Maybe a different approach of climate change conferences would help

The climate conference COP20 has ended in Lima. As usual, there was lots of hype and fear mongering beforehand. Then, after lots of false hope press releases and fun hobnobbing, the conclusion was exactly the same as usual and as expected: a few vague statements meaning about nothing and no agreement except the one to meet next year in Paris, because having to cancel two weeks in the City of Light… oh la la quel malheur!

As COP20 indicates, that was the 20th time that such a conference was organized, and that was the 20th time that the outcome and conclusion were so predictable. One can wonder why it is so difficult to make significant progress. Is there really a problem? If so, why is this charade going on and what do the world leaders waiting for. Well, maybe it is just because they have no vision for an alternative economic model. That could be a problem, indeed.

This repetitive failure is frustrating. Sometimes, I think that the conference participants should be locked in the conference center with no air conditioning (or maybe on at full blast is another option) and only 80% of the food and water necessary to make it through the duration of the event. It might be more stimulating. But I admit this is not a politically correct proposition. As an alternative I give you here an excerpt of my second book, We Will Reap What We Sow that I published in 2012. In this excerpt, I had written some of my thoughts about how to do it differently.

Here it is:

“The reason behind the resistance and the denial of climate change is actually very mundane. It is about money. Climate change is an incremental process. It takes years to show significant effects. Opposite to this, the effect of tougher legislation is immediate. The negative impact on costs and on jobs manifests quickly. The negative short-term impact is even more sensitive in a time of economic hardship. In such conditions, it becomes more difficult to gain acceptance for long-term sacrifices while there is no viable alternative to generate at least an equivalent profit and employment in the short term. Of course, subsidies can alleviate the pain and make the transition acceptable, but they are difficult to justify in times when government deficits take alarming proportions everywhere around the world.

The path of least resistance and the preference of the short-term prevail. The leaders choose not to be courageous. Such a conclusion is common, and it is a simplistic one. Is the failure to take courageous decisions only the responsibility of the leaders? To answer this question, one must wonder how many people in polluting industries would accept to sacrifice their jobs, their livelihoods to save the next generation. If there is no viable alternative, the answer will be a loud “No!” without the shadow of a doubt. Similarly, one can wonder if consumers would be willing to stop buying products that contribute to climate change. Would they give up their cars and switch to bicycles? Unless the alternative would be much more painful, it is likely that they would answer “No!” to that question, too. In the current economic model based on consumption, asking people to cut back on consumer goods to live lives that are more frugal would cause a deep recession.

Such a proposal will never receive the support of the political and business deciders, even if it would keep the world livable for the coming generations. The truth is that everybody is responsible for the problem, not just the leaders. Everybody enjoys the convenience and the comfort created by mass consumption. Very few would be willing to give it up voluntarily. The lack of political will, as it is called, showed by the world leaders is only a reflection of the collective inertia. While many people are contributing to the problem, nobody feels responsible for it. It is always someone else’s fault. Climate change can be seen as an illustration of Jean Paul Sartre’s quote “Hell is other people”. It is difficult to hope to see a solution to the problem as long as nobody is willing to acknowledge responsibility and take action so drastic that others will feel compelled to follow the example. The world leaders skillfully dodge their opportunity to state whether they think climate change is a problem or not. It would be nice to hear from the different countries how they feel about the issue. It would also make it easier to understand why they act the way they do. Climate change is a problem or it is not a problem. The leaders who think that climate change is not a problem should say so. Those who think it is should do the same. Of course, those who would state that it is a problem will have to develop their plan to show what they want to do about it.

Failure to do so would look strange. Another reason why talks about climate change make so little progress is the lack of vision for the future. The international conferences try to address greenhouse gases emissions without addressing the economic model of the consumption society at the same time. In such a model, where people are supposed to buy more and more goods that are cheaper and cheaper, that are made and delivered with massive amounts of energy and natural resources, there is simply no climate-friendly alternative. There will probably never be any climate-friendly alternative in the future, either. There is no point in being hypocritical and in trying to make believe that the economy can grow forever. It is not possible to increase the use of finite resources in a finite system indefinitely. It is physically impossible, but it is possible to deny it.

In this case, humanity will reap what it will have sowed. However, it is possible to debate and find out where the point of no return is. Even if some countries have higher emissions than others do, pointing fingers at them is not productive. Greenhouse gases emissions may be produced locally, but their effects extend much farther than the national borders. The solutions must be global and developed by all countries as a team. They need to have a vision and a plan to reduce the effects globally. As different sources of energy have different effects on the level of greenhouse gases emitted, the focus should be more on how to produce the required energy than on where the problem originates. The conferences should offer brainstorming sessions about solutions and concrete funding measures for cleaner energy production. The approach should be one of a global contest to offer systems that solve the problem. It would be interesting to change the discussion from one focusing on by how much which country should reduce greenhouse gases emissions into one focusing on developing a vision for energy production, both quantitative as qualitative. The next step is how to produce the amount of energy needed in the future while producing this energy below a global limit that all parties must define. Since money plays a central role in political decisions, it could be a good idea to organize a different type of conference. This time, the participants would have to present all the scenarios that would be possible if they did not consider the short-term economic consequences. It would be stimulating to hear how the problem can be solved from a technical point of view. The solutions would have to review all the possibilities for all industries, starting by the most polluting, to produce more with fewer emissions. Once this part would be completed, the next question would have to address how much these scenarios would cost, and to elaborate a plan that would fund the winning solutions. Nowadays, economic decisions seem to be based on the too-big-to-fail-bailout concept. Then, why not apply the same approach to humanity and climate? Pumping as much money as necessary to ensure the transition in order to create the energy production of the future and save humanity from much costlier consequences sounds reasonable. It would be interesting to compare it with the amount of money printed and the amount of debt created to alleviate the effect of the Great Recession of 2008 that still lingers in many regions today.”

Copyright 2014 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

 

Precision is the future of agriculture and our future

By the end of last July, the InfoAg conference took place in St Louis, Missouri. Matt Waits, CEO of SST Software, a conference sponsor, introduced me before my presentation titled “Beyond the Farm of the Future”. In his brief introduction he told the audience that he strongly believes that precision agriculture is the future of agriculture. His statement resonated quite positively with me. I see only advantages in making agriculture more precise. Just for starters, per definition the opposite of precision agriculture would be an imprecise agriculture. That is already reason enough to become a supporter of precision agriculture.

The first reason why a precise agriculture is the way to go is the necessity to manage finite resources more efficiently. Precision agriculture means sustainability. The philosophy behind precision agriculture is to use only what is needed where it is needed when it is needed in the mount that is needed by crops. In practical terms, this means that every molecule of input in agricultural production has to be transformed into food and not end up in the environment. Precision agriculture reduces waste. When I was writing my first book on the future of agriculture in 2009, the estimated worldwide amount of nitrogen loss due to leaching was of about 50%. The example of nitrogen shows what reducing waste can mean. In an ideal world where nitrogen would be used much more efficiently, it could be possible theoretically to use only half of the nitrogen we have been using, or in other terms, the current amount of nitrogen used should help produce twice as much food. Considering that the FAO claims that between 2010 and 2050, agricultural output should increase by 70%, it means that in an ideally precise agriculture, the world could meet the demand for agricultural products by using 15% less nitrogen than it did in 2010, theoretically. Also considering that the production of chemical nitrogen fertilizers represents about half the use of fossil fuels in agriculture, the positive impact on the carbon footprint of agriculture would be substantial. Similar calculations can be done on other inputs, such as water and crop protection products. By bringing just the right quantities at the right time at the right place, the consumption of water and chemicals will be reduced substantially, too. As recent droughts have reminded us how precious water is, precision watering is also becoming more important than ever. Water is precious, but in many cases, its price has not emphasized this enough. The main reason for wasting is always the result of economics. If inputs appear cheap, the low price is always implicitly perceived as a sign of abundance and of negligible value. Such a perception goes against the reflex of sustainability. Our elders did not waste anything (candle bits, soap bits, socks, you name it). They were frugal simply because the cost of replacement was too high, and at least was higher than the cost of repairing and saving. When a government subsidies inputs to make them cheaper, the users end up wasting much more. It is sad because such subsidies always have a well-meant starting point. The idea is to make it affordable to poor farmers so that they can increase their production. The result is when the less poor ones get the subsidies, they do not see the new price as affordable anymore but they see it as cheap instead. Managing for sustainability really is about managing the fine line between affordable and cheap. That is not easy, because the difference is not just about the price of inputs; it is also about the financial situation of the subsidy’s recipient. Subsidies should not be aimed at just price, but at more at efficient use of inputs and should be based on achievable yields. If governments wish to spend money, it should not result in farmers overusing and wasting water and production inputs. That is counterproductive. These governments, which often are in developing countries where resources are scarce and access to inputs difficult, had better spend money on helping farmers being more precise. The math is simple: efficiency is the ratio output/input, and the difference between what comes out and what got in the field in the first place is what is wasted – or lost. A precise agriculture reduces the waste, and therefore increases the ratio. This means that precision is the way toward increased efficiency.

