Tag Archives: Sustainability

First speaking engagement with Turkey

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I recently had the honour to be the keynote speaker at the 5th Aegean Economic Forum. Below you will find the video of the session dedicated to agriculture (my presentation starts at 23:45 and lasts until 26:00). This was the first time I had an assignment with a Turkish organization and I encourage you to watch the video if you have 2 hours available. It was an outstanding session and I was quite pleased to be involved with a group that focused on essential topics before focusing on first world problems and first world solutions, unlike it often is the case in North America or Europe. I have added the text of my presentation below the embedded video, and I have highlighted in bold letters my main messages.

Text of my presentation:

Tonight, I will quickly tell you what changes I see coming and what is needed to adapt to a different future.

We have gone a long way since the beginning of agriculture. For centuries, agriculture worked in local and closed systems at the level of a region. With the development of industrialization, we started to open the loops, and not just in agriculture. We actually created two problems, not just one. On the one hand we have depleted natural resources and on the other hand, we have created piles of waste. We went from a circular to a linear system.

To make it worse, we never looked at the long-term effects and costs of this linear system. We never included these externalities in the production costs. So, waste became an accepted part of consumption society. And we waste lots. In the case of agriculture, the number that comes back regularly is that 30 to 40% of the food produced never gets eaten.

The issue of food waste is twofold. In developed countries, it is a behavioural and organizational problem at consumer, retailer and restaurant level. In developing countries, the main cause is post-harvest, either rotting on the field or because of poor storage and logistics. It is an infrastructure and money problem.

Regardless of the causes, food waste is not just about food, it is about all the water, the energy, the money and the land used to produce, transport, process and sell it. 

For consumers, it is about throwing away a third of their food budget. For a household spending 12% of its budget on food, it means that they voluntarily throw 4% of their budget in the garbage bin. That is rather silly, isn’t it? The total price tag of the wasted food alone amounts to about one trillion US Dollars worldwide. But beyond the money, let’s just think about what a third means.

A third of the world agricultural land is about 10 million km2 wasted (Added note: world arable land is about 14 million km2 and grasslands twice as much, so 10 million km2 is a conservative number, out of caution). This is 60% the area of Russia; it is the area of Canada or the Sahara; it is slightly bigger than the USA or China or Brazil; it is 2.5 times the size of the EU and 3 times the size of India. Because of waste, we need to put more land in production. So, indirectly, food waste is a significant source of deforestation.

Now, if we look at a third of the world population, we are talking about 2.6 billion people. It is almost the combined population of China and India, and more than twice the population of Africa.

Where else than by solving food waste, do we have 33% room for improvement in food and agriculture? It is only a behavioural, an organizational and an infrastructure investment issue. It is not rocket science. All it takes is money and discipline.

Right now, people are gathered at COP26. Unlike what they claim, what is at stake is not the planet, it is the biosphere, which is soil, water, organic matter, climate and of course life.

There is not only one food production system. There is a huge diversity of production systems and they do not pollute equally. There are huge differences between the different regions of the world. Even within one particular system, different farmers have different production and environment performances, and impacts. We need a targeted approach.

The proper way is to look at the different situations and through innovation and knowledge transfer level up the playing field and help producers improve. We must do more to help farmers succeed. They know the problems; they often know the solutions, but often lack the needed support. There is great potential in this field, especially with the introduction of new technologies.

Previous periods of modernization of agriculture were about adding muscle, first with animals, and then with machinery, it literally and figuratively was about adding horse power. The current transformation of food and agriculture is about adding a nervous system and synapses. Drones, satellite imaging, robotics, driverless vehicles, sensors, artificial intelligence and data collection are all extensions of the farmer’s senses and brain, but far beyond human capacities. The principle of precision agriculture is about taking the right action at the right time at the right place. This actually offers the best of all worlds. It helps producing the highest yields by using the very strict minimum of inputs. It helps reduce the use of fertilizers and pesticides; it helps reduce the amount of energy, therefore reduce greenhouse gases and it helps reduce the use of water. These technologies go beyond production alone. They also can help monitor the environment and help detect possible impact on the environment immediately. The main issue with implementing new technologies is their cost.

New technologies and precision are the ideal tools to address waste, simply because waste and efficiency are two sides of the same coin. When we reduce waste, we are more efficient, as we need less input for the same output. It really comes down to producing more with less. 

In my opinion, there is no reason to sacrifice yields. Not everybody agrees. The USA think along the lines of increasing efficiency and producing more to meet future world demand. The EU, with its brand-new Farm to Fork policies seems to prefer to reduce production as the way to reduce greenhouse gases. Personally, I am surprised by the EU’s choice. The EU has a highly efficient agriculture, with some countries being the very top, and its carbon footprint is relatively low compared with many other regions of the world. Indeed, the EU, like all other regions, needs to reduce the use of inputs but in my opinion, the EU’s agriculture problem is not so much a carbon footprint one as it is a problem of distribution of productions, in particular a few areas having too high a density and concentration of intensive animal farms. They mostly need to rebalance animal farming and crops. The reason is, as I mentioned earlier, that loops that have been opened. 

