Food prices, one year later – Some lessons

September 16, 2013

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

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

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

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

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

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

Copyright 2013 – The Happy Future Group Consulting Ltd.


My futurism

April 16, 2013

The future has had the same intriguing appeal since the dawn of time. The reason is simple. Trying to predict the future is simply about reducing uncertainty. Looking into the future is about anticipating change. It is about preparing to adapt. Regardless of whether the motivation is fear, greed, pride, power or any other reason, the urge to foresee the things to come is really about one goal only: survival.

The material I offer focuses on how the future will affect my customers and what they can do to adapt and thrive. My approach to futurism is centered on how my clients can turn future changes into a competitive advantage for themselves. One of my main objectives is to show them how their activities are actually interconnected with developments that seem out of their daily world. It is quite easy to overlook these connections, but they exist nonetheless and will have an effect. Bringing the big picture helps create awareness and stimulates critical thinking, curiosity and questions. It makes the experience active and lively. The big picture broadens the scope away from the tech gadgets innovation part. It includes the human dimension, and the interactions between people and technology. It initiates a reflection about what to do and to use, as well as what not to do and what not to use.

In that regard, I could describe my form of futurism as practical and applicable. I do not limit my presentations and seminars to storytelling. Setting up a science-fiction-like story is rather easy to do. In very little time, anyone can gather the latest news about technological advances by going on internet and doing a search on these topics for agriculture and food. It probably will make this very website pop up high on the list. I have to admit that presenting scenarios that sound like science fiction always appeals to audiences. It has the mystique of an ideal world in the making where all problems will be solved by science and new technologies. Such an approach of futurism is fine for entertainment purposes. Journalists, writers and performers will excel in this kind of exercise. It is true that technology has brought many new possibilities. It has helped overcome many challenges, as well as it has open new frontiers. However, technology alone is not enough to describe the future. Especially not in an activity that depends so much on nature’s laws and nature’s forces as agriculture and food.

My Futurism

As a futurist, I often get the question of whether I have a crystal ball. It could be useful to have one, but so far I have not heard of any futurist predicting that crystal balls will ever exist. Ironic, isn’t it? Especially more so when some predict things as bold as plants will communicate to each other, as I read recently. If we can insert some sort of a nervous system in plants, I am sure crystal balls have to be in the realm of possibilities. Futurist can’t support that. I suppose it would put them out of business. I do believe that artificial intelligence will help replace them, as the technology will help create machines that can analyze faster, better and without interference from emotions and bias. One tempting pitfall to fall into is to try to make exact quantified predictions on market components, in particular prices and volumes. Until this day, I have seen many of such predictions fail quite sadly. After all, even computer models must contain in a factor of uncertainty. Personally, I do not try to give exact numbers, but I explain the trends and the dynamics behind to show in which range such specifics would land. Since food production and consumption can be influenced by many factors on which we have relatively little control, it is always good to remind audiences of such uncertainties. Although my approach may not appear particularly bold, my predictions are of rather good quality (click here to some of my past predictions).  For instance, when I started giving presentations or participating in panels, I crossed skeptical looks when I was telling that Africa is a region that has tremendous agricultural potential and that opportunities abound there. It has been ice since then hearing some of my apparently skeptical clients now seeing that continent as a key one for the future and theirs as well. Similarly a few years ago, I received amused smiles when I was mentioning the rise of robots, drones, sensors and other futuristic devices that would help farmers make better and faster decisions, and that in a time when I hardly ever heard any of the futurists talk about them. Now, most of them bring up this same topic. Yet, the information had been there all along. It was rather easy to know what was in the works. By then, agriculture had not reached the level of fancy it has lately. That will pass and practical analysis will replace entertainment. I also prefer to not make many predictions, which saves me from ending up tongue in cheek. I always give the preference to the sensible and the prudent. Until this day, it has helped my predictions to be accurate and valuable to my business partners.

