Perhaps the ultimate challenge

Posted on July 1, 2017 by Christophe Pelletier

There certainly is no lack of challenges on the path to feeding a growing world population, but a successful future does not just stop with food volumes. Beyond quantity, it is necessary to ensure that people eat balanced diets. Of course, this is true for those who are food insecure and need help to be able to access more food, but it just as true for the overweight and the obese. The health cost to society is high and is so the cost to the environment. Although excess calories end up as body fat and not in landfills, overweight and obesity should be looked at as food waste nonetheless. After all, body fat is food that has been produced but not consumed for any useful purpose. The problem is only getting bigger as rates of obesity are increasing among the population of emerging countries and are reaching alarming levels. It is not a Western countries’ problem anymore. It is a global one. There is no one particular cause to explain this trend, but it is a combination of lifestyle, example at home and education about the basics of nutrition. We are what we eat and we eat what we are. Diets are undoubtedly a reflection of society and its values.

One of the drivers of today’s economies is growth and too often this concept is restricted to quantitative growth. We must be honest and recognize that our food and agriculture systems still are greatly production driven. Although the idea of a market-driven approach is widely spread, the practice seems to differ, and it looks like it is only translated in marketing-driven instead, always with an underlying production-driven thinking. About all food sector and companies always look for ways to sell more volume. There is competition within any particular industry, but also between industries. For example, in the animal protein sector, poultry, pork, beef and fish are always trying to get a higher stomach share at the expense of one another. Usually, the main decision factor for consumer to make their purchase is the relative price of one type of protein versus the others.

The main message that consumers receive every day is: eat more of this or more of that. Then, it is only normal that they do just that. Why expect any other behaviour? The result is a value system of always more, without really thinking about how it all adds up, while it should be about always enough. Overconsumption leads to waste and to unbalanced diets. Waste is the number one enemy of sustainability, and educating the public about proper diet is actually an important weapon in fighting waste, but it is a difficult one. Although good habits are generally not any more difficult to adopt than bad habits, it seems that the latter group is more attractive. Changing eating habits is all about education. It starts at home and in school. Actually, it is rather easy to learn about the proper ratios between protein, fats and carbohydrates –both fast and slow ones- that are needed in a balanced diet. Information is everywhere, but unfortunately, the lack of education and therefore knowledge about nutrition results in many consumers having no idea how to read labels and how to compose proper meals. If our lifestyles and our needs have undergone major changes over the past five or six decades, physiology of digestion and nutritional metabolism have not changed much at all over the tens of thousands of years that humans have been roaming the planet. It would seem obvious that such an essential element of life should be common knowledge, but it is not. An interesting experiment is to ask people at random what the nutritional needs of an average human being are. Usually, people have an idea about how many calories a person should eat on a daily basis. When it comes to how many grams of protein and even more so fat, then the faces tend to turn blank. Another even more interesting experiment is to ask the same question to people working in food and agriculture. Just go ask how many calories, how many grams of protein and fat. It is an eye opener.

It is possible to make consumer behaviour change from harmful to healthy. There are lessons to be learned from the example of tobacco. To change, consumers need the proper incentives, but the bottom line is that people change only if they perceive the change to be an improvement. Since eating habits rest on powerful psychological triggers, the difficulty is in finding the right triggers and creating a perception of reward. Food producers have a critical role to play in this transformation, and it has to be a collective and collaborative effort with all other stakeholders as well.

My Wish List 2017

Posted on January 5, 2017 by Christophe Pelletier

Another year just started. It is always a good time to reflect a bit. As I have focused my activities for quite a few years on how the future of food and agriculture can be shaped, I regularly come across a number of the same little flaws that, in my opinion, delay the progress we can make towards a prosperous future.