The future will be about repairing the damage done. We will have to replace the consumption economy, which is about quantitative growth -about “always more”- by a maintenance economy, which focuses on qualitative growth, or on “always enough”.

Closing the loops is about the biosphere, with a financial element on the side. It is about preserving and regenerating soil, water, organic matter, while mitigating climate and by including the externalities. This means changing the economic equation. The economy is a combination of three components: resources, labour and capital. Next to this economic equation, markets determine prices through supply and demand. The math for both the economic equation and the markets are influenced by policies which set the rules of the game through rewards and penalties, and future choices of the reward/penalty system will strongly influence how agriculture will be organized and how it will perform, because producers will choose what returns them the highest income. A change I expect is the implementation of taxes on some product categories and production systems, mostly because governments need more money. To some extent, it will also influence consumers’ choices although consumers are subject to many more stimuli to make their choices. 

Setting new rules require thinking carefully about how they change externalities and therefore what the long-term consequences will be. It also means looking at the bigger picture. Climate change will affect the food world map. Some regions will not be able to keep producing what they produce today. They will have to choose for different crops and combinations thereof. Other regions will be more suitable to take over. Water availability will be a crucial factor in the future food map. How long can regions that produce and export large volumes of water-rich products to far away markets, from which the water will never return can continue to do so? 

New strategies are required. It can be the adoption of new and better varieties that can resist drought. It can be the use of different production systems, such as the use of cover crops, the use of mulch and organic matter. It can be the development of plants that use fertilizers more efficiently or that have higher photosynthesis efficiency. It can be different irrigation systems and move to a crop-by-drop approach. It also can be production systems that reduce evapotranspiration, for instance by combining a low-level crop under a cover of trees. It also can be desalination of sea water for irrigation purposes. 

The list of solutions is long but the redistribution of the world food map will have consequences far beyond the field. It will redefine geopolitics. All countries will have to rethink both old and new alliances. Feuds and partnerships combined with new natural conditions, and therefore trade, will affect food security.

It is also important to realize that food security, food sovereignty and self-sufficiency are different concepts. It is impossible for all countries to produce everything, simply because of different natural conditions. With more extreme climatic conditions, choices will have to be made. This is why I think that trade will be essential not only for food security, but also to mitigate the effect of climate change. 

Until now, the economic model has been “to produce where it is cheapest to produce”. As such not a bad idea, except that it opened the loops and did not include externalities. True sustainability means closing the loops and including these externalities. In the future, the concept must evolve to “producing where it is the cheapest to produce sustainably”. And this word, sustainably, is going to make all the difference. It will affect availability; it will affect costs and it will affect prices. And as always when prices increase, it offers opportunities for alternatives and also for resourcefulness.

An example is urban farming and there are all sorts of projects. It is estimated that 20% of all food produced in the world is produced in urban areas. Next to food production, it also has a social function and can help mitigate some of the effects of climate change. The question is often to figure out how to organize urban farming. There can be community gardens, people can also use their balconies to grow food, or old buildings can be transformed into farms. In cities, the roof surface is huge and roofs can be an ideal location to set a garden. Actually, some supermarkets are already growing perishables such as tomatoes, lettuce and strawberries on their roofs and sell them day-fresh to the consumers visiting their stores.

On the consumer end, there is plenty of activity, too. Suppliers offer products with green claims, true or not by the way. There are campaigns of information as well as disinformation about the impact of various food groups. Protein is one of these areas, and the fight to meet the need for protein is on between animal farming and alternatives.

But what do consumers want? They want food to be available, affordable and safe. There is also strong demand for natural, although natural is a rather unclear term, and most of the time, it means “not artificial”. They want healthy foods, and the rise of obesity and diabetes reinforces this demand. Because of climate change, consumers have become more discerning or at least try to be about which products they consider responsible or which ones they see as harmful for the environment. Production methods will matter more and more and a good example of this is the growing concern for animal welfare. Another strong trend is authenticity, which is also an unclear term rooted in some nostalgia and often means that it must not be “industrial”, or at least not be perceived as such.

Other areas that consumers look for are value and values. Value is not new but it becomes more complex. It is rooted in perception and psychology, not to say ego and status. Values have become increasingly relevant with the presence of social media. Consumers buy from suppliers that are aligned with their values. They are keen on knowing the food producers’ views on their role in society and environment. For a food producer, this can be tricky, as often it will take only one word or message that goes against the consumer’s values and they decide to stop buying. Social media have made people extra sensitive and touchy and bad publicity spreads like fire on social media platforms. This is a new dimension that food producers need to consider very carefully. Social media can make you and can break you in a heartbeat.

