Category Archives: Agriculture

Food security in Paradise

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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!

Copyright 2011 – The Happy Future Group Consulting Ltd.

Wisdom in poetry

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Little note March 18 2020: I am busy writing a book of poems about the theme of food and agriculture. The poetry book has now been published both in English as “Down to Earth” and in French as “Vers de Terre“. It is available both as paperback and Kindle.

The more discussions about future food production and food security in which I participate, the more I discover the amazing number of dimensions this issue contains. This makes it even more fascinating to investigate and to reflect upon it.

Meeting the food demand of an increasing world population goes much further than agriculture. Some like to see it as a matter of science and technology, others as a social issue, others as an economic problem and so on. This is all true, but isolating the various pieces of the puzzle is not satisfactory. At least, it is not to me. When I listen to the many points of views, it becomes increasingly obvious to me that we will need to integrate all these dimensions: the science, the technology, the finance, the social, the environmental, the cultural, the religious, the spiritual, the philosophical and the moral. I probably even forget to mention some dimensions in this list.

As human beings, we have the privilege of the thinking and of setting the rules to ensure our prosperity. The human genius is amazing, and we have been able to develop an astonishing amount of tools to improve our lives. However, tools are only an extension of our understanding and of our perception of the world around us.

The drivers of our societies have changed in the course of time. In ancient Greece, philosophy and science played a central role in our effort to understand the world. During the Middle Ages, science became a threat to religious leaders. Galileo experienced the pressure. Science did not make much progress in these dark centuries. With the Renaissance, the arts and the curiosity to understand the world came back in fashion, supported by a number of enlightened rulers. Leonardo da Vinci could experiment and let his genial mind at work without fear. For a couple of centuries, science, arts and philosophy were considered equally important. Personally I am a great admirer of the 18th century philosophers/scientists whose curiosity helped develop many theories and research that are still useful today. During the course of the 20th century, a shift occurred. Science gradually took a dominant position, and the philosophical, the spiritual and the arts lost quite a bit of their lustre. I can understand that the feeling of “exactness” in science offers an apparent sense of security, although, the use we make of science is not always that exact. Some of our societies seem to reject anything that has not been proven scientifically. They tend to reject the point of views of those who search answers in other areas of human sciences. Pragmatism, which I strongly advocate, requires that we consider all possibilities, before choosing which ones offer the best answers to our problems. Science is not a judge for what should be allowed or not. For eons, farmers have applied successful techniques without having any scientific explanations, simply because science was not advanced enough. That does not take away that certain things worked. Similarly, we need to keep an open mind about yet scientifically unproven techniques. If we had to know how everything works before we could do anything, we would be stuck in inaction. I believe that technical sciences and human sciences have much to benefit from each other. Only by considering all aspects of our knowledge, technical as well as human, will we be able to achieve the most in future years.

Recently, I remembered a poem I had to learn in school. Although the topic has some agricultural background, the theme is more about the true values in life and the true riches. It is about fulfillment and achievement, but it also gives a nice reference to what motivates most of us. I believe it could serve as a useful tool to think about what will or should really matter for the future.

Here I give you Jean de la Fontaine’s “Le Laboureur et ses Enfants” that he published in 1668, first in French, and then translated in English.

French version:

Le laboureur et ses enfants

Travaillez, prenez de la peine :
C’est le fonds qui manque le moins.
Un riche Laboureur, sentant sa mort prochaine,
Fit venir ses enfants, leur parla sans témoins.
Gardez-vous, leur dit-il, de vendre l’héritage
Que nous ont laissé nos parents.
Un trésor est caché dedans.
Je ne sais pas l’endroit ; mais un peu de courage
Vous le fera trouver, vous en viendrez à bout.
Remuez votre champ dès qu’on aura fait l’Oût.
Creusez, fouiller, bêchez ; ne laissez nulle place
Où la main ne passe et repasse.
Le père mort, les fils vous retournent le champ
Deçà, delà, partout ; si bien qu’au bout de l’an
Il en rapporta davantage.
D’argent, point de caché. Mais le père fut sage
De leur montrer avant sa mort
Que le travail est un trésor.

English translation:

The farmer and his children

Work hard, sweat all you can:
Riches is what counts the least.
A rich farmer, sensing his impending death,
Called for his children, and spoke to them without witnesses.
Do not sell the inheritance left by our parents, he said,
As a treasure is hidden in it.
I do not know where, but with a bit of courage
You will find it, you will figure it out.
Go search the field when summer ends.
Dig, scratch, plow, do not leave no earth unturned
Anywhere your hands can reach.
After the father’s death, the sons worked the field
Everywhere, over and over again, so that within a year
It produced more than ever before.
There was no money to be found, but the father had been wise
To show them before his death
That work is a treasure.

