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Agriculture systems and the value chain
Master Roma 3 - Food Security and Human Development Agriculture systems and the value chain Luca Colombo Fondazione Italiana per la Ricerca in Agricoltura Biologica e Biodinamica Recent advocacy effort by the UN Secretary General to keep food and nutrition security high in the discussions in Rio Boundaries of the system to be analysed: From the farm gate to the consumers’ house The different uses of ag commodities. The food/feed/fuel competition Cereal production, utilisation and stocks Food, feed, fuel demand for wheat Food, feed, fuel demand for coarse grains The food/feed competition driven by demand Meat demand (partially) depending on income Per capita consumption of livestock Historical trend of meat production 11.4% annual growth of aquaculture (1990-2000) The feed competition is now also due to fish Livestock production Different contributions from feed crops Use of feed concentrate by region Environmental impact of products: the livestock sector contribution The current state of research identifies products in the following three areas as having the greatest impact: • food and drink • private transport • housing There is no clear ranking, as products in the three areas identified are of approximately equal importance. Together they are responsible for 70 to 80% of the environmental impact of consumption, and account for some 60% of consumption expenditure. • Food and drink cause 20 to 30% of the various environmental impacts of private consumption, and this increases to more than 50% for eutrophication. This includes the full food production and distribution chain ‘from farm to fork’. Within this consumption area, meat and meat products are the most important, followed by dairy products. Food production contributes strongly to the impacts of water use, land use, acidification, eutrophication and greenhouse effect. Environmental impact of products: the livestock sector contribution % contribution to eutrophication Top 5 categories: livestock sector Environmental impact of products: the livestock sector contribution % contribution to global warming potential Top 5 categories: livestock sector Livestock and GHG emissions Prospects for biofuels driven by mandates Land use and energetic performance of key agrofuel crops Projections for feedstock sources: ethanol Projections for feedstock sources: biodiesel Biodiesel demand driver for vegetable oils Geografic distribution of biofuel plants in EU & USA Get the difference (and then the analogy) Climate change impact on yields in Europe The 2003 hot summer experience The different GHG sources: it is also a matter of models of production Understanding the consequences: CC and water / temperature stresses 0% 2080 -50% -15% +15% +35% Understanding the consequences: CC impact on yields (IFPRI 2010) Source: Stern Review Stige et al, PNAS 2006,103 Waste and losses account to 1,3 BLN tonnes Fair and sustainable food systems from vicious to virtuous cycles The value chain …in the case of GM seeds and foods The dynamic structure of power in the food chain The current (and dictated) shape of the agrifood sector • Increase in external inputs (seeds, fertilizers and pesticides, mechanization, fossil fuel) • Proprietary control of seeds and germplasm through IPRs • Decrease and devaluation of labor • Vertical integration: farm to fork control • Ambition to a global market for food, commodities, seeds and know-how • Production targeting a middle class (super)market The bottleneck of food chain power FAO concerned of the supermarket chain expansion Source: FAO (2004) State of Food Insecurity in the World (SOFI) - 2004 Retailers share in the global market The global suppliers: ABCD • The global agro-corporations: A – B – C – D – ADM, Bunge, Cargill, Louis Dreyfus • These 4 companies dominate global trade in agricultural commodities • They are the space between the farmer and the consumer: they own or control the elevators, the trucks, the barges, the shipping and the processing facilities of agricultural commodities on a very large scale. They are also directly involved in food production. – – – – They supply all product range Processing – milling and crushing plants … Logistics – storage, freight, distribution, financing … Trade – physical contracts plus futures & options ABCD trading