Influence of Roundup Ready® maize on the South African maize herbicide market
Abstract
The first Roundup Ready crop to be commercialised was soybean in 1996. Soybean farmers, initially in the USA and more recently in Argentina, rapidly accepted these varieties. Roundup Ready soybeans were commercialised in South Africa in 1999. Since then Roundup Ready maize, canola and cotton have also been induced in the USA. The introduction of Roundup Ready technology may be viewed as a disruptive
technology. This innovative technology emerged 25 years after the discovery of the non-selective herbicide (glyphosate) that is now selective in maize, cotton, soybeans and other crops. This means that the crops are
now (due to genetic modification) tolerant to this herbicide, but that weeds remained susceptible. In light of the introduction of Roundup Ready maize into the South African market in 2004, and the subsequent influence thereof on the South African maize herbicide market, the objectives of this research is to: evaluate the influence of Roundup Ready maize on the South African maize herbicide market; determine which benefit, contributed by Roundup Ready maize, is ranked to be the most and to be
least important as perceived by maize growers; propose strategies to maximize Roundup Ready maize adoption amongst maize growers; and to propose strategies for the sustainable marketing of conventional herbicide program in conjunction with Roundup Ready maize programs. A total number of 260 respondents were telephonically interviewed, covering I98 415 hectares which represents 7% of the total maize plantings in South Africa. The most significant results are that: * 60% of the respondents believe that weed infestation have a fair to serious influence on maize
yield; * 60% of respondents apply herbicides on the total soil surface; * 60% of the respondents rely on triazine containing herbicides; * the dominant weed types in the West are broad leaf weeds, irrigation area is grasses and East is a 50/50 split between these two types; * more than 50% of the respondents have weed control costs exceeding R2OO/hectare; * less than 80% respondents believe that their current weed control program's efficacy is more than
90%; * respondents believe that the use of residual herbicides will decrease with 37.6% due to Roundup Ready maize; * 95% of first users of Roundup Ready are satisfied. The biggest perceived benefit is the broad
spectrum of weed control; * 8% of respondents indicated that they will already plant Roundup Ready maize in 2004/05; * 75% of the respondents will plant RR/YG, but price is the major influence factor; * demand for Roundup Ready maize and the stacked hybrid is relatively elastic. The following recommendations were derived: * weed control costs increase in the order - dry land West < dry land East < irrigation and also low
<fair < serious infestation. Due to these differences, marketing need to be focused on segments in which the greatest customer value can be created and sustained over time; * the positioning should be along the benefits as perceived by the maize growers. These include, firstly, the broad-spectrum weed control (main benefit), secondly the control of difficult weeds and thirdly flexibility of the programme; * the demographics section reflected that the Roundup Ready growers are < 50 years of age and have higher education levels and are subsequently more receptive than later adopters or non-adopters. Marketing efforts should be directed at these two categories; *
the growth stage will be entered next season (05/06), in which sales will start climbing quickly. Stacked hybrid (RR/YG) need to be released in this stage to drive the growth. The early adopters will continue to buy and will be followed by late adopters. The marketing objective now is to create product awareness and to get as many growers as possible to test the technology. A total of
95% of first time users are satisfied and will use the technology again. High intensify sales promotion to create awareness and perception of optimum weed control programme; * price elasticity of demand should be taken into account when new prices are set. Due to the bigger demand than supply (seed shortage) that is expected over the next two to three years, both
companies could ignore this elasticity and maintain value-based pricing. Demand for the stacked hybrid is relatively elastic. The recommended technology fee should be R 500/bag. The fee for the Roundup Ready maize should remain R 270/bag; * the perception of Roundup Ready growers is that the use of residual herbicides in maize
production will decrease by 44.6% due to the introduction of this technology. This will come mainly at the expense of atrazine and atrazine-containing products. The focus needs to move to the promotion of high qualify acetanilide herbicides as part of the Roundup Ready weed control programme to ensure success. Residual herbicides will also be a valuob1e tool in resistance management. The first Roundup Ready crop to be commercialised was soybean in 1996. Soybean farmers, initially in the
USA and more recently in Argentina, rapidly accepted these varieties. Roundup Ready soybeans were
commercialised in South Africa in 1999. Since then Roundup Ready maize, canola and cotton have also
been induced in the USA. The introduction of Roundup Ready technology may be viewed as a disruptive
technology. This innovative technology emerged 25 years after the discovery of the non-selective herbicide
(glyphosate) that is now selective in maize, cotton, soybeans and other crops. This means that the crops are
now (due to genetic modification) tolerant to this herbicide, but that weeds remained susceptible. In light of
the introduction of Roundup Ready maize into the South African market in 2004, and the subsequent
influence thereof on the South African maize herbicide market, the objectives of this research is to:
evaluate the influence of Roundup Ready maize on the South African maize herbicide market;
determine which benefit, contributed by Roundup Ready maize, is ranked to be the most and to be
least important as perceived by maize growers;
propose strategies to maximize Roundup Ready maize adoption amongst maize growers; and to
propose strategies for the sustainable marketing of conventional herbicide program in
conjunction with Roundup Ready maize programs.
