Marcos Fava Neves
Navigating the Global Food System
By Marcos Fava Neves (chinadaily.com.cn)
Updated: 2010-06-25 09:18
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In four nice hot sunny days, the beautiful city of Boston had the 20th Conference of the International Food and Agribusiness Management Association (www.ifama.org). Congregating around 300 food and agribusiness experts and managers, the major discussions were about the global food system in a new era. IAMA is an association of academics and industry created in 1990 as a forum of discussions towards the future of food and agribusiness, having one event per year.
This year companies like Sysco, Coca-Cola, Los Grobo, Novus, British Foods, Fonterra, Alltech, Cofco, Rabobank, GlobalGap had the opportunity to share their positions. We were also contemplated with the views and thoughts of Ray Goldberg (creator of the agribusiness concept) towards the future. In this article I share with China Daily readers my “processed take-away” of the event.
Soybean imports today are over what was projected for 2030. When asked about this subject, a COFCO/China executive and presenter did not want to give a projection towards 2020. For Rabobank, there will be a 109% growth in food consumption in 10 years from now. If China wants to be self sufficient in soybeans today, over 35 million new hectares should be dedicated to soybean. Where are these? Importing soybean in China represents importing fresh water.
Overexploitation of water resources is already creating problems to China and India. Half of the world’s population is located in less than a third of the arable land, and this means a large food trade in the future. We need bigger ships, bigger ports and more efficient logistics and transport systems.
The dilemma of having the same sources of land to produce food, fiber, feed and fuel was also discussed. In a global perspective, around 10% of grains in the world go to fuel (biodiesel), 35% of USA’s corn goes to ethanol and 50% of Brazilian cane has its destiny to fuels.
The good point is that there is capacity in agriculture to react towards food consumption and biofuels, which was covered already by this column. In 40 years food production was doubled and can double again, since farming is definitely becoming global with an even faster every day movement of buying land on the most cost efficient producing countries.
For Olam, based in Singapore and one of the most important sourcing and trading companies nowadays, supply chain arbitrages to produce cheaper and better is the way forward, so they do large investments towards supply in several countries using this philosophy. The example of CHS (a large cooperative in the US) was discussed and is a lesson to other cooperatives over the world. Why? Simply because CHS is not attached to the US land anymore, and is producing in Brazil, Eastern Europe and looking for other areas for expansion over the world in the next 10 years. Farmers and cooperatives will be global and South America is considered, before Africa, the food frontier to be conquered, but it lacks the investment in logistics. This is where we can find important opportunities for Chinese capital and investors to have good investments and return.
Ray Goldberg pointed that to define agribusiness in 1955 was quite simple, since up on the past, most societies were 90% dedicated to agriculture. Redefining it nowadays is much more difficult, since the food system has changed, and merged to a much more sophisticated system, from commodity companies to consumer companies. Food is culture, economic development and a new integrated partnership system. Health insurance companies are working together with food companies, since food is the most important element of health. There is a thin line between private companies, public companies and NGOs, and this conversion is making people sit together to avoid conflict of interests. How do we know that what we are doing is good? To answer this question, third party evaluators will become the fastest growing industry in the food business.
For us involved with education, we have to create managers that look at the totality of these decisions, since food production, health, nutrition, environment, climate control are not isolated public policy issues. We have to teach in a multi-discipline way and not treat multifaceted problems isolated. It is a new world of multidiscipline approach that we are navigating in with very complex and fast moving waves to understand.
The author is professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker