1

Improving Our Quality of Life Improving Our Quality of Life

Through Advancements in ScienceThrough Advancements in Science

World Food Prize International Symposium13 October 2005

Robb FraleyExecutive Vice President

and Chief Technology Officer

Monsanto Company

2

Solving Human Challenges Through ScienceSolving Human Challenges Through Science

Protecting Biodiversity

Lack of reliable food source, malnutrition

Limited arable land

Insufficient fresh water

Soil degradation

“To feed the eight billion people expected by 2025, the world will have to double food production…”

CSIS - Seven Revolutions

3 * Photo credit: AAAS, ARS, Nature

1980 – 2000Gene

Sequencing, Biotech Crops,Human Insulin

2001Human Genome,Plant Genome,Animal Genome

10000 BCFermentation &

Leavening

1800’s Mendel’s Pea,

Darwin’s Species, Pasteur’s Microbes

1950-1980DNA,

Human Nutrition, Fortification,

Green Revolution

1900-1950Antibiotics,

Pasteurization, Preservation, Crop Breeding

Building on centuries of science,

biotechnology is a collection of tools used to

improve and enhance plants, animals, and

microorganisms for the benefit of society.

Building on centuries of science,

biotechnology is a collection of tools used to

improve and enhance plants, animals, and

microorganisms for the benefit of society.

Continuously Improving the Quantity and Quality of Continuously Improving the Quantity and Quality of Food Production Through ScienceFood Production Through Science

4

Creating Positive Economic Impact with Creating Positive Economic Impact with Increasing SpeedIncreasing Speed

Source: J. Bradford De Long, Estimating World GDP, One Million B.C.-Present

Information Age50 years

Information Age50 years

Estimated world per capita GDP in constant 1990 dollars

6000 BC 1600 1700 1800 1900 2000 2025

5000

10000

15000

20000

GDP

SteamElectricity

Microprocessor

GenomeGenome

Industrial Age350 years

Industrial Age350 years

Biotech Age25 years

Biotech Age25 years

Agrarian Age7000 years

Agrarian Age7000 years

5

Ag Productivity

Food and Nutrition

Pharmaceuticals

Industrial Processes

Bioremediation

Bio-Fuels

Personal Care

Advancements are Important in Both Developing Countries and Developed Countries Around the World

Biotechnology Continues To Advance Biotechnology Continues To Advance With Applications In…With Applications In…

*: Courtesy of DOE Human Genome Project

6

10 Years of Plant Biotechnology10 Years of Plant Biotechnology

10 years of commercial experience on over 1 billion acres:

– Proven economic and environmental benefits

– Solid record of safety

– Promising future benefits from new products

30 years of R&D efforts

M. A

c.

Source: ISAAA (International Service for the Acquisition of Agri-Biotech Applications) & Monsanto estimates

canolacottoncornsoy

0

50

100

150

200

250

300

350

400

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

F

2010

F

7

17 Countries Planted Biotech Crops in 2004 17 Countries Planted Biotech Crops in 2004 – Benefits Drive Adoption– Benefits Drive Adoption

USA118M A (1)Soybean,

Corn,Cotton, Canola

Canada13M A (3)Canola,Corn,

Soybean

Uruguay740k A (9)Soybean,

Corn

Paraguay3M A (6)

Soybean

South Africa

1.25M A (8)

Cotton, Soy

Mexico250k A (12)

Cotton,Soybean

Honduras<125k A (16)

Corn

Argentina40M A (2)Soybean,

Corn, Cotton

Spain250k A (13)

Corn

Colombia<125k A (15)

Cotton

Brazil12.3M A (4)

Soybean

Australia500k A (10)

Cotton

China9.1M A (5)

Cotton

Philippines

250k A (14)

Corn

Germany<125k A (17)

Corn

Romania250k A (11)

Soybean

India1.3k A (7)

