Devangshu Dutta
March 24, 2011
During its history, the Indian subcontinent has been known as the “Golden Bird” for its natural and manufactured riches. In fact, long before the United States of America, India was the Land of Promise. (The irony, of course, is that Columbus also set foot on North America when he was actually trying to discover an alternative route to India.)
However, in the more recent centuries, India became an exploited golden goose which not only stopped laying golden eggs, but also almost appeared starved at different points in time.
The government’s thrust on infrastructure and industrialisation in the 1950s would have been a great base for economic growth, but the country had to wait another 4 decades to see a true boom, which only happened after the government began stepping back from excessive controls. Similarly, while the Green Revolution took India to self-sufficiency in grain and White Revolution made India the largest producer of milk, we are very far from the place where we can celebrate a boom in agriculture.
If anything, the recent economic boom is much more an urban and upper-income phenomenon, and that is creating some serious socio-economic fault-lines, about which I have expressed concern earlier. The growth of income inequality looks slower in the case of India than in the case of China, but that is only because India still has far too many poor people weighing down the decile averages.
My concern today is of a different nature: about the need to secure food and nutrition supplies for the burgeoning economy.
Over the decades, farm-holdings have steadily fragmented. With shrinking parcels, a farming family finds it increasingly difficult to create enough surplus produce to trade effectively. As farming becomes unattractive, the family looks at alternative, primarily urban opportunities to generate income, reducing the hands available to farm.
At the same time, economic shifts are causing increasing urbanisation, as concrete and glass takes over what used to be active farming land. Large cities such as Delhi (Gurgaon) and Bengaluru are prime examples, but the phenomenon is affecting smaller cities as well.
The demographic dividend to which we should otherwise look forward could, therefore, turn out to be a triple time-bomb, with:
The employment issue needs to be addressed by placing adequate emphasis on manufacturing (especially labour intensive products) and entrepreneurship, but without addressing agriculture, even this growth would unsustainable.
Also, India is at the inflexion point similar to where China was in the 1990s. The increasing income is leading to changes in food consumption. Not only is the overall consumption growing, the diet is broader and more balanced, as people are able to afford a greater variety of food. There is a growing consumption of milk, meat and poultry products, as well as processed foods (per capita of processed foods quadrupled from the late 1980s to the early-2000s). All of these require more inputs (land, feed, water, and fertiliser) per unit of food produced.
We may be tired of hearing this, but Indian farm productivity continues to be among the lowest in the world. For instance, India as the largest milk producing country is still only at about half the level of milk production per head of cattle, when compared to the global best. Similar comparisons can be made across the food supply chain.
There are three legs to create a change: technology, dissemination of information, and market demand.
There is an urgent for technology infusion across the chain, from seed to shelf. Technology doesn’t only mean tinkering with the genetic code (about which there are significant sensitivities). Traditional technologies that are centuries-old can be as effective, sometimes even more so, as technologies that come out of modern labs. If we can avoid taking a “fundamentalist” approach between modern and traditional, we will probably achieve much more, and faster in cultivating and harvesting more efficiently.
Information dissemination is vastly superior today, and with the convergence of internet and mobile technologies, not only is it possible to compile ever more information, but also spread it in regional languages very cost-effectively.
But these two alone will not be quick enough. The last, but possibly the most important leg, is market demand.
For obvious reasons, manufacturers and retailers are focussed on growing their brands, sales and driving per capita consumption. I would argue they also need to look equally critically and perhaps more urgently at the supply chain.
Without seeing the farmer and the processors as true partners in the supply chain, and ensuring them a productive existence, any victory on the market or brand-side will only be hollow.
As customers, retailers and brand manufacturers not only have the weight, but the sophistication to encourage development. Retailers and brands have the power to drive change. They must also assume the responsibility. A few of them have begun showing the way, but need support from many more. Urgently.
Devangshu Dutta
February 28, 2010
Who knew that a mere vegetable – the humble purple, shiny brinjal, eggplant, aubergine – could create such an uproar?
And why retailers and consumer product companies should be concerned about genetically modified (GM) crops is a complicated story with multiple twists and turns across political, economic, social, scientific and philosophical landscapes.
