Agrarzeitung newspaper, 05.02.2021

Interview with Stefan Dürr, President of the EkoNiva Group, and Franz Beutl, Managing Director of I.G. Pflanzenzucht (IGP)

EkoNiva is the largest producer of raw milk in Russia. The agricultural machinery sector also plays a crucial role in the company. What prompted you to now also take on the seed and seed breeding sector?

Dürr: In fact, the roots of our company lie in the seed sector. That was the reason for us to enter the upstream area of agriculture – seed propagation on our own farm. In 1996, we started importing technical seeds from Germany and began multiplying them. In 2002, our first propagation crops were malting barley, spring wheat and potatoes. So seed multiplication has always run alongside and is now an important foothold – only active breeding work we started just about four years ago.

How and when did the idea of cooperating with I.G. Pflanzenzucht come about and why is the company your most important partner in the seed sector?

Dürr: Breeding is a long-term story and the investment in equipment is very high at the beginning. At some point we were at a crossroads: either stop or do it right. It was therefore crucial to know that, with IGP, we had a strong partner at our side. The breeders at IGP in particular have years of experience, comprehensive know-how and a wide range of crop types and varieties. This is how we started our joint variety selection and development for the Russian market a good ten years ago.

Beutl: It was also an important decision for us. Together with EkoNiva, we have created a unique selling point – the successful cooperation between Central European breeders and a Russian sales organization and the start of joint breeding work – that is unique so far.

The basis for this is our cooperation agreement – we have tied ourselves exclusively to EkoNiva with the cultivars we offer and vice versa.

What exactly does the cooperation between EkoNiva and I.G. Pflanzenzucht look like?

Beutl: We have three forms of cooperation. The "simplest" one, which we started with, is to check or screen young material from our members to see if it is adapted to the climatic conditions in Russia. We do this mainly with summer crops such as spring wheat, oats, barley, but also soybeans.

The second form is the joint breeding program with the Saatzucht Bauer Group, a member of IGP with its headquarters in Obertraubling near Regensburg. Here we have a pioneering breeding cooperation with EkoNiva; there has never been a German-Russian cooperation in this form before. Our cooperation focuses on winter wheat with the aim of combining German yield with Russian robustness. In practice, the breeding process takes place at two locations. An EkoNiva breeding team advises on crossbreeding in Germany, while selection takes place in Russia. The resulting varieties are then a joint project aimed at joint variety protection.

In addition, there is another cooperation on maize that goes beyond breeding. Here we not only want to find suitable varieties for the Russian market, but also to professionalize seed production and hybridization together and produce seed of the highest quality. It is about bringing together the possibilities of EkoNiva and our know-how. The project is still in the start-up phase, but we are on a path that has begun quite successfully.

What strategy are you pursuing in the distribution of the varieties?

Dürr: We do not use sales partners, but have our own branches in all sales regions and usually even farms. The seed branches are linked to these and the customers see directly what we grow on the farms. We carry out variety trials there and also demonstration cultivations. Where we do not have a farm, we use external farms and have our own sales outlets there – pure sales branches without own farm.

What potential does I.G. Pflanzenzucht see in the cooperation with EkoNiva?

Beutl: As a foreign company, we see the cooperation with EkoNiva as the best potential we can have to conquer the Russian seed market with Western European genetics. EkoNiva is one of the most innovative agricultural companies in Russia, with a very large network and a very good image. Entering the market from the outside is not very easy.

The EkoNiva Group, which itself manages farms with more than half a million hectares, already has great potential for us. There we find openness for new developments and a good common culture of discussion. The partnership helps us to invest in this direction in a targeted way, to expand the cooperation and to use synergy effects.

Which genetic material is to be used to conquer the Russian market and, above all, which parts of Russia?

Dürr: The fact is that weather conditions have been changing noticeably in Russia in recent years. In the southern Black Earth region it is much drier, while in the Volga region – which used to be a dry area – we have much more precipitation. We never used to grow maize in the Novosibirsk region, but now we have our most beautiful maize there. The cards are being reshuffled and we have to respond to climate change. That is why we need very flexible varieties. And together with IGP, we have this opportunity because of its very broad portfolio of crops and varieties.

