Warr Athens 26 Jan 2010 Sustainable Agriculture


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Sustainable Agriculture 2010

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  • haha just saw this. Yep, only 1/4 of the Earths surface is land. There is a lot of sea.
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  • Nice apple metaphor ... But it is really 1/4 of the earth only made of 'land' , or did you mean 'livable lands' ?
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Warr Athens 26 Jan 2010 Sustainable Agriculture

  1. 1. Benjamin Warr Senior Research Fellow, Sustainability benjamin.warr@insead.edu INSEAD Social Innovation Centre http://www.insead.fr/facultyresearch/centres/isic/ Sustainable Agriculture Challenges for Business Athens January 26th 2010
  2. 2. Topics for Discussion •Urgency – Options – Innovation •Extension – Intensification – Efficiency ? •Supply / Demand focus, or Systems of Production and Consumption? “Feeding a hungrier world gets harder, even with all the tools…the way we manage the global agriculture and food security system doesn’t work” (FAO, 2009)
  3. 3. What is the urgency: new imperatives for business?
  4. 4. Agricultural GHG emissions 32% of total GHG emissions related to land use and agriculture Source: IPCC
  5. 5. The global population: feeding 9 billion by 2050 From 6.80bn today reaching 9.1bn in 2050 and over 10 bn by 2100
  6. 6. A changing diet will exacerbate pressures Source: The Independent, Nov 1st 2009 from report by Robert Goodland, a former lead environmental adviser to the World Bank, and Jeff Anhang, World Bank.
  7. 7. Potential undesirable impacts of biofuels need for land deforestation monoculture biodiversity loss price pressures water use
  8. 8. Biofuels and forest cover loss in Borneo 1950-2020
  9. 9. Water requirements and regions of physical and economic water scarcity Source: IMWI, Insights from the Comprehensive Assessment of Water Management in Agriculture, 2006 and FAO.
  10. 10. The environmental food crisis: extension possibilities?
  11. 11. Projected cropland and yield losses
  12. 12. Feeding the planet – what are the options? • Science (Another ‘more sustainable’ green revolution) • Market-based solutions (example: reducing subsidies and trade barriers) • Community-based solutions and sustainable agriculture (example: agriculture cooperatives) • Supply chains (example: waste in food supply chains) • Sustainable consumption (example: the Tesco SCI program) • Self regulation (eco-labels, eco-brands) and Government regulation (license to produce)
  13. 13. Competitive Environmental Strategies Competitive Advantage Lower costs STRATEGY 4 STRATEGY 1 Environmental Cost Eco-Efficiency Leadership Differentiation STRATEGY 2 STRATEGY 3 Beyond Compliance Eco-Branding Leadership Organizational Processes Products and Services Competitive Focus R.J. ORSATO (2006) ©
  14. 14. Example: Efficiency and productivity through site- specific management and precision farming. • Farmstar, a precision agriculture service for Europe by Infoterra and Arvalis.
  15. 15. Intrinsic (spatial) vs. Idiosyncratic (management) Variability Relative Performance of Agricultural Enterprises (Source: James Moody, WANTFA Conference, Perth, Australia, February 2005)
  16. 16. Example: Agricultures participation in carbon markets via innovative eco-efficiency • Eco-N, Eco-efficiency (Strategy 1) meets environmental cost leadership (Strategy 4)
  17. 17. Nitrate ions (NO3-) are not held by soil particles and can easily be leached when drainage occurs NH4+ ---- Cation exchange NO3- R.J. ORSATO (2006) ©
  18. 18. NH4+ ---- Cation exchange Nitrification inhibitor ‘eco-n’ slows down the rate of nitrate production and thus reduces the NO3- nitrate leaching loss R.J. ORSATO (2006) ©
  19. 19. Eco-n reduced nitrate Farm eco-n from below urine Lincoln University Dairy leaching lysimeter trial patches on season (data not published yet) 2004/05 the Lincoln University Dairy Farm (data unpublished yet) 100 90 80 NO3-N leached kg N/ha 70 60 50 40 81 % 79 % 30 reduction reduction 20 10 0 Paparua: Urine Paparua: Urine Eyre: Urine + Eyre: Urine + eco-n only eco-n only R.J. ORSATO (2006) ©
  20. 20. The extra nitrogen retained in the soil produces more pasture. Me an Annual Pasture Y ie ld: LUDF Drainage Plots Seasons: 2002/03, 2003/04, 2004/05 20000 21 % 23 % Pasture Yield (kg DM ha ) -1 16000 Non-Urine 12000 Non-Urine+eco-n Urine 8000 Urine+eco-n 4000 0 Treatment R.J. ORSATO (2006) ©