The math and the myth

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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!

Copyright 2011 – The Happy Future Group Consulting Ltd.

The fertilizer of the future?

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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.

Copyright 2011 – The Happy Future Group Consulting Ltd.

Ten human factors that may hinder feeding nine billion people

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The road to ensure food security for all is still long. Although humans are very creative to solve and overcome their problems, when it comes to food production, they still lack control on many parameters. Since the beginning of agriculture, farmers have watched towards the sky to see what the weather would bring them. Rituals to call for friendly climatic conditions and soil fertility have been common in all cultures. Droughts, floods, never-ending rainfall, frost and other climatic events have happened on an ongoing basis and, climate change or not, they still will happen in the future. If natural events are out of our control, we can influence another parameter, although mankind’s history has shown that it is a difficult one to tackle: the human factor.

Here follows in condensed form my top ten human limitations to succeed in feeding nine billion people by 2050:

#10: Fear

Although fear is a defence mechanism, it will not protect humanity against food shortages. There are many fears that play a role in our understanding (or lack of it) of food production. The problem is not so much fear itself, but the inability to overcome it and to start bringing effective solutions to the problems. The other risk that fear brings is its ability to spread and to evolve into panic.

There are many challenges ahead, but we need to keep our heads cool, and address the issues practically and rationally, at least as much as we can. Inaction, which is a symptom of fear, will not be helpful. To feed nine billion we cannot be passive.

#9: Greed

Greed is fear’s twin sibling. It is a strong driver that makes people take risks for the sake of material reward. As such, a little bit of greed is good, as it stimulates action and entrepreneurship. It stimulates the need for action that I just mentioned. Speculation, the purest form of greed, will have to be brought under control. Its consequences in terms of social unrest and on the stability of societies are too serious. The risk with greed is that all the focus is on the short-term financial reward. It is also essential to ensure the continuity of food production for the long term, and we should not engage in solutions that can undermine future food security. A little bit of fear will help bring some balance.

#8: Not addressing the right issues

This, together with the slow disappearance of common sense, is a growing tendency. Too often, the focus is on eliminating the symptom rather than the cause of the problem. This usually results in creating a new set of unnecessary problems. By eliminating the cause of a problem, the solution does not create any new problem. We just have to deal with other problems and their causes. In the case of food security, an example of mistaking the cause and the symptom is hunger. The cause is poverty, not the lack of food. The food is there, but the poor cannot afford it. In our world of information overflow where the media are more interested in the sensational and the “sexy”, true and thorough analysis has gradually become less interesting to the public. Although analysis may be boring indeed, it is an absolute necessity if we really want to solve problems.

#7: Lack of education/training

Here is a topic that rarely makes the headlines in the media. Farmers, and candidates farmers, need to have access to proper education and training. In order to improve and produce both more and better, they need to have the knowledge and have the possibility to update this knowledge. This may seem obvious in rich countries where education and training are well organized, but in many developing nations, usually plagued with food insecurity, this is not the case. Too often, even the most basic knowledge is missing. For these populations to succeed and to contribute in increased food security, it is necessary to have education high on the list of priorities.

#6: Lack of farmers

This topic does not get much publicity, although it is of the highest importance. In many countries, the average age of farmers is above average and there seems to be little interest from the youth to take over. We need farmers if we want food. To have farmers, we need to make the profession attractive and economically viable. Two weeks ago, the US Secretary of Agriculture announced measures to make it easier to start up a farm. He mentioned that his country needs to find 100,000 new farmers. In Japan, they are developing robots to do the farmers’ work as there is too little interest from the youth for agriculture, and they face a serious risk of not having enough farmers. In the EU, there are more than 4.5 million farmers older than 65, while there are fewer than 1 million farmers younger than 30. This is how serious the situation is becoming.

#5: Lack of compassion/Indifference

In our increasingly individualistic and materialistic societies, the focus has shifted towards the short term, and even to instant gratification. Our attention span has shrunk dramatically, and unless other people’s problems affect us, we tend to forget about it. When it comes to food security for nine billion people, this will not work. There are many possibilities to produce enough food, as I have shown in previous articles, but to achieve this goal, we still have a lot of work to do. Mostly, we have to change a number of bad habits.

Throwing large amounts of food in the garbage is one of those bad habits. By changing this, we can save amazing quantities of food. First, we must lose the I-do-not-care attitude.

Large quantities of food are lost before reaching markets in developing countries. All it takes to solve the problem is to make the funds available. Compared with the stimulus packages and bank bailouts, the amount is ridiculously low. There too, the not-my-problem attitude is improper.