A total number of 260 respondents were telephonically interviewed, covering I98 415 hectares which
represents 7% of the total maize plantings in South Africa. The most significant results are that:
>60% of the respondents believe that weed infestation have a fair to serious influence on maize
yield;
60% of respondents apply herbicides on the total soil surface;
>60% of the respondents rely on triazine containing herbicides; the dominant weed types in the West are broad leaf weeds, irrigation area is grasses and East is a
50/50 split between these two types;
more than 50% of the respondents have weed control costs exceeding R2OO/hectare;
less than 80% respondents believe that their current weed control program's efficacy is more than
90%;
respondents believe that the use of residual herbicides will decrease with 37.6% due to Roundup
Ready maize;
95% of first users of Roundup Ready are satisfied. The biggest perceived benefit is the broad
spectrum of weed control;
8% of respondents indicated that they will already plant Roundup Ready maize in 2004/05;
> 75% of the respondents will plant RR/YG, but price is the major influence factor; and
demand for Roundup Ready maize and the stacked hybrid is relatively elastic.
The following recommendations were derived:
weed control costs increase in the order - dry land West < dry land East < irrigation and also low
<fair < serious infestation. Due to these differences, marketing need to be focused on segments
in which the greatest customer value can be created and sustained over time;
the positioning should be along the benefits as perceived by the maize growers. These include,
firstly, the broad-spectrum weed control (main benefit), secondly the control of difficult weeds and
thirdly flexibility of the programme;
the demographics section reflected that the Roundup Ready growers are < 50 years of age and
have higher education levels and are subsequently more receptive than later adopters or non-adopters.
Marketing efforts should be directed at these two categories;
the growth stage will be entered next season (05/06), in which sales will start climbing quickly.
Stacked hybrid (RR/YG) need to be released in this stage to drive the growth. The early adopters
will continue to buy and will be followed by late adopters. The marketing objective now is to
create product awareness and to get as many growers as possible to test the technology. A total of
95% of first time users are satisfied and will use the technology again. High intensify sales
promotion to create awareness and perception of optimum weed control programme;
price elasticity of demand should be taken into account when new prices are set. Due to the bigger
demand than supply (seed shortage) that is expected over the next two to three years, both
companies could ignore this elasticity and maintain value-based pricing. Demand for the stacked
hybrid is relatively elastic. The recommended technology fee should be R 500/bag. The fee for the
Roundup Ready maize should remain R 270/bag;
the perception of Roundup Ready growers is that the use of residual herbicides in maize
production will decrease by 44.6% due to the introduction of this technology. This will come
mainly at the expense of atrazine and atrazine-containing products. The focus needs to move to
the promotion of high qualify acetanilide herbicides as part of the Roundup Ready weed control
programme to ensure success. Residual herbicides will also be a valuob1e tool in resistance
management.