Bio-Fuels: Food or Fuel?

Executive Summary

Food shortages and security concerns after the Second World War drove many countries to encourage agricultural production through various forms of subsidisation and protectionist measures.  These subsidies survived long after their intended usefulness ended, causing a huge over-supply of agricultural commodity products throughout much of the developed Western world.  As the mountains of product grew many countries responded by reinforcing protectionist measures to support their primary industries and shield their own markets from foreign traders.  Under the relentless pressure from over-supply, commodity prices consistently kept falling in real terms and agriculturalists typically responded by increasing production even further to become more efficient in order to maintain the standard of living they had become used to.

As we enter the twenty-first century new forces are emerging which will shape the path that agriculture takes in the near future and it will be to the advantage of those involved in the industry to have some understanding of those pressures and how they might affect the future direction of agriculture.

Agriculture is being used to shoulder some of the world’s increasing energy needs, especially in the transport industry.  Bio-fuels easily utilise existing infrastructure and therefore becomes a natural alternative to fossil fuels.  Developed countries have increasing concerns surrounding national security for both food and fuel.  The prospect of remaining dependent on the Middle East for ever-decreasing amounts of oil is not attractive to most Western countries and in particular America.  Although bio-fuels are unlikely to replace fossil fuels they do play a strategic part in reducing dependency on a volatile source of supply.

Commodities flow around the world more readily than ever before with improved transportation, communication and financial services enabling this to happen.  Trade barriers have come under intense pressure as countries have sought to trade their surplus agricultural products on the world market.  It might be expected that under such pressure these barriers would have been lowered much more quickly than has been the case.  One reason for the slow dismantling of trade barriers is best explained by the comment made by Darci Vetter, Director for Agricultural Affairs in Washington DC when she said:

“America gives nothing away at the negotiating table without getting something in return”.

The complicated process of finding suitable trade-offs when giving trade concessions is clearly a difficult task that is often responsible for the stalling of trade negotiations.  While in many circumstances politicians have a willingness to lower these barriers, they will not do so without some perceived trade concessions being made in another area.

Bio Fuels: Food or Fuel? – Steven Sterne

Sustainability of agricultural systems regarding nutrient losses.

Executive Summary

There is little doubt that the environmental cost of food production is becoming a much greater concern to the general public. Since the change in land use of our own property here in coastal Southland from sheep and beef farming to dairying in 2002 there has been a highly effective campaign to highlight the negative consequences for lowland water ways resulting from this change in land use. This has had a significant impact on public opinion which will inevitably have an impact on the decisions of policy makers who regulate our farming practices.

The aim of my study was to look at the result of intensive agricultural land use in the countries I visited and from that see what can be applied to our situation here in New Zealand.

My conclusions are:

  • New Zealand animal production systems are much less intensive than those that dominate food production in the northern hemisphere where the majority of animal production is in confined or housed systems. This means they are significantly more energy intensive and have far more animal manure to spread mechanically.
  • Nutrient regulation seems to follow mechanical manure spreading, probably due to visibility and odour issues. Pressure for regulation increases with affluence and population density.
  • Regulations are invariably the result of public outcry due to incidents of mismanagement. The response of publicly elected regulators does not necessarily follow good science and tends to be prescriptive and overly cautious.
  • Prescriptive regulation rarely achieves positive outcomes for the environment as farmers then tend to farm the regulations and it becomes difficult for the game keeper to keep ahead of the poachers.
  • Regulators tend to focus on limiting inputs and controlling systems (including stocking rate) when their objective is to reduce nutrient losses.
  • Prescriptive regulation of farming systems effectively stops useful on farm innovation, and reduces the incentive for scientific research into mitigation or even efficiency strategies.
  • Public opinion towards food production is no longer coloured by the potential for shortage as was the case 50 years ago. With there being no prospect of supermarket shelves going bare, the public are less susceptible to threats that local food producers are unviable.

The majority of farmers see themselves as good custodians of the environment but have no way of proving it. They have little defense when regulators suggest that they are having a deleterious effect and tend to stoically accept the inevitable.

Sustainability of Agricultural Systems regarding Nutrient Losses – Vaughan Templeton

Meat Supply Chains and Climate Change: how Meat supply chains may be affected by climate change.

Executive Summary

I found that Global Influences are resetting the rules. The economies of large newly developing countries (e.g. Brazil) are becoming very important influences on world agriculture. Global warming and biofuel are causing huge spin off effects in commodity prices

These factors influenced the final shape of my topic which became:

Meat supply chains and how they may be affected by climate change’

I Focussed on:

     The Farmer end of the supply chain and also the Consumer particularly looking at the concept of ‘green-branding’.

