Realizing a New Vision for Agriculture:A roadmap for stakeholdersPrepared in collaboration with McKinsey & Company
ContentsExecutive Summary                                                     4The Need for a New Vision                  ...
PrefaceThe World Economic Forum is pleased to present this roadmap for realizing a New Vision for Agriculture, which is th...
Executive SummaryThe World Needs a New Vision for AgricultureAgriculture provides much more than food. It offers essential...
Sparking a Virtuous Cycle of Increasing Skill and InvestmentRealizing agriculture’s full potential as a driver of foodsecu...
Agriculture Matters                           30%   Proportion of greenhousegas emissions related to agriculture       (16...
The Need for a New VisionSociety is critically dependent on agriculture. It is the foundation of the food chain and provid...
Soil — Poor soil health threatens yields                              Climate change — yields potentially depressed 20%+ i...
Poverty                                  hunger and malnutrition                             low productivity and         ...
Rethinking AgricultureUnderdevelopment in rural areas pushes individuals to follow economic opportunity into the city, lea...
Farmers at the ForefrontEfrén Rizo, NicaraguaIn the impoverished province of Jinotega, more than 80% of thepopulation earn...
The Goals of the New VisionAgriculture can be a positive driver           A global agriculture system that harnesses the p...
Agricultural production need not be a detriment to the planet; in fact, it can be a linchpin of sustainability. It provide...
Critical Path Interventions                        Significant issues exist at every stage of the value chain             ...
Innovative tools can break specificbottlenecks along the value chain                                High-yield, disease-re...
Farmers at the Forefront Dinh Xuan Toan, Vietnam                                   Gurmail Singh, India Dinh Xuan Toan is ...
Generating a Virtuous CyclePoint interventions are clearly critical, but the impact of each is limited by the             ...
Ensuring a sustainable cycle requires market structures that Village-based Models of Holistic Change                      ...
Models of CollaborationWe are witnessing the emergence of a new generation of agricultural initiatives, many in an early s...
A National-sector Transformation: Green                         A Value-chain Intervention: Horticulture in a             ...
c   A Proposed Infrastructure Corridor: Beira                    d   A Breadbasket: The Ghana Northern Region     Agricult...
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
Realising a new vision for agriculture
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Realising a new vision for agriculture

  1. 1. Realizing a New Vision for Agriculture:A roadmap for stakeholdersPrepared in collaboration with McKinsey & Company
  2. 2. ContentsExecutive Summary 4The Need for a New Vision 6The Goals of the New Vision 12Generating a Virtuous Cycle 17Models of Collaboration 19Moving Forward Together 22Appendices 24Acknowledgements 28The views expressed in this publication do not necessarily reflectthose of the World Economic Forum.World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744E-mail:© 2010 World Economic ForumAll rights reserved.No part of this publication can be reproduced ortransmitted in any form or by any means, includingphotocopying and recording, or by any informationretrieval or storage system.Photographs by Brent Stirton, courtesy of Getty Images(inside covers, p 14, 16, 19, 20, 21, 22)REF: 131210
  3. 3. PrefaceThe World Economic Forum is pleased to present this roadmap for realizing a New Vision for Agriculture, which is theoutcome of an 18-month process that engaged global and regional stakeholders around the world.The World Economic Forum’s New Vision for Agriculture initiative is led by 17 global companies that are Industry Partnersof the Forum. The initiative addresses the major challenges of global food and agricultural sustainability based on a visionof agriculture as a positive contributor to food security, environmental sustainability and economic opportunity. To advanceprogress toward that vision, this roadmap outlines a framework for action to implement business-led and market-basedsolutions that are explicitly linked to national development priorities.Over the past 18 months, the initiative has outlined its vision and worked intensively with global and regional stakeholdersto identify priorities for action and opportunities for collaboration. Through leadership-level brainstorming sessionsin Tanzania, Vietnam, India, the United States and Switzerland, the initiative engaged over 350 leaders of business,government, civil society, international organizations and academia. In the process, it catalysed two country-levelpartnerships in Tanzania and Vietnam to put its ideas into action. These and other innovative models of collaboration willbe discussed by global leaders at the World Economic Forum Annual Meeting 2011 in Davos-Klosters, Switzerland.Many partners and constituents contributed to the roadmap. The 17 global companies that championed the initiativeare Archer Daniels Midland, BASF, Bunge, Cargill, The Coca-Cola Company, DuPont, General Mills, Kraft Foods, Metro,Monsanto Company, Nestlé, PepsiCo, SABMiller, Syngenta, Unilever, Wal-Mart Stores and Yara International. Theycontributed tremendous leadership and technical expertise through a project board and working group, whose membersare listed in the Annex.McKinsey & Company served as project adviser for the initiative, contributing substantial time and analysis through adedicated team of experts. The International Food Policy Research Institute served as a knowledge partner, providingexpertise to global and regional discussions. The World Economic Forum’s Global Agenda Council on Food Security, ahigh-level multistakeholder group, served in an advisory role.Eight members of the Schwab Foundation for Social Entrepreneurship also provided input. A number of academic andinstitutional experts provided input and review. Farmer leaders participated in each of the regional leadership dialogues,providing key insights and recommendations that shaped this roadmap. These contributors are also listed in the Annex.This roadmap carries a key message that the private sector is ready to be a partner and driver of solutions for sustainableagriculture. However, the private sector cannot accomplish these goals alone. Partnership among stakeholders, andeffective government leadership in particular, is critical to success. We hope this roadmap will encourage many others toinitiate action or collaborative efforts to achieve our shared goals for a sustainable future.Robert Greenhill Sarita NayyarManaging Director Senior Director, Consumer IndustriesWorld Economic Forum World Economic Forum USA A New Vision for Agriculture | 3
