BioGlobal

Fonterra’s Impact on China

Over the past five years, the regulation of the agri-chemical industry in China has been progressively tightening.  No doubt, the experience with Fonterra and its joint-venture Chinese partner Sanlu re chemical contamination of milk powder will only accelerate this process.  Food security and safety are a major focus of the Central Government to ensure safe food, and export credibility (the made in China brand has been severely affected by this incident).

Bioglobal was issued a permit to trial its biochemical product in 2007.  These trials commenced in March 2008, and have completed the first year of a two year process.  The regulatory regime is managed from Beijing, but the Provincial Governments through their research institutes are responsible for the protocols and supervision.

This year, the trial regulations relating to agri-chemical registrations have tightened considerably. Bioglobal’s current trials have not had to comply with these new conditions. They involve:

1. Three years of trials prior to registration instead of two years.
2.  Higher costs for chemical trials. and more trial data required including residue studies.
3. Current toxicity data is required and residue studies on crops are now essential.

Tightening residue studies will make it harder for conventional insecticides to gain or maintain registration, and will cause some to be withdrawn from the market.  This is due to the studies revealing residue problems with insecticides or because producers know that residues will occur and will not try to register them. Toxicity studies for hard chemicals will have to be the full 3 tier system and this will be very hard for many of the local insecticide manufacturers.

Bioglobal is advantaged because its products have zero residuals.  As Bioglobal was able to gain a trial permit before this tightening, any competitive product will take at least 4 years (1 year of application, 3 years of trials) to come to market if these regulations are applied.  The food safety offered by its products to the fruit industry ensures that they fit within the Chinese government strategy of clean, green and chemical-free.  The impact of the Fonterra incident can only highlight the benefits of a chemical residue-free technology.

Reduced Carbon & Sustainability

Rising petroleum prices have three major impacts on the agri-chemical industry.

1. Increased transport costs for all sectors (manufacturer, distributor, grower).

2. Increasing inputs costs to manufacturers (plastics and actives).

3. Increased operating costs for growers.

Bioglobal faces the same rises in inputs (transport and raw materials). Exposure to volatile exchange rates can exacerbate this situation, and manufacturing or formulating in the country of consumption offers advantages. These are risks that require management.

Dow Chemicals in the USA raised product prices across the board by 20% due to these costs.  Fertilizer costs have risen up to 250% in the past 3 months. The rise in petroleum prices has made freight much more expensive.  This has caused airlines to reduce plane hours and routes to cope with these rises, reducing cargo load capacity.  In turn, increased demand for shipping capacity has forced up prices and reduced availability.  Given the distance Australia is, and especially for Bioglobal, from its target markets, these become serious considerations for exporting goods around the world.

The cost of fuel is impacting heavily of growers’ costs, as much of their current management regimes involve regular use of tractors and spray rigs to deliver insecticides to the crops.  The more sprays, the more cost.  This offers significant opportunities for Bioglobal biochemical technologies, as the mating disruption products only require deployment before crop flowering, and remain in place for the whole season. This allows for a minimal spray regime using integrated pest management (IPM) with the associated cost savings. A significant factor in spray regimes is that the tractor usually pulls up to 5 tonnes of water and chemical mixture each spray and applies 1 to 1.5 tonnes of liquid per hectare in an orchard each time a chemical application is made. For insecticide only sprays, this constitutes between 4 and 8 tonnes of liquid per hectare per season.  Application of pheromone mating disruption involves application of about 500 grams (active ingredient and plastic) per season.

The attract and kill products e.g. Bioattract Heli for cotton or wheat offer delivery advantages over the normal chemical spray routines.  Bioattract Heli is deployed in large scale crops one row in 50 to 100, and can be delivered by quad bike (very fuel and time efficient) when moths are flying..  Most conventional sprays are delivered by plane over the whole crop, and aviation fuel is expensive. For low tech, intensive small size cropping in developing countries the product can be delivered by plastic squirt bottles with no fuel component at all.

Sustainability

For moth control in orchards by pheromones, about 120 gm of active and 400 gm of plastic is used per hectare per season.  Spray chemicals use 5kg per ha per season, and 800gm of plastic ha/season.  This is a significant reduction in actives derived from petroleum sources.  Also, water savings using pheromone as distinct from spray chemicals is around 5 tonnes of water per ha per season, and while small in irrigated orchards is nonetheless reducing demand for a scarce and increasingly costly resource.

As attract and kill products are made up of 50% sugar, this is a renewable resource unlike oil. On average, 20gm of active is used per ha compared to 250gm of spray chemical per ha – again a significant reduction.  A reduced carbon footprint results from reduced volumes moving long distances combined with locating product formulation in target markets.

R&D tax concession

Bioglobal has received for the financial year 2008 a R&D tax concession payment of $209,000.  The R&D tax concession is an extremely valuable offset for losses incurred by the company by choosing to receive the cash benefit of those losses now, rather than wait for future income to extinguish those losses.

It provides a much needed working capital boost to companies such as Bioglobal intent on creating a product pipeline to feed into the global markets.

