ABC Perspective: ‘Access to safe and nutritious food for all’
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ABC Perspective: ‘Access to safe and nutritious food for all’

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Dr John Purchase presented at the Consumer Rights Conference. He addressed the following topics:...

Dr John Purchase presented at the Consumer Rights Conference. He addressed the following topics:
Global Food System and Value Chains;
Food Chain and Network Development;
How do we capture value?;
Role of Government and the Case for International Investment.

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ABC Perspective: ‘Access to safe and nutritious food for all’ Presentation Transcript

  • 1. ABC Perspective:‘Access to safe and nutritious food for all’NCF: 2011 Consumer Rights Conference Dr John Purchase 3 November 2011
  • 2. Theme addresses Food Security• Many definitions to food security, but the one we will use is the FAO definition (World Food Summit 1996): “A situation that exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”.
  • 3. Components of Food Security FOOD UTILISATION FOOD ACCESS • Nutritional Value • Affordability • Social value • Allocation • Food safety • Preference Food Security FOOD AVAILABILITY Complex concept: • Production Difficult to measure • Distribution and evaluate. • Exchange/trade Purchasing power key to access Stability over TIME
  • 4. Severity: Integrated FoodSecurity Phase Classification
  • 5. Presentation outline• Global Food System and Value Chains• Food Chain and Network Development• How do we capture value?• Role of Government and the Case for International Investment• Concluding remarks
  • 6. Global Food System and Value ChainsFrom Farms to … No. 1:Everything! Food & Respect our Paper Beverages Feed farmers! Construction & Furniture Fuel Shoe & From Pharma Leather Ind Farms Medicine to…… Textiles & Pharma Clothing Cosmetics Entertainment/ Electricity Tourism Plastics Environment Source: Marcos Fava Neves
  • 7. Want to Make More than a Banker? Become a Farmer! By STEPHEN GANDEL July 10, 2011 • If you want to become rich, Jim Rogers, investment whiz, best-selling author and one of Wall Streets towering personalities, has this advice: Become a farmer. Food prices have been high recently. Some have questioned how long that can continue. Not Rogers. He predicts that farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street. The essence of hisTools of the trade surround John argument is this: We dont need moreWilloughby on his 800 ha plot outside Grand Island, Neb. bankers. What we need are more farmers. Photograph by Danny Wilcox The invisible hand will do its magic. "The Frazier/TIME world has got a serious food problem," says Rogers. "The only real way to solve it is to draw more people back to agriculture."
  • 8. Value Chain Approach Consumers Output Markets - Wholesale Policy & Legislation environment - Retail Policy & Legislation environment Service providers - Processing - Storage - Manufacturing - Packaging Primary agriculture - Smallholders - Emergent - Commercial Input service providers - Finance & Insurance - Seed, Fert’s, Agro-chemicals, etc. -Livestock inputs
  • 9. Status and Trends South Africa
  • 10. Global Food System• Within IFAMA, major look at increase in global food consumption – 1 billion people in Asia alone moving into middle class.• All forecasts 10 years ago for China/Asia’s production, imports & exports were wrong.• If China today intends to be self sufficient in soybeans, it will need over 35 million new hectares – but does not have the land for this.• Thus increased trade & opportunity.• Will need much better logistics, ports, etc.
  • 11. Global Food System• Changing food system: Redefining agribusiness from commodity companies to consumer companies – worldwide trend.• Demands of system far more complex and variable – requires multi-disciplinary approach and readiness to change.• Common knowledge South Africa’s agro- food system competes in the global food system – thus need to adapt to new trends and demands to remain competitive and unlock opportunity. Consumer focus NB!
  • 12. Global Food System• Retailers, the Giants of the Chains - Wal-Mart sold €337 billion worth of food from 8 400 stores in 15 countries in 2010 - Private vs retailers labels/brands - Powerful: Information about consumers - Their supply chains incredibly important - Move to ‘Green Economy’, Fair Trade, Smallholder procurement, increased convenience, tasting areas, etc.
  • 13. FAO Food Price Index
  • 14. Food Commodity Price Indeces
  • 15. InflationSource: AMT, 2011
  • 16. Exchange rateSource: AMT, 2010
  • 17. SAARF LSM Segments: Proportion of SA adult population and average monthly household income in 2009 Source: SAARF (2010a) & BFAP, 2010
  • 18. LSM class mobility: All adults during the period 2004 to 2010 Source: SAARF AMPS data for the period 2004 to 2010, as quoted by BFAP
  • 19. BRIC(S) to drive Modern Retail growth 2006 2010 2014Forecast Rank Country €bn Rank Country €bn Rank Country €bn 1 US 612 1 US 638 1 China 761 2 China 328 2 China 529 2 US 745 3 Japan 297 3 Japan 345 3 India 448 4 France 206 4 India 279 4 Japan 360 5 India 190 5 France 205 5 Russia 322 6 UK 188 6 Russia 186 6 Brazil 284 7 Germany 150 7 Brazil 185 7 France 228 8 Italy 127 8 UK 170 8 UK 198 9 Russia 116 9 Germany 160 9 Germany 168 10 Mexico 112 10 Italy 130 10 Indonesia 167 2,326 2,827 3,681 Note: 2010F and 2014F are calculated using fixed exchange rates based on the average rates of 2009 from www.oanda.com (01.01.09 to 07.12.09). Source: IGD Research, December 2009
  • 20. Germany: The Melander family of Bargteheide Food expenditure for one week: $500.07 Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
  • 21. USA: The Revis family of North CarolinaFood expenditure for one week $341.98 Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
  • 22. Egypt: The Ahmed family of CairoFood expenditure for one week: $68.53 Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
  • 23. Chad: The Aboubakar family of Breidjing Camp Food expenditure for one week: $1.23 Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
  • 24. Food Chain andNetwork Development: 14-Point List
  • 25. Food Chain: 14-Point List1. Chain Design, Governance and performance2. Chain Waste3. Food risks and chain integrated risk management4. Sustainable chains and certification5. Chain and network impacts, and adaptation6. Chain and networks legislation and regulation7. Food and health communication
  • 26. Food Chain: 14-Point List8. Climate change and chains adaptation9. Chain information management10. Biomass based chains11. Metropolitan agriculture chains12. Chain and network intermediaries13. Chain and network entrepreneurship and innovation14. Chain inclusion and social innovation
  • 27. How do we capture value?• Innovation in integrated food chains: input suppliers & farmers• Innovation for Food Industry and Retailers• Creative Pricing Strategies – framework method: 3 phases• Value capture trilogy: - Costs - Differentiation - Collective action
  • 28. Role of Government and the Case for International Investment
  • 29. Strategy for International Investment• Considerable debate globally on pros and cons.• However investment mostly positive and should be promoted, but some limited and transparent form of regulation necessary.• Wal-Mart issue, for example, big debate in SA.• Can evaluate Multi-nationals contribution to economic development: Environment, Human resources, Taxation, R&D, Financing, Policies on market access, JV’s for farmers/suppliers, and governance structures.
  • 30. Role of Government• Acknowledge agro-food industry is private sector business, where markets have to work.• Create facilitating and enabling environment for competition in an open, competitive market.• Provide infrastructure at competitive pricing.• Market development (PPP with Private Sector)• Trade and tariff policy, etc.• Assist in incorporating smallholders into commercial value chains.
  • 31. Agribusiness Executive Survey: Competitiveness: Factor analysis Cost of doing business Aids 3 Labour 2.5 Crime Infrastructure 2 1.5 Labour policy Capital 1 0.5Land reform policy 0 Technology Trade policy Market size Local suppliers of… Market growth Electricity supplies Financial institutions Scientific research… 2004 2008 2010 Source: Agricultural Business Chamber
  • 32. SA economic growth: Tradable goodssectors lag the non-tradable goods sectors GDP % per Sector of Economy 300 250 GDP 200 Agric Mining INDEX 150 Manufacturing Construction 100 Trade Transport 50 Finance 0 20002001200220032004200520062007200820092010 Source: StatsSA Graph: ABC
  • 33. Concluding remarks• Value chains compete globally, and our agro- food value chains are part of that serious World Cup competition. Ref not always fair!• Generally fairly well developed value chains, but by following a more strategic and networking approach, together with government, we can improve access of safe, affordable and nutritious food for all.• Our approach must be pro-active, and our focus must be on people to make it happen!
  • 34. Thank Youwww.agbiz.co.za