Transparency is important. Most suppliers see it has providing consumers with every bit of information but this is a herculean task and one can wonder if this is the right approach. Let’s face it, only very few consumers want to know everything from beginning to end about the history of the product they buy. Transparency is not so much about information as it is about trust. They want to know enough about the producer to feel confident buying the product. They want to have the assurance that the producer has nothing to hide and will answer honestly all questions. The food producer’s business needs to be on display as if it were behind a clear –transparent- window where consumers can look at anything they want in complete freedom.

Traceability is a cousin to transparency. It is essential to trace the source of a problem, should one arise, but it must be much more than that. It must be a proactive tool. Knowing why something went wrong is nice but it is after the facts. A good traceable quality assurance system is what producers need. This is where new technologies – “the nervous system”- can be useful by allowing a full online in real time quality control that has the ability to flag any deviation and stop the production line immediately. Having a proactive system that will prevent quality issues to be sent to the customer will spare many frustrations and save lots of money.

But next to better production methods and new technologies, one area that needs to improve in the future is to help people eat better. It should be the moral duty of food producers to take good care of their customers. In this area, we are still in an era of marketing-driven business, which is about having consumers buy more. It will have to change from quantity to quality, and the promise will have to be kept, indeed. An advantage of social media is that it will expose those who make false claims and false promises. Consumer information is going to be another front for suppliers. A system like NutriScore is drawing more and more criticism. It seems to have become a marketing tool and is no longer a true nutrition tool. If it does not get fixed, it will lose all credibility and in fact reinforce the feeling that the industry is always trying to deceive consumers.

So, what segments can be the winners of the future?

The points I have presented before, such as quality, clean, healthy, authentic will do very well. Foods and recipes that are rooted in nostalgia and tradition have great potential. This is especially true in mature markets that I see evolve into a mosaic of niche quality specialties. Of course, because not everybody is wealthy, there still will be a large market for low-cost staple foods sharply priced, but with increased standards about health, environment and ethics.

Over the last few years, perhaps the most disputed battlefield has been protein. Animal farming is being challenged. A lot of investor money flocks to tech protein alternatives. Plant-based imitation meat and seafood has received a lot of publicity. Many claims have been made about their potential. So far, they come short of those claims. The segment has room to grow but it will not replace animal farming. Performance on the stock markets is poor and the investors’ money is now moving somewhere else. I see better potential for smaller private producers with a low profile, catering to the need of consumers with wholesome products instead of high-tech meat imitations. If the stigma is currently on meat, the next category to be demonized will be ultra processed foods. Investors have also moved into what used to be called lab meat, a product that still struggles to find its name. Although they make regular claims about readiness to deliver large market quantities and being price competitive, it is still not really clear whether it will happen on a large scale. Other alternative protein sectors include the use of bacteria to produce specific protein. Perhaps, it will have some potential for animal feed, but more surely in the medical field. And of course, there are insects. There has been a lot of publicity but success is slow to materialize. One problem is the price. Just like all the other alternative proteins, they are not price-competitive with animal products. Producers of insects try to push it in Western countries’ markets but this is not the right place. There, people do not want to eat bugs. Westerners like soft and meaty. That is why lobster and shrimp are in demand. They are large aquatic insects really, but their look does not matter because they contain lots of flesh. Crickets don’t. It is that simple. I see insects having more potential for animal feed, if it can be price competitive.

The protein fight is useful. It has put animal farming on the spot and forced producers to find solutions to reduce their environmental impact, and it works. The sector has already come with innovations to reduce its methane emissions, and although there still is a lot of work ahead, the improvements are getting noticed. This is the beauty of the fight between industry and environmentalists. As long as the industry does not feel threatened, the initial reaction is always : “no, it costs too much”, but when the industry sees that it will lose business and it will cost them dearly, they are actually amazingly innovative, fast and cost efficient. 

Perhaps anecdotal is the fact that Bill Gates, who has been an investor in alternative protein and a man behind the claim that it would replace animal farming in a decade, which is not going to happen, has now invested in a cow milk producer (Note: the company’s name is “Neutral”) that gets the milk from farms where new technologies are being used to reduce methane emissions. He is pragmatic and he is moving on. Others will follow him. 

As animal products are concerned, all the forecasts for the long term show a further increase of consumption. In particular, poultry is by far the biggest winner. Aquaculture could do very well, too, if consumer prices become more affordable. You are in an area with great potential for the production of fish, shellfish, crustaceans and seaweed.

