abc perspective: ‘access to safe and nutritious food for all’
DESCRIPTION
Dr John Purchase presented at the Consumer Rights Conference. He addressed the following topics:Global Food System and Value Chains;Food Chain and Network Development;How do we capture value?;Role of Government and the Case for International Investment.TRANSCRIPT
ABC Perspective: ‘Access to safe and nutritious
food for all’
NCF: 2011 Consumer Rights Conference
Dr John Purchase
3 November 2011
Theme addresses Food Security
• Many definitions to food security, but the one we will use is the FAO definition (World Food Summit 1996):
“A situation that exists when all people, at all times,
have physical and economic access to sufficient,
safe and nutritious food to meet their dietary
needs and food preferences for an active and
healthy life”.
Components of Food Security
FOOD UTILISATION • Nutritional Value
• Social value • Food safety
FOOD ACCESS • Affordability • Allocation • Preference
FOOD AVAILABILITY • Production • Distribution
• Exchange/trade
Complex concept:
Difficult to measure
and evaluate.
Stability over TIME
Food Security
Purchasing power key to access
Severity: Integrated Food Security Phase Classification
Presentation outline
• Global Food System and Value Chains
• Food Chain and Network Development
• How do we capture value?
• Role of Government and the Case for International Investment
• Concluding remarks
Global Food System and Value Chains
Food & Beverages Feed
Fuel
Pharma Medicine
Pharma Cosmetics
Electricity
Plastics
Entertainment/ Tourism
Textiles & Clothing
Shoe & Leather Ind
Construction & Furniture
Paper
Environment
From Farms to……
Source: Marcos Fava Neves
From Farms to … Everything!
No. 1: Respect our farmers!
Want to Make More than a Banker? Become a Farmer! By STEPHEN GANDEL July 10, 2011
• If you want to become rich, Jim Rogers,
investment whiz, best-selling author and one of Wall Street's towering personalities, has this advice: Become a farmer. Food prices have been high recently. Some have questioned how long that can continue. Not Rogers. He predicts that farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street. The essence of his argument is this: We don't need more bankers. What we need are more farmers. The invisible hand will do its magic. "The world has got a serious food problem," says Rogers. "The only real way to solve it is to draw more people back to agriculture."
Tools of the trade surround John Willoughby on his 800 ha plot outside Grand Island, Neb. Photograph by Danny Wilcox Frazier/TIME
Consumers
Output Markets - Wholesale - Retail
Service providers - Processing - Storage - Manufacturing - Packaging
Primary agriculture - Smallholders - Emergent - Commercial
Input service providers - Finance & Insurance - Seed, Fert’s, Agro-chemicals, etc. -Livestock inputs
Value Chain Approach
Polic
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Status and Trends
South Africa
Global Food System
• Within IFAMA, major look at increase in global food consumption – 1 billion people in Asia alone moving into middle class.
• All forecasts 10 years ago for China/Asia’s production, imports & exports were wrong.
• If China today intends to be self sufficient in soybeans, it will need over 35 million new hectares – but does not have the land for this.
• Thus increased trade & opportunity.
• Will need much better logistics, ports, etc.
Global Food System
• Changing food system: Redefining agribusiness from commodity companies to consumer companies – worldwide trend.
• Demands of system far more complex and variable – requires multi-disciplinary approach and readiness to change.
• Common knowledge South Africa’s agro-food system competes in the global food system – thus need to adapt to new trends and demands to remain competitive and
unlock opportunity. Consumer focus NB!
Global Food System
• Retailers, the Giants of the Chains
- Wal-Mart sold €337 billion worth of food
from 8 400 stores in 15 countries in 2010
- Private vs retailers labels/brands
- Powerful: Information about consumers
- Their supply chains incredibly important
- Move to ‘Green Economy’, Fair Trade,
Smallholder procurement, increased
convenience, tasting areas, etc.
FAO Food Price Index
Food Commodity Price Indeces
Inflation
Source: AMT, 2011
Exchange rate
Source: AMT, 2010
SAARF LSM Segments: Proportion of SA adult population and average monthly household
income in 2009
Source: SAARF (2010a) & BFAP, 2010
LSM class mobility: All adults during the period 2004 to 2010
Source: SAARF AMPS data for the period 2004 to 2010, as quoted by BFAP
Note: 2010F and 2014F are calculated using fixed exchange rates based on the average rates of 2009 from www.oanda.com (01.01.09 to 07.12.09).
