Innovations in the Ag Biologicals Sector: Why All the Recent Excitement? Presentations Biopesticides OverviewEric Sachs Bayer CropScienceMarcus Meadows-Smith Monsanto CompanyKelly Fleming University of CapetownJennifer Thompson Panel Q&A

Innovative Natural Products for Pest Management in Agriculture and Water BIOPESTICIDES Pam Marrone, PhD CEO & Founder

Defining the Basics

Page 4 Characteristics of Biopesticides Natural products derived from plants or other natural sources, comprised of microorganisms or other organisms Insecticides, fungicides, herbicides, nematicides, plant growth regulators, insect growth regulators, repellents Can be synthetically made Must be nature-identical Highly biodegradable and non-persistent Generally comprise the lowest risk category of pest management Products 64-year history of safe use with no environmental or human safety issues

Page 5 History of Biopesticides The first, and still most, widely used biopesticide included spores of the bacteria Bacillus thuringiensis (Bt). In 1901, Bt was isolated from a diseased silkworm by Japanese biologist Shigetane Ishiwata. Ernst Berliner in Thuringen, Germany, then rediscovered it ten years later in a diseased caterpillar of flour moth. The Bt pathogen was classified in 1911 as type species Bacillus thuringiensis and remains the most widely used biopesticide to this day. In the early 1920s, the French began to use Bt as a biological insecticide. The first commercially available Bt product, Sporeine, appeared in France in In the US in the 1950s, widespread use of biopesticides began to take hold as a host of research on Bt efficacy was published.

Page 6 The Majority of Biological Applications Target Insects 2/3rd Insecticides Plant Health Herbicides Fungicides Nematicides Nutrients Biologicals by Region Latin America Asia Europe North America 6 Global Ag Biologicals Industry Primarily Focused on Targeting Pest and Disease Control Naturally Derived Chemicals are 1/3 of Biologicals Market Other Microbial Pesticides Biochemical Beneficial Insects Bt Naturally Derived Chemicals Inoculants

Page 7 Biopesticides Size and Growth Estimates Source: Frost & Sullivan, Nov. 2009; BCC Research Survey 2010; CPL Business Consultants 2010 bn $ Short term (<3 years)  Food Chain demands  Sustainable Use Directive EU  New Biological product introductions Mid term (>5 years)  Increasing demand for biological solutions emerging markets (Brazil, China and India)  Sustainable growth of Green Product market in the US and EU, based on existing technologies Long term (>10 years)  Introduction of new Green technologies > 10 % 10 % Biologics, Chemicals < 3% CAGR 1.2 – 3.7 bn. US$ Biologics Market ( ): 1.2 – 3.7 bn. US$

Page 8 Global Market for Biologics is Growing at > 10% p.a $900mio $1,600mio $’ Millions at Retail Level Source: Biopesticides A Global Strategic Business Report, Global Industry Analysts, Inc. Growth across all regions; largest growth in Europe

Benefits and Barriers to Use of Biologicals

Page 10 Cost to Discover & Develop a Synthetic Chemical ($Mil) Fewer New Chemicals – Higher Cost # of Chemicals Screened to Find One Product (‘000) # of New Chemical Leads vs. Product Launches (Source: CropLife) Source: Ag Chem New Compound Review (Vol 28) 2010

Page 11 The Case for Biopesticides in Programs Biopesticides are effective tools for production, are renewable sustainable, offer an improved impact profile, and reduce pesticide residues. Meeting the 3 challenges of Sustainable Agriculture Increase productivity Promote Food Quality Minimize Impact IPM Additional benefits Resistance Management Harvest & Labor Management Residue Management Biopesticides conventional crop protection products + = Increased efficacy, higher yield, lower chemical load.

Page 12 CA Pest Control Advisors Golf Course Supts. FL DistributorsCA Growers FL Growers (n=69)(n=40)(n=26)(n=30) Environmentally Safe48%63%54%60%64% All Other Replies35%27%16%11% Operator Safety12%42%8%4%21% Safe/Benefits Insects14%8%12%36% Public Perception22%8%15%20%4% More Natural/Safe16%4%8%24%14% Crop Safety17%12%4%25% Organic Farming25%12%16%4% Product Effective13% 15%8%4% Don't Know/Cannot Say3%25%4%8%4% Target Specific9%7% Economic Benefits3%4% Reasons Biopesticides are Used

13 CA Pest Control Advisors Golf Course Supts. FL Distributors CA Growers FL Growers (n=69)(n=40)(n=26)(n=30) Not as Effective52%42%73%68%39% Higher Cost36%42%31%44%43% Lack of Awareness39%38%18%32%43% Don't Know6%17%8%24%7% Lack of Research4%21%12%8%4% Limited Availability6%8% 4%18% Only Works in Specific Conditions 7%17%4%7% All Other Replies26%12% Old Habits3%7%4%14% Works Too Slowly12%4%11% Public Perception4% Reasons Biopesticides are Not Used

Innovations in the Ag Biologicals Sector Are Driving Investment and Opportunity