Shilpa Divekar Nirula took over the mantle of CEO at Monsanto India last month. Passionate about agriculture, Nirula is presiding over a company that is transforming from just being a seeds and biotechnology company into one which will provide farmers with services including weather information, farming and seed support. In her first interview after becoming CEO, she tells Business Today about Monsanto's plans.
Q- What are the plans for Monsanto in India in the medium to long term?
A- We are transforming into a solutions company. This means that here's my farmer; I will look at one of the needs of my farmer, I may not be the sole provider of those needs. As a company, Monsanto will provide some aspect of those solutions including agronomic advice. But then how do we partner and collaborate with a whole host of others, so that if we can address a farmer, we sort of give the correct inputs collectively so that he can achieve his objectives. This is directionally where we look to go as a company.
Q- So from a biotechnology company you are going to become a solutions and services company?
A- We already have one million farmers with whom we have been working. We will reach out to them. There is the issue of reading and language skills, we don't want to lose out on farmers who may not necessarily be able to read very fluently. It is very fascinating in terms of what is possible.
Q- In the next three to five years, what are the concrete goals you have in mind?
A- There are three or four spaces. Very clearly, we will continue to focus on our core, which is very clearly our seed business - cotton, corn and vegetables. We do a lot of R&D, which is focussed on developing germplasm, which is the seed required for Indian conditions. India has seven to eight different agronomic zones, and each of those has different climatic conditions, soil patterns, farmers are different, so they tend to differ. So how can we continue to develop the seed that are needed. The third area will be the whole services space. How we can evolve to become a solutions company to the farmers. As we go ahead, we will seek to partner with various companies who are participating in agriculture in very different ways. It could be a weather services company, for example. There may be opportunities to combine some of the opportunities with insurance - farmers are exposed to a lot of weather risk, for instance, and we are very open to collaboration and partnerships.
Q- Would you consider collaborating with insurance companies?
A- We are open to collaboration and partnerships and it has played out quite well in the cotton technology business. And that will form the central pillar of what we will do in the country.
Q- What kind of growth targets do you have?
A- Like every company we have our cycles of what we can achieve and therefore plan. I think we could over the next five years look at growing the Indian business at least three times the current size. That is only possible if we bring what is the most relevant to the Indian farmer. And we are completely focussed on that.
Q- Can you be more specific as to which areas these are?
A- Water is a huge challenge in the country; agriculture is the biggest user of water, and many parts of India are already below the threshold of how much the water table has shrunk, for example. That's another area of focus as we develop our seeds for Indian conditions. As we work in partnerships along with state governments. We would like to work on how farmers would do agriculture more sustainably. A day will come when it might be impossible to grow anything on that land. It doesn't end without tying up the whole chain together. But if you want to talk to farmers and say ok, you are growing a crop which is using a lot of water, and I want you to switch to something else, as a government, or a state government, he would say, who's going to buy my produce? That is the biggest concern - that today I am growing a crop and someone's going to come and buy my produce. Tomorrow I may grow a crop and no one might be interested. So we are increasingly thinking about how can we actually bring those linkages. A big area of opportunity is to see how this can become a more integrated chain. A seed company, starting with the farmer from the seed it will plant to the output and seeing who needs that output. It isn't really easy in the first year, but you will have to hang on in there.
Q- Does this mean, for instance, there will be ketchup companies setting up factories in places where there is tomato produced?
A- I think there will be people seeking to find a place where they can create established capacity, so that the produce is available closer. If you look at corn today, it is all over, and there is a lot of quality degradation as it is transported over long distances. We see more and more capacity coming up in starch, or poultry and there is a real opportunity to build these in the hubs where some of the actual production is happening so that the time it needs to travel to get to the point where it is going to get processed reduces.
Q- You mentioned getting closer to the farmer. How do you want to achieve that in terms of the services play?
A- There is an opportunity to get more information out to our farmers. So that they can use the resources that they have to get far better yields or say costs. I think there is an opportunity there. I think farming is the riskiest profession in the country today. You saw what has happened in the monsoon and the peak planting season. It causes a lot of angst among farmers because it will decide on whether they would earn any money which will last them the rest of the year. Crop insurance in the country is very limited, it is largely linked to loans so there is always an insurance cover. Weather insurance penetration to the so-called non-loanee farmers is less than four per cent. This element of 'secure' has a lot of opportunity.
Q- What is the workaround for water problems?
A- We are working on drought-tolerant seeds. Depending on where it is in the various stages of R&D, we will bring it to market.