desks ABCD trading ABCD power The influence of ABCD • They are not passive observers. Cargill and ADM substantially write US Ag and trade policy. • Bunge has a big influence on Brazilian Ag and trade policy. • They all work in partnership with GM seed companies to distribute existing GM crops and to create and distribute new GMOs. • Cargill is openly pro-GM while ADM and Bunge claim to be neutral on the issue. “The consolidation process between the agrochemical and the seed industry is currently being extended to a third stage, as the life science companies broaden their reach through strategic alliances with major trading companies such as Cargill o ADM”. Bruinsma J. (2003) World agriculture: towards 2015/2030 – an FAO perspective Codex Alimentarius: the growing importance of food safety Its mandate: to develop scientifically sound international standards and norms for consumer health protection and fair food trade practices 1962 World Health Organization (WHO) Food and Agriculture Organization (FAO) CODEX ALIMENTARIUS COMMISSION 2005 170 Member States Codex Alimentarius and WTO WTO AoA SPS TBT Codex Alimentarius Codex Alimentarius • • • • • Food standards for commodities Codes of Practice Limits for pesticide residues Limits for contaminants Limits for veterinary drugs 237 41 3 274 25 289 Ministries in charge of the Codex Alimentarius Commission Agriculture/Nutrition/Rural Development (Albania, Angola, Argentina, China, Italy, New Zeland, USA) Economy (Algeria, Yemen) Health (Chile, Switzerland) Germany, Mongolia, Russia, Spain, Iran, Israel, Foreing Affairs (Belgium, Brazil, Poland) Industry and Commerce Jordany, Finland) Foreing Trade (Portugal) (Camerun, Trade in food and agriculture The 2009 global economic crisis made trade in food&ag. regress by 3% in volume and 13% in value European and Chinese trade structure European food&ag. export and imports European arable land virtually traded (in million ha) A closer look to ‘globalisation’ in food&ag. source FAO stat: last consultation June 2010 (in million tonnes and %) PRODUCTION TRADE TRADE/PRODUCTION Potatoes 323543199 Potatoes 10472706 Potatoes 3.2 Rice, paddy 657413530 Rice, paddy 33080958 Rice, paddy 5.0 Wheat 132832103 Wheat 21.7 Wheat Cereals 611101664 2348996350 Cereals, 327043802 Cereals, 13.9 Oilcrops Primary 148773770 Oilcrops Primary 97482863 Oilcrops Primary 65 Meat 272351414 Meat, 34842180 Meat 12.8 Milk 680660488 Milk 93194540 Milk 13.7 INTERNATIONAL AGRICULTURAL TRADE • The global market has smaller dimensions than some internal markets EU USA China India • International trade is mainly between ‘northern’ countries 2/3 import/export between OECD 1/3 within EU (a ‘single market’…) • Main export of the majority of dev.ing countries is on tropical produce Coffee The Cotton Tropical fruit • Dev.ing countries’ import is mainly of food staples Wheat Rice Milk powder ComModification •crop and variety diversity is sacrificed by the need of standardisation; agrobiodiversity qualification –and conservationremains neglected •the comparative advantage focuses on a few agricultural produce, limiting countries’ crop and cultural patrimony to the detriment of food security and sovereignty •farming activities targeting the global market need large land size per productive unit (exacerbating land ownership struggles) and are capital and technology intensive thus favouring land concentration •integration along the food chain is inevitable: this leads to the progressive decrease of economic and social role of farmers for the benefit of trading, transport and retailing sectors and companies •agriculture is thus compared to a mining activity simply ‘extracting’ raw materials to hand over to industrial processing (BUT, this economic activity is exposed to climatic and parasitic risks) Soybean: the comModified crop Why is soybean so important? Most of the soybean (≈ 80%) goes into animal feed (as soy meal), the remaining ends up in the majority of food products Product range soy meals, lecithin, oils, proteins, processed ingredients, consumer products (i.e. margarine) + biodiesel + but also: Hedge funds have increased to 19% their control of the soya bean market, up from 13% last year, as prices have jumped 14% since January (Guardian, 10 October 2010) Vegetable oil: a key commodity Oilseed market World vegetable oil and protein meal consumption 2008 Vegetable oil Meal