The futuristic and the future

December 8, 2018

From the many requests I get, the one thing that excites people most about the future is to be presented with a futuristic picture of the future. They like the idea of seeing a different world than the one they know. Maybe it has to do with the fact that many feel unhappy with our world the way it is. Maybe they want to dream a bit or maybe they simply want to have a feeling that there is hope for a utopian world. Science fiction is full of that futuristic feeling. Sometimes it carries an optimistic feeling and sometimes it paints a brutally gloomy vision of the future.

Very often, conference organizers approach me because they would like me to present a futuristic view of food and agriculture. If all they are looking for is science fiction entertainment, I prefer to decline. Fiction is nice, but my business is about realistic and practical evolution of food and agriculture. Everyone who knows me well will tell you that I have no lack of imagination, on the contrary, but that is not what I do as a futurist. My main objective is that my audiences go home with a feeling that it is possible to evolve from today to tomorrow with feasible changes, instead of chasing dreams, which nobody can say whether they have any chance of succeeding. I believe in baby steps, and possibly quick ones.

Perhaps it is the advantage of having been around the block for quite a while, but I always take a circumspect attitude regarding futuristic visions. I am old enough to have heard that we were all going to shift away from traditional foods and that our future diet would be made of pills, one for energy, one for protein and one for God knows what else. That was the time of the Apollo space missions and of the movie 2001: A Space Odyssey. Our future meals would be an astronaut type of diet. Well, guess what, we have passed 2001 a long time ago and meat and potatoes are still on our plates. Be careful about science fiction, because although it certainly is a great source of inspiration for exciting innovations, it also contains the word “fiction”. To me, the most realistic part of 2001: A Space Odyssey is HAL 9000, the computer. As we are eagerly working on artificial intelligence, I can very well see that we could end up with machines that can think and feel the way that HAL does. If some genius finds a way of creating an artificial ego and implant it in such an AI machine, then humans would have a problem. Anyway, we are not there yet.

Another big change in our food, presented several decades ago, was making synthetic meat out of oil (does that sound somehow familiar; you know meat from an incubator?). I started my Career at BP Nutrition, which was part of the BP oil and gas company. Apparently, BP had moved into the food business because they thought that the “oil steaks” could be a reality and be a part of their business. Of course and as usual, nobody can foresee everything and the oil crisis of the 1970s hit and that was the end of the synthetic meat, because guess what? Money matters and if the numbers do not add up, the project dies.

In more current innovations, I remember feeling a bit of the ugly duckling in a conference about the future of agriculture where one of the hottest topics was the Google glass. Maybe you remember, some sort of portable smart device that would make you feel like a cyborg. I did not see the added value of the glasses for a farmer. Apparently, I was one of the very few and you know almost not much a futurist at all for not embracing unconditionally some tech innovation. No, I do not do unconditional support. Instead, in these current days of compulsively pressing “Like” buttons, I did –and still do- this almost heretic thing: I think and exercise my critical sense. Just as a short addendum, I would like to remind you of the quote by Descartes ”I think, therefore I am”. The way, I look at things, a derivative of that quote would be “I don’t think, therefore I am nothing”

Another recent hot topic that seems to have lost steam is the 3D printer that would produce food. I remember even posting a question on a futurist’s website. It was several years ago and I am still waiting for an answer. My question related to an article with the illustration of a banana laid on the printing area of a 3D printer. I was asking two things. The first was why anyone would use resources to make the banana peel as it appears on the posted picture, as the peel is waste. The second was to know what material would be used to make the flesh of the banana (and where it would be coming from) because if it were banana flesh, that would be rather absurd. This banana example is the perfect illustration of hypes being parroted by everyone who wants to be trendy without thinking about the most basic principles, such as the one expressed by Lavoisier “Nothing is created, everything is transformed” If you want to print a banana, you need some material to print with. Everyone seems to think that it would be created out of nothing. Great way to solve famine…

If I have an issue with the banana, I do not have any about 3D printing. When it comes to food, it could certainly crate new textures and new ways to experience foods and perhaps even discover new flavors that do not pop up in traditional textures. That is an area that could be useful. If lab meat is to be a viable production system, 3D printing might be a way of making it more appealing to the market. It is worth investigating. Another area that I would hope 3D printing to be useful is the production, possibly at home, of spare parts that you and I could use when some device gets broken (instead of having to buy an entire device all together), and possibly by using recycled raw materials to make the replacement parts. That would be a great step towards sustainability and in the fight against planned obsolescence.

I can name other hypes that have never impressed me. Remember the “new economy” that was going to make the old economy obsolete? Well, the result was the dotcom crash (bubbles are made out of hot air usually) and the good old-fashioned economy came back with a vengeance, as the good old care for our living environment will. Bitcoin and other cryptocurrencies were going to make existing currencies obsolete. Guess what? It is bursting simply because these are currencies that do not have any really economic roots. They are artificial with nothing to sustain them but hype, so poof goes the bubble. In the area of something more useful, I have not been impressed by blockchain either. I found it artificially inflated for something actually quite simple and basic. By the time, they complete it, if that ever happens, it will already be replaced by something more useful and effective. And I could go on with a list of things that would revolutionize our world and that nobody remembers.

To me, the main difference between the future and the futuristic is that the latter finds its source in imagination while the former is about practical and economical feasibility. We need both, but it is essential to make the distinction because it is difficult to find our way with a blurred vision. The virtual is not the real but it can become it under the right circumstances.

Similarly, we must not think that innovation is only about technology and that technology is only about high-tech. High tech is very sexy and the fact that teenagers can become billionaires overnight is very appealing but, in the grand scheme of things, that part is only a drop in the ocean of problems to solve for the future. I am convinced that many solutions will actually be low tech and inspired by old-fashioned wisdom. Innovation must address the causes of the problems it solves, not just the symptoms. Morphine can be very useful for cancer patients but it does not cure the disease. Another misconception is also to think that innovation is the same as progress. There is a difference. It may appear that way on the short term, but progress is also a relative concept. What seems progress today might appear as a disaster a few decades from now. I will let you think for yourselves of some examples for “progress” from the 19th and 20th centuries that hurt us today to illustrate my point.

A similar kind of confusion is to think that science and knowledge are the same. Indeed, good science is, but through the centuries people have known many facts even though they had not been scientifically proven. Here, I will only mean knowledge and not beliefs, as beliefs very often rest on non-proven concepts, and in some cases possibly improvable but beliefs are not about knowledge. They are about creating a system of values that help making sense of what we do not know or do not control. Therefore, beliefs and knowledge are two distinct things. Bordering on knowledge and science, but quite abundant in bad science is another confusion: statistics and facts. Anyone who has studied statistics knows that one must first make a hypothesis and then test it. If the test is negative, one must reject the hypothesis. That is the easy, and non-confusing, part. If the test result is positive, one can only say that one cannot reject the hypothesis and that is all. One cannot conclude that the hypothesis is correct. No, all one can say is that the hypothesis may just not be incorrect. But that subtle -yet essential- difference is never a problem for those who want to push their point of view and they will merrily go as far as using to claim the absence of evidence as being the evidence of absence. So much for intellectual integrity. Further, depending on which statistical test you chose, you may come to a different result about the same hypothesis. It can be a bit complicated, can’t it? That is the conundrum of research and science when they are not independent anymore, not to mention when they are funded by groups who are after making a profit of their “findings”, but that is the way human nature goes.

For a successful future, futuristic ideas are important but critical thinking, a solid dose of common sense, a practical approach and the ability to make the money work are essential. If we lose grip on reality or, worse, if we ignore it, it will catch up with us, a bit the way HAL 900 does in the movie. Dreaming is good as it feeds the human machine, but a strong sense of reality is essential to go in the right direction. It is a bit like both the legs and the brain when riding a bicycle.