Cotton

Source: James, C. ISAAA, 2004; Brookes, G. 2005 www.agbioforum.org

The Global Economic and Environmental ImpactThe Global Economic and Environmental ImpactThe first Nine Years 1996-2004The first Nine Years 1996-2004

Pesticide Reduction 172M Kg (379M lbs) less pesticide use, 6% reduction Overall Environmental Footprint reduced by 14%

Greenhouse Gas Emissions Reduction Reduced >10B Kg Carbon Dioxide Emission Equivalent to removing 5 M cars from the road for a year

Economic Return $6.5B increase in farm income in 2004 $27B cumulative net economic benefits at the farm level

8

Biotech Crops Bring Benefits to Biotech Crops Bring Benefits to Agriculture, Growers and the EnvironmentAgriculture, Growers and the Environment

Control Crop Biotech Crop

Insect resistant crops:

Reduces insecticide use

Protects farmer health

Benefits environment

Herbicide resistant crops:

Reduces herbicide use

Protects farmer health

Benefits environment

Control Crop Biotech Crop

9

Most Farmers Growing Biotech Crops Most Farmers Growing Biotech Crops are in in Developing Countriesare in in Developing Countries

8.25M farmers in 17 countries grew biotech crops

More than 3/4 of them are resource-poor farmers

in developing countries

10

Bt Cotton: Delivering Economic and Bt Cotton: Delivering Economic and Health Benefits to Indian FarmersHealth Benefits to Indian Farmers

India: Cotton = 30% Agriculture GDP

-50%(-$22.3/Ac) pesticide reduction

+58% (+294kg/Ac) yield increase

+163% (+ $132/Ac) net return

BtCotton

Conventional Cotton

2004 Season

Results of 2004 season

Source: IMRB International, 2005 AC Nielsen - ORG Center for Social Research, 2004

Bt cotton in 2004 helped farmers in India to earn US $172M additional income

Additional $1.33B in economic impact through cotton industry

Overall cotton production is up by 384M Kg of seed cotton or 134M Kg of lint

Bt cotton reduced pesticide loading worth US$29 million

(1quintal = 100kg; 1 bale = 170kg)

11

Bt Maize: Delivering Yield Advantage and Bt Maize: Delivering Yield Advantage and Economic Return to Philippine FarmersEconomic Return to Philippine Farmers

>15,000 farmers growing Bt maize in the Philippines

Yield advantage: ~30% Production cost reduction

~20% Income increased by 20% for

farmers planting Bt maize

Conventional Corn Bt CornConventional Bt Corn Conventional Bt Corn

6.3

T/H

a

8.0

T/H

a

5.7

T/H

a

7.7

T/H

a

27%35%

Hybrid 1 Hybrid 2

Yield Comparison

12

Enabling Technologies (Global)

Virus resistant Cassava (Africa)

Bt Cowpea (Africa)

“Golden Rice” (Global)

Rice genome sequence data (Global)

Delayed ripening papaya (SE Asia)

Virus resistant papaya (SE Asia)

Virus resistant potato (Mexico)

Insect resistant potato (Russia)

Virus resistant sweet potato (Kenya)

Public-Private Partnerships for Public-Private Partnerships for Developing CountriesDeveloping Countries

Potato

TransgenicControl

TransgenicControl

Papaya

Cassava Cowpea

13

Monsanto: Focusing Agricultural ResearchMonsanto: Focusing Agricultural ResearchAround Four Major AreasAround Four Major Areas

Agronomic Traits Insect, Weed and Disease Control

Agronomic Traits Insect, Weed and Disease Control

Feed & ProcessingFeed & ProcessingAnimal productivity (e.g. amino acids)

Feed & ProcessingFeed & ProcessingAnimal productivity (e.g. amino acids)

FoodFoodHuman nutrition (e.g healthier oils)

FoodFoodHuman nutrition (e.g healthier oils)