Another example is Africa. With the size of Australia of unexploited arable land, and low yields because of lack of proper seed and proper support, the potential for food production is huge. We need to help Africa succeed. The attitude of the West towards Africa, and Africans, needs to change.

Humans are social animals. This behaviour is an evolutionary advantage aimed at ensuring the survival of the species. Hard-nosed individualism and indifference go in the opposite direction. They work only in period of abundance. By showing some compassion and helping others succeed, the fortunate ones actually increase their own odds of survival. In our globally interconnected world, any negative food security event affects us all, eventually. We feel a pinch while we are “only” seven billion. This says how painful it would be by being nine billion.

#4: Interest groups

A better name should be self-interest groups. There is not a day that goes by without showing us the total lack of interest they have for those who are not affiliated to them. For as much as it is essential that all opinions and philosophies can express themselves, it is just as essential that they also have empathy and respect for those who think differently. Interest groups do not appear to do that. They express the behaviours that I indicate under #10, #9, #8 and #5. Their objective is to influence policies by bypassing the people who elected the representatives who depend on these groups for their political funding. Would that sound accidentally reminiscent of corruption and banana republic?

#3: Lack of long-term commitment to the vision/plan

There are many plans for food security out there. About every government has one. Industry groups come out with their vision as well. So do environmental groups. The problem in many cases is not the lack of objectives; it is the failure of execution.

To achieve food security, proper execution is paramount. It requires much more than a vision and a plan on paper. It requires a clear allocation of responsibilities and a schedule for the delivery of the objectives.

Often, what undermines the execution of a plan is the lack of a sense of ownership of the mission. All the actors of food security need to be involved as early s possible in the process. This makes them participate in the set up of the plan and this increases their level of commitment. There is nothing worse than a plan developed by a limited group that tries to push it on those who actually must make it happen. When people are not involved and committed, they feel no ownership of the plan. They simply will not participate.

#2: Ego

There is nothing like some good old-fashioned ego to thwart the general interest. Unfortunately, ego is a rather common component in higher circles of government, business and organizations. Some of the symptoms include the inability to say “I don’t Know”, the inability to admit being wrong, the tendency to wage turf wars, and the unawareness of the win-win concept. Acknowledging one’s ignorance is the first step to learning, therefore improving. Believing to be always right is simply delusional and shows a lack of sense of reality. Turf wars may end up with a winner, but usually it is a Pyrrhic victory.  Thinking that one can win only if the others lose is just an illustration of point #5. When it comes to food security for nine billion, a short-term victory at someone else’s expenses will soon be a defeat for all.

#1: Poor leadership

Leadership is paramount in any human endeavour and feeding nine billion is quite the objective. While I was writing Future Harvests, I constantly came across the importance of leadership. I have no worries in our technical abilities.

All the success stories that I could learn from had all in common having a strong leader with a clear vision of what needs to be done. The leader also had the ability to gather all the energies behind him and get a consensus on the objectives and the path to follow.

Similarly, all the failures stories also had leadership in common. Usually, it shows a despotic leader who acts more out of self-interest than for the general interest, who does not accept being wrong and change course before things go haywire.

In order to succeed and meet food demand by 2050, we will need leaders, at all levels of society, who have the following qualities. They will overcome fear, keep greed under control, address the right issues, will foster education, will encourage farmers’ vocations, will be compassionate, will work for the general interest, will involve and commit all to succeed, and will not put their egos first.

Copyright 2011 – The Happy Future Group Consulting Ltd.

An Interview with The Food Futurist: 100 Answers about the Future of Agriculture

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Following up on the recent publication of the report “100 Questions of Importance for the Future of Global Agriculture” by a group of experts from all over the world under the lead of Jules Pretty of the University of Essex in the United Kingdom, I wanted to react candidly and spontaneously on every of these 100 questions.

Since giving extensive answers would represent several months, if not years, of work for a single individual, I chose for the interview format. I gave myself just a couple of minutes to say what came to my mind.

The result is this document: 100 Answers – An interview with the Food Futurist

I hope it will be as enjoyable for you to read as it was for me to write. I hope that it will trigger reactions, as this is more a first attempt to initiate a forum discussion.

The questions were quite interesting. However, I missed a few elements tat I believe to be quite important in the challenge of feeding a population of nine billion by 2050. The initial report did not raise enough questions about the issue of water. Water is essential to agriculture, and the challenge of accessing enough water is even more urgent and more critical than improving food availability. Similarly, the initial report did not reflect much on urban farming. Estimates of today’s urban food production are of 15-20% of the total world food production. Considering that about 50% of the population lives in cities, this means that 30-40% of all the food consumed in cities is produced in urban centers. This is far from negligible. As the urban population is expected to double by 2050, urban farming will be an essential part of our food supply. I had also expected more attention to aquaculture, which is the fastest growing food production.

