Environment « The Food Futurist

Just for fun, a bit of science fiction

October 15, 2011

One of the issues that I regularly raise during my presentations is the one of the farmers of the future. As about everywhere in the world, the average age of farmers is increasing, this brings the question of who will take over and what effect it will have on the future of agriculture and future production systems.

One topic that generates interest from audiences is the possibility of having farming robots. Surprisingly, the same intrigued enthusiasm comes from audiences that have a bias against industrial large-scale agriculture. Yet, the prospect of robots roaming the fields does not seem to be a cause for concern.

Because of the lack of interest by the youth to take over farms, the Japanese are actively working on setting up farms that could be run by robots, instead of humans. In many other countries the aging farming population with the limited interest from younger people to become farmers, also linked to the rising price of agricultural land, raises the question of how big farms might become, and how to manage them.

Currently, the many developments in the field of robotics, of satellite applications, of field sensors and of computer programs make a futuristic picture of farming become more realistic.

With the expected rise of the cost of energy and of the price of all compounds made with massive use of fossil fuels, precision agriculture is the future. The name of the game will be zero-waste. Future economics will not allow for wasting energy, water or fertilizers or any other input. It will be imperative to get the most out of the least, not just simply producing more with less.

The use of satellites to map fields and indicate the variation of the content of fertilizing elements in the soil is already a reality. The use of GPS for harvest is now common with modern equipment. We are really only one step away from having computers processing all this data and operating fertilizer spreaders by automatically regulating the distribution of fertilizer on the field, based on the soil scan assessment. This will avoid overuse of fertilizer in zones that already contain enough nutrients. With the expected exhaustion of phosphate mines, and the large variation of phosphate contents in soil, it will pay off.

We are also only one step away from having tractors, harvesters and other agricultural equipment doing the fieldwork without drivers. A company in Iowa is already developing such a technology by linking the position of a tractor to the harvester via GPS. Such an approach makes the use of human operators less of a need than it used to be. This would allow farmers to manage much larger areas from one remote location. Their role would become more one of process controller, monitoring and steering the fieldwork by ways of cameras and remote control. This also would require less physical work, thus allowing aging farmers to manage at least as much production as they would have at a younger age. This would become even more of a possibility, as farming robots would be developed to replace humans for the physically more demanding activities.

Developments in the area of sensors also offer many possibilities in terms of farm and risk management. The ability of monitoring variations of temperature, humidity, plant growth, the presence of diseases, fungi and other pests in real-time would help make use of resources much more efficiently. Current developments of biosensors used in food packaging are amazing. Some of such sensors have the ability to turn fluorescent in presence of food pathogens. They can help prevent risks of food poising. Sensors help to detect undesirable “visitors”. Sensors also would help farmers detect potential threats at an earlier stage, even before they actually become visible by the human eye. This would allow starting treatment before problems could take proportions that would threaten production. This has the potential to help farmers produce more optimally, and to produce higher yields than they would otherwise. Linking such sensors to devices that can release the necessary amounts of water, nutrients, pesticides and possibly herbicides would help produce quite efficiently, and would reduce the use of inputs. This would help reduce waste, work towards more sustainable farming methods and reduce the use of chemicals, as they would be used only at the right time, at the right place and in the right quantities, instead of being applied systematically to the whole fields, including areas where they are not needed. The use of airplanes to spread chemicals could be eliminated, which would also reduce the use of fossil fuels. Instead of airplanes, it is possible to envision the use of drones that would have a “patrolling” function to detect anomalies or the extension of pests in the fields. By bringing the huge amount of data that these robots, sensors and drones would produce, fields would be monitored on a 24/7 basis and decision-making would be faster than today. Corrective action could be implemented automatically just as well.

By adding more monitoring functions and developing ecological modeling, this futuristic approach would be a way of managing the interaction between the crop itself, which is the purpose of food production, and the need to manage the ecosystem surrounding the fields, to ensure that production is carried out in an environmentally sustainable manner. Monitoring living organisms in and outside the fields would help optimizing production. The farmer would know the status of soil organisms, mostly worms, insects and microorganisms. He would be able to deal with pests in a targeted manner, almost in a similar way as the images of surgical strikes that we can see in the news. Mapping the extent of weeds through such devices would also allow their control in a targeted manner and with minimal use of potentially harmful compounds. The emphasis would be about control and management, not on killing out everything that seems a threat.

Further, monitoring fields as described above would support the environmental steward’s role of farmers, while making it easier to execute as well. Farmers would be informed timely about production effects on groundwater quality and possible residues in the soil and the crops.

Of course, all of the above sounds like a bit of science fiction, but considering the amazing innovations taking place in the all the areas mentioned, together with the constant miniaturization of devices and the increased processing abilities of computers, it might not be as far-fetched as it may sound today. Although many of these developments are not taking place in the agriculture sector as such, they are real and happening faster than one could imagine. Farming in 50 years from now will probably look different from it does today.

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Posted by Christophe Pelletier

No shortage of action points for the future

August 5, 2011

The path to feeding the growing world population and to preserve agriculture’s ability to provide adequate volumes is paved with many challenges. Leaders will have to show how to resolve the many issues food production is facing or will face in the coming decades, and how to create a viable future.

As the population increases, the need for energy increases, too. Oil reserves are finite and new oilfields are becoming more and more difficult and expensive to exploit. It is only logical that oil will become more and more expensive in the future. This will call for more fuel-efficient equipment and vehicles. At the same time, oil that is more expensive also means that the relative price for alternative energy sources will become more competitive. In March 2011, an analyst from the bank HSBC published a report announcing that oil will no longer be available in 2060. In its future projections, the International Energy Agency (IEA) describes our energy sources as more diverse than they are now. They also mention that oil will not be the main source of energy anymore. Natural gas will take over. We should expect some significant changes in the way agriculture uses energy, the type of machinery that farmers will use and how future logistics will be organized.

The change of economics in energy will affect fertilizers, too. Especially, the production of nitrogen fertilizers uses large amounts of fossil fuel, essentially natural gas. On average, half of the nitrogen spread on fields is lost because of leaching. We can expect the focus to be on efficiency and on strategies of applications that are more efficient. This is already happening with precision agriculture techniques. Next to this, the focus of the fertilizer industry should be on developing nitrogen fertilizers that are less sensitive to leaching. Imagine a nitrogen fertilizer that may cost twice the price of the current ones, but for which there is no loss. Farmers would use only half the quantities that they currently do. The money to spend would be the same, but the use of fossil fuel to produce the fertilizer would be much less. There would be an environmental advantage to do so.

In the area of environmental issues, climate change needs to be addressed more effectively than it has been so far. Regardless whether people believe in it, or believe it is caused by human activity or it is only a natural phenomenon, the number of severe climatic events is reason to consider counter measures, just in case. The debate should not be about whether climate change is real or not. It is not about who may be responsible for it. True leaders take care of their people, and in this case, they should at least come with scenarios, contingency plans and emergency preparedness plans. That is the least we must expect from those in position of power and responsibility. In this case, the saying “the failure of the preparation is the preparation of failure” takes all its meaning.

Linked to climate to some extent, and a precious resource in all cases, water needs to be managed properly and carefully. For instance, all major river systems in Asia depend on Himalayan glaciers. If the glaciers were to disappear, which is a possibility, the source of water that sustains 2.5 billion people would be depleted, even if water used for agriculture also comes from other sources, the monsoon especially. The consequences would be catastrophic. Further, as agriculture uses 70% of all fresh water resources, growing food production will require more efficient water usage techniques. The focus must be on efficiency and on reduction of waste of water resources. Such objectives will require substantial financial resources and solid planning.

