New technologies challenge chemical giants

Bloomberg features that as the global agricultural sector grapples with the rising costs and environmental concerns associated with herbicide use, machinery manufacturers are introducing innovative solutions to address these issues.

Farmers, who collectively spend $37 billion annually on liquid weed killers, are increasingly adopting a new approach: leveraging technology to reduce usage. After nearly a century of employing a more-is-more strategy with chemical herbicides, the global agriculture sector is swiftly embracing innovations that could slash herbicide use by up to 90 per cent.

New sprayers equipped with artificial intelligence-powered cameras can now identify and target invasive plants while leaving cash crops untouched. If even a small percentage of farmers integrate these advanced tools, it could significantly impact major crop-chemical companies like Bayer AG and BASF SE.

"Though they don’t widely acknowledge it, they realize selling millions of gallons of product is a blunt and fading model," said Jason Miner, global head of agriculture at Bloomberg Intelligence, referring to the herbicide industry. 

Crop protection, a substantial industry valued at approximately $79 billion in 2022 according to S&P Global, sees herbicides making up nearly half of the market. In the US, herbicides are used on 96 per cent of planted corn acres, compared to 19 per cent for fungicides and 14 per cent for insecticides, as per a 2021 USDA survey. While 28 per cent of cropland is treated via aerial applications, most relies on ground sprayers. Reducing herbicide use through precision technology can lower costs for farmers, especially as their overall incomes are projected to decrease in 2024. 

Environmental concerns also drive this shift, as herbicide drift can damage crops and wildlife, leading to costly lawsuits. Drift incidents, such as those involving dicamba, have prompted legal actions. Additionally, crop chemicals have faced expensive legal challenges related to human health. Bayer has already spent about $10 billion of the $16 billion allocated for US litigation over Roundup, a weed killer acquired from Monsanto that is alleged to cause cancer. Despite Bayer's claims that glyphosate, the product's main ingredient, is safe, Europe's goal to cut chemical pesticide use by half by 2030 further motivates the shift towards reduced chemical use. Machinery manufacturers, both large and small, are actively developing new solutions. 

By Naila Huseynova