The initial report focuses more on production aspects and systems than it does focus on the human factor. Population increase, distribution and especially the quality of leadership will be crucial for the way food security strategies can be set up. As I mention in one of my answers, our future will be as bright as our leaders.

Writing this document, and reacting to questions asked by highly qualified experts, was a good way of assessing the book “Future Harvests” that I published in August 2010. I was quite happy to see that the book addresses all the concerns of the thinkers and policymakers.

I wish you happy reading.

Feeding nine billion is an exercise in leadership

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In a previous article, “Hunger is about more than just food production”, I showed how much more potential we have to feed the world than we commonly think. However, having the potential to do so does not mean that we will do it. Human nature has the habit of fluctuating between its best and its worst. Therefore, whether we will actually feed nine billion is far from done. In this article, I am going to reflect to what it would take to be successful at making it happen.

In my book, Future Harvests, I present the six principles that are critical to meet future food demand successfully: Sustainability, Innovation, Market Orientation, Pragmatism, Leadership and Efficiency. I had regrouped these principles under the acronym SIMPLE. While I was writing the book, I always came back to the same observation: success or failure to feed nine billion simply depends on us all. Someone needs to set the course and create the conditions to take the proper actions. The world needs leaders that will make food production potential the reality by 2050.

The job description is, interestingly enough, rather reminiscent of food production and genetics. In order to express the full potential of its genes, an organism needs the proper environment. This is exactly the role of the future leaders. They must create the conditions that will allow farmers to produce efficiently, yet sustainably.

The starting point will be about making the right decisions for both the long term as for the short term. We must preserve the potential to produce for future generations, but we must not forget to provide for today as well. Proper leadership will need to take into account the interest of many different groups and manage a balanced approach between money, people and environment. For sure, future leadership will be a balancing act. This will be easier to achieve if the leaders can sell the world their plan, which means that they must have one.

Leaders come from all layers of society. They are in government, in industry, in non-profit organizations, they are independent farmers, or they come from non-food related occupations. Adequate food supply is the very fundament of societies. Where there is hunger, there is no prosperity. Without food, there is not life, and just as importantly, without water there is no food. Developing food security is not an option; it is probably the most important policy sector of any society. This is something that we must not take lightly, even in rich countries where we seem to take food for granted. Things may change.

What story do our leaders need to tell and execute? The points that I raised in the article mentioned at the very beginning are a good place to start. The scandal of food waste, because it really is a scandal, must be dealt with and fixed. In developing countries, this is caused by a lack of infrastructure. It is only a matter of money. If world leaders have the will to get that money at work, it will happen. For some reason, they do not do it. Maybe it is a sign that things are not that critical after all. Compared with the amounts of money thrown at financial bailouts and stimuli of all sorts, the cost of infrastructure development looks ridiculously insignificant. Such projects would actually create jobs and increase the wealth of the populations where it takes place. This would not be artificial GDP boosting, but actual poverty reduction and increased food availability. In rich countries, food waste happens at the consumer end. What leaders of these countries need to communicate is a sense of responsibility. Wasting food is simply immoral, just like any other waste. If we take the example of nitrogen, the waste by leaching is estimated at about half the nitrogen spread on crops. This is huge and very damaging for two reasons. One is that the nitrogen ends up in the drinking water making it harmful, especially for pregnant women and infants. The other is that the production of nitrogen fertilizers uses half the world’s agriculture natural gas consumption. Efficiency is not a luxury, but it is a necessity. When efficiency increases, the amount of waste decreases. This works towards a higher sustainability, too. Food waste is one thing, but food consumption excesses or unbalanced eating habits are another area of work for our leaders. Eating more food than one needs is not only detrimental for that person’s health, it is also food that is less available to others. This pushes food prices up, too.

The effectiveness of leaders depends on their ability to communicate and get the message over to their dependants. Changing habits and infusing a sense of solidarity and responsibility requires patience, communication and proper education programs. Defining vague objectives or using hollow populist slogans and expressions will have no effect. Only charismatic leaders with strong convictions about what ensures the future of their people, even if it means sacrifices, will be able to bring such a change. It is not easy to do when your country is not on the verge of a terrible crisis. An interesting example about unilateral leadership is the decision of the Chinese government to slow down the number of new car registrations. They consider that there are enough cars. Getting a licence plate will be difficult in the future. In 2008, they decided to ban the use of disposable plastic bags in supermarkets, thus saving an estimated 100 billion bags and the equivalent of 37 million barrels of oil per year. Similarly, China is now the world leader in renewable energies. What actions did the Western democracies take about new car sales and supermarket plastic bags? When children died because of tainted milk, the Chinese authorities arrested all the people involved, and even executed two persons. Of course, the use of melamine in the milk was intentional, making the case extreme. However, in the West, I do not recall anyone being arrested or considered personally liable after deaths by food poisoning. My point is not to demand imprisonment of CEOs as a standard operating procedure, but I am sure that if executives of food companies felt that they could be personally liable for food poisoning, the precautionary principle would apply much more systematically. Leaders need to make understand that doing something wrong comes with consequences. Although there is much to say about China’s political system, one must admit that not having to think in terms of elections every four years and not having political campaign funded by any industry of NGO of any sort can help politicians focus on the long-term, too. Maybe the fact that China is plagued with so much pollution in the air, in the water and in the soils also makes the issue more acute for the leaders to resolve.