To conclude,

Feeding a population of 10 billion individuals is a huge challenge. It will require changes in the way we produce and in the way we consume. 

My main concern is that the conversation has become more and more polarized and intolerant. Instead of opposing systems and points of views, we need to listen and think carefully. Nothing is black and white and there is no one-fit-all solution. There is no silver bullet that will solve the problems so that we do not have to change. Instead, we will solve the problems through a combination of many solutions. Some will be of a technical nature but technology is only as good as how we use it. Technology is not only about high-tech, and innovation is not only about technology. The key is the way we think, and we need to be flexible with thoughts and ideas. 

Pragmatism will be essential. Whatever works is good, even if it is sometimes goes against our prejudices. Remember what Deng Xiao Ping said when he changed the course of China 40 years ago. “It does not matter if the cat is white or black, as long as it catches mice”. 

Our attitude will make all the difference. I expect that we are going to rediscover old wisdom and that many solutions will come from the past but in a modern jacket, as it is already happening. Money will make a difference, too. There is plenty of it around. All it will take is some effort. 

Succeeding will also require humility and cooperation. Nobody knows everything and nobody can solve all the problems on their own. Engaging in a positive and constructive dialogue is what will shift the conversation from a sterile win-lose debate into a win-win vision.

You can read more about my thoughts and views about the future of food and farming on my website blog and my books. 

I thank you for your attention and I wish you a fruitful session.

Copyright 2021 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

Ecological accounting vs. financial

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When it comes to sustainability, the debate always shifts to the respective weights of money, people and environment. As we all know, these three areas are always tricky to reconcile. Here, I am going to give my views on why that is. In fact, it is not that difficult to understand. It comes down to the concept of externalities that I have addressed many times in previous posts. You can see the list of all these posts at this link I am really amazed how absent this term of externalities is from conversations about sustainability and about the future, because externalities are the very cornerstones that will determine our future. Talking about sustainability without mentioning and digging into externalities is purely and simply a useless exercise. Externalities being the long-term effects of human activities, it really raises the issue of the me/here/now vs. the others/somewhere else/later. This simple statement sums up the dilemma about both future and sustainability. In my opinion, not talking about externalities when addressing sustainability and future comes down to not taking the topic very seriously. Another area of discussion that I do not hear enough is the idea of closing the loops. Our materialistic consumption society based on always more has grown by opening the loops and ignoring externalities. To have a future we must close the loops again. The discrepancy between the me/here/now and the others/somewhere else/later is another expression of that.

To clarify, just have a look at the picture below. I compare Nature’s accounting with man-made financial accounting. I believe it makes everything much clearer. The way humans have organized their financial accounting is about having a snapshot of the financial situation of an organization or of an individual. Since it is a snapshot it is limited in time. We look at the financial situation over a defined period (week, month, quarter or year). As it is a snapshot, it is frozen at a particular moment. A few minutes later, another snapshot would show a different financial situation. Everyone who has had to do some accounting knows that. We allocate things in certain ways, most of which are arbitrary and dealt with just to make sure the snapshot looks good. It is just like having a portrait taken. Accounting makes sure that the subject is showing its best profile and under the nicest light possible. But because of this moment frozen in time, man-made financial accounting is of a linear nature, which also fits very well, or at least accommodates itself quite well with a system in which the loops have been broken open. Financial accounting, as its names tells, is about money and money only. The social and human balance-sheet does not appear in there, and neither does the impact on the environment. They are externalities. They are matters that are neither limited in time, nor linear and which are way beyond money only. Just imagine how things would look different if instead of our current currencies, we all shared one same currency, which would be CO2. Just think what it might do for the way we internalize the environmental externalities.

That is what Nature kind of does. Our little accountant bee from the picture could tell us more about that. Nature’s accounting is not based on a snapshot, it is an ongoing process. It is not a photograph, but it is a movie! And a very long one that has no beginning and no end. What can be more circular than that? And to be this circular is must have closed loops all interacting with each other. That is how Nature works. Humans, on the contrary, look at accounting of organizations as independent units from each other. The interactions are not factored in. There is no comprehensive accounting for the entire system, which makes each organization focus only on itself and leaves the others deal with their own. Human accounting limits co-responsibility and collaboration on our long-term impacts.

