Industry Insights: BASF’s Livio Tedeschi on EU Farm to Fork Strategy
21 March 2023
AgriBusiness Global sits down with Livio Tedeschi, President of BASF Agricultural Solutions, on how he views the EU regulatory environment as a European citizen, his takes on the most exciting developments in ag, what BASF has learned from doing business during COVID, and more.
ABG: How does BASF approach the Farm to Fork Strategy, and as a European, what is your perspective on this policy?
LT: The Farm to Fork is a vision which I fully support to transform agriculture, making it more sustainable. By the way, this is not something which is starting now with the Farm to Fork strategy. We have been operating a network of sustainable farms for over 20 years. And so this topic is very big in our company, dealing with innovation and the continuous transformation of agriculture. Now, what Farm to Fork wants to do is to change the way agriculture is run, but I think one big issue is that the focus is mainly on reducing technologies currently available to farmers. So the Farm to Fork is aiming to achieve a reduction in fertilizer, a reduction in chemical crop protection, volume and risk combined, and an increase in area dedicated to organic farming. One of the main worries which have been raised by multiple universities, also the US Department of Agriculture is, if all those measures will come to place, then there will be an inevitable loss of productivity. This is a big worry, because in times where food security is a very big topic and the war in Ukraine has made even more evident is how important it is to secure food availability, then a loss of productivity cannot be part of an innovative strategy.
What we’re trying to do as a company is to exactly realize that vision of an agriculture, which is having a lower environmental footprint, lowering co2 emissions but doing it in a way which is accelerating the introduction of new technologies rather than just eliminating whatever tools farmers have got at their disposal. One example you mentioned is smart sprayers. So going back to the Farm to Fork, but also similar regulations in North America, like the Endangered Species Act has got an element of agriculture which is more in sync with the environment and a common theme and the topic of carbon emissions from agriculture and feedstock is very, very prominent these days.
So what we want to do is again, speed up the introduction of new technologies. One of those is smart sprayers. What is that? So, if we want to optimize the use of chemical protection without losing in productivity and yield, the way to do that is to apply crop protection products at the concentration needed where you have a certain problem. So our system allows to have a rapid recognition for weeds or disease and distinguish for example, weeds from crops, and then apply the right concentration and the right combination of herbicides to deal with that single weed in that particular spot. So in this way, you can effectively optimize the use of herbicide without losing on yields, which would happen if we would just reduce the herbicide rate and apply uniformly on a hectare basis.
In general, we are really active in the debate with authorities, regulators, political stakeholders, and industry to really press first of all, for the formalization of a regulatory framework and incentivizing the development and adoption of new technologies, and really move away from the focus only on elimination, because this is not what is going to help farmers and is not what is going to make them competitive on the global markets, considering that you are not having a system which is so globally interconnected, and one region taking a completely different direction than all the others.
ABG: How is BASF helping farmers address the challenge of drought?
LT: You mentioned Italy, my home country, it is drought, but it’s also a lot of floods in the fall and in the winter season. So actually, it is a combination of much, much higher weather volatility that we ever experienced in the past. And I think that we at BASF are tackling that in two ways. First of all, water management and resource management becomes more and more prevalent. And we have studied a series of projects, also working with companies delivering irrigation systems and micro-irrigations in order to make sure that we can build the holistic support system for crops, looking at seeds, looking at crop protection, but also resources like water, and how we can make sure that we can create an element of stability and weather conditions which are becoming much, much more unpredictable.
But we’re also working to help farmers not only from a water management point of view. Also, we have introduced in the development of our innovations the element of water, much more prominently. So we are looking at seed varieties with higher tolerance to drought, but we are also looking at chemicals which can be applied with a much wider window of application so that no matter what conditions are you do not need to get there one day of perfect weather conditions in order to have your fungicide application or insecticide application, whenever needed. But you can even have a wider window due to protective activity and curative activities of fungicides, for example, will have a formulation which allows for much more flexibility. So it is a topic which goes into our entire development philosophy, and we don’t want to have a debate on climate change ,but what we know is farmers all over the world have to deal with much more volatile weather conditions and we want to support them with any part of our innovation pipeline.
ABG: What has BASF learned about supply chain in this post-COVID era? How has it changed the way you do business?
LT: I think the last three years have been a revolution in the way we had to deal with supply chain. We have experienced every possible travel and issue from lack of truck drivers, lack of containers, and lack of raw materials. Some of those were caused by the general tension and bottlenecks in the global supply chain system, but also partly caused by weather conditions. We had extreme low temperatures in the Americas, which have caused problems in some of the production plants. We had floods, we had hurricanes, so I would say there’s been disruption from every angle now.
I think one important learning is we used to have a system which was very much focused on minimizing cost of production of our active ingredients and trying to concentrate our production in certain regions and then ship all over the world finished products. Now, it has become apparent that if you want to be close to customer, flexible, and react to variational demand very rapidly, you really need to have more localized production and this idea of driving costs down with a very central production steering has met its limitation, with the multiple challenges in the global logistics system. So what we have done is increase our formulation capacity, in particular, close to the major countries. And then we had very strong structures in Europe and North America. We’ve increased our presence in Asia with new formulation sites, one opened very recently in Singapore and in China. And with that we will be able to minimize the lead times in the growing regions, be able to respond very deep variations on demand locally, and then continue to have the best possible service to our customers. Because I think in the end, everybody has experienced constrained systems, not only suppliers and distributors, but ultimately farmers.
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