Although the expression “keep it simple” is well-known, it seems that we have a hard time doing exactly that. I am amazed by the number of situations in my work in which I meet incredibly complicated set-ups. It is almost as if we have an almost masochistic tendency to make our lives more difficult than they need to be. Let me be clear, food production is a very complex system, but why make it even more complicated than it is? Too often, the problem is that food producers carry to much old baggage within their systems. Problems happen and innovations bring solutions. Unfortunately, it often results in adding layer after layer of old baggage. Keep it simple! Once in a while, just imagine how you would set up your production if you were starting with no past history and were setting processes and systems anew with all the latest technology, knowledge and experience. Then de-clutter! It makes life a lot easier.

Common sense is one of the things I would like to see more often. I remember a customer of mine who always enjoyed to say “With Christophe, if it makes sense he will deliver it; if does not make sense, he will say no” I know I have sometime frustrated some of my customers but I always took the time to explain how persisting in error would only result in bigger problems later and they actually always praised my no non-sense style. Remember that food production is not an intellectual exercise but a practical one. A customer will not reward you for your being intellectually stimulated, but for your reliability, consistency and honesty.

For the New Year, I also wish for more critical thinking. In these times of information oversupply and even fake news, it is quite easy to be misled. Sometimes it is accidental, sometimes it is intentional. Nonetheless, it always pays off to never assume and to double check. I pay special attention to numbers. Simple calculations help verify whether claims are true or not. I am amazed by how often I see numbers presented to the public that do not add up. Some numbers look spectacular and get attention, but that is no reason not to do the math again, just to make sure.

Another wish of mine is to see more listening and empathy, and less shouting and fighting in the debate about food. Too many arguments about this topic are a bit too Pavlovian for my liking. People are not rational, but they are always logical with themselves. It pays off to find out the logic and to have candid conversations. More than fighting about who is right and who is wrong, I prefer to see a focus on improving food production in a collaborative manner. Of course, it is easier said than done but he pays off because in the end, regardless of who is wrong or right, the customer is always right. The key for such a successful exercise is to use both our brain hemispheres and help our interlocutors do the same. How we will improve food and agriculture is really a balancing act between the emotional and the rational.

Another item on my list is humility. Every day, Nature and chance bring new challenges and sometimes opportunities. It is essential to stay on our toes. It does not take much for problems to happen and it is necessary to never slip into complacency. In particular, always beware of good times. It is always tempting to see successes be the result of one’s qualities and systems and setbacks as being caused by outside factors. It is tempting but it is rarely that simple. Adversity is the true test. An area of excessive ambition that humours me is when it comes to feed the world. I gently smile at statements such as “Insects will feed the world”, “Aquaculture will feed the world”, “So and so country or continent will feed the world”, etc… I smile because it sounds like we could feed the 10 billions of 2050 several times over. I say humour because it is more about excessive enthusiasm than a lack of humility. We will feed 10 billions –and I really believe that- through the combination of many foods and many production systems all over the world. There is no magic bullet. It will take dedication, work, innovation, market orientation and visionary leadership. It is a never-ending exercise.

Changing economics to overcome future challenges

Posted on October 21, 2016 by Christophe Pelletier

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 about 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.

What future do you want?

Posted on March 10, 2016 by Christophe Pelletier

Usually, when my customers contact me, their purpose is to have me tell them my vision of the future. Since the dawn of time, people have always had the secret hope that someone can tell them about their future. People have always sought to reduce uncertainty and looked for a more predictable future, be it in the stars, in a crystal ball, in cards or goat insides. If the purpose is the same, there are different attitudes and expectations when it comes to the future. I would identify four main types of requests.

Some are interested in what I would call Fantasy Future. Their expectation is not so much to have a realistic view of the future but they want to see a picture of unlimited possibilities. Their focus is primarily on the potential of new and as futuristic as possible technologies. They want to stimulate their imagination as much and as possible. Presentations that sound a bit like science-fiction fit quite well for such audiences. Whether such a future is actually possible and viable is secondary. Escaping from hard rational reality of day-to-day operations is a great way of getting new hopes, see new opportunities and building a dream about how thing might be. There is no real timelines for when that future might take place and it is fine, as it is not so important in this context.