Copyright 2018 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

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Why we are not solving the climate challenge

November 30, 2018

The latest report on climate change published last week was not cheerful. Instead of making progress towards the goals, it appears that we are off course and actually deviating further away. None of the G20 countries will achieve their goals. The world has had plenty of notice and time to act, but clearly success is further away than before, but probably less so than next year and the years after. Why is it so difficult to do the right thing, then? Well, there are a number of reasons for this and this does not bode well. Here they are, in no particular order.

Reason #1: We are not scared, yet

Whenever a devastating climatic event hits us, it is not really perceived as a threat for those who have not been affected. Like any dramatic piece of news, people read about it, think how terrible it is for a few moments and then move on and forget. It is a bit like car accidents. Everyone thinks that it won’t happen to them. Even if you are a good driver, you never know when a bad one will cross your path, and it is the exact same thing with climate. The consequences do not stay within the borders of the countries that produce emissions. It takes only one bad neighbour to spoil it for everybody. The consequences go all over to the neighbours just as well. In my book We Will Reap What We Sow, I addressed the denial and procrastination by making a comparison with Pharaoh in the movie The Ten Commandments by saying that the leaders of the world may pay attention when their first born will be killed in such a natural disaster and just like in the movie, they might grieve for some time and then decide to taunt fate again. I believe that is exactly where we are heading.

Next to that, as long as insurances are willing to cover the damage, a false illusion of protection will still exist. Be assured that if insurers decided to not cover climate change related damages, the debate would change rather quickly. Last summer, there was a wildfire rather close to my place. It was the second year on a row that the region had been hit by forest fires. I can tell you that this time, considering the location and the direction and strength of the wind, I was seriously worried. We were lucky and the fires were eventually contained. We had to breathe very smoky air for weeks and our air quality was worse than Beijing or Delhi, though. In my opinion, we should be a bit more scared by what is going on than we currently are.

It is difficult to scare people by talking about just a couple of degrees in 80 years from now. Presented in those terms, it sounds benign. That, too, is part of the procrastination problem. We need to hear where there is going to be devastation, how big it will be and how much it will cost. If the problem is big and serious, it must sound that way.

Reason #2: We have no real vision for a different, better world

It is nice to look at alternative energies and all sorts of innovations, but they will not happen unless the numbers (meaning the $$$) work out well. That is the problem. Technically, everything is possible. We could replace fossil fuels rather quickly but the economics as stated today do not stimulate change. To change the economics, it would be nice to start by stopping subsidizing the disaster, but we do not do that. The problem with climate a change and economics is that there is a simple reality: it will cost money and we all will have to pay a share. The worst part about this is that the longer we wait to invest in our future, the more expensive it will get.

But beyond the boring money concerns, what we need is a vision of our future world. How will it look like? How will people be able to have a decent standard of living (oops, money matters again)? What are the jobs of the future and which ones will disappear? Will it be a safe or dangerous world? There are many questions to answer if we want to create good will for change. There is no such thing as fear of change as such. Fear of change is actually the fear of loss. What I might lose is the primary concern. To alleviate this concern, clear and reliable vision is a prerequisite, and we do not have any at this moment. There is too much focus on problems and not enough on solutions. Without a vision that speaks to people, there is no reason why they should get excited about change.

Reason #3: There is no plan

Since there is no clear and strong vision, there cannot be a plan. When it comes to climate change, all we hear is an abstract-sounding target of limiting temperature increase to 2 degrees maximum, even though it sounds specific. What does that mean concretely for our daily lives, starting today? Who is supposed to do what and by when? All the climate agreements have been non-binding, which means that, in terms of determination, they compare with the average person’s New Year’s resolutions. It is obvious why the agreements are non-binding. If they were, there is not one single country who would commit. Countries have goals. It almost sounds like a plan, except that the goals are not really specific. Indeed, which sectors of society, business, governments and non-governmental organizations are supposed to do what? Does any industry have goals to achieve? Not really. Look at the car industry. Since the economy runs better, they have decided to stop the production of small cars and focus on larger cars, mostly SUVs and trucks, which consume more fuel  than the smaller sedans. Why? Just because the profit margin on larger vehicles is higher. At least, during the Great Recession of 2008 and the following years, when gas prices were much higher and the economy was hurting, sales of small economical cars were out performing the big gas guzzlers. Maybe economic hardship is what is needed to fix the problem. We just never really learn, it seems. Let’s face it, we have no plan and everybody does what is in his/her best interest, or just suits them best, on the short term.

If we and all the leaders in all sectors of society had a plan, there would be clear instructions about what is required from us. Nobody is giving instructions to people like me about how I should and could reduce my environmental footprint. There is a lot of PR and marketing, though, but the underlying message from businesses is really the same as before: buy as much goods as you can from me. It is all about volume, while the solution is to replace volume to shift from always more to always enough.

The most important part of the plan would be the transition plan. Setting targets without defining all the concrete practical steps and how to measure progress is rather pointless. How do we get from situation A to situation B? How long does it take and how do we ensure progress? Let me know if you know because I do not see anything of the kind.

Reason #4: There is no collective coordination

Besides the goals, a good plan would indicate clearly what the respective responsibilities are of all organizations and individuals. It would be clear what the contribution of each entity needs to be. This is essential for a plan and in particular for the transition plan. Since we are all in this together, success is about team work. Everybody must be motivated, must believe it is the right thing to do and participate. How many of you have received clear goals and a mandate to participate?

Yes, we can fix the problem. We did fix the hole in the ozone layer, didn’t we? We also fixed acid rains, didn’t we? How did we do that? Simply by defining very clear and specific goals and allocating them clearly. The team knew what to do, who had to do what… and they did it. Regarding climate change, we are just 25 years late. Countries reject the blame on each other instead of finding good agreements on how to fairly solve the problems and help each other out of trouble.

Reason #5: We prefer to blame than to fix

As I mentioned earlier, emissions from one country travel all around the Earth. Eventually, we all own and share all emissions, not just the ones we create. We are collectively responsible and the problem can be solved only collectively. That is tricky in a world where individualism spreads everywhere. The result is that we focus much more on who is to blame than on fixing the problem. We have limited time to fix the problem, but once it is fixed, we will have ample time to figure out who was to blame if we think it is a useful way to spend time.

Let’s face it, everyone who indulges in the consumption society is to blame, but of course, as Jean Paul Sartre wrote “Hell is the others”. Unfortunately, we have created a society in which we all feel so entitled to pretty much everything; we have lost the sense of what the value of things really is. Our entire economic system is about more for me here and now. Of course, changing this philosophy will not be easy because to fix the problem is going about to give up something and that is tough. Of course, we can choose not to act and Mother Nature is going to fix it for us. I suspect that then all the consumption aficionados will turn to their mother (nature) and say angrily that is it not fair and that they hate her. That is always how it goes when mommy decide to clean the little one’s messy bedroom. So who will fix it:  we or Mother Nature? The choice is ours.

Reason #6: Short term prevails

This is a basic human nature trait. The short-term always comes first, before the long-term. It is certainly interesting to try to bring a message of responsibility about future generations but the human animal is not wired that way. Only very few people are truly altruistic and have the willingness to give up their own interest. The only way to get people to have a balanced approach between the short term and the long term is by creating a trade off that is worth it. Here, the key word is trade. If we want people to give some of their short-term comfort for future generations, we must give them something in return. Give and take is a very basic human characteristic, too. So what can we trade off? Let’s not be naive, what will work is always something of a material nature, in particular money. As time runs out, there is not much time for cute negotiations. We are going to have to bribe the current generations to do something for the future ones. It is just that simple. Of course, somebody is going to have to pay for it. My guess is that it will be all of us, present and future. There is no real alternative to that, and it is time we all realize this it is what it is going to be.