Yield & Stress

Yield & Stress

14

Reduce/eliminate trans fats with increased oil stability, requiring less hydrogenation

Achieve yield parity and stack with standard soybean

Reduce linolenic acid to <3%

Future developments will increase oleic and reduce saturates

Molecular Markers

Crop Genome

Food Quality Traits

YieldDrought

Flavour

Nutrients

Disease

OilProteinCarbohydrate

Metabolism

ImprovedFoods

ImprovedFoods

ImprovedFoods

ImprovedFoods

Crop Breeding

Crop Breeding

Low Linolenic SoyLow Linolenic Soy : Reducing : Reducing Trans Fats for Human HealthTrans Fats for Human Health

Standard Soybean

Low Lin

Mid Oleic + Low Lin

Zero Sat + MO + LL

Linoleic18:2

Oleic18:1

Sats18:0 / 16:0

Linolenic18:3

™

15

Omega-3 Oilseed: Increasing Omega 3 Omega-3 Oilseed: Increasing Omega 3 for Heart Health for Heart Health

Build on demand: AHA, USDA/DHHS and FDA all have recognized the importance of omega-3s for heart health

Enrich vegetable oils with bio-available Omega-3

Promote heart health with Omega-3 Enhance stability of SDA as an Omega-3

*AHA: American Heart Association; DHHS: Dept. Health and Human Services

Population Coronary Heart Disease Mortality and Tissue Omega-3 Fatty Acid Content

USA

QuebecQuebec Cree

Quebec InuitSpain

JapanGreenland

0

50

100

150

200

15 25 35 45 55 65 75 85

Omega-3 (% of all long-chain PUFA)

CH

D M

ort

ality

Source: W Lands, Lipids 2003: 38:317

Dietary Omega-3 in Biotech Oil seed

0

20

40

60

80

100

Fa

tty

Ac

id (

wt%

)

ControlOilseed

BiotechOilseed

New Bio available Omega-3

Mono-unsaturates

Saturates

Other Poly-unsaturates

0

10

20

30

Event 1 Event 2 Event 3 Event 4 Event 5 Event 6 Event 7

Biotech Plants in Development Meet or Exceed 20% Target

Omega levels in U.S. Field Trials

targetF

att

y A

cid

Wt

(%)

16

ALA a-linolenic acid18:3 n-3

Current Sources of Dietary Omega-3Current Sources of Dietary Omega-3

canola, soy & flaxcanola, soy & flax

Vegetable Oil Fish Oil

EPA eicosapentaenoic acid20:5 n-3

DHA docosahexaenoic acid22:6 n-3

Omega-3 Consumer Awareness

82% Fish oil

58% Omega-3

55% interest in trying fortified foods

Source: Sloan Trends & Solutions, Inc., 2003

6 3

18:2linoleic acid

LA

18:3-linolenic acid

GLA

20:3dihomo--linolenic acid

DGLA

20:4arachidonic acid

ARA

18:3-linolenic acid

ALA

18:4Stearidonic Acid

SDA

20:5eicosapentaenoic acid

EPA

20:4eicosatetraenoic

acid

Pro-inflammatory Anti-inflammatory

SDA Benefits

In humans,* SDA is converted to EPA ~5X more efficiently than ALA

In foods, SDA has greater oxidative stability than EPA or DHA

* Dr. Mick James, Royal Adelaide Hospital

Rate limiting step

17

High Lysine Corn

Amino acid enhancements add human nutritional value for developing countries

Enhance level of limiting essential amino acids and corn oil content

Improve amino acid balance and total energy

Enhancing Essential Amino Acids Enhancing Essential Amino Acids to Add Nutritional Valueto Add Nutritional Value

0

1000

2000

1st Generation

South Am. Result

US ResultControl

MinimumMinimumTargetTarget

2nd Generation

Event 1 Event 2Control

MinimumMinimum

TargetTarget

3000

4000

5000

Fre

e ly

sin

e le

vel (

ppm

)