Tackling Malaria and Dengue

Bioglobal introduces a new technology to their product line.  The MOSQUITO SLAYER is an environmentally friendly attract and kill device for mosquitoes and midges. 

This technology is the first mosquito and midge trap to use ten scientifically proven attractants to target females. It plays a significant role in breaking the localised breeding cycle to reduce insect numbers and the associated health risks such as Malaria, Dengue, Ross River Fever, Encephalitis, Yellow Fever and West Nile Virus.

MOSQUITO SLAYER will play a pivotol role in the area-wide management mosquitoes and midges.

Product Features:

• Designed for use in Commercial, Retail, Government and Military Applications.
• Compact and light weight
• Easily installed and easily maintained.
• Designed for safe, outdoors and robust use.
• Works in all countries that have mosquito problems.
• Patent protected.
• The trap itself is a robust weatherproof trap made from UV protected plastic and controlled by a “military spec” circuit board.

Benefits:

• An effective vector trap – in response to a need that is growing globally.
• Helps prevent mosquito-borne diseases
• An environmentally compatible alternative to chemical control.
• Fits into the pest industry requirements of being able to service all areas including Commercial Retail and Government.

Collaboration with Michigan State University

Bioglobal is currently conducting research with Dr Larry Gut and Dr Juan Huang of Michigan State University’s Department of Entomology. The research is focused on a number of attract and kill formulations targeting specific lepidopteron pests of pome fruit using wind tunnel testing.

South African Trial Success

Bioglobal, in conjunction with Tsunami Crop Care (RSA), have now successfully completed full product evaluation of the Bioattract Heli (attract and kill) product in South Africa. Two years trials on wheat and maize crops demonstrated the product as highly effective in significantly reducing large flying moth populations and the associated damage. Full product registration is currently being pursued.

Bioattract Heli is a sprayable kairomone (plant-smells) bait which reduces on-farm insecticide rates and associated application costs. The product also has proven use in cotton, grain legumes and sorghum. Target pests include Heliothis (Helicoverpa armigera and Helicoverpa punctigera), Lucerne seed moth (Etiella behrii) and other large flying moths.

Managing Codling Moth (grower’s brief)

Codling moth, the major pest in apples, is favoured by hot, dry conditions. It is likely that Australian orchards will see more of those conditions in the coming years.  Development (from larvae to moth) is faster - more insects make it through to the third generation in a season before the end of summer, infesting more fruit and creating bigger problems for the coming year.

For growers to remain viable with rising costs (fuel, water and fertilizer) and increasing insect pressure, it is vital that the best pest management decisions are made. Mating disruption is an effective tool, but like all technologies must be managed well. The following is a guide to good management.

Hygiene
Larvae overwinter in tough cocoons under bark and in cracks and crevices on the tree frames. A small but significant population stay dormant for a second year. Old uneconomic trees that serve as reservoirs of the pest should be removed. Trees bulldozed in winter should be burned before the moth’s emergence in spring. Build a hot fire and push the green trees into this so that the larvae on the trunks are killed.  Burn old bins especially if they held culled or infested fruit.

Spray coverage and timing
Build up of codling moth in a hot year is made worse if spray coverage and timing is poor. Achieving good spray coverage involves attention to tractor speed, spray volume and pressure, nozzles and droplet size and tree height.  Achieving good timing involves attention to predictive tools such as monitoring traps and degree day models. Even with all this right, control is ineffective if your insects are resistant to the chemicals you are using.

Resistance
In Australia, codling moth resistance to organophosphates has been recorded in all the apple growing districts in the mainland. Resistance has been recorded to almost every insecticide that has been used widely. This includes soft option biologicals such as granulosis virus. In addition, codling moth is frequently cross resistant – resistance to one chemical makes it resistant to others including ones that have never been applied against it.  If an insecticide is used widely and repeatedly, then codling moth will become resistant.

Pheromone mating disruption seems to be a special case. When used correctly, it progressively reduces the population and does not appear to select for resistance.

Codling moths have yet to become resistant to some new products such as spinetoram (Delegate™) , thiacloprid (Calypso™) and clothianidin (Samurai™). These are precious resources. If they are used sparingly in conjunction with mating disruption, they will remain effective tools for many years.

Economics of codling moth control
The cost of programs for codling moth control depends on
•    the growing season of the crop
•    the amount of codling moth pressure within the orchard
•    the presence or absence of resistance in the pest population
       
Typical costs for the new chemistry sprays are $120 per hectare - treatment with $60 per hectare treatment for fuel, labour and depreciation. Application costs will increase as fuel prices rise. A full season insecticide program costs in excess of $1000 per hectare. Costs can be more than 50% higher in orchards with serious codling moth pressure. Total dependence on new chemistry runs the risk of rapid development of resistance.

Programs using old chemistry (i.e. organophosphates) involve lower chemical costs, the same or higher application costs, worker health and safety concerns and the very real risk of product failure. A grower still relying on this kind of program is ‘courageous’.