Another form of future that is also in the realm of fantasy but more dangerous is what I call Wishful Thinking Future. For as much as with the Fantasy Future, it is clear that the predictions are quite speculative and the tone is more one of entertainment, those who tend towards Wishful Thinking Future have the tendency to think that, just because they believe in a particular scenario, it will and must happen, regardless of whether it makes any sense from a technological, practical or economic point of view. Usually, those who look at the future from the wishful thinking angle rarely do a thorough analysis of the actual possibilities and of how sensible their scenarios are. Quite often, they do not have the thorough set of skills and knowledge to carry out such an analysis. They seem more interested in pushing their dogma on others and they generally have a hidden agenda. The danger here is that it misleads and even possibly deceives the public. In the end, it is a major waste of time and money. Unfortunately, Wishful Thinking Future is much more common than one may think and unfortunately not that rare with some so-called influencers with some ego, and that is where the danger lies.

I enjoy some Fantasy Future once in a while. It is entertaining and, usually, the audiences that are interested are quite relaxed and curious. There is always a good energy in such meetings. However, I always present the futures scenarios in a very practical way to connect my story to the day-to-day activities of my clients. I also always present the limitations and what I think the odds of such scenarios are to actually concretize, so that my clients keep in mind what to expect. I do not engage and cannot stand the Wishful Thinking Future. Making people believe things that are not realistic, not possible or, worse, not true, is not in my DNA. I have exposed some non-sense quite a few times in the past, which is usually rather simple with the help of grade 6 math. Yet, I am always surprised how non-critical most people are and many fallacies get spread quickly and reach large numbers of people through social media. Fortunately, there are more alternatives to sketch a more sensible future. We live in a world where many one-eyed try to be king of the blind, I see my function to get my clients have 20/20 vision.

One approach towards realistic future scenarios is what I call the Likely Future. It is based on actual trends and historical patterns. The scenarios are the result of a rational analysis and usually such scenarios have a high probability to realize. In a sense, it is a cautious approach of the future. On the one hand, it takes into account facts and data and on the other hand the emotional and psychological aspects of human behaviour. It has little to do with fantasy and absolutely nothing with wishful thinking. It is based on verifiable facts and the scenarios can be discussed in a rational manner. It may not be the most exciting exercise but is creates the basis for the development of alternative scenarios and to assess their feasibility and assumptions by identifying areas of uncertainty. I wrote my first book, Future Harvests, with this approach in mind. What was the result? Pretty good because most of the issues that have now gone mainstream were all mentioned in the book, which I wrote in late 2009 and early 2010. Many other issues mentioned in the book certainly would deserve to get the same exposure but getting the message to the average person is a baby step process. Clearly, my approach of likely future works. I wanted to see whether the world could feed 9 billion people. I just wanted to get to either Yes or No, and I found the answer, and I also debunked a lot of myths and fallacies in the process. To me, the Likely Future is a good first step towards a strategy, but it is only a first step. By connecting such scenarios with resources, ambitions and desires for the future, it is possible to go to the next approach of the future, in my opinion the most interesting but also the most challenging: the Desirable Future.

The Desirable Future is really a lot of fun to investigate. It mixes the Likely future with the development of a vision. In this regard, it makes both brain hemispheres work. It combines a rational approach with strategy, creativity and leadership. By using the Likely Future as a basis, it aims at not taking the outcome as inevitable. It is a matter of finding out what will be if we act “normally” and then challenge it to deliver a better prospect. It leads towards a positive, collaborative and stimulating vision of the future. It is an extensive exercise that includes many disciplines and many stakeholders. Futurists mostly like to talk about technologies, but building the future depends much more on leadership and managing human nature than it does on technology, which will only offer tools to achieve future goals. Technology is only as good as the use we make of it, as I explained in a previous article. Earlier on, I mentioned both brain hemispheres having to work together, but the cooperation goes beyond what is inside. It calls for a collective approach. It requires enthusiasm and respect of others. It is about building a better world for all and not just for a few. There will not be a better world if a select few build a future for themselves only. The Desirable future is by far my favourite approach. It is energizing and an endless source of hope and happiness for me. This is why I sketched quite a few avenues about the Desirable Future in my second book, We Will Reap What We Sow, which was ahead of its time when I wrote it and still is (unfortunately?) and still will be for years to come (that’s fortunate for me!)