In the area of waste, food losses must be reduced as much and as diligently as possible. The moral issue of food being thrown away by the wealthy is obvious. The wealthy are not just in developed countries. In emerging countries, similar behavior is appearing. It is interesting to know that the Indian government is considering fines for those who discard edible food. It is even more interesting to notice that in Western countries where the percentage of food thrown away is the highest, governments are not investigating this possibility of fines. The other food waste scandal is the post-harvest losses. The food is produced. It is edible, but because of a lack of proper infrastructure, it is left to rot. What a waste of seeds, land, water, money, labor and all other necessary inputs. I have mentioned this problem in previous articles, as I have shown that the financial return to fix the problem is actually high and quick. There is plenty of work in this area for leaders. The first step to succeed in this is to recognize that no organization can fix this on its own. There is a need for collaborative leadership, because all the stakeholders in the food chains must participate, and they all will reap the financial benefits of fixing post-harvest problems.

Food production is not a hobby. It is of the utmost importance for the stability and the prosperity of societies. Well-fed and happy people do not riot. The need to improve infrastructure and logistics is obvious. Food must be brought to those who need it. A proper transportation infrastructure is necessary. The choice of transportation methods has consequences for the cost of food supply, and for the environmental cost as well. Road transport is relatively expensive and produces the highest amounts of greenhouse gases. Rail transport is already much better, and barge transport even better. The distance between production areas and consumption centers also needs to be looked at, together with the efficiency of logistics. Optimization will be the name of the game. Completing the cycle of food and organic matter will become even more important than today, as the world population is expected to concentrate further into urban centers. As humans are at the end of the food chain, many nutrients and organic matter accumulates where the human settlements are. These nutrients, as well as the organic matter, will have to be brought back to the land. This is essential if we want to maintain soil fertility. As phosphates mines are gradually running out, sewage and manure are going to play a pivotal role in soil fertility management. The concentration of the population in urban centers, together with the change of economics in energy, will require a very different look on economic zoning, and in urban planning in particular.

Special attention will be necessary to inform and educate consumers to eat better. Overconsumption, and the health problems that result from it, is already becoming a time bomb. Overweight is not only a Western problem. The same trend is appearing in many developing countries as well. Overweight is on the rise all over the world. The number of obesity cases in China, and even in some African countries, is increasing. The cost of fixing health is high, and it will be even more so in countries with an aging population, as age-related ailment add up to eating-habits-related problems. Healthy societies are more productive and cost less to maintain.

As the economy grows, and wealth increases in more and more countries, diets are changing. Consumers shift from carbohydrate-based meals to a higher consumption of animal products, as well as fruit and vegetables. The “meat question” will not go away. Since it takes more than one kg of feed to produce one kg of animal product, increasing animal production puts even more pressure to produce the adequate volumes of food. The question that will arise is how many animals can we -or should we- keep to produce animal protein, and what species should they be? Levels of production, and of demand, will result in price trends that will regulate production volumes to some extent, but government intervention to set production and consumption quotas cannot be excluded, either.

Similar questions will arise about biofuel production, especially the type of biofuel produced. There will be debates about moral, economic, social and practical aspects of biofuels. The consequences on the price of food and animal feed are not negligible. The function of subsidies in the production of biofuels adds to this debate and there are strongly divergent points of view between the various stakeholders.

One of the most important issues in the discussion about feeding the increasing world population is food affordability. Producing more, and producing enough, is not enough. The food produced must be affordable, too. When this is not the case, people cannot eat, and this is the main reason for malnourishment. To make food affordable, food production must be efficient. The costs of production need to be kept under control to avoid either food inflation and/or farmers bankruptcies.

In agriculture, just like in any other human activity, money always talks. Money is a powerful incentive, and when used properly, it is a powerful driver for improvement. Strategic use of financial incentive is part of policies. To meet the future challenges, leaders will have to develop the right kind of incentives. The focus will have to be on efficiency, on long-term continuity of production potential as well as on short-term performance. The financial incentives can be subsidies. Although the debates tend to make believe subsidies are all bad, there are good and useful subsidies. Another area of incentives to think about is the type of bonuses paid to executives. Just imagine what would happen if, instead of just profit, the carbon footprint per $1000 of sales was factored in the bonus? Gas emissions would be high on the priority of management teams.

If the way executives are paid matters, the type of financial structure of businesses could influence the way they operate, too. Now, it may sound surprising, but in the future, expect the question whether food companies should be listed on the stock exchange to arise. Short-term focus on the share price can be quite distracting from the long-term necessities. If we find that elected officials are short-term-oriented because elections take place every four or five years, how short-term quarterly financial results to the stock markets influence CEOs? The pressure by investors on companies’ Executive Boards to deliver value is high. They expect some results within a relatively short period, while what happens to the companies, their employees and long-term effect on the environment after they took their profits is irrelevant to them. This brings the question of the functioning of financial markets as a whole. What derivatives are acceptable? Who should be allowed to have access to which ones? What quantity could they be allowed to buy and sell? Many questions will arise more and more loudly every time food prices will jump up again the future, and as social unrest may result from it.

To prepare the future, it is important to prepare the generations of the future. Education will play a critical role in the success of societies. Only by helping future generations to have access to knowledge, to develop skills and to train to fill in the jobs of the future, will countries develop a strong middle class. Thanks to education, people can get better paying jobs. This allows them to buy adequate quantities of food for themselves and their families. Education is an investment to fight poverty and hunger. In the agricultural sector, it will be important to attract more young people to work in the food and agricultural sector. In many countries, farmers are getting old and replacement is scarce.

These are just a few of the issues that the current and future leadership will have to solve, if we want the feed and preserve the world. There will be many discussions about which systems are the best suited to ensure prosperity and stability. The respective roles of governments, businesses, non-profits and of the people will certainly be reviewed with scrutiny.

During the writing of Future Harvests, it became obvious to me how crucial the role of leadership is for our chances of success. In the course of a number of assignments with my company, this observation has grown even stronger.

For these reasons, I have decided to start writing another book focused on the role of leadership to develop long-term development of food production and food supply. It will be a reflection about the tough calls that leaders need to make. The final objective is to ensure viable food production systems and proper infrastructure, while ensuring the continuity of food supply in the long-term, through a successful interaction between all stakeholders.

Tentatively, the publication date is fixed for the summer or the fall of 2012.

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Posted by Christophe Pelletier

Food security in Paradise

June 20, 2011

Many Hawaiian residents express their concern about their dependence on food that comes from far away. Actually, there are more and more conferences and workshops about the topic of food security for Hawaii. With this in mind, I went to the Big Island of Hawaii for a vacation last April. I certainly would recommend to everyone to do the same if they ever have the chance.

Since Hawaii is part of the USA, food security will be guaranteed from the mainland. However, looking at the situation as if Hawaii was an independent country makes the debate about food dependence from other
regions quite interesting. The Islands of the State of Hawaii are isolated, as they lay in the middle of the Pacific Ocean, thousands of miles away from any significant continental mass.

During my stay, I was reminded about food security and environmental issues in several occasions. On Earth Day, I came across an event that was interesting in many regards. Apart from the more militant speeches about mostly the big bad oil, and the fact that “Lady Green” touched me with a sunflower, I spent some time engaging in conversations with a number of exhibitors, from government organizations to renewable energy systems (solar makes a lot of sense in Hawaii to me). One booth where I spent more time was
the one of the University of Hawaii’s Pacific Aquaculture& Coastal Resources Center. There, I had a good conversation with PACRC’s Director Kevin Hopkins, a very knowledgeable man with extensive experience in aquaculture, not only in the USA, but also in Asian and African countries. Thanks to him, I got a better idea of the challenge to integrate a sustainable aquaculture in the Hawaiian environment. Living in Vancouver, BC, and having worked in the salmon farming industry, this is not a new topic for me. Aquaculture faces similar concerns in both places.

