Technology Intensive Agriculture:
The Netherlands’ Experience
Presentation used in 2012 and 2013 for several
international...
Content of the presentation

 Challenges in food security: technology needed

 The performance of Dutch agriculture and ...
Foresight(s) 2050: Scarcity & Transition
The food security issue: Can we feed 9 billion (with higher
income levels) with l...
The end of declining food prices?
© Niek Koning et al. Wageningen UR
Food index
EU’s SCAR Foresight: two narratives
Productivity:



Science has the potential to develop technologies that can boost
pro...
It is clear we need high tech: the delta of
the Netherlands can be an interesting case
NL: a city state and a big agricultural exporter
United States
Netherlands

France
Australia
Argentina
Brasil
Denmark
Thai...
Destination (%) of Dutch agricultural
exports, 2009
Land use in the Netherlands, 2006
42.000 km 2
agriculture

19%

nature and
forest

2%

built-on area

3%
55%

9%

traffic
...
Agricultural land use, 2009 - 1.9 mln ha.

3%
3%

grassland
arable land

42%

52%

vegetables & fruit
flowers,ornamentals
...
Location of the dairy farms and industry
Location of arable farming
Location of intensive livestock complex
Location of the vegetables and fruit sector
Location of the floriculture sector
Technical results / land prices
Milk production per cow: 8.000 kg
Cows per ha: 1.7
Wheat: 10 ton per ha
Piglets: 26.5 per ...
Agricultural holdings by type, 1985-2009

140000
120000

mixed

100000

pigs and poultry

80000

arable crops
60000

horti...
Farm size in the EU, 2007
Belgium
Denmark
Germany
France
UK

acreage (ha)

Italy
economic size
(ESU)

Spain
Poland
Netherl...
Distribution of total income / ag. household
100%
90%
80%

> 100.000

70%
60%
50%

50100.000

40%

25-50.000

30%
0-25.000...
value added Dutch agro complex, mrd euro, 2008
Distribution
import

Food Industry
import
6.3

8.9

Supply
import

5.2

3.3...
Innovation as basis for competitiveness
R&D expenditure as % of value of production in food products, beverages and
tobacc...
Delta with good
soils

High level of
knowledge

Climate, light

Specific Competences

Investments

Efficiency of scale

So...
Agricultural Knowledge and Innovation Systems
commodity boards: cofinance
Wageningen University and
Research centre: unive...
Public-Private Research partnerships –
(‘a golden triangle’ from the polder)

Research

A golden
triangle

Business

Gover...
Our agro-innovation system and theory

 Innovation happens in a social system: “an institutional
clustering of practices ...
Linking public and private interests
Knowledge

Linking principles:
• Openness
• Proximity
• Synergy
• Absorption capacity...
Part 4: GRIN Technologies

 Genetics
 Robotics
 ICT – information and communication technologies
 Nano technology

27
How more data contributes to current business models
Input industries

Software
Provider

Farmer

Transport

GRIN

Small

...
Organisational arrangements in the food
chain are changing
Programmability

Low

High

Asset specifity Low

High

Low

spo...
Development of farm systems
Net value
/ ha
Ag. policy

Family
farming
AKIS.gov

Subsistence
farming

Latifundia
socialist
...
Scenarios: qua vadis?
Strong government

Conserve

Develop

Room for markets and networks

(c) Poppe et al, 2009
Part 5: Innovation policies

 The EU and Dutch government try to increase the level of
innovation

 For economists and o...
Increased relevance in EU policy:
•

Europe 2020 strategy: growth strategy for the coming decade. It
wants the EU to becom...
Economics: thinking on equilibrium and dis-eq.

Adam Smith
•
•
•
•
•
•
•
34

Ricardo
Marshall
Walras
Coase
Hayek
Friedman
...
Two views on innovation policy (Smits et al,
2010)
Mainstream macro-economics
Main assumptions

Equilibrium

Institutional...
Knowledge & Innovation System: 7 functions

1. Knowledge development and diffusion
2. Influence on direction of search and...
Agricultural Knowledge and Innovation Systems

An AKIS should be able to
propose and develop practical
ideas to support in...
The Food Chain Plays a Role too

38

SCAR Collaborative Working Group AKIS
Learning and Innovation Networks

 Thematically-focused learning networks that are made up
of different actors, within an...
Planned results:
• Tools and methods for practitioners that are involved in learning and innovation in
agriculture
• Recom...
Different motivations for research should
be recognised – and interaction managed
Science