  4. 4. Executive SummaryThe World Needs a New Vision for AgricultureAgriculture provides much more than food. It offers essential commodities, environmental services and social goodsthat facilitate economic development, industrialization and diversification. From its inception, the purpose of agriculturehas been to feed and fuel human activity. And now, it is more important than ever.The world must produce more with less. The sector is entering a new era, marked by scarcer resources, greaterdemand and higher risks of volatility. Since agriculture accounts for 70% of water use and up to 30% of greenhouse gasemissions, it contributes to and is threatened by environmental degradation. This will be exacerbated as the growingpopulation demands more food – nearly double today’s levels by 2050 – and more resource-intensive produce such asmeat and dairy.Agriculture can better fulfil the world’s most basic social needs. Nearly 1 billion people go hungry today – half ofthem farmers – and malnutrition severely impedes human and economic development. Three-quarters of the poor livein rural areas, most relying on agriculture for their livelihood. In many regions, women contribute the bulk of farm labour.Farmers can be among the greatest beneficiaries of agricultural development and are at the core of the solution.The Time to Act Is Now:Committing to 20/20/20 …The New Vision for Agriculture strives to inharness the power of agriculture to drive food ansecurity, environmental sustainability and .. en all. vireconomic opportunity. Its aspirations are high, for on ENVIRON ENVIRONMENTAL menot least of which are to increase production FOOD SECURITY ECURITY ty uri ntaby 20% while decreasing emissions by 20% SUSTAINABILITY SUSTAIN ec lly dsand reducing the prevalence of rural poverty by su foo sta20% every decade. ina ide ble ovThese goals are intended to build on the Pr waMillennium Development Goals and otherinternational targets by coordinating and yconcentrating the efforts of agricultural players ...while generating economic growth and opportunityaround the world. ECONOMIC OPPORTUNITYWe must act together with scale and speed. Market-based approaches are essential to implementing viablesolutions, as is collaboration among farmers, private industry, governments and civil society. The challenge is enormous,but the opportunity is both substantial and achievable.Innovative Tools Can Break Bottlenecks in the Value ChainConstraints can be found at every stage of the agricultural chain, from research to consumption. Whilecommon problems affect agriculture in many countries, such as inadequate access to inputs, finance and storage, themost effective solutions to breaking these bottlenecks vary between regions and systems.Agriculture is and must continue to be innovation-driven. Many players have developed highly effective pointinterventions to address bottlenecks in the value chain, improving input technologies and farmer capabilities, for example.The technical know-how of global institutions must be combined with the resourceful acumen of local entrepreneurs toinspire new breakthroughs. Achieving the New Vision requires a greater number of these successes, adopted quickly atscale.4 | A New Vision for Agriculture
  5. 5. Sparking a Virtuous Cycle of Increasing Skill and InvestmentRealizing agriculture’s full potential as a driver of foodsecurity, environmental sustainability and economic aopportunity requires fundamentally shifting the waythe system operates. Policy InfrastructureInnovative tools only work if they are supported bythe right policy, infrastructure and market structure.Improved seed does not yield a full harvest without bsoil management and storage; an improved harvestcan result in price erosion and regional surplus withoutappropriate market links.A New Generation of Agricultural cInitiativesIn a few places, governments, businesses and civil Tools Marketsociety are spearheading these virtuous cyclesby orchestrating and accelerating investments to structurechange agricultural systems holistically. Many such dapproaches are in the early stages, but have thepotential to transform even the most challengedgeographies.Examples of robust collaboration concentrate on a particular crop or geographic region, such as value chaininterventions, infrastructure corridors, breadbaskets and national sector transformations. By coordinating their efforts,stakeholders can mitigate risk, leverage their contributions and build on each other’s competencies to harness marketforces for sustainable growth.Every Stakeholder Has a Critical Role The scale of the challenge will require everyone to step up their efforts. Governments must lead, setting the i c Se cto direction for their country’s transformation and creating the Publ r right environment to achieve it. Businesses drive implementation through innovation, investment and competition. Civil society mobilizes and supports communities, manages risk, builds local capacity THE ector and bridges gaps not addressed by the market. Ci vi l So FARMER The companies leading this initiative commit to eS realizing the new vision for agriculture. t c a i et Priv y But they cannot do it alone. What will you do? A New Vision for Agriculture | 5
  6. 6. Agriculture Matters 30% Proportion of greenhousegas emissions related to agriculture (16% from forestry) 40% Share of worldwide employment in agriculture (including 70% of the “bottom billion”) 70% Share of worldwide water withdrawals from agriculture 10,000 Years of historical food production that must be matched in the next 50 years 925,000,000 Hungry people today6 | A New Vision for Agriculture
  7. 7. The Need for a New VisionSociety is critically dependent on agriculture. It is the foundation of the food chain and provides 40% of the world’sjobs. From its inception, the purpose of agriculture has been to feed and fuel human activity. Driven by innovation andinvestment, agricultural productivity has increased substantially. Almost 5 billion people have enough to eat today, upfrom only 2 billion half a century ago; in that same period, farmers in some parts of the world have doubled their resourceefficiency. These successes have underpinned unprecedented growth and supported the development of modern society.But agriculture is entering a new era marked by scarcer resources, greater demand and potentially higher price andsupply volatility.Going forward, the world must produce far more with less.Constrained Environmental ResourcesAgricultural growth, although commendable, is placing increasing stress on the earth’s resources. The sector contributesto and is threatened by environmental degradation and climate change. Agriculture accounts for 70% of waterwithdrawals and up to 30% of greenhouse gas emissions (including 16% from deforestation).In recent decades, poor agricultural practices have been a factor in the depletion of soil fertility, species diversity andwater availability and quality. Meanwhile, broader environmental changes are affecting agriculture in ways yet to befully understood. Alterations in climate mean that farmers must adapt to changing rainfall patterns and fluctuations intemperature; yields could be reduced by more than 20% in many areas, with poor countries – and poor farmers – facingparticularly severe outcomes.Growing DemandAgriculture faces the dual challenge of becoming more environmentally sustainable while feeding more people. In thenext 40 years, the global population is expected to increase by one-third, peaking at over 9 billion. The intensity