Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 14 2017-2018 1.3.1.1. The increase in food needs The current rate of increase in the world's population is unprecedented in history: each year it grows by an average of more than 82 million inhabitants. Having risen from 1.66 billion to 6 billion inhabitants in the 20 th century, the world population is expected to reach nearly 10 billion by 2050. It is the Asian and especially African populations that will contribute most to this increase in the coming decades. The growth in the world population is accompanied by greater urbanization (in 2050, 2 out of 3 people are expected to live in urban areas) and changing diets that will lead to an overall rise in the consumption of vegetables and meat, and an increase in the need for agricultural raw materials. By the year 2050, food production will therefore need to be increased by 70% in order to meet the food needs of humanity (Source: United Nations Food and Agriculture Organization/FAO). 1.3.1.2. Growing use of commercial seeds Farmers and growers are using commercial seeds more and more systematically. They are more efficient technically than farm seeds, and their use can considerably improve crop yields. And indeed, meeting world food requirements, producing more and better – particularly utilizing less resources – has become a major challenge in a context characterized by: slow reduction of arable land on a world scale, because of urbanization, desertification and the overall deterioration in soil quality; more complex growing conditions, because of the greater need to take environmental factors into account, but also because of climate variations and increasingly limited access to water resources. Moreover, commercial seeds guarantee production that is perfectly adapted to new industrial requirements: resistance to diseases and insects, shorter production cycles, simultaneous maturity and homogeneity in production, etc. The potential to replace farm seeds by commercial seeds remains significant in several countries where agriculture is in the process of being modernized, and for certain crops in particular, such as wheat. For example, about 50% of the European wheat market is covered by farm seeds; this rate is almost identical on average in the United States, even if it reaches up to 70% in certain states (Internal source). 1.3.1.3. The adoption of genetically modified organisms (GMOs)* The technology of genetically modified seeds has become indispensable in several areas of the world, particularly in the Americas, with the market expanding fast in recent years, both in volume and in value. Over the past five years, with average annual growth of 3%, it is GM* field seeds that have continued to drive the seed market. Evolution of the seed market between 1999 and 2017 (in billions of USD) Evolution of the acreage of genetically modified plants between 1999 and 2017 (in millions of hectares) Source: Phillips McDougall 2018. Conventional seeds GM* seeds Total seeds Source: ISAAA 2018. World North America  Latin America Asia Africa Yearly evolution over 5 years 45 40 35 30 25 20 15 10 5 0 +1.0 % -1.2 % +3.0 % 18.00 39.43 21.43 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Yearly evolution over 5 years  -1.0 % -5.0 % +2.0 % +2.0 % +2.0 % 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 0 20 40 60 80 100 120 140 160 180 200 17 1.3. The seed market