If the stick is one option to make people do what is right, the carrot is, at the very least, as important. Nothing stimulates people more than being rewarded for doing a good job. People are at their best when they know that others appreciate what they do, and that what they do makes the world a better place. Then, they do not see their occupations as “have to” activities, but as “want to” ones. Subsidies, bonuses, tax credits are all motivating tools to make people do the better thing, but the key is to have incentives that meet the goals without having harmful side effects.

Leaders also need to be innovators. Considering how fast our world changes, and the quantity of new knowledge made available about on a daily basis, many new possibilities will be available to solve old problems. Innovation is the child of human genius and, to cope with future challenges, creativity and adaptability will be major assets. It is the leaders’ role to foster innovation, yet by keeping in mind all long-term implications.

The ideal leader would have the qualities described by Plato in “The Republic”. Although it is an ideal, having committed leaders matching his description would increase our odds of success.

Copyright 2011 – The Happy Future Group Consulting Ltd.

Food, Inc. or just the description of America?

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A couple of days ago, I watched the documentary Food, Inc. Although the underlying theme is that the four large US corporations that dominate food would try to keep the American consumers ignorant of their activities, I saw this documentary much more as a review of the US society over the past 60-70 years.

As usual with this kind of documentaries, there is a mix of commentaries with pictures without presenting anything specific about the relation between the text and the images. The chicken farmer from Pennsylvania is angry, but it is not clear exactly at what. She removes dead chickens, but we do not hear what the cause of death is. To me, with my experience in chicken production, it seems that her chicken house is in very poor shape, and I am not sure about her level of commitment and overall technical performance. The Tyson grower seems quite a bit happier than the lady chicken farmer who ends up being terminated by Perdue. Unfortunately, the crew cannot film inside his chicken house and we never hear to know exactly why, but the commentary tends to imply that Tyson wants to hide something. Unfortunately as well, no representative from the large food companies mentioned wished to be interviewed, and that creates the impression that they want to conceal something. The chapter about the staff policies of meat companies is quite interesting. If this seems a surprise for the journalists, it was not for me. In Europe, we knew 20 years ago how harsh contracts were for farmers and plant staff. This is the product of free job market mechanism with a slight reminder of a certain thinking about labour force in the old south. Certain things simply die hard. John Steibeck’s Grapes of Wrath had shown several decades ago how agricultural labor force could be exploited. The reminder that meat packing plant workers used to have decent wages is an indicator of two things. One is a reflection of the disappearance of the American middle class in the manufacturing sector, and the other is that meat plants would purely and simply suffer tremendous financial losses if they had to reset wages the way they used to be. There might be some concerns about their financial long-term sustainability. They are not ready to cope with production cost increases, and they can hardly reduce personnel costs much anymore.

The family of four that lives on a diet of fast food is also a typical example. They do not have time to cook, and that justifies eating only burgers with fries and pop. The fast food meal for four comes down to almost US$ 3.00 per person. You can make a healthy meal for that money. The luxury meal that I prepared for my spouse on Christmas Eve was hardly more expensive than this. For that family, like for many American households, money is tight and they need to do the best out of a limited budget. The filmed visit to the supermarket tends to focus too much on the broccoli at US$1.29/lb. That price would be too high. That is possible, but there is more than broccoli to choose from. Potatoes, rice, carrots, beans, cabbage or onions are much cheaper than broccoli, and by combining them, it is possible to prepare quickly a healthy nutritious diet, including some meat. The mom works long hours and has no time to prepare diner. I accept that, but the teenage girl could do that to help her mother. My parents also worked long hours, and dinner was not before 9 pm. This is why I learned how to cook. When there is a will, there is a way. Then, we learn that the parents suffer of diabetes. This is not really a surprise considering such a crazy diet, and this problem is spreading to more and more American families. When you add the medication costs to the price of the fast food meals, preparing a healthy meal as I described above is really the best deal in all respects. In the land of individualism, where people are expected to take charge of their destinies, it is a bit strong to reduce the discussion to the agribusiness having “altered” foods, thus presenting this family as victims. I disagree with this. They made a choice, which may be the most convenient, but not the wisest. The alternative certainly requires some effort, and that may be difficult to handle. The blaming game, which is even more popular than baseball in the US is not leading anywhere. Most of all, why do they have to order pop with their burgers? They can cut their calorie count by filling bottles with tap water. Making sandwiches is easy and quick, too. This is a lot cheaper and a lot healthier, and it does not require much work at all. Last year, I had written an article in which I was showing the similarities of human behaviour and how we produce food. Food, Inc. makes this comparison quite vivid.