ofconsumption is growing even faster; as incomes rise in emerging markets, new members of the middle class demandmore meat and dairy, which require more resources to produce.Experts project that annual meat production will need to rise by 75% – to 470 million tonnes – by 2050. Societies will beforced to make difficult trade-offs in allocating resources. Riots over the last few years remind us that food uncertainty canrapidly undermine basic stability.With 70% of the world’s population expected to live in cities by 2050, the need for effective food distribution – linkinggrowers to retailers to consumers – will intensify. Urban populations demand more processed and ready-to-eat food, aswell as more diverse options. This will increase the role of processing, packaging and logistics providers in food systems.Water availability — 30% crop production at risk by 2025 GHG Emissions — Agriculture and forestry contribute heavily Percent Transport Buildings, Waste direct 14 3 8 Buildings, 16 Forestry power 10 Industry, 13 14 Agriculture power 22 Industry, directSource: UNEP Source: IEA A New Vision for Agriculture | 7
  8. 8. Soil — Poor soil health threatens yields Climate change — yields potentially depressed 20%+ in many areasSource: SAGE Source: World BankBasic Social NeedsAgriculture is a principal platform for human development and social “If we are serious about endingwelfare. It is the foundation upon which diverse economies have been built extreme hunger and poverty aroundand provides a pathway out of poverty for millions. the world, we must be seriousAgricultural development is an opportunity to better meet these basic about transforming agriculture.” William H. Gatesneeds. Nearly 1 billion people are hungry today – half of them farmers. Co-Chair, Bill & Melinda Gates FoundationThree-quarters of the poor in developing countries live in rural areas – over2 billion people get by on less than US$ 2 a day.These issues are inextricably linked, particularly in developing countries, where the poor spend a high proportion oftheir income on food. Poverty usually leads to malnutrition, causing physiological and cognitive damage, depletingcapital, increasing vulnerability and diminishing productivity at both the individual and national levels. Child malnutrition isparticularly detrimental, as many of the health impacts incurred between conception and two years of age are irreversible.Undernutrition — Linked to one-third of all deaths Healthcare — Both production and consumption declineamongst children under 5 in developing world when illness strikes rural households % children underweight 10-20 30-40 50+ Adult HIV prevalence 0.1% 0.5% 1% 5% 15% 100% Inversely, over- consumption and Largest imbalanced diets populations increasing rates living with of obesity and HIV chronic illness 40%+ in India, Bangladesh SSA accounts for: infections globally; Malnutrition in children leads 67% of HIV both increasing and increased by high to permanently reduced physical/mental capacities 60% of Malaria food insecurity 27% of TBSource: CIESIN Source: UNAIDS/WHO8 | A New Vision for Agriculture
  9. 9. Poverty hunger and malnutrition low productivity and physical and cognitive lack of capital underdevelopmentThese cross-cutting issues form vicious cycles of deprivation, particularly in rural areas. They are often aggravated by theabsence of basic services such as healthcare and education, further impeding the potential for human development.These issues pose particularly severe challenges for women, who in many regions have both the greatest responsibilityand the fewest resources by which to ensure food security food for their communities. Limited access to land, finance andtraining together with cultural factors constrain women’s ability to produce and deliver adequate nutrition for their families.Education — Lowering productivity, earning potential, Gender inequity — Driving resource misallocationcapacity of rural development Percent, developing countries Projected number of adult illiterates 5 MM women (age 15+), 2015 5 MM men Male 30 776mn adults are illiterate; 95 99 two-thirds are women Up to 10% 10% of 75mn children are out of school 98 32mn of them are in SSA alone in developed small 4 out of 5 out-of-school kids Female 70 countries farmer are in rural areas credit 5 2 1 S/ W SSA EAsi a/ Arab LatAm/ 16% adult Ag Extsn Land Ag Asi a Pac states Cari b illiteracy workforce srvcs tenure creditSource: UNESCO EFA Source: Bill and Melinda Gates Foundation A New Vision for Agriculture | 9
  10. 10. Rethinking AgricultureUnderdevelopment in rural areas pushes individuals to follow economic opportunity into the city, leaving the mostvulnerable behind. Agricultural development can mitigate this trend by cultivating rural opportunity and more inclusivesocietal growth.Given the stakes, the world must deliver on agriculture’s full potential. The approaches of the past simply cannot meet thechallenges ahead. Building on successes, we must proactively factor in the cost of natural resources, the need to boostproduction in developing countries and ways to provide hungry people with basic nutrition. This will be one of the greatestchallenges of our generation.The time has come for a New Vision for Agriculture. Yesterday’s approaches... ... will not be sufficient tomorrow Convert potential arable land to Diminishing land availability, soil Resource cropland degradation, high environmental cost utilization Rapid scaling of irrigated land area, Depleted ground water stores render overdraw on groundwater urgent water efficiency measures Agriculture’s environmental impact Environmental sustainability as necessary accepted or ignored stipulation Productivity Reliance on increased yields in Yield growth in developing countries growth developed countries vital to meet global demand Acceptance of low smallholder Smallholder improvements critical to productivity address global hunger and poverty Scope Priority on calories and increasing Importance of crop diversity, nutritional improvement cereal production content and food affordability Focus on farm-level output and yield Efficiency in whole value chain necessary for access, food security10 | A New Vision for Agriculture
