La Creciente Demanda de la Producción Agrícola

Megatendencias Agrícolas Mundiales Agosto, 2014 Jorge Parizzia. DOW AGROSCIENCES RESTRICTED

Las Mega Tendencias Influencian en la Agricultura Global January 2012 Las Mega Tendencias Influencian en la Agricultura Global Factores de Demanda Factores de respuesta de la produccion Limitantes Globales Aumenta la poblacion global Aumenta la riqueza Demanda por proteinas Unprecedented Productivity Need Inversion en innovacion Mayor adopcion de biotecnologia Escasez de Agua Disminucion de la superficie agricola Escenaro Regulatorio DEMAND FACTORS Global Population Growth According to the Food & Agriculture Organization of the United Nations, “Despite unprecedented global economic growth, 850 million people suffer from chronic hunger while ecosystems are being threatened as never before.” Another way to look at this is of the roughly seven billion people on the planet today, 850 million go to bed hungry. The world’s population is expected to increase by 50 percent between 2000 and 2050, with the developing countries home to almost all of that growth. China and India’s rapid development and the resulting increase in living standards for 40% of the world’s population is generating a huge demand for food. Russia and Brazil advancement also is a factor in increasing demand. 2. Increase in Global Wealth A result of rising world incomes is a rapidly increasing demand for food. Asia and Latin America are experiencing significant GDP growth. Improved standards of living create demand for higher protein diets. The first expectation of many consumers in regions with accelerating economic growth (emerging markets) is a more diverse diet. This means a diet with more protein, primarily from meat, which requires additional grain to feed more animals. SUPPLY RESPONSE FACTORS 1. Unprecedented Productivity Needs As world population grows and urban areas expand, the quantity and quality of land available for agriculture declines. This puts significant pressure on farmers to boost crop yields to get production out of a diminishing land base. 2. Collision of Food, Feed, Fuel Food, feed and fuel consumption have led to a trend increase in demand for Agriculture products. It’s important to note that this trend is not driven solely by Fuel…it is more driven by needs for Food and Feed. Examples: Traditional biofuels (ethanol form corn/sugar cane) / Biodiesel from oilseeds and animal fats. Next generation biofuels (cellulosic ethanol). Biochemicals and biomaterials (replacements for petroleum based products, high value chemicals from bioprocessing) / NBiopharma. 3. Increased use of Biotech Crops Broader adoption and acceptance of biotech crops globally GLOBAL CONSTRAINTS 1. Arable Land As world population grows and urban areas expand, the quantity and quality of land available for agriculture declines. Conversion to industrial and urban uses is growing rapidly. China feeds 22% of the world’s population on only 7% of the world’s arable land. By 2020, there will be just over 0.2 hectares per person for animal and crop production. Significant pressure is on farmers to boost crop yields and get production out of a diminishing land base. 2. Water Availability Population growth and economic development are putting ever-greater demands on freshwater supplies. Additional pressure will come from issues of water pollution and poor quality water. Per capita water availability is decreasing and more regions are experiencing water stress. Ag uses the majority of water: Agriculture (irrigation) accounts for 70% of world water withdrawals, compared with 20% for industry and 10% for domestic consumption. Increased consumption of beef and poultry increases water input needs for agriculture. Water price increasing: Between 2002 and 2007, municipal water rates rose “by an average of 27% in the US, 32% in the UK, 45% in Australia, 50% in South Africa, and 58% in Canada. In Tunisia, the price of irrigation water increased fourfold over a decade.” El Desafio de la produccion y la sostenibilidad.

Las Tendencias Mundiales de Población, 1950 - 2050 January 2012 Las Tendencias Mundiales de Población, 1950 - 2050 1.8% CAGR 0.9% CAGR The interesting thing is to look at is the expected distribution of the increase in people The big questions are: what are they going to eat how are they going to get it The population increases are in geographies where there are food deficits currently. (note: some regions with food deficiency have enough availability but government and infrastructure limitations prevent the food from getting where it is needed) Implied is a need for increased global trade or increased yields in Asia and Africa. Source: World Population Prospects: The 2012 Revision (UN, 2013). Si bien las tendencias de crecimiento poblacional comenzarán a desacelerarse al acercarnos a mediados de siglo, el crecimiento en los mercados en desarrollo de Asia (excluyendo China) y África seguirá siendo fuerte. DOW AGROSCIENCES RESTRICTED

