Cades lecture november 2013: agriculture, food & globalisation


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Who will feed the 9 billion by 2050 and how, while lifting the pressure on poverty and planet?

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Cades lecture november 2013: agriculture, food & globalisation

  1. 1. VREDESEILANDEN & THE FARMER EFFECT Chris Claes, Leuven 21/11/2013 Smallholder farming and its contribution to saving the world
  2. 2. Overview • The world situation with regard to agriculture and food systems • Investing in smallholder farming: how to intervene in complex systems • A contribution from a Belgian development NGO
  3. 3. By 2050, food production is projected to increase by about 70 percent globally and nearly 100 percent in developing countries. This incremental demand for food, together with demand from other competing uses, will place unprecedented pressure on many agricultural production systems across the world. These 'systems at risk' are facing growing competition for land and water resources and they are often constrained by unsustainable agricultural practices. They therefore require particular attention and specific remedial action.
  4. 4. Why an increase in grains? Consumption at world level: grow th of 21 million ton per year 1990-2005  45 million ton per jaar 2005-2011 • Historically two reasons: Population growth (increases with 219.000 per day) Diets change by increasing living standards  „grain‟-fed intensive meat production (Westen: after WWII, now 3 billion consumers (China, already 2 times as much meat as USA) • New: Cars: grains for bio-ethanol because petroleum is expensive (USA in 2011: 400 million ton grain production 127 million ton bio-ethanol)
  5. 5. USA: 800 kg grain/person/year of which 100 kg directly, the rest through conversion to meat India: 200 kg grain/person/year, all directly
  6. 6. 35 % of 2.3 billion tons of world grain production is for meat production • 7 kg grain needed for 1 kg beef (increasingly in stables without grazing) • 3,5 kg grain needed for 1 kg pork • > 2 kg grain needed for 1 kg poultry • 2 kg grain for 1 kg eggs • < 2 kg grain needed for1 kg carp (fish)
  7. 7. FOOD WASTE • More or less 1/3rd of the food produced globally for human consumption gets lost: +/1.3 billion tons per year. • This equals 6-10 % of greenhouse gasses generated by mankind.
  8. 8. Those who produce our food now are poor and go hungry
  9. 9. Looking at numbers and statistics • 3.1 billion people, more than 55 % of the developing world, lives in rural areas • Between 2020 & 2025 rural population will peak and then start to decline • Of rural inhabitants, an estimated 2.5 billion are involved in agriculture, 1.3 billion are smallholders, while others include farm laborers, migrant workers, herders, fishers, artisans and indigenous peoples who depend on agriculture and natural resources for their livelihoods. • 1.4 billion people living on less than 1.25 US $ a day (world poverty benchmark), 70 % of the world’s extreme poor are rural (1 billion people) and live from agriculture • 925 million (2010) suffer from chronic hunger, which means that their daily intake of calories is insufficient for them to live active and healthy lives (80 % of the hungry live in rural areas)
  10. 10. Smallholder farmers Almost 90 % of all farms in the world are less than 2 ha. Big or small can not be defined by area only (depends on soil, crop, climate, vegetation…).
  11. 11. Who produces the food?
  12. 12. Poverty, hunger and other crises  interlinked, a system crisis • • • • • Poverty persists Food crisis and hunger Financial crisis Ecological crisis Climate Change Newspaper ‘De Morgen’, 3/12/2011, Gaston Meskens, Prof. Nuclear Physics, University Gent:  “Climate Conferences of the UN will not save the climate… the world needs a global protocol for energy, water, food and transport. Climate is a transversal issue that can be adressed meaningfully within each of these issues.
  13. 13. Food & the limits of the planet
  14. 14. Source: WWF Living Planet Report 2006 Rising to 100% by 2050. 18
  15. 15. Sustainability, a playground of four elements Transport Travels Housing agriculture/food (25%) 80 % foot print Transversally: climate, energy, natural resources, poverty, … 70 % of Earth Surface is Farm Land 19
  16. 16. Climate Change: Agriculture= problem and solution 1.2 What next? billion people; 1.3 trillion US$ in farm revenue; 13%-30% GHG Agriculture= problem and solution emissions • ( 1,2 billion people; 1,3 trillion US$ in farm revenu; 18-30% GHG emissions) • Vredeseilanden working on solutions on the ground within a broader framework and vision
  17. 17. Water • Petroleum may be replaced, water not • An adult drinks 4 liter water per day, 2,000 liter water is used to produce the food we eat daily • 70% of water use in the world= irrigation • Surface irrigated agriculture grows less than population (10% less irrigated surface per person than in 1960) • Water shortages = food shortages
  18. 18. FOOD FOR FUEL: land for energy Biofuel Net Energy Ratio for Selected Crops Crop Biofuel Type Net Energy Return* Corn Sugar Beet Wheat Sugarcane Ethanol Ethanol Ethanol Ethanol 1.2 – 1.8 1.2 – 2.2 1.2 – 4.2 2.2 – 8.4 Rapeseed Soybean Oil Palm Biodiesel Biodiesel Biodiesel 1.2 – 3.6 1.4 – 3.4 8.6 – 9.6
  19. 19. Ethanol & biodiesel : some numbers • The amount of grain needed to fill up a tank of 25 gallon (= 95 liters) once = the amount of grain needed to feed one person for a year • The amount of grain that in one year in the USA is converted to ethanol (2011) would be able to feed 400.000.000 persons (on average consumption levels) • 14 billion gallons production = 6 % of yearly car fuel in the USA • USA & Brazil (14 billion and 6 billion ton) = 87 % world production • Biodiesel made of oilseeds, production more equally distributed over different countries
  20. 20. Food Systems: Globalization, markets, trade agreements, subsidies and Agriculture
  21. 21. Globalisation and shift in power • • • small-scale family farms, Little risk for farmers Governments created semi-public enterprises that ensured minimum prices, administered inputs and outputs, extended technologies, extension services, capacity building… Structural adjustment programs, liberalisation of trade, globalisation, foreign investments… • • • • Situation has changed dramatically: states are absent Agro-corporation or Food-corporation = multinational, active in (bio)technology, chemical inputs production, processing, banking activities Alliances with others= clusters or oligopoly From input markets to retail 28
  22. 22. The Bottleneck in Europe Grievink (2003): OECD Conference to Explore Changes in the Food Economy, The Hague, 6-7 February 2003 Consumers: 160,000,000 clients: 89,000,000 stores: 170,000 supermarket formats: 600 buyers: 110 processors: 8,600 Semi-processors: 80,000 suppliers: 160,000 Farmers/producers: 3,200,000 85 % of food sales in Netherlands, Belgium, France, Germany, Great-Britain and Austria
  23. 23. Concentration of Food Sales Land Austria Belgium CR3 57.4 61.8 CR4 66.2 70.4 TopEntreprises Rewe, SPAR (Austria), Aldi, Metro Carrefour, Colruyt , Delhaize Group, Metro, Aldi Czech rep Denmark Finland France Germany 24.8 66.4 – 78 83.6 48.1 44.3 29.7 74.1 87.6 60.0 56.1 - 66.7 Ahold, Schwartz, Metro, Rewe, Tesco FDB, Dansk Supermarkt, Dagrofa, SuperBest Kesko, SOK Carrefour, Leclerc, ITM, Casino, Auchan Metro, Rewe, Edeka/AVA, Aldi Hungary 48.2 51 CBA, Tesco, Co-op Hungary, Metro, Ireland 54.4 70.3 Musgrave,Tesco,Dunnes Stores, Stonehouse, Italy Netherlands 29.1 51.5 - 62.6 36.0 56.9 - 82.6 Coop Italia, Auchan, Carrefour, Conad Ahold, Casino Norway 62.6 – 83 76.3 - 99.5 Norgesgruppen, Coop Norden, Ahold, Reitan Poland Portugal Romania 14.9 48.3 17.5 17.7 56.8 18.7 - 27.0 Metro, Jerónimo Martins, Tesco, Carrefour ModeloContinente, Jerónimo Martins, ITM Metro, Rewe, Carrefour, Delhaize Slovakia Spain Sweden UK 25.3 53.8 80.9 – 95 42.3 – 60.4 31.4 62.5 83.8 49.3 – 70.6 Tesco, Metro, Rewe, Schwartz El Corte Inglés, Carrefour, Marcadona, Ahold, Axel Johnson, CoopNorden Tesco, Asda-Wal-Mart, Sainsbury‟s, Morrisons
  24. 24. Evolution food retail (share of total sales) in Belgium between 20022012 2002 2012 carrefour 25,30 % 22,60 % delhaize groep colruyt 21,80 % 16,00 % 22,50 % 27,70 % louis delhaize aldi & lidl 9,10 % 10,00 % 4,90 % 15,80 % 8,60 % 9,20 % 4,10 % 2,30 % makro & metro anderen Bronnen 1 Investigation of the determinants of farm-retail price spreads Final report to DEFRA by London Economics, 2004 2 „De concurrentie neemt sterk toe op de Belgische voedingsdistributiemarkt‟ retaildetail communication platform, 27 juni 2012 3 presentatie Bill Vorley over regoverning markets, Boerenbond, 19/04/2006
  25. 25. Power in the chain Consumer price remains equal or higher Producer price decreases Margin processor remains equal Supermarket margin doubles