Then, the documentary shifts to food safety and presents some footage of meat processing plants. That is certainly a very important item in the US, where the number of recalls for bacterial contamination is simply astronomical. I found this part very interesting because in my many years in the meat, poultry and fish businesses, I have spent several years in close contact and even supervised plant operations as well. What this movie from 2009 showed gave me the same impression that I got the first time I came to the US in 1998, and toured what was by then one of the largest chicken processing plants in the country, in Alabama. Americans certainly love everything big, just like the calorie count of their meals. They love huge complicated plants where the molecules (chlorine by then in that particular chicken plant that smelled more like a swimming pool than anything else, and ammonia in the case of the plant featured in the movie) are supposed to do the work. Unfortunately, with such layouts, visual control is rather difficult as it appears in the documentary. When a plant is such a thick forest of pipes, chains and rotating parts, not only is it very difficult to see what is happening, but it is the best amusement park you can imagine for bacteria. They have so many niches where they can settle and grow in peace. The more complex the layout gets, the more difficult it is to sanitize the plant. The hamburger factory has installed cameras and management claims that this helps them to control what is going on in the several plants they own over the country. My view on meat processing plant supervision is that it has to be done in an ongoing manner, online, with the supervisor being on the plant floor, not sitting in his office. I doubt that cameras will eliminate food contamination issues. Moreover, online quality control requires motivated staff, which also requires proper wages and benefits. Food safety is less a technology matter than it is a matter of management and motivation of staff. Another important element that I noticed is that the boss of the hamburger plant describes himself as a mechanic. I had expected him to see himself as a food producer who wants most of all to offer safe food to consumers. I did not hear that statement. I also would have liked to see him eat some of his ammonia-marinated burgers. I am a meat lover, but I really do not need that on my plate. When I think that, in The Netherlands, we were not even allowed to use chlorine in the slaughterhouse water… We had to work on eliminating the causes of the problem instead of applying never-ending layers of technology band-aid. And we did significantly reduce the causes!

Then, the documentary presents the “natural farmer”, Joel Salatin of Polyface Farms. He certainly is very successful, but by his own admission, he has no plans is growing much more than he currently is. If there is more demand than he can supply, that will be the customers’ problem. By looking at his chicken slaughter installation and system, I doubt that he can supply much volume, but we never got to hear how big his business is. He is a niche producer, and his customers appreciate him, since one of them claims it to be worth driving 5 hours to get to his shop. That is 10 hours drive including the way back. One can wonder if the footprint of that food is all that great when it comes into the consumer’s home. How many of such farmers are necessary to meet consumer demand? And what is the price of the food they sell? Could this feed the family of four on a very tight budget that eats from the fast food drive-through? The movie never answers these questions.

The story of Stonyfield Farm yogurt was cause for more optimism. They offer the organic alternative. According to the CEO of the company, they are the third yogurt brand in the US and the most profitable one. This is a success story. They sell to Wal-Mart and fit in the retailer strategy towards more sustainable food. It also shows that organic has long passed the stage of hippie small-scale and that is a rational modern business, which the industrial agribusiness tends to refuse to see. The one thing that was missing about this story, though, was how the farmers who supply the milk perform financially.

Probably, the scariest part of Food, Inc. was the one about the lobbying and the politics. In the material country, this is no surprise. This does not make it any less scary, though. Since winning elections is about how much money candidates have in their “war chests”, the actual vote ballot is a banknote. The ones with the most bank notes have the most power. Reality is less idealistic than the idea of a “government of the people, by the people and for the people”. The system seems to have evolved to somehow reminiscent of an aristocracy structure. The US is a republic, but maybe a little less of a democracy after all. The money power is not only political, but in society where suing is a lifestyle, justice tends to favour the richer ones, simply because the poor cannot offer the fight very long. This power of money through lobby and lawmaking might not be as strong as one think, though, Last year, an oil lobby backed-Republican Senator of Arizona wanted to pass a bill to kill solar energy in the state. A Chinese company, Suntech Power, had plans to open a solar panel factory in Arizona (a Chinese company opening a manufacturing facility in the US. That is interesting is it not?) If this bill had passed, they would have lost the business. What did they do? They threatened to stop the project and kill the jobs. Do you know what happened? The Republican Senator did not proceed with his plans. Maybe China will help eliminate the negative effects of lobbies. Nonetheless, for now, lobbies are still active and powerful.