At their basic level, brinjals have so far been possibly equally hated and loved for their flavour and texture across the world. But their newest avatar – Bt Brinjal – is now being viewed on the one hand as an evil alien transplant that will kill everything good and natural, and the first step of capitalist monopolies to dominate food crops in a large and growing market, while on the other hand it is seen as a saviour of the embattled farmer, an eco-friendly alternative to pesticides and a well-thought out scientific solution to agricultural productivity.
Though it might appear that genetically modification is a 20th century invention, the fact is that such food is not new. Since the time we began farming some 10,000 years ago, we have been carrying out genetic screening and selection, and modifying to create plants and animals that suit our purposes. All farmed products are a product of artificial rather than pure natural selection, as humans have pure-bred and cross-bred strains of crops that are seen as more beneficial in terms of nutrition, hardiness and ease of cultivation.
However, there are some important differences between earlier efforts and now, which underlie the recent loud and violent debate. Let me outline the concerns as seen from the anti-GM side of the table.
Previous genetic selections and modifications happened not just over generations of plants, but generations of human beings. By default, this allowed time to try and test different variants and arrive at varieties that met multiple criteria – profitable cultivation, nutrition, taste, durability and safety. There are concerns that not enough is known about the eventual impact of the new GM crops on human and environmental health, and the speed of adoption frightens people. (In 1948 a Swiss chemist was awarded the Nobel Prize for his work on DDT’s effectiveness as a pesticide, just a few short decades before it was banned from widespread agricultural use for – among other things – apparently causing cancer, and being acutely toxic to organisms other than the pests at which it was targeted.)
In the past, if some variety was wiped out due to climatic variation or pests, it was very likely that alternative varieties were close at hand to substitute it. (Estimates about the number of brinjal varieties in India alone vary widely, from 2,000 to over 3,500 though most of them are not actively cultivated in any significant number.) On the other hand the agricultural information and supply chain today is far more integrated, allowing a previously unknown speed and completeness of adoption of new technology and inputs, frequently at the cost of traditional knowledge. Extinction of natural species is not just due to hunting or disasters, whether man-made or natural. If a new engineered variety is profitable in the foreseeable future, farmers would very likely replace other varieties without examining the long-term impact. (This is true also of other inputs, like overuse of heavily promoted synthetic fertilisers or pesticides.)
Previous ‘engineering’ was restricted to pollination, grafting and selection, whereas now we are attempting to manipulate individual genes or sets of genes, and transplanting genes across species (from a bacterium in the case of Bt). This approach is similar to how we look at most things, today – individually, separate from or devoid of the natural context, ignoring any interaction with other elements (other genes, in the case of genetically modified crops). While in some cases there may be no significant impact on the outcome, our knowledge of genetics is far from complete and holistic to be able to confidently make the statement about no long-term harm.
All agriculture in the last 10,000 years was based on the assumption that future generations of the crop could be raised from seed saved from previous generations. Current genetically modified varieties, on the other hand, are seen as corporate intellectual property created with huge investments, where the return of investment is sought from fresh seed being sold by the company to the farmer for each planting. This is one of the most violently opposed aspects of GM crops, not just in developing economies like India but in developed economies such as the US as well.
I believe I’ve listed the major concerns of the anti-GM side of the debate above, with the rider that not everyone on the anti-GM side shares all the concerns equally.
Unfortunately, the debate is neither simple nor clear as emotions and stakes run high on both sides of the debate.
Pro-GM groups and individuals express the view that their opponents are stuck in the past and are standing the way of progress that is urgently needed to solve immediate human problems.
For one, proponents of genetic modification will point out that the humongous increase in human population needs new strains of crops that can grow more with fewer inputs in terms of water, fertilisers and pesticides. Without such crops, we run the risk of widespread food and water shortages around the world. ‘Green’ concerns may also be quoted in favour of GM crops. The argument is that using genetically modified crops would actually do less damage to the environment than conventional crops, for instance by needing lower doses of pesticide, or producing more crop from smaller patches of land.
Another concern quoted by the pro-GM group is that publicly funded organisations do not have the skills, the scale or the funding to undertake massive and rapid research for the breakthrough agricultural solutions needed in the short term, and that fundamental research needs to be carried out by commercial for-profit organisations. Obviously, as an outcome of that, the profit from the intellectual property needs to be protected such that it can provide adequate returns over a period of time.