As I mention developing countries, here is another important point to bring up: precision agriculture is not just for large farms but can be implemented everywhere. The development of precision agriculture goes parallel with the development of new technologies. At first, it would seem that such technologies are too expensive for small and/or poor farmers. If the point of view were to be that every farmer should own all the precision equipment, the answer is: yes, it is only for the large and wealthy, but looking at precision agriculture from that angle would be rather dull. Satellite imagery, drones, sensors, robots and other big data software can also be shared. In the era of the cloud and social media which are all about sharing, so can new technologies. Just like ownership of agricultural machine has also been shared through equipment coops for instance, so can these new devices. After all, it does not matter so much who owns them, as long as those who need it to do a good job can have access to them. Mobile communications have changed how farmers everywhere can get the latest information on markets. Smart phones have become affordable to the point that there are about as many mobile phones as people on the planet. Similarly to mobile communications, precision agriculture will also become more affordable in the future. If precision agriculture tools can monitor, map and help make fast decisions on farms of tens – and even hundreds – of thousand acres, they just as well can look after an area of the same size even if it is divided between many farms. It is just a matter of management and coordination between farmers. In poorer regions, it could very well be that the authorities be the owner of the equipment and proactively communicate with farmers through extension services to help the groups of farms manage the region efficiently for higher output. Such tools will help developing agriculture, in a sustainable manner. The benefits will be many. It will help increase farmers revenues, create economic activity, enhance social stability and help reduce the waste of water, energy and all other inputs. It will pay off in the long run and actually probably in the not-so-long run at all. Agricultural development requires financing and investments. Precision agriculture is in my opinion a very good place to put money at work.

In the future, the key for these technologies will be to also help see the bigger picture, not just the field and not just production data. The potential for applications and interfaces seems almost endless. By connecting all the devices and allowing sharing information of all events taking place on farms, these technologies are going to help reconcile the interests of all stakeholders much more effectively than it has been the case in the past. By monitoring production parameters as well as environmental parameters, proactive action will help anticipate instead of reacting. Actions will be targeted timely. One of the difficulties to manage sustainability is one of timelines. It is possible to monitor financial performance on a second to second basis, even faster actually, in the case of financial markets where algorithms can execute millions of transactions in less than a second. Environmental impact does not manifest immediately. It takes decades to notice the impact of a particular type of activity. With this time discrepancy between financial performance and environmental performance, it is only logical that money has trumped environment, even though there is a price to pay some day. That is the dilemma of externalities: how to factor such externalities when the exact cost is unknown. The future generations of technologies to monitor and map agriculture and environment will bring solutions. Once the focus widens from the field to the level of regions, countries and the entire planet, then it is possible to envision monitoring systems for all resources, environmental impact of agriculture and production output. It is only logical to expect dynamic information systems that could look like Google Earth, but with many editions, such as, the aquifer status edition, the nutrient edition, the crop yield edition, the soil erosion/restoration edition, the pest edition, the contaminants edition, and so on and so on. With such dynamic systems, it will be possible to not only monitor but to also produce simulations and test different scenarios. It would become possible to have an idea of how long resources can last, depending on different production techniques. It could be possible to make estimates and develop policies to adapt agriculture timely and ensure that future practices will maintain sustainable production systems. With such tools, precision agriculture, it will possible to develop worldwide policies and strategies to coordinate agricultural production. It also will help make markets much more transparent, as such dynamic systems would take into account consumption demand, worldwide stocks and production updates. Such transparency will reduce risks of speculation as the system would present a continuous update on the most likely scenario. Let’s face it! The computers will eventually replace the market places or agricultural commodities.

I agree with Matt Waits, precision agriculture will be the agriculture of the future. I also believe that the technologies that agriculture will use will play a role at a much larger scale and beyond just agriculture to shape the way we deal with our planet and our societies. Precision agriculture will play a crucial role in ensuring food security and prosperity.

Copyright 2014 – The Happy Future Group Consulting Ltd.

