Taking on the Big Issues at World Ag Forum
6 December 2011 BRUSSELS, Belgium – As talks to save the euro buzzed at the EU council, just across the street, agricultural leaders met on a different topic of critical importance that also, at times, lent itself to a tense atmosphere: feeding the world.
Last week’s World Agricultural Forum drew industry stakeholders and policy influencers hailing from a broad spectrum – government, NGOs, multinationals, banks, farms and other institutions around the world.
A handful of sign-toting agribusiness protesters occupied the main stage at the event’s start, tossed leaflets into the air and crawled out of the room in dramatic fashion, but the diversion was short-lived.
Over four days, participants swapped views and debated how to nurture global agricultural development in the face of trade barriers, unpredictable political and economic climates, volatile commodity prices, climate change and water and energy shortages, among other issues.
One consistent message was the need to reverse the trend of declining investment in research, said former New Zealand Prime Minister James Bolger, chairman of the event’s advisory board and a lifelong agriculture advocate who left school at 15 to work on his family’s dairy farm.
“Ultimately, we are left with land lost to urbanization, desertification or salination – water is challenged in a whole bunch of ways. But one area that is not challenged is knowledge, and research is knowledge,” he said in an interview with Farm Chemicals International. “We have to produce the knowledge to need less resources, land and water to produce more output, so science has a huge role.”
Bolger said the biennial event does not aim to reach a bland resolution, but rather encourage people to break out of their silos and challenge their own propositions.
“We want people leaving two to three days after the Forum and saying, ‘These are issues I need to reflect on and think about because maybe, I’m not quite right.’”
Here is a sample of comments shared by participants at the World Agricultural Forum:
Eurozone crisis:
“I think we are literally seeing history written at the moment. If [European policy makers] get it wrong, they will get it spectacularly wrong … This is the very broad macro backdrop, and with this kind of thing going on, it’s almost impossible to forecast anything. It’s going to be very choppy, very volatile.”
Ric Deverell, Director of Commodities Research Team, Credit Suisse
Food security and protectionist policies:
“Food security is … not about protectionism; it’s not about border measures; it’s not about subsidies. It is really the ability to pay for food. Anyone who’s talking about trade protectionism as a means to grow comfortable in maintaining food security is ill-advised.”
Carole Brookins, former US Executive Director, World Bank
“Our industry is not concerned we might run out of innovative ideas. We are concerned about regulatory and political obstacles. Fostering a political climate that facilitates trade flows is of the essence. We must base our decisions on science, and keep our minds on growers who need technology.”
Sandra Peterson, CEO, Bayer CropScience
Food prices:
“In 2005, Oxfam said US and Europe’s surplus production was sold on the world market at artificially low prices and as a consequence, caused farmers to lose their livelihoods. In 2008, Oxfam said that higher food prices were pushing millions of people into malnourishment. It shows how complex the food price issue is.”
Franz Fischler, Chairman, RISE Foundation and former European Commissioner of Agriculture
Water scarcity:
“Water is the number one constraint for agricultural development in China. China has only one-quarter of the total global average. In China, agriculture is characterized by smallholder farms. Drip irrigation is currently the best technology for improving water and nutrient productivity.”
Ren Wang, Vice President, Chinese Academy of Agricultural Sciences
Climate change:
“The common link [between GMOs and climate change] is left-wing activists are opposed to genetic modification of crops and right-wing activists are opposed to acceptance of climate science. There has to be something strange in that space.”
James Bolger, former Prime Minister of New Zealand
“We are seeing weather patterns that we’ve not seen in my lifetime. I’m not sure that the physical scientists even know that it’s global warming. All they know and all I know at this point is that it is most unusual. If it all stabilizes a year or two from now, I’ll take all this back and say this was a short-term worry, but my hypothesis is that it’s not short term.”
Clayton Yeutter, former US Secretary of Agriculture and Chairman of the Republican National Committee from 1991 to 1992
Raising investments:
“In terms of boosting investment, $80 billion a year needs to go to emerging markets … We need a real investment in knowledge, education, and I don’t think the private sector is going to do it itself. Agriculture has 8% to 12% returns. It’s a low-return business with high risks. It’s a long-term business, and I don’t think for hedge funds looking for two- to three-year quick returns it is the right sort of money.”
Bruce Tozer, Head of EMEA Sales, Softs & Agricultural Products, Credit Agricole Corporate and Investment Bank, Commodities, Fixed Income Markets
“No single cropping-only company in Russia – not one – is profitable. Between that and the fact there is a fundamental mistrust of government, nobody is able to raise finances for any farming project, cropping-only, in Russia. It’s dead. Money goes where it feels safe.”
Mikhail Orlov, Founder and President, Ambika Group
Biofuels:
“We are at a turning point from being a fossil-based to a bio-based economy. We will have to deal with it in a smart way – that demands a strong collaboration of the value chain not only for food but also energy. Oil and agricultural companies are looking into the reduction of fuels and chemicals. For agriculture, biomass offers huge opportunities.”
Anton Robek, Vice President, Bio-Based Products & Services, DSM
“We are just playing the clock and hoping no congressman will put an amendment in some legislation to renew the [54-cent-per-gallon US tariff on Brazilian sugarcane ethanol,] but we are comfortable this will not be the case. The champagne is in my fridge.”
Geraldine Kutas, Head of International Affairs and Senior Adviser to the President, UNICA
“In hindsight, people will say the move to biofuels was a good thing. It helped trigger reinvestments in agriculture at a time when things were going the other way.”
Bruce Tozer, Head of EMEA Sales, Softs & Agricultural Products, Credit Agricole Corporate and Investment Bank, Commodities, Fixed Income Markets
Biotech:
“The problem is that GMOs are not seen as critical in areas of the world where people don’t have a problem to afford daily food, like Western Europe. We are not able to explain to people what’s in it for them with biotech. We tried [convincing people of the benefits] at BASF with our potato that reduces application of chemicals. No one is going to eat this potato, but even here it came into the ethical dimension and was not accepted in Europe. We won’t give up, but I’m not optimistic to be honest.”
Christoph Wegner, BASF Head of Global Research and Development, Crop Protection Division
Reducing waste:
“Demand for food in the next decade will double. My situation in China is that there is a lot of waste. I think that the 50% figure [estimating the amount of food wasted] is too conservative. For instance, we have a huge pumpkin-producing province. But we don’t have the infrastructure to carry them out. We can increase production if we stop waste.”
Alex Chu, Deputy Chairman and Executive Director, Dah Chong Hong Holdings
Managing risk:
“We have to start looking at tools to figure out how we manage the risk for input costs. This season in Canada, fuel costs went up 30% between the time farmers were planting their crop and the time they got planted. We have to look at market instruments that we’d use for that.”
Ron Bonnett, Board Member, World Farmers Organisation, President, Canadian Federation of Agriculture
“What we are involved in now is a higher risk environment. I get a little concerned when I see Iowa and Nebraska farmers paying $10,000 or $12,000 an acre for land at a time that the costs are going up. How are you going to advertise $12,000 an acre of land if your costs are going to be a lot higher next year and the year after than they are today?”
Clayton Yeutter, former US Secretary of Agriculture and US Trade Representative
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