For now, most governments (including in India) are playing it safe by maintaining the current status, and disallowing the introduction of GM crops, although there are opposing viewpoints even within each government.
As consumers, also, we could take the view, as many consumers are taking, that what exists (or what existed many years ago) is the best and safest option, since it is the most proven. We could give more muscle to producers and sellers of natural, organically grown varieties, by choosing to buy only such merchandise and rejecting GM foods completely.
I wish it was that simple.
I wish we could say that everything artificial is harmful and everything natural is beneficial. I wish we could blithely accepts labels such as ‘Franken-foods’ for genetically modified crops, treating them as a monster creation.
I wish we could say that one side or the other is adopting more robust scientific methods so that we can take clear and well-informed decisions.
As consumers, unfortunately for us, the truth is not so clear. There are pros and cons on both sides, which will get quoted in and out of context, to support different arguments, for and against genetic modifications.
More importantly, both for consumers and the industry, what is not clear is how complete separation of GM and non-GM products can be maintained. Once GM foods enter the supply chain, it is likely that they will mix with non-GM produce, whether at the farm, in storage or in processing. The current compliance standards in the global food sector offer no confidence that the non-GM and GM supply chains can be sealed off from each other and monitored separately, such that retailers and consumers can make their choice with complete confidence that they are buying what it says on the label.
In this case, more time, and a more robust and holistic investigation may be the only solution. The Environment Minister has asked us to ‘watch this space’.
Now what we end up with in terms of individual, social and economic health will depend on what kind of effort and intent goes into that space. Industry, consumers, scientists, farmers, and governments, all have a role to play in shaping that intent. We all choose whether we want the green organic genes – or the other kind, be they blue genes, purple or yellow.
Devangshu Dutta
August 18, 2009
Four months ago in this column (“Organic – Hope or Hype?”) I wrote about the need for customers to make themselves aware of the true nature of organic products, and it is time to reopen that discussion.
Food is an emotive subject with us as consumers, food distribution and retail is big business with us as the trade, and agriculture is a sensitive area of governance.
On top of that, studies are seldom exhaustive enough in terms of sampling, duration of the study, establishment of controls etc., and for every study that proves the superiority of organics, you will be able to find counter-studies and opposing arguments.
In recent years brands have tended to make much of their organic certification. Marketers are known for overstatement anyway, and the promotional language used by some implies (or even explicitly states) that these products are superior to other alternatives. Surely, then, the consumer should be willing to pay higher prices for these “better” products?
If only, if only, facts were that straightforward.
In the earlier column I’d written: “We expect organic products to contain more nutrition and be better for our bodies. While this may be true of organic animal products compared to their inorganic counterparts, it has not been demonstrated for plant products, other than anecdotal experience of taste and appearance.” I had also raised the question: if organic foods are no better nutritionally than inorganic and could be as productive for the farmer, are many of the organic brands just skimming the gullible customer while the going is good?
Well, the debate just got messier. Recently a study sponsored by Britain’s Food Standards Agency last month (July 2009) really set the cat among the pigeons. The report was based on review of existing research papers to find out if organic products were nutritionally superior to inorganic products. And their conclusion was that the studies reviewed did not provide enough evidence that organic food is more nutritious.
Well, what the report really said was that on the basis of the limited number of studies that were deemed to be rigorous enough, there was not enough evidence to prove that organic food is more nutritious.
Okay.
Imagine an examiner saying that he does not have enough evidence to prove that a student who has passed did not cheat. Notice, he is not saying that the student actually cheated. But wouldn’t this statement alone raise suspicion in your mind about the student’s integrity?
Unfortunately, newspapers and electronic media sell headlines, and headlines need to be short and snappy. Here are a couple of examples about this study.
These clearly raise questions about any benefit at all from organics.
In the noise, the disclaimers by the team that prepared the report seem to have been ignored. For instance, this one: “It should be noted that this conclusion relates to the evidence base currently available on the nutrient content of foodstuffs, which contains limitations in the design and in the comparability of studies.” The report also states: “This review does not address contaminant content (such as herbicide, pesticide and fungicide residues) of organically and conventionally produced foodstuffs, or the environmental impacts of organic and conventional agricultural practices.”