Instead of practicing creative accounting, Nature’s loops just constantly rebalance themselves. Nature works according to the most fundamental market liberalism there is. If something is out of balance, it readjusts itself. If that means that some populations see their numbers being decimated, so be it. That is the price of rebalancing life with resources. It is brutal but it is highly sustainable. Nature’s does not print money, does not maintain an imbalance for the sake of not affecting populations. Nature does not play musical chairs with its economy, as we do. For example, in financial accounting, there is always the game of improving the working capital for the closing date of the fiscal year, one part of this being to postpone payments to suppliers for just after the end of the fiscal year, but try to get the customers to pay their bills before the end of that fiscal year. That way, the working capital is lower and the numbers look better. That is the beautiful portrait snapshot approach I mentioned earlier. What we do with working capital, we do with externalities, too. We try to pass the inconvenient hot potato to others. In man-made economy, we also fight “natural’ market forces as much as we can. And even liberal capitalistic countries who champion free-market economy do this. Just see how much money has been printed pumped and into the economy after the subprime crash of 2007-2008. Just see how much money has been printed and pumped into the economy to deal with Covid-19, just to try to keep the economy (herewith I mean the GDP) afloat as much as possible. Just also look at all the subsidies of all sorts to keep systems running while they have no future, and the food and agriculture sector is no stranger to that. In our consumption society system, we have done nothing else than subsidize activities that produce negative externalities, and we can read “subsidizing” as actually “rewarding”. While Nature rebalances to function at the lowest energy level possible, we fight the rebalancing with the highest energy level possible. Should we really be surprised that this cannot go on?

Actually, human economy and its financial accounting do not work in parallel with its ecological counterpart. All the money we print to support our gigantic consumption levels is nothing but a loan that we take at Nature’s bank. All that printed money is used to use (well deplete and burn mostly) natural resources, while we have not earned that money, which is actually the right to use these resources. On top of that (literally), with broken-open loops, we pile up mountains of waste with the resources we deplete. Breaking the loops is not one problem, but it consists of two problems. One is running out of useful resources, the other is accumulating waste that kills us. We do this for the “me, here and now” and just like we play with working capital, we play the exact same game between generations. The generations that have benefited from this world of abundance are playing musical chairs with the following generations. The former do not want to factor the externalities in their lifestyle and just pass them on to their children and grand children. This is why, in terms of environmental impact, we are using resources much faster than we should. The problem is that Nature’s patience is not unlimited (here, read “resilience” for “patience”). It is a matter of time before Nature’s is going to ask us to pay the interest. The boomers won’t pay the interest. They leave it to their offspring. Nobody wants to take ownership of the externalities. It has become part of our culture. It is only fair for the young ones to push back now. They have started realizing that they are going to be left with the bill to pay, possibly in a system where Nature’s approach to economy will be stronger than the man-made system.

My purpose is not to depress you, although we all know that we are running out of time and climatic events certainly are cause for perplexity, to put it mildly. There are not many ways to rebalance our environmental impact. The most important is to reduce waste, which means reducing consumption volumes, From the 3 Rs (Reduce, Reuse, and Recycle), Reduce is not popular because it means lower GDP and our politicians and economists freak out at that thought. At least, reuse and recycle leave some hope for GDP. Even the word Recession is unbearable. It is now called the R-word instead. As a society leader, if you cannot say the word recession and accept that it happens once in a while, because recessions are good, they are like slimming down after the excesses of Thanksgiving and Christmas, to get back in better shape, you have no place as a leader. Actually, you are a liability to society.

We are seeing more and more attempts to internalize the externalities. Unfortunately, they are always referred as taxes, which is another word that nobody wants to hear. So much for the quote “taxes are the price we pay for a civilized society”. Perhaps, it is no wonder that we see an increase in incivility. To make our world sustainable, which means having a future, we cannot keep the same economics as now. Then, we must change the economics. We must change the way profit is built up. We must change the way we organize taxes. Money always talks and people will always welcome change if they make more money. Considering the amount of money printed, as I mentioned above, we clearly have the ability to put money at work to solve the challenges that we are facing. Yet, everybody seems to wish that when the Covid-19 problem is behind us we can revert to where it was before the virus hit us. Why on earth should we revert to a system we know leads to disaster? There was a great opportunity for our leaders to organize a shift of economics for before and after the pandemic, by putting money at work to create a healthier economy. No, most of that money has gone to the stock markets instead. We are missing an opportunity to change economics. We are missing an opportunity to reward good behaviour while penalizing damaging activities. Money talks and rewards are even more important than penalties to get acceptance for change. People always manage to dodge penalties and they do not cooperate. Opposite to that, people love rewards and cannot get enough of them. Not only do not they dodge rewards, they actively look for more. Here is a sadly underused potential: more rewards for good behaviour! As we can see, the solution lies in our behaviour and how we want to deal with adversity. This is quite important to underline. Technology alone will not deliver much if we do not want to change. Those who say otherwise are just salespeople trying to make some bucks. If we think that technology will do the work for us, while we do not make efforts to succeed, like spoiled lazy brats waiting for their parents to clean up their bedrooms, we just as well can cut the charade right now and accept the fact that Nature will go on but without us. The planet will be fine, no need to feel self-important by claiming to save it. What we need to save it humanity and life.