Then the conclusion of the documentary comes in a rush. Buy local, from the farmer’s markets. This is nice, but millions of households cannot afford that food. Moreover, production is not even remotely close to meeting the national food demand. You can vote three times a day to choose the food system. Americans voted a long time ago to have instant gratification, and they chose for the consumption society. Never things would have evolved to what they are if consumers had rejected it from the start. Nobody forced Americans to drive to a fast food restaurant and stay seated inside their cars to eat. Nobody forces them to drink pop, eat potato chips or candy bars, to think that the right size for a steak is 9 oz., to pour ketchup on everything, just as they did not have to spend more then they earned and dig themselves in huge debt.  I do not consume any of those items, yet my self-esteem is good, though.Freedom requires a bit of will power. Freedom of choice does not imply that one should not resist temptation. The American consumer’s behaviour has been a boon for the industry. Nothing is better than consumers who just consume without asking questions. Fortunately, this is now changing gradually. Americans realize that consumer goods producers have looked at them in a similar way as the livestock in feedlots, passive and submissive. Unlike what the makers of Food Inc. may say, all Americans are responsible of the society they have. The industry is, of course. But consumers are just as much. In order to change, consumers are going to realize what role they have played in the consumption society. They can vote, but the US is one of the countries with the lowest turnout at elections. The ones who choose not to express themselves just miss an opportunity to change things. Most Americans have lost faith in their politicians. Yet, there is a democratic force that can, and in my opinion, will restore true democracy. This force is the food retail, with Wal-Mart as the leader. They do not wait for politicians to make laws when it comes about food should be produced. They do not care much about the games played in Washington, DC. They just listen to the people and they offer the workable solutions to meet these wishes. Unlike politicians, they do not set their objectives for the next four years. Wal-Mart has already done more about sustainability of food supply than lawmakers have. Earlier, they had decided not to sell milk from cows injected with growth hormone. Yesterday, they announced their decision to make healthier food affordable to their customers. They represent such a purchasing power that they can force their suppliers to change their practices and their purchasing strategies, enforcing the change all the way back in the supply chain to the seed producers. Be assured that the food industry will do what the retail tells it to do, because without the retail, they are out of business. Their purchasing power is so much larger than the one of the people buying on farmers markets. People should cast their vote and give power of attorney to the retailers. Really, the food retail is just one step away of enforcing change on antibiotics, hormones, animal welfare and GMOs; even if the politicians have not made up their minds. Just compare the size, financially and in jobs, of Wal-Mart and Monsanto. Who is the true giant?

Altogether, I found that the movie was raising good questions, but it was not giving much hope for a quick change, either. This is a weakness, just as the lack of specifics of the pictures. They need to make a sequel in which they will show how things can change for the best, make food affordable and farming sustainable, and how they see the US making the transition. I missed that. The documentary is not as specific to the food industry as it seems. A similar movie with a similar commentary could be made on about every industrial sector of the US, from energy to electronics, telecommunications, the car industry, the banks or the pharmaceutical industry.

Copyright 2011 – The Happy Future Group Consulting Ltd.

Investing in agriculture requires thorough research

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Since the price hike of food and other commodities in 2008, agriculture is one of the hot topics in the investment community. This is also fuelled by the perception that the world might face a food crisis. For those looking at investing in the food sector, there are many possibilities, but in this sector as in many other investment types, caution is required. The investment community is a pool of sharks, and the name of the game is to sell at a profit. Beware of the salesperson!

According to Jim Rogers, a famous investor and former partner of George Soros, farmers will be the ones driving Maseratis in the future. He believes firmly that, in the future, those who actually produce the commodities, instead of brokers, will make fortunes. It is a very interesting point of view, although history tends to show that the power in food value chains is in both ends of the chain: genetics and marketing to consumers. Becoming a farmer is not an investment. It is a job, and a busy one. Farmers need to generate cash on a regular basis to provide for their families and keep the farm in business. Land is not liquid. Investing is about reaping the profit when selling at a higher valuation.