Market
driven
R&D

Not a lineai...
Different objectives,
methods, and public
roles

Science

Market
driven
R&D
• Science for competitiveness or social
issues...
Role of EU policy

Science

Market
driven
R&D
• Collaborate with
business in Food
Chain in PPP
• Manage spill overs
betwee...
Thank you for
your attention
krijn.poppe@wur.nl
www.lei.wur.nl
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KJ POPPE an intro on Dutch agro for foreign delegations

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Presentation that I used in 2012 and 2013 to inform several foreign delegations (a.o. South Korea, Taiwan, Malaysia) on Dutch agriculture

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KJ POPPE an intro on Dutch agro for foreign delegations

  1. 1. Technology Intensive Agriculture: The Netherlands’ Experience Presentation used in 2012 and 2013 for several international delegations visiting the Netherlands Krijn J. Poppe
  2. 2. Content of the presentation  Challenges in food security: technology needed  The performance of Dutch agriculture and food industry  Explanations of the Dutch success  GRIN technologies determine the future  European and Dutch innovation policies 2
  3. 3. Foresight(s) 2050: Scarcity & Transition The food security issue: Can we feed 9 billion (with higher income levels) with less environmental impacts? The debate focuses on scarcities: • Climate change (and the role of livestock) • Environmental impact and biodiversity loss, eco system services • • • • • 3 Energy supply, biobased economy Phosphate supply Water availability Declining productivity Resistance to industrialisation of agriculture in Western countries (incl. animal welfare issues)
  4. 4. The end of declining food prices? © Niek Koning et al. Wageningen UR Food index
  5. 5. EU’s SCAR Foresight: two narratives Productivity:  Science has the potential to develop technologies that can boost productivity whilst addressing resource scarcities and environmental problems  Massive investments needed in R&D, technology adoption, rural infrastructure, access to markets  GRIN technologies (Genetics, Robotics, Informatics, Nano) Sufficiency:  Science has the potential to develop technological solutions that are productive, reduce resource use, preserve biodiversity  However, demand increases need to be mitigated, through behavorial change, structural changes food systems  Appropriate governance structures to internalise externalities
  6. 6. It is clear we need high tech: the delta of the Netherlands can be an interesting case
  7. 7. NL: a city state and a big agricultural exporter United States Netherlands France Australia Argentina Brasil Denmark Thailand Total import value Total export value Net trade value New Sealand Ireland Algeria Saoudia-Arabia Taiwan Hongkong South-Korea Italy Russian Federation United Kingdom Germany Japan -60 -40 -20 0 20 40 60 80 Trade value in billion US$
  8. 8. Destination (%) of Dutch agricultural exports, 2009
  9. 9. Land use in the Netherlands, 2006 42.000 km 2 agriculture 19% nature and forest 2% built-on area 3% 55% 9% traffic recreation 12% water
  10. 10. Agricultural land use, 2009 - 1.9 mln ha. 3% 3% grassland arable land 42% 52% vegetables & fruit flowers,ornamentals and seeds
  11. 11. Location of the dairy farms and industry
  12. 12. Location of arable farming
  13. 13. Location of intensive livestock complex
  14. 14. Location of the vegetables and fruit sector
  15. 15. Location of the floriculture sector
  16. 16. Technical results / land prices Milk production per cow: 8.000 kg Cows per ha: 1.7 Wheat: 10 ton per ha Piglets: 26.5 per sow per year Land prices: 35.000 – 75.000 euro / ha
  17. 17. Agricultural holdings by type, 1985-2009 140000 120000 mixed 100000 pigs and poultry 80000 arable crops 60000 horticulture 40000 grassland based livestock 20000 0 1985 1990 1995 2000 2009
  18. 18. Farm size in the EU, 2007 Belgium Denmark Germany France UK acreage (ha) Italy economic size (ESU) Spain Poland Netherlands EU-27 0 20 40 60 80 100 120
  19. 19. Distribution of total income / ag. household 100% 90% 80% > 100.000 70% 60% 50% 50100.000 40% 25-50.000 30% 0-25.000 20% 10% <0 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009
  20. 20. value added Dutch agro complex, mrd euro, 2008 Distribution import Food Industry import 6.3 8.9 Supply import 5.2 3.3 4.6 6.9 Ag Services, Forestry 10.6 4.7 Inland supply 20 Distribution inland Food Industry Inland Primary Agricutlure Total € 50,4 bln. (9,5%), incl. 20,4 based on imports; 685.000 annual labour units
  21. 21. Innovation as basis for competitiveness R&D expenditure as % of value of production in food products, beverages and tobacco 0.8 0.7 0.6 0.5 1992 1997 2002 2007 0.4 0.3 0.2 0.1 0 21 NL Dk D F USA PM 2007: High prices
