by Andrew Hore
Finding ways of growing more food and making it resistant to pests is important for the whole world. London’s Alternative Investment Market has a sub-sector of cleantech agricultural companies which can help to do this and reduce the use of scarce resources.
The UN estimates that the world’s population will reach 9.2 billion by 2050, 40% higher than at the present time, while food consumption is set to double over the same period.During the past decade the area of harvested land has increased by 2%: in that same period the population has increased by 16%. Although additional land is being brought into production, it is a scarce resource and techniques need to be found to enable more food to be produced from that land.
More efficient farming techniques will help, but improved pesticides and crop nutrients are also required. However, demand from both governments and consumers for the reduced use of chemicals has sparked the search for more natural alternatives.
Global warming also threatens to make the cultivation of crops in existing agricultural areas more difficult. Gas is used in the manufacture of fertiliser: therefore rises in oil prices make standard fertilisers dearer. Even so, plants typically recover less than 50% of the nitrogen from fertilisers.
Plant Impact and Plant Health Care are the two better-known AIM companies in this area: and both are making strong progress in signing up partners for their products.
Plant Health Care has just announced a licensing deal with Syngenta, which wants to use the AIM company’s Harpin technology in combination with its own herbicide products to develop a foliar spray. A combination of natural Harpin proteins and ingredients such as glyphosate has been shown to improve crop yields. The Harpins work by getting plants to switch on their self-defence mechanisms.
Myconate, another of Plant Health Care’s technologies, stimulates the growth of roots to make plants stronger and more productive: it can be used as a seed treatment. The company ended its Myconate agreement with Bayer earlier this year.
Plant Impact gained the first firm contract from its link up with Arysta LifeScience Corporation during this summer. Arysta is a Japan-based global crop protection company with annual revenues of more than $1 billion.
Arysta’s Mexican subsidiary has signed a distribution agreement for InCa (known as TALENTUS in Central America), which enables plants to obtain more calcium from the soil. The product helps plants use the calcium effectively in regions of high temperatures. The ten year agreement covers Mexico, Guatemala, Costa Rica, El Salvador, Honduras, Dominican Republic, Panama, Belize and parts of the Caribbean.
Sales of InCa in Mexico will start in Q3 2010. There could be further distribution agreements involving Arysta, with the Czech Republic and Romania being two of the most likely new countries where a deal could be agreed. Plant Impact also has a licensing deal with Arysta for BugOil, a benign controller of insects and mites.
It is not purely new technology-based businesses that are involved in developing innovative products. Another AIM company, William Sinclair, which is best known for supplying peat, is also developing alternatives to what is a declining resource.
During June, Sinclair launched its peat-free alternative product called Sincro-BoostPlus. This is good at retaining water, is nitrogen stable, has a low nutrient level and looks like peat, but it is made from renewable sources. Sinclair has spent millions of pounds on the product, which is made from local authority green waste (there are four million tonnes of civic amenity and garden waste in the UK). The waste material is treated to remove the salts, glass, plastics, metals and stones that normally contaminate green waste.
It is important that Sincro-BoostPlus is able to deliver comparable results to organic peat, since many alternatives do not produce satisfactory results and gardeners have been disappointed.
Even before the latest launch, Sinclair’s sales of peat-free alternatives were starting to build up and they will become increasingly important. The New Horizon peat-free products grew sales by 44% in the six months to March 2010.
There are concerns about the damage to the environment that can be caused by farming peat, and the UK Government wants the use of peat by amateur gardeners to be phased out by 2020. Sinclair received an initial £9 million from Natural England for agreeing to end peat harvesting at Bolton Fell over the next few years.
Other AIM companies, including natural pesticides developer TyraTech and natural feed additives supplier Kiotech International, could also contribute to increasing agricultural production and safer control of pests.
Although these companies are all relatively small, they could play a significant part in improving agricultural yields as well as become attractive targets for much larger companies in the sector.
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