  11. 11. Farmers at the ForefrontEfrén Rizo, NicaraguaIn the impoverished province of Jinotega, more than 80% of thepopulation earns less than US$ 1 a day.The 22 vegetable farmers who comprise the Tomatoya-ChagüiteGrande cooperative were once stuck in this cycle of extremepoverty. Efrén Rizo, the cooperative’s president, and his familyoften suffered from hunger because of their low income.Tomatoya-Chagüite Grande worked with TechnoServe to improvethe quality of their harvest and secure supply orders from leadingsupermarkets.They now sell directly to Nicaragua’s largest supermarket chain,earning 10 times their previous income. Today, Rizo earns enoughto provide his children with the education he never received.Source: TechnoServeSuzanne Tsovalae, Madagascar Clay Mitchell, United StatesSuzanne Tsovalae, 23 years old, is a farmer in the Clay Mitchell and his father Wade operate a fifthTanandava village. She supports her family by growing generation, 1,000 hectare, non-irrigated corn andsweet potatoes and beans, raising small livestock, and soybean farm in the state of Iowa. A leader in no-tillbuying and selling fish and prickly pear in the regional techniques and novel agronomic systems, the Mitchellmarket. Farm is best known for the applying automation and GPS data to achieve large savings in seed, fertilizer andTsovalae’s livelihood is dependent on the harvest, which chemical use (10%, 10% and 20%, respectively) whileis dependent on the rain. She has not heard of climate consistently delivering high yields.change (news only transmits from a few local radios)but recognizes that increasingly volatile floods anddroughts are forcing villagers to go hungry or migrate. In this region, significant gains in farm productivity andShe believes she will always be a farmer, but says, “I will long-term farm value will come through soil maintenancedo my utmost in commerce not to fall into poverty.” She and improvement. In Iowa, near-perfect growinghas never received training and uses very rudimentary conditions have become more variable after a history offarming practices. Her basic education allows her to intensive tillage has reduced overall soil organic matterread and use currency at the market. Without access to by 50% and moved remaining soil around within fields.a bank and hesitant to keep cash, she “stores” moneyby accumulating chickens. Perhaps the most important innovation from the Mitchell Farm to agriculture’s future is the use of large-scale yetShe feels her life has been steadily improving, and intricately precise earthmovers that automatically cut andcredits her initiative in small commerce. She has towalk great distances to trade, though, and would like to fill soil to restore the full productivity of land and reversesee a marketplace in her village that will bring produce, the effects of an erosion process that was previouslyvehicles and news. She hopes to save money to buy considered irreversible.cattle so she may put her children through school. Source: Mitchell FarmSource: IFAD, PANOS A New Vision for Agriculture | 11
  12. 12. The Goals of the New VisionAgriculture can be a positive driver A global agriculture system that harnesses the power of markets and multi-of food security, environmental stakeholder collaboration to feed the world, protect our planet and create prosperitysustainability and economicopportunity. It is the only sectoralinvestment that addresses thesethree pressing issues simultaneously.Each part of this Vision is vital to the FOOD SECURITY TY ENVIRONMEN ENVIRONMENTAL SUSTAINABILITY … in Meet nutritional demands while Conserve or eenhance the quality andlong-term viability and success of an providing affordable choices able quantity of nat natural resources; meet enagriculture. .. across the food value chain the challenges of changing climate all. vir on f or meWhat do we envision with this New ty nta uriVision? Consider the following: as ec lyl ds sua farmer, you feed your family and s ta f oothe wider community. You produce ina ide bleenough to earn a living without ov Pr wacompromising the ecosystem. You yhave the knowledge to make betterdecisions about what to grow and ...while generating economic growth and opportunityhow to grow it. Your produce reachesconsumers, who can make informed ECONOMIC OPPORTUNITYchoices for a healthy diet. The obesityepidemic is curbed and mass hungeris eliminated. Clean water is availablewhen and where it is needed; wecontinue to rely on biodiversity for daily and future needs. People Supporting Nutritional Securityalong the agricultural value chain can pursue livelihoods and createjobs – not just on farms, but in industry, business and services. Men Proper nutrition is essential for humanand women are motivated and rewarded for inventions that improve development and productivity. Ensuringtheir food system and living standards. Rural parents can raise their proper nutrition requires robust agriculturechildren to lead fulfilling and healthy lives. systems globally, as well as appropriate awareness and decision-making locally.To help realize these aspirations, the New Vision is anchored tothree core goals. These build on the foundation of the Millennium Nutritious food must first be available.Development Goals and other international targets by coordinating This involves balancing crop choices (e.g.and concentrating the efforts of agricultural players around the world. vegetables), as well as appropriate varieties (e.g. biofortification) to meet protein, caloricProvide food security for all … and micro-nutrient requirements.Meet nutritional demands while providing affordable choices across Nutritious food must also be affordable tothe food value chain enable equitable access. This entails both improving consumers’ incomes and lowering• Increase agricultural production by 20% each decade and costs through supply chain efficiencies and substantially reduce waste, towards the elimination of hunger and product design. undernourishment Finally, consumers must choose and absorbAchieving food security requires more than increasing production – healthy nutrition. This can be furtheredalthough sufficient supply is necessary. Building this pillar of the New by delivering evidence-based and locally-Vision will require improvements across the supply chain to close yield appropriate options (e.g. supplementation, ,gaps, promote efficient distribution, minimize waste and improve food diverse menus), raising community awarenessaccess.It will also involve focused efforts to engage the most vulnerable and and promoting healthy practices such asbring them into the broader agriculture system. Consumers will have breast-feeding and proper be educated to make the best choices and minimize spoilage andwaste. A critical focal point is maternal and child health, as this is a An emerging area of focus is the interactionproven axis for a community’s broader nutritional status. between agriculture, nutrition and health. While historically managed as separate… in an environmentally sustainable way … sectors, these are increasingly recognized as closely interlinked parts of a larger chain,Conserve or enhance the quality and quantity of natural resources; in which agriculture serves as a driver ofmeet the challenges of a changing climate human health through its delivery of nutritional needs. This requires a broader framework• Reduce emissions per tonne of production by 20% each decade; for managing health – including both over- optimize overall water use; lessen agricultural impact on the and under-nutrition – within the context of a environment sustainable food system.12 | A New Vision for Agriculture