So, dear reader, what future are you most interested in? The answer is important because it will shape yours!

How can insects be a part of future food security?

Posted on July 31, 2015 by Christophe Pelletier

Since the FAO published a report in May 2013 presenting insects as a possible source of food to meet future protein demand, the topic has become quite popular in the mainstream media. I wrote an article about this (Insects on the menu) in May 2010, in which I was giving some of my thoughts. I still think along the same lines.

In the last few weeks, I bumped into the insect story several times, purely by coincidence. I believe insects can play a role but I am getting a bit frustrated by the lack of specifics in all the talk about insects and worms.

Apparently insects would present many performance advantages compared with traditional meat productions. Aaron Dossey did a presentation at the IFT15 symposium organized by the Institute of Food Technologists. Here are the advantages of insects he mentioned as reported in the article from Science Daily of July 14 2015:

Efficiency. They use less land, water, feed, energy and other resources than livestock.
Environmentally friendly/clean. Insects create fewer greenhouse gases and are not contaminated with pesticides. They also do not have any hormones in their bodies.
Prolific. They reproduce quickly so they can replace depleted resources.
Biodiverse. There are millions of insect species, so it is easy to find a match to a location’s need.
Nutritious. They have protein and Omega 3s, a class of essential fatty acids that help lower cholesterol.

All of this is nice but…

How efficient? How much less land, water, feed and energy and other resources?
Environmentally friendly as long as they do not massively invade it. How many fewer greenhouse gases? No hormones at all, really? Of course insects contain hormones. They are necessary for their physiology and development. So which hormones was he referring to?
Yes they are prolific, which raises the issue of what would happen if insects escape from farms in large numbers. They are prolific but they are tiny, so it takes huge numbers to match the weight of a cow or pig or even a chicken. The real question to answer is how many tonnes of insect protein can a farm produce compared with other animal productions? What should be the size of an insect farm and how many farms should there be to meet future demand. Also what feed will the bugs eat to grow?
Biodiversity may be nice, but what species would be production worthy when it comes to the mass production of volumes that would be comparable with other productions?
They are not the only food sources of omega-3

Unless someone can quantify the above, the story remains rhetoric. If insects are to become a large-scale production along the lines of other animal proteins, it is necessary to single out the species that will be the most efficient, technically and economically. It is also necessary to sketch the design and the magnitude of farms. There are a number of companies that have been venturing in the insect business but most of them are tiny, in the grand scheme of world food security. Aaron Dossey’s company produces 25,000 lbs of insect powder per year. That is 12 tonnes, and he does not sell them to the hungry of Asia and Africa. Compared with the world average meat consumption per capita per year, 12 tonnes of meat represents the yearly consumption of 250 to 300 people. If insects represented 1% of the world average meat consumption per person, his production would feed only 25,000 to 30,000 people, or less than 0.0005%! Clearly, even to cover 1% of the average animal protein need as it is on average per today, the magnitude of the challenge to set up a significant production is huge. The other challenge to overcome is to make insect production economically competitive, be it for human consumption of for animal feed purposes. Most businesses offering insect products today are operating in a small niche, just because there is little industrial production. The dominant part of the insects and worms consumed are picked in nature by those who eat them, as those animals are usually consumed when there is a seasonal shortage of other protein sources. The niche businesses sell their insect products at prices that even many people in wealthy country could not afford on a frequent basis. The insect products are offered to consumers at prices reaching several hundreds of dollars per pound. Presenting such foods as helping the world feeding itself, which means mostly helping the world’s poorest to be able to afford nutritious food is at best delusional if not even plain cynical. Insects and worms can be contributors to future food security only if they are affordable and competitive against the other meat sorts. That cannot happen if they are limited to the treat sector.

