Tag Archive | agribusiness

On the Edge of Mainstreaming Sustainability

My close friend and I were arguing yesterday over what work environments and organizations I should strive to work for if I want to stay in the sustainable development field and make a significant difference. My friend A argued that the obvious choices–the World Banks, Oxfams, WWFs, World Resources Institutes, and DfIDs of the world–are not influential enough. They’re too bureaucratic (read: risk-averse and increasingly unused) or too reliant on outside funding (read: risk-averse and unsustainable). Instead, he argued, I should look toward smaller, more nimble organizations that are financially self-sustainable, do more interesting work, and create their own value.

I found one such place today: the Sustainable Food Lab. Its mission is to “clean up” agricultural supply chains; it partners with big businesses like Costco, funders like DfID, and NGOs like Oxfam to come up with sustainable solutions, though many of these currently appear to be on a small scale relative to the size of the market and even the corporations themselves.

I also came across a letter by its director, Hal Hamilton, about how sustainably-minded change by big businesses is not enough: he argues that collaboration between businesses (the private sector), government (the public sector) and NGOs (and it must be all three) is essential for getting past the many perverse incentives to sustainability (like needing to keep a company’s market share by sourcing with the cheapest, most harmful methods possible). In particular, Hamilton seems to imply that government action is especially lacking (such as in the case of Indonesia and palm oil expansion leading to expansive deforestation, despite companies that buy palm oil trying to be more sustainable).

He also included a great quote by his colleague, Adam Kahane:

Change from the top down doesn’t work, and change from the bottom up doesn’t add up.

It was refreshing to hear a realistic perspective on the approaches commonly taken by NGOs to mainstream sustainability and social change, though I’m slightly skeptical of how financially sustainable and transparent their own organization (the Lab) is, based on the lack of annual reports and other systematic reporting. I was also glad to see that the directors acknowledged that partnerships between NGOs and corporations can only go so far, and I’m eager to see what next steps the Lab will propose to push the frontier of what’s feasible, both for the agribusiness industry and business in general.

Companies only make changes that are cost neutral or that gain consumer support. They cannot add costs, in isolation, that make them less competitive… Some of the costs of sustainability require co-investment by other sectors.

The new FAO Director General (and why things will falter)

In going through recent articles on food security, I was extremely surprised to see such a pompous stance taken by José Graziano da Silva, who will step up as the new FAO director general on January 1, 2011.

1. In the several questions addressed to him explicitly mentioning Africa, he sidestepped the question and instead gave examples from South America. Your background may be specific to Latin America, but if you are to be the global director for such an organization, you ought to know the global state of things.

2. He plans to “start consultations with…poor food importers.” Importing food is not the way to go for any country that already has foreign debts, high poverty rates (thus people can’t afford imported food without high subsidies), and no other industries to fall back on when local economies are driven by smallholder food production.

3. He sees nothing wrong with biofuels other than corn (supposedly because everything else doesn’t distort food prices.) There are other measures of good decision-making besides economic efficiency…

4. The kick: he sees corporate agribusiness as benevolent and complementary to smallholder farmers, and civil society groups as a detriment to progress. Even smallerholders in Brazil are screwed over by Cargill and other global traders. Sure, they may have a market to sell their soy now, but if they’re getting below-market prices because the agribusiness has no competitors, then is that really the best outcome?

The few views from his interview that I would agree with (that were, albeit, rather obvious):

  • More emphasis on diversified food crops
  • Greater cooperation between FAO and other relevant organizations (i.e. IFAD, though one could ask “How?”)
  • Less emphasis on chemical rather than organic fertilizers
  • Development of local markets (which I doubt is within the jurisdiction of the FAO anyway, but he’s a politician after all)

Toeing a Thin Line

When does one draw the line between foreign direct investment (FDI) in agribusiness and large-scale land acquisitions? The case of Australia is particularly perplexing to me: this is a highly developed country with a healthy economy, an educated population, a theoretically functioning justice system and strong civil society. And yet, Australia’s lands have become privy to so much foreign investment that the government last year felt compelled to launch a national investigation on large agribusiness investments…because they no longer knew how much of their land was still in the hands of Australians.

As John Cobb, the Australian Shadow Minister for Agriculture and Food Security, said in April 2011:

“While foreign investment has been vital for the development of agriculture in Australia, in the last three years we have seen a ten fold increase. There has been a marked change in the activity by foreign companies from investment in agriculture to ownership and control of supply lines.”

It is precisely this control of supply lines that will make the difference between FDI, which has helped to boost agriculture and R&D worldwide when the public funding just hasn’t been there, and land acquisitions that directly threaten food security and food sovereignty.

Frankly, after having run a model analyzing food supply to 2050, I am surprised that Australia is taking such leisure to sell off its most productive lands. It has already faced serious droughts in recent years, with the wheat crop—its largest agricultural export—suffering heavily due to rising temperatures (wheat’s optimal growth occurs below 26 Celsius.) This trend of decreased yields will continue to accelerate, and a greater shift toward barley, sugar, and fruits (its other main agricultural exports) will only get Australia so far if the aquifers become even more depleted due to increased reliance on large-scale irrigation and are not recharged at sustainable rates due to decreased rainfall.

Unfortunately, instead of incentivizing Australian politicians to limit foreign agricultural land purchases, this pressure from decreasing yields has begun to make Australians, like Prof. Robin Batterham, consider pushing this fate onto others:

”Other countries are investing in Australia … so that the produce of the land can go to their countries… As an investment, why aren’t some of our larger farms – that is the companies that own them – also investing in places where the soil is a bloody sight better than Australia’s?”

Hence why a headline like “Western Australia to release 15,200 hectares of new farm land” makes me so upset. Since when is this land “new,” undeveloped, unowned? Aside from the obvious lack of concern for any ecosystems that may have once existed on this “new” land, there is likewise a blatant disregard for farmers that were already on this land, the native peoples that have been on the land for centuries, and the children who would have inherited the land tomorrow. When does the cost of economic growth finally become high enough to make politicians question their decision-making?