Like any good research report, it admits that “it is important to recognise the potential limitations of the review process”. And the final line in the Conclusion section of the detailed report says: “Examination of this scattered evidence indicates a need for further high-quality research in this field.”
As a reader or TV viewer, how many of us would be motivated to go to the original source and read these disclaimers as well?
Promoters of organic farming, such as Britain’s Soil Association, of course, have trashed the study saying that it is too narrow having excluded most of the available research papers since they did not meet the review standards, and that it ignored the biggest long-term health impact – that of pesticides and other chemicals used in inorganic produce.
Their opponents, in turn have trashed defendants of organic farming by calling them unscientific and narrow-minded in their own right. They point out that high-output inorganic farming is far more useful to serving the exploding human population, than low-intensity organic farming.
One of the readers of the British newspaper Daily Mail was emphatic that she didn’t “eat organic stuff to get extra nutrition”, but was “happy to pay more to be free from additives”. Certainly that is a significant benefit that motivates most people who are well into organic products. In an unusual open letter, the Chief Executive of the Food Standards Agency clarified: “Pesticides were specifically excluded from the scope of this work. This is because our position on the safety of pesticides is already clear: pesticides are rigorously assessed and their residues are closely monitored. Because of this the use of pesticides in either organic or conventional food production does not pose an unacceptable risk to human health and helps to ensure a plentiful supply of food all year round.”
The other motivation for organics is our attitude towards the environment, which can either benefit us over the longer term or, if we are irresponsible, it could accumulate toxins which only show their impact over decades and generations. But, let’s be honest, are most consumers likely to buy products because of some distant benefit to the environment, or products that benefit themselves immediately?
Possibly the answer lies in the organic sector cleaning up its message.
Are consumers any wiser after this study and the debate? I’m not sure. For now, my take on this issue remains: be aware and make up your own mind about what you want to ingest, because this debate isn’t over yet.
Devangshu Dutta
April 15, 2009
The organic movement has touched a variety of products, including clothing, cosmetics and home products. Possibly the most emotive area is organic food, because food products are directly taken into the body while other products have a limited and external contact.
In a sense, before the appearance of industrial agriculture and the application of synthetic nutrients and pesticides, all farming was organic. In fact, the traditional Sanjeevan system of India dates back several millennia.
Even the existing organic farming movement has been around since its founding in Europe in the early-1900s. This was initially treated as fad and its proponents were seen as eccentric (at best) or insane. However, as damage to the environment and to human health became a bigger concern, organic farming emerged as the healthier option.
Organic farming is based on the following fundamental premises:
The aim is to drive a more healthy approach all around – for the environment, for people, as well as for the animals and plants.
The organic trade (all products) is currently estimated at over US$ 40 billion globally, with an annual growth of approximately US$ 5 billion. Organic production is driven today more by demand than by supply – in many cases supply constraints of certified organic produce is more of a concern than the market demand.
Every year, increasing numbers of consumers consciously buy organic products regularly or occasionally on the basis that it is good for them and good for the planet. Certainly, true organic farms do not use synthetic materials, avoiding damage to the environment and can help to retain the biodiversity. Whether measured by unit area or unit of yield, organic farms are more sustainable over time as they use less energy and produce less waste.
It is not as if, after decades of individual enthusiasts pushing their ideas from the fringes, consumers have suddenly become more environmentally conscious. This mainstream awareness has possibly been pushed up in recent years by the involvement of large companies which have spotted the tremendous growth of a profitable niche. “Organic” is the new speciality or niche product line that can be priced at a premium due to the greater desirability amongst the target consumer group, with potentially higher profits than inorganic products or uncertified products. Today, at least in the two largest markets (the USA and Europe), large companies have the lion’s share. For instance, statistics from Germany show that in 2007 conventional retail chains sold over 53% of organic produce, while specialist organic food retailers and producers lost share during the year. Similarly in the US, after the development of the USDA National Organic Standard in 1997, significant merger and acquisition activity has been visible.
However, as the interest in organic products has grown, so have the noise levels in the market. With that the potential for confusion in customers’ minds has also grown.
