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Global warming could mean big business for controversial agriculture giant Monsanto, which announced last week it was purchasing the climate change-oriented startup Climate Corporation for $930 million.
Agriculture, which uses roughly 40 percent of the world’s land, will be deeply affected by climate change in the coming years. In 2007, the Intergovernmental Panel on Climate Change predicted that warming will lead to pest outbreaks, that climate-related severe weather will impact food security, and that rising temperatures will hurt production for farms in equatorial areas. (In areas further from the equator, temperature rise is actually estimated to increase production in the short term, then harm production if temperatures continue to rise over 3 degrees Celsius in the long term.) Meanwhile, increases in the global population will make it crucial for farmers to be efficient with their land, says UC Davis professor Tu Jarvis. “The increase in food production, essentially, in the future needs to be in yields—output per acre,” Jarvis says, even while weather patterns make farming less predictable or more difficult in some places.
Monsanto, meanwhile, has been gearing up to sell its wares to farmers adapting to climate change. Here are five climate change-related products the company either sells already, or plans to:
1. Data to help farmers grow crops in a changing climate. Climate Corporation, which Monsanto is acquiring, sells detailed weather and soil information to farmers with the stated mission of helping “all the world’s people and businesses manage and adapt to climate change.” This data is meant to help farmers better plan, track, and harvest their crops, ultimately making farms more productive. According to its press release, Monsanto thinks the ag data business will be a $20-billion market, and that farmers using these tools could increase their yield BY 30 to 50 bushels (that’s between 1,700 and 2,800 shelled pounds).
In a video interview about the acquisition, Monsanto vice president of global strategy Kerry Preete told TechCrunch: “We think weather patterns are becoming more erratic, it places a huge challenge on farmers with their production. We think a lot of the risk can be mitigated out of weather impact through information,” Preete said. “If you know what’s going on every day in the field, based on climate changes, soil variations that exist, we can really help farmers mitigate some of the challenges that impact their yield.”
2. Insurance for when it’s too hot, cold, dry, wet, or otherwise extreme outside. Climate Corporation currently sells both federally subsidized crop insurance and supplemental plans that pay out additional benefits when crops go awry. While federal insurance repays farmers up to the break-even point for a failed crop, Climate Corporation insures the lost profits as well. Monsanto says it will maintain this insurance business.
Though the broader insurance industry is concerned about losses due to major natural disasters occurring more often as the result of climate change, insuring crops is less risky because payouts for a damaged crop season a generally smaller than those for dense, damaged urban areas, according to Gerald Nelson, a professor emeritus at the University of Illinois.
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5 Ways Monsanto Wants to Profit Off of Climate Change