Another aspect of insects as food is their attractiveness, or lack of it. Insects and worms are much more common in Asia and Africa, where the largest part of the world population is and will be in the future. In Western countries, insects and worms are perceived as repugnant by most people. In terms of marketing, it would make more sense to focus on the Asian and African markets instead of trying to convince Westerners to eat lots of insects, just because of the respective levels of acceptance.

However, there is communication to do and lessons to learn from the past. I would name two. First, escargots, which are so popular under their French name, are an expensive item on menus. Escargots are never sold as “snails” because that sounds gross for most people. Everything sounds tastier in French. Try presenting insects under a French names and the Anglo-Saxon population might be more tempted. Snails used to be, just like insects and worms in Africa and Asia today, food that the French were going to pick on walls after a rain in times of food shortages. My second example is lobster. Lobster used to be considered a bottom feeder that was only for the poor, and so it was. Clearly, the image of lobster has changed a lot. The other lesson about lobster, and I would add shrimp, langoustine and many other ugly crustaceans, is that there are expensive delicacies that actually look a lot like insects, and they are actually rather close to insects in their body structures.

When it comes to human consumption, I wonder whether people will still be tempted to eat bugs if the economic situation keeps on improving in Asia and Africa. Not that long ago, China was in situation of near famine. Anything that contained protein was food. They were roasted rats for sell. In France, during the privations of World War II, rats – and cats- were used to replace pork in many deli specialties. There is a big difference between having to and wanting to. Has rat meat consumption increased in China since the economic boom? Do the French since WWII ended have been asking their butcher for rat pâté? I may be wrong, but I really think that when people, wherever in the world, have the choice, they will go for a juicy steak or some chicken before looking for bugs.

Then, there is the possibility of using insects and worms for animal feed. The advantage of animals compared with humans is that they eat to satisfy their hunger, but there is no psychological side to what is in animal feed, at least from the animal perspective. A trial to feed live insects to chickens just started in The Netherlands. It will be interesting to see the results. What I am wondering about this trial is why use live insects instead of dead ones. When I worked in animal husbandry, one of the things farmers worked on preventing was the possible invasion of insects in the houses, in particular because of the damage to insulation material. Further, I hope they make sure the insects will not escape, and that at least, should that happen, they are not using species that could cause damage in the neighbourhood. Also, I hope that the insects chosen have been screened on the health safety in terms of passing on diseases. Especially, after all the problems caused over the past years by avian flu and contamination by migratory birds, one can never be too cautious.

So what will be a good production system for large-scale production? I do not know yet, and I cannot find much information on how insect husbandry of the future may look like. However, I remember a TV program I saw some 25-30 years ago on the Dutch channel VPRO. I am not sure about the title of the program, but here is what it was about. The documentary was presenting an old fellow living as a hermit somewhere in the wild. He was using meat offal from his farm animals to attract flies, by storing them in a large tank. The flies were colonising the offal and bones and used them to lay their eggs. Later, the maggots hatched and when he found they were large and ripe enough, the hermit harvested the maggots and boiled them in a large caldron. He used that mass of cooked maggots as feed for his pigs and so he recycled the carcasses leftovers of the previous batch of pigs to produce the next one. I found that it was a pretty smart feeding and recycling system. Perhaps, it could be a solution for the future. In his system there was no waste. Of course, it sounds a bit like a porcine version of the movie Soylent Green.

For as much as I can see potential for insects and worms, I also see a huge lack of number crunching and comparative trials to figure out which species to produce and in which productions systems to provide an abundant and affordable of safe insect and worm food for both consumers and environment worldwide. The generality talk about bugs is cheap and does not help me envision how insects would play a prominent role in feeding the future.