  13. 13. Agricultural production need not be a detriment to the planet; in fact, it can be a linchpin of sustainability. It provides vitalecosystem services such as watershed management and carbon sequestration that offset industrial growth.The New Vision strives for an absolute minimization of the environmental footprint, beginning with reductions in its impactrelative to production. This includes limiting greenhouse gas emissions and water consumption while preserving soil healthand biodiversity. It necessitates judicious use of technologies, monocultures and cropland expansion.It will also require technological breakthroughs to help farmers adapt to the consequences of climate change, enableproduction and mitigate risk under increasingly difficult conditions.… while generating economic growth and opportunity.Drive rural and national economic development around the globe with well-targeted investments• Decrease the proportion of rural inhabitants living on less than US$ 1.25/day by 20% each decadeAgriculture is the predominant driver of growth in many low- and middle-income countries, and GDP growth fromagriculture has proven to be more effective at reducing poverty than growth originating in other sectors. Investing in thesuccess of rural populations is vital to equitable human development. This involves targeting those below the poverty lineand enabling the growth of rural economies with widespread access to transport, energy and information.Farmers who earn can spend, supporting jobs and incomes for local businesses and service providers. Thriving localcommunities can invest more in education and healthcare, propelling productivity.Reaching the central goals of the New Vision will require contributions from every stakeholder of global agriculture:developed and developing countries, exporters and importers, large-scale producers and subsistence growers. Farmerswill need to be engaged and empowered in every system. Large commercial players are critical to stabilizing global supplyand can apply sustainable practices at scale. Smallholders, who currently lack access to critical inputs and markets, willbe vital to meeting local nutritional and economic needs. Pursuing the New Vision’s three objectives simultaneously willinevitably require careful societal choices and tradeoffs.Achieving these goals will require contributions from every aspect of global agriculture and conscientious navigation of difficultsocietal tradeoff Potential impact Potential impact Economic Economic Environmental Environmental Changes required Changes required Example tradeoffs Food security security Example tradeoffs Food development development sustainability sustainability Smallholder Farming as a a livelihood Farming as Potentially accounts for Greatest number of of Potentially accounts for Represents 90% Increased productivity Increased productivity Smallholder livelihood 40-50% of outputof output people lifted out of will reduce pressure on on green revolution 40-50% farms worldwide, will reduce pressure green revolution increase to 2030 to 2030 increase poverty greatest lifting forestforest land land Relies on farmer access Prospect for rural number of people out Covering 60% of arable to inputs, markets, credit of poverty livelihood diversification land Farming asas a business information Farming a and Represents 90% of Opportunity to maintain business farms worldwide agrobiodiversity Robust commercial Robust commercial Need for foreignforeign Need for Potentially accounts for Potentially accounts Potential contribution Contribution to exports, New technology to Opportunity can agriculture agriculture investment investment 40-50% of output of output to exports and processing, for 40-50% higher-value reduce ecological implement improved increase to 2030 to 2030 increase development ofinternational footprint and active a food irrigation and fertilizer Needs technology trade processing sector Opportunity toat scale practices implement developments, supply Contribution will be ment irrigation efficiencies Fear ofof land grabschain efficiency and Fear land and enabled with active and fertilizer practices technology grabs and open trade international trade at scale technology Demand for land for Potentially accounts Potential catalyst for Conflicts with other Responsible for 15-20% Responsible Demandcrops/livestock for land Potentially accounts of output Potential catalyst forisolatedPotential reduction in for development of land uses: forestry, land expansion increase to 2030 regions REDD, biofuels, etc land expansion for crops/livestock 15-20% of output development of biodiversity and carbon increase to 2030 isolated regions sink Conflicts with other land Preservation of Offsets land taken out Intense footprint of delicate ecosystems forestry, REDD, uses: of production by urban- raising livestock Preservation biofuels, etc ization May allow other areas of delicate Efficient irrigation (e.g., forests) to be More food available Land and earnings freed Reducing food ecosystems infrastructure required taken Environmental footprint out of production waste where needed for other uses reduced Reducing food More food available Land and earnings Environmental footprint NOTE: Food production estimates based on FAPRI demand forecasts for 2020 and 2030, with productivity forecast to increase by 20-30% in commercial agriculture in developed countries and 30-50% in smallholder agriculture, plus 5-10% of available uses waste where needed freed for other land brought into production reduced A New Vision for Agriculture | 13
  14. 14. Critical Path Interventions Significant issues exist at every stage of the value chain Stages Specific issues at each stageGiven the complexity of the agriculturalsystem, progress is no simple matter. Orphan crops Research & Specific soil/ climate adaptationsTechnical challenges and market Development Major crop and livestock breedingfailures arise at every stage of thevalue chain. Financial risk for farmers Insufficient credit Input distribution Inadequate distribution channelsAgriculture will require the continued and adoption Poorly functioning regulatory systemsinvention and dissemination of “point Best practices not understood/adoptedinterventions” to improve specific parts Degraded soil health/ fertilityof each system. Agriculture is and Farming Threats from disease, pests, climatemust continue to be innovation-driven: Greenhouse gas emissionsNorman Borlaug’s work on rust- Poor post-harvest managementresistant wheat brought food security Lack of operating capital Trading andto Mexico, while the tools developed processing Lack of local storage and processingby EMBRAPA transformed theBrazilian Cerrado into a breadbasket. High price volatilityThese breakthroughs applied global Manufacturing Lack of market linkages or demand sinks and retailing Poor quality and safety standardsscientific and technical innovationthrough the resourceful insight and Food share of household expenditureacumen of local entrepreneurs. Poor nutrition awareness Consumer Understanding of sustainable productionAchieving the New Vision requires table Food waste in developed countriesmore of these successes at a largescale, with proactive attention towardsthe health of people and this planet.But overcoming constraints along the value chain requires more than technical capacity. It requires better dissemination oftools and knowledge. Too many farmers are unable to access or effectively use proven technologies and practices.The methodology for product development, technical assistance and extension must be broadened: emphasizingaffordability and harnessing local knowledge to maximize adoption. Furthermore, to ensure that increased productionmeets its goals – feeding and fuelling human activity – better networks must be developed for processing, trading anddistributing food, both domestically and across borders. Closing these gaps will require new incentives and funding forresearchers, companies, farmers and consumers to develop and enact the right solutions – for themselves and the planet.Stakeholders are already engaging on many interventions Specific interventions in the value chain High yield, stress-tolerant input Proper incentives for R&D Research & Bottom of the pyramid designs High-caliber institutions Development Local varieties/adaptations Grants for nutritious orphan crops Agri-dealer networks Farmer networks/organizations Input distribution Product bundling Model farms and adoption Risk mitigation in purchasing Smart subsidies Contract/nucleus farms Train off-farm skills, diversification Crop selection optimization Extension services, capability building Farming Water efficiency Monitor land use change Soil/emissions management Husbandry safety procedures Trading businesses Investments in “value-add” Local storage facilities industries (e.g., oil refining) Trading and Processing plants Cooperatives processing Prudent food aid procurement Grain exchanges Conscientious sourcing Access to export markets Manufacturing Fair trade pricing Build ports and retailing Local distribution channels Quality/safety standards Fortification Nutrition education Consumer Ethical labeling Access to potable water table Build consumer awareness on diet diversity/nutrition Teach proper food prep habits Prioritize maternal/infant health14 | A New Vision for Agriculture
  15. 15. Innovative tools can break specificbottlenecks along the value chain High-yield, disease-resistant variety developed by research institutes Dwarf wheat, and adopted at scale across Mexico, transforming it into wheat- Mexico secure exporter Insect-protected seed now planted on majority of cotton BT cotton, hectares, significantly boosting both farmer profitability and overall India production Zero-tillage soy Soil-conserving and emission-reducing process championed by cultivation, researchers and farmers that cultivates soy in narrow trenches rather Argentina than tilled soil and retains biomatter on field Technical livelihood training (farm and off-farm) and socio-behavioral Pradan, India skill-building with rural womens’ organizations in poorest regions Effective interventions often build on: Home electricity systems leased monthly by Sistemas de Technologia Rentable solar • Links with research Adequada Agroeletro to rural households off the electricity grid, energy, Brazil institutions drastically increasing rural incomes and reducing fossil fuel use • Community organizations “Biogesters”, Farm-based units which convert manure into biogas and provide low- • Risk-sharing tools China cost energy to rural households, piloted with Nestle suppliers • Telecom • Targeted Mobile banking, Safaricom service allows mobile-phone transfer of currency credits, regulations Kenya facilitating rural liquidity • Local capacity building Sustainable Advanced hives sold to farmers on a lease-to-own basis along with Beekeeping, extension and fair/ immediate payment for harvest from Honey Care Kenya Africa, mitigating producer risk and improving quality Private internet kiosks set up by ITC in villages to transmit E-choupals, relevant data on markets, legislation, weather, and prices to local India producers Homestead Diversified gardens and nutrition training provided by Helen Keller gardens, International to female-headed households in order to address Bangladesh malnutrition, micronutrient deficiencies Hindustan Level Ltd outsources rural distribution to female Door-to-door entrepreneurs who receive products by mail and sell them throughout retail, India village Flour fortification, Addition of iron and folic acid to wheat flour to address Egypt malnutrition amongst children and the poor, led by GAIN, WFP, and the governmentSOURCE: GAIN, Center for Management Research, IFPRI, ITC, Monsanto Company, Nestle, Pradan, RichardIvey School of Business, Safaricom, Unilever A New Vision for Agriculture | 15
  16. 16. Farmers at the Forefront Dinh Xuan Toan, Vietnam Gurmail Singh, India Dinh Xuan Toan is a vegetable farmer in the Lam Dong Gurmail Singh has been growing rice in Punjab for province of Vietnam. He contracts with Metro Cash 30 years. Until recently, he relied on conventional & Carry to grow and sell high-quality produce for methods of transplanting, transplanting, groundwater. paddling and which rely on which rely on consumer markets. The depth of the water table has dropped from dropped groundwater. The depth of the water table has 60 feet below ground to 250 feet,250 feet, requiring Singh from 60 feet below ground to requiring Singh to use As a part of this partnership, he receives extension a pump with more than twice the power. power. to use a pump with more than twice the services that inform him about improved practices like year-round cultivation, crop rotation and balanced Contract farming with PepsiCo, Singh was introduced to fertilizer application. the direct seeding technique for rice, allowing him to sow seeds directly in the main field without water at the crop In return, he must comply with growing standards that base. He began using this technique on 0.5 hectares ensure crop safety and quality. His income is now not and realized water savings of 30-40% in addition to only higher, but also more stable. He is investing his decreased labour and increased yields. profits in a new bamboo greenhouse, packing house and truck as well as repairs to his tractor and family Singh now uses this technique across 15 acres of paddy home. and has championed its adoption on over 500 acres in his village, increasing environmental sustainability with Source: Metro Cash & Carry the powers of partnership and example. Source: PepsiCo16 | A New Vision for Agriculture
  17. 17. Generating a Virtuous CyclePoint interventions are clearly critical, but the impact of each is limited by the “Open markets offer theweakest link in the value chain. The challenge ahead demands approachesthat will fundamentally shift the way the system operates. We need functioning only realistic hope of pullingmarkets in which individual incentives are aligned with the social good prices billions of people in developingreflect real costs, and honest work yields a dignified way of life. countries out of abject poverty while sustaining prosperity inAgricultural development can be environmentally, socially and economically the industrialized world.”viable if approached as a market investment rather than short-term aid. Kofi Annan KofiInvestors, beginning with farmers, should expect to turn a profit. Only then Secretary-General, General, United Nations (1997-2006)will they have the incentive to innovate, resilience to endure risk and capital to United Nations (1997-2006)advance.When farms succeed as businesses, other enterprises can develop in rural areas: not only selling inputs and buyingoutput, but also processing crops, retailing goods, providing services and sparking trade across villages, borders andoceans. To make this happen, a cycle of skill and investment in agriculture must be sparked.Innovative tools only work if they are supported by the right policy, infrastucture and market structure Policy Infrastructure Frameworks and