Presentation for a PhD program at Agreenium in Dijon, april 2019

1. Transitions at farm level in the years to come
Krijn J. Poppe Agreenium, Dijon
Wageningen UR April 2019

2. Krijn J. Poppe
 Business economist, EUR 1981
 Chief Policy Analyst Wageningen Economic Research
 Rli – Council for the Environment & Infrastructure:
member of the council (1 day / wk)
 Fellow and former Secretary-General of the EAAE
● Involved in its journal management (ERAE, EuroChoices)
 Member South Holland Council for Environmental Advise
 Member of the Governing Board of SKAL
 EU Projects; SCAR-AKIS 1-3 and Chair Experts Food2030

3. Content
 It’s the economy, stupid.
 Need for a food system approach
 Climate change and - policy
 Key innovation challenges
 The role of ICT – and why now
 Future farm organisation
 Three scenarios

4. tijd
Mate van verspreiding
van technologische revolutie
Installatie periode
Volgende
golf
Uitrol periode
Draai-
punt
INDRINGER
EXTASE
SYNERGIE
RIJPHEID
Door-
braak
Werkeloosheid
Stilstand oude bedrijfstakken
Kapitaal zoekt nieuwe techniek
Financiele bubble
Onevenwichtigheden
Polarisatie arm en rijk
Gouden eeuw
Coherente groei
Toenemende externalities
Techniek bereikt grenzen
Marktverzadiging
Teleurstelling en gemakzucht
Institutionele
innovatie
Naar Perez, 2002
Crash
2008
1929
1893
1847
1797
time
Degree of diffusion of the
technological revoluton
Installation period
Next
wave
Deployment
period
Turning
point
IRRUPTION
FRENZY
SYNERGY
MATURITY
Big Bang
Unemployment
Decline of old industries
Capital searches new techniques
Financial bubble
Decoupling in the system
Polarisation poor and rich
Golden age
Coherent growth
Increasing externalities
Last products & industries
Market saturation
Disappointment vs
complacency
Crash
2008
1929
1893
1847
1797
Institutional
innovation
Based on Perez, 2002
The opportunity for green growth
1971 chip ICT
1908 car, oil, mass production
1875 steel
1829 steam, railways
1771 water, textiles

5. Food chain: 2 weak spots – opportunity?
Input industriesFarmerFood processorConsumer Retail
• Public health issues –
obesity, Diabetes-2 etc.
• Climate change asks for
changes in diet
• Strong structural change
• Environmental costs
need to be internalised
• Climate change (GHG)
strengthens this
Is it coincidence that these 2 are the weakest groups?
Are these issues business opportunities / market failure?
Or system failure and lack of transformative capacity?

6. Key
Innovation
Challenges

7. Five major challenges
 Food and nutrition security and safety
 Climate change and water & energy use
 Reducing ecological impacts (biodiversity)
 Healthy diet for a lifelong healthy lifestyle
 Inequality

8. We need clarity for farmers, fast.
Less animals is not an objective, but cannot be escaped
Animal husbandry and climate

9. We need clarity for farmers, fast.
• After 30 years milk quota, >40 years manure policy, this is the
new issue and limit to growth
• Innovation must start up (feed, slurry/manure, breeding,
stables)
• Risk of ‘stranded assets’, for the chain, for banks
• Current government intentions are only the beginning, starts
with low hanging fruit.
Less animals is not an objective, but cannot be escaped
• Innovation is needed, with lower number of animals these are
not by definition more sustainable.
• Objective is so big that other farm systems with more value
added per kg, with less animals should be taken into account.
Number of animals or export is not a purpose in itself, value
added matters.
• Contribution of lower consumption is more than welcome
• Dutch government starts already to restructure pig farming

10. Five major innovation areas
 Genetics
 Digitalisation and big data
 Energy and bio-based transitions
 Redesigning the food chain
 Social innovations