Copyright 2021 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

What’s ahead for animal protein?

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As I explained in previous articles about protein, the future of animal farming looks rather good, actually. This does not mean that current productions systems are perfect. They are not, and many changes are necessary. Four drivers are going to make animal farming evolve towards systems that meet future requirements in term of environment, health, sustainability and consumer demands. They will not affect only farms, but the ways entire value chains are organized and even future flows of animal protein in international trade.

Two pillars of sustainability are externalities and the necessity to close the loops. Strangely enough, these two fundamental topics rarely ever get mentioned. Yet, they will define the future. I mentioned externalities quite a few times on this blog and if you are interested to read what I say about it, just do a search on the search window on the right side of this page. Basically, externalities are the long-term economic effects and in particular long-term costs of repairing the damage that any human activity causes. Closing the loops is simply following the basic principle that nothing ever disappears or get created, but that everything gets transformed. These two pillars of sustainability are going to force us to review how balanced -or not- productions systems are. Greenhouse gases and minerals balance from manure will force a change in location of animal productions, in regard to the location of production areas of ingredients for animal feed, feeding programs, logistics of both feed ingredients and animal products, in particular in terms of transport. Distance between markets will be only one part of the equation. Transportation systems will weigh even more. Will trade rely on road transport, rail or water ways? Different transportation systems have very different carbon footprints and this will affect the future of some industries depending on how they are organized and where they are located. It will also force countries to invest heavily in their infrastructure, which is another topic that is too often ignored and yet so critical for the future. Of course, infrastructure is not as sexy as tech start-ups and more importantly, it does not have the same appeal for investors. After all, infrastructure is an expense that benefits all, while the current thinking about money is more about individualising profits. Yet, infrastructure will have more impact than tech. Location will also be influenced by water availability, as water will become an increasingly influential aspect of sustainability. Just as an example, California has been struggling with water availability for decades. Yet, it keep sending water-rich produce to other regions, thus exporting its already scarce water. On top of that, California produces about a quarter of American agriculture. See the danger ahead? For the future, the economic paradigm will shift from “producing where it is the cheapest to do so” to “producing where it is the most sustainable to do so”.  The main reason for the shift will be externalities as we will have no choice but internalizing the externalities (sounds fancy doesn’t it?… try to place that one in a cocktail party when you have a chance).

Location is one of the changes, but of course when it comes to greenhouse gases, there will be other solutions to reduce the impact. Feed programs are one, and gas capture from manure will be another one. Tech and innovation will play their roles in those areas. Markets will do to, and I expect manure to become a highly valued co-product, and not a by-product anymore. Just as manure is a side effect of intensification and high densities, so are diseases. Last year saw the huge outbreak of African swine fever in China, which so far has lead to the destruction of 25% of the world’s pigs. That is the perfect example of what can happen again. It is not the first outbreak. There have been other ones before of the same disease and of avian influenza. The risk of diseases and their huge cost will also contribute to a readjustment of location of animal production, in terms of production centers, in terms of density of farms and also of densities on the farms themselves. So will the prospect of possible transmission of diseases from animals  to humans.

Next to such production issues, consumer demands will also change the way animal products are produced. The pressure for better animal welfare is increasing and will not weaken. It is just fair and it also makes a lot of economic sense. In my times in the pig industry, the poultry industry and in aquaculture, I did quite some research on the topic and the numbers spoke chapters. Treating animals with the proper respect pays off big time. Yet, I also faced a lot of resistance when I tried to show my conclusions by then. I guess that it did not fit in the thinking of the times. The future proved me right, though. The need for better animal welfare will also contribute to a change in production systems, housing and feeding in particular. Animal densities on farms will also be reduced. This trend is already taking place in Europe and there are more and more farming programs that go in this direction. And so do government policies. Along with animal welfare, environmental concerns from consumers will also push towards more “natural” methods of farming. Intensive animal husbandry is not going to disappear but its excesses will. The problem is that too many people tend to associate intensification with efficiency but it is only true to a point. When we reach that point, any incremental intensification does not lead to incremental efficiency anymore and the further we pass this point, efficiency actually decreases and externalities increase substantially. The future will be about finding the optimum between intensification, animal welfare, environmental impact and long-term effects. Next to that, as consumer markets mature, especially when people already eat more than they really need, demand shift from quantity to quality and we will see more and more quality programs appear. It will be good for consumers, for health, for the environment, for the animals during their life and for the profit margins of farmers.