Click on picture to enlarge

With this in mind, I continued my vacation. At the Kaloko-Honokohau Historic Park, I found a sign showing a comparison of food security between today and 300 years ago. By then, there were 150,000 inhabitants on the Big Island of Hawaii, 100% of the food was produced on the island, 0% was imported, and they were producing 300,000-500,000 lbs. of fish in stone fishponds. Today, for a similar population, only 18% of the food is produced locally, and the Kaloko fishponds do not produce any fish at all (see picture). Of course, these numbers do not take the number of tourists to feed into account. Moreover, the current food consumption per capita is probably substantially richer in calories than 300 years ago, too. However, this history could be a good basis for more constructive discussions about aquaculture. Clearly, aquaculture was a traditional way of improving food security for ancient Hawaiians. The old fishponds were made of walls built with the volcanic rocks, and the fish was passing though a gate made of vertical bars. The small fish could enter, but as they grew bigger, they were unable to pass the gates and leave. This system made me think of a hybrid form of closed containment. In BC, where many discussions are about producing salmon on land, the Hawaiian fishponds are actually a quasi-closed containment on the seabed. It does not require all the land-based infrastructure and equipment, as is the case for land-based closed containment systems. What I saw at this park tells me that the useful could meet the historical, cultural and the modern just to help develop a responsible and productive aquaculture to increase food self-sufficiency for Hawaii. In a region where the ocean space available is as vast as this is the case around Hawaii, I am convinced that there have to be plenty of locations where aquaculture can be conducted without harming the environment, and there have to be more than enough adequate production techniques to do it right.

In the same park, there were remnants of pits in which rocks were set up in many individual planters. In these planters, called mala’ai, the ancient Hawaiians used to grow food plants. This is an ingenious system, because in that area, the fields are covered by lava. There is no soil to be used for open field crops, such as wheat, for instance. On the other hand, there would be plenty of acreage to set up such planters. This would be labor intensive, though.

At the Kaimu-Kalapana black sand beach, I read on a sign that ancient Hawaiians used to harvest seaweed and that apparently, their methods were sustainable. It is only after commercial harvesting by European settlers started that the seaweed quantities plummeted because of excessive harvest volumes. Just like for fish production, researchers from all sides should work on restoring such a seaweed production in a sustainable manner. This example, like all other examples of unsustainable human practices, simply demonstrates that we must produce or harvest what we can, instead of trying to produce or harvest always more while ignoring the signals that we are passing a breaking point.

I spent time only on the Big Island, and I did not visit the other islands. Probably, I do not have the whole picture, especially considering that more than two-thirds of Hawaii’s population lives in the State capital, Honolulu. According to the latest US population census, Hawaii’s total population is of about 1.3 million people, out of which more than 900,000 live in Honolulu. To get a more accurate picture of how much food needs to be produced to meet demand, it is necessary to add the visitors. Per year, the number of visitors is about 7.4 million people, who stay on average 9.15 days. This number expressed in average outside visitors staying in Hawaii per year is 7.4 x 9.15 / 365 = 186,000 people. To simplify, I will estimate the number of mouths to feed at 1.5 million.

For the Hawaiians concerned by the food security or, better said, the low food self-sufficiency of their state (less than 15 %!), what are the possibilities?

Just like in most of the rest of the USA, the local food movement is growing. More and more people are trying to grow some food on their balconies. Of course, this will not be enough to reverse the situation, but it will contribute. Farmers’ markets are gaining in popularity, and I have to say rightly so. Unlike what I am used to in my neighborhood, the food sold on the farmers markets that I came across on the Big Island offer many affordable and actually cheaper foods than in the large supermarket chains. At the farmers markets, I could notice that many more generic vegetables such as onions, tomatoes or bell peppers were shipped from the West Coast of continental US, mainly Washington State. On the other hand, I found quite interesting to notice that the big retailers are also trying to source local products. I only visited a Wal-Mart and a Safeway. From what I have been told, the selling of local products at their outlets is a recent change.

This is interesting, because these retailers will try to be able to source larger volumes, and they actually maybe in a position to stimulate more local food, agriculture and aquaculture production.

The quality of the local food is quite good, although when on vacation everything tends to taste better for some reason. Although I am not much of a beef eater, I was tempted by a “Hawaiian” local grass-fed beef burger recipe, and I have to admit this was the best burger that I ever tasted. It was so good that we went back to the same pub the next evening and I had another burger, while my spouse had a steak. Her steak was simply stunning. And the price was actually cheaper than similar generic beef dishes here in Vancouver.

When it comes to justifying more local food production, I have seen very interesting numbers about the amount of money that Hawaiians spend on food, and therefore to producers outside of their state. According to the same studies, local production would also result in more local jobs. However, I would not develop a plan based on such numbers, not because I doubt them, but because the business must be financially viable as well. I find all the reports that I have read too general or too academic for my liking. Moreover, I am not convinced that the politicians are committed to take the necessary steps to increase food self-sufficiency in Hawaii. They give it quite some lip service, but I miss signs that this topic might be on top of their priority list.

Personally, my first step to see what needs to be done would be to look at how many farms are required to produce what is needed: how many eggs, how much milk, how many chickens, how many pigs, how much fish, how many fruit and vegetables, how much wheat, rice, potatoes, and so on. Once I would have identified the size of the local market for all the food items, I would calculate how many farms are needed to meet that demand. After all, there cannot be food security if there are not enough farms.

For instance, every 10 kg consumption per capita of chicken meat means a production volume of 1.5 million x 10 kg = 15 million kg of chicken. As a chicken weighs about 2 kg, this would correspond to 7.5 million chickens per year. With an average of six flocks per year in a chicken house, this would mean a production capacity of 1.250 million places. This represents about 60 chicken houses. Depending on the size of the farm, my guess would be that 10 to 20 farms are necessary to cover a consumption of 10 kg per capita per year. If consumption were 40 kg per capita per year, Hawaii would potentially need up to 80 farms. Do they have the farmers and the locations for all of them? That is what I would like to determine.

Similarly, in the case of marine fish farms, every 10 kg consumption per capita per year of fish requires 15 million kg of fish, or close to 30,000 tons of live fish. If we were to imagine the containment system from Hawaii Oceanic Technology that I mentioned in “High-tech fish farm”, it almost could be produced on one farm. Of course, it would not be wise to put all the eggs in the same basket. If production volumes were comparable to a salmon farm, the 30,000 tons could require 10 farming sites. This is just theoretic in order to give an idea of the production space needed. There would be different species produced, but the calculation method remains the same for each of them.

With such an approach, for all the relevant food products, it can appear very quickly if being self-sufficient for the various food items is realistic or desirable.

The final exercise, which is also the most important, is the business plan per farm, to assess the viability of the individual projects. Even local, food production must be competitive. The example of Hawaiian sugar cane shows that this is not necessarily the case.

Next to farmers, food producers and market outlets, the Hawaiian government can stimulate more local production if it wishes to do so by setting the appropriate policies. Developing such a thorough review of how to reduce food dependency on outside sources in a market-driven and viable manner for the long term would be quite enjoyable to carry out in paradise!

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Posted by Christophe Pelletier

What a waste!

April 12, 2011

Nobody can have missed it. The hot topic of the past month was the so-called global food crisis. If you believe the media, the conventional ones as well as the social media, we are facing food shortages. For those who follow my articles, it will be no surprise that I am inclined to challenge such statements.

When 40% of all the food produced is wasted and lost, it is not possible to talk about food shortages. As I had explained in “Hunger is about more than just food production”, there is plenty of potential to increase food availability. Currently, and with this extremely sloppy 40% food waste, the world agriculture feeds quite reasonably six billion people. Unfortunately, this is not the case for one billion hungry people. By eliminating the waste, we could supply enough food to feed nine billion people. Not in 2050, but today already! That is not ideology or political agenda. It is simple math. Interestingly enough, the amount of the 40% food waste corresponds with the 70% more food the FAO says we should produce to feed nine billion. The more food we will save, the less we will need to push production up.

Unfortunately, the food waste issue receives little attention in the media. This is surprising because there would be some sensational articles to write about it. A little bit of guilt here, a little bit of horror there. That should sell some newspaper or get people watching TV. If this does not happen, it is probably because the food situation is not dire. From time to time, I receive requests from journalists. Sadly, the stories that interest them have to be scary, such as doomsday scenarios including food shortages and the imminence of food riots everywhere, to be followed of course by World War III. I do not do that. Other type of topics that journalists love is science fiction stuff, such as meat artificially grown in labs and anything related with high-tech, or freaky stuff like eating insects and worms.

