The quiet revolution of food retailers

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

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

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

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

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

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

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

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

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

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

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

Copyright 2010 – The Happy Future Group Consulting Ltd.

What if agricultural subsidies were a good thing?

Over the past decades, agricultural subsidies have received an increasingly bad publicity, especially as a major part of the WTO Doha round of negotiations is aimed at removing them.

Yet, with an increasing world population and the need for more food production, one can wonder whether agricultural subsidies really are a problem. History has shown that subsidies can be a very effective way of boosting production. For instance, subsidies have been a major element for the European Union to increase its agricultural production in the decades following WWII. To show how effectively money talks, you just need to see how financial incentives have made European vintners pull off vines, then replant them pretty much at the same place later. Subsidies have encouraged Spanish farmers to plant many more olive trees than the olive market needed. Subsidies work. When people are paid to do something, they usually do it quite willingly.

The true problem with subsidies is to have a cost-effective system. Subsidies must help produce what is needed. They are only a means and they must not become an end. Subsidies also need to deliver the right incentive to be effective. Too often, they have adverse effects because they do not encourage the right behaviour. An example of subsidy that seemed to aim at the right action and yet did not deliver proper results is the subsidy on agricultural inputs by the Indian government. They subsidize fertilizers with the idea that, this way, fertilizers would be more affordable for farmers and therefore the farmers would be able to increase their yields. As such, this is not a bad idea, but the practice showed a different outcome. Farmers with little or no money were still not able to buy enough fertilizers, and richer farmers just bought and used more fertilizer than necessary. The result has been an over fertilization in some areas and an insufficient fertilization in other regions, as I explained in more details in my book, Future Harvests.

For subsidies, too, quality must come before quantity.

Subsidies must be a part of a comprehensive plan towards the essential goal: feeding more people. They must be part of a market-driven approach, and they should not to entertain a production-driven system. Subsidies, or should I call them government support, take many forms and many names, from straight subsidies to grants, “market support mechanisms”, “export enhancement programs” or specific tax regime for farmers, etc… There is quite a bit of semantics involved. Perhaps the stigma on subsidies comes from their being granted by governments. Aren’t private investments just another type of subsidies? After all, that money aims at encouraging more production. The main difference is about the kind of return. Private investors look for a capital return, while governments look for a societal return.

A positive example of effective money incentive linked to a comprehensive approach that involved government and private companies is the rice production boost in Uganda (which I also present in Future Harvests). This effective policy helped increase production 2.5 times and turned Uganda from an importing rice country to a net exporter within 4 years!

I believe that the main bone of contention about subsidies is the competition on markets. Every player involved on world markets, either importers or exporters wants 1) to have the best conditions to compete against others and 2) wants to make conditions for others to compete as difficult as possible. The untold story is that many countries would like others to cut their subsidies while keeping (some of) their own. Only the competitor’s subsidies are unfair. Moreover, addressing subsidies is not enough. At the same time as subsidies, all import restrictions, such as anti-dumping tariffs or import duties should be looked at, as they are blatant attempts to skew the competitive positions.

The issue is not really aimed at developing a comprehensive plan to feed the world. The Doha round started in 2001, but since then, we have had the food riots of 2008 and the spectre of further food inflation. This, too, should be taken into account.

Considering how critical financing is for farmers, and that many farmers (more than half in the USA) need a second job to make ends meet, some form of financial support is generally very useful. Also, let’s not forget that we will need farmers for the future and agriculture needs to be an attractive profession if we want to have the people that we need to produce all the food!

Copyright 2010 – The Happy Future Group Consulting Ltd.

What a game changer my book is!

Future Harvests has been published less than two weeks ago, and it is going to change my company rather profoundly.

What started as a blog on the side of The Happy Future Group Consulting Ltd. is now about to become the very core of my business.

Not only the book sales are already higher than I would have thought, the book is creating much interest for my other activities. The book has already been shipped not only to Canada or the USA, but also as far as South America, Asia and Europe. This is truly amazing.