As the graphs from my articles Cow farts, or quite a bit of hot air?  and What’s ahead for plant-based foods? show, demand for animal products is expected to increase and a number of products will do quite well. As I mentioned in the same article, ruminants actually play a important role in the management of grasslands and I mentioned their importance for a healthy environment, I believe that responsible animal production systems will help mitigate climate change. Of course, this means that the necessary changes be carried out as I mentioned earlier on in this article. I also believe that animal productions will play an important role in economic development, especially in developing countries and in regions where the population is expected to increase the most. It is nice to expect that the urban population will increase, but it is essential for a prosperous future that we also make sure that people in rural areas can be prosperous and that we do not end up with a demographic desertification of regions that can contribute to a prosperous future. Just as animal productions, although they were intensive and have had a negative impact on the long term, have helped many European young farmers stay in their regions and make a decent living for themselves, it can play the same role in rural areas in developing countries. It is true that mistakes have been made in the past and grave ones. We cannot change the past, but we can learn form past mistakes and make sure not to make them again. Productions that I expect to be successful and popular as economic development tool are poultry (meat and eggs) and aquaculture. Poultry and chickens in particular have the advantage to have a short production cycle and this helps farmer getting a quick cash-flow, which is essential to limit the need for capital. Aquaculture can have the same advantage with fast-growing species but less with species that have a longer production cycle as capital requirements can be heavy, although this can be attractive to investors. Two big pluses for aquaculture are the strong deficit between supply and demand and the health aspect of aquaculture products. The world is quite short of healthy seafood.

I see many areas of success for certain types of animal productions and I have summed them up in the following illustration. In particular, I would like to emphasize is my expectation for the future to see a surge of grass-fed beef with special breeds in semi-intensive systems in which there will be a minimum amount of high energy feed and no hormones at all. For all productions, I expect to see more and more of old-fashioned “authentic” products and recipes, and also a lot of “happy animal” products to be marketed more aggressively than has been the case so far.

Copyright 2020 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

Happy Holidays!

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Time flies and 2019 is coming to an end. For me, it has been a good year. I have had very interesting assignments with really great organizations and people. From that perspective, 2019 might very well have been the most interesting of my 10 years as “The Food Futurist”. I am also in the process of launching another venture: The Sensible Gourmet (see at the end of this posting to have a glimpse of what I have in mind).

The end of the year is always a good time to reflect as things slow down and almost everyone is taking a break. The end of the year is also the time of COP conferences. For 25 years, world leaders have gathered to do I am not sure what. This year was no different, or maybe it was after all. Previous years always saw the same theatrics at play: disagreements, slight extension and a miraculous last minute non-binding agreement but at least some sheet of paper that would make us believe that it is worth organizing the next conference. This time, this did not even happen. Santa did not bring a shred of hope. Of course, many will blame politicians for the failure. I do it too because it is easy. Yet, should the politicians be the ones to blame? After all, we have the leaders we deserve and we either chose them or let them take that position. Is it that they could not agree or is it possible that there might be a different reason and perhaps a much more sinister one than their being poor leaders? As a highly empathetic person, I always like to try to put myself in the other side’s shoes and even play devil’s advocate. I am sure that they, and their advisers, are all aware of all the reports about climate change and the many challenges that we face. They cannot be that ignorant and stupid. I believe that their problem is not so much about finding agreements as it is about finding workable solutions. We have to be realistic. Even though technology and innovation will bring solutions, our problem is not as much of a technical nature as it is of a behavioral nature. As a futurist, no day that passes by without crossing paths with news of technology and innovation. Purely from a technical point of view, we already have all the technologies to fix all the problems, and we will have more technologies coming our way. The problem is that most of them are not financially competitive, or not competitive yet. One of the reasons is that we have not and still do not include externalities (a very important concept that I have addressed regularly in this blog, books and conferences) in the cost of the goods we produce and consume. That additional cost can be included through regulations and fiscal incentives or penalties, but it takes time. If technical solutions face a financial challenge, so does our behavioral problem. We overconsume, and to add insult to injury, we waste a lot. We waste, energy, water, food, resources, clothing, electronics,  etc… You name it and you can be sure that we waste a lot of it. Reducing waste will mean a relative slowdown in production and therefore an industrial slowdown, and the same thing is true if we decide to consume less. The “3 Rs” have different impacts from a production capacity and thus economic point of view, at least as long as we rate our economies from a quantitative growth point of view instead of a qualitative growth point of view. One of the Rs, recycling, is popular. Why is that? Recycling means that the only thing to change is the source of raw materials. From that perspective, industrial production processes hardly would have to change. It gives an impression that the system would not have to change much, and we know how much we tend to dislike change, regardless of what we say. It is always OK for others to undergo the change but when it hits us personally, it is a different story. Just look at all the demonstrations a bit everywhere around the world to realize the validity of my point. A second one of the Rs, reuse, although less popular is not perceived as too much of a threat. After all, it does not imply a reduction of industrial activity, and the growth of population would mitigate the stagnation. Then, there is the third R, the one that we mention but we would resent from a quantitative growth point of view: reduce. The word says it all: it implies a shrinking of the economy, at least the current economic model. Our economic system is about always more. Reduce goes in the opposite direction. Yet, from an environmental point of view, it is probably the only effective approach. The Great Recession of 2008 was a period when actually, greenhouse gas emissions were showing some change of trend, because consumption was slowing down. “Reduce” works, indeed. A couple of months ago, I read an article from The Guardian and it basically said that the best way to save our future was to stop buying stuff. I agree, and I believe that it is true but how to do that and not end up in a major economic depression? It comes down to have a transition plan, and we do not have that and I wonder if we have any idea of how to do that.