Tendencias en la Urbanización, por Región January 2012 Proporcion Urbana (%) Global urbanization is having significant impact on agriculture: Over ½ of the world now lives in cities. This means: Changing diets with people eating more processed foods with diversity New food distribution systems are emerging in the developing world People are buying refrigerators & cold distribution systems are emerging Shift from backyard to high-efficiency livestock production (corn/soy rations) Farms aggregated, seeing larger scale farming Increased urban vs ag competition for water Demographics, particularly in the developing world, are having a significant impacts on agriculture Source: World Urbanization Prospects: The 2014 Revision (UN, 2014). Aumenta la migración de población rural a zonas urbanas , y consecuentemente se los aleja de la tierra que tradicionalmente ha satisfecho sus necesidades alimentarias. DOW AGROSCIENCES RESTRICTED

Los países BRIC están liderando el aumento de la clase media global January 2012 Population (millions) Source: Mike Dwyer USDA; Global Insight *Households with income > $20,000 China = 234 mil Middle Class* Projected Growth to 2020 De 2009 a 2020, se espera que la clase media en los países en desarrollo aumente en más de un 100% (en comparación con un crecimiento del 9% en los países desarrollados) En 2020, se proyecta que China tendrá mayor población de clase media que los Estados Unidos. Se proyecta que India casi triplicará su clase media en 2020. It is expected that 234 million new Chinese citizens will enter the middle class by 2020. This wealth creation is driving a domestic demand for agriculture in China. China is impacting their economy other than with just low cost labor. They have implemented global trade initiatives, educational initiatives, manufacturing upgrades, their own attitude about environmental rules. This is the big driver for ag for the next decade. DOW AGROSCIENCES RESTRICTED

Cambio de dietas. Impacto multiplicador sobre la demanda de cereales Consumo de alimentos per capita, ppalmente commodities (kg/persona/año) Source: N. Alexandratos and J. Bruinsma, 2012, World Agriculture Towards 2030/2050: the 2012 revision, ESA Working Paper No. 12-03, Rome, FAO Source: Ephraim Leibtag, “Corn Prices Near Record High, But What About Food Costs?” in Amber Waves, February 2008. La ingesta adicional de calorías es sólo una parte de la historia. La creciente demanda de productos de origen animal (leche y carne) crea un efecto multiplicador sobre la demanda debido a los tipos de conversión para diferentes productos de origen animal. DOW AGROSCIENCES RESTRICTED

Las dietas alrededor del mundo Peter Menzel, from the book, “Hungry Planet: What the World Eats.” Chad: La familia Aboubakar del Campamento Breidjing. Gasto de alimentación para una semana: $1.23. Platos favoritos: sopa con carne de cordero. DOW AGROSCIENCES RESTRICTED

Las dietas alrededor del mundo Peter Menzel, from the book, “Hungry Planet: What the World Eats.” Mongolia: La familia Batsuuri de Ulaanbaatar. Gasto de alimentación para una semana: $40. Receta familiar: Bollo relleno de carnero, DOW AGROSCIENCES RESTRICTED

Las dietas alrededor del mundo Peter Menzel, from the book, “Hungry Planet: What the World Eats.” Estados Unidos: La familia Revis de North Carolina. Gasto de alimentación por semana: $342. Comida favorita: spaghetti, papas, pollo con sésamo. DOW AGROSCIENCES RESTRICTED

La demanda no alimentaria también ha sido creciente Source: Phillips McDougall Corn now tracks with oil price - creates more price volatility for livestock producers A larger and larger percentage of the US corn crop is diverted for alternate uses Using corn for ethanol not only increases the demand for Corn, but it also increases the demand for other feed crops that are a substitute to corn at certain price scenarios (i.e. wheat last year) El aumento de la demanda de la industria de los combustibles alternativos ejercerá presión sobre la industria agrícola para seguir mejorando los rendimientos de los cultivos. DOW AGROSCIENCES RESTRICTED

Desafíos para Superar

Tierra Cultivable Per Capita Source: FAOSTAT and Jelle Bruinsma Due to increasing population and static to reducing arable land, the amount of land available to feed a person continues to decrease. This makes it important to be able to maximize yields on the land that is available. A medida que las poblaciones aumentan y los países se vuelven más desarrollados, la tierra cultivable per cápita disminuye. DOW AGROSCIENCES RESTRICTED