The reactions to the announcement of the book’s publication have been amazingly enthusiastic and they made me feel like I had just produced something that many were waiting for. This is both very rewarding and very humbling, because working on solutions for future food supply to an increasing world population is a huge task. Since the publication, people with whom I never had contact before, from all around the world, have approached me, thanking me for having engaged in this venture.

New contacts are asking me to participate in conferences and to organize workshops and seminars for them. The CBC (Canadian Broadcasting Corporation) is interested in having me on one of their programs. Of course, the concrete discussions are still to come, but I have to admit that my Food Futurist is now showing incredible potential.

The part on policy making and strategy is getting more attention, too. This activity has the potential to become a solid business that will need to involve more people in my organization. I have already started to develop a plan for this. I can see interest coming from companies, professional associations and governments, not only in Western countries, but in many emerging countries, such as in South America, Southeast Asia, India, or Russia to name a few.

The first step that results from all of the above is for me to formalize the Food Futurist further into a more structured activity than it has been so far. This has started with my defining and posting the mission on all the business pages of the website. The mission is “To help our clients challenge today’s certainties, shape the future, and manage the transition with a targeted and practical action plan for the coming 10 years and beyond”.

The following step is going to be to develop business around this mission and the principle expressed in Future Harvests.

If you are interested in this, please do not hesitate to contact me. Talking is cheap. If you know people who would be interested, please pass it on to them.

As Humphrey Bogart’s character said in the movie Casablanca, “I think this is the beginning of a beautiful friendship”.

Countries mentioned in Future Harvests

Here is a list of all the countries that appear in my book, Future Harvests:

Afghanistan, Angola, Argentina, Armenia, Australia, Azerbaijan, Bangladesh, Belarus, Belgium, Brazil, Burkina Faso, Cameroon, Canada, Chad, Chile, China, Congo, Côte d’Ivoire, Cuba, Denmark, Ecuador, Egypt, Ethiopia, Fiji, France, Germany, Ghana, Greece, Guinea, Hungary, India, Indonesia, Iran, Iraq, Ireland, Israel, Italy, Japan, Kazakhstan, Kenya, Kuwait, South Korea, Lebanon, Libya, Madagascar, Malaysia, Mali, Marshall Islands, Mauritania, Mexico, Moldova, Morocco, Mozambique, Nauru, Netherlands, New Zealand, Niger, Nigeria, Norway, Pakistan, Palau, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, Senegal, South Africa, Spain, Sudan, Sweden, Syria, Tanzania, Thailand, Tunisia, Turkey, Tuvalu, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uruguay, Venezuela, Vietnam, Zimbabwe.

Quite a trip around the world!

Future Harvests – A preview of the book

My book, Future Harvests, is expected to be published before the end of August.

Here is a preview to give you a flavor of the content.

For a full view, please click on the thumbnails.

 

 

 

 

 

 

 

 

 

 

Here is a sample containing the table of contents and the preface of the book:

 

For the video trailers, please visit my YouTube channel.

Beyond the book

Now that the publishing company is working out the final details before the release of the book, time has come for me to spend some time again on the blog part.

During the making of the book, I have been asked about my opinions on a number of subjects. Listing opinions was not the theme of the book, but the blog is a good vector for this. In the course of the coming weeks and months, I will review as concisely as possible specific subjects, present which areas require attention and how I believe the topics will evolve in the future. If you have any request, please let me know.

In addition to these articles, I will develop new topics for seminars and conferences that relate to the book and that offer matter for reflection to the attendees. I also will introduce new modules aimed at improving organization and efficiency of –and within- food value chains. The purpose of these modules will be twofold. They will help participants understand the broader picture, and they will help improving the functioning and the performance of business relationships. This is not only about economic performance, but also about technical, environmental and social performance.

 More about this soon.

Future Harvests – The book is coming soon!

 

The editing of my book “Future Harvests – The next agricultural revolution” is about completed. All that is left to do is developing the cover and start the publishing.

I have already received orders, even before the book is out. That is quite a good sign. And a great surprise for me.