Because of the financial lag for better alternatives, jumping ships without a proper transition would result in short-term economic hardship and politicians do not want that. They want happy people. And people do not want that, either. They do not want to lose their jobs, and politicians know that, too. Who is willing to volunteer to lose their livelihood to save the environment? Nobody wants to do that of course, unless there is some compensation. Just as politicians do, all individuals try to protect themselves from adversity. It is just human nature. How to transcend the fear of loss into a desire for sacrifice, because sacrifice there will be? The question is just when and who. What is needed to answer this question are 1) a conviction that it is meaningful and useful and 2) a sense of hope for the long term. In an increasingly individualistic world, this is difficult to make happening because it requires altruism. One might think that the Holiday Season is the perfect time to ponder about altruism, but that spirit has become a nostalgic thought, really. Nowadays, Christmas is about buying more stuff. The causes of our future challenges are behavioral and collective, and therefore so are the solutions. We may blame the politicians because finding scapegoats takes away some of the guilt from ourselves, but we allowed those politicians to be where they are and we all (well many of us) want always more, so each of us really are responsible twice for the problem. And since we are all responsible, we all have to bring our share of the solution. Waiting for others to do it for us won’t cut it. Doing nothing is not really an option. In the end, the choice is simple: willing to make sacrifices today or having to make much tougher sacrifices soon.

I can understand that reducing consumption might not always be easy but reducing waste is. I have made a comparison between the Canadian average (since I live in Canada) and my household on a per capita basis. In my home, we generate 87% less garbage going to the landfill, waste 99.9% less food, use about 70% less water (and I have a garden and little vineyard that I need to irrigate!), use about half of gas and electricity of the per capita Canadian average. I will give you that I always have been a frugal type but I live quite comfortably. All it takes is a bit of discipline, some organization and planning, simple common sense and some basic sense of money, because reducing waste and consumption saves quite a bit of money that we can use for more useful things.

Perhaps, there is hope after all. All the companies that I follow on LinkedIn post many articles and announcements about how sustainable they are or will be soon. Of course, they must deliver and their claims must be true. Because, it is the holiday season, I will do as if I believe all of what they say. In the meantime, I am going to start thinking of how I will treat my family with a nice Christmas Eve’s dinner. One of my predictions is that cooking and home economics will make a strong comeback because it (meaning proper cooking) helps reducing food waste, it helps making healthier meals, it saves tons of money, has many social benefits and is among the nicest things a human being can offer to his loved ones. It is good for people, the environment and for the wallet. Cooking is going to be one of the most sophisticated skills to show around. Wait and see!

My idea for the dinner is (you’ll have to look up a few things because it is French):

  • Smoked salmon on toast with a shallot and dill sauce
  • Duck magrets (fillets) in a cherries, honey, port and balsamic sauce accompanied with Sarladaise potatoes and mixed vegetables
  • A chocolate “Bûche de Noël”
  • Accompanied with a selection of the wines I make from my vineyard

Enjoy your time with your loved ones and see you again in 2020!

Copyright 2019 – Christophe Pelletier – The Happy Future Group Consulting Ltd.

Why we are not solving the climate challenge

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

Reason #1: We are not scared, yet

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

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

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

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

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

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

Reason #3: There is no plan

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

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

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

Reason #4: There is no collective coordination

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

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

Reason #5: We prefer to blame than to fix

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

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

Reason #6: Short term prevails

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

Reason #7: Lame leadership

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

Reason #8: There are powerful opponents

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

Reason #9: We are addicted to materialism

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

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

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

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

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

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

Reason #11: We are increasingly disconnected from Nature

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

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

Reason #12: We put too much faith in technology

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

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

Running out of time or simply not running at all?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Feeding the future with focus on health and environment

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

nutrition

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

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

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

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

Changing economics to overcome future challenges

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First, a personal story

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

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

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

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

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

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

Searching for a new economic model

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

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

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

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

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

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

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

 

 

Nature will reshape food value chains

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

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

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

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

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

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

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

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

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

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

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

Maybe a different approach of climate change conferences would help

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

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

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

Here it is:

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

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

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

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

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

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