  26. 26. GDP and supermarket concentration Source: Booz-Allen Hamilton, 2003 Large Supermarket penetration in Consumer Goods Market 100% Belgium UK 90% USA Sweden Germany 80% Denmark Switzerland Norway Finland 70% Portugal Austria 60% Chile Spain Costa Rica Greece Argentina 50% Italy Brazil Colombia Mexico 40% 30% 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 GDP/Capita in USD (2001)
  27. 27. Globalisation and market restructuring • Supermarket power grows: 85 % of food sales in West Europe Also 60 % in Latin America (20 years!) 30 % in Africa Increase of supermarket sales: 40 % per year in China High quality and food safety standards, also penetrating in traditional markets
  28. 28. International trade • Trade Barriers reduced in industrial countries since 1995 • Exception: agriculture and labour intensive products (comparative advantage for developing countries) • OECD countries: 226 billion Euro support to agriculture; low international commodity prices (milk, cotton, sugar, meat) • Import barriers (taxes): protect 28 % of agricultural production of OECD countries • Less market opportunities for developing countries (added value!) • Commodity suppliers… • Free trade agreements New barriers: norms and standards: see supermarket contentration
  30. 30. Technological Revolutions • Industrial revolution: Intensification of land use Leguminosae Mechanisation Fertilizers on basis of petroleum • Green revolution Wonder seeds (HYV), hybrids, fertilizer and pesticides: unstable plants Asia & LatinAmerica: increase in productivity high, Africa not Green revolution did NOT improve access to food for poor people; wonder seeds are not pro-poor, doesn‟t take into account the complexity of farming systems India: poorest 30 % of population (285 million!) no increase in food and nutrient intake during the last 25 years Environmental problems: erosion, soil intoxification, increase in pests and diseases…
  31. 31. Technological revolutions • Genetic revolution: extreme form of wonder seeds: Industry driven (stock driven?) No access for small farmers • Economic growth instead of increase in productivity/production: commercial agriculture, export agriculture, foreign exchange, trade balance…
  32. 32. Agro-biodiversity • Simplification: 12 types of grain crops, 23 of vegetables, 35 fruits and nuts • 70 types on 1.5 billion ha of crop land (100 years ago: 2000 types) • Rain forest: more than 100 types of trees on 1 ha • Scientists: “no more research on traditional varieties” • USA: > 80 % of varieties that can be bought (corn, soja) are gmoseeds: “in a few years there will be only gmo-seeds left”
  33. 33. Food Production & Population Growth • Between 1975 & 2005, more than 175 % increase in food production, bigger increase than population increase, 16 % more food per person • Hunger and food security have grown worse • 78 % of countries with undernourishment problems of children, are net food exporters!  Food is NO production or technological problem: it’s a problem of ‘having access to food (income, land, knowledge…) 40
  34. 34. FOOD FOR 9 BILLION BY 2050
  35. 35. You will have to invest in smallholder farming if you want to: - feed the world - reduce rural poverty - reduce the pressure on the earth
  36. 36. Smallholder farming as solution ‘You don’t have another choice than promote smallscale agriculture. Those small farmers don’t have another option, there are no jobs in industry or services for them. In the short term you can only strive for more means for small farmers, if not, you will create a massive emigraton from rural areas.‘ ‘There’s more, small-scale agriculture has 3 big advantages. Firstly there’s more respect for the environment, just because there’s no money for pesticides and chemical fertilizers. That kind of agriculture is more in harmony with the environment and the climate. Secondly, it is a labour-intensive production, creating a lot of jobs. And thirdly, it can be a very productive agriculture, on the condition that those farmers have access to the know-how, resources and the institutional environment tat is needed. Prof. Oliver De Schutter, VN-rapporteur for the right to food
  37. 37. From neglect to renewed interest for agriculture • • • • World Bank Development Report 2007: agriculture in the spotlight Food Crisis 2007-2008 Studies show that a 1 per cent growth in GDP originating in agriculture increases the expenditures of the poorest 30 per cent of the population at least 2.5 times as much as growth originating in the rest of the economy. Another study shows that agricultural growth is up to 3.2 times better at reducing US$1/day poverty than growth in non-agriculture. IFAD 2010: “the key policy priorities to halve rural poverty by 2030 are: developing more sustainable forms of agriculture; greatly enhancing education and skills; rural wage labour marktets tightening; and acces to land.