     The UK covering issues such as food-miles and carbon foot-printing. ♦ Wider Europe to give a perspective in markets beyond the UK.

I investigated Key Influencers in the UK including: farmers; retailers; government and regulatory authorities; lobby groups and experts; media; consumers.

I was particularly interested in the attitude and approach of UK farmers towards climate change. UK farmers are becoming more aware of the potential impact of climate change on their farm businesses. How they perceive climate change is influenced by where in the country they farm and which sector they are in. Some areas of England are concerned about the increased threat of drought and flood. With relatively intensive livestock systems awareness is increasing of potential requirements to reduce energy inputs and calculate carbon emissions. Farmers are investigating systems to produce energy from waste and byproducts. Arable farmers, in particular, see opportunities from climate change through growing crops for fuel not just for food. UK farmers have seen the emergence of the food miles concept as an opportunity to reinforce campaigns encouraging the consumption of British food.

At the other end of the chain I looked at retailers and consumer behaviour particularly related to green branding issues. I also looked at the influence that retailers, media, NGOs, food policy experts and government policy are having on consumer reaction to the issue of greenhouse gas emissions throughout the food chain.

Consumer Issues I investigated in the UK included: food miles; carbon footprints; local food; and livestock in the food chain as well as consumer concerns about food ethics. I identified that the British consumer links the ‘food miles’ concept with: climate change; sustainability; gourmet and local food and food patriotism. I concluded that, in the UK, New Zealand needs to promote the broader issues of sustainability and carbon footprints. It is important for New Zealand to communicate a positive message of its green credibility.

In other countries I found that:

  • ‘Food-miles’ is mainly a UK concept
  • ‘Natural’ and ‘safe’ are important concepts in many countries
  • The approach to climate change varies hugely between countries
  • Energy is a much more common focus than food
  • There is considerable variation between cultures and countries in there approach to climate change as there are similarities – it is very easy to focus on the English-speaking countries.

My recommendations include:

Continuing to cultivate and enhance our ‘natural’ image in overseas markets. In the UK in particular this should include providing good quality information on carbon emissions from New Zealand agricultural products.

Increased emphasis on research and development in the area of climate change including a high degree of collaboration both on and off shore. This should include livestock GHG emissions and analysis of emissions throughout food chains that originate in New Zealand.

For carbon equivalent footprints we need industry examples and methodology particularly in the agricultural sector. Where are the easy things to change even if the gains are smaller? Are the differences between farm types and regions significant?

Small grants, pilot projects to get things happening in New Zealand that are everyday overseas in the energy and agriculture sector e.g. more use of by-products and waste.

Each part of the chain needs to understand its contribution and make changes. It may be easier to make larger gains in some areas than others – e.g. refrigeration techniques, but all parts of the chain including on farm need to look to what they can do in the short-term as well as the longer term where new technology and research may make a substantial contribution to solutions.

Meat Supply Chains and Climate Change – Jane Mitchell

Adding value to New Zealand milk.

Executive Summary

For as long as I can remember, the catch cry of New Zealand agricultural producers has been to “add value”.  Governments and business circles have pointed the stick at the agricultural sector demanding we step up and add value to our commodity products by further processing and marketing before we on-sell that produce.

Dairy companies and Dairy Boards have invested in brands and marketing campaigns to establish a dominant market share in consumer products.  The superior value from the consumer markets would add to the returns and enhance the value New Zealand dairy farmers would receive for their milk.  Of even greater importance was the added value from consumer markets, which would come into their own in times of low commodity prices.  The higher returns from the consumer markets would bolster the ailing commodity prices and provide stability against the rollercoaster nature of commodity returns.

The cost of developing and competing for, a dominant market share in the consumer sector, proved to be very high, with an extremely long payback period.  The swings in global commodity pricing and the influence of a floating New Zealand dollar when adverse to New Zealand milk returns have not been able to be offset by the returns from the consumer markets.

The struggling returns from the consumer markets presented a dilemma in times of good commodity prices.  Too many times, product and commitment were withdrawn from the consumer markets, to chase the spiking commodity prices.  Add to this the recent massive increase in the production of raw milk in New Zealand and the role of adding value to New Zealand milk through consumer products becomes even more daunting.

Adding Value to New Zealand Milk – Les Keeper