Future rhymes with infrastructure

In all the talk about feeding 9 billion people by 2050, the issue of infrastructure receives too little attention. In my opinion, this is a mistake. Of course, building, repairing and maintaining roads, railways, bridges, waterways or warehouses may not appear as sexy as fantasizing about robots, drones and machines that exchange information, or fancy marketing concepts, but infrastructure is really the lifeblood of future food security. For as much as I enjoy presenting a futuristic vision of food and farming and talk about market niches of the future, I also find essential to remind my clients about the practical implications of future development for their very concrete daily activities. Infrastructure is definitely one of the important topics. Considering how much attention the topic of producing more to meet future demand has received over the past couple of years, and considering the good prices for agricultural commodities of the past few years, it is only normal that production volumes have been on the rise. It may sound obvious that logistics should grow in parallel with production volumes to be able to keep moving products. Unfortunately, when it comes to the big picture, the supply chain seems to be overlooked to some extent. One of the problems is that the agricultural world is still very much production-driven, and so is all the talk about the future of farming. As I presented in Future Harvests, there are plenty of possibilities to supply the world with more food. Although there will be challenges to overcome, the potential is there to meet the demand of 9 billion, and even for the 11 billion that the UN is forecasting for 2100. However, the key is to be able to bring the food to the consumers, and that is where action is badly needed. Post-harvest losses may be the clearest example of how important infrastructure is. Worldwide, the estimate is that about 20% of all the food that is produced is lost on the fields or between the farms and the consumers because of a deficient infrastructure. In particular, the lack of proper storage results in food that rots or gets spoilt by mold or vermin. The problem is especially serious for perishables. In particular in the case of produce, which is fragile and contains a lot of water, post-harvest losses may exceed 50% of the total production, as for instance it has been observed in India and Africa. Post-harvest losses also occur with non-perishables. In China, it has been estimated that the amount of wheat loss during transport because of a poor infrastructure amounts to the quantity that Canada exports. Since Canada is the world’s second largest exporter of wheat, this shows the magnitude of the problem. Brazil, which is one of the world’s agriculture powerhouses, also suffers from infrastructure issues. Most of the transport of agricultural commodities takes place on roads that are far from being well-paved. The result is twofold. Firstly, the poor road conditions cause the loss of significant amounts of grains between production areas and export terminals. Secondly, since road transport is the main way of transporting agricultural products, the cost of transport and the resulting carbon footprint of food supply are both higher than they could and should be if there were enough railroads and waterways to bring products to markets. A couple of years ago, I read a report about the comparison of the carbon footprint of beef production between countries and one of the surprising conclusions was that Brazil scored relatively high. Although the survey needed to be taken with a critical mind, the infrastructure situation of Brazil certainly was one of the reasons for its high footprint. The good news about Brazil is that the country recently launched an ambitious plan of $200 billion to fix its infrastructure. As its economy grows, this will be essential to secure the future. Infrastructure development is not just a matter for developing countries, though. In Canada, the shortage of rail capacity for grain transport has recently become an issue, as record crop volumes have difficulties to reach their destination. Not only is this a logistical problem, but it highlights the lack of forward thinking and of communication within the entire supply chain. Over the past few years there have been more than enough conferences in which many experts insist on the necessity to increase production, in particular though yields. The high prices of agricultural commodities of the past few years have been great incentives for farmers to do exactly that. And they certainly have delivered. Did some not pay attention? Perhaps. Unfortunately, the post-harvest links of the chain have not adjusted on time. This will be true for the US agriculture, too. American farmers are working hard on increasing yields and export possibilities are good on the long-term, but they will have to keep the ability to move enough volume to the final markets. Roads, railways and waterways need not only some revamping but also need to develop further to adjust with future volumes. In spite of all the talks about improving the American infrastructure during the deepest of the economic crisis following the financial disaster of 2008, not all that much has been done, really. Transportation infrastructure, as well as the energy grid, still needs some serious refreshment. Like anywhere else in the world, a healthy infrastructure will be the basis for a sustained economic prosperity. Beside the volume implications, a well-organized infrastructure also contributes to lower costs and improves the competitiveness of the value chains that benefit from it. In my opinion, there cannot be long-term prosperity or successful economic development without an adequate infrastructure. For the future, another area that is going to require solid planning and vision is the population boom that will take place in urban centers of Asia and Africa. Many of the mega-cities that will emerge in the coming 40 to 50 years hardly exist, yet. Nonetheless, they are coming. Urban planning that will address the challenges of these megalopolises is one thing, but organizing the supply of food, water and all other essential from production centers is another. The “unfortunate” thing about infrastructure is that it is a long-term investment. It is money that needs to be spent to get the economy flowing. The return is long-term. If done well, the positive financial return lies in economic development, more and better jobs and more people having more money to pay for goods and services as well as for taxes that can be used to ensure a good maintenance of the infrastructure. One of the issues is of course who finance infrastructure. Many stakeholders benefit from a good infrastructure. As I show in We Will Reap What We Sow, the FAO estimated the annual cost of fixing post-harvest problems in developing countries at $83 billion. Doing so provides so many upsides for all stakeholders from farms, businesses and government that the return for the entire system is actually higher than the $83 billion, and my calculation is quite conservative and cautious to say the least. There is more than enough money to fix the problem. What is $83 billion compared with the amounts spent since 2008 to bail out banks, to print money as massively as it has been done and to rescue the European countries that were in serious financial trouble? It is a drop in the ocean! Yet, fixing post-harvest losses is a painfully slow process. It is a matter of taking the right decision. How long will we accept not only to waste that food, but also all the water, the energy resources, the time and the money that have been used to produce it in the first place? Among the many projects that I have carried out, I would like to present one briefly here because it illustrates the importance of infrastructure. When I came to Canada, the previous management had signed an agreement with a First Nation community of the North Coast of British Columbia for the production of farmed salmon. When I inherited the project, I took a look at the agreement and I remember sending a memo of a page and a half that was actually a list of questions that had all to do with infrastructure. In a nutshell, how to transport fresh fish and deliver customers at least twice a week on the West Coast of the US from a remote island with no road connection, only a ferry every other week and highly unpredictable sea conditions? It was mostly unpredictable in the sense that the number of days the barge of some transport company involved in the project and run by someone who would prove later to be rather unreliable would be stuck for undetermined amount of time between that island and Vancouver where the dispatch center to our customers was. By then, nobody among those who shaped the agreement had the slightest clue about what answers to give to my questions. In the end, it all worked out fine and our customers never missed a delivery of fresh salmon. What it took was for yours truly to dive in the scrum and enjoy some Wild West type of action to get it all together, to bring materials in and send products and waste southbound using a tiny barge and connect with trucks on some unpaved wilderness road through the mountain ranges. By the way, 14 years later today and the unit is still running. That project could be a textbook case of why infrastructure is so important both to bring in stuff and take product away to consumers markets. Every time I hear or read about the need for farmers to have access to markets and of post-harvest losses in developing countries, I can totally relate to the complexity of how to set it all up. Producing without having the possibility to bring to customers is not economic development. It is economic suicide. In a business, be it a farm, a store or a manufacturing plant or any other, one rule is always true. And that is that money comes only from one end of the business: from sales. To get there, the business needs customers that they can actually serve properly in order to get paid and to retain them, because in the end, the customers are the ones who must pay for all the expenses of the business. It sounds obvious and yet it is forgotten too often. I am a strong advocate of a market-driven approach. The term market-driven already implies the value of infrastructure, as to be market-driven a proper and reliable supply chain is necessary. The other major advantage of being market-driven is that selling is easier because market-driven businesses offer what the market wants. Business is easier when all one has to do is to produce what is already sold. On the other end of the spectrum, production-driven is quite the opposite. It is the best recipe to end up painfully pushing production volumes at slashed margins and being depended on others to decide of the future of your business. For having been a market-oriented person in production-driven industries, I have seen the value of the market-driven approach. It requires a different mindset. It is about stepping out of the commodity markets rats’ race, and it is about implementing the necessary changes to deliver customers what they want while asking the price that you need. For the future, developing the agriculture of the future and being able to feed the world population will be about understanding the markets, finding the right customers and having the required infrastructure to bring to them, wherever and how far or close-by they may be, what they need. In my opinion, all agricultural development projects must start from the market end and be built backwards into adequate production volumes and structures. The organizations involved in such projects must bring in the marketing and the supply chain expertise to give local farmers the highest chances of success. All the technical and knowledge support is essential, too but they have to be aimed at supporting the implementation of the sales plan.

Copyright 2014 – The Happy Future Group Consulting Ltd.

China is evolving – A look towards future consequences

Aside

Recently, interesting economic news has come from the Empire of the Middle. On the one hand, financial markets reacted worried on the softening of the Chinese economy, but on the other hand they reacted rather positively about the first corporate debt default allowed in the country. To me, all of the above is good news. If financial markets get a bit nervous for a few days, then so be it! It cannot be a complete surprise that at some point the growth of the Chinese economy would slow down. Double-digit growth cannot last forever, and growth cannot keep going on a straight line without some corrections along the way. If markets are worried about a growth of 5% for China, then how will they react when China lands into a recession, as it surely will happen at some time?

Personally, I find China’s performance over the last 30 years quite impressive to say the least. I am old enough to have seen dramatic changes about that country. When I was a kid, all the news from China was rather sad. There was a chronic situation of near-famine, and what I heard then, true or not, was that the Chinese had only one bowl of rice per person for a whole day. The Great Leap Forward and the Cultural Revolution directed by Mao Zedong did not exactly spelled prosperity, by far not. After the arrival of Deng Xiaoping, things changed and a new direction took place, which had led the country to where it is today. Pragmatism took over from blind dogma. Deng Xiaoping’s quote “It doesn’t matter whether the cat is black or white, as long as it catches mice” summed it up nicely. I have to admit that I was still rather young and did not pay much attention to what happened in China. That came later during my professional life. In the early 1990s, the price of wheat increased, and this became cause for concern in the poultry industry, in which I was working by then. I remember a conversation with one of my customers. We came to the conclusion that China had decided to feed its people, and that was the sign of a new era. Since that day, I have followed with much interest the evolution of China, and until this day it has not stopped fascinating me.

Bringing a country of 1.5 billion people in 30 years from hunger to the world’s largest economy is no small deed. Western economies with a much lower population should know, since they struggle to provide enough jobs to their populations, which in many cases would fit in only one of the large Chinese cities. Chinese leaders have shown a remarkable pragmatic approach in the way they have carried out this change. They have performed an impressive balancing act to stay in power through economic development that allowed the population to not have enough reason to start a revolution, which is the only way to change a government when there are no elections. Feeding their people was definitely a sound strategy to achieve the double objective of power continuation and increasing prosperity. However, this economic success has come at a high price. China suffers from major environmental damage, and the rest of the world also undergoes the consequences. This is where the news of the past few days sends some interesting signals about the future. China is now entering a phase of optimization. Growth is not anymore just about more, but it is about better. Phase one, providing for the basic needs seems on its way to completion. Now, focusing on the quality of future growth becomes necessary, as keeping the course of the previous decades would probably soon lead to make the country hardly liveable. But allowing the pace of growth to slow down in order to get the time to improve the situation and clean some of the damage is not the only sign that shows that Chinese leaders have the confidence that the country has achieved a level of economic prosperity sufficient to absorb this slowdown. The recent debt default of the solar panel company Chaori shows that China has decided to stop to protect business from failure, as until this case, various levels of government would guarantee the debt. The message seems to be that the economy is strong enough to take such hits. This is a strong signal that China will no longer bail out businesses and that they will let market forces select the winners and the losers. That is quite the move toward liberalism. A number of Western countries do not appear this bold, lately. In the same area of a changed economic philosophy, China is also currently allowing market forces to regulate the value of its currency, which is currently weakening, even though Western countries have always put pressure on China to re-evaluate the Yuan. The ability to persevere on long-term objective and not let outsiders interfere more than necessary is one of the quality of the Chinese that I like particularly. They do what is good for China and do not allow foreigners to undermine they progress. They run their economy with the same resilience and determination as they did with the Long March. Personally, I like the approach of the Chinese leaders. They are smart, focused and pragmatic. The new generation of entrepreneurs and executive also shows these good qualities. I also am quite impressed by the enthusiasm and curiosity of young Chinese students. They have the momentum on their side and it feeds their desire to succeed.