for livestock Soybean is primarily an American crop The change in arable land use in USA, Argentina and Brazil 1995 2009 18,0% 36,7% 17,7% Avena Avena 49,2% Grano Sorgo 35,1% Grano 58,1% Sorgo Riso 56,3% 49,4% Argentina Soia Brasile Stati Uniti 65,6% Mais Orzo 31,2% Riso Soia Mais 40,0% Orzo 24,0% Argentina Brasile Stati Uniti Land use in Brazil The soybean cultivation in the Americas… Soybean defines a new geopolitical horizon… Ranking of key commodity trade in some American countries Incidenza media sul valore totale dell’export nel periodo 1995-2004 dei tre principali prodotti esportati. Peso dei 3 principali prodotti sull’export totale 48,1% 56,4% 61,5% 92,0% Italy Wine 15,0 Pasta 6,0 Tomato sauce 4,7 25,7% The unloading in Europe SOYBEAN IMPORT China is the center of origin of soybean, but the country is currently a leading importer Soybean meal trade flow The soybean bottleneck The Responsible soy initiative A global campaign against RTRS “May 28th 2009 the international ‘Round Table’ has agreed on criteria for ‘responsible’ soy. These are very weak and do not offer an effective solution for the grave impacts of soy production. Even worse, they legitimise genetically engineered (GE) soy which is designed to be produced with large (and increasing) amounts of agri-chemicals. This is at the cost of people and the environment. This site explains what is wrong with this and questions the important role WWF, Solidaridad and the Dutch government play in this process.” EU countries are moving towards positive GE labelling The first GMO on a supermarket shelf GMOs: the 2010 state of the art china 3% canada 6% india 6% other 19 countries 5% oilseed rape 5% cotton 12% usa 48% soybean 52% argentina 16% maize 31% brazil 16% Source: ISAAA, 2011 ISAAA homepage Combinazione di tolleranza e resistenza (Ht e Bt) 22 Tolleranza agli erbicidi (Ht) 61% 148 million hectars Resistenza agli insetti (Bt) 17% “The International Service for the Acquisition of Agri-biotech Applications (ISAAA) is a not-for-profit organization that delivers the benefits of new agricultural biotechnologies to the poor in developing countries. It aims to share these powerful technologies to those who stand to benefit from them and at the same time establish an enabling environment for their safe use.” How it had to be… Fonte: James, C. and A.F. Krattiger. 1996. Global Review of the Field Testing and Commercialization of Transgenic Plants, 1986 to 1995: The First Decade of Crop Biotechnology. ISAAA Briefs No. 1. ISAAA: Ithaca, NY. pp. 31. R&D investments The science of GM is still young and complex: for each gene or trait explored in the discovery stage, the odds are only about 1 in 250 that it will make it to market. It can cost from $30-50 (Source: US Undersecretary Larson), to $100-200 (Source: Riccardo Ferri, Monsanto Itay) to $50-300 million (Source: Graff & Newcomb) to develop a GM crop from the laboratory to the market The process can take up to 12 years Monsanto’s pipeline expansion How to assess this innovation: an evaluation grid GMO outcome efficiency impact control power recall How to assess this innovation: the implications GMO outcome efficiency impact control power recall OGM ricadute efficacia US farmers expectations controllo impatto potere tutela OGM ricadute efficacia controllo impatto potere tutela Bt maize pros OGM ricadute efficacia HT soy pros controllo impatto potere tutela OGM ricadute efficacia controllo impatto potere tutela Transgenic Vs conventional varieties OGM ricadute efficacia controllo impatto potere tutela What does a farmer pay purchasing GM seeds? OGM ricadute efficacia controllo impatto potere tutela Glyphosate dominance: the US and Argentinian cases OGM ricadute efficacia Map of HT weeds in USA controllo impatto potere tutela (The New-York Times, 2009) OGM ricadute efficacia The herbicide excalation controllo impatto potere tutela Gramoxone contains Paraquat. EU classifies Paraquat T+ (highly toxic). Paraquat is banned in Europe after a European court of justice ruling in 2007 How to assess this innovation: who is controlling what GMO consequence efficiency impact control power recall OGM ricadute efficacia impatto controllo potere tutela US Antitrust procedure Vs Monsanto (in)Corporation OGM ricadute efficacia impatto controllo potere tutela The process of Merger&Acquisition in the agrochemical&seed sector OGM ricadute