Reason #7: Lame leadership

I wish I did not have to say that, but it is truly part of the problem. Our leaders are not really leading when it comes to climate change. As I mentioned earlier, they have not presented a vision of where our world is going and how our lives, private and professional, will be in the coming decades. They have no detailed specific plan to transition to the future and they do not have the gut to enforce change. They mostly give lip service. I understand that. When you have to face elections every so many years, you do not want to upset the voters. You do not want to put their jobs at risk and you do not want to cause a recession or worse. That, too, is very human. But the job of governing is not about trying to please all the time. Just as there is a difference between being friends and being parents, there is a difference between being a head of state and being a demagogue. In exceptional times, tough decisions come with the territory. As a leader, if you cannot take the heat, get out of the kitchen! Being a leader is first of all to take good care of your followers so that they can make it to the destination. Communication is a crucial part of leadership, especially when it comes to change. A leader must explain what must change, how it must change and what it will take to succeed. There is never enough communication about change. It is the only way of making it sink in the people’s minds. They have to get acquainted with the idea and they also must be part of the conversation to develop a sense of ownership of where things are going. About the climate change issue, the communication has been insufficient by far. This lack of communication is largely responsible for the lack of trust in politicians and why the people think their leadership is disconnected with the reality of their daily lives and concerns. Leaders must reassure people. Instead, they too often worry them.

Reason #8: There are powerful opponents

Not everybody is pleased with the potential change that the climate change challenges are calling for. This is the main reason why they work hard to discredit the scientists who report about their findings. As I said earlier, fear of change is really about fear of loss and the climate change deniers are no different than the average man about that, even when they happen to be millionaires or higher. What are they afraid to lose? Well, it is always about the same: money. Either because they would have to accept higher costs of operation or possibly seeing their business die or simply lose their jobs and livelihoods. I can understand such a fear when the person in question could lose his/her job and not find employment easily and land into financial hardship. I find it much more difficult to understand that from billionaires who have nothing to worry about in terms of financial security. Actually, I would expect from true captain of industries that they see opportunities in new business activities and venture into them for both their benefit and society’s. Perhaps, it depends if they are billionaires by hard work or just by birth.

Reason #9: We are addicted to materialism

The so-called consumption society has been acting like a drug dealer in a way. Most people are so hooked on buying stuff that they can’t stop. The banks have contributed greatly to the problem but lending money too easily so that people who cannot afford stuff can go to the mall and buy just like the rest. The flip side of this addiction is that withdrawal is not easy. Everything is about tempting the client. It is not just businesses that lure consumers but peer pressure joins into pushing people into buying more stuff. Perhaps, it is easy for me to say this because I must have some sort of a temptation resistance gene. Marketing leaves me completely cold and I buy something only if I need it, not because someone wants to sell it to me. My wife calls me a minimalist. I am not sure what that means but maybe I am. All I know is that I live happily and I do not have any creditor breathing in my neck. Along with this personality trait of mine, I also have no problem making sacrifices if needed. I can wait to buy something. In a way, my motto could be “if you don’t need it don’t buy it/if you can’t afford it, don’t buy it”.

About climate change, sacrifice will be part of the game one way or another. I believe that it will be quite useful to realize that life cannot be about instant gratification all the time and that happiness can be found through many other ways than through buying “stuff”. Of course, such an approach is going to conflict with our dominant economic model.

Reason #10: The economy and financial system is all about growth

All our economy revolves around always more. In a finite world, it is just a matter of time before such a model comes to an end. In biology, there is a distinction between growth and development. And it is a very important distinction.  I believe that when it comes to economy and finance, the distinction between the two terms has blurred out and it might very well be the root of a misunderstanding that might prove very costly in the future. I am all for development, but I have mixed feelings about growth. As an example, I would mention an animated graph that has been circulating recently on social media about the variation of GDP per country between 1961 and 2017. It is a cute animation, but I do not find it all that interesting because the GDP depends for a part of the size of the population. A graph showing the GDP per capita would have been a better indication of the wealth of the inhabitants of the different countries, although an average does not say much about distribution. I also would have preferred to see a graph showing the distribution of that wealth with the people of the countries, as this would be a good indication of whether the countries takes good care of their people or not. I also would have liked to see the graph with the ratio debt/GDP and deficit/GDP. I suspect those graphs would have told very interesting stories. For a country, the GDP is just the same as what the sales revenue is for a business. It is not a particularly good indicator of the profit or of cash-flow.

Growth is also the magic word for stock markets, and in particular of the share price. Since the entire financial system is locked in stocks directly and indirectly, any stock market crash will affect everyone, because even people who do not own stocks depend on the markets (just think of how deep in stocks some pension plans are).

This is why the climate is tricky to handle because if company stocks from environmentally damaging companies or industries crash, the entire system can potentially implode. The best way to prevent this would be to have a plan, and in particular a transition plan ready so that company could transition smoothly and thus avert a market crash, but we haven’t got that. As we all know, there is a lot of short-term activity on stock markets and there, too, short-term prevails over long-term. Speaking of short term, CEOs have to present their results quarterly to financial analysts. Compare that with elections only every 4 or 5 years!

Reason #11: We are increasingly disconnected from Nature

This is a consequence of how our societies and economies have evolved since the first Industrial Revolution. Today’s most obvious consequences are mass production and mass consumption, which relocated human populations from rural and agricultural areas into urban centers and the trend, continues. There are a couple of generations who have never really been in much contact with Nature. Surveys for city people about where they think food comes from are always revealing. In particular, with animal products, it is amazing to see how many people do not make a connection between eggs and hens or between milk and cows, or even between a live animal and its meat. I strongly believe that when we lose the connection with nature, we also lose a sense of where we come from and what we are about. If we do not understand how Nature works, it is difficult to respect it and when we do not understand our biological nature, we also lose respect for life. Unfortunately, we look at ourselves less and less as biological entities and more and more as legal entities. This trend worries me.

In a way, the so-called primitive societies (which I am less and less sure that they were that primitive at all) had a strong respect and fear for the forces of Nature. The term Mother Nature that I have used above is reminiscent from this respect and fear. We would not mess with it because we understood that we could be punished. Once the connection with Nature fades, the punishment part fades too. Then, we are just too happy to take and not give back and this is a serious mistake. Sustainability and circular economy are all about giving back so that the cycle can continue. This part we tend to have forgotten and this is why we shifted away from always enough to always more and that we will have to revert to the original concept because always more is not sustainable but always enough is. Here is your challenge!

Reason #12: We put too much faith in technology

Understand me well, I am all for technology and innovation. That said, technology is only as good as how we use it. I have mentioned in earlier articles how important this subtle distinction is. I am convinced that as of today we already have all the technology we need to mitigate climate change and have happy lives. So, why don’t we solve the problem? Once again the magic word is: money. For many of these technological solutions, the economics do not favour them, but favour the current destructive system. A part of the problem is in the allocation of where subsidies go. We encourage non-sustainable systems to survive while we do not reward enough sustainable solutions. Another important aspect of whether technology can help us overcome the challenges lies in our behaviour and that is independent of technology. Technology can only help us if we want to help ourselves first. Keeping our same bad habits of wasting and overconsumption and hoping that some new technology is going to clean the mess for us without us having to make any effort of any sort is completely delusional, not to say completely immature. There cannot be any solution if we do not change ourselves. I could paraphrase both Einstein’s quote saying that insanity is doing the same thing and expecting a different result and Ghandi’s saying that we must be the change we want to see.

Copyright 2018 – Christophe Pelletier – The Happy Future Group Consulting Ltd.


Is animal farming really on the way out?

October 22, 2018

Lately in the food world, one can read many stories about alternatives to protein from animal farming. Animal farming also gets blamed for its contribution to greenhouse gas emissions. With so much finger pointing, one can wonder whether animal farming has a future. Proponents of alternatives do all they can to convince everyone that the writing is already on the wall. Personally, I believe that things are far from being that simple.

To predict what scenarios are likely for the future, it is necessary to look at the issue from its many dimensions, both on the production side as on the consumption side. I prefer to look at it first from the consumption side because consumer markets shape production systems more than production systems shape consumer markets.