As I mentioned earlier, a couple of decades ago China decided to feed its people, mostly to avoid social unrest that could get out of control. In the area of food security, China has, like in the rest of its economy, achieved impressive results, but at a high cost, too. I believe that part of the current shift in economic philosophy can be looked at from the perspective of Maslow’s pyramid of needs. The objective number one for China has been to meet the basic needs: food, shelter, safety. Although there is still a part of the population living in poverty, the basic needs, from a collective point of view, are more or less met, as the majority of the population has now entered the middle class or better and the rest seems to follow in that direction. In the first phase, it is clear that environmental damage was under little scrutiny, as the end justified the means. After all, hungry people are not picky about what they eat, if it means surviving. In the today’s Chinese society, just eating what is available is no longer the only priority. Once the basic needs are met, the emotional takes gradually over from the biological. Consumers start to think and to question. It is not anymore about surviving today only, but about living in the future. The population is expressing its discontent of the quality of life and against the environmental recklessness of businesses more and more often. If food was used to be considered a potential source of unrest, now the problem has shifted to air and water. Heavy air pollution, contaminated water and the sight of thousands of dead pigs floating in the river that flows through Shanghai, as was the case a few months ago, are no longer tolerated by the population.

China Food Map (Photo: Zhang Yanlin/Asianewsphoto)The phase of optimization is also going to take place in food and agriculture. The situation about corn is a good indicator. Until 2012, China was self-sufficient for corn. With the increasing demand for meat as a result of economic improvement of the population, China has now become a net importer. The type of demand for the various food groups, together with the environmental toll of pursuing the objective of food self-sufficiency has reached its limits. It is important to acknowledge the performance of the Chinese agriculture, though. Even is the cost of achieving food security is high, one needs to remember that China is the world’s largest producer of rice, wheat, pork, eggs, fruit and vegetables, and cotton. It is the second largest producer of corn, behind the US. Considering the size of the country, being the main producer for all those commodities is quite an achievement. Yet China, announced last February that it was changing its objective, and that grain self-sufficiency was no longer sacred. It makes very good sense. The long term is as important as the present. China needs to work hard now to protect and restore its soils and its fresh water. On other area where the country can also achieve substantial results is by fixing post-harvest losses. Infrastructure will be developed further. Optimization of the food value chains will also take place, largely in the form of a consolidation of businesses. The seed sector will be interesting to follow in this regard, as many small seed producers will either disappear or be absorbed by larger entities. Considering the crucial role of genetics for crop yield, this rationalization of the sector should also contribute to a further improvement of the Chinese agriculture.

With land purchases abroad, world agricultural production up, international trade and a more astute food stocks strategy, China does not need to try to produce all its food itself. The bulk of the basic needs is covered. Now, it is time to optimize and repair without having to fear shortages. The focus is going to be more on waste reduction and efficiency than before. It definitely will be about doing more with less, to use a commonly used expression. An example of this tightening of standards is the so-called Green Fence for the recycling goods that China imports. Now the recycling materials need to be cleaned to enter the country. China simply does not want to use its energy and water resources. They want the waste producers to do that in their own countries. That is wise.

Another area for optimization is food safety and food quality. In a previous article , I wrote about a strategic shift towards speeding up the learning curve to meet higher standards. The shift from quantity to quality is a reflection of the pyramid of needs. When people have enough to eat, as is the case in large Chinese urban centers, they start to look at how food is produced and question what they do not like. Food security is for most no longer a worry, as the alarming rise in overweight and diabetes shows. When food security is no longer a worry, the focus shifts to food safety. That is quite normal.

My expectation is that China is no longer in the logic of just copying and producing cheap low quality. Although this reputation is still quite alive in Western countries, in my opinion it is incorrect. But after all, similar prejudices lived long about Japan, too, until the time that Americans realized that Japanese goods were of a better quality and Japanese companies were better run than their domestic counterparts. We will see the same thing about China. Some people will wake up too late. The Chinese are quite awake. Don’t worry for them.

Although the food industry, like all industries, resents criticism, it is actually the sign of a developed society. Basic standards do not satisfy anymore. People look for the something extra, and that is where opportunities arise. Those who listen to consumers and offer them what they want increase their chances of capturing the high-margin market positions. Let’s face it; markets for undifferentiated commodities are attractive mostly because of the large volumes they represent. In China, too, health and environment will be the drivers of future food supply. This will definitely offer good possibilities in the future. The Chinese will also take a look at their diet, and the per capita consumption of meat, just like economic growth, will not keep increasing forever. In the same way as it did in Western countries, it will reach a plateau, probably in 10 years from now, and later will gradually decline, for the same reasons as it is doing in the West, and also because the population of China is expected to decrease to 1.4 billion by 2050 and to 1.1 billion by 2100. That decrease represents a lot of consumers. It will be important to notice this change of trend on time. When consumption of certain food items in Western countries reached that plateau, most companies did not anticipate it. As usual in such situations, denial is the first reaction. First the change of trend is considered a temporary hiccup. Investments to increase capacity have often been made on the expectation of continuous growth, causing an overcapacity of production, and the production capacity needs to be used fully to be economically efficient. This creates a lack of flexibility and all producers enter the difficult times with the same cost profitability concerns. When the stagnation appears to last, producers like to think that indeed there will be a consolidation of the sector, but they usually all seem to think that they will weather the storm and will not be affected. Of course, it never works that way. Bad things do not happen only happen to others. Then, the crisis follows and usually a vigorous restructuring takes place. I have seen this many times and it is amazing to see how history repeats itself. There is no doubt that when food consumption will have reached its top, the same mechanism will show. This time, the problem will be quite robust, though. To supply China, production volumes will be much higher than previous similar scenarios of stagnation in the various Western regions. Further, just as much any marginal increment of consumption per capita multiplied by 1.5 billion means large volumes, any decrease of consumption will represent significant pain. This point is not here, yet. There are years of growth for most food groups ahead, but it is time to start thinking, and especially start planning, about a change of strategy. When the plateau appears, differentiation will become the main theme, and niches will be the place to be. Considering that the Chinese culture is long-term oriented and that relationships are a fundamental element of business in China, I would recommend starting paving the path for this shift sooner than later. After all, 10 years pass quite fast.

Copyright 2014 – The Happy Future Group Consulting Ltd.

A couple of billion reasons why Africa is a priority for the future

More than three years ago, I had posted on this blog the list of the 16 most populated countries in the world by then. It helped put things in perspective in today’s world, but looking ahead, another table is more useful. Here is the list of the 16 most populated countries in 2050 and 2100 according to the UN.