Source: IGD Research, December 2009
2006 2010 2014Forecast
Rank Country €bn Rank Country €bn Rank Country €bn
1 US 612 1 US 638 1 China 761
2 China 328 2 China 529 2 US 745
3 Japan 297 3 Japan 345 3 India 448
4 France 206 4 India 279 4 Japan 360
5 India 190 5 France 205 5 Russia 322
6 UK 188 6 Russia 186 6 Brazil 284
7 Germany 150 7 Brazil 185 7 France 228
8 Italy 127 8 UK 170 8 UK 198
9 Russia 116 9 Germany 160 9 Germany 168
10 Mexico 112 10 Italy 130 10 Indonesia 167
2,326 2,827 3,681
BRIC(S) to drive Modern Retail growth
Germany: The Melander family of Bargteheide Food expenditure for one week: $500.07
Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
USA: The Revis family of North Carolina Food expenditure for one week $341.98
Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
Egypt: The Ahmed family of Cairo Food expenditure for one week: $68.53
Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
Chad: The Aboubakar family of Breidjing Camp Food expenditure for one week: $1.23
Source: Peter Menzel www.menzelphoto.com Hungry Planet: What the World Eats
Food Chain
and
Network Development:
14-Point List
Food Chain: 14-Point List
1. Chain Design, Governance and performance
2. Chain Waste
3. Food risks and chain integrated risk management
4. Sustainable chains and certification
5. Chain and network impacts, and adaptation
6. Chain and networks legislation and regulation
7. Food and health communication
Food Chain: 14-Point List
8. Climate change and chains adaptation
9. Chain information management
10. Biomass based chains
11. Metropolitan agriculture chains
12. Chain and network intermediaries
13. Chain and network entrepreneurship and
innovation
14. Chain inclusion and social innovation
How do we capture value?
• Innovation in integrated food chains: input suppliers & farmers
• Innovation for Food Industry and Retailers
• Creative Pricing Strategies – framework method: 3 phases
• Value capture trilogy:
- Costs
- Differentiation
- Collective action
Role of Government and the Case for International Investment
Strategy for International Investment
• Considerable debate globally on pros and cons.
• However investment mostly positive and should be promoted, but some limited and transparent form of regulation necessary.
• Wal-Mart issue, for example, big debate in SA. • Can evaluate Multi-nationals contribution to
economic development: Environment, Human resources, Taxation, R&D, Financing, Policies on
market access, JV’s for farmers/suppliers, and governance structures.
Role of Government • Acknowledge agro-food industry is private
sector business, where markets have to work. • Create facilitating and enabling environment
for competition in an open, competitive market.
• Provide infrastructure at competitive pricing. • Market development (PPP with Private Sector) • Trade and tariff policy, etc. • Assist in incorporating smallholders into commercial value chains.
Agribusiness Executive Survey: Competitiveness: Factor analysis
0
0.5
1
1.5
2
2.5
3Cost of doing business
Labour
Infrastructure
Capital
Technology
Market size
Market growth
Financial institutions
Scientific research…
Electricity supplies
Local suppliers of…
Trade policy
Land reform policy
Labour policy
Crime
Aids
2004 2008 2010
Source: Agricultural Business Chamber
SA economic growth: Tradable goods sectors lag the non-tradable goods sectors
Source: StatsSA
Graph: ABC
0
50
100
150
200
250
300
20002001200220032004200520062007200820092010
IND
EX
GDP % per Sector of Economy
GDP
Agric
Mining
Manufacturing
Construction
Trade
Transport
Finance
Concluding remarks • Value chains compete globally, and our agro-
food value chains are part of that serious World Cup competition. Ref not always fair!
• Generally fairly well developed value chains, but by following a more strategic and networking approach, together with government, we can improve access of safe, affordable and nutritious food for all.
• Our approach must be pro-active, and our focus must be on people to make it happen!
Thank You
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