From the consumer end, there is already much to say. First, as the population is increasing and more people are able to afford protein, the demand for protein is increasing and will continue to do so in the coming decades. I wrote already many articles about this during the nine years of this blog and the topic is also part of my books. The fact that more and more people can afford food is a positive development. The problem is that more and more of them now actually consume more than they should. Overconsumption boosts the need for more production beyond what nutritional needs are. Overconsumption comes down to excess, waste and pushes our use of resources too far. The goal must be to help people to eat balanced meals and not to overeat. If the purpose of the suppliers of alternative protein is to push for consumption of their products and not address the issue of overconsumption, they will be just as guilty as the current protein suppliers. The future challenge is not just to replace one overconsumption with another. It is to stop overconsumption. Unfortunately, as long as our economic model is about volume growth, one should not have too many illusions. Future food prosperity is really about having always enough, not about always more. To achieve this goal, we must shift from sheer volume growth thinking to high quality (including production of course but also social and environmental) with faire distribution of the created wealth between all links of the value chains, and in particular a fair price for farmers through proper planning between supply and demand. The purpose is to supply affordable food instead of just cheap food with all the consequences that we all can see of the race towards always cheaper. Unfortunately, the volume-driven model is heavily subsidized in the wrong places and that will also have to stop if we want change.

Consumers also need to realize the true value of food instead of taking it for granted because future food is anything but for granted. Regardless of the type of protein, one thing is sure: it is precious and rare. This is much more so than for carbohydrates. Protein should be treated with respect. Here are two examples why I make this point. I remember in the 1990s the CEO of Tyson Foods explaining in a conference that the poultry industry is a producer of lean protein and he lamented that, in the US at least, the favorite use was to deep fry it in cheap oil, and thus completely change the nutritional quality of chicken meat. The second example was during a presentation by the CEO of a German fish fast food restaurant chain called Nordsee, who was mentioning that breaded fish was very popular, but not so much because fish is healthy but because fish sticks were used to be a carrier of ketchup from the plate to the mouth. If the true purpose of meat for some consumers is to be a carrier of oil or ketchup, then this is a problem. Never should a product that required the sacrifice of an animal be used to soak into cheap and unhealthy product when over consumed. Speaking of sacrifice, it is good to remember that the word “sacrifice” comes from the word “sacred”. It is true that often our dealings with animal protein looks more like sacrilegious. This is a useful detail to think about when considering consumption of meat. The thing is that animal protein should never really be a commodity. It should remain special. But that is not the way or economic model has decided.

From the production side, agriculture has followed a similar pattern as most other industries. It is about lowering costs (nothing wrong with that) and standardization (maybe a topic more susceptible to debate). Regardless of what people may think of intensive animal husbandry, this system is not here per accident. It is the reflection of how we look at economy and ourselves. Have no illusion about alternatives to animal protein; they follow exactly the same economic philosophy. I always say that the dominant production system is the one that matches the desires of the larger number of consumers. The saying “we are what we eat” is very true. If you look at it that way, you can see that our economy is just as much about intensive human husbandry as it is with farm animals. Economy is organized around three components: resources, labor and capital. Depending on the prioritization and distribution of these three components, we build different systems. A simple example can illustrate what I mean is mechanization: workers have been replaced by machines backed with capital investment in machines. The tricky thing about heavy injection of capital is that the system becomes capital-dependent. The capital must deliver a return on the investment and very often the only way is inject even more capital, just to keep the head above water. It is good for the bankers, but as many farmers and food producers will tell you, less so for them.

So, will animal farming eventually disappear? Of course, it is difficult to answer this with certainty. My opinion is that it is not going to happen any time soon, if it ever happens. What will change are the production systems. After all, the current intensive production systems have not been around since the dawn of times. They are actually fairly recent. They have changed and are continuously adapting. Production systems that are not environmentally sensible will disappear, simply because they will not be able to be profitable and competitive. The reason for this is simple: sooner or later they will not be able to ignore the negative externalities anymore from their production costs. Environmentally sensible systems will take over. Note that I do not use the term environmentally friendly but I use environmentally sensible instead. I believe it is a much better reflection of reality. Will this transition be smooth? It might be, but it is much more likely that it will not be.

Another question to reflect about is whether animal farming is unnecessary? My answer to this is: no! First, like it or not humans are omnivores. Our dentition can testify about that. That is the result of dozens of thousands of years and it is ingrained in our system. It is nature. We are mammals, even though there’s no shortage of groups who try to even deny our biological reality and try to reduce people –and animals- to legal entities. Between Laws of Nature and man-made laws, we will see which ones will prevail. Our first food –milk- is animal in nature. There always will be people who want to eat animal protein. Every time that economic prosperity has increased, meat consumption has increased. It does not happen per accident. When money is tight, meat is often the first thing to decrease. To get back to the question, I believe that animal farming is alright, as long as it is respectful of the environment, of the animals, and also of the farmers. I believe that animal protein is a privilege what we must cherish, not a right that we should take for granted. Animal protein is not the sole source of protein and there are many delicious dishes to make with vegetal protein. Look at Indian cuisine! If the purpose of animal farming is to stuff oneself, then yes I am with those who have an issue that approach of farming and consumption.

Of course, most of the opposition to animal farming takes place in Western countries. It is kind of a First World problem. If certain animal farming systems are environmental time bombs, other systems are actually beneficiary. In many developing countries, having a few goats or cattle is actually essential for the economy and for the survival of farmers. Pastoral systems contribute to prosperity and social stability. Another important point is the biology of ruminants. Just as much as I was mentioning the biology of humans as the results of dozens of thousands years of evolution, the same is true for animals. Ruminants are amazing processors of cellulose. Humans can thrive on grass, because we are not equipped biologically to extract nutrients from it. Ruminants are experts at that. Since there is about twice as many hectares of grasslands as there is of arable land, grasslands represent a huge food potential and ruminants are superb transformers of cellulose in high-value foods for humans in the form of milk and meat. The key is that must be done sensibly and by taking future consequences into account. Many societies around the world know the value of farm animals. If ruminants are excellent transformers of cellulose, it is also important to mention that they have never evolved to be grain eaters, at least in large quantities. Sooner or later, this will become a much more vivid issue than it is now.

Suppliers of alternative protein bring a number of arguments why their products have the potential to replace “traditional” animal meat. The environment plays a central role, in particular the issue of greenhouse gasses. They also address the animal welfare as a driver for their products. The issue of slaughterhouse by-products is also a valid argument. Theoretically, texture proteins, lab meat, insects and vegetarian diets do address these concerns, indeed. So can alternative protein push animal farming out of business? The answer is complex and I will try to answer it as concisely as possible.

The animal protein market is huge and one cannot expect to replace it overnight. Since the demand for protein is going to increase further, alternative protein would probably happy to take only a chunk of the growth. They have to create their spot in an existing and very competitive market. Textured proteins have been around for decades and they have never represented a threat to traditional meat. That does not mean that it could not change of course. Lab meat is all new and there is at this stage no solid indication that they can even compete with traditional meat on world markets any time soon. They are still a long way of representing a force in the animal protein business. Time will tell. An important detail for both textured protein and lab meat is the number of factories, incubators and texturing lines that they need to build to replace animal farms. That will represent huge investments for which they will have to earn the money to carry out. Competing with traditional animal proteins means engage fully in a commodity markets where margins are often thin. They will compete with independent farmers who are often contracted by corporations and often hardly make minimum wage. These suppliers will have to fight against the huge animal protein corporations and deal with retailers and food service companies with strong bargaining power. Will they really want to take the road to commodity markets? I doubt it, or it will be a very long journey. When I hear or see their pricing objectives, nothing tells me that they are really willing to target the mass animal protein market. It looks more to me that they will try to work from a targeted marketing strategy and will work their way into niches for quite some time. Another hurdle is the consumer perception for their products. Vegetarian products already have exposure and are well-perceived. Lab meat may be a more difficult challenge. The mere fact that lab meat producers want to call it clean meat instead and are already facing opposition from meat producers who claim that lab meat is not real meat shows that they have not solved the perception challenge, yet. Even the term meat is not a given.