The food crisis was not so about shortages. If it had been the case, we would have seen pictures of people fighting for food. It did not happen. Actually, it is a price crisis. The price increase of commodities futures results from the depreciation of the dollar (as I was predicting in “The danger of a weakening US dollar”), and the strategy of what the financial media likes to call hedging against inflation. The later is really smart stuff, as investors rush into buying commodities to hedge against potential future inflation. The high demand for commodities results in price increase. That is the best guarantee to get inflation. Brilliant!

The media attention has been interesting to follow, though. Every newspaper wanted to have a piece about the subject. And they really published a lot. Everyone became a food security expert, from restaurant critics, to balcony gardeners and other economy reporters. Depending on the sources they wanted to use, the sponsors, and of course their paying audience, everybody could find about anything and everything about the subject. Some made a bit of sense, but many reports were sadly erroneous.

For some pundit, we are just one bad harvest away from a global food crisis. That was true 10,000 years ago, that was true just before the Irish famine, and it will be true as long as farmers do not control on the weather. Is that worth receiving coverage? For many, it has been an opportunity to push their respective agendas. For some, the only way is high-tech big agriculture. Hmm is that so? For others, only small-scale organic farming will save us. Hmm again. For others, eating meat is responsible for all the problems. Did I say hmmm already?

In this frenzy of food apocalypse reporting, I simply have not seen one article dedicated to food waste, just I have not seen any sensible research about how the price of commodities is set, either. When the total market for financial derivatives is US$ 600 trillion, while the world GDP is only US$ 60 trillion, something is a little out of balance, would not you think? The daily trading volumes of commodities largely exceeds the actual physical daily consumption of these commodities. Are all the traders only adding costs in the food chain?

However, let’s come back to the waste part. What the math I presented at the beginning of this article shows, is that the future is not so much about producing more, but about producing better and smarter, consuming better and smarter, and organizing the supply chain more effectively to ensure that food indeed reaches consumers.

The waste issue is rather simple to sum up. In rich countries, and also increasingly among the wealthier in emerging countries, the food waste occurs at the consumer end of the chain. In developing countries, the waste occurs at the post-harvest level. Food rots before it had a chance to reach consumers. In these countries, food losses are the result of an insufficient infrastructure. Another area of major food waste is fisheries. Because of (ironically) highly efficient trawlers, many fish species, as well as large quantities of edible fish are lost as they are crushed in fishing nets

Retailers are working on improving their part. For instance, Wal-Mart has initiated a large program to offer food to food banks, as part of their zero-waste strategy. European retailers did something similar several years ago. Consumers must do their part, too. Throwing food away is inexcusable for people who have refrigerators at home. People need to get some basics of household management. When I was a kid, there were classes about this at school, but it disappeared somewhere in the 1960s. Throwing away food is bad economics. Although nobody would think of throwing away coins and bank notes in the garbage, throwing away food is exactly that. That money could be used for better purposes. Throwing food in the garbage, or as I have recently read in a local paper here in Vancouver throwing it in the toilet pot is pretty much an immoral act, especially when so many lack food. Of course, not throwing away food in North America will not solve hunger in Africa, but there are other consequences to think about. Producing food requires a lot of energy (for production of fertilizers, for transport, for agriculture machines, packing plants etc..) and water. Wasting food means that the water and energy have been used for nothing! It is pure waste. Some may think that this is not relevant in Europe or North America. Do not be so sure, because for instance California is struggling with water scarcity, while exporting its water to other regions in the form of produce and other perishables. The gas emissions created for the wasted food will have been for nothing. Not wasting food actually reduces the environmental impact of agriculture, and this particular impact is the consumers’ responsibility. They need to know about this, because their behaviour influences the quality of the environment.

In rich countries, there is no food shortage, but we could use more leadership in informing and educating consumers to do the right thing. This is not only a matter for retailers or food service, but for all levels of the society. Rising awareness about the cost of wasting food should be on the agenda of all community leaders. Schools, parents, religious and political leaders should all address this topic in their respective circles. Food waste is where economics meet morals.

The post-harvest losses in developing countries are also both about economy and morals. The moral part is about their populations who already have so many difficulties to afford enough food, while almost half of it rots because of poor storage and infrastructure. The economic part is about the waste beyond the food losses. In many developing countries, water is scarce and most of them use large amounts of this water to irrigate food crops. Many developing countries already struggle to have clean drinking water, yet almost half the water used for irrigation is wasted together with the food. This is not acceptable, morally and economically. Moreover, some governments subsidise water for farmers to irrigate. Yet half of these subsidies are wasted with the food. Some governments also need to subsidize food for low-income families and to counter food inflation, simply to allow their people to buy food. If food availability were about to almost double by fixing the infrastructure, this would have some very positive consequences. Today, close to half the food receives zero money for revenue, while the production costs have been made to produce all of it, the eaten food as well as the wasted food. By eliminating the post-harvests losses, the currently lost quantities would create revenue that is currently missing. Considering the volumes of food involved, the total amount of new revenue generated in all these countries would be astronomic. Everybody would win. Retailers and wholesalers would increase their sales substantially. Farmers would make more money. Storage companies would have a business. Transport companies would have more business as there would be much more food to bring to market. More food available would also mean less inflationary pressure on food prices. This new activities would create jobs. This would help more people have a better income and be able to afford food a bit more easily. Governments would not have to spend as much money to subsidize food. A population that eats better would not be as tempted into social unrest as a hungry mob. At the production level, less food waste would mean less waste of water, energy and inputs. This would alleviate water problems, and increase the efficiency of the use of energy. All of this has a positive impact on the environment. According to the FAO, the cost of fixing the post-harvest losses in developing countries is about US$81 billion. Considering the quantities of extra food involved available “almost for free” since it has already been produced, the US$81 billion sound like a bargain. Indeed, agriculture represents 5.8% of the world GDP (source: CIA Factbook), or roughly US$ 3.5 trillion! Therefore, saying that post-harvest losses must be in the neighborhood of US$ 1 trillion is probably conservative. One would expect to see the payback time for infrastructure investments to be rather short. Someone needs to crunch the numbers, to take the lead and to show to all parties involved what their advantage will be. I certainly would be happy to do that. All actors of the food chain will have to participate, private sector as well as public sector. The return will be high in all respects, financially of course, especially once the current social and environmental externalities will be eliminated as the result of an efficient supply chain.

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Posted by Christophe Pelletier

The math and the myth

March 22, 2011

No, this is not one of those “are in a boat” riddles. Those who have read my articles or my book know that I like to bring some perspective by crunching numbers and double checking statements that seem beyond any discussion.

During National Agriculture Week held last week in the US, one of such statements popped up in most of the social media dedicated to agriculture: In 2010, one US farmer provided on average for the needs of 155 people, while in 1960 this number was only 26!

Of course, if you follow social media, you know that, immediately, the partisans, mostly in the Midwest, spread the good news as fast and as much as they could. To them, this number of 155 is the best proof that large-scale industrial technology and mechanization driven agriculture is the best there is, and US farmers are the best in the world! So that the world knows it this time!

That is clear. Or is it really? Then let’s look at the numbers a little closer and do some math.

Knowing that China became the first export destination of US agricultural goods since only last month, finally passing Canada and its gigantic 35-million population, I had some doubts.

First, one statistic that is not mentioned in the 155 per farmer is the total number of farms. This number dropped from 4 million in 1960 to 2.2 million in the latest (of 2007) census mentioned on the USDA website. Going from 26 to 155 would have been very impressive if the number of farmers had been stable, but this is not the case.

In 1960, 4 mio x 26 = 104 million people fed.

In 2010, and by keeping the number of 2.2 million farms, the calculation is 2.2 mio x 155 = 341 million people fed.

Instead of increasing 6-fold (155/26) as the fans try to make believe, the actual improvement of US agricultural production has increased only 3.3 times. Over a period of 50 years, this represents an average year-on-year increase of people fed by US agriculture of only 2.4%. It is higher than the average year-on-year increase of the world population over the same period, but it is not stellar, either. As an indication for comparison, the world’s food production has increased by 3% year-on-year over the same period.