incentives that protect Roads, railways, ports and communications people, attract investors and facilitate Policy links that facilitate the movement of development Infrastructure people, goods, services and ideas Virtuous cycle of skill and investment Tools Tools Market structure Interventions to fix specific Market Strong web of actors that facilitate bottlenecks in a region, crop or stage structure efficient links between farmer supply along the value chain and consumer demandGovernment policy is critical for investment in agriculture. A framework of regulations should be consistent,transparent and evidence-based and include strict standards of governance, property administration and qualityregulation. The policy environment must provide incentives for players to invest in agriculture while protecting the welfareof citizens and the environment. This entails increasing market access while ensuring sufficient public goods (such asresearch, education and gender equity).Adapting and adjusting government policy can transform production – as demonstrated in China and Vietnam overthe last two decades. In Vietnam, the Doi Moi reforms dismantled collective farms, assigned land rights to farmers andliberalized trade; these policy changes drove GDP growth to 7.6% annually in the 1990s and yielded sharp declines inrural poverty, hunger and malnutrition.Robust infrastructure is another base requirement for agricultural development and is critical to a self-sustaining cycle. This includes roads, electricity, rail, ports, aqueducts, storage and telecommunications to connectinterdependent components of the economy. Insufficient infrastructure creates logistical inefficiencies at every stage ofproduction and makes investing – and even interacting – costly.Strategic infrastructure investments can trigger and support diverse rural economic growth. For instance, the constructionof the Erie Canal and proximate railways in the US ignited regional trade: industry boomed in the Northeast, the Midwestbecame a national breadbasket and productivity rose nationally. A New Vision for Agriculture | 17
  18. 18. Ensuring a sustainable cycle requires market structures that Village-based Models of Holistic Change allow producers to meet consumer needs efficiently. This entails market links between players along the value chain, financing A number of civil society actors have mechanisms to reduce risk and appropriate scales of supply and demonstrated the importance of an integrated demand. approach to development. A healthy market structure requires strong actors with the investment Institutions such as BRAC and Save the capacity to tackle bottlenecks. In some instances, individual players Children and initiatives like the Millennium manage this capability, but often it is created through aggregation and Villages Project leverage community cooperation. leadership and target investments to simultaneously improve local health, nutrition, For instance, the organization of small coffee producers in Colombia education and incomes. – complete with research, extension and marketing – propelled Colombian coffee to the top of the global market. In India, local dairy Many such efforts have had substantial farmers formed cooperatives to process and market milk efficiently at impact at the village or district level and offer scale; the farmer-branded dairy now thrives, mitigating crises of rural useful lessons to public- and private-sector actors who can help adapt and scale such poverty and malnutrition. approaches.Mobilizing Business as an Agent of Change “Farming at any scale is a business, and smallholders and producers mustGiven these historical successes and today’s need for broad-basedaction in agriculture, stakeholders are beginning to orchestrate their be treated as entrepreneurs.”efforts to spark such virtuous cycles. An initial challenge in developing Kanayo Nwanzecountries is how to reach and engage millions of smallholders and President, International Fundrural consumers: it is impractical for a single institution to address the for Agricultural Development (IFAD)varying barriers in every village. Who Is the Private Sector?If profit incentives are aligned with the goals of agriculturaldevelopment and appropriate social safeguards, businesses have the The private sector includes any individual ormotivation and capability to drive localized change. This applies to institution that earns income by producing andfamily-owned shops as well as multinational corporations. trading goods and services. In the agriculture sector, this spans the range from smallholderIn many areas today, there are impediments to robust private sector farmers to national and multinationalinvolvement. In addition to ensuring the right policies, infrastructure companies.and market structure, stakeholders may help attract and accelerateprivate investment. For instance, the government can offer time- These diverse enterprises are complementarybound financial incentives (such as land or tax breaks) to offset start- and interdependent. Farmers rely on localup costs; foundations can provide seed funding for research and businesses to provide inputs, and purchaselogistics; and NGOs can organize and train producers so they offer a and process the harvest.critical mass of talent. Small and medium-sized enterprises rely onIn attracting local businesses, it is critical to consider economic scale larger firms for technology, manufacturing andand sustainability: forward-looking business models that allow for retail of consumer products.sufficient ongoing operating profit without long-term dependence onoperating subsidies. Regional and global companies have the expertise and capacity to help developAchieving the New Vision requires the private sector to be engaged markets and deliver impact at an active partner. This includes, but is not limited to, traditionalcompetencies such as technological expertise, financing and Each has a unique capacity to drive andsourcing. sustain market-based transformation of the agriculture sector.It also extends to more proactive roles like private extension,smallholder aggregation (e.g. nucleus farms, warehouses), nutritioneducation and multistakeholder coordination. In stepping up to leadthe transformative process, companies can harness the power ofmarkets to deliver enduring impact.18 | A New Vision for Agriculture
  19. 19. Models of CollaborationWe are witnessing the emergence of a new generation of agricultural initiatives, many in an early stage, which can deliverthese transformations in even the most challenged geographies. Private, public and civil actors are using a range ofexciting approaches to shape robust markets.Emerging examples of holistic approaches (not exhaustive): Broad policy scheme that National sector renovates market structure to a transformation spur private investment towards specific economic and social objectives cy I nf Pol i r Value-chain Business investments in the b production of a particular crop to as intervention improve the value of goods from tr u planting through to consumption ctur e ol s Coordinated investment in an Infrastructure c infrastructure system to To st r M uctu corridor jumpstart and facilitate rural ar k r e markets and reduce logistical et inefficiencies Concentrated investment in an d Breadbasket area with high agricultural potential and many smallholder farmers to increase production of staples A New Vision for Agriculture | 19