Where does that leave us for the future and the issue of animal farming greenhouse gas emissions? Considering the time that I believe it will take for alternatives, I do not see that they will play as big a role as they think and/or claim. I believe that reducing greenhouse gasses emissions will have to be enforced. Regulations on production systems will have to address this. This has to happen today already. There is no time to wait until these emerging industries will have developed critical mass. Also production volumes will have to be addressed. It is likely that if we want to be serious about curbing the environmental footprint of animal husbandry, they will not be many alternatives to capping production volumes. That will be a tough one as nobody will want to be at a disadvantage with their competitors. There will be the exact same discussions as there already are with climate change and those who refuse to participate. Neither governments nor corporations will take effective measures. The answer lies with consumers. They are the ones who have the power to reduce animal protein production and changing production systems. From an environment point of view, the only real option is a reduction of global consumption of animal protein. That is the easiest and fastest path to solve the problem, but I do not expect a massive shift from omnivore to vegetarian of such amplitude that anything significant will happen. Unfortunately and just like with anything else related to climate change and overconsumption, only a minority will really act voluntarily. On the consumer side, if prices remain too cheap to trigger a change in behavior and a reduction of consumption, then overconsumption will simply continue. What I wrote in my previous article will fully apply to the topic of animal protein and animal farming.

Copyright 2018 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

 


Running out of time or simply not running at all?

October 15, 2018

Last week, the UN had a message. We must take unprecedented action if we want to avert a catastrophe because of rising temperatures. The tone is pessimistic, and we all should be, too. We have had warning after warning and let’s face it, we have not done much to really address the challenge. It kind of reminds me that episode from The West Wing https://www.youtube.com/watch?v=-RzF-Wg2g-k (the interesting bit starts at time point 1:00). It is not that concerns about modern technology and so-called progress are new. We knew long before there even were COP conferences, the Kyoto agreement or Al Gore’s Inconvenient truth. Sixty years ago, In 1958, the American (ironic isn’t it, considering the current US views on climate change) movie The Unchained Goddess was already warning about what was coming (see it here https://www.youtube.com/watch?v=x1ph_7C1Jq4 – duration 55 minutes). Sixty years ago, I was not born yet. All that time, we have chosen to not think about it and mortgage the future (possible bankrupt it) for the sake of short-term fun and I guess trying to be cool in some way.

The thing with procrastination is that the longer we wait to take action (and we already have procrastinated more than long enough), the steeper the hill on which we will have to fight the battle. The longer we wait, the more expensive it will be, but I suppose we all think it is someone else who will pay. I consider highly likely that the consequence of that will be a triple bottom line crisis: environmental, social/human and financial (The 1929 Great Depression will look like a holiday camp in comparison). That is my prediction. I am thrifty and cautious on predictions but history tells me that I tend to have a talent for predictions.

There has been and there is no shortage of conferences. You know those places where the self-proclaimed elite meet in obscenely luxurious surroundings enjoying a good time with plenty of good food and drinks. I wrote in an article a few years ago that the “deciders” (who never really decide anything that involves their accountability and commitment) should carry out their negotiations in a locked room without food, water and energy and be released only when they have done their work. I still think it is a good idea, although I have absolutely no expectations that it will ever happen. Well, except when Mother Nature is going to take charge of that.

The question now is: are we going to take unprecedented action? The answer is easy: NO. The obvious clue is that the news lived for about 3 days on the media websites and was not even the main headline. It gives a feeling of humankind is on the brink of extinction, but there are more important news. Perhaps. Clearly, not many people really care. Now that the economic crisis of 10 years ago seems to be a thing of the past (psst: beware it is coming back) and gas prices have been back to lower levels than a decade ago (psst again: they are rising again), car manufacturers have focused their production on the gas guzzlers again. Bigger cars that satisfy the fragile egos of males with insecurity issues in the downtown area is what sells. Well it sells because smaller, more efficient cars do not generate enough margin in comparison, and therefore are not going to be produced. Have you noticed how cars never get mentioned as a problem for climate change? No! Cars are fine and the more they consume, the better it seems to be, not to mention the decisions from the USA to pretty much eliminate anything that tried to alleviate the problem. Apparently, the real problem is agriculture and especially the cows. Those damn cows have been sneakily waiting their hour to take their revenge and finally free eradicate humankind by farting. OK, I will drop the cheap sarcasm. It is true that agriculture contributes to the problem, but I resent agriculture being singled out this simplistically. I will get back about this in a next article.

Agriculture is like most industries. It has evolved from mixed systems in which its by-products where reused and recycled on the farms. As one of my teacher at the Agricultural University used to say: animal production has moved from making high-value protein and fat from cheap food scraps to making cheap fat and protein from high-value feed ingredients. The loops have been open and food production moved from a circular system into a linear one in which by-products are considered useless and thrown away and replaced at the input area by their “replacement” produced with much resources and energy. The good news in this is since we knew how to have a circular food and agriculture, we can revert to it. The only problem is… $$$. The industrialization of agriculture led to much more affordable foods, just like most other industries that enjoy the so-called consumption society, which is actually a transaction society. Sellers do not really care if you even actually use their products. They just want you to buy again and again. This economic system is purely production-driven and linear: large volumes from large capacity units to keep costs low. The problem is this picture is that never ever are the collateral long-term costs taken in the cost break down. These negative externalities, as they are called, are never factored in the accounting and of course never addressed at the quarterly financial reports. There is no true circular economy without factoring externalities in the costs. Here is a note for the young readers, if you have been reading this far without falling asleep with my drivel: you, my poor friends, are the ones who are going to foot the bill of externalities that your parents and grandparents are leaving behind. They are the lucky ones because they have lived in obscene abundance on credit and you are the ones who will pay the interest. Unfortunately for you, Mother Nature (from whose bank the interest will come) does not do bailouts. She does not do politics or BS either. She does not print currency. Mother Nature is a ruthless accountant that believes not in liberalism or socialism or whatever dogma humans have invented to give a meaning to their lives. Mother Nature only lives by immutable laws of physics. Mother Nature is kind, though because she sends us message after message to warn us. We, on the other end, we act like squatters who do not even look in the mailbox to go through the unpaid bill reminders or threats of eviction notices. I hate to bring it to the young ones, but your life is going to be quite different than what you parents and grandparents have enjoyed. I am not a spring chicken anymore, but not really old (at least, that what I like to tell myself), and I am sure that I am going to face a very different world in the coming decades. For me, too, the good times are going to fade out. At least I will have had some. I suppose I could complain that it is not fair to me because I live quite a simple and frugal life and my environmental footprint is low. It won’t matter because life is not fair, and that is a fact of life. If everyone were like me, Wall Street would crash in less time than it takes to type “Wall Street”. I spend very little. I drive about 5,000 km per year and walk or bike every time I can. I repair instead of replacing every time I can, although it is not easy. Yep, I know how to repair socks, believe it or not, and I do it when it is needed. I cook all my meals and as you can see on my good food page, I eat quite well. I have a garden that produces a large chunk of my produce yearly needs. I can and preserve the summer surpluses. I make my own bread, and I also make my own wines. I have a little vineyard out of which I am going to make 6 different types this year. I have a small car because I need one, since I live in a rural area, but it unlike my neighbors who seem to need big engines, my little mules runs a gentle 5 liters/100 km (or if you prefer 47 miles per gallon). Speaking of fossil fuel, I am also the only one in the neighborhood who uses a broom instead of a gas-engine blower and uses a push mower instead of a gas-engine lawn mower, and the funny thing is that I do the job faster than my neighbors and much more quietly, which is a bonus. Another bonus is that it keeps me fit. I have a six-pack while my neighbors have beer kegs.