If you wish to be updated automatically when the book is published, just subscribe in the sidebar window on the right.

To describe the topics addressed, I have posted three short promotional videos on YouTube. In previous articles (The fun of writing this book and The next agricultural revolution), I had already given an idea about the content of the book.

Video #1: The Fundamentals (duration 2:37) – Introduction to the background and fundamental principles mentioned in the book “Future Harvests – The next agricultural revolution” to achieve food security for 9 billion people in 2050. Topics such as demographics, the shift in economic power, the control of food  and food security strategies are reviewed. Sustainability, innovation, efficient market driven food production and strong leadership are required.

or click here if video does not appear

Video #2: The Actions (duration 2:12) – A short review of some of the actions mentioned in the book to achieve the objectives. Solving the water challenge, finding new land for production, urban farming, hydroponics, farming the desert, rebuilding fisheries and developing aquaculture further are all possibilities.

or click here if video does not appear

Video #3: The Questions (duration 3:08) – A sample of some of the questions raised in the book. They cover technology, land deals in Africa, improving yields, restoring soil fertility, change in consumer needs, organic farming, risks of conflicts, biofuels or meat are some of the topics presented.

or click here if video does not appear

If you know someone who could be interested by the topics on this page, please pass it on!

The fun of writing this book

Over the last few months, I have been working quite a bit on writing this book about the future of agriculture.

I must say that compiling in one book a wide range of topics that, without any doubt, will be part of the future of our food production has been an exhilarating experience.

From demographics in full motion to the latest in technology, we can envision many different scenarios to set up the most efficient food production possible, as local farmers, industry NGOs and governments will need to find optimal solutions with the land, the water, the labor force and the capital available to them. Water and soil will be of vital importance, and their proper management is essential for the stability of many countries.

In the future, there will be no room left for wastage and inefficiencies, or we all will be punished if we get complacent. Similarly, we will need to change our thinking and accept that solving future problems will not be about transferring a one-fit-all model to very diverse situations. We might have had the illusion that it once worked, but it actually did not. We will learn from the mistake of the past to perform better. Sustainability is not an option; it is the only choice, because per definition what is not sustainable is doomed.

As food is a necessity, and since when we share between 9 billion people there is less left for each of us than when we shared between 4 billion, efficiency will be paramount. This will affect food prices and social stability. Technology is necessary but it is not the panacea in itself. The most needed resource for the future is strong visionary leadership to help us develop the plan for the next decades.

Let’s prepare ourselves for a deep change and we must accept the idea that we might have futuristic farms run by robots, satellites and computers in some regions as well as local urban gardeners in the heart of the cities, where 70% of the world population is expected to live. We will have small organic farmers and we will have large industrial farms using genetically engineered crops, but we also will have large highly efficient semi-organic farms that will combine the best of both worlds. We still will have specialized farms as well as mixed operations. Hydroponics and aquaponics will grow substantially in the future.

Today’s diet will be revisited and excesses will be out of place. Should we become vegetarians or do we simply need to eat less meat? Will aquaculture live up to the expectation and become the main source of animal protein? You will find out in the book.

Countries will have to think on how to guarantee food security to their populations. If it is not done well, this challenging task might end up in serious conflicts. Foreign and private investment in land and farming will continue in Asia and Africa. If managed properly, they will bring much prosperity to these regions, but if not managed properly, then we can fear the worst.

All these topics and many more will be presented in the book and I hope that it will help readers to understand all the variables that are at play, as well as it will help them get a more objective view of many controversial topics such as GMOs, nanotechnology or in-vitro meat. Once readers will have finished the book, they will be able to figure out whether and how we can feed 9 billion people. Thanks to examples from all over the world in as diverse countries as Uganda, Kenya, the USA, China, Indonesia, India, Brazil, Argentina, France, The Netherlands, Cuba, Kazakhstan and many more, we discover a myriad of different situations and solutions that illustrate human ingenuity to produce food.

However, for now just a few more months of patience as I need to get through the process of publishing.