Another important thing for me is to stick to a sector that I know and understand. I do not believe it is possible to have enough insights in everything. The more sectors one wants to follow thoroughly, the thinner the outer layer of practical and applicable knowledge he/she can bring over. The risk, in my view, is to fall back being the storyteller with the nice tech gadgets of the future. It is entertaining, but with little direct use for my public. I follow many sectors, always with the angle of what it might mean to food and agriculture. I am convinced that many developments that will help food production progress in the future will originate in other areas, but I am not going to pretend I am an expert in all these sectors. I stick to food and that is already vast enough a domain.

From my end, what I want is that the members of my audiences can go back home with several concrete points that are important to their work and that will affect them one way or the other during their professional life span, not in 50 years. Ideally, I wish they can start using my material the next morning to build a better future for themselves. Considering the lines of people who wish to speak to me after my presentations and the number of contacts that I receive afterwards, I believe that I reach both my goal and theirs.

With this philosophy in mind, I will add soon several programs that will be useful for my customers to envision, shape and build the future.

Copyright 2013 – The Happy Future Group Consulting Ltd.


Dealing with complexity

February 1, 2013

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

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

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

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

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

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

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

Copyright 2013 – The Happy Future Group Consulting Ltd.


Thinking of a better agriculture in a better world

August 11, 2012

Recently, I joined a group on LinkedIn called “Future of Agriculture”. One of the discussion topics, which caught my attention, was “What’s your dream for the world with agriculture as a theme?” Of course, this is quite a broad topic. I decided I would write here my thoughts about the discussion as concisely as possible. Therefore, here is what I believe is important for the agriculture of the future.

Agriculture must provide food today and tomorrow. Keeping the potential to feed the world for future generations is not an option; it is a necessity. Agriculture must produce in a sustainable manner. It must meet both the demand for food, but also be able to continue meeting future demand. It must take all necessary actions to ensure there will be enough water, enough soil, enough organic matter and enough nutrients to keep producing. It must also make sure that it does not contaminate the water and the soil. Agriculture must be sustainable from an environmental point of view, but it also must prove sustainable financially and socially. Without agriculture, there cannot be prosperous societies. To have agriculture, the world needs farmers. Farming must be an attractive occupation that allows those who practice it to make a decent living. This is more important today and in the future than it has ever been before.

Future food production must be innovative. Innovation is essential to solve current and future problems. It is the main trait of the human genius. Finding new ways of doing a better job and meeting all the future needs is a must if humanity wants to succeed in feeding its growing population. However, innovation is not the same as high-tech. Innovations do not need to be complicated and expensive. Innovation must integrate science, experience, common sense and practicality. Innovation does not oppose the past and the present or the future. It comes for the search of the best of all worlds. Innovation is useful only when it solves actual problems. It is not a doctrine of its own. The purpose of innovation is not about R&D for the sake of new products that help boost sales of those who market them. Its primary purpose is really about helping others succeed. Innovation must start from the market. What does the customer need to do a better job? The answer will be much more successful and better accepted if it starts from the market end, instead of being pushed onto the customers. This leads me to the next point: the necessity of being market-oriented.

Market orientation is the best approach for any type of business activity. It is true for R&D, but it is true for farming, too. Developing and producing by investing large amounts of money are much more effective and cost-efficient when the markets and the infrastructure are there. Offering what customers need has a much higher level of success than trying to convince buyers who are not very interested. The prices and the margins are always higher in a pull strategy. Market orientation also means that the infrastructure to bring the goods to the final users exists and that it actually works. One of the main scandals in today’s agriculture supply chain is the postharvest losses. It is outrageous that food that has been produced at the high cost of money, labor, water, energy, inputs and the farmers’ time rots in the fields or in deficient storage while it is good for consumption. It is the responsibility of all partners in production, supply chain and government to co-operate by organizing operations, so that food reaches those who need it.