  20. 20. A National-sector Transformation: Green A Value-chain Intervention: Horticulture in a b Morocco Honduras Agriculture accounts for Holistic value-chain interventions in Central America and almost 20% of GDP in around the world tackle obstacles from local production to Morocco and over 40% international trade to improve the efficiency and equity of of jobs but, until recently, strategic crops. productivity had remained stagnant for two decades. To In Honduras, an NGO (TechnoServe) and a farmer revitalize the sector, create organization (Asociación de Productores de Hortalizas y sustainable rural employment Frutales de Intibucá) are leading a partnership with donors and meet growing demand and private companies to improve the productivity of for diverse food choices at horticulture. The country is relatively poor, with high populationhome and abroad, the government developed a strategy to density and a per capita GDP below US$ 4,000 year.attract private investors while protecting social interests. This value-chain intervention focused on the impoverishedThe government stimulates high-value crop production to region of Intibucá, where smallholders formed a strongmeet national and international consumer demand through organization and diversified their crop production but needed“Le Maroc Vert”. Their strategy is to lease land to private a jump-start from external investors to access higher-valueinvestors in return for implementing advanced production, domestic and foreign markets. Together, the partners investeddeveloping value-add facilities, employing rural Moroccans in enhancing resource productivity, building organizationaland aggregating the produce of neighbouring smallholders. capacity and targeting consumers.In this system, private players invest their resources and The farmer organizationknow-how for higher-value agriculture, including cash now contracts withcrops, irrigation efficiency and processing. They also link sophisticated regionalsmaller players with the inputs, expertise and consumers buyers such as Grupothey may otherwise not have the scale to reach. A Comidas Especializadas. Indedicated government agency manages the contracts to just two years, participatingattract investors while monitoring to ensure social equity for farmers boosted yields bylocal communities. 50% and realized prices by 30%. The capital inflowThe programme initially identified 700-900 investment has not only funded sectorprojects across the country. The strategy was then upgrades and additionalincorporated into regional development plans with the aim employment throughof reaching 700,000 farmers out of 1.5 million in the first such enterprises as newseven years. Through this proactive approach, Morocco is processing facilities,determined to create a million jobs and double agricultural but also improved livingGDP. So far, between 2008 and 2010, the annual income standards, includingof participating smallholders has tripled to US$ 3,000, and higher rates of schoolagricultural GDP has increased by 30%. participation and access to potable water.20 | A New Vision for Agriculture
  21. 21. c A Proposed Infrastructure Corridor: Beira d A Breadbasket: The Ghana Northern Region Agricultural Growth CorridorBusinesses allied with the government and international Concentrating resourcesdonors to build infrastructure in central Mozambique, in areas with the mostwhere over 10 million hectares of high-potential land remain agricultural promise cancommercially underdeveloped. The Beira Agricultural maximize efficiency, improveGrowth Corridor is intended to reduce early-mover risk and food security and createcreate economies of scale for investors by coordinating economic surplus forprojects in advance – literally laying the groundwork for an off-farm development. Toactive rural economy. this end, the breadbasket approach upgrades allInspired by the success of the Cerrado, which has a elements of the value chainsimilar ecosystem, investors hope to make this region in a region that has thea global source of maize, sugar, horticulture and soy. potential to produce a largeImproved infrastructure, such as a freight network and share of a country’s staplehigh-capacity port, will catalyse production and link it with food markets. Construction is anchored to major miningprogrammes, commercial farms, smallholder aggregation The Government of Ghana and the Alliance for a Greenand enhancements of railways that connect to the port in Revolution in Africa (AGRA) are leading a coalitionBeira. to apply this strategy. Stakeholders identified four breadbaskets to support the country’s economic goals,Proponents hope to use the technological, financial and staple self-sufficiency and smallholder income. Theymanagerial capabilities of global investors along with the tackled the northern region first, both for its high stakesregional expertise of domestic players to bolster local and high potential: it is the poorest region but has greatbusiness. By facilitating commercial opportunities for agricultural capacity with large areas of uncultivatedsophisticated private players, the corridor will upgrade land, good water supply and lagging yields.the supply chain and attract resources for smallholders,such as financing, improved seed, agri-dealers, storage The strategy involves smallholder aggregation, sociallyfacilities and links to deeper demand. A goal is to ensure inclusive commercial farms on undeveloped landequitable growth through models that benefit smallholders to stabilize supply and generate employment, andand protect their communities. To this end, commercial interventions to boost access to inputs and credit. While farms are designed to serve the focus is on achieving self-sufficiency in cereals, the as hubs for outgrowers and strategy facilitates the market links necessary for high- provide services such as value crop cultivation and supports boosting production irrigation to smaller farmers. of local fruits and vegetables. The partnership comprises a The plan mobilizes the local private sector as change broad array of stakeholders, agents: about 250 entrepreneurs, such as SME owners including governments, and small warehouse operators, support smallholders donors and businesses, and interface initiatives of the government, donors, input/ organized around a detailed off-take companies and commercial banks. National investment plan. Together, players with deep regional knowledge find investment they hope to raise farming opportunities in supplying domestic food markets and revenues by US$ 1 billion global agri-business companies can use sophisticated and tax receipts by US$ technology and large-scale production mastery to 50 million annually, create secure export markets. 350,000 new jobs and improve market access for In the northern region alone, the plan should double the 200,000 smallholders. incomes of 250,000 poor farmers to about US$ 750 a year, increase national rice self-sufficiency to 70% and boost agricultural GDP by US$ 500 million. A New Vision for Agriculture | 21