This becomes interesting when comparing with other parts of the world. I choose India, because, it is often presented, especially in the Anglo-Saxon press, as a country that does not tackle agriculture properly. According to those articles, India should be a lot more like the US, going big and industrial, instead of keeping their large rural population.

India has 1.2 billion inhabitants, and statistics indicate that 200 million people are malnourished. This implies that 1 billion people are fed reasonably. Now, let’s compare another number that rarely appears in analyses. The population density of India is 10 times higher than the American population density. This means that if the US had the same population density as India, there would be 3 billion Americans, and only 341 million of them would have food. In such conditions, they would not eat much meat, they would not suffer from obesity and they certainly would think twice before growing food to feed their cars. If India had the population density of the US, there would be only 120 million Indians. India would probably be the largest food exporter in the world.

Maybe this comparison is not the best to make. After all, the Indian diet is rather different from the American one, and India still needs imports to feed its people. Let’s try something that is closer to America in terms of eating situation: the EU.

There rarely passes a day by without some article from a US industrial agriculture supporter that criticizes Europeans to resist the American model, especially GMO crops. According to the biased pundits, Europe is losing ground because of this shortsighted stubbornness. There again, some math can help. Once again, the population density will provide us with insight. If the US had the population density of the EU, there would be 1.1 billion Americans. Once again, that is much higher than the 341 million that US farmers can feed. As far as the EU is concerned, the region is self-sufficient, and in most European countries, the yearly per capita consumption of meat is close to 100 kg. There is no food security problem in the EU. In this case, we are not comparing meat eaters and vegetarians. Just as it looked that India was doing not such a bad job at feeding its people, the EU actually delivers a nice and enviable performance.

The math shows us that the number of people fed by one farmer is not a good indicator of the actual performance of the national agriculture. I would compare it with bragging about the number of horsepower in one’s car engine without looking at how far that car can take you. Gas mileage is more important. In the case of the US, the 155 only indicates that there are very few farmers, and that they have to manage very large farms. It is not an indicator of yields. Bigger, more intensive or more technology do not necessarily mean more efficient. It has to be the right size, the optimal level of intensification and the proper use of the right type of technology.

A much more relevant number is the number of people that one hectare (or one acre) of land can feed. With this indicator, the performance of the US is average. The key is the yield. In the case of wheat, which is grown in most regions, the yield in the EU varies between 6 and 9 tons per hectare, depending on the country. In the US, the yield is of only 3 tons/hectare, which also happens to be the world average.

What the math really shows is that the world is very diverse. It is diverse from demographic, economic, sociocultural, climatic, agricultural points of view. Agriculture is not mechanics. It must consider all these parameters and be adapted to the specific environment to meet food demand optimally. There is no universal model, and there does not need to be any. We simply must focus on producing high yields in a sustainable manner, meaning that this performance can be repeated indefinitely for the generations to come. To grow food, we need good seeds, fertile soil , proper financial resources and skilled farmers!

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Posted by Christophe Pelletier

The fertilizer of the future

March 12, 2011

Among the many challenges that the agriculture of the future faces, soil fertility ranks high on the list of priorities.

Originally, most farms were mixed. They had land to grow crops and they had animals for milk, eggs and meat. Markets were mostly local, and food was consumed in the villages and towns near the farms. Food waste was fed to farm animals; the manure produced was mixed with straw and returned to the fields where the crops had been grown. Over time, farming has evolved. Agriculture has become much larger scale, global and specialized. This evolution has been driven by the use of oil, mechanization, and by the development of mineral fertilizers.

That model, which has been greatly based on cheap energy and resources, needs to be looked at critically as the economic environment changes. Energy is no longer cheap and, like oil, the resources used for the production of fertilizers have been depleted. New solutions are required to be able to produce optimally.

The production of nitrogen fertilizers requires a lot of energy. According to estimates, it uses 5% of the world’s natural gas production, and half the fossil fuels used in agriculture. Because nitrogen is quite mobile when dissolved, as this happens when it rains, a large amount of these high-energy-consumption compounds are lost. An estimated 50% of the nitrogen spread on crops leaches through the soil. It ends up in the water system. The reserves of phosphates, another important mineral fertilizer, are facing depletion. This might happen in 20 years from now. With the development of precision agriculture, the waste of minerals can be reduced. With the development of satellite imaging indicating the mineral status of a field, and the local variations within the field, it has become possible for farmers to bring just the right amount of the right mineral at the right time and at the right place. This follows somehow a similar thinking as fertilizing plants in hydroponics operations where crops are produced without soil and fed a mineral solution drop by drop.

A consequence of the specialization between crop farms and intensive animal farms is the rupture of the organic matter cycle. Large monoculture farms have suffered soil erosion because of a lack of organic matter, among other reasons. In soils, the presence of organic matter increases moisture retention, increases minerals retention and enhances the multiplication of microorganisms. All these characteristics disappear when the quantity of organic matter decreases. A solution to alleviate this problem is the practice of no-tillage together with leaving vegetal debris turn into organic matter to enrich the soil. This has helped restore the content of organic matter in the soil, although one can wonder if this practice has only positive effects. Tillage helps eliminating weeds. It also helps break the superficial structure of the soil, which can develop a hard crust, depending on the precipitations and the clay content of the soil. Possibly, in the future the use of superficial tillage could become the norm. Deep tillage, as it has been carried out when agriculture became mechanized, has the disadvantage of diluting the thin layer of organic matter in a much deepen layer of soil. This dilution seriously reduces the moisture and mineral retention capacity of soils, thus contributing to erosion as well, even in organic matter-rich soils.

The removal of farm animals from specialized crop farms requires the systematic use of mineral fertilizers because farmers do not have access to manure and the minerals it contains, even though most of these minerals originate from the crops farms.

At the other end of this interrupted cycle of manure, intensive animal farms do not suffer a lack of organic matter and minerals. They have the opposite problem. They have too much of it, and not enough acreage, if any, where to spread it. This leads to accumulation of manure and other related problems, such as stench, high concentrations of minerals in the soil and eventually in the waterways and drinking water reserves.

Since nothing is lost, what has happened to the minerals from fields and from fertilizers? They have been transferred to other places via the global trade of agricultural commodities. Many of these commodities are used to produce animal feed. Phosphate in European pig manure may come from Asian manioc farms. Therefore, the best way to find out where the minerals are is to look at where intensive animal husbandry farms are. As mentioned earlier, nitrogen is washed away into the water system because of its mobility. Unlike nitrogen, phosphates are not mobile in the soil. They will accumulate, which also leads to a loss of soil fertility, eventually. The other area of concentrations of these minerals is in city sewers, and in the soil of slums. Since the purpose of agriculture is to produce food, and since consumers are increasingly concentrated in urban centers, the exportation of minerals is actually gathering momentum out of rural areas.

In the future, we are going to see a new look at fertilization. The economics of agriculture will change. This is inevitable, because the cost of inputs will increase. This will be a direct consequence of the increase of the price of oil, and of the depletion of phosphates reserves. This change of economics will drive renewed interest for manure, and for sewage. These sources will become attractive and competitive, as they contain large amounts of minerals directly available. Because of their nature, they have a high content of organic matter. One of the most efficient ways to remove nitrates from water is to grow plants with it. One of the main sources of phosphates will be manure.

There is little indication that the human population will return to the land, but animal farms can be moved rather easily. After all, they already are segregated from vegetal production. The increased need for manure will call for a relocation of animal productions. In an expensive-energy economy, having the “fertilizer factory” on site, or at least much closer than today makes a lot of sense. This is especially true because manure contains a lot of water, although there are substantial differences between productions. Transporting water is expensive. Mixing crops and animal productions again on farms will also allow the inclusion of vegetal debris together again with the feces and urine, producing a higher dry matter content, with limited transport costs between the field and the “fertilizer factory”. Regardless of the size of the farms, I expect to see a relocation of animal production units on agricultural land. They will be spread more evenly in the landscape than today. This will decrease the density of farm animals in currently high-density areas to levels that will allow a better control of environmental issues, as well as reduce partly the risks of transmission of animal diseases. Animal production units will reappear in areas where they had disappeared because of the fertilizer that they will provide.

