To save on water, seeds get microbes

Aiding the earth, 2 Arkansans say

David Perry, 48, president and chief executive officer of Indigo Agriculture.
David Perry, 48, president and chief executive officer of Indigo Agriculture.

A couple of Arkansans are key parts of a Massachusetts agritech research firm's plans to spend some $100 million to help farmers raise crops on less water and eventually help feed the planet's population more efficiently.

David Perry, 48, president and chief executive officer of Indigo Agriculture, grew up in Magnolia. Tyler McClendon, 31, of Marianna is a farmer and founder of Oxbow Agriculture. Together, they're on a mission to feed the world.

McClendon has 1,000 acres of cotton in Lee County that is not ordinary cotton. It is cotton that has been specially treated by Indigo to better withstand drought and bring higher yields than untreated cotton.

Indigo seeds have a special coating of microbes developed by the company to help plants survive stressed conditions, whether brought on by lack of water, excessive heat, poor soil, weeds or insects. Indigo's scientists developed those coatings after comparing ancestral plant species with modern ones and found that beneficial microbes had been unintentionally stripped out after many decades of commercial farming and the use of herbicides, insecticides and fungicides.

With agriculture consuming 70 percent of the world's water diverted from freshwater sources and the world's population expected to grow to 10 billion by 2050, food and water will both be in short supply, Indigo Agriculture said. Because of that, Indigo aimed its first project -- the cotton seeds -- at drought. Indigo cotton has been planted on 50,000 acres in five states, including Arkansas. It will offer Indigo wheat later this year, also aimed at resisting drought.

Oxbow Agriculture's purpose is to feed the world, McClendon said.

"The best answer to feeding the world, we believe, is in innovative technologies," he said. "Indigo's model fits us. Farmers don't need new technology. We just need to better use the technology we've already got. Getting farmers to try new things is powerful."

For Perry's part, it took a while for him to decide to feed the world.

Born in Magnolia, he and his parents, Pat and Linda Perry, lived on a small farm from which his father also sold fertilizer. When David Perry was 14, the Perry family moved to Harrison after his father took ill and had to sell the Columbia County property.

After graduating from Harrison High School in 1986, he attended the U.S. Air Force Academy, then transferred to the University of Tulsa, where he received a bachelor's degree in chemical engineering. He also has a master's in business administration from Harvard. Perry has been called a "serial entrepreneur'' -- he co-founded Anacor Pharmaceuticals of Palo Alto, Cal., which was bought by Pfizer this year for $5.2 billion. Perry had left Anacor in 2014.

"Sometimes it takes a while to find that intersection-of-life thing, where you find the things you're passionate about, the things that are worthwhile for the world, and you also find something that will pay your bills and maybe you have a little something left over," Perry said Friday by telephone.

Perry's intersection of life now includes Indigo's 65,000 square feet of office space, laboratories and grow rooms overlooking the Charles River in Boston.

From there on Thursday, Perry and Indigo Agriculture announced it had picked up $100 million in private-equity financing, much of it from the $54 billion Alaska Permanent Fund. It was the largest Series C private investment in agriculture-technical investment ever made, Indigo said. Indigo now has received more than $156 million in private-equity investment since its founding 2 1/2 years ago.

A 2007 graduate of the University of Arkansas with a degree in agriculture business, McClendon said his company has a reputation for using data technology and innovation. "I use data rather than intuition," he said. Indigo's use of research and data attracted him. "We have no faith in a farmer's ability to just look at a plant and say how it'll do."

McClendon provided the seed, and Indigo treated it. He then planted the seed as he would any other. He has another 1,800 acres of non-Indigo cotton in adjacent fields so the two crops can be easily compared from planting through harvesting. All of his cotton is healthy right now, he said.

Indigo said trials of its cotton being grown under stressful conditions have shown yields of 10 percent or better than crops with untreated seeds.

It won't be until early December before McClendon know his yields.

Indigo's business plan with farmers is based on risk sharing. The farmer is charged only when there is a measurable increase in yield. If there's a drought and Indigo performs as its leaders expect, both the company and the farmer will profit. If there is no drought, Indigo loses, and the farmers won't lose because they weren't required to make a big investment upfront.

"They profit only when there is yield," McClendon said. "I pay only when there's an increase in crop yield. There's no downside."

McClendon was featured prominently in Indigo's rollout this week and in resulting news coverage, but he said he's an ordinary farmer who struck a regular deal with the company.

"I get no extra consideration or deals," he said. "I run my farm just like any other farmer. We believe it has a good chance of a 5 to 20 percent increase in yield. If I'm the first or among the first to know about it, then that would be a big advantage for me." McClendon said he knew of one other farmer, also near Marianna, who has Indigo cotton.

Somebody's always trying to sell something to the farmer, Perry said. "Farmers have to pay for the land, then pay for the tractor. They've got to buy the seed and pay for the fertilizer. They've got to pray for rain and then hope for good prices. If they get a little money coming in, they'll pay their bills and then hope to have a little something left over. We're happy to share the risk and the reward."

Because Indigo's special microbes are naturally occurring, the company said it is not considered to be improving crops through genetic engineering or through chemicals. The company also said it differs from other agribusiness companies doing work on microbial products because the others focus on the soil, while Indigo investigates what is living within the plant.

Bill Robertson, a cotton specialist in Newport for the University of Arkansas System Division of Agriculture, wasn't familiar with Indigo's work but said it makes sense. The microbes serve as probiotics, he said.

He said he knew McClendon and his father, also a veteran cotton farmer in Marianna, and said, with a laugh, "Both know where to get the biggest bang for their buck." Robertson also praised for Indigo's business plan because the company is sharing the risk with the farmer.

"If it doesn't work, they don't get paid," he said. "But if it does work, they're going to get paid a lot, and I think that is alright."

Business on 07/23/2016

Upcoming Events