2010

Country

Population

(millions)

% of world population

World

6,794

 

China

1,337

19.6

India

1,180

17.3

USA

309

4.5

Indonesia

231

3.4

Brazil

193

2.8

Pakistan

169

2.5

Bangladesh

162

2.4

Nigeria

155

2.3

Russia

142

2.1

Japan

128

1.9

Mexico

108

1.6

Philippines

92

1.4

Vietnam

86

1.3

Germany

82

1.2

Ethiopia

79

1.2

Egypt

78

1.2

Top   16

4,531

66.7

2050

Country

Population

(millions)

% of world population

 

      9,551

 

India

1,620

17.0

China

1,385

14.5

Nigeria

440

4.6

USA

401

4.2

Indonesia

321

3.4

Pakistan

271

2.8

Brazil

231

2.4

Bangladesh

202

2.1

Ethiopia

188

2.0

Philippines

157

1.6

Mexico

156

1.6

RD   Congo

155

1.6

Tanzania

129

1.4

Egypt

122

1.3

Russia

121

1.3

Japan

108

1.1

 Top   16

6,007

62.9

2100

Country

Population

(millions)

% of world population

        10,854  
India

1,547

14.3

China

1,086

10.0

Nigeria

914

8.4

USA

462

4.3

Indonesia

315

2.9

Tanzania

276

2.5

Pakistan

263

2.4

DR   Congo

262

2.4

Ethiopia

243

2.2

Uganda

205

1.9

Nigeria

204

1.9

Brazil

195

1.8

Philippines

188

1.7

Bangladesh

182

1.7

Kenya

160

1.5

Mexico

140

1.3

 Top   16

6,642

61.2

Immediately, some interesting information appears. China is already reaching a plateau and it will decline later. Most of Asia will have reached its peak of population by mid-century. India’s population is going to keep growing in the coming decades and with regards to food security, the country has still lots of work ahead. However, with the growth of its middle class, the situation should improve gradually in the future. The continent that will see the strongest population growth is Africa. Between now and the end of the century, eight countries will account to over half of the world’s population increase from currently 7.2 billion to 10.9 billion, with six of these countries being on the African continent. These eight countries are Nigeria, India, Tanzania, the Democratic Republic of Congo, Niger, Uganda, Ethiopia and the USA. It is worth noticing that the population of Nigeria will pass the population of the USA before mid-century. For a country the size of Texas, the challenge is huge, especially considering the current political instability. Other small countries such as Tanzania and Uganda are going have to cope with a very strong population increase.

The challenge for Africa is clear. Most of the countries with a strong population increase are poor countries that already have serious difficulties to feed themselves. African agriculture has not followed the pace of other regions in terms of productivity and yields. Many rural communities are poor and can hardly subsist. The flip side Africa having lagged in agricultural development is that it has huge potential to increase its food production. At the beginning of the current decade, the FAO estimated the area of unexploited arable land in Africa to be roughly the size of continental USA. By increasing acreage in production with higher yields, there is plenty of room to increase production volumes to sufficient levels. Food production is the not the only problem. To solve hunger, these countries must eliminate poverty. People who have enough money to buy food are not hungry. Only the poor are. And to have enough money, one needs a decent paying job. For the future of Africa, employment is really where the battle will be won or lost. Between now and the end of the century, Africa will have to create 600 million new jobs, and to get jobs, people need to have the proper education and training. They also need to be healthy. As the expectation is that most of the population will be living in cities, another challenging goal will be to build these urban centers and all the necessary infrastructure to move the goods and the people. Such megacities will also need to be food secure and urban planning will need to take food distribution and food production into account. Education, health care, construction, infrastructure, jobs, food and agriculture… This sounds like building an entire continent doesn’t it? And that is exactly what it is. Expect Africa to be a huge construction site! Action must be taken and properly phased out over the next nine decades. If the challenges are many, so are the opportunities and the benefits in the long term.

So what does it take to make this happen? The answer to this question is rather simple. The implementation and proper execution is less so. It will take money, and a lot of it. There is plenty of that, though. The Central bankers of developed countries did not have to think too long to start printing a couple of trillion dollars, emitting bonds and doing the quantitative easing as needed to save the financial sector when the system was imploding in 2008 and since then. Building Africa would not require more money than that. If there has ever been a need for Keynesian economics, the Africa of the coming decades is it! Not only the money pumped in the system would allow projects to happen, but it will be the basis to create the many jobs that will be required to build all that is needed. The challenge for Africans is to have and to provide the training required to qualify for the jobs come.

To rise from its current situation, the task is somehow comparable to rebuilding Europe after World War II. Both the Europeans and the Americans who provided financial help by then can tell the Africans what a great period of prosperity followed for them. Africa needs a Marshall plan of its own, but it also must convince the rest of the world that it will put the money at work. And that is where the second crucial component of success – or failure – resides: leadership. Africa needs strong visionary leadership with integrity that will not only make things happen, but also will keep the energies focused on a long-term effort. Another eighty-six years to complete it all before the end of the century will not be too many. Africa will have to bring forward a new generation of leaders that will follow a course that is quite different from the one many of their predecessors followed. Encouraging investors will require fighting corruption, starting with a leadership by example. Corruption is a theme that I hear regularly from businesses that would like to engage in Africa, but that feel reluctant to do so for that very reason. Endeavours may be risky, but they have the potential to be quite rewarding for those who will dare and have the patience to wait to reap the fruits. As for anything else anywhere else, there will be success stories and some failures, but that is the way the world goes. It will be important to factor in disappointments and a percentage of mistakes and failures to assess the true future return. One thing is sure: searching for a quick return is probably not the best strategy over there.

Africa is diverse. The challenges will vary per country and so will the quality of the leadership. I expect the political geography of Africa to change between now and 2100 (actually much earlier than that). Borders are inherited from the independence from the colonial power and they do not always reflect a good partition for the future. Sometimes this may happen peacefully and sometimes unfortunately not. Note that I never said it will be easy. Nonetheless, the continent must move forward and the countries must develop their economies.

Although it will not be simple, I am optimistic about future changes in Africa. In my limited dealings with young professionals from Africa, I can say that this new generation is highly motivated and keen to succeed. In my contacts, I have many bright, smart and well-educated young African professionals in the field of food and agriculture. I enjoy their energy and desire to change the course of the future. They have travelled and they know quite a bit about food production in other places. They push relentlessly to bring new dynamics and I do believe that they will make good things happen. But they will need all the help and support to have access to the right resources and knowledge to succeed.

For some reason, since I started the Food Futurist, I have always considered that Africa will be playing an important role in the future of food and agriculture. I have believed immediately in its potential and I have never been shy about it. This has sometimes created interesting situations such surprise or disbelief from my audiences and clients. I guess I was a little early with my predictions, but I have had the pleasure to hear some of them who looked at me as if I had a sunstroke who now advocate in favour of Africa’s food and agriculture potential. It just took them a year or two to come to the same conclusion. I guess the first part of my work has been done. Now, I really would like to be involved with organizations that want to build solid pragmatic market-oriented food production in Africa.

Copyright 2013 – The Happy Future Group Consulting Ltd.

Launching the Seeds of Leadership mentoring program

Contact with young professionals who are starting their careers is always special. They are eager to learn and have a fresh look on the world of food and agriculture. Personally, I find this particularly vivid with young people from developing countries. I truly enjoy their energy, their enthusiasm and especially how they do not take what I say at face value. I have always appreciated people who dare to challenge, who want to go to the bottom of things and who keep a critical mind.

As I also wanted to find a way of giving back just for the pleasure of it, I gradually came to the idea of creating my own modest free mentoring program.  So, there it is. I have called it “Seeds of Leadership”. It is open to anyone who has less than three years of experience from anywhere in the world. In my opinion, mentoring young professionals from the sector is an important part of helping shape the future of food and agriculture.

For more details, just go to the Seeds of Leadership page.

If you know candidates for whom this program would be useful, please send me a recommendation for him/her as described on the page mentioned above.

SoL logo

Why now may be the best time to work on the future of food and farming

Now is the right time to look forwardAlthough agricultural commodities markets have recently calmed down, the past few years have been turbulent. The result has been an increased attention for the world’s food supply and demand. Even in food secure regions, it is quite important to not take food security for granted, as it is always a work in progress. In this regard, the stress on agricultural markets and the recent price hikes have been a good thing. They have forced many to take a closer look at the situation and to start reflecting about the things to come. I have been among the ones who started earlier than most others, for two reasons. Firstly, it was obvious that meeting the demand of a strongly growing population would bring some challenges. There was no need for a crisis to figure that out. Secondly, I did not find analyses that connected the dots beyond the particular interests, the particular regions or the particular business areas of those who produced research and documents about the subject. This is why I have developed my foresight activities for food and agriculture and published the two books. The first, Future Harvests, answers the question of whether we can feed the future population and the second, We Will Reap What We Sow, reflects on how our future behavior towards consumption, together with the quality of our leadership, will decide whether the future will be prosper or gloomy. Those of you who read them know what the answers are and why.