This evolution will also come together with a new approach of manure storage and treatment. Open-air lagoons like those that we know today will simply cease to exist. The changed economics of energy will make the capture of gases financially attractive. Manure storage units will be covered; the biogas will be collected to be used for energy purpose, for the farm and the local communities. The solid and the liquid fractions of the manure will be processed and transformed to provide organic matter and the fertilizing minerals necessary for crop production. The location of the “manure units” will be influenced by the type of animal production, and therefore by the physical quality of the manure. There will be a logistic optimization of manure collection to the crop farms. It will be based on efficiency and optimization of resources. Therefore, the new farm structure will be efficient, as much financially as environmentally. Similarly, open-ocean fish farms that currently do not collect the feces will see the financial value in recuperating the fish waste and sell it. In cities, there will be an increasing interest to recycle the sewage. The purpose will be to recuperate the organic matter and the minerals it contains. A similar approach for human waste will apply as for animal production units as I described above. This will also be integrated in the future approach of urban farming, as it will provide the necessary nutrients for an efficient urban food production. It will be a source of revenue to the cities.

In rural areas and in urban areas, organic matter and fertilizing minerals will become strategic activities. They will serve the purpose of feeding sustainably the world population.

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Posted by Christophe Pelletier

Why we will change our eating habits, one way or the other

February 8, 2011

In the discussion about producing enough food for the 9 billion people the world will have by 2050, one of the sensitive issues, especially in the overfed world, is about what to eat and how much of it. There always is resistance to change, and changing eating habits may be even among the most difficult challenges we have. Eating habits are developed unconsciously since early childhood, and switching to conscious choices is not easy to achieve. It requires will power and self-discipline.

Most of the gloomy scenarios about the challenge of feeding the world are based on the assumption that the diet model would have to be the Western diet, and in particular the American diet. This is far from certain. Actually, do not expect this to be the case.

Changing eating habits will happen in two ways. One will be voluntary and the other will be a consequence of food prices.

There is a growing awareness of the health consequences due to overconsumption of food. All the stakeholders seem to blame each over for obesity, diabetes and other heart conditions, and try to convince the public that they are not the cause of the problem. Whose fault is it? Is it meat? Is it corn syrup? Is it fast food? Is it salt? Is it lifestyle? Is it the parents’ fault? Is it the schools with their vending machines offering snacks and soft drinks? We all have read such statements. Here is a scoop: overweight is caused by consuming more calories than are burnt through physical activity. Ailments are the results of rich and unbalanced diets. Eating (and drinking) too much, and too much of the wrong things is bad for you. There is a reason why gluttony is one of the seven deadly sins! Actually, our societies should have a close look at that list, because we might be in trouble.

In Western countries, we eat too much, and that should not be a surprise to anyone. Obesity and diabetes are becoming society problems in the USA, but other countries are following the same path. Europe and China have a rising percentage of obese people, especially young people. Even in Africa, there seems to be an increase of the number of overweight people. A recent study confirmed this (click here for the interactive chart). Awareness about health problems has already generated action. There are government campaigns. Food producers are reviewing their formulas and are working toward healthier products, in particular by lowering the content of salt and sugar of their foods. More and more consumers are also adjusting their eating habits, mostly by changing what they buy and where they buy it. The trend towards healthier and more natural food is growing and it will not stop. Only biotech companies seem to ignore this fact. This food trend is not just in Western countries but in China, too, the demand for natural and organic foods is increasing. After all, nobody really feels happy with being fat or unhealthy. If some people are taking action to improve their diets and its impact on the environment, this voluntary choice is still about a minority of the population, today. One of the reasons for this is that healthy diets seem more expensive than the junk fattening eating habits. I say seem, because those who can cook know that it is quite simple to make delicious balanced meal for less than the supersize combo deep fried so-called menu.

Money matters. That is a fact. This is why money is probably the best incentive for change. And the future will bring us plenty of incentive to change our diets. The current concerns about food prices, and the food riots of 2008, have created awareness about food supply. Although the price hike is more the result of investors, not necessarily speculators, looking for a safe haven for their US dollars through transactions in futures contract, the reality is that the commodity markets, even on paper, becomes the “official” market price. This enters the real economy and affects the price of food for households all over the world. The poorer countries are more sensitive to food price inflation, and this has the potential to cause very serious unrest.

Regardless of the current causes of food price increase, simple economics show that when demand increase, while supply has difficulties to keep up, prices increase. And this is exactly what will happen. In a previous article, I showed that the potential for meeting food demand, or I should say the demand for nutritional needs, of 9 billion was there. Quite easily. However, in this calculation, I indicated the road to success includes reducing food waste and a reduction of the quantity of meat in the diet. This means that we need to change our behaviour towards food.

If there is a sensitive topic about diet, this has to be meat. Opinions vary from one extreme to another. Some advocate a total rejection of meat and meat production, which would be the cause for most of hunger and environmental damage, even climate change. Others shout something that sounds like “don’t touch my meat!”, calling on some right that they might have to do as they please, or so they like to think. The truth, like most things in life, is in the middle. Meat is fine when consumed with moderation. Eating more than 100 kg per year will not make you healthier than if you eat only 30 kg. It might provide more pleasure for some, though. I should know. My father was a butcher and I grew up with lots of meat available. During the growth years as a teenager, I could gulp a pound of ground meat just like that. I eat a lot less nowadays. I choose quality before quantity.

The future evolution of the price of food is going to have several effects. The first one is the most direct. As food becomes more expensive, consumers look for the more affordable alternative first. If their budget is tight, they buy slightly smaller portions. People will slightly reduce their food intake. Those who were over consuming might actually benefit from a positive impact on their health. For those who already were struggling, this will be more difficult to deal with. From all the food sorts, animal protein will be the most affected by an increase of the price of food commodities. Already today, there are clear signs from the meat and poultry companies that the price of feed is seriously squeezing their margins. As usual, passing the price increase to consumers will take time, as retailers will resist. If the price of agricultural commodities is to stay high, consumers will inevitably have to accept price increases for food in general, and for meat and other animal products in particular. The price of meat is going to be affected by other factors than just feed prices. The need for more control on food safety issues, the stricter environmental regulations that will come for animal husbandry, on the land and in the sea, a change in animal husbandry practices, especially a lower use of antibiotics and farms with lower densities of animal will all contribute to an increase in costs. Energy will become more expensive, too. A whole system based on cheap commodities is about to change, simply because there will not be any cheap commodity anymore. These are all adjustments to rebalance our consumption behaviour from the unbridled overconsumption of the past decades, when consumers were not thinking about the consequences of their actions. The industry will figure out how to increase efficiency to contain some of the cost increases, but the change of farming practices will make meat significantly more expensive than it is today. The price of ad-lib cheap meat is ending. The future dynamics of food prices as presented here will be ongoing. A long as we will not have adjusted our diets to a new equilibrium, meat will keep increasing faster than other basic food staples, until meat consumption, and therefore meat production, will reset to different levels. Do not expect this to happen overnight. It will be a gradual process. There will not be any meat or fish riots. If food riots happen, they will be about the basic food staples, simply because the first ones to riot will be the poorer among us, and their diet is composed mostly from rice, wheat, corn, cassava or potatoes. Should the situation become dire, governments will intervene to ensure food for the poorest. Such price systems are already in place in many developing countries, and they are likely to be maintained, and even strengthened.

The same critical factors to keep food prices in check are very much the same as the ones that I presented in the previous article that I mentioned earlier: food waste reduction, moderate meat consumption per capita; and economic development, especially in Africa.

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Posted by Christophe Pelletier

The rise of the non-profits and how they shape food production

December 20, 2010

In the years before the current economic crisis, the non-profit sector was already creating more jobs than the for-profit sector. Last year, the total of all operating budgets of non-profit organizations passed the US$1 trillion mark. This makes non-profits the eighth economy in the world. This amazing number seems to have been rather unnoticed, yet it has quite some significance for the way economy might evolve in the future. They are a force to be reckoned with.