My point, I suppose, is that a good life is not about lots of stuff and/or being so afraid of missing out on something that you need to be addicted to consumption. Actually, the issue is not so much about consumption as it is about excesses, and the always more, as I have mentioned in previous articles (do a search in the window on top of this page), while we should strive to always enough. When you have enough, you are good every time. If you never have enough, perhaps it is time to reflect about why that is so.

Excessive consumption is only the visible part of the problem. The other –hidden- part is waste. And how wasteful are human beings. The amounts of resources, water, energy and food that are wasted are staggering. Earlier, I was mentioning my little car and my neighbors’ thirsty vehicles. On a same trip, at the same speed, I am sure that they consume between 2 and 3 times as much gas as I do. The extra gas consumption does not add anything to the outcome of the trip. Though, the result is that I use fewer resources, emit fewer gases than they do per mile, and most importantly of all: I spend between half and a third of the dollars at the pump. I have more money left for other things. Frugal pays off, big dividends.

A large part of the waste is truly a behavioral problem. Technology may help, but if behavior and attitude towards waste do not change at the same time, do not expect technology to save us. It won’t. Only WE can save ourselves, technology won’t, other people won’t. It comes down to the quote from Ghandi “Be the change you want to see in the world”. We want technology for a simple reason: we do not want to change because we are lazy and lack self-discipline.

Food waste has become a mainstream topic. I addressed it in my two books but it was before the UN addressed it. Sad that such a large organization with their resources could not figure that out before an independent guy like me working from his home office. I even had estimated the cost right. Can you imagine? Anyway and even with the higher profile the issue has received, they are a few waste issues that I never read about.

Obesity is presented as a health issue. It is, but it is also a major waste issue as well. Over consumption of calories that end up being stored in body fat are wasted calories. They serve no purpose, since the overweight people never really benefit from them, or when they die, the fat is buried under ground or cremated. Totally wasted calories that never fulfilled their purpose. In a world where, like in developed countries, people consume twice their nutritional needs in calories, fats and protein, feeding 9 or 10 billion people is not feeding 9 or 10 billion people; it is feeding 18 to 20 billion!

Other waste topic, I never read about (but I suspect I will in a few months from now) is also about fat: the fat in the meat that consumers cut off and throw away. The sad thing about fat in meat is that it requires much more energy for an animal to grow fat in its tissue than it requires to grow muscle. For the biochemists among you, the difference is fat requires two times as many ATP (Adenosine Tri Phosphates) to fix the same amount of fat than it does for muscle. ATP is the fuel used in mitochondria, the microscopic power plants inside our cells. Roughly, throwing fat away cost twice as much as throwing lean meat.

And what to say about food recalls? Food that is unfit for consumption gets destroyed and all the resources used along the entire value chain to produce have been wasted. It represents a lot more than just the tonnage of food that must go to destruction. I suspect the reason why we never connect the dots between the links of entire value chain is just because the different links of the chain are active within their own area. In a linear system, collateral waste and externalities are always someone else’s problem. In a circular system, it is everyone’s problem. It creates very different dynamics in terms of co-responsibility and solidarity and also willingness to act.

I hate waste, and in particular food waste. I am very rigorous in how I manage the foods I have at home. Unfortunately, it happens sometimes that something goes bad. It is rare, but it happens and it ticks me off beyond belief. Ask my wife about that! When that happens, I always cut out just what is not edible at all but no more than that. I will pinch little crumbs of bread out where the mold is and I eat the rest. Sometimes it does not taste great, but if I screwed up, it is only fair that I get some punishment for it. It never made me sick. All in all, I do not think that I waste even a pound of food a year, so I guess I am doing fine. Further, any organics, such as potato peels or even egg shells all end up in the compost that I use in my veggie garden. In town, we have a yard waste collection schedule from the municipality, but I hardly ever use it. I recycle all I can.

My conviction to meet the “unprecedented” efforts to curb the effect of climate change is to live a good but simple life. There is nothing that frustrates me more than those who oppose action on environment and jobs. They are not mutually exclusive. Actually they can work together, but the rules and laws need to change and integrate the externalities. Unfortunately, I do not see government leaders or business leaders even trying to get this done. After all, it is easier to pass it onto the next generation.

Trying to keep up with the Joneses or impress one’s little social circle with stuff is not my thing. Actually, moderation helps appreciate things better. Much better. Instead of wasting money on always more stuff, I prefer to buy quality stuff that lasts and to buy only when I need something. If I don’t need it, why should it clutter my home while not fulfilling any function? That is pretty stupid if you ask me. A long time ago, I posted on this blog an article titled “We will change or eating habits, one way or another”. You can be sure that sustainability, especially with a world population growing, is about “we will become frugal, one way or another”. Sustainability and excess do not match well. Be assured that Moderation is a key word if we want a prosperous future, and prosperity really is about inner harmony and happiness. Prosperity is not about more stuff; that is for empty people. The other key word for the future –and that is in stark contrast with our current philosophy of economy and of life is: Humility. How do we move from a world where so many of us use social media as their own narcissistic issue of People magazine in which they take center stage as self-proclaimed I-am-the center-of-the world-look at me? I venture for some time on Twitter and I left. I did not even try Facebook as soon as I got the form asking for personal information on my screen, and I think it was the smart thing to do.

So, will we make it? I believe the answer is the same as the one I gave to a journalist who was asking me if I thought we could feed the world in 2050: “Yes we can but it will take a terrifying crisis before we do what it takes”. I ended up Future Harvest with “we can but will we?” and We Will Reap What We Sow takes it from there. The cover has two halves: a prosperous farm field and a devastated barren land. I see many more signs that we are heading towards the latter, not the former. Maybe there is hope, though. Today, the Great Pumpkin said that he did not think climate change was a hoax after all.

Copyright 2018 – Christophe Pelletier – The Happy Future Group Consulting Ltd.


Feeding the future with focus on health and environment

February 2, 2017

In my opinion, the food and agriculture sector does not receive enough praise for its performance. Over the past four decades, the world population increased by 80%, which means that farmers have been able to supply food for an additional 3.3 billion people during that same period. Unfortunately, the number of hungry people has remained about stable, around a billion people. Every person who is hungry is a hungry person too many. There cannot be any discussion about that, and there still is a lot of work to be done. This is no small feat. Clearly, there is plenty of room for improvement, especially when you consider that about a third of the food produced is wasted but that means that the potential to supply future food demand is there.

nutrition

Image created by Paula Nettleton Source: Educational Materials Center (EMC), Central Michigan University

The discussions about meeting future food demand always tend to focus on production volumes. Of course that is the minimum requirement but to meet all other challenges, it is necessary to broaden the scope beyond volumes. Production is only half the equation. The other half is consumption. There is a lot of work to help consumption patterns contribute to a balanced future between supply and demand. The ongoing increase of obesity and diabetes are at least as worrying as hunger because of the negative health, environmental and economic consequences. One of the most important roles in the future for the food and agriculture sector will be to help people feed themselves properly. There is a need for this and it goes far beyond a marketing exercise. The basis for success will have to be education about nutrition and home economics. There already is action in these areas but it will be necessary to move towards a collaborative education, centred on physiological needs and how any particular food product contributes –or not- to healthy meals. The purpose will not have to be about enticing consumers to eat more volumes but to make educated decision and pick the right ingredients. Changing the focus from always more to always enough will also require a change in which foods to produce and what their future physical and organoleptic qualities will have to be. It also will change the dynamics of markets and on which criteria farmers get paid. Collaborative education will have to be carried out by and with full involvement of all stakeholders. It will have to place human physiological needs as the primary focus. Consumer well-being will have to come first, before particular interests and before volume.