Beutl: The selection of winter wheat, for example, takes place in the "chocolate region" of Russia, the Black Earth region. For other crops the cultivation area is of course regionally much broader. Soybeans, for example, can be grown as far away as Vladivostok. Here, it is a matter of adapting maturity to climatic requirements – just like it is with maize.

The eye of the needle is the Russian value test, which is very cost-intensive due to the numerous test locations. That is why we have successfully approved a first maize variety as a test balloon, so to speak, and at the same time used the opportunity to jointly develop seed production. Seven more maize varieties are currently awaiting approval.

Which crops are predominantly grown in Russia and what are the market potentials in the seed market?

Dürr: As far as our cooperation is concerned, it is definitely winter wheat ¬– also because it is traditionally the most important crop in Russia. Here, the varieties from our joint breeding are characterized by Russian winter hardiness paired with Western European yield strength and disease resistance.

Beutl: Our first winter wheat variety "STRG 8060'15" was approved in Russia in 2020. We have not yet bred this together, but we have selected it together. Our winter wheat cooperation is unique in the industry. We have noticed that some of the big competitors are withdrawing from the Russian market because they are unable to breed suitable varieties and get them through the Russian evaluation. This once again shows the strength of our cooperation.

Dürr: Oats are also coming on strong at the moment, especially with the increasing focus on healthy eating. The pea market, which has almost completely disappeared in the West, is also still developing well. And one crop that will become increasingly important in the future is soy – which is experiencing a real boom here. Genetic engineering is also banned in Russia. Cooperation with breeders like those of I.G. Pflanzenzucht, who breed GMO-free soybean varieties, is very forward-looking for the Russian market.

Beutl: IGP has a total of 13 members with broad breeding programs. That is why we can offer almost all cereals for the Russian market. We are particularly well represented in the summer crops. The I.G. breeders have their own oat, wheat, barley, pea, lupin and soy programs. In the particularly early maturity segment of soybeans, IGP is currently the market leader in Germany. We also see great potential there in Russia. EkoNiva and IGP have already taken the first steps and launched a first soybean variety with the Russian variety approval of "GL Melanie". This diversity is what makes us stand out, especially in this large market, which now reaches as far as Kazakhstan for us with EkoNiva. For example, the I.G. oat variety "Max", which is known throughout Europe, is also sold to Kazakhstan.

Overall, all crops in Russia are larger for us than in Germany – the Russian market already covers over 42 million hectares in cereal cultivation alone. Maize cultivation covers about three million hectares. Therefore, hybrid maize also offers great potential to increase seed rotation in the Russian market.

The I.G. partners select their varieties primarily under the conditions of Central and Northern Europe. How should the breeding programs be adapted so that the I.G. genetics also fit to Russia? Are there different strategies for the different crop types?

Beutl: We screen more adaptable varieties, especially spring cereals and grain legumes, on site in Russia – with great success. We can measure this well from variety approvals and the resulting sales, which are mainly generated from the crops mentioned. When it comes to wheat, we cannot select for Russian conditions in Central Europe. This has to be done locally in Russia in order to test winter hardiness, disease resistance and yield capacity under Russian climatic conditions. In maize breeding, the maturity group plays a decisive role in meeting Russian location requirements. An important point for breeding and also seed production in maize is: does hybridization work? Seed production in Central Europe follows different standards than in Russia, due to different temperatures and daylight conditions. Synchronizing the flowering times of the mother and father lines is a challenge.

We need to adapt not only in seed breeding, but also in seed production. This is where the great potential lies, so that we can achieve high seed yields as well as high quality in Russian seed maize production in the future.

What goals are to be achieved through the cooperation?

Beutl: Our long-term goals are to have our own high-performance portfolio of varieties approved in Russia, to further professionalize seed production and to increase seed quality. We want to bring more of our own varieties to the market and jointly expand distribution. We achieve this through our cooperation as equal partners.

Dürr: With the expertise of IGP and EkoNiva in the seed trade, our nationwide distribution power and the joint, high-performance varieties, we can become the leading seed producer and breeder on the Russian market.