Although the period of tensed markets helped bring valuable attention to the food issue, it has produced more quantity than quality about what should be next. Between those who announced the end of days and those who see it only as an opportunity to use fear to stop others from thinking, there has been little structural long-term thinking. Both groups play on short-term fear to push agendas that serve mostly only themselves. The future cannot be selfish; it will be about helping others succeed. Profit is only a by-product of sound decisions. Those who will foresee the actual needs of the future will make lots of it in the long term. The others, although they might score in the short term, will not win the race. In food and agriculture, foreseeing the future and defining winning strategies are complex activities. I say complex, but I do not say complicated. Ironically, the more thorough the analysis, the less complicated it comes out. When done well and communicated properly, there is no reason why others would not be willing to build a successful future. The complexity comes from the many levels involved in food security. The interactions between natural conditions with the political, economic and cultural environments, together with the many – and often divergent – interests of the players of food value chains are difficult to reconcile. But this is not all. The fact that food production systems and consumption behavior are also influenced by many other sectors competing with agriculture for resources adds to the complexity. The issue is not just about production techniques, new technologies or functioning of markets. Other societal issues play a role, too. The quality of a society and as a result of the people of which it consists will play a role. Health, education and on-going training are very important components of how we will manage the future. Each of the “blocks” I just presented are complex in themselves, simply because they deal with life and keeping the dynamics of life running harmoniously is no easy task. On top of that, the fact that these different blocks, depending on how they individually function, interact with each other and affect the performance of the others, it is clear that we need to look at the issue of feeding the world in a comprehensive manner. We need to identify and integrate all these elements in the analysis to determine the proper action to take. It would be quite convenient if future actions depended only of what directly affect a particular sector. Unfortunately, limiting the thinking to one degree of separation is not enough, by far.

In my years of the Food Futurist, I have had the opportunity to notice that the multidimensional nature of the issue is the one that seems the most difficult for most organizations to fathom. There is no shortage of reports or publications about the future of this or that. However, although they clearly are of excellent quality and the result of hard work, many of them miss the dot connecting part. They focus on the area of interest but tend to neglect the bigger picture. It is only natural that organizations look at the future from the angle of how it will affect them. Yet, nobody should investigate the future from a self-centered kind of production-driven manner. This tends to produce a self-serving strategy that will not prepare those organizations to deal with what will come from the higher degrees of separation. The here and now is nice, but to thrive, they must focus at least as much on the elsewhere and later. I must say that I also have dealt with organizations that do have this comprehensive approach. I found that they had several qualities in common with each other (and with me to some extent): serenity, a rather positive and optimistic outlook on the future, and the quiet confidence that we can overcome the challenges.

Yet, even these “better” organizations still need to go further than they have in preparing the future. Their comprehensive understanding on all the factors that will influence the future needs to go to the next level. All organizations, those with the comprehensive outlook on the future as well as those who carried out the exercise in a less deep manner must translate their understanding of the future in specific strategies and effective execution. In many cases, this is still missing. Organizations must let go of the past by not assuming that past, present and future are linked in a linear manner. That way of thinking is still dominant and, considering the magnitude and the nature of the changes to come, it will not be the best approach to be successful in the future. Another important aspect to take in consideration is to clearly identify in advance what the effect of their actions will be on the rest of us. The latter will be a prerequisite for a prosperous future. It is amazing to see that most plans have no plan B. Without a plan B, a plan is pretty much not a plan. There cannot be only one strategy. There has to be an arsenal of options. What must stand fast, though, is the final outcome. Building a strong future is also about being prepared for the unexpected and to adapt accordingly to succeed. Such an approach would also show that their future actions are taken in with responsibility in mind.

The current times of agricultural markets calming down and readjusting to more reasonable and realistic prices are, more than any other, ideal to focus on how to proceed to build the future of food and farming. As grain prices have slowed down and the animal protein sector is improving financial results, everybody is in a more serene mode. The white noise from the media and the fear mongers has faded for now. Everyone can hear him/herself think again. That is quite a good thing. However, this is no time to lay back or become complacent. Such a serene environment will not last. The population keeps on increasing. Meat and poultry producers will resume production increase as demand for their products is among the fastest growing of all foods. With grain and oilseeds prices less attractive, the incentive to push for more production will also slow down. It will not take a genius to figure out that demand for animal feed will grow faster than production of feed ingredients once again. Lately, Asians have also hoarded agricultural commodities to have stocks at hand, but as availability of commodities increases, they will get more relaxed about it. For all these reasons, agricultural prices are going to go up again, hurting animal protein producers again and sending agricultural markets up as investors and speculators will see their chance for quick money. Let’s also be sure that there will be some climatic event somewhere sometime that will also join the party to add on the stress. When the different parts of the food value chain do not plan ahead globally to ensure a balance between supply and demand, such cycles persist and crises come back. It probably will be a couple of years (my guess is three to five) before we face a similar crisis again. This is why the time to act is now by developing solid plans, engaging in the right partnerships and collaborate closely and intensely to work on the future of food and farming. I mentioned earlier that analyzing what will happen in the future and to prepare for it is complex, the exercise is actually easier than it sounds. It is only a Herculean task for those who want to solve all the world’s problems on their own. One simple trick is to see the big picture but to define what the realistic contribution of the organization to the whole problem actually can be. Another one is to ask for help and support, and thus engage others on the right path. The contribution can be products, services or collaboration. Nobody will fix the situation alone, and nobody should think in such terms. The essence is to act and make others act in the right direction. Communication towards others is quite important as it helps other organizations to determine their respective objectives. In this regard, conferences and events about the theme of the future of food and farming are quite useful. I have participated to quite a few already. Sometimes, I wish they were more focused on what it means for the partners and the audience than what it means for those organizing such events, though. It is clear that many of such events have a marketing and/or image purpose, but that too can only be a by-product. The most important is the added value to the attendants and what they can use practically in their own operations from what they heard at the events. At least, that is my philosophy and how I approach such speaking engagements. Too often, participants present their offering, such as new products for instance, but so far I have not heard anyone ask what I think is the most important question and the key to success: What do you need from me or from other partners to succeed? There are too many conferences about the future of agriculture that do not even include a farmer among the speakers! The customers are the ones who know best what they need from others to do a better job in the future. Let them speak out!

As far as I am concerned, I have now started to work on my third book, the topic of which will be about strategic foresight for food and farming. It will be about anticipating the changes that will come as well as the changes that must take place with the main purpose of presenting adequate strategies to adapt and to prosper. It will review the future evolution of the different productions, the different links of the entire food value chain from DNA to consumer. It will present strategies for and between stakeholders in the different regions of the world, as they face different challenges and conditions, with the objective of showing how it can work for all. I believe it will be a welcome follow-up to the previous two ones, which had already paved the way to show options a building a prosperous and viable future for all, here and now as well as elsewhere and later.

Copyright 2013 – The Happy Future Group Consulting Ltd.

Food prices, one year later – Some lessons

According to the data gathered by the FAO, global food prices are on the decline. They have been so for some time. However, this good news does not seem to make the headlines. Reassuring news does not score with the mainstream media. What a difference with the past year during which all of a sudden they discovered that food might not be taken for granted after all! What have we not heard and read by then. The most absurd theories and pseudo-analyses have been spread around by some who know nothing better than copying and pasting the internet without exercizing the slightest sense of critical thinking. Of course, the fear mongers got plenty of publicity while they really did not contribute to anything productive, as I had described in a previous article (Fear mongering does not build a strong future).

What a difference a year makes! And that is a very good thing. It shows that agriculture and farmers are much more resilient and have much greater potential than some want to make believe. That confirms what I have always claimed and that I relentlessly repeat in my presentations and publications. I have lost the count of how many times I have been told that “Christophe, you are quite the optimist”, in particular about the content of Future Harvests. Frankly, I do not think that I am particularly optimistic. Actually, I can see many reasons why we will face serious crises along the way to meeting the goals of feeding a growing population. That warning is the message behind We Will Reap What We Sow. I see human nature and in particular our leadership, as serious reasons for temporary failures. But if I do not consider myself as an optimist, I definitely have a positive attitude. I truly believe we can manage and overcome future challenges, because I crunched the numbers and I have demonstrated in my literature and my talks that feeding 9 billion people in a sustainable manner is quite possible. It is possible, but it is not a given. There is work ahead. That makes it interesting and exciting.