11. Food2030: 4 themes
EU’s Framework Programme #9 (FP 9)

12. Recipe for change:
An agenda for a climate-smart and
sustainable food system
for a healthy Europe
Krijn Poppe,
Chair Food 2030 Expert Group
https://publications.europa.eu/en/publication-detail/-/publication/d0c725de-6f7c-
11e8-9483-01aa75ed71a1/language-en

13. Grand challenge:
A climate-smart, sustainable food system for a
healthy Europe
3 mission-type approaches
(with 17 focus areas):
A.Improve dietary patterns and lifestyles for a 50%
reduction in the incidence of Non-Communicable
Diseases in 2030, while reducing the environmental
impact of food consumption
B. Create a resource-smart food system with 50% lower
GHG-emissions by 2030
C. Realise trust and inclusive governance for a resilient
and safe food system
13

14. Misunderstandings in social debate: one
as a solution of everything, -where??
Productivism paradigm
 Focus on more supply
 Calories for the world
 Eco-efficiency per kg
Sufficiency paradigm
 Food is more than calories
 Changes in menu needed
for sustainability
 Local effects, emissions
per ha count too.
@SCAR 3rd foresight
• Put fewer forks on the table –
Thomas Maltus (1798, An
essay on the principles of
population)
• Bake a bigger pie - Marquis
de Condorcet
• Teach everyone better table
manners – William Godwin
© Warren Belasco: Meals to come – a
history of the future of food

15. INPUT
INDUSTRY
FOOD
PROCESSING
FARMERS ICT
RETAIL
& OUT
of
HOME,
Food
Procesng
Health
sector
+ Cities
CONSU-
MERS
Less animal
based:
• Reduce GHG cattle
• Improve sustainb.
pigs and poultry
• New (lab) meat
and feed (insects,
algae etc.)
More plant based:
• Improve soil management
• Cope with climate change (water)
• Less chemicals, more biodiversity
• Improve factory farming
CIRCULAR PRINCIPLES
• Less waste
• More resource efficiency
• Close P-cycle
Help
Consumers
Change:
* personalised
nutrition
Green,
Healthy
Cities
Peri-urban
multifunctional
farms with short
supply chains
Help Empty
Rural Regions
Climate
change
Healthy diet
for a
healthy life

16. Sustainability: Incentivise farmers
0
20
40
60
80
100
Cost price
per 100
kg milk
Income per
Family
Labour unit
solvability
(%)
Energy use
per euro output
Water use per euro output
Pesticide use
per hectare
Grazing days
Education
Surplus of
Phosphate per
hectare
Surplus of
Nitrogen per
hectare
PEOPLE
PROFIT
<< PLANET >>

17. The role of ICT – and why now?
Based on work with WUR team (Sjaak Wolfert, Cor Verdouw, Lan Ge, Marc
Jeroen Bogaardt, Jan Willem Kruize and others)

18. Disruptive ICT Trends:
 Mobile/Cloud Computing – smart phones, wearables,
incl. sensors
 Internet of Things – everything gets connected in the
internet (virtualisation, M2M, autonomous devices)
 Location-based monitoring - satellite and remote sensing
technology, geo information, drones, etc.
 Social media - Facebook, Twitter, Wiki, etc.
 Block Chain – Tracing & Tracking, Contracts.
Big Data - Web of Data, Linked Open Data, Big data
algorithms
High Potential for unprecedented innovations!
everywhere
anything
anywhere
everybody

19. Drones, Big Data and
Agriculture 19
IoT in Smart Farming
cloud-based event
and data
management
smart sensing
& monitoring
smart analysis
& planning
smart control

20. Towards smart autonomous objects
Source: Deloitte (2014), IT Trends en Innovatie Survey
Tracking &
Tracing
Monitoring
I am thirsty: water
me within 1 hour!
I am product X at
locatie L of Z
My vaselife is
optimal at a
temperature of
4,3 °C.
I am too warm:
lower the
temperature by
3 °C
Event
Management
I am too warm: I lower
the cooling of my truck
X by 2 °C.
I don’t want to
stand besides
that banana!
I am thirsty!
I am warm!
Optimalisation
Autonomy