efficacia impatto controllo potere tutela (in)Corporation OGM ricadute efficacia impatto controllo potere tutela (in)Corporation Owners of the Seed Market - 2006 57% 39% Source: ETC Group Owners of the Seed Market - 2007 67% 47% Source: ETC Group Owners of the Seed Market - 2009 Source: ETC Group OGM ricadute efficacia impatto controllo potere tutela The biotech revolution gives rise to new food chain approaches OGM ricadute efficacia impatto controllo potere tutela Monsanto’s contract on RR canola seeds The grower shall plant one and only one crop ..shall not sell, give, transfer or otherwise convey such seed The grower shall purchase and use only Roundup branded herbicide The grower shall grant Monsanto the right to inspect, take samples and test all of the grower’s owned… (fields, storage bins)… for the following three years If the grower violates… agrees to pay $15 per acre for every acre planted with RR canola Terms and conditions of the Agreement have full force and effect on the heirs… OGM ricadute efficacia impatto controllo potere tutela GMO possible dispersal in the environment: 3 case studies LLRICE601 GE salmons (and other fishes) Pharmcrops field trials OGM ricadute efficacia controllo impatto potere tutela The transgenic wheat case No GM wheat varieties currently on the market A single GM variety notified for commercial cultivation: Monsanto’s Roundup Ready (RR) wheat (notified in USA and Canada, Dec. 2002) Monsanto pledged to respect a (self-made) decalogue prior the commercialization of RR wheat The North American wheat chain started a lively debate OGM ricadute efficacia impatto controllo potere tutela Wheat chain reaction in Canada OGM ricadute efficacia impatto controllo potere A planetary diffidence tutela "Japanese millers state opposition to GM wheat-group," Washington DC, February 22, 2001, Reuters. "European Buyers Warn U.S. over Gene Wheat Plans," Greg Frost, February 2, 2001, Reuters. "European and American Millers Tell U.S. Wheat Associates Board to Go Slow on GM Wheat," August 28, 2002, Associated Press. "GM Concern Could Mar US Wheat Sales to Egypt," February 9,2002 Reuters. A FAS-USDA survey reveals a worldwide diffidence on transgenic wheat (“USDA world survey shows biotech wheat reservations” - Reuters, 03.15.2004) OGM ricadute efficacia impatto controllo potere tutela …finally… Monsanto to Realign Research Portfolio, Development of Roundup Ready Wheat Deferred Decision Follows Portfolio Review, Consultation with Growers ST. LOUIS (May 10, 2004) Current situation on GE wheat Monsanto had asked for government approvals for import and processing of RR wheat in Australia, New Zealand, Russia, South Africa and Colombia. “The company and regulators in the countries mutually agreed that Monsanto should withdraw its submissions” • Monsanto withdrew all RR wheat applications, with the exception of the one notified at the FDA • FDA had completed its food safety assessment for Monsanto's biotech wheat variety: “all safety and regulatory issues had been adequately addressed”. FDA spokeperson U.S. Food and Drug Administration Biotechnology Consultation Agency Response Letter BNF No. 000080 “Based on the safety and nutritional assessment Monsanto has conducted, it is our understanding that Monsanto has concluded that the wheat grain and forage derived from the new variety are not materially different in composition, safety, and other relevant parameters from wheat grain and forage currently on the market and that the genetically engineered wheat does not raise issues that would require premarket review or approval by FDA. (…) Based on the information Monsanto has presented to FDA, we have no further questions concerning grain and forage derived from glyphosate-tolerant wheat event MON 71800 at this time. However, as you are aware, it is Monsanto's continued responsibility to ensure that foods marketed by the firm are safe, wholesome, and in compliance with all applicable legal and regulatory requirements.” Unattended implications… GRADUATION EXAM AUTHENTIC ASSESSMENT AGRICULTURAL SCIENCE: 1. Outline the steps involved in engineering your own super high yield, all weather hybrid strain of wheat. 2. Describe its chemical and physical properties and estimate its impact on world food supplies. 3. Construct a model for dealing with world-wide surpluses. 4. Write your Nobel Prize acceptance speech.