Next to the potential and the future development that can make us overcome the coming challenges, I am also a firm believer of market forces. Market fluctuations trigger action and reaction. Nothing like high prices and solid profits get food producers increase production. Similarly, nothing like poor financial results have the ability to tamper any desire to increase production. The so-called invisible hand works. Sometimes, it holds a carrot. Sometimes, it holds a stick. It makes things move in the right direction. Over the past year, I have presented during a number of events how market forces would influence prices in different sectors in the years to come. By looking at it from the consumer demand end and by going back in the production and supply chain, I showed how the different actors would react to their own particular situations. So far, my predictions have come true, the reactions of retailers, food service, animal protein producers, crop farmers and input suppliers have been as expected. The drop in global food prices is one of these predictions. Those who attended some of my presentations know what I mean. For the others, here is a link to a video showing an excerpt my talk about the dynamics of future agricultural markets that will illustrate what I am writing about.

The past year contains many lessons. Some of them are about us, and some of them are about how to look at the future. The main lesson is probably that the situation of food and agriculture cannot be looked at in a simplistic manner and can certainly not be described or commented with scary slogans. The population is growing but so is agricultural production. The famine that is supposedly around the corner is far from happening. In a year time, the world population has increased by a few dozen million people, who on average tend to eat more food, and in particular meat. Yet, supply is able to meet demand better this year than last year, as global food prices and grain stocks indicate. Another lesson is that even though severe climatic events affect food supply negatively, there is no reason to panic. The fact that last year a severe drought depleted production numbers in one of the essential producing countries, the USA, the system was able to absorb the shock. There has been no food riot in 2012 like in 2008. The reason needs to be looked at what products were the most affected.  Supply of basic food stables remained in balance with demand. There was no particular shortage of bread or rice in sight. The commodities that were affected were business to business products, destined to the animal feed and the corn ethanol industries. Another lesson is that even though the prices of 2012 did not lead to riots, climatic events are a serious threat and need to be factored in future supply and demand scenarios to build enough of a buffer to reduce the risks of supply disruption. Another area that requires more attention is the regulation of financial markets, and in particular the regulatory aspects. It is clear that derivatives amplify market price fluctuations. By deciding who is allowed to be active on the markets of agricultural commodities and for which quantities, the functioning of markets can be more representative of the physical reality. In particular, the participation of players who have no physical production or supply functions in the food and agriculture need to be taken under strict scrutiny. As it is important to have fair market rules for a proper functioning of markets, it will be also useful to look at the functioning of crop insurance. Last year’s drought in the US cost insurance companies much money, while it appeared that US crop farmers ended up the season with the second highest profit level on record. No one will argue that farmers need to be protected from such unpredictable events.  Insurance should guarantee them a minimum income so that their future would not depend from forces out of their control. That is just fair. Opposite to that, it sounds beyond normal that, thanks to other contributors, farmers could go through such a drought without hardly feeling the slightest pinch in the wallet.

After the past year, am I still an “optimist”? Yes, I do believe that farmers will meet demand in the future. For all the reasons above, I am convinced as ever that the potential is largely there and that the world can absorb tough years. But I would attach a warning to my optimism. It is not because it can be done that it will be done. It is necessary to keep thinking ahead, to come with innovative ideas, products and services to be able to plan and forecast better, to make better and faster decisions. It is also essential to pass knowledge and information better and faster, and to choose the attitude of helping others succeed before one’s particular interest. Our societies have succeeded by acting together. Nobody will be able to do it all alone. Providing help and support will be critical for success, just as much as asking for them will be. It also becomes crucial to be able to look beyond one’s area of business and to connect the dots even – or maybe actually in particular – with events and activities that have, at least apparently, several degrees of separation with agriculture in order to anticipate, adapt and be prosperous. That is the core of what I do, and I can only encourage you to take the same approach.

As markets ease, it will be quite tempting to drop the guard. In my opinion, this would be a serious mistake. The time things seem to be under control is the right time to prepare for the future and to do some foresight. Markets will change again as the bargaining power of the different links of the chain will shift. Be assured that there will be some severe price hikes again. My best guess is within five years from now. Those who will do this exercise will have a strong advantage over those who will procrastinate.

Copyright 2013 – The Happy Future Group Consulting Ltd.

Dealing with complexity

Looking at the future of food and farming goes far beyond agriculture. It comes down to looking at the future of humankind. Balancing future supply and demand of food is an exercise that includes many disciplines and dimensions, probably more so than any other human economic activity. Anything that affects life and its level of prosperity must be taken into account. Feeding the world is not just a matter of production. Of course, the ability to produce and to keep producing enough food is paramount, but there is more to it than that. The consumption side is just as important. Demand will depend on the diet, which also depends on how much money people have available to pay for food.

Total future food demand is a combination of which foods and food groups people in the various regions of the world will buy and eat. This is a function of demographic, economic, cultural, religious and ethical factors. If future demand is about consuming according to the nutritional needs of a human being, clearly the situation will be different than if people demand twice as many calories and protein as the actual nutritional needs. The relative share of animal products in the total diet will also change the situation in terms of production and of production systems. Food production must adjust to the demand and do its best to meet it, but not at all costs. Therefore, it is essential to optimize food production at the global level so that the largest quantity of food can be produced at the lowest environmental cost. At the local level, production depends of course on natural conditions, but also on economic, political and cultural conditions as well. This may be the most profound change that we must deal with: feeding the world of the future is a global exercise. As more and more people worldwide have more and more money to spend on food, demand is now global, and therefore production plans must also be global. The times of producing food simply for the own people and exporting surpluses is over. Markets will now react to any event that will affect production or consumption somewhere else. Borders do not make this shift in thinking easy. It is always tempting to think that having one’s house in order is enough, but it is not. What happens in other countries on the other side of the world will affect us just as well. Why is that? Just one word to explain it: markets. There used to be a time, not so distant when if there was a drought in Russia, China or Brazil, markets would not react as strongly, and anyway not so much in the media, as we have seen over the past few years. This was the case because only a minority of the world was consuming large quantities and that minority did not have competition. Now the competition is wide open. Markets will keep reacting on this and the relative price levels of various foods will influence how much of what is consumed and where. We will see eating habits change because of this economical aspect of food supply.

At the same time, food production is also adapting to a changing environment, and to face its future challenges. The amount of new developments in technology, access to information and knowledge and in decision-making tools is amazing. Innovation is flourishing everywhere to solve environmental issues, to cope with new energy and water situations. The dominant themes are the reduction waste of all sorts, as well food as agricultural inputs and by-products, and the prevention of the release of harmful contaminants. Innovation is developing towards better and more efficient systems that must ensure the future continuity of food production and, at the same time, keeping food affordable for consumers. Interestingly enough, many innovations that will be useful for agriculture do not originate from the food sector. Food producers will need to be curious and look beyond the field to prepare for the farming of the future.

Clearly, the number of factors affecting both consumption and supply are many. To add to the complexity, many of these factors are not of an agricultural nature. Many of them originate from the population, its activities and its needs for all sorts of goods. I mentioned earlier that what happens in one region affects others, but the natural resources markets, such as energy, metals and minerals, that must meet demand for non-food consumer goods also affects agriculture and its production costs. Although many see rising costs first as a threat, I tend to welcome them, as they always stimulate innovative solutions to increase efficiency and reduce waste. Two examples show that it works. One is the car market in the USA that shifted from gas-guzzlers to high gas mileage vehicles since gas at the pump became much more expensive than it was only 5 years ago. The second one is food markets. Had you heard as much about food prices, food security or food waste before the food price hikes of 2008 and 2012?

In my work, I always try to make my clients and audiences aware of how everything that has to do with food is interconnected with many other sectors, and how economic, demographic and political events are linked to food security or how they might affect it in the future. That is an underlying them in my books.