In day-to-day conversations, we tend to treat organic as superior to inorganic. But the reality is a little bit more complex.
For instance, we expect organic products to contain more nutrition and be better for our bodies. While this may be true of organic animal products compared to their inorganic counterparts, it has not been demonstrated for plant products, other than anecdotal experience of taste and appearance.
There are studies that suggest that inorganic farming can produce more crop per acre and more meat per animal, and is, therefore, the better option for a planet bursting with overpopulation. (Some proponents extend that argument to genetically modified foods as well, but let’s stay away from that for the moment.)
However, there are also other studies that counter this argument by suggesting that the organic farms can end up being more efficient and productive in direct costs, yield and long-term sustainability.
Then, the big question is: if organic foods are no better nutritionally than inorganic and could be as productive for the farmer, are organic brands just skimming the gullible customer while the going is good?
We might expect certification and regulation to clear the air, but in many instances these leave out as many things as they include. Labelling is yet another concern. Countries where labelling is more stringently monitored allow logos such as “100% organic”, “organic” (more than 95% organic ingredients) and “made with organic ingredients” (over 70% organic ingredients). In other countries logos and where labelling may be less strictly monitored, the use of the term organic is far looser and even more confusing. What’s more, the usage of terms such as “Bio” or “Eco” can also mislead consumers into believing that there is something distinctly superior about the product they are about to buy when, in reality, it is often only a marketing gimmick.
Further, just because something is certified as organic does not mean it is a higher grade of product. Organic produce may end up having a shorter shelf-life, or may also be otherwise inferior to inorganic produce in the store. In fact, as the KRAV (Sweden) website states: “The KRAV logo is a clear signal that the product is organically produced but does not say anything about the quality. That must be guaranteed by the producer, i.e. yourself”. This is similar to saying that the fact that someone has a management certification from a certain institute means that he or she passed the tests of that institute in a particular year, but that does not automatically make him or her a good businessperson.
Countries and regions that have a poor record of environmental consciousness, poor transparency norms, are also not seen as the best source for organic produce even if it is apparently from a certified producer. In some cases, certification may be carried out second-hand and unverified, leading to instances such as the one in 2008 where the US retailer Whole Foods pulled out pesticides-laden “organic-certified” ginger that was shipped from China. The mixing of inorganic ingredients of uncertain origin, especially in blended products such as juices or snacks, can also make a mockery of the organic labelling.
Another visible concern today is the carbon footprint, and some people raise the question whether buying local (whether inorganic or organic) may be less environmentally damaging than importing produce from distant countries. In such instances, the evidence of lax certification, such as the Chinese case mentioned earlier, takes support away from the cause of organic imports.
Arguments have also been raised about whether the larger “organic” factory farms merely follow the letter of the law rather than the principles behind the organic movement? Small organic farmers allege that large organic-certified factory farms – especially those selling animal products – do not really follow the core principles of “natural” growth, and confine their animals in unnatural surroundings.
With all these arguments and counter-arguments flying about, some organic (or nearly organic) producers elect not to be certified, letting their customers vote with their wallets. Some of these smaller farmers may be driven by economic necessity since certification could be costly and cumbersome, while others may just find it more feasible to stick with a local sales strategy where the customers are able to physically see the organic nature of the farm.
It’s clear that all of these questions will take years to sort out – through debate, research, legislation, as well as social and commercial pressure. Meanwhile, most conscientious retailers and concerned consumers will need to do their own studies to educate themselves, and will need to examine each product for genuineness of the organic promise.
And, if you are not quite that savvy, the final message would be: “caveat emptor” (“let the buyer beware”).
admin
September 22, 2008
Devangshu Dutta
In a departure from popular retail philosophy, Devangshu Dutta calls for a new model of food supply based on multiplicity and diversity. Modern retail must, he says, take into account the changing environment and be sensitive to evolving consumer preferences and to the failures and obsolescence of traditional mass retail models adopted by western developed markets.
Devangshu Dutta is chief executive of Third Eyesight, a management consulting firm focused on consumer products and retail, whose clients include brand leaders and some of the largest companies in their respective markets.