DOW AGROSCIENCES RESTRICTED Agua dulce distribuida de manera desigual, desperdiciada, contaminada y gestionada de manera no sostenible Alrededor de 1,2 millones de personas, casi una quinta parte de la población mundial, viven en áreas de escasez física, y 0,5 millones de personas se están acercando a esta situación Otros 1,6 mil millones de personas, casi una cuarta parte de la población mundial, se enfrentan a la escasez económica de agua Freshwater Availability (2007) Source: Vital Water Graphics. UNEP Human Development Report 2006. UNDP, 2006 Coping with water scarcity. Challenge of the twenty-first century. UN-Water, FAO, 2007 DOW AGROSCIENCES RESTRICTED

El uso del agua Ag está siendo examinado por el mundo cada vez más urbano January 2012 Green represents the percent of agricultural water use. Source: (FAO) Government office for Science: The Future of Food and Farming: Challenges and choices for global sustainability. La agricultura representa el 70% del consumo anual de agua dulce del mundo, a menudo ineficiente, impactando de manera desproporcionada a las poblaciones más susceptibles a temas del agua dulce. DOW AGROSCIENCES RESTRICTED

La oferta global contra la demanda de los principales cereales y oleaginosas The agribusiness environment is becoming increasingly volatile. This volatility stems from several different sources: the changing climate, political actions and social changes. The weather has been responsible for fluctuating yields and a supply shortfall which has put pressure on crop prices. This was what sparked the 2006 food crisis when drought in Australia led to a greatly reduced wheat crop which then had knock-on effects around the world and on other crops. Historically, while demand tends to be relatively smooth and predictable, supply is much more erratic, due mainly to the weather (see below). Mientras que la producción ha sido capaz de satisfacer la demanda, año a año la volatilidad de la oferta aumenta la necesidad de estrategias eficaces de gestión de riesgos en toda la cadena de valor. DOW AGROSCIENCES RESTRICTED

El desafio: Produccion vs. Poblacion Poblacion Global Global Meat Consumption 20000 40000 60000 80000 100000 120000 140000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (000)MT Beef Pork Chicken 2050 9.3 billion 2010 6.8 billion 1960 3.0 billion Source: montanawatertrust.org Global Water Use DOW CONFIDENTIAL - Do not share without permission 18

Respuesta de la Industria a los Retos de Suministro

DOW AGROSCIENCES RESTRICTED Gasto de R&D de las principales empresas de protección de cultivos y semillas Source: Phillips McDougall Empresas de protección de cultivos y semillas siguen invirtiendo fuertemente en nuevos desarrollos tecnológicos. El costo de traer una nueva molécula para la protección de cultivos de mercado supera $ 250 millones *, mientras que un nuevo rasgo de la biotecnología puede costar más de $ 140 millones. * *Source: CropLife America / ECPA, CropLife International DOW AGROSCIENCES RESTRICTED

Adopción de cultivos transgénicos continúa a lo largo de su tendencia positiva DOW AGROSCIENCES RESTRICTED

Volúmenes globales de importación de trigo, maíz y soja Source: Phillips McDougall Europa, China y el resto de Asia / Oceanía son cada vez más dependientes de las importaciones de las Américas para satisfacer su demanda interna. DOW AGROSCIENCES RESTRICTED

Resumen de Presentación January 2012 Demanda agrícola mundial sigue siendo sostenida El crecimiento demográfico El aumento de la riqueza de liderazgo a dietas mas diversas /Migración rural-urbana Los países que buscan ag para diversificar el suministro energético Respuesta de la oferta se enfrenta a retos cada vez mayores La creciente escasez de recursos naturales (tierras cultivables, agua) La volatilidad de la oferta La industria esta respondiendo a los desafíos de suministro El aumento de la inversión en R&D está expandiendo soluciones de productos Prot. de cultivos pero con mas foco en Biotecnologia. Los altos precios de las materias primas han impulsado la expansión del área de producción El comercio mundial requiere cada vez mas satisfacer la demanda / desequilibrios geográficos de suministro DOW AGROSCIENCES RESTRICTED

DOW AGROSCIENCES RESTRICTED Muchas Gracias. DOW AGROSCIENCES RESTRICTED