For those interested in owning farmland, there are possibilities to buy large acreage in many countries. A recent article published in CNBC presents some strategies.  Large private investors seem interested in Brazil, Argentina, Uruguay and Canada. Prices of farmland have been firming up in the US. There are people advertising for Brazilian farmland who promise you a yearly guaranteed (not clear how, though) of 12%. In the former communist Eastern European countries, many farms are for sale. Net importing countries such as China, India and Arab countries choose to invest and develop farmland in Africa. For investors with a strong stomach, Africa may be a place of choice. The continent is pretty much for sale. However, the ownership of the land is not always very clear and the rules of engagements may vary. If you only wish to lease land, you might be interested in Ethiopia: the country is offering 100-year leases for $1 per acre. Although some offers may seem irresistible, buying farmland or a farm is a complex endeavour. Many factors weigh and things may not be as they seem. What is the quality of the soils? How is the climate, and in particular are there risks of floods or drought?  Is there proper access to water? What are the local regulations in the country where you are thinking of buying? How much bureaucracy should you expect? Who are the suppliers, and how they deal with their customers? Is there access to quality supplies? What are the banking facilities and what type of credit can you get? How are the infrastructures for storage and logistics? What access to markets do farmers have, and how is the marketing chain organized? Today’s situation may not be a good predictor of the future, and problems may loom ahead, as Jason Henderson, vice president and Omaha Branch executive of the Federal Reserve Bank of Kansas City told in an interview to Agri-pulse.

If farming or owning farmland is not your thing, there is always the possibility to invest in commodities with futures contracts. Instead of buying the hard commodity, which would take quite some space in your garage, you just do the same but on paper only. This is a risky business though and it should be left to the pros. Originally, futures had been introduced to give farmers the possibility to fix in advance the selling price for their crops, instead of waiting for the spot market at harvest time. Futures contracts have been taken over by the Wall Street geniuses who brought us the Great Recession. Also realize that nowadays the future contracts prices reflect the supply and demand situation of paper contracts, not of the actual physical market. The result is that futures markets are all about speculation and most transactions are made with borrowed money. Speculation may be about the weather, planted acreage, expected yields or plant diseases. Any news is cause for rumours and markets may change direction without warning. If agricultural commodities interest you, you may prefer to invest in funds that include these commodities, and therefore offer a lower risk. Another possibility to get money at work in the agriculture and food sectors is by buying shares of companies involved in agricultural value chains. For instance, when commodity prices increase strongly, the logical (?) thinking of stock investors is that the next food crisis is ahead and that the world is about to run short of food, which will stimulate farmers to plant more and therefore require more inputs. Especially shares of fertilizer suppliers always shoot up in such situations, all the more so as there are just a few of them. This gives them a strong bargaining position, and they pass on sharp price increases to the farmers… which is why the margins of farmers usually suffer after a year of high commodity prices. In the agricultural sector, it is important to remember what I said about which links in the chain have the strongest position, as this will affect their bargaining position and their ability to get, or to keep, the added value. Weak links will always underperform, while the stronger ones will outperform compared with the average of the sector, that is for as long as these companies are managed properly. Investing in stocks always require a thorough financial analysis, as well as a good understanding of the quality of the management. How does the future look like for a particular company? Does it have a sustainable competitive advantage? How does the future look like for the sector of activity of this company? What is the track record of performance? Does it depend on world market prices or is it more predictable than that? How is the valuation of the company?

Another type of investment that is gathering momentum in the agri-food business is new technologies start-ups. With worries about the future of oil, and especially oil prices, and the challenge of providing enough water to produce crops, many new technologies try to find their way to market. The sector of new technologies attracts many investors, probably because it seems reminiscent of what happened in the tech sector, therefore giving hopes of high return. I come across such ventures regularly, and every time I hear enthusiastic stories from the owner or from the venture capitalists involved. In many cases, the story is about how this new technology is going to revolutionize the way food is produced, or even it will be the solution to hunger. Returns on investments always sound amazing, making one wonder why this has not been on the market for some time already. For such projects, too, it is essential to do the proper research on the claims that the owners and financiers are making. In many cases, I find difficult to get the proper background to support the financial results that they claim. In even more cases, I do not see any real thorough market research, and instead of explaining in which niche they will operate, the market story is about macroeconomics. The macroeconomics may be true, but except for the unlikely event that the particular technology would indeed take over the world within a few years, they are not a relevant description of the actual market possibilities within the foreseeable future. Of course, there are also projects that have strong cases, but they are a minority.

In all cases, a number of simple rules can save you from a very painful experience.

  • Do not invest in something you do not understand.
  • Do not mind hypes and tips.
  • Take all the necessary time to do your research, and do it thoroughly.
  • When in doubt, do not invest.
  • Ask as many questions as possible. When investing, information is power, and lack of information is weakness.
  • Ask independent third parties, and never ask advice from someone who has a vested interest in your transaction.
  • Buy low, sell high.
  • If it sounds too good to be true, it probably is exactly that.
  • Investing is not mandatory, and if you miss an opportunity, there will be other bargains later again.

Copyright 2011 – The Happy Future Group Consulting Ltd.

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

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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.

Copyright 2010 – The Happy Future Group Consulting Ltd.