The agriculture of the future needs to be developed in a pragmatic manner. There is no fix-it-all agricultural system. Food production depends on climate, landscape, soil types, water availability, need for sustainability, land rights, as well as the cultural, social, economic and political environment. The types of crops and animal production will depend on these factors. If systems cannot always be transferred from one place to another, knowledge and skills can be. Human intelligence and sharing is what spread progress. If farmers and all players in food production must be pragmatic and choose among the arsenal of tools and techniques what fits best in a particular situation, there are no boundaries in helping others to succeed. The energy must be spent to level up performance, not on defending a system for ideological or mercantile reasons. If the agriculture of the future succeeds, all of humanity will succeed. If it fails, humanity will have to deal with unrest, riots, hunger and possibly wars. Pragmatism is what will help the farmers of the future optimize food production around the world by making decisions that are in the best interest of all the partners from farm to table. Pragmatism is also what will deliver the highest financial return for them. However, for pragmatism to beat partisanship, bias and short-term interests, outstanding leadership will be paramount.

The leaders of the future will identify the right actions and execute them. They will cut the rhetoric and focus on delivering result on all fronts: financial, social and environmental. They will crystallize the energies around the objectives that serve all on the short term and on the long term. This will not be an easy task as the reasons to choose the path of least resistance are many. It will take courage, vision and the ability to convince the opposition. In history, great leaders have always sacrificed their personal interests, their personal safety and comfort for the good of the group. Such leaders are rare, but they exist, at all levels of society. They need to rise and improve the way we currently do things. They will succeed only if the average person is willing to make the right changes, too. This is not an easy task, either, but the alternative is even worse. The great leaders of the future will show the rest of us how things can be. They will give others the courage to implement the change and make them believe in the future. They will have to lead by example. They will have to reconcile instead of dividing and polarizing. When it comes to food production, they will not only help develop an efficient and sustainable agriculture, but they also will make sure that consumers change their eating habits where it is needed. They will help educate consumers about proper nutrition and moderation, while keeping food a positive experience, as well for the senses as for it social purpose. They will ensure that proper nutrition protects the health of their people. They also will give agriculture its rightful place in society and ensure that producing food is a respected and attractive occupation. They will take all actions to help food producers to succeed. They will reconcile urban and rural areas. They will make sure that people understand where food comes from and what it takes to feed for prosperity. They will work against waste.

Every waste is a loss of efficiency. With a population of 9 billion coming in the next few decades, waste will not be an option anymore. As the number of people increases and their needs have to be filled, the margin for error will shrink. The consequences of 9 billion behaving badly will be much worse that when there were only 3 billion people on Earth doing that. Every waste of resources will be quite costly, financially, socially and environmentally. The only way to reduce waste will be by being more efficient.  This will be true for food, as well as for water, for energy, for agricultural inputs, for soil, for organic matter and for biodiversity. Preserving and replenishing will protect humanity from a situation of depleting resources, which is where it is currently heading. The consumption and depletion society has no future. Future food production and consumption must be aimed at maintaining and preserving the potential of agriculture.

Those who are familiar with my work know that sustainability, innovation, market orientation, pragmatism, leadership and efficiency are the 6 principles that I had gathered under the acronym of SIMPLE in my first book, Future Harvests. In my second book, We Will Reap What We Sow, I developed and discussed the characteristics of proper leadership and the vision required to rethink food and farming to succeed in the future.

Even if future solutions need to be adapted to their specific local situations, these 6 principles apply everywhere and need to be implemented in a concerted manner by all regions.

Copyright 2012 – The Happy Future Group Consulting Ltd.


The Food Futurist is three years old

May 2, 2012

And what exciting three years these have been!

The reason for me to start The Food Futurist was my frustration about getting clear answers on the ability of agriculture to produce sustainably and to keep meeting future demand. Unlike today, there were not many articles about feeding the world by 2050, simply because food was cheap and the world seemed to experience a never-ending economic boom. Things changed and a couple of food price increases got the attention of many who did not pay attention, while they should have. The few organizations that were addressing the topic did not publish anything satisfactory to me. The doom and gloom messages of we need two Earths (three or even four for some) did not really bring any useful response.