Food price inflation it is still hogging the headlines. It is, after all, an emotive topic. We are terribly concerned not just as food and grocery professionals, but also as consumers and the general public. After all, food and grocery typically account for half of our monthly spend, give or take a few percentage points.
Most students of management, economics, and human behaviour are aware of Abraham Maslow’s classification of human needs into a hierarchy construct. Other economists and psychologists prefer to use other models. Whichever model you consider, the need to eat and the need for security are invariably at the bottom or base level which must be fulfilled the earliest.
The interesting fact is that well after you would imagine these basic concerns have been taken care of, they are actually never far from the surface. This is true not just of the poorest of the poor, but of the wealthy and the well-off as well—whether individuals, communities, or nations.
Increasingly, the agricultural supply chain is dependent on non-renewable petroleum and its products, rather than by the natural energy of the sun being converted into food by the plants.
Is it any wonder that “food security”—the combination of these two—is such a charged subject, especially in these times?
However, a significant set of questions is not really touched in the question of costs and in the question about the continuing security of food supplies: how the food supply chain is structured, how it is driving consumption, what impact that might have on food prices and several broader cost implications.
INDUSTRIALISING AGRICULTURE—FARMING PETROLEUM
Thousands of years ago, when hunter-gatherer human beings stumbled upon agriculture, it was a breakthrough similar to the discovery of controlled fire. Hunter-gatherers were dependent on the natural availability of food, while agriculture created the opportunity to have some control over food supplies and reduce the natural feast-famine cycle. Thereafter, farming, processing and storage techniques kept evolving incrementally to ensure that more food could be produced for each unit of land and effort, and stored for longer – all moving towards ensuring “food security”. This led to the age of empire-building, where monarchs grew their wealth (essentially food territory) with the help of military- imperial complexes, and the greater wealth in turn supported the military-imperial complex.
This remained the trend for a few thousand years, until the age of industrialisation and the age of petroleum. Through the industrialisation and the world wars, the military- imperial complex gave way to a military-industrial complex, which essentially became the military-industrial-petroleum- agricultural complex. Suddenly, there were not just machines to plant, reap, thresh, sort, clean and process, but also petroleum-based and synthetic substances to dramatically increase output and to keep the produce fresher for longer.
As farms industrialised, the parameters that began to be applied were the same as in any factory—how to produce more while spending less—and every year the target was to grow more for less. Underlying this was the principle of “efficiency from larger scale”. The same philosophy played out further down in the supply chain – from processing aimed at extending the shelf-life of the product as it was (chilling, cleaning, sorting) to processing and packing in order to change the nature of the product itself and gain additional value (such as turning tomatoes into puree and potatoes into chips).
Standardisation became a vital link in industrialisation — if you can standardise produce, you can cut down human handling — while you may lose product variety (including flavour and colour) you gain through lower production costs. By reducing unpredictability, you can also concentrate on building the scale of business, because it becomes more repetitive.
The interesting side-effect of this is that, gradually, we are converting ourselves (and people in many industrialised economies already have) into petroleum-burning machines rather than those running on solar energy, because increasingly, the agricultural supply chain is dependent on non-renewable petroleum and its products, rather than by the natural energy of the sun being converted into food by the plants.
The important thing to keep in mind is that, in this switch- over, energy efficiency is actually going down rather than up
Energy efficiency is actually going down rather than up – we are using more calories of fuel source to produce each calorie of food energy.
—we are using more calories of fuel source to produce each calorie of food energy.
So it is worth asking the question: can lower costs actually be costing us more?
THE DEMAND-SIDE STORY
The growth of industrial agriculture has not happened alone, but has been accompanied by the growth of modern or “organised” retail.
On the one hand, large retailers such as Wal-Mart, Carrefour, Tesco, Metro and others, have been widely credited for achieving cost-efficiencies from scale, and then passing on these efficiencies to the consumer in the form of lower prices (and, apparently, higher standards of living). That is a good thing and definitely of benefit to the population at large, especially in inflationary times such as these. Surely, it is good to push for lower costs rather than keeping prices high as a result of inefficient sourcing, wasteful and expensive handling, and non-value-adding costs in the supply chain.
On the other hand, these organisations are driven to standardise their own product offerings, reduce the number of supplier touch-points and increase the volume per supply source.
