application in action. Image source: Chafer Machinery/Flickr.

The Internet almost caught on fire several weeks ago, when the World Health Organization characterized the generic, but widely used, herbicide glyphosate as "probably carcinogenic to humans." Two other pesticides -- malathion and diazinon -- were also singled out, but only glyphosate is a household word, thanks to Roundup from Monsanto , and, of course, to the Internet mobs that regularly assemble against the company.

Although the classification caused quite a stir, it probably won't have any meaningful impact on the use of glyphosate (farmers are well aware that it replaced several much riskier herbicides), Monsanto's revenue or profits (no viable or economical alternatives exist), or the general conversation on genetically engineered crops (some of which are resistant to glyphosate applications). After all, WHO has also labeled the occupational exposure experienced as a barber and emissions from high-temperature food frying as "possibly carcinogenic to humans" -- and the world still has plenty of barbers and fast-food joints.

While it's difficult to have a reasonable discussion on GMO crops, given how polarized the conversation has become, biotech crops aren't perfect. They're just tools. When used properly, tools can provide simple solutions to age-old problems. When used improperly or abused, tools can exacerbate existing problems or create new issues. With that in mind, let's attempt to have a reasonable discussion on the topic by examining one real problem a specific type of biotech crop poses, and a potential solution that Monsanto and Dow Chemical are developing.

The path of least resistance
Herbicide-tolerant crops allow farmers to apply herbicides to their farms without the need to pinpoint the locations of weeds or avoid revenue-generating crops, thereby saving time, money, and carbon emissions during field maintenance. It's a tremendously simple solution, which explains why farmers have widely adopted crops engineered to tolerate applications of herbicides, such as glyphosate, since their introduction in 1996. Today nearly 90% of all corn, cotton, and soybean varieties planted in the United States exhibit such traits, as U.S. Department of Agriculture data demonstrates.

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Herbicide-tolerant traits denoted by "HT." Image source: USDA.

Unfortunately, widespread adoption of herbicide-tolerant crops has led to the widespread prevalence of herbicide-tolerant weeds. Here the word "tolerant," used to denote a positive trait in crops, is often replaced by the word "resistant," since the trait has negative consequences when exhibited in weeds. Or, when sensationalism wins, the term "superweed" is applied.

Terminology aside, it's still a problem -- and one that has been accelerating according to market research polls. In 2011, about one-third of farmers reported having glyphosate-resistant weeds on their farms. That jumped to nearly 50% in 2012.

Are biotech crops really to blame? While there's no doubt that biotech crops engineered to tolerate the application of herbicides have played a major role, the problem can be more accurately characterized as one of herbicide management. Resistant weeds existed long before biotech crops were deployed to American farms. However, the agricultural industry's heavy reliance on a single herbicide, in this case glyphosate, has made it easier for resistance to emerge.

In other words, easy-to-use biotech crops have made it easier to rely on a single herbicide but haven't directly led to herbicide-resistant weeds just because they're genetically enhanced. Of course, farmers are still left with a big problem that needs solving. What solutions are emerging?

Industry stepping up
Some may balk at the idea that the agricultural industry can solve a problem it made worse, but there's no getting around the fact that companies such as Monsanto and Dow Chemical will play a key role in any unified plan to address problems associated with herbicide-resistant weeds.

If the problem can be simplified as an overreliance on one herbicide, then one obvious way out is to use additional herbicides. Indeed, that idea is the driving force behind Dow Chemical's Enlist Weed Control System, which includes (1) corn and soybean varieties engineered to resist both glyphosate and 2,4-D, another commonly used herbicide, and (2) a new mixture of the two herbicides called Enlist Duo.

The system worked beautifully in field trials, demonstrating the ability to control over 90% of five common weeds, including three already at least partially resistant to glyphosate.

Image source: Enlist.com.

That table should make it no surprise that Dow Chemical has experienced high demand for the Enlist Weed Control System -- even before regulatory agencies approved it. The product is expected to contribute a majority of EBITDA growth for the company's agricultural sciences portfolio, which is expected to grow by $1 billion from 2013 levels by 2020.

While the Enlist Weed Control System will provide an important near-term solution for farmers, weeds will eventually develop resistance to Enlist Duo. It's an unfortunate reality that awaits agriculture if more robust guidelines and mandates aren't introduced.

Longer term, it makes sense for the USDA to step in and encourage farmers to rotate herbicides, whether every harvest or every several years. It's a bit complicated, since one herbicide cannot simply be substituted for another in the same amounts or applications. Such a move would also require coordination with industry to ensure adequate supply of herbicides and seeds in the mandated year. But if we want to protect the value that biotech crops and genetic traits provide, then it's an inevitable step.

What does it mean for investors?
Whether or not you blame the likes of Monsanto and Dow Chemical for aiding the advance of herbicide-resistant weeds, there's no denying that the pair are working on novel solutions. Do the solutions go far enough on specific timelines? Maybe not, depending on the length of time in question, but the difficult lessons learned by relying too heavily on one herbicide have created significant opportunities for companies that develop solutions, even if they're partial ones.

The article Dow Chemical and Monsanto Could Hold the Solution to This Accelerating GMO Problem originally appeared on Fool.com.

Maxx Chatsko has no position in any stocks mentioned. Check out hispersonal portfolio,CAPS page,previous writingfor The Motley Fool, and follow him on Twitter to keep up with developments in the synthetic biology field.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.