They are perceived as independent, although this is not necessarily the case, and this tends to give them a higher moral status, especially compared with the for-profit sector. As I had written in a previous article, nobody has the monopoly of morals, but non-profits have a PR advantage in this area. A part of their strength comes from the loss of trust in government, science, industry and politics by the general public. In the food and agriculture sector, the influence of non-profit organizations is growing, and it challenges the way food is produced.

Just like in the for-profit sector, the size of non-profits as well as the quality of their message varies. Similarly to many corporations, the integrity of some non-profits is questioned. However, in order to motivate individuals and organizations to donate money, they need to have and to keep enough credibility. Competition exists in the non-profit sector, too. Only the ones that do the best job can survive. Nonetheless, non-profits have been instrumental for many changes in food production. It is also clear that change and improvement comes only from being challenged. In this article, I just want to name a few examples of the power of non-profits and their ability to cause visible change.

First, here is an example as recent as last week. The HSUS (Humane Society of the United States) came out with video footage of what they called inhumane treatment of pigs at a Smithfield Foods pig farm. For those who may be unaware of who these two organizations are, the HSUS is a non-profit organization strongly opposed to intensive animal husbandry. They want to end factory farms. Smithfield is the world’s largest pig processor. The HSUS and the US meat industry are no friends. They have opposite views on animal husbandry and meat production. They accuse each other of the usual shortcomings and lies, as is the case between industry and its opponents. What I found quite interesting in this case, though, was the communication of Smithfield about the “crisis” on Twitter. Here, I can only speak about my perception, which was that Smithfield was quite nervous about this matter. Obviously, the HSUS scares them, and not just a little bit. The pork company came with numerous tweets about the problem, and in my opinion too many messages. As long as the investigation is not completed, any communication is unnecessary, and potentially confusing. I got confused to the point that I even wondered how they actually implement the procedures about animal welfare that I believe they have. They even communicated that they would have emergency audits from authorities in the field of animal behaviour and animal handling, such as Temple Grandin and Jennifer Woods, from Alberta, Canada. The farm is in Virginia. That sounds rather drastic if all procedures are in place and followed. The end of the story, at this day, is the report of the Virginia State vet, who did not notice any violation during his visit. There is no way of knowing whether something bad actually happened. The vet’s reports also mentions that the farm will have to be monitored, which makes sense in the context. Smithfield also communicated to have fired three employees for violation of animal welfare procedures, which tends to confirm that the HSUS had put their fingers on something true. Of course, the background of the story is that the HSUS finds that Smithfield does not make the move to banning gestation crates for sows fast enough, as the company had announced a few years ago. They compare Smithfield with other US hog producers who have already implemented change of husbandry systems. Regardless of this specific case, the reaction of the world’s largest pig producer tells me that the HSUS is going to win its battle to reform substantially the US meat industry. It will not happen overnight, but it is just a matter of years.

Another example, still in the pig sector, comes from The Netherlands. The largest supermarket chain, Albert Heijn, part of Ahold, the fourth largest retailer in the world, will sell only pork produced in animal friendly conditions, according to a protocol set up together with Vion, The Netherlands’s largest pork producer and Dierenbescherming, a non-profit organization dedicated to humane animal treatment. I remember when I used to work in the pig industry in the late 1980s in The Netherlands; Dierenbescherming was considered a rather extremist organization that supposedly did not get the realities of meat production. How things can change in 20 years!

Greenpeace is one of the most active organizations that try to change how food is produced. The agriculture lobby is not too enthusiastic about their actions, but Greenpeace gets things changed. They addressed the issue of beef production in Brazil and its relation to deforestation. They achieve more than the Brazilian government by reaching agreements with beef producers in a region where the “law of the gun” tends to prevail, but also mostly with the beef producers’ customers. The main fast food companies (McDonald’s, Burger King, etc…) and retailers like Wal-Mart have pledged not to buy beef that would be produced at the expense of deforestation. Be assured that something like this has quite some leverage. A similar situation has happened about the production of palm oil in Indonesia and Malaysia. Greenpeace’s action to save the orang-utans’ natural habitat has resulted in large users such as Nestle and Unilever to purchase only sustainable palm oil products. This has more impact than government action. I had mentioned a few weeks ago, the ranking for seafood sustainability by Greenpeace of retailers. Costco, which came last, first tried to contest the results. However, within a couple of weeks they reduced their seafood assortment from 15 to only seven, sustainable, species.

Another non-profit with influence on food production is World Wildlife Fund (WWF). They created in 1997, together with Unilever, the Marine Stewardship Council, which role is to set sustainability standards and conduct certification of fisheries. In 2009, the WWF created, together with the Dutch Sustainable Trade Initiative, the Aquaculture Stewardship Council, which has a similar mandate as the MSC, but for aquaculture.

Another typical example came with the wish list of a prominent seafood industry representative for 2011. On that list, he chastises environmental organizations for their negative and critical picturing of the seafood industry. Especially Greenpeace and the WWF are on his “bad guys” list. That is not surprising, but the irony is when he expresses his wish for further development of clean energies to stop the risks of pollution by oil spills and other contaminants. When it comes to other industries than his, he sounds very much to me like a Greenpeace and WWF supporter.

These are just a few examples, but they show without any doubt that the message of non-profit organizations has an audience, and with environmental issues becoming common media material, their influence will only increase. It is also clear that, more and more, retailers, foodservice and, to a lesser extent, consumer goods manufacturers are joining them. The businesses with direct contact with the consumers (aka the public) are leading this change, as I had mentioned in “The quiet revolution of food retailers”.

The next step that I foresee to enforce more transparency is the development of WikiLeaks-like activities that will make public confidential internal memos and other information not destined to publication. This will bring deep changes in the way food is produced. Of course, where there is change, there is resistance, too. The food industry’s reaction is normal in this process. The winners of tomorrow will be the companies that understand where the business environment is heading, and that will see the opportunities to implement change faster and better than their competitors.

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Posted by Christophe Pelletier

Helping farmers produce better

November 26, 2010

Meeting food demand depends for a large part on the ability of farmers to produce adequate quantities of the food products of the right quality. To achieve such an objective, farmers depend on their business partners. To feed an increasing world population, helping farmers succeed is not an option; it is a necessity.

There is no argument against producing better. A market-driven and more efficient production reduces the amount of waste, and it increases the amount of food available for consumers. It reduces the impact on the environment and it actually reduces the cost of production. However, it is important to realize that actions to produce better often are investments, as the effect is not always immediate.

From a value chain point of view, efficient production starts with high-quality ingredients. If the world wants farmers to produce higher volumes, they must have access to good genetics. Seeds that have the potential to deliver high yields, or farm animals that can produce and grow fast, while using feed and water efficiently, are an absolute necessity. Genetics and agriculture must also take genetic diversity and sustainability into account, but with poor genetics, farmers will not be able to meet food demand, and they will not be financially viable for the long-term. Vision and proper strategy are the elements to deal with this dilemma.

Farming inputs, such fertilizers, pesticides, herbicides and animal feed, must help plants, and farm animals, to express as much of their genetic potential as possible. Suppliers can play a very important role in helping farmers use the proper products in the right amounts, in the right place, and at the right time. The same principle applies for food processors and distributors. It is their role to help farmers deliver what the market needs when it needs it. They must encourage this by rewarding financially the farmers who do things right. This is in the interest of all the parties involved. Farmers make more money with their products. Processors get products that are more efficient to process, thus saving on costs. Distributors gain market share because they offer the right product to their customers, thus increasing customer satisfaction, appeal and loyalty. The advantage of doing things right is that it becomes more difficult for business partners to switch to a competitor. By being the best partner in business, the need for complicated contractual and legal agreements becomes a little less relevant. It is about loyalty and mutual security.