  22. 22. Delta with good soils High level of knowledge Climate, light Specific Competences Investments Efficiency of scale Social capital International oriented Infrastructure rural area New land (polders) Homogeneous, highly educated population Cheap (water) transport Knowledge system Breeding material Large NW European consumer market Diversity in production + trade: complete offer Lobbying power Cooperatives Efficient capital market Competitive advantage The model of value creation for Dutch agriculture High productivity and low cost price Supportive general policy High volume Good in productdifferentiation High Marketshare Financially healthy Cheap capital Important in export en GDP High land prices Strong export position image abroad High wages Environmental issues: pressure to innovate Multifunctional landscape Results (c) Poppe et al, 2009
  23. 23. Agricultural Knowledge and Innovation Systems commodity boards: cofinance Wageningen University and Research centre: university, innovation driven applied research and 2 experimental stations Extension service (privatised), agribusiness – advise and accounting offices University Utrecht – Veterinary science TNO (-Applied Food Research) Government: clear regulations, system responsibility RABObank Agribusiness (coops and investor owned firms) Demanding consumers 23 Highly educated farmers Agricultural Schools (managed by Ministry of Agriculture)
  24. 24. Public-Private Research partnerships – (‘a golden triangle’ from the polder) Research A golden triangle Business Government
  25. 25. Our agro-innovation system and theory  Innovation happens in a social system: “an institutional clustering of practices among the participants (not necessarily implying consensus)” (Anthony Giddens)  Long-term infrastructural investment in ‘mental capital’ and its improvement is crucial for successful economic development and for competitive trade performance (Chris Freeman for OECD, quoting List, Keynes, and investigating historical cases in Europe and Asia)  ‘Coupling mechanisms’ between the education system, scientific institutions, R&D facilities, production and markets have been an important aspect of the institutional changes introduced in successful ‘overtaking’ countries. (Freeman)  Dutch agro-innovation system: PPPartners, linking principles en connection mechanisms (process design) 25
  26. 26. Linking public and private interests Knowledge Linking principles: • Openness • Proximity • Synergy • Absorption capacity external info Institutes Gover nment NGO’s Busin esses Intermedi ates 26 Connection mechanisms: • Fora like Knowledge rooms etc. • Strategic agenda sector • Strat. Knowledge & Innovation Agenda • Public-private investments • Supporting institutional changes
  27. 27. Part 4: GRIN Technologies  Genetics  Robotics  ICT – information and communication technologies  Nano technology 27
  28. 28. How more data contributes to current business models Input industries Software Provider Farmer Transport GRIN Small Feed the growing world Food processor Transport Cost price Service Sustainability Precision Farming: better control Better management decision Sophisticated Technology, More advise Logistics solution providers Retail / consumer Transport cope with retail loyalty Food Safety Health Segment products and input suppliers; Benchmark with competitors Better service concepts, e.g. in store replenishment Consumer decision support (pre- and after sales)
  29. 29. Organisational arrangements in the food chain are changing Programmability Low High Asset specifity Low High Low spot long-t. spot joint market contract mrkt venture cooperation coop./ vertical inside contract vertical owner- High Contribution partners separable High Low © Boehlje ownership ship
  30. 30. Development of farm systems Net value / ha Ag. policy Family farming AKIS.gov Subsistence farming Latifundia socialist state farms Agricultural Family Firms (sme) 3rd gen. uni Urban farming Residen -tial farming Time Metropolitan agriculture Food supply networks
  31. 31. Scenarios: qua vadis? Strong government Conserve Develop Room for markets and networks (c) Poppe et al, 2009
  32. 32. Part 5: Innovation policies  The EU and Dutch government try to increase the level of innovation  For economists and others: 2 views on innovation policy A recent report on Agricultural Knowledge and Innovation Systems is available (see EU’s website SCAR) 32
  33. 33. Increased relevance in EU policy: • Europe 2020 strategy: growth strategy for the coming decade. It wants the EU to become a smart, sustainable and inclusive economy. • The Innovation Union is one of the seven flagship initiatives of the Europe 2020 strategy: • turn Europe into a world-class science performer; • remove obstacles to innovation • revolutionise the way the public and private sectors work together, notably through Innovation Partnerships • Within the Innovation Union, Horizon 2020 is the financial instrument 2014 to 2020, proposed budget €80 billion (the EU’s new programme for research and innovation) • CAP post 2013: Reinforce the role of the Farm Advisory Service 33 (FAS) and to create a ‘European Innovation Partnership (EIP) for agricultural productivity and sustainability’.