Even, within the food and farming sectors, organizations do not realize enough how their future will be influenced by other food productions and vice-versa. I always get reactions of surprise at the magnitude of the interconnection and the interdependence with these factors, and how they affect their activities indirectly. It is a normal reaction, as most people tend to focus on what has a direct connection with their activities. After all, that is why I do what I do: to help them see and decipher this complexity, and understand what actions to take to adapt and prosper. I never shy away from show the complexity. My audience needs to get a flavor of the any dimensions and many layers involved. However, I always take a practical approach and show them that complexity is not the same as complicated. Deconstructing the complexity actually works well to show the many levels of actions there are. It helps my clients connect the dots between their activities and what will affect them and how. It gives them a level of confidence in how to deal with the future and take action. I also like to warn against oversimplifying, which is another tendency that I observe from time to time. The mainstream media is rather good at that. But I also get questions that sound like those who ask hope that I have a magic wand and will be able to give them a foolproof recipe for success. That simply does not exist.  If preparing the future were easy, nobody would even talk about it. It would be done. It it was easy, I guess many of the organizations that have been involved in agricultural development and food aid for decades would have already succeeded, and they would not exist anymore. Yet, they still have to keep up with their work.

Feeding the world is work in progress. Developing the right actions is complex, but not as complicated as it sounds. However, the true difficulty is in the execution, and in particular bringing other stakeholders with different agendas and different views on board to contribute to the success.

Copyright 2013 – The Happy Future Group Consulting Ltd.

Fear mongering does not build a solid future

Since the drought in the US of this past summer and the strong price increase of agricultural commodities, agriculture has become a favorite topic in the media. As such, this would be really good if it were not for the (potential) disaster voyeurism. There is nothing like a flavor of end of the world in the works to get the attention of the readers. After all, this is good to fill advertising space and to promote a book.

Since I started to look at the future of food and farming, I have seen an evolution on how people look at the future of agriculture. When I started, I could hear statements about the need to have two (even three and four) Earths to meet demand. Interestingly, none of those who stated this impossibility neglected to pay attention to food losses, and they were only focusing on more production. When could passing a mop under an open tap be a sensible approach? If we really come to need more than one planet, then there is only one outcome. Since that second Earth does not exist, the surplus of people would have to die so that the world can meet the demand of the survivors. I agree that it is not a cheerful thought. However, Mao Tze Tung once considered that it could be acceptable that half of his people, the poor, would die of famine to allow the other half that could afford food to be able to meet its needs. Such a morbid thought is actually more common that one would admit, and in this world of political correctness, it is repressed voluntarily. That does not stop the fear mongers, though. They just not choose to sacrifice a group to save another one. They tell us that we are all going to face our demise. That is politically correct, I suppose. Personally, I do not consider that announcing disasters is constructive. Fear is a poor adviser, and it is certainly not the proper way to communicate about problems.

There is no shortage of doomsday thinkers out there. In We Will Reap What We Sow, I address the many challenges that the doomsday thinkers bring up. Instead of taking an apocalyptic approach like they do, I chose to initiate a positive  reflection about alternatives and solutions. Scaring people is too easy, especially when they are not experts in the field of agriculture. I am not a fan of the one-eyed being king in the land of the blind. I have 20/20 vision and I want to help others to also see with both eyes. In my book, I make clear that we will live with the consequences of our actions (hence the title), but I give many reasons for hope. It is more productive then despair.

In the realm of doom and gloom, I must admit that the Post Carbon Institute wins the prize. Among the other prophets of doom, Lester Brown currently fills the stage, especially since he is promoting his latest book. I had the chance to hear him speak some 14 years ago at an aquaculture conference. I must say that he is an excellent speaker and quite a charming man. Actually, he inspired me to venture into foresight and futurism. I really believe that his talents should be used to create positive momentum instead of sowing depressive thoughts in the population. Before the summer (before the US drought that is), he had stated in an interview that “the world is only one bad harvest away from a food crisis”. I have never subscribed to that point of view. The issue of feeding the world is much more complex than that. Well, we just have had a bad harvest and there is no more food crisis than last year. Prices of agricultural commodities have gone through the roof. Yet, there have not been any riots like in 2008. It is almost a wonder considering how much fear mongering has taken place in the mainstream media. They all came with scarier scenarios the one than the other. And thanks to social media, the news spreads even faster and further. In particular, Twitter is an amazing place to be in. Anything and everything gets tweeted, retweeted many times over without the slightest critical thinking. Their symbol should not be a bird. It should be a sheep. The top of uncritical maniacal tweeting was about the writer from Australia who spoke at a conference telling the audience that agriculture needs to produce 600 quadrillion calories a day. That was all over twitter. Wow, do you fancy that, 600 quadrillion? Yes, I have to admit it is a big number. I found is so big that I had to count on my fingers. Considering that the average human being needs about 2,000 calories a day (the FAO says 1,800, but let’s keep the calculation simple!), 600 quadrillion calories corresponds to the needs of 300 trillion people. That is about more than 40,000 (yes, forty thousand) times more than the current world population. With math like this, it should be no surprise that his book is titled the Coming Famine. Regardless of the title, I would agree that one Earth could not feed any number of people remotely close to 300 trillion, but we are not there yet. When I saw that number, I could not resist tweeting about the math, and the sheeple out there realized that the numbers did not add up.

That has not been the end of my tweeting against the fueling of fears about food and agriculture. Another tweet that caught my attention came from Graziano da Silva, Director General of the FAO (actually his staff) stating about food prices “This is not a crisis yet. We need to avoid “panic buying””, to which I replied that a good way to do this could be to stop talking about food crisis so often. What can be more of a boon to speculators in commodities than Twitter and its instant worldwide spreading of any rumor, information or myth that indeed can create panic? There is no better way to make food prices increase than by repeating exponentially that there might be food shortages, even though it is not the case. Interestingly enough, since then, the panic button seems to have been turned off at the FAO.

Fear mongering and doomsday thinking, although morbidly attractive, will not help build a solid future. Predicting terrible disasters without giving clear clues of how to prevent and overcome them is rather useless. Actually, it is counterproductive. Those who do not know the facts or are not in a position of doing something about the problem are going to feel demotivated and there is a chance that they will not try to care anymore. Those who actually contribute to solutions will not pay much attention, as it sounds like the kid who cried wolf to them, and might miss important information in the process. There are challenges ahead. Some of them are quite serious and difficult to overcome, but not impossible. I know that and I know them. And so do many others. However, the fact that the task ahead is challenging  is no reason to undermine anyone’s morale. The amount of knowledge and of tools at our disposal is quite amazing, and we probably have more than we need to fix things. What must change is our attitude. Rambling and whining about problems have never made any disappear. It is necessary to create positive momentum among the population(s), to show them that success is possible. To achieve this, it is important to avoid the opposite of fear mongering, which is blissful optimism. It is possible to feed the world, even when it reaches 9 billion people. It can be done with one Earth. A couple of years ago, I was one of the few who claimed that it could be done. By then I felt a bit lonely, as the main thinking sounded like it could not be achieved. Maybe my blog, books and presentations have contributed to change that. Those who have read me or listened to me seem to think that my positive and practical look on the issue have contributed to changing their mindset. The thought is nice, but it is not what counts. What really matters is that gradually, more people start to see beyond the myths and the catch phrases. Not everyone does. This summer, I heard about the “Great Global Food Crisis”. So far, I had heard only about the Global Food Crisis. Apparently, fear had increased by a notch or two.  Such expressions are non-sense. If the food crisis were to be global, there would be a food crisis everywhere around the globe. That is pretty much the definition. I do not see any food crisis in many countries. Actually, a study showed that the number of overweight people was on the rise in more and more countries. What is true is that there are local food crises. Unfortunately, for the populations that suffer from it, they are not caused by global food shortages as some like to make believe, but because of armed conflict and /or by poverty and lack of infrastructure. The number of undernourished people is actually decreasing as the FAO showed in their latest State of Food Insecurity 2012. To me, everything points at progress in the fight against hunger, even though negative climatic events affect agricultural production. But just for fun, let’s get back to the Great Crisis. If the food crisis were to be global, can it get any bigger than that? What does the adjective Great add? It adds nothing except the desire to scare. Let’s face it! Some people jobs depend on cultivating the idea that something goes wrong. It is their only purpose. Personally, I prefer those who roll up the sleeves and conceive, develop and execute solutions. These are the ones who make our future world a better place. It is too bad that they do not get as much attention from the media as the fear mongers. Of course, things that go well are not as sensational as disasters, but they are more valuable. They are the success stories that need to be told, so that others can learn from them. They are the success stories that must be told so that we all eventually can realize that building a solid future is possible. It is not easy as spreading fear, but it is much more productive and useful for present and future generations!

Copyright 2012 – The Happy Future Group Consulting Ltd.