This is why I started this blog. I wanted to write down some of my thoughts and sort out the information that I could find. At the beginning, I had no master plan about what it could become. Then, I started to see the traffic on this website grow by the day. I realized that the future of food and agriculture mattered to many people, and that happened all around the world. This led me to write Future Harvests in the winter and spring of 2010. At that stage, it felt a little lonely, in the sense that my investigations did not support many of the mainstream thinking. Very quickly, it became very clear to me that hunger was about much more than just food production. I also could deduct from numbers that the world already produced enough to feed 9 billion with a sufficient and balanced diet, even 40 years before the mythic year of 2050. When I make that statement, I can see eyebrows rise. This fact still is little known, even within a number of organizations involved in food and agriculture. I am always surprised by their surprise. The good news is that, nowadays, more and more people and reporters bring it up. Feeding the world gets easier once some myths fall. In an article, I had indicated that world agriculture has the potential to feed 12 billion. Needless to say that I was pleased to read that same number on the FAO website a few months later.

What I discovered was the scandal of food waste, the relative lack of action to fix it, while the numbers show that it is quite feasible and not that expensive at all. By then, the issue was a matter within rather confidential circles. The economic crisis, especially in the USA, has opened the eyes of the aberrant behavior of consumers in rich countries. Considering that 30% of food is lost and wasted, this issue could not stay under the radar. I have raised it every time I could, and I hope it contributed somehow to an increased awareness of the problem.

Similarly, through my preliminary research, it became obvious to me how large the potential of Africa is for food production. A couple of years ago, I was one of the few who were claiming that Africa could and should feed itself, as well as it has the potential to become a net exporter. I got the same risen eyebrows and skeptical looks from my interlocutors. By then, reports about Africa were about all the usual negative stories. The only story about African agriculture was the so-called land grab, with the emphasis on making it a neo-colonialism. None of the articles I could read even bothered estimating the potential of food production. For the sake of rejecting this neo-colonialism, the only stance was apparently to consider the status quo, poverty and hunger, the better choice. How pathetic was that? A couple of years later, everyone is talking enthusiastically about the great potential of Africa, and how much the world needs it. My words in Future Harvests were “what happens in Africa will affect us all, for better or worse”. I am glad that more and more people see this. Nowadays, there is a lot of enthusiasm about Africa. To that, I would warn that there also still are many challenges to overcome.

To me, what made Future Harvests different from other publications was the fact that it was comprehensive and non-partisan. In particular, the comprehensive character of Future Harvests makes the book a cut above from other publications. Usually, reports, articles and books about the topic of feeding a growing population are focusing on a particular area or with a particular bias to try to influence the thinking about future decisions. There is none of this in Future Harvests. I looked at all areas, the land, the desert, the cities and the oceans. As many systems are no longer workable for the future, I reviewed many innovations to see if there were alternatives. The section of Future Harvests dedicated to innovation presents an abundance and diversity of ideas being developed. It is not exhaustive because the list would be too long. My purpose was to give an idea about the resourcefulness available to fix problems. Those who read the book confirmed that such creativity gives a lot of hope. In the book, I also emphasized the need for pragmatism. Too many articles try to advocate for either big large-scale industrial agriculture or for all natural, small-scale subsistence-like farming. None of them is a universal answer. Anyone with knowledge of agriculture knows that farmers must adapt to their natural, political, social and economic environments. The right production systems derived from a harmonious balance between these components. Dogmatism is rigid and rigidity is an impediment to the ability to adapt.

Hope is certainly better than the doom and gloom people out there. It is sad to read sometimes how negative they are. It feels like they are trying to demotivate people who have positive energy, for God knows what purpose really. One rather famous expert in the field of environment and agriculture, who actually has been an inspiration for me to get in this food and agriculture foresight business has become a disappointment to me. Statements such as “we are only one poor harvest away from a food crisis” or “the urban poor will be the most affected by high food prices” do not tell anything that anyone with half a brain already knows. Everyone can push to an open door. It does not take an expert. However, the media love this kind of depressing and scary stuff.