  38. 38. Composition of total expenditures (%)
  39. 39. Agricultural aid as a percentage of total aid, 2002–2006 Some promises • • Belgian Federal Governement Agreement: focus on agriculture, especially family farming and transformation of products. DGD: 10% 15 % to agriculture Declaration of Maputo: 10 % budget spending on Agriculture: +/- 20 % of African countries have reached this %
  40. 40. How to get there? • Investing in smallholder family farming! • Building up evidence that family farming can indeed contribute to the elimination of rural poverty, feeding a growing world population and reducing pressure on the earth • Use the evidence to serve as a leverage for structural change • Network and cooperate; involve all kind of actors, public, private, civil society, consumers…
  41. 41. Systems thinking • • • Sustainability is closely linked to systems thinking Economic AND socio-cultural AND ecological sustainability (not OR) Changes in one parameter, will induce changes in most of the other parameters
  42. 42. Sustainability at which level: agriculture versus food chain? • What is produced and how it is produced more and more defined by demand (see market restructuring, food safety concerns, sustainability claims) • E.g. Consumers have a principal role in the definition of food production • Many actors involved; farmers on their own will not be able to solve their situation… • Complexity… Interactions between different stakeholders with different perspectives/needs/visions…
  43. 43. • No straight forward planning • Cause-effect? • Emerging solutions • Multi-actor Titel • Klik hier om tekst toe te voegen
  44. 44. Need for a new regime, a new paradigm to over come business as usual • Agro-ecology Regime System thinking Complexity leads Building resilience Capacity to adapt & innovate Technology and interaction driven • Biotechnology Regime Reductionist science Cause – effect Problemsolving (respond to problems) Creates dependence on technology Technology driven “You cannot solve a problem using the same way of thinking as when the problem was created” A. Einstein
  45. 45. A contribution of a Belgian Development NGO
  46. 46. Viable livelihoods for smallholder farmers via income from sustainable agriculture
  47. 47. Vredeseilanden - Senegal, Benin, Togo, Niger, Gambia, Burkina Faso, Mali Uganda, Tanzania, Kenya, DR Congo Nicaragua, Honduras, Ecuador, Peru Indonesia, Vietnam Belgium 170 partners 150 personnel (40 in Belgium, rest in 7 regional offices) +/- 13 million euro turnover yearly Funding: public (>65%) and private 54
  48. 48. Scenarios Markets dominant Value shift marginal Scenario A Scenario B Energy cheap Energy expensive Scenario C Valueshift in markets Ecological and social concerns give direction 55
  49. 49. How to make a transition towards to a world where market logic that incorporates social and environmental concerns, is leading? -governments: laws, incentives? -private sector: CSR in the heart of the business model? -consumers: consuming sustainable produce? -performant farmer organisations that produce quality, quantity, sustainably, lobby, negociate…?
  50. 50. In other words: • With multiple chain actors, analyze, design and implement at experimental level, green chains, inclusive for family farming • Build the evidence to advocate with these and other actors for structural changes so that smallholder family farming can take up its role to: Feed the world Reduce rural poverty Reduce the pressure on the earth
  51. 51. Sustainable business models Lacks critical buyer relationships that ensure market demand Does not empower Business driven Supply side model Sustainable model model Donor driven model Small producers to succeed over long term Lacks market insight and raises Empowerment and sustainability problems
  52. 52. Realisation of economic objective through multi-stakeholder dialogue processes Market complexity Different actors farmer organisation private company public authorities research institute NGO Multi-stakeholder dialogue Experiments Innovation
  53. 53. Realisation of political objective via ‘political’ alliances Multi-stakeholder dialogues Experiments Innovation Evidence ‘Political’ alliance Advocacy (decisionmakers private- and public sector) 61
  54. 54. Competitive Rice Chains in West-Africa • To compete with imported rice in function of food sovereignty 1. Set up multistakeholder programs that try to design and implement these chains: economic rice farmer organisations, local governments, business service providers, traders, consumer organisations… 2. Support national farmer platforms to advocate to national governments for a supporting environment , and WestAfrican platforms to advocate at the regional level (e.g. for harmonized import taxes) based upon the evidence from the experiments to create competitive rice chains
  55. 55. Examples at: