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A vision of the soybean sector

From someone who sees and understands.

November 14, 2007  By Ralph Pearce

30aThe picture of the soybean sector of late has become somewhat conflicted. Concerns
regarding public versus private breeding initiatives, identity preservation
markets becoming a commodity, not to mention the price of soybeans, all have
served to cloud the future for the sector. But Peter Hannam believes there is
reason for optimism. While he concedes the short-term situation has its setbacks,
he looks to the future with a distinctive blend of vision and practicality,
and sees considerable potential.

Hannam is president of Woodrill Farms near Guelph, Ontario and has spent more
than three decades helping advance the growth and diversity of the province's
soybean trade. His influence ranges from his involvement with First Line Seeds,
to the development of Soy 20/20, to being the driving force behind the Ontario
AgriCentre in Guelph. Beyond his accomplishments, it is his sense of vision
that draws people to him. One moment, he can trace the history of soybean yields
and the next, envision where the industry is heading.

Private favoured over public
On the variety side, the new elite lines will continue to be developed by the
private sector companies, primarily because they can invest the large amounts
of money to meet increasing demands from growers and consumers. In fact, Monsanto's
new Vistive soybean, which will be commercially available in 2007, is one of
those products the industry has been predicting for years. With low linolenic
oil levels, food processors approached Monsanto, citing consumer demand for
foods with no trans-fats.


"So for major traits, like yield, disease and major food items, like low
linolenic, those will come from the major private industry companies,"
says Hannam. In his view, the public sector in any jurisdiction cannot compete
with the hundreds of millions of dollars required to keep pace with changing
demands for North American users.

Speed is another advantage of the private sector. With their large-scale investment
capacity, companies can use technology and a network of researchers to reduce
the time to market for the latest developments. "You can't expect the public
sector to have that much money to commercialize so rapidly, but in the private
field, you have to do it," concedes Hannam. "They're able to spend
on biotech and new products, so there will be major advancements on soybeans
in the next few years."

In fairness, Hannam insists there is a place for public and private sectors
as the market expands. But with continuing cuts in government funding, the public
sector is better suited to training breeders and focussing on niche markets
and smaller innovations. "The introduction of natto soybeans by the Ottawa
research station of Agriculture and Agri-Food Canada was a major role for them
in bringing a whole new industry to Ontario, and made us competitive with some
of the jurisdictions in the US that already had natto beans," says Hannam,
citing a positive example.

"But the big role of the public institutions is in breeding specific things
for the Ontario market, like industrial soybeans, some food and health soybeans,
and if they concentrated the majority of their efforts in those areas, those
aren't being addressed nearly as big on a global scale by the private industry."

New partners, new opportunities
Longer-term, Hannam sees an enormous potential for a unique partnership between
the two leading economic sectors in Ontario: automotive and agriculture. "The
automotive manufacturers are keen to use bio-products, so there are new initiatives
being developed to help the automotive industry work with agricultural research
to come up with products they can use in Ontario," says Hannam. He notes
that Ontario recently surpassed Michigan and California as the largest automotive
manufacturing industry in North America.

The potential for the two sectors is staggering. At Soy 20/20's annual meeting
in 2004, Jack Grushcow, president of Linnaeus Plant Sciences in Vancouver, spoke
of the benefits of motor oil derived from canola and soybeans, including lower
pollution emissions and higher lubricity factors that reduce engine wear. The
challenge is the cost efficiency: even at $60 to $70 per barrel, conventional
oil is still less expensive than vegetable oil. "But there's a huge market
for motor oil, and if soybeans were used for 10 percent of that market in North
America, it would require millions of acres, and that's just one small example,"
says Hannam.

Two hurdles to overcome, too
If there are two barriers to advancing the sector, Hannam keys on infrastructure
and regulatory delays, with the latter being the more serious. According to
a study by the George Morris Centre, Canada has one of the slowest regulatory
processes, averaging 850 business days, or more than four years, for approval.
"We're the hardest country in the world if you come in, even if it's just
regular breeding, if you can't prove that trait's been here already and it's
a plant with novel traits, it goes through almost a biotech approval system,"
details Hannam. "It's very costly to get something regulated and that's
a major issue."

For infrastructure to advance, a market and manufacturing process for an end
product must be developed to entice further investment. Whether Bunge Milling
in Hamilton, or Archer Daniels Midland in Windsor, can meet specific demands
by a manufacturer remains to be seen. "Our plea is for responsive crushing,"
says Hannam. "If we get a plant to manufacture insulation for cars, we'll
need to develop that crusher, so there will either be a number of smaller plants
or more responsive crushing. There are so many valuable components in a soybean,
and in Ontario, we're not processing them and getting that extra value, and
we need to do that." -30-



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