Now, The Food Futurist has reached its third anniversary. This work has brought me a lot of satisfaction. Future Harvests sold nicely, although I hardly advertised for it. I have done work for large organizations in the field of food and agriculture about the topic of the future, and the demand keeps coming in. The interesting part is that I really do not advertize at all, except for what I write on this website. My customers appreciate much more than the knowledge I bring. They like the fresh angle from which I look at the subject. My being independent is conducive to candid discussions without the tension that some of the controversies in food and agriculture usually cause. We review what is best for the future. The criticism is positive and always focuses on developing viable solutions.

Three years after I started writing and speaking about the future of food and agriculture, every newspaper is publishing a story on the topic, every company or non-profit in the food sector is posting a YouTube video about it. Unfortunately, most of them are rather incomplete and tend to repeat the common myths. Many of them, not all of them, seriously overlook the number of dots that need to be connected, and the complexity of the entire system. The risk is that we might end up barking at the wrong trees and address problems sub-optimally because of that. Anyway, they bring the issue to a larger audience. That is what counts the most. It is also very humbling to see groups of a couple of hundreds of scholars and experts from all over the world spend a couple of years to publish reports on the subject, and to see that, so far, I have not forgotten anything in my books.

Since I like to be ahead of the pack instead of following it, I am bringing out more material. Soon, I will publish my next book “We Will Reap What We Sow”. This book will focus on two areas that are rather neglected, yet essential to succeed in balancing food demand and supply. They are human nature and leadership. Human nature’s little flaws make it a fascinating subject, while they certainly raise reasonable concerns about humanity’s ability to do the right thing. Leadership has the role to alleviate these flaws. It has the duty to make society function properly by enforcing the values that ensure long-term sustainable prosperity. The book mixes number crunching and rational elements with a more philosophical reflection on how humans can work together to produce the food they need, while at the same time maintaining the capacity to do so for the generations to come. Diets, functioning of markets, influence of prices on people’s decisions are all presented in We Will Reap What We Sow. As the title suggests, the book indicates clearly that, although we are free to make the decisions that are best for us, we cannot escape the consequences of our actions. In these three years, I have gathered so much material and knowledge, that I will publish soon a third book which will be a quick overview of which parts have potential for which food production. Tomorrow’s powerful nations are the ones that have something the world needs, and food is one of these things. That will be the theme of that last book.


When externalities cannot be externalized anymore

March 29, 2012

Externalities are costs, or benefits, that are not included in the price charged for a product. If a cost is not included in the price, it represents a negative externality. If a benefit is not included, the externality is positive. The concept of externality is particularly important to determine whether an activity is sustainable. For instance, if an industrial activity pollutes and causes harm, there will be consequences, and costs. As it takes many years for environmental problems to become obvious, the cost of repairing the damage caused by pollution is not included in the cost of the goods produced by the industrial activity in question. However, there will be a day when it there will be no alternative but to clean the damage. That cost is the externality.

Every activity that pollutes without cleaning the contaminants is a negative externality. Everything that damages physically the environment and undermines the sustainability of food production is a negative externality. Every activity that depletes essential resources for the production of food is a negative externality. In this highly industrialized world, the consequences of economic and human activities, slowly add up. Nature’s resilience makes it possible for damage to remain unnoticed for quite some time. However, the ability of Nature to repair the damage shrinks, as the damage is continuous and exceeds Nature’s ability to cope with the problem. As the population increases, the level of human and economic activities intensifies further. There will come a time when Nature simply cannot handle the damage and repair it in a timely manner anymore. The buffer will be full. When this happens, the effect of negative externalities will manifest immediately, and it will include the cumulated damage over decades as well. It will feel like not paying the bills for a long time and then having all belongings repossessed. Humanity will feel stripped and highly vulnerable. The advisory services company KPMG published a report in 2012 stating that if companies had to pay for the environmental cost of their production, it would cost them an average 41% of their corporate earnings. These costs are currently not included in the pricing. That is how high negative externalities can be. Looking at it from the other way, companies would still deliver 59% of their current earnings. Repairing the damage and still generate profits shows that sustainability is financially achievable. On average, the profits would only be lower, but the impact would vary substantially between companies. Businesses that create high negative externalities will show much bigger drops in profits, than business that do the right thing. The only ones who would have to get over some disappointment would be Wall Street investors and all those who chase capital gains on company shares. The world could live with that. Investors should put their money only in companies that actually have a future.