To achieve this kind of ideal situation requires a lot of effort, commitment and communication. Market needs must be translated in clear product specifications. The knowledge on how to be able to meet the required standards needs the proper channels to be transferred to farmers. Access to information has become much easier with the development of communication tools such as Internet and cell phones. Smart phones are helping further, and now farmers, anywhere in the world, have much faster access to market and technical information than by the past. This helps them make faster and better decisions. However, better technologies and better communication tools are not enough. Extension services are crucial. In my book, Future Harvests, several examples show how positive this is for food production. One is the policy of the Ugandan government that resulted in a boom in rice production, making the country a net exporter of rice. The second example is about the extension services of a food corporation, McCain Foods, in India, that helped farmers produce a better quality of potatoes, meeting market requirements, and earning substantially more this way. Another illustration of the positive effect of knowledge transfer is about the farming leader in Burkina Faso who helped increase food production with simple techniques, and stopped the exodus of population. Proper education and on-going training is part of the food production of the future. The human factor in knowledge transfer is as important as ever. Only people can know what the specific situation of a farmer is. Knowing the farmer is the best way to help them set up plans and strategies to improve their technical and financial performance. A farmer being independent business owners, their main concern is to generate enough revenue to stay in business, and to offer a decent standard of living and a secure future for their families. Helping them in these objectives is the way to get their attention and loyalty. Extension services need to offer the most effective solutions by taking into account the level of skills of the farmers, as well as their financial situation. Some farmers can afford and use high-tech solutions easily. Others may have money, but lack the skills to use certain techniques or technologies. Others may be technically savvy, but may lack the money. Extension service people are the ones who can help farmers make the best choices. They also must assist farmers to get the proper financing if this is the limiting factor, for as long as the money would used to deliver the proper return.

As Cicero stated, “The sinews of war are… endless money”. This tends to be overlooked by many who talk about increasing food production. If farmers do not have access to enough money to be able to produce the food the world needs, they simply will not. Developing agriculture requires serious investments, either from individuals or from governments. Asian and Arab countries know this and this is why they spent massive amounts of money in African and Asian countries, and even in Brazil and Argentina. If farmers cannot buy the basics to produce efficiently, they will have poor harvests. If farmers cannot be profitable, they will stop farming. This is important to realize that being a farmer must be attractive financially, too, if we want to motivate the next generation to be in agriculture. Money is important, but just for food production, more is not necessarily better. To get good results, we must ensure to have the right amount of money at the right time at the right place for the right purpose. The money must be aimed at producing for the market. Financing agriculture is about meeting food demand, not to produce blindly. Just like there is a need for efficient market-driven precision agriculture, the future of agriculture financing must evolve to efficient food-market-driven precision financing.

Comments Off | Agriculture, Food Security, Policies & Politics, Sustainability, Value Chains | Tagged: Agriculture, Animal Feed, Consumer, Economy & Finance, Environment, Food Security, Genetics, Investments, Market-orientation, Policies & Politics, Sustainability, Value Chains, Waste | Permalink
Posted by Christophe Pelletier

The quiet revolution of food retailers

October 28, 2010

While many debates continue in the political and “parapolitical” world about many aspects of food production systems and the impact of human activity on the environment, retailers lead a quiet revolution. Without making the headlines, they gradually change the way their suppliers will do business in the years to come.

Such an evolution is certainly welcome, especially in a time where important decisions need to be made. Political leaders seem unable to reach any agreement on environmental issues, as the world could see at the late Climate Summit of Copenhagen. In the food sector, there are many discussions going on about sustainability and genetic engineering, to name the two hottest items, but the political class does not seem to generate clear and concrete action plans.

Just like what happened in the 1990s about food safety in Europe, retailers are taking the initiative to create momentum on the current issues. The problems that plagued the food industry in Europe, such as salmonella in poultry, the mad cow disease, or the dioxin in Belgian fat for chicken feed showed a number of weaknesses that needed to be addressed. In the case of BSE, UK retailers did not wait for British or European legislation to demand meat and bone meal-free feed for farm animals. As I was working for a company supplying the UK market with chicken meat, I can testify that these were dramatic times. Tough decisions had to be made on a very short notice that had serious financial consequences. By then, a couple of reasons made the retailers took the lead. First, the inability of the government to prevent and tackle the issues was creating a bit of a vacuum on leadership. Consumer confidence in their institutions was fading, and retailers were the only ones, true or not, perceived to take the proper actions to protect the public. The second reason was the fact that many retailers had their own private labels. In this case, the problem was not the supplier’s problem anymore because the supermarket chain could have risked serious PR damage if a food safety issues would have been associated with their brand.

This time, retailers are again in the position where they can present themselves as the consumers’ champions. Legislation is slow to move and make significant decisions. The involvement of interest groups adds to the infighting and delays decision-making.

To prepare for the future, they already have come out with plans and communication on how and where they want the food they sell to be produced, and they try to offer a choice to consumers. By doing so, the most active among them are setting new standards, and forcing the whole production and supply chain to think about the things to come.

In previous blog posts, I have mentioned some of such initiatives, and in Future Harvests, I described the increasing leadership role of food retail in agricultural practices.

In particular, I mentioned the carbon footprint labelling on dairy products by Tesco, Wal-Mart’s Sustainability Index questionnaire to suppliers, and the seafood sustainability programs of many retailers. Marks & Spencer started their Plan A in 2007 with the objective of making their business more sustainable. To achieve this, they are involving their suppliers and the farmers producing for them to carry out the changes that M&S finds necessary for a better future.

More recently, new initiatives indicate that retailers are pursuing further on such initiatives. Wal-Mart came last week with their plan for sustainable agriculture. In the UK, Sainsbury let know last week that they were committing GBP40 million to invest in farming. Earlier this week, Carrefour unveiled their “Reared without GMO” program. In their stores in France, they will sell 300 food items labelled as being GMO-free, to offer consumer a choice based on transparent information. If Carrefour ventures into this, one can be sure that they do so because they already know that this will be good for their business. By gaining market share, it is very likely that their competitors will soon react by issuing similar programs. The EU Commission may be struggling to figure out how to deal with GMOs, but Carrefour says “Let the consumers tell us!” Vox populi, vox dei!

Of course, such initiatives do not please everyone. Today, I could read in a blog for a US magazine backed by the meat industry some interesting reactions about Carrefour’s new plan. Some readers were bringing up the typical arguments. Meat would be so expensive in Europe. Well, meat is quite affordable in France, even without GMOs, so think again! The other argument was about freedom of choice: people should be able to eat what they want. By labelling its food item, Carrefour does just that. French consumers are free to buy at Carrefour or somewhere else, and they have the right to choose what label they prefer. The freedom of choice is ironic coming from the US meat lobby, since American consumers do not have that freedom. Reared with GMOs is pretty much the only choice in the US. For now, that is. However, it is interesting to see on Carrefour’s press release that the pictures of fish, chicken and pork chops are exactly the same, regardless of whether they would be grown with or without GMOs.

In the 1990s, British and European consumers, and retailers, were challenging food industry practices because they were worried about their health and about the lack of transparency about food. Nowadays, in the USA, consumers are increasingly suspicious of their agribusiness, because they are worried about their health and the lack of transparency of the industry. Beef recalls because of E. coli, egg recalls because of salmonella, spinach contaminated with manure are in the news on a (too) regular basis. They are also increasingly aware, and suspicious, of the relations between interest groups and their government agencies, and how this influences decisions on what they eat.

Retailers are now saying that they are not waiting for politicians to make decisions. They have defined their vision, they know what they want, and they are passing the message on to the suppliers. What would happen in agribusiness USA if Wal-Mart took a similar approach as Carrefour?

Comments Off | Animal Feed, Consumer Market, Future Harvests, Policies & Politics, Retail | Tagged: Animal Feed, Carrefour, Consumer, Environment, Food safety, Future Harvests, Genetic Engineering, Leadership, Marks & Spencer, Meat, Policies & Politics, Pork, Poultry, Retail, Sustainability, Tesco, Wal-Mart | Permalink
Posted by Christophe Pelletier

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