Argentina is growing a bumper crop of agtech startups and one of the brightest is Bioceres SA

Hot biotechnology firm co-founded by 23 Argentinian growers is finding success by sustainably developing higher-yielding crop varieties

As the second largest country in South America and 8th biggest in the world, Argentina’s grasslands, plains, and plateaus have deeded it a long agricultural and ranching history. An impressive 34 million hectares of its 2.8 million square kilometers of land mass are devoted to its primary crops of soy, wheat, and corn. Over the last several years all of that farming experience has been increasingly channeled into spawning a thriving agtech sector. Thanks to industry conferences, a great availability of capitalization, and a plethora of international joint ventures, much of this Argentinian agtech know-how is beginning to plant seeds of opportunity around the world.

Within Argentina’s ag industry, a multitude of initiatives have emerged to create better transparency and efficiencies for growers. One of the most impressive is InteliAgro, a platform which provides farmers with real-time market data and crop management and analysis systems. Many of the most promising agtech startups have been assisted by the National Agriculture Technology Institute (INTA), a government agency. Functioning as a centralized research laboratory and agroclimate resource, INTA operates a network of research centers, scientific institutes, satellites, and 154 meteorological stations for monitoring weather and climate variability, all of which is shared freely with family farms and large scale ag multinationals. 

Each year, a vibrant cross section of the latest advances gather at the annual AgTech Week, a conference sponsored by the government’s commerce department known as Agencia Argentina de Inversiones y Comercio Internacional. Featuring three days of presentations, fast pitch competitions, and breakout sessions which showcase speakers making presentations on a wide range of topics from AI to investment forums. Organizers of AgTech say its mission is to position Argentina as a global leader in AgTech by creating business opportunities, encouraging innovation and raising awareness about the transformative possibilities of AgTech in Argentina.

A firm frequently featured at AgTech Week is Bioceres S.A., a vertically-integrated developer of crop productivity solutions with research and products emerging in seed traits, crop nutrition, and crop protection. Originally co-founded in 2001 by a consortium of 23 growers throughout Argentina, the firm was launched with a modest $12,600 “friends and family” seed capital round.

To date, the company has since accumulated $85 million in funding and now operates 12 divisions. Federico Trucco, CEO of Bioceres, credits the firm’s success on its holistic approach to innovation, a lengthy process which he says is based on a “three pillar” open architecture. The first stage is innovation discovery which is conducted by INDEAR, the research and development arm of Bioceres. Much of the R&D costs are underwritten by government grants, which have increased substantially for the life sciences, Mr. Trucco says. 

Following testing and refinement of the technology under development, Bioceres’ secures patent protection before shopping the solution to well-established global seed companies. The objective is to gain market validation and either funding or a joint venture agreement. Finally, to bring the resulting biotech products to market, the firm’s subsidiaries, each with a with crop-specific focus. Enter the picture: Verdeca specializes in soybean traits, Trigall Genetics in wheat and Bioceres Semillas in alfalfa. 

Having these “go to market” platforms are key to ensuring an unhindered distribution channel to growers. According to Mr. Trucco, this helps the firm maintain its independence and not have to rely on the large multinational seed and ag products entities for distribution. As is typical in the industry, Bioceres also counts among its investors and partners several of the industry’s top tier companies, including Syngenta, Valent Biosciences, Corteva Agriscience, DONMARIO Simillas and TMG Holdings

Leveraging its capitalization, Bioceres has recruited a special acquisition corporation, Union Acquisition Corp. for the purposes of acquisition or to secure equity stakes in well-established biotech companies to gain global market access:  Rizobacter, active in 30 countries selling therapeutic seeds, adjuvants and fertilizers, Chemotechnica, a 65 year-old developer of insecticides, herbicides, fungicides, and Synertech Industrias, a French firm specializing in micro-granulated fertilizers and crop nutrition/protection products. Through these and other acquisitions and subsidiaries, Bioceres has a direct pipeline to over 700 dealers.

In its quest to raise additional funds with a public listing, Bioceres has come to the edge of going public three times before pulling back due to political or economic considerations in Argentina. This past March, the stars finally aligned and through a reverse merger with Union Acquisition Corp., Bioceres finally listed on the NYSE and renamed the former ticker of Union to BIOX. Mr. Trucco says part of the capital infusion will be used to boost Bioceres’ stake in Rizobacter Argentina SA from 50.01% to 80.00%.

Proof of the vertically integrated model achieved by Bioceres was seen in an announcement this month that the firm is seeking U.S. Department of Agriculture approval of a soybean seed variety called HB4 which has been engineered with drought-resistant properties. Bioceres has already been given the green light for sales in Brazil and their home country. All three nations are the leading soy producers globally. Mr. Trucco say he is hopeful to have approval for sales of HB4 soybeans in China sometime next year, the world’s largest importer. 

Due to climate change, drought resistant seeds are of increasing interest to growers and governments as a way to mitigate crop yield uncertainty and negative economic impact caused by unusually dry weather. Bioceres executives say that had its newest drought-tolerant soybean and wheat varieties been available before the 2018 drought in Argentina, approximately 5 million out of the 15 million tons of crops that were lost could have been prevented.

Pending bans in U.S. and overseas put Corteva Agriscience’s Lorsban (Chlorpyrifos) in regulatory crosshairs again

Human health concerns, especially on embryos and children, prompt the E.U, Canada, and California to move toward a total phase out 

For over 50 years, farmers in approximately 100 countries have used Chlorpyrifos (brand name: Lorsban) as their go-to, all-purpose pesticide to protect cotton, soybeans, corn, almonds, and fruit trees from a wide spectrum of insects and worms. Now, following intense review by scientists and regulators in many of the nations where its in daily use, the organophosphate pesticide seems destined to be regulated off the market, and relegated to agricultural history. 

Chlorpyrifos has already been banned for residential use in the European Union, Canada, and the U.S., and Hawaii banned it outright last year. Use is still widely permitted internationally for agricultural application and in specific private property cases such as golf courses. Last month, California announced it will be issuing a “cancellation” of Chlorpyrifos, effectively a complete ban on its use which will be phased in over a roughly two year period. In making the announcement, California State Environmental Secretary Jared Blumenfeld noted it was unprecedented for the state to unilaterally ban a pesticide but said it was warranted.

“This pesticide is a neurotoxin and it was first put on the market in 1965,” Mr. Blumenfeld said. “So it’s been on the shelf for a long time and it’s past its sell-by date.”

Concerns over links to health and developmental problems have swirled for years, with a large volume of epidemiological studies providing evidence of everything from autism, low IQ, memory issues, and learning disabilities in children born to women living near fields and farms. Critics of Lorsban have pointed out that organophosphate pesticides are chemically similar to a  nerve gas developed by Nazi German shortly before the outbreak of World War II. IN 2012, a University of California at Berkeley study documented evidence that 87% of umbilical-cord blood samples tested from newborns had at least detectable levels.

Until former EPA head Scott Pruitt reversed potential restrictions on its use last year which had been working its way through the legislative process under the Obama administration, health and environmental advocates had been hopeful Lorsban would be outlawed within a few years. Now the issue is heading for a mid-July final decision as a result of a court order issued by the 9th Circuit U.S. Court of Appeals in San Francisco.

“The science is definitive,” Mr. Blumenfeld has stated in defense of the California action, taken in lieu of federal decision. “This job really should have been done by the U.S. EPA.”