Using New Technologies; The Challenges for UK Food and Farming Reflections and Projections

Transcription

1 Using New Technologies; The Challenges for UK Food and Farming Reflections and Projections Iain Ferguson CBE SFDF Edinburgh April 22nd, 2010

2 Value Chain Analysis - From Farm to Fork Imported staples (sugar cereals, oil seeds, meat, feed, etc) Imported exotic, seasonal products or packaged food Animal Husbandry Secondary Processing Retail Seeds, Fertiliser, Herbicide / Pesticide Agriculture Staples Fruit / vegetables Primary Processing Exported staples (cereals, oil seeds, meat, fruit, etc) Exported packaged food Neither the UK nor Europe is an island Click for additional data -1-

3 Maslow s Hierarchy of Needs Self actualisation Fresh and seasonal Provenance Ego / social needs Convenience, easy to prepare Freshly prepared, world food, eat yourself healthy 1980 s 90 s Tinned, frozen, processed food Safety Increase value of surplus production by extending usable life 1960 s 70 s Tinned, frozen, processed food Survival Maximise nutritional value in a time of scarcity 1940 s 50 s Food scarcity, rationing To succeed, manufacturers must deliver what customers want and create new solutions -2-

4 Impact of Recession on Consumer Behaviour A new found respect for value -3-

5 Challenges Today and Tomorrow Global Population Increasing Steadily - Growth Driven by Less Developed Countries Water Scarcity - Most Acute in the Developing World Water Availability Across the World Global Warming - Impact on More Volatile Weather Patterns on Food Production? Source: Bio-fuel Provides an Alternative Use for Staple Crops Sourcing raw materials is likely to become increasingly challenging -9- Sourcing raw materials is likely to become increasingly challenging

6 Challenges Facing the Food Industry - Volatile Soft Commodities 300% Commodity Price Trends 250% 200% Sugar 150% 100% Corn 50% 0% Wheat -50% -100% Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Falling trade barriers will expose the food industry to greater volatility Source: Bloomberg -5-

7 Are Genetically Modified Crops the Answer? First Generation GM Crops Increase resistance to herbicides Boost natural insect resistance Second Generation GM Crops Resistant to drought / other climatic extremes Tolerance of soil salinity Third Generation GM Crops Increase nutrient content (e.g. carbohydrate, sugar or oil) GM crops are not a silver bullet, but will probably be part of a global solution -6-

8 Use Of GM Crops Is Growing - But Growth Focused On Specific Crops in a Few Regions Percentage of crop area that is GM Canada Europe USA China Japan India GM Share of Total Area Planted Soya 64% Cotton 43% Corn 24% Rapeseed 20% Brazil Argentina China and India are likely to be growing GM rice by 2009/2010 Johan Cardoen (CEO, CropDesign) GM Non-GM As GM crops proliferate, non-gm crops will be priced at a premium Sources: OECD Biotechnology Statistics 2006, ISSAA, GMO Compass. Notes: Europe is the EU

9 Growth in GM Cultivation Source: ISAAA -8-

10 Current European Position on GM? Reasons to oppose GM crops Inadequate understanding of their impact on the environment Potential health risks Unpredictable impact on the food chain Debunking myths 10+ years of evidence shows no adverse impact on environment or health EU agencies have found no health issues with GM products Current barriers are political? EU consumers are exposed to GM products via animal feed and travel Is the EU position on GM sustainable? Are we living a lie? What is the real basis for European opposition to GM products? -9-

11 What Could Explain the UK s Response to GM Crops? Cui bono? No effort made to demonstrate value to end consumers All benefits accrued to farmers and seed producers Retailers used GM free as a marketing hook Timing Launch coincided with peak of BSE and first foot and mouth outbreak Lexicon Opponents used evocative language to maximum effect Are the concerns of ten years ago still valid? -10-

12 Why the Lexicon Matters What Consumers Want to Hear About Food Natural or all natural Organic Whole grain Healthy Nutritious Additive free Like my mum cooked How GM Food is Described to Consumers Transgenic technology Genetically engineered Genetic manipulation Somaclonal variations Alien genes Anti-biotic resistant genes Broad spectrum herbicide resistant Agro bacterium gene transfer Using scientifically accurate descriptions plays into the hands of GM opponents -11-

13 What Next For GM Crops? - Clear Communication of Consumer Benefits Could Transform the Debate Potential to alleviate hunger in developing countries Minimise impact of extreme climate on food production Enable cultivation of marginal land Security of supply, price stability in developed world Environmentally friendly Fewer herbicide / pesticide residue Lower carbon footprint by minimising frequency of spraying Minimum cultivation Minimise petrochemical based fertiliser Safety Safety debate should focus on relative safety instead of absolute safety Trade off concerns vs. benefits The only question for Europe is whether or not we want to be a part of future development -12-

14 Summary Takeaways Neither the UK nor Europe is an island To succeed, food manufacturers need to give customers what they want Sourcing raw materials is likely to become increasingly challenging GM crops are not a silver bullet, but will probably be part of a global solution As GM crops proliferate, non-gm crops will be priced at a premium Opposition to GM serves as a convenient non tariff barrier Consumer benefits will evolve Perception is reality when addressing consumer concerns What role does the UK / EU want to play in development of global agriculture? Should the food industry attempt to change perceptions proactively or simply react to changes as they occur? -13-

15 Using New Technologies; The Challenges for UK Food and Farming Reflections and Protections Iain Ferguson CBE SFDF Edinburgh April 22nd, 2010