Making future food and agriculture sustainable requires that we address both production and consumption. Waste and excess do not fit in a sustainable future. Food waste is only a part of the total picture. When food is wasted, all the inputs required, such as water, energy, fertilizers, crop protection and money, are all wasted in the process. Overconsumption is not a sustainable strategy either. It takes a lot of resources to produce all the excess calories and protein than end up producing nothing else than excess human body fat. Until the rise of mass consumption, our grandparents knew what sustainability meant. It was about saving and about moderation. These two concepts vanished from the moment that consumption goods became so cheap that and consumers lost touch with scarcity and long-term negative effects, also known as negative externalities. It would be an eye opener to quantify these externalities and include them in the cost structure of consumer products. The consumer price and/or the producer margin would look different! Although it is quite a difficult exercise to quantify the externalities, just carrying it out would give some good insights about the limitations of the current economic model and in which areas it needs to change. Such a calculation would help rethink many of the existing financial incentives that drive the economics of food and agriculture, in particular many subsidies that find their origin in times where the objectives were quite different than the ones of the future. For example, health issues related to food should be considered as externalities. Many governments have calculated estimates of the cost generated by these two diseases. If society were to be able to quantify what part of the amount should be factored in food, as well as lifestyle and distributed between the entire chain from farm to patient, and to try to estimate the relative part of responsibility between the different links of that chain, it certainly would give a good indication of how to look at future economics of a healthy and satisfied society. The price of food would change but the key would be to have it change in a way that helps a better nutrition and better health while keeping good food affordable.

Copyright 2017 – Christophe Pelletier – The Happy Future Group Consulting Ltd.


Changing economics to overcome future challenges

October 21, 2016

First, a personal story

A year ago, I moved away from Vancouver to the Okanagan Valley Region some 300 miles east from Vancouver. There, I bought a property with a decent yard where I will have a garden and with a small vineyard. In some way, it is an illustration of what is necessary to foster sustainable practices. The parallel is obvious with some of the global challenges the world is facing and will continue to face in the future. For eight months of the year, the area looks and feels quite similar to the Mediterranean. Precipitations are not abundant with an annual quantity of only 337 mm. Clearly, water is scarce and needs to be preserved, even though an extensive system of lakes fed by mountain snow ensures an adequate supply of water. The region is quite agricultural with many orchards and vineyards, all thanks to irrigation. There are also many lawns in the area and the estimate is that about 25% of the water consumed in the region is just to keep the lawns green.

My plan is to install rain barrels to collect the water from rain and snow and use it for the yard. This is where the economics do not go in parallel with all the talk from politicians about sustainability. Around the house I would need five rain barrels. The lowest and best retail price I can find is of about $80 for a 200 liter barrel. To set up my water collection system, it will cost me $400 to provide me with a 1 cubic meter storage capacity. In comparison, the price for a cubic meter that the municipality charges for water is $0.30 per cubic meter. In the most ideal situation, that is if I were able to collect all the rain and snow through my five barrels, I would at most collect about 30 cubic meters per year. In money, it comes down to a saving of roughly $10 per year. To break even, I’d better hope that the barrels will last 40 years, which they might, but considering my current age, there is a fair chance I may have moved to a much smaller underground dwelling by then. Of course, my example is about quite a small investment and if the return is lousy, it will not change my life. At least, the barrels will help me save water.

The point of my story is that the comparison between cost and benefit would deter most people to consider buying rain barrels. It just does not make financial sense, if money is what matters. I always say that money talks and what it says here is to forget about being sustainable. One of my neighbours also considered installing solar panels on the roof of their house. After comparing the price of the panels plus installation and maintenance with the electricity savings, they discovered that it would last twice the life of the panels to break even. In terms of money, solar panels are a different kettle of fish than my five rain barrels. Recently I saw the price of a propane generator that produces 3650 watts for Canadian $350 while a solar panel that produces 100 watts is sold for Canadian $250. I can understand people decide to not pursue the solar option.

The economics of water and energy savings that I just described can be extrapolated to the much larger picture. All through the food and agriculture value chains, many changes for more sustainable systems face the same kind of dilemma. What makes sense from an environmental point of view often does not make sense financially in the current economic environment. Demanding more sustainable production system is quite legitimate and sensible, but the conditions must also be there to make it happen. The numbers have to add up for farmers and businesses to make the switch. As usual, money is of the essence and it can come from different sides.

First, the purchase price and the cost of operation of alternatives have to come down and be competitive. Either suppliers are able to drop their prices or offer more efficient systems. Governments also can help through subsidies to ease the pain. Subsidies, being public money for the general interest, it is only fair that we all must pay if what we want is a sustainable. Subsidies must of course be set up properly and be effective

Second, the customers, which in a fair value chain would be eventually the consumers, have to pay for extra cost of the better production systems, simply because our consumption societies with their sense of entitlement have to understand that there is no such thing as a free lunch. Such a realization also means that producers also understand that mass production that only deplete resources do not fit in the long-term picture and that value will have to replace volume.

Searching for a new economic model

With the many challenges arising from a growing world population, it becomes more and more obvious that the economic model of the past six decades needs some refreshing. As such providing consumer goods at an affordable price for the masses is not a bad idea. Helping people to have a more comfortable and pleasant life is certainly welcome by most of us. The problem is that the so-called consumption society is not so much aboutpillars-of-economy consumption as it is about people buying and giving their money to someone else. In the current system, consumption is optional. Research has shown that consumers use 75 to 80% of the goods they buy no more than once.  What really matters is the act of purchasing the goods. It is good for growth and the GDP, currently the leading metrics for the state of the economy. The problem is that mass production has gradually shifted from affordability to cheapness and from value to price. It has focused mostly on volume and has not taken into account that consumers would have to get rid of what they bought after usage. Negative externalities have been kept external indeed. Short-term financial results have had the preference and long-term impact has been ignored. The system is hitting a wall and issues of greenhouse gases emissions and waste of resources are now becoming urgent matters to address. All industries will be affected one way or the other. Food and agriculture will be no exception.

The big question is how to change the system without having it implode. That is not an easy one to answer but sooner or later it will have to change. Vision and leadership are crucial to manage the transition. I wish I had seen more of it. So far, I see and hear more about pro this and anti that. It is highly insufficient and produces more noise than results.

In my opinion, the problem is not so much about growth as it is about what growth means. Over the past decades, growth has been mostly about volume numbers. It has been a quantitative growth. I believe that the best transition towards the next model is to focus on what I call qualitative growth. It is not so much about volume as it is about adding value to the buyer. For consumers and countries, qualitative growth would be to quantitative growth what EVA (economic value added) is to turn-over for a business. It is about prosperity.

For food producers, such a shift will lead to a different approach. The most valuable areas of value added for consumers and society lies probably in providing good and enjoyable nutrition, yet affordable, through advice and education. The industry will have to help consumers eat better and help them have healthy diets. It will go beyond just supply food. Consumers will also have to rediscover what proper nutrition is. Initiatives such as the Global Access to Nutrition Index can play a pivotal role in helping food producers make the transition towards quantitative growth. The food sector has also an important role to play in keeping our environment livable. The trend towards transparency is an important part of the evolution on both health and environment fronts.

Of course, such a change of economic model means that the economics must change, too. It is also essential that those who do the right thing must be rewarded. A new reward system must be introduced in the set of rules and regulations so that producers get the proper incentive to make the shift because adding the type of value that I mention to consumers also requires a different price tag in the store, or at least a different breakdown of costs and benefits along the entire chain from producers to consumers. How to distribute fairly the cost tag of the change is still open for debate. The reward system has to apply for the business activity by allowing margins to be comparatively competitive in the new situation. Consumers doing the right thing must also be rewarded. The reward system should also apply at the remuneration level. In particular, the share of qualitative improvements in companies’ bonus systems will have to increase at the expense of qualitative growth targets.  The adjustments needed in the food and agriculture sectors will not end in this sector. They will have to include other area of government. In particular the health sector will have to be involved, as the consequences of the quality of nutrition on health are obvious for individuals and society both at the personal as at the financial level.

