Entrepreneurial Aspects of Foodproduction and Foodsecurity. Hans Eenhoorn KLV/SKOV, Wageningen, 13 May 2014

Transcription

1 Entrepreneurial Aspects of Foodproduction and Foodsecurity Hans Eenhoorn KLV/SKOV, Wageningen, 13 May 2014

2 Entrepreneurship The entrepreneur is the person who is willing to task risks in the face of uncertainty with the expectation of a reward (profit) Every farmer, including the smallholder, is per definition an entrepreneur

3 Job of the Entrepreneur To combine the production factors : land, labour and capital, in such a way that the total cost: rent + wages + interest = < lower than the total income of the combination. Resulting in profit as the reward for entrepreneurship

4 Entrepreneurship and Foodsecurity Entrepreneurs NEVER invest in Foodsecurity They invest to serve a market accepting uncertainty and taking risks with the expectation to make a profit

5 Definition Food Security Food security exists when all people, at all times, have physical, social and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life. Availability, Access, Affordability (Stability, Utilisation)

6 Availability Sufficient food is/can be produced to feed the worldpopulation now (7 billlion) and into a distant future (10 billion +): Subject to certain conditions 75% of all food produced for human consumption is produced locally/nationally 50% of all food produced is animal feed

7 Access Due to poor infrastructure, high transportation costs and other impediments, millions of people do not have sufficient access to food

8 Affordability Due to lack of buying power and/or opportunities to grow sufficient food for subsistance, millions of people cannot afford to eat what they need for a healthy life. Hunger is caused by poverty and unequality

9 1000 Million: chronically hungry Smallholder farms: 50% Forests dwellers, pastoralists, fishermen: 7% The urban poor: 25% The rural landless: 18 %

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11 Morality, Safety, Economics It is morally unacceptable that in this world about 1 billion people live in wealth and have access to so much food, that they get sick of it ( cardiovascular disease, obesity, diabetes, forms of cancer), while at the same time another 1 billion people are so poor, that they get sick of being chronically hungry and are physically and mentally incapacitated. It is dangerous for world-security to neglect 1 billion poor and hungry people, as they are a source for armed conflict, terrorism and the spreading of HIV and TBC. It is economically undesirable to exclude 1 billion potential consumers and producers.

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13 Food and Nutrition security in the Future? Now almost 2 billion hungry people 1 billion chronic 1 billion hidden World population now 7 billion World population in 2050, > 9 billion Population growth in Africa 1 billion How to feed the world in 2050?

14 Impediments for achieving global Foodsecurity 1. Rising populations ( 7 -> 9 billion) 2. Rising per capita incomes 3. Growing demand for livestock products 4. Growing demand for biofuels 5. Increasing land scarcity 6. Slowing of productivity increases in agriculture 7. Climate change 8. Increasing water scarcity? 9. Fertilizer scarcity (nitrogin, urea, phosphate)? 10.Unfavorable Public Mindset

15 World Ecological Footprint - humanity today needs 1.3 planets to survive - Source: Living Planet Report 2008, WWF, GFN,ZSL 15

16 Possible effects of climate change on agriculture productiviteit Cline, W. R Global Warming and Agriculture: Impact Estimates by Country. Washington D.C., USA: Peterson Institute.

17 The Challenge of Mankind 2x more with 2x less

18 Preconditions for World foodsecurity Heavy investment in agricultural development in development countries, with emphasis on smallholders Reduced meat and dairy production/consumption in developed countries Reduction/adaptation of climate change More agricultural research and education Acceptation of safe GMO s Reduction of raw-material use (water, energy, fosphate) Stop 1 st. generation bio-fuels( corn, palm) Improve rural infrastructure Reduce harvest-losses and food-waste

19 Harvestlosses and Foodwaste About 1/3 of all food produced for human consumption is lost. 1.3 billion ton per year. Marketvalue $ 1000 bln. In The Netherlands 4 bln.

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21 Consensus about focus on subsistence-smallholder Supporting smallholder farmers to feed themselves and produce marketable surpluses, is the quickest and in the short-run the most efficient way to reach food-security for four hundred million poor people in Africa and Asia.

22 Food security through Smallholder development Millions of (sub-) subsistence smallholders. Totally insufficient employment outside agriculture No examples of mass poverty reduction, that did not start with sharp rises in employment and self-employment due to the higher productivity in small family farms. No country has ever enjoyed an industrial revolution without first undergoing a revolution in agriculture.

23 Food security for the Millions Productivity increase & markets that work for the poor Smallholder farmers Entrepreneurs

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25 Entrepreneurship Planned Production Defined market Profit Objective

26 Constraints What constrains the smallholder to become entrepreneurial?

27 Fieldwork 1200 smallholder farmers Five locations in Ghana 20 Dutch and Ghanaian students Different research methods

28 Constraints for Entrepreneurship 26 constraints in 4 clusters Production and Processing Risk and Uncertainty Incentives Mindset

29 1. Production and Processing Constraints Capital/Credit Soils, Seed, Water, Labour Technology Knowledge Transport/Traction

30 2. Constraints related to Risk and Uncertainty Market Forces Information/Communication Climate/ Rainfall Corruption and Crime Institutions, Law & Order

31 3. Lack of Incentives Input/Output Ratio Roads/Infrastructure Extended family pressures Taxation

32 4. Mindset Culture/Religion Consumption vs. Saving/Investing Ignorance Trust (social capital)

33 Conclusions on major constraints 1. Capital 2. Countervailing Power 3. Good Governance 4. Technology and Education 5. Infrastructure 6. Mindset

34 General Recommendations 1. Think entrepreneurial (planning, markets, profits) 2. Ensure marketing drive 3. Provide capital Injections for a prolonged period 4. Organise know-how transfer and technical assistance 5. Take a Holistic approach to tackle constraints simultaneously 6. Place women at the core of any development programme 7. Realise that fair trade sometimes means protection

35 Reasons to worry but also Hope Technology mostly available In principal enough money Strong increase in attention for the problems Understanding that a holistic approach is required: agriculture, water, energy, environment, climate Private sector is prepared to be the driving-force Social media /actions/campaigns Young people in the whole world find each other in the quest for a fair and sustainable world

36 Foodsecurity for all, now and in the future is possible, but not without sustainable Agricultural Entrepreneurship Opening of the Conference of ELLS Rector Magnificus