18

Improving Nitrogen Uptake to Increase Improving Nitrogen Uptake to Increase Corn YieldCorn Yield

Product Concept 10% yield increase over

elite varieties at time of launch

Equivalent yield with 50% less nitrogen fertilizer

Benefits Produce greater output

per unit input

Manage yield variability

Potential to reduce fertilizer

Environmental benefits from reduced fertilizer run-off

Enhanced nitrogen uptake and utilization as demonstrated by increased:

BiomassGreennessKey metabolitesYield

Screening Under Limiting andSufficient Nitrogen

Limiting N Sufficient N

Gre

enh

ou

seF

ield

Yield Across All Acres and/or Reduced Inputs

19

Water Consumption Shares by

Sector(1995)

Water…One of the Most Limiting Water…One of the Most Limiting Resources in Our WorldResources in Our World

Developing Countries

Irrigation85%

Livestock2%

Household8%

Industrial5%

Developed Countries

Industrial22%

Livestock3%

62%

13%Irrigation

Household

By 2025, Developing Countries will have about

300 Million MT grain deficits due to water scarcity

Source: International Food Policy Research Institute

-500

-400

-300

-200

-100

0

mil

lio

n m

t

1995 2025

Base Case

Water Crisis

SustainableWater Use

Loss of Grain Production Due to Water Scarcity in Developing Countries

20

Helping Solve Water Usage Challenges Helping Solve Water Usage Challenges Through Biotech SolutionsThrough Biotech Solutions

Drought Tolerance Objective

Yield Protection on all acres to protect against drought stress

Yield enhancement on all acres through improved water use efficiency

Cost savings on irrigated acres through reduced water use

Improved economics and environmental sustainability

ArabidopsisArabidopsis

With GeneWith GeneControlControl

With GeneWith GeneControlControl

RiceRice

21

Drought Tolerance Corn

New Genes Provide Drought ToleranceNew Genes Provide Drought Tolerance

Reduced Leaf Temperature

Without Gene With GeneWithout Gene With Gene

Reduced Leaf Rolling

40 32oC34

22

Consistent DroughtStress

(western US dryland)

Reduced Irrigation

Costs

Broad Acre Water Use Efficiency

KS, NE, TX, CO, SD

Opportunity to utilize in

other crops

KS, NE, TX, CO

Water usage down

and pumping prices

increasing

Central , E and S. corn belt

More reliable yields

All corn acres

Most cornexperiences

low water that

limits yield

Drought“Insurance”

10-13 M corn+ 5 M non-corn

12 M 30-50 M Potential US Acreage

MarketSegment

70- 80 M

Drought Tolerant Corn for Every FarmerDrought Tolerant Corn for Every Farmer

10+ % (8+ bu/A) yield benefit stackable with best elite germplasm and biotech agronomic traits

10+ % (8+ bu/A) yield benefit stackable with best elite germplasm and biotech agronomic traits

23

Imagining the Benefits of Drought Tolerance Imagining the Benefits of Drought Tolerance For the Developing Country FarmerFor the Developing Country Farmer

We are developing a plan to ensure humanitarian access to drought tolerance trait

White maize is the single largest subsistence food crop in Africa & subject to repeated drought caused famines

Offer broad humanitarian access to any drought tolerant maize that we develop for food security in Africa

Continue to explore humanitarian access and development partnership concepts for other crops for Africa

24

Improving Food Quality and Production Improving Food Quality and Production for Our World’s Farmers and Consumersfor Our World’s Farmers and Consumers

Biotech crops have been planted for a decade with successful, safe and beneficial use in countries that account for more than half of the world’s population.

The tools of biotechnology continue to improve the quality of our food and our lives.

New TraitsNew

Traits

Global

Food

Production

Global

Food

Production

Current Food

Production

More and BetterFoods

More and BetterFoods

Greater BenefitsGreater Benefits