I also believe that such a shift in economic model will mean that business partners within the value chain will have to challenge each other to carry out the transition and it will become a critical point in choosing with whom to do business in the future.

Copyright 2016 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

 

 


Nature will reshape food value chains

October 15, 2015

The recent climatic events, in particular droughts, have attracted more attention on future challenges for food production, and rightly so. Unfortunately, the mainstream media cannot help presenting the as all gloom and doom. Certainly, there are very serious reasons for concerns, but solutions can be found. I wish the media would present more examples of positive actions to face and overcome the challenges.

It is not easy to deal with a changing environment, especially when it is impossible to predict accurately what the change will be. Predictions about temperature increases are useful but they are quite insufficient. An increase of 2 degrees on average will be different if the standard deviation is 1 degree or if it is 20 degrees. Other factors such as hours of sunlight and precipitations (including their nature, frequency and intensity) will impact agriculture at least as much as average temperatures. Changing climatic conditions will not only affect plant growth and development, but they will change the ecology of weeds and pests as well and that needs to be factored in future forecasts and models

Nature will reshape food value chainsA special attention on water is necessary. Without water, there is no life. Unfortunately, over the past few decades, wasting natural resources has been a bit of a way of life. The issue of food waste has finally received the attention it deserves, but the waste is not just about food. It is about all the inputs such as water, energy, money, time, and fertilizers. Water is still wasted in large quantities. Just compare how many liters a human being needs to drink compared by the amount of water that is flushed in bathrooms every day. Before the housing crash of 2008 a study in the US had estimated that lawn watering used three times as much water as the entire national corn production. But the issue of water is not just about waste. It is also about preserving water reserves. The late example of the drought in California illustrate what water scarcity may mean for food value chains. California is not only a major agriculture power house, but it exports a large part of the production outside of the state’s borders. The issue of water scarcity and the dwindling level of the Colorado River are not new for Californian agriculture. It has been known for a couple of decades that problems were coming. California produces a lot of water-rich fresh produce by means of irrigation. It actually has been exporting its water in the form of lettuce, spinach, melons, strawberries and citrus far away to places from where the water will never return to California. The water loop has been broken wide open and that is why, among other reasons, the system is not sustainable. If California can no longer supply its current markets, it will have to rethink its target markets. At the same time, other regions, that may not be competitive with California today, because externalities are never included in the cost of production, will eventually take over and replace the Golden State as suppliers for some productions. Unfortunately for the future, California is not the only region with a water problem. Saudi Arabia changed its food security policy a couple of years ago as the country leaders realized that trying to produce all its food would lead to a severe depletion of its available drinking water reserves. Instead of pursuing food self-sufficiency at all costs, the country chose to find other supply sources through international trade and through the purchase of farmland in foreign countries. The examples of California and Saudi Arabia demonstrate how natural –and demographic- conditions shape food value chains. The issue of water is not just about produce. Animal productions require usually more water than vegetal ones. In the future, water availability will surely affect where which kind of animal products are produced. New regions will arise and old traditional ones may review their strategies from volume-driven to higher margin specialty animal products market opportunities because of environmental constraints.

Climate change and water scarcity show how international trade can actually contribute to food security when done responsibly and with long-term vision. The prevailing model of producing where it is cheapest to produce without taking into account negative environmental externalities is facing its own contradiction and demise. The next model will be to produce not only where it is the cheapest to produce but where it is sustainable to do so. When water runs out, it is no longer possible to ignore the externalities of a production. When water becomes scarce, it gets more expensive. The law of supply and demand commands. When inputs get more expensive, several things happen. The economic model shifts. Priorities and externalities change, too. At first, producers try to find ways to increase efficiency and eliminate waste. The benefits outweigh the additional costs. Uncertainty stimulates innovation. New systems, or sometimes old ones that found a second youth, replace the current ones. If that does not work well enough, then producers start considering producing something else to ensure the continuity of their operation and find new business.

It is not the first time that our natural environment changes. Finding successful solutions to deal with it really are about our ability to adapt and to preserve our future, as it has been the case in the past. The challenges may be of a magnitude like never before, but so are our knowledge, our technical abilities and the tools present and future.

From an agricultural point of view, adapting to a new environment is about finding the type of production that thrives under new conditions. It may mean different areas of production for some species. In North America, there is already a shift for corn. Iowa has traditionally the main grower, but the corn production area is now expanding north. Minnesota is now producing more corn than in the past and so are the Canadian Prairies. Similarly, the production area for soybean is shifting north. Minnesota is growing an increasing volume of soybean and even in the province of Manitoba in Canada, soybean production attempts have been carried out since a few years.  It is the result of better production conditions and the development of new varieties that can adapt to new less favorable climatic conditions. Because of the local supply for soybean, the development of aquaculture with local soybean products for fish feed is now considered a long-term possibility in Minnesota among others. In Europe, corn production regions also saw a shift to the north for corn during the 1970-80s thanks to the development of new varieties, which largely contributed to the growth of dairy production in these new areas through the widespread use of corn silage. For the future, there is no doubt that genetics will contribute again to ensure food security. There is currently a lot of work done to develop varieties that can withstand droughts, floods or soil salinity. The ability to know the complete genome of species, to spot genes through gene markers, to be able to create new varieties that are less sensitive to diseases help speed up the development of crops that can thrive under future conditions. The recent developments in synthetic biology are quite interesting. Research conducted at the IRRI (International Rice Research Institute) on the development of rice varieties that can have a higher photosynthesis efficiency and thus higher yields could open new perspective for a more productive and more sustainable production.

Next to the development of better and more adapted seeds and genetic material, the development of new technologies that I described in a previous article will bring a number of effective solutions as well. In particular the rise of precision agriculture is certainly quite promising. The ability to deliver to the crops exactly what they need when they need it at the right time and at the right place in the right quantity will help reduce the environmental impact of agriculture while offering the possibility of delivering higher yields. Similarly, in animal production, there still is room to improve feed efficiency. It can happen through further genetic improvement, the use of more efficient feed ingredients and feed composition and through better farm management. The latter is definitely an essential facet of a better future for food production. Better and updated skills for food producers will help being more efficient, more productive and more sustainable at the same time.

An area that is often forgotten when it comes to the future of food is the functioning of markets. If demand for certain products, and in particular animal products, increases faster than supply, price will go up and there will differential increases between the different types of products. As most consumers, unlike what marketers sometimes tend to make believe, still choose what they eat depending on the price of foods, there will be shifts. Some productions will thrive while others will struggle.

As prices still will be an essential driver of the location of the various vegetal and animal productions, markets and environmental constraints will increasingly have a joint effect. In the future, the dominant economic model of producing where it is the cheapest to produce will evolve. As the pressure on water supplies, soil conditions and pollution issues will keep increasing, the model will include an increasing share of negative externalities. They are the long-term costs that are never factored in the production costs but that will affect future production economics. Externalities are the hidden side of sustainability and they will determine the future map of agriculture, as it will no longer be possible to ignore them. Choices will have to be made between short-term financial performance and the long-term ability of various regions to be able to produce, and to keep producing, the volumes and the quality specifications that are needed by the different food markets of the future.

A friend of mine told me a couple of years ago after a trip to Asia how she could see from the plane the large plantations of palm oil trees, and how they had replaced the jungle. She described her impression as the view resembled the strategic game of Risk to her. Yes, climate change and water availability in particular, will reshape food value chains because agriculture, regardless of it scale, is a strategic activity. It is about life and death. It is about peace and war. Future strategies for both global commodities as well as for local food value chains will integrate Nature’s new deal of precious resources and conditions of productions. Together with the geography of future consumption markets, world agriculture will readjust, relocate and the Earth will look different once again.

Copyright 2015 – Christophe Pelletier – The Happy Future Group Consulting Ltd.