21. There is a need for
ABCDEFs:
Agri-Business
Collaboration & Data
Exchange Facilities
• Large organisations have
gone digital, with ERP
systems
• But between organisations
(especially with SMEs) data
exchange and
interoperability is still poor
• ABCDEF platforms help
• Our focus: data governance
law & regulation
innovation
geographic
cluster
horizontal
fulfillment
Vertical

22. Programmability: Low High
Asset specifity: Low High Low High
Contribution
partners
separable
High spot long-t. spot joint
market contract mrkt venture
Low coope- coop./ inside vertical
ration vertical contract owner-
© Boehlje ownership ship
Organisational arrangements in the food chain are
changing

23. Chain organisation changes (©Gereffi et al., 2005)
inputsEndproduct
PRICE
Shops
Complete
Integration
Lead
company
Lead
company
Turnkey
supplier
Relational
supplier
Market Modular Relational Captive Hierarchy
Low Degree of explicit coordination and power asymmetry High
Lead
company
Farmers

24. Strong concentration in farming: 5 mln farms matter
0
20
40
60
80
100
120
0 20 40 60 80 100 120
percentagestandardoutput
percentage farms
France
Germany
UK
Spain
Italy
Poland
Sweden
0
10
20
30
40
50
60
70
80
90
0 5 10 15 20 25
percentagestandardoutput
percentage farms
France
Poland
Romania

25. And the average farm size increases (NL):

26. How many livestock farmers do we need?
 Svend Rasmussen on Denmark (2011)
 Optimal farm size, according to FADN data (and DEA):
● 2000: 174 cows; 712 sows
● 2007: 229 cows (on 258 ha); 1022 sows
 Eurostat 2013
● 23.6 mln cows on 878,215 farms (27 cows/farm)
Assume optimal size in 2020: 300 cows
Then we need
• 80.000 dairy farms (= 9% of today)
• and 3.000 new entrants per year

27. Europe towards
2030
3 scenarios to
explore the future
of EU agriculture +
implications for
Agricultural
Knowledge and
Innovation
Systems

28.  HighTech: strong influence new technology owned by
multinationals. Driverless tractors, contract farming and a
rural exodus. US of Europe. Rich society with inequality.
Sustainability issues solved. Bio-boom scenario.
 Self-organisation: Europe of regions where new ICT
technologies with disruptive business models lead to self-
organisation, bottom-up democracy, short-supply chains,
multi-functional agriculture. European institutions are weak,
regions and cities rule. Inequalities between regions,
depending on endowments.
 Collapse: Big climate change effects, mass-migration and
political turbulence leads to a collapse of institutions and
European integration. Regional and local communities look
for self-sufficiency. Bio-scarcity and labour intensive
agriculture. Technology development becomes dependent on
science in China, India, Brazil.

29. Scenario 1: High Tech
multinationals, clean technology, strong EU
(c) Toshiba

30. ... Or outside in stripfarming with robots

31. Scenario 2: Self organisation
new business models, regions and cities rule, diversify
Tempelhof, Berlin (c) Kasper Jensen

32. Scenario 3: Collapse
climate change, migration, breaking up of the EU

33. Resilience is defined as:
see: https://magazines.wur.nl/resilience-en/welcome/
 Capacity to bounce back to normal functioning after
perturbation
 Ability of a system to maintain specific functions in the
face of changes
 Capacity to tolerate disturbance without collapsing
 Capacity of a system to absorb disturbances and
reorganize while undergoing change in order to retain
essentially the same function, structure and feedback
 Capacity of a complex system to deal with change and
continue to develop
33
Adaptive capacity of a system
to prevent collapse

34. Thanks for your
attention
krijn.poppe@wur.nl
www.wur.nl