  34. 34. Economics: thinking on equilibrium and dis-eq. Adam Smith • • • • • • • 34 Ricardo Marshall Walras Coase Hayek Friedman Ostrom • F. List: infant industry • K. Marx: role of capitalist • J. Schumpeter: entrepreneur / business cycle • K. Arrow: market failure • O. Williamson: Inst. Econ. Ministry of Economic Affairs, Agriculture
  35. 35. Two views on innovation policy (Smits et al, 2010) Mainstream macro-economics Main assumptions Equilibrium Institutional and evolutionary economics: Systems of Innovation Dis-equilibrium Focus Perfect information Allocation of resources for invention Asymetric information Interaction in innovation processes Main policy Individuals Science / research policy Networks and frame conditions Innovation policy Market failure provide public goods Systemic problems solve problems in the system mitigate externalities facilitate creation new systems reduce barriers to entry facilitate transition and avoid lock-in eliminate inefficient market structures induce changes in the supporting structure for innovation: create institutions and support networking context specific Main rationale Government intervenes to main strengths of clarity and simplicity policies designed under analysis based on long term trends of this paradigm science-based indicators involvement of all policies related to innovation holistic approach to innovation difficult to implement main weaknesses of linear model of innovation policies designed under (institutional) framework conditions are not lack of indicators for analysis and evaluation this paradigm explicitly considered of policy 35
  36. 36. Knowledge & Innovation System: 7 functions 1. Knowledge development and diffusion 2. Influence on direction of search and identification of opportunities 3. Entrepreneurial experimentation and management of risk and uncertainty 4. Market formation 5. Resource mobilisation 6. Legitimation 7. Development of positive externalities (c) M. Hekkert et al. 36
  37. 37. Agricultural Knowledge and Innovation Systems An AKIS should be able to propose and develop practical ideas to support innovation, knowledge transfer and information exchange. 37 Policy needs to reflect the manner in which innovation actually occurs today: often through diffuse networks of actors who are not necessarily focused on traditional research and development.
  38. 38. The Food Chain Plays a Role too 38 SCAR Collaborative Working Group AKIS
  39. 39. Learning and Innovation Networks  Thematically-focused learning networks that are made up of different actors, within and outside the formal AKS.  Members can include farmers, extension workers, researchers, government representatives and other stakeholders (Rudman, 2010).  The emphasis is on the process of generating learning and innovation through interactions between the involved actors.  LINSA: LIN for Sustainable Agriculture  The difference between AKS and LINSAs is connected to how knowledge is conceptualized: AKS sees knowledge as a “stock to be transferred”, whereas LINSA emphasizes the processes needed to make knowledge useful and applicable to other actors. 39
  40. 40. Planned results: • Tools and methods for practitioners that are involved in learning and innovation in agriculture • Recommendations on policy instruments and financial arrangements that support learning and innovation for sustainable agriculture • Concepts to reflect on learning and innovation processes as drivers of transition to sustainable rural development More information: www.solinsa.net; contact: heidrun.moschitz@fibl.org
  41. 41. Different motivations for research should be recognised – and interaction managed Science Market driven R&D Not a lineair model ! Innovation in partnership
  42. 42. Different objectives, methods, and public roles Science Market driven R&D • Science for competitiveness or social issues • Business sets agenda, helps to steer, uses results • PRIVATE-PUBLIC PARTNERSHIPS • Science driven knowledge development • Basic research • Linear model • Cross overs sectors • Society sets agenda • PUBLIC TASK Innovation in partnership • • • • • Prototypes // Localisation Change business models / finance Food chain is co-creator (De-)regulation, procurement etc. LEARNING AND INNOVATION NETWORKS • INFORMATION BROKERS
  43. 43. Role of EU policy Science Market driven R&D • Collaborate with business in Food Chain in PPP • Manage spill overs between EU regions • Countries are too small, large spill overs: pool funds • Compete and collaborate with US, China, Brazil etc. • Help re-organisation process in Europe (infrastructures) Innovation in partnership • AKIS are REGIONAL • Innovation , not dissemination • Organise international exchange for spill-overs (farmers, extension) • Empower innovation groups in CAP • Don’t forget monitoring (learning)
  44. 44. Thank you for your attention krijn.poppe@wur.nl www.lei.wur.nl
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