Future rhymes with infrastructure

Posted on March 21, 2014 by Christophe Pelletier

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

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

Posted on December 13, 2013 by Christophe Pelletier

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

2010
Country	Population (millions)	% of world population
World	6,794
China	1,337	19.6
India	1,180	17.3
USA	309	4.5
Indonesia	231	3.4
Brazil	193	2.8
Pakistan	169	2.5
Bangladesh	162	2.4
Nigeria	155	2.3
Russia	142	2.1
Japan	128	1.9
Mexico	108	1.6
Philippines	92	1.4
Vietnam	86	1.3
Germany	82	1.2
Ethiopia	79	1.2
Egypt	78	1.2
Top 16	4,531	66.7

2050
Country	Population (millions)	% of world population
	9,551
India	1,620	17.0
China	1,385	14.5
Nigeria	440	4.6
USA	401	4.2
Indonesia	321	3.4
Pakistan	271	2.8
Brazil	231	2.4
Bangladesh	202	2.1
Ethiopia	188	2.0
Philippines	157	1.6
Mexico	156	1.6
RD Congo	155	1.6
Tanzania	129	1.4
Egypt	122	1.3
Russia	121	1.3
Japan	108	1.1
Top 16	6,007	62.9

2100
Country	Population (millions)	% of world population
	10,854
India	1,547	14.3
China	1,086	10.0
Nigeria	914	8.4
USA	462	4.3
Indonesia	315	2.9
Tanzania	276	2.5
Pakistan	263	2.4
DR Congo	262	2.4
Ethiopia	243	2.2
Uganda	205	1.9
Nigeria	204	1.9
Brazil	195	1.8
Philippines	188	1.7
Bangladesh	182	1.7
Kenya	160	1.5
Mexico	140	1.3
Top 16	6,642	61.2

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

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

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

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

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

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

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

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

Posted on October 21, 2013 by Christophe Pelletier

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

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

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

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

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

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

Food prices, one year later – Some lessons

Posted on September 16, 2013 by Christophe Pelletier

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

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

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

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

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

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

What more demand for meat means for the future

Posted on October 21, 2012 by Christophe Pelletier

Here is an excerpt from We Will Reap What We Sow, the book I published in May 2012. The recent difficult climatic conditions for agriculture and their impact of agricultural markets have made the issue quite relevant. Here it is then:

As the economy in emerging countries is improving, their population becomes wealthier. Just as it happened in Western countries during the 20^th century, the increase in wealth translates into dietary changes. The consumption of animal protein, especially the consumption of meat, increases.

To realize what the consequences of a higher consumption of meat might be, it is interesting to make calculations for China. When 1.5 billion people eat on average one more kg of chicken meat per person, world production needs to increase by about 750 million chickens. That represents about 2% of the world’s production. Similarly, when each Chinese consumes on average one more kg of pork, the world must produce 15 million more pigs. That number represents 1.5% of the world pig production. For beef, an increase of consumption of one kg per capita per year means the need for a production of 2.4% higher than today.

Meat consumption in China has already passed the milestone of 50 kg per capita per year, and projections indicate that it should reach 80 kg per capita per year in 2030. Clearly, consumption will increase by much more than just one kg.

An increase of 10 kg of chicken meat per capita per year in China means that the world’s chicken production would have to increase by 20% to meet the new demand! This represents almost the entire US chicken production volume, and more than Brazilian production. In the case of pork, an increase of consumption of 10 kg per capita means that the world’s pig production would have to increase by 15%. That is five times the current pig production of Iowa, USA. That is 60% of the EU production. For beef, the world’s production would have to increase by 24% to meet an increase of 10 kg per capita per year! This number also represents about 125% of the current total US beef production.

