Genetically modification (GM) of seeds involves the modification of DNA of natural seeds, in order to increase tolerance against pests and herbicides, with the help of genetic engineering methods such as gene gun and agrobacterium tumefaciens. It also aids in improving the yield of the crop. Genetically modified seeds are gaining popularity over conventional seeds, owing to factors such as longer shelf life, improved yields, enhanced nutritional values, and capacity to sustain against climatic changes. According to the Food and Agriculture Organization (FAO), increasing population and rising disposable income of consumers would result in an increase in food production by almost 70% by 2050. The steadily growing demand for food and the reduced availability of arable land is expected to increase the adoption of various agricultural developments such as GM seeds, which in turn, is anticipated to support the global growth of the market. According to the Department for Environment Food and Rural Affairs, total agricultural land in UK was reduced from 17,240 thousand hectares in 2014 to 17,147 thousand hectares in 2015.
Stringent regulations imposed by various regulatory bodies such as Environmental Protection Agency (EPA), United States Department of Agriculture (USDA) and Food and Drug Administration (FDA), on genetically modified crops is hindering the market growth. For instance, EPA regulates the use of Bt toxins under the FIFRA Act (Federal Insecticide, Fungicide and Rodenticide Act)
Genetically Modified Seeds Market Taxonomy
Based on crop type, the global genetically modified seeds market is segmented into:
- Sugar Beets
Based on trait, the global genetically modified seeds market is segmented into:
- Insect Tolerance
- Herbicide Tolerance
Among crop type, corn segment dominated the GM seeds market in 2016 and is expected to maintain its dominance throughout the forecast period. This is attributed to rising demand for corn, as it is extensively used in production of ethanol and also as a feed for livestock. According to the US Energy Information Administration (EIA), corn is used as a primary feedstock of ethanol production and according to the estimation based on United States Department of Agriculture (USDA), U.S. produced 15.1 billion bushels of corn in 2016–2017 harvest year, which was 11% higher than the 2015–2016 harvest year. Moreover, according to the Renewable Fuel Association, the total ethanol production of the U.S. increased from 14.30 billion gallons in 2014 to 14.81 billion gallons in 2015.
Herbicide tolerant segment accounted for the dominant share in 2016 and is expected to retain market dominance over the forecast period, owing to the various benefits such as reduction in the amount of herbicides used and the associated environmental impact as compared to conventional crop production methods. Herbicide tolerance in genetically modified crops provides protection against weeds and enhances the crop yield. Soybean, canola, cotton, corn, sugar beet seeds and wheat are some of the crops, which are modified for herbicide tolerance.
Genetically Modified Seeds Market Outlook
- North America dominated the genetically modified seeds market in 2016, owing to high adoption of genetically modified or biotech crops in the region. According to the International Service for the Acquisition of Agri Biotech Applications (ISAAA), in 2016, Canada was reported as one of the major countries producing genetically modified crops with an area of 11.55 million hectares, with an average adoption rate of 93%. In the same year, five majorly produced genetically modified crops in Canada were soybean, canola, maize, sugar beet, and alfalfa and the total planting of these crops increased by about 5% from 2015.
- Additionally in 2016, the Canadian Food Inspection Agency (CFIA), approved cultivation of SU Canola and innate potato. Increasing support from government with respect to promotion of genetically modified seeds is one of the major factors fueling growth of the market.
- Asia Pacific is expected to exhibit fastest growth over the forecast period. Biotechnology in the agricultural field segment is exhibiting strong growth in emerging countries such as India and China, to provide enhanced crop yield against fluctuating environmental conditions such as drought and salinity. In 2016, according to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), around 7.2 million farmers adopted the IR cotton, in order to increase cotton productivity per hectare. In China, virus resistant papaya was planted on 8,550 hectares of land and IR cotton on 2.8 million hectares of land in 2016. The adoption of genetic seeds is associated with various advantages such as cost savings on the application of insecticides and improved crop yields. These factors have led to increasing demand for genetically modified seeds in Asia Pacific.
Major Players in the Genetically Modified Seeds Market
The global genetically modified seeds market is highly consolidated and characterized by intense competition. Mergers and acquisitions, joint ventures and partnerships, product innovations, and expansions are some of the major strategies adopted by key players to retain their market dominance. For instance, in 2016, Vimorin & Cie SA entered into joint agreement with KWS SAAT SE — a seed company — in order to develop traits of GM corn. Vimorin & Cie SA operates as a subsidiary of Groupe Limagrain Holding S.A.
Major players operating in the global genetically modified seeds market include Syngenta A.G., BASF S.E., Bayer A.G, Monsanto Company, DowDupont Inc., Groupe Limagrain Holding S.A., Bejo Zaden B.V., DLF Seeds A/S, Canterra Seeds Holdings Ltd., Takii and Co. Ltd., and AgReliant Genetics LLC.
Genetically Modified Seeds Market Key Developments:
- In November 2014, Maharashtra Hybrid Seeds Company Limited (Mahyco), a leading agri-biotech company based in India focused on production on GM crops, acquired 60% stake in Quton Seed Company (Pvt.) Limited, a Zimbabwe-based seed company. Quton is focused on research & development activities in order to provide superior quality seeds to farmers and improve productivity. Therefore, this acquisition is expected to strengthen Mahyco presence in Africa genetically modified seeds market over the forecast period.
- In October 2015, Syngenta announced expansion of its corn traits licensing agreement with KWS SAAT SE & Co. KGaA and Limagrain and their joint ventures AgReliant and Genective respectively. Under this agreement, Syngenta will provide worldwide rights to its current as well as future GM corn traits portfolio. The agreement is valid for next 20 years and covers the AgReliant business in North America and the individual operations of the two companies outside North America.
- In June 2018, Bayer AG, a German based life science company, successfully completed the acquisition of Monsanto Company. Monsanto is an agrochemical company and focused on agricultural biotechnology and on developing GM seeds. Therefore, this acquisition is expected to strengthen Bayer’s position in global GM seeds market.