All the fossil fuels that humans burn are gone forever. It is not renewable. All the water that farmers use for food production and exported away from the production region is gone forever. Exporters in arid regions will have no choice than disappear, produce only for the local markets, or if that is economically sensible, import water from surplus regions. All the minerals that are used as fertilizers and that are exported from the fields in the form of leaching or in the form of agricultural commodities are gone forever. New supplies produced either with non-renewable energy sources or from mines that are slowly depleting must replace the loss. Organic matter that is lost from soils must be replaced, or it will be gone forever. Soil that is lost through erosion and climate is gone forever, unless new soil is brought back on the land or very long-lasting repair techniques are applied. Every gene that is lost is lost forever and might be missing dearly. Every species that goes extinct is gone forever, as well as its role in the ecosystem. Every molecule of greenhouse gas that goes into the atmosphere is gone out of human control forever. It might bring a heavy cost in the future.

Since everything that becomes rarer also becomes more expensive, the externalities are going to weigh on the economics of food and agriculture, as well as in any other activity. There will be an oil price for which the current machines will be too expensive to operate, and for perishables to be too costly to truck with fossil fuels over long distances. The economics of water will change the purpose of farming in arid regions. It will alter the agricultural policies and force farmers to innovate new irrigation techniques. The economics of minerals and organic matter will change the location of animal farms and manure containment systems. No minerals will be lost. Manure will become a competitive fertilizer, as chemical fertilizers will become much more expensive to produce. The logistics of manure will change and the location of animal farms will change to allow an optimal cost efficiency of raw material for feed and access to fertilizing elements and organic matter. Farms will not have to be mixed, but the agricultural landscape will restore an integration of crop farms with animal farms.  Agriculture will be sustainable only if completes all the cycles. In the past decades, the cycles of minerals, of organic matter and of water have been open. Food has been produced in one place, and then moved over long distances and the waste and surpluses have accumulated somewhere else, while the original production areas were slowly depleting. New systems and new organization will work on closing the cycles again to bring back what agriculture needs to function. The economics of energy will change the chemical industry and its products. Everything will aim at using as little primary resources as possible and maximize the efficiency of inputs by both bringing entirely new products and application techniques. It will be true for energy, water, fertilizers, chemicals, medicines. The new focus will be about using just what is needed when it is needed and only in the dose that is needed, and no more than that. It will be all about precision agriculture, precision animal husbandry, precision packing, precision manufacturing, precision processing and precision logistics.

When externalities manifest immediately, there will not be the time discrepancy between financial results and environmental results. There will be no excuse anymore to say that there is no evidence of consequences. There will be no possibility of creating the confusion, either. When pushed to the limits of its resilience, Nature will bring the financial and the environmental at the same timeline. It will be stressful. Doing the right thing environmentally, or in other words, producing sustainably, will be the best, and only, short-term strategy for financial sustainability.

Copyright 2012 – The Happy Future Group Consulting Ltd

Just for fun, a bit of science fiction

October 15, 2011

One of the issues that I regularly raise during my presentations is the one of the farmers of the future. As about everywhere in the world, the average age of farmers is increasing, this brings the question of who will take over and what effect it will have on the future of agriculture and future production systems.

One topic that generates interest from audiences is the possibility of having farming robots. Surprisingly, the same intrigued enthusiasm comes from audiences that have a bias against industrial large-scale agriculture. Yet, the prospect of robots roaming the fields does not seem to be a cause for concern.

Because of the lack of interest by the youth to take over farms, the Japanese are actively working on setting up farms that could be run by robots, instead of humans. In many other countries the aging farming population with the limited interest from younger people to become farmers, also linked to the rising price of agricultural land, raises the question of how big farms might become, and how to manage them.

Currently, the many developments in the field of robotics, of satellite applications, of field sensors and of computer programs make a futuristic picture of farming become more realistic.

