Article

by Carey Gillam

• BASF, Monsanto to invest additional $1 billion
• Expanded joint venture will commercialize biotech wheat
• Drought-tolerant corn expected to hit market around 2012
• Monsanto to get 60 pct of profits; BASF 40 pct

KANSAS CITY, Mo, July 7 (Reuters) - Monsanto Co MON.N. and BASF BASF.DE said Wednesday they will nearly double their investments into an already established joint venture to develop biotech crops, expanding their efforts to include a focus on wheat, a key food crop that as yet has no commercialized biotech variety.

The companies said they were adding potentially more than $1 billion to the collaboration they formed in 2007, which already had a budget of about $1.5 billion and has been focused on developing higher-yielding and stress-tolerant versions of corn, soy, cotton and canola.

Monsanto tried to bring a biotech wheat to market several years ago but was stymied by objections from farmers, exporters and foreign buyers of U.S. wheat who feared consumers would reject products made with genetically altered wheat. It shelved its efforts to develop an herbicide-tolerant spring wheat in 2004.

Currently no biotech wheat is grown on a commercial scale anywhere in the world due to opposition from consumers and food industry players.

But some of that opposition has waned in recent years and many U.S. farmers have said they would welcome a genetically altered wheat if it helped them increase yields and profits.

BASF Plant Science President Peter Eckes said increased yield would be a focus for the work into wheat as well as other crops.

“The yield increases that we have achieved together in the field so far give us confidence that we can do more in our collaboration crops, which now include wheat,” Eckes said in a statement announcing the deal.

The companies said they hope to develop a yield enhanced biotech wheat for North American and Australian markets, but initial commercialization will occur sometime after 2020.

The joint venture is still on track to introduce a genetically modified drought-tolerant corn around 2012, pending regulatory approvals, the companies said Wednesday.

The drought-tolerant corn will mark the first product emerging from the companies’ joint pipeline, and is designed to provide farmers yield stability during periods of low rainfall by mitigating the effects of water scarcity on corn plants.

The companies said U.S. field trials for drought-tolerant corn met or exceeded targeted yield enhancement - an increase of roughly 7 to 10 bushels per acre over the average yield of 70 to 130 bushels per acre in some of the key drought-prone areas in the United States.

The companies said under the terms of their collaboration, each company will maintain independent trait discovery programs, nominating from those programs specific genes to advance for accelerated joint development and joint funding. Products from the joint development will be commercialized by Monsanto with a profit-sharing arrangement that gives Monsanto 60 percent of the net profits and BASF 40 percent.

(Reporting by Carey Gillam; Editing by John Picinich)