There is not just a reduction in diversity of suppliers, but also a reduction in the number of product variants. (I’m not referring to the number of “types” of potato chips or packaged meals, but to the actual core food product—the natural species or sub-species that are the basic source.) Of course, agriculture itself is a process of consciously selecting and encouraging species that are more useful to us humans, but industrial
Lower costs can be delivered by reducing the variation of products
Higher sales can come from either having consumers buy more of the same product (which in food does tend to taper off after a while), or by turning the basic product into a “value-added” product (e.g. potatoes into wafers, mash, fries; corn into syrup and food additives, and so on).
THE NEED FOR A DIFFERENT MODEL
We don’t have to look too far into the future to realise that this is not a sustainable model. (Or, as someone pithily said: “Only fools and economists believe in infinitely compounding growth.”) So far, this model has impacted less than a fifth of the world’s human population, but now the growth markets of choice for industrial agriculture companies are China and India. If these two countries move through the exactly same path as have the western economies in terms of agriculture and food processing, given the population base itself the impact may be 5-7 times (or more) on the demand for petroleum as well as the fall-out on the ecosystem.
You may ask: why should retailers and their suppliers worry about this?
Firstly, pure cost considerations – clearly, the costs of petroleum are ranging at the highest levels ever, and explosive demand through industrialised agriculture will only serve to push them up. How far can you push the food bill every month, before people start buying less? What impact would that have on large retail supply chains and farmers whose processes are increasingly built around products of industrial agriculture?
Secondly, what consumers are already beginning to express in western markets will possibly happen in India in the next few years as well: concern about where and how the product has been produced, what has been the fall-out on the environment and on the overall health of people involved with that supply chain as well as the health of consumers. Carbon footprint, food miles and locavores (people who only consume food that is produced within 100 miles of where they live) are terms that companies are increasingly becoming familiar with.
agriculture takes it to a completely different level. Carbon footprint, food miles
The industrial-agricultural-retail economic model can be paraphrased as follows:
Businesses (especially those that are publicly held) need to show growth in profits each year
Growth in profits can come from higher sales at the same cost base or lower costs
Carbon footprint, food miles and locavores (people who only consume food that is produced within 100 miles of where they live) are terms that companies are increasingly becoming familiar with
And an alternative set of questions is also being raised. Is it ok to burn non-sustainable fossil fuel if you get “carbon credits” by planting trees somewhere else—have all the carbon costs been accounted for from the start to the finish of the production process? Is it better to reduce the food miles and have food produced locally in a high-cost economy’s industrial agricultural model, or to have naturally grown foods from a more primitive farm in Africa or Asia where the environmental impact is only the “carbon debit” of the air-freight. And, even if the produce is carbon-friendly, what about the nitrogen footprint (from the fixation of nitrogen into fertilisers) and the methane footprint (from large scale animal farming)?
THE POWER OF THE SMALL AND THE MANY
And finally the question of maintaining diversity must be top- of-mind. For all its so-called inefficiency, diversity is actually a great shock-absorber. Imagine a bean bag or a piece of foam — what gives them their cushioning ability is the space and air between the little balls, or the material. Now imagine a cropland that is attacked by a pest—if there is diversity in the plant population, there is a good chance that certain varieties will survive even if others don’t; unlike a cropland with limited variety which may be totally wiped out (and possibly the farmer with it). Further imagine a supply chain that has multiple suppliers with the same or similar product versus one where the supply base is highly concentrated. Which ecosystem do you think will survive better during times of trouble, even if some of the suppliers—a part of the ecosystem—do not? (One doesn’t have to think too far: the example of the former Soviet Union with its mega manufacturing plants supplying the whole country are a case in point.)
To really find long-term solutions for food security issues, retailers, suppliers, economists and governments need to acknowledge that sustainable safety lies in numbers and diversity. A dispersed economic system with a lot of variety has resilience built in. And the solutions may actually be very close at hand, in the updating of traditional techniques.
It is high time to start figuring out how India (and China) can take the lead in creating an alternative and more sustainable model for food security for large populations, rather than blindly push development models borrowed from the 19th and 20th century western economic history.
Source: FLY ON THE WALL
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