With the expected rise of the cost of energy and of the price of all compounds made with massive use of fossil fuels, precision agriculture is the future. The name of the game will be zero-waste. Future economics will not allow for wasting energy, water or fertilizers or any other input. It will be imperative to get the most out of the least, not just simply producing more with less.

The use of satellites to map fields and indicate the variation of the content of fertilizing elements in the soil is already a reality. The use of GPS for harvest is now common with modern equipment. We are really only one step away from having computers processing all this data and operating fertilizer spreaders by automatically regulating the distribution of fertilizer on the field, based on the soil scan assessment. This will avoid overuse of fertilizer in zones that already contain enough nutrients. With the expected exhaustion of phosphate mines, and the large variation of phosphate contents in soil, it will pay off.

We are also only one step away from having tractors, harvesters and other agricultural equipment doing the fieldwork without drivers. A company in Iowa is already developing such a technology by linking the position of a tractor to the harvester via GPS. Such an approach makes the use of human operators less of a need than it used to be. This would allow farmers to manage much larger areas from one remote location. Their role would become more one of process controller, monitoring and steering the fieldwork by ways of cameras and remote control. This also would require less physical work, thus allowing aging farmers to manage at least as much production as they would have at a younger age. This would become even more of a possibility, as farming robots would be developed to replace humans for the physically more demanding activities.

Developments in the area of sensors also offer many possibilities in terms of farm and risk management. The ability of monitoring variations of temperature, humidity, plant growth, the presence of diseases, fungi and other pests in real-time would help make use of resources much more efficiently. Current developments of biosensors used in food packaging are amazing. Some of such sensors have the ability to turn fluorescent in presence of food pathogens. They can help prevent risks of food poising. Sensors help to detect undesirable “visitors”. Sensors also would help farmers detect potential threats at an earlier stage, even before they actually become visible by the human eye. This would allow starting treatment before problems could take proportions that would threaten production. This has the potential to help farmers produce more optimally, and to produce higher yields than they would otherwise. Linking such sensors to devices that can release the necessary amounts of water, nutrients, pesticides and possibly herbicides would help produce quite efficiently, and would reduce the use of inputs. This would help reduce waste, work towards more sustainable farming methods and reduce the use of chemicals, as they would be used only at the right time, at the right place and in the right quantities, instead of being applied systematically to the whole fields, including areas where they are not needed. The use of airplanes to spread chemicals could be eliminated, which would also reduce the use of fossil fuels. Instead of airplanes, it is possible to envision the use of drones that would have a “patrolling” function to detect anomalies or the extension of pests in the fields. By bringing the huge amount of data that these robots, sensors and drones would produce, fields would be monitored on a 24/7 basis and decision-making would be faster than today. Corrective action could be implemented automatically just as well.

By adding more monitoring functions and developing ecological modeling, this futuristic approach would be a way of managing the interaction between the crop itself, which is the purpose of food production, and the need to manage the ecosystem surrounding the fields, to ensure that production is carried out in an environmentally sustainable manner. Monitoring living organisms in and outside the fields would help optimizing production. The farmer would know the status of soil organisms, mostly worms, insects and microorganisms. He would be able to deal with pests in a targeted manner, almost in a similar way as the images of surgical strikes that we can see in the news. Mapping the extent of weeds through such devices would also allow their control in a targeted manner and with minimal use of potentially harmful compounds. The emphasis would be about control and management, not on killing out everything that seems a threat.

Further, monitoring fields as described above would support the environmental steward’s role of farmers, while making it easier to execute as well. Farmers would be informed timely about production effects on groundwater quality and possible residues in the soil and the crops.

Of course, all of the above sounds like a bit of science fiction, but considering the amazing innovations taking place in the all the areas mentioned, together with the constant miniaturization of devices and the increased processing abilities of computers, it might not be as far-fetched as it may sound today. Although many of these developments are not taking place in the agriculture sector as such, they are real and happening faster than one could imagine. Farming in 50 years from now will probably look different from it does today.

Copyright 2011 – The Happy Future Group Consulting Ltd.