  21. 21. • Reduce nitrate leaching by 60% • Reduce Nitrous Oxide emissions by 75% • Reduce cation leaching by 50% • Increase annual pasture production 15% R.J. ORSATO (2006) ©
  22. 22. Eco-Efficiency And E-Cost Leadership • Resource productivity based • Eco-efficiency when: on ecological prerogatives 1.Supplying industrial markets can push the levels of 2.Relatively high levels of: efficiency beyond normal • resource utilisation standards • processing costs • generation of by-products • Multiple dividends from spin- 3.Under pressure to reduce both off effects of eco-efficient environmental impacts and costs of practices processes • Within the firm: Lean • E-cost leadership when: Thinking 1.Required to present ever increasing environmental performance • Beyond the borders: 2.Can only compete on the basis of cost Industrial Symbiosis 3.Radical process redesign and • In the skies: Carbon Credits dematerialization are possible without compromising performance.
  23. 23. Waste and inefficiency in the food supply chain Required above-ground phytomass exergy (human) CROPS PASTURE 48 GJ GE /capita/year 19 GJ GE /capita/year Feed and Product Commodity Feedstock generation utilisation utilisation efficiency efficiency efficiency US: 0.64 US: 0.16 US: 0.55 Food end-use per capita Non-eaten food (GJ/capita/year) (enduse-intake) ME1 (US) : 5.5 (GJ/capita/year) GE1 (US) : 6.9 ME (US) : 2.2 GE (US) : 3.1 Food intake per capita Faeces and urine (GJ/capita/year) (sum of intake GE2- sum of intake ME2) ME2 (US) : 3.3 0.4 GJ/capita/year GE2 (US) : 3.7
  24. 24. Competitive Environmental Strategies Competitive Advantage Lower costs STRATEGY 4 STRATEGY 1 Environmental Cost Eco-Efficiency Leadership Differentiation STRATEGY 2 STRATEGY 3 Beyond Compliance Eco-Branding Leadership Organizational Processes Products and Services Competitive Focus R.J. ORSATO (2006) ©
  25. 25. Beyond Compliance Leadership Beyond Compliance Leader Non-Compliance Average laggard VEIs - Green Clubs Negative Positive Reputation From To Beyond Compliance Sustainability leader in the industry Avoiding Negative Reputation Building Positive Reputation Reactive and Defensive Reflexive Stakeholder opposition and confrontation Stakeholder criticism, negotiation and dialogue Consumer boycotts Consumer engagement R.J. ORSATO (2006) ©
  26. 26. Business Responses: Linking sustainable consumption to sustainable supply: Example: E.g. Walmart
  27. 27. Labels? Global Sourcing of Processed Foods Is Ubiquitous Making Tracing Country of Ingredient Labeling Difficult NutriGrain Source: Roth, Tsay, Pullman, Gray, Journal of Supply Chain Management, 2008
  28. 28. When does Beyond Compliance Leadership and Eco-Branding Pay? • Beyond Compliance Leadership • Eco-branding 1. Firms supplying industrial markets 1. are difficult to imitate by competitors under pressure to improve their 2. do not depend on sophisticated and environmental performance controversial information about their 2. Exporting companies coping with environmental performance non-tariff environmental trade barriers 3. can obtain price-premium for their differentiation. 3. Firms dependent on loans from international banks environmental impact assessment 4. Multinationals susceptible to shareholder environmental pressure in their home country
  29. 29. Beyond Competition towards Sustainable Value Innovation Couts Economic Costs Environmental Impacts New Business Models New Markets ENTREES STRATEGIE RESULTATS 5 New Clients New Value Proposition Value to Contibution clients to Society Valuer
  30. 30. Example: Stimulate productivity, the use of fragmented unused land and new markets. • The example of Vayugrid Inc. leveraging fragmented supply chains via business-to-community social entrepreneurship in India.
  31. 31. Thoughts for the Future • A systems view is essential to understanding risk and sustainability (soil, water, energy, climate, industry, society…) • Opportunities to extend are constrained • Opportunities to intensify face scarcity of other resources (water, oil, phosphate, environmental resilience) • Resource Use Efficiency is required • site specific land management • culture specific business models • A way to do this is through agro-industrial symbiosis (energy- food-land-climate nexus) • Collaborations are critical for risk avoidance and sharing
  32. 32. If this apple represents the Earth…
  33. 33. And of this apple… ¼ is land, of which… 1/8 is productive But ¾ are sealed by roads, cities, towns, parking or protected leaving 3% for 6 billion souls Soils are Scarce!
  34. 34. And if this apple represented the Earth… …only this much for 6 billion today and 8 million in 2020.