Different animal productions have different feed conversion ratios (FCR). The FCR is the quantity of feed needed to produce 1 kg of meat. For chicken meat, the FCR is of 1.8. For pig meat, the FCR is about 3. For beef, depending on the proportion of grass in the cattle’s diet, the amount of grain used to produce 1 kg of beef varies. With an average FCR of 3 for the various types of meat productions, an increase of meat consumption of 30 kg in China would result in the need to produce three times 30 kg times 1.5 billion. Depending on the consumption of which type of meat will grow the fastest, the need for feed, excluding grass, would vary between 100 and 150 million tons.

The world’s second largest population, the Indian population, is still largely vegetarian. Although India is among the countries with the lowest meat consumption, with less than 4 kg per capita per year, Indians are gradually changing their eating habits. Meat consumption is increasing in India, too, but not in proportions as dramatic as in China. Nonetheless, with a growing population, any incremental meat consumption will have physical consequences. Some simple math can show the magnitude of the higher demand for meat.

Between 2010 and 2050, the world’s population will increase by 2.2 billion, from 6.8 billion to nine billion. If everything stays equal, the consumption would increase by about a third (2.2/6.8). According to the FAO, the average consumption of meat per capita in the world in 2010 was of about 47 kg. The population growth alone would represent a meat consumption increase of 2.2 billion times 47, or 103 million tons. This number represents about a third of the 2010 meat consumption.

In the example of China mentioned earlier, the predicted increase of 30 kg per person represented an increase in meat consumption of 45 million tons.

Even if the world average meat consumption per capita remained stable between 2010 and 2050, the need for additional meat production would be of 2.3 (103/45) times the numbers in the China example. This represents an additional need for animal feed, excluding grass, of between 230 and 345 million tons compared with 2010.

The situation becomes even more interesting when the average consumption per capita increases. For every 10 kg increase of individual consumption, the need for additional meat production increases by nine billion times 10 kg, or 90 million tons of meat. For each 10 kg increase of average meat consumption, an additional volume of 600 to 900 million tons of animal feed is necessary. The following table presents the effect of the population increase to nine billion people and its meat consumption on production volumes.

Average individual meat consumption increase from 2010 (kg/capita/year)	0	10	20	30	40	50
Average individual meat consumption(kg/capita/year)	47	57	67	77	87	97
Total meat consumption(million tons)	423	513	603	693	783	873
Total meat consumption increase from 2010 (million tons)	103	193	283	373	463	553
Percentage of increase from 2010	32%	61%	89%	117%	145%	173%

An average meat consumption of 97 kg per capita per year would be about the current average of developed countries. If the average meat consumption per capita per year in the world were to meet such a number, meat production would have to almost triple from 2010 volumes.

Most of the gloomy scenarios about the challenge of feeding the world are based on the assumption that the diet model would have to be the Western diet, and in particular the American diet. This is far from certain. Actually, it probably will not be the case. As the world’s population increases, one of the sensitive issues, especially in the overfed world, will be what to eat and how much of it. Higher food prices will also force people to indulge less. It is important to understand the difference between nutritional needs and consumer desires. Today, the world produces enough calories and protein to meet the actual nutritional needs of nine billion people. If the nine billion people expected for 2050 all want to have a Western diet, the amount of calories needed would be equivalent to the nutritional calorie needs of 17.5 billion people.

It would be normal to expect feed conversion efficiency to improve in the future. Nonetheless, the production for animal feed would then increase with 3,000 to 4,500 million tons above the volumes necessary in 2010. Since a third of grain production goes to animal feed, a tripling of meat production means that grain production would have to double, just because of the desire for more meat.

Clearly, the challenge of feeding the world will depend increasingly on meeting the demand for meat. The challenge for producers of agricultural commodities will be to keep up with the demand for animal feed. As demand for meat increases, there is no doubt that more and more questions will arise about how much meat the world can afford to eat. The world food situation will depend on how much meat people want to eat, not on calorie count.

How much meat should we eat?…

The rest of the text for this topic and much more is in the book.

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