July 28, 2015

28/07/2015: The Pelletier Column: Future rhymes with infrastructure

By Christophe Pelletier 

First published in Milling and Grain, May 2015

The potential to grow the quantity of food needed to meet the needs of the world growing population is there. It is not just a matter of production on farms, though. To succeed, the entire value chains will have to be well organised and efficient. Infrastructure rarely makes the headlines. Yet, it should because it plays an essential role. Infrastructure is really the lifeblood of future food security.

There cannot be long-term prosperity or successful economic development without an adequate infrastructure. Once food is produced, it must also be delivered to consumers and be eaten. For the future, the population boom that will take place in urban centers of Asia and Africa is going to require solid planning and vision. Many of the megacities that will emerge in the coming 40 to 50 years hardly exist, yet. Nonetheless, they are coming.

Organising the proper supply of food, water and all other essentials from production centers is crucial. The amount of money needed will be huge. For some regions, a Marshall Plan type of action will be necessary. In my previous article, I explained why I see a great opportunity for the feed and milling industry to lead in the future to achieve food security in the decades to come. It is particularly true for infrastructure.

The feed and milling industries could not exist if it could not get the raw materials delivered to the plant and their products to the customers. They need storage, vehicles, roads, railways and waterways. They are going to need them even more in the coming decades. As the map of population and of economic activity evolves, so does the location of consumption centres as well as of production areas.

The organisation of supply chains needs to adapt. Raw materials will originate from new and different locations and the industry will have to deliver customers in new places. Because of its central position in the value chains, the feed and milling industry can look both upstream and downstream to pinpoint where infrastructure needs will be.

Then, it has a duty to be vocal about it and to let all the stakeholders know about the infrastructure objectives to achieve. The “unfortunate” thing about infrastructure is that it is a long-term investment. Nonetheless, it is an essential one. If the goods cannot move to their destination smoothly, neither will the money in the economy.

When done well, the positive financial return lies in economic development, in more and better jobs. Eventually, more people will have more money to buy more goods and services, and also to pay taxes to ensure a good maintenance of the infrastructure. Good infrastructure helps prosperity and peace. Of course, an important question is who must finance infrastructure. Many stakeholders benefit from a good infrastructure and therefore it must be a collaborative effort.

Setting up the right infrastructure improves sustainability of food production and supply. Not only does it reduce food losses, but it allows transportation systems that use less energy and emits fewer greenhouse gases. In particular, railways and waterways that replace road truck transport work towards that goal. Better roads also make transport cleaner and more efficient than bad ones.

Using the right type of vehicles and maintaining them properly reduces the environmental impact. A good infrastructure prevents waste. The key is to be able to bring the food to the consumers.

Still, too much of the food production does not reach the market because of a deficient infrastructure. The FAO estimates the annual cost of fixing post-harvest problems in developing countries at $83 billion. Doing so provides many upsides for all stakeholders from farms, businesses and government.

The FAO estimates the annual missed value of post-harvest losses at US$ 1 billion. Clearly, the return of fixing postharvest losses is huge. There is more than enough money to fix the problem. Compared with the amounts spent since 2008 to bail out banks, to print money massively as it has been done and to rescue some financially troubled European countries, it is a drop in the ocean!

Yet, fixing post-harvest losses is a painfully slow process. Solid collaborative leadership that crystallises the energies is necessary to make it happen. All stakeholders must realise how important infrastructure is for them and for all of us. They must come on board and together solve infrastructure problems.

Practically, reducing food losses means that to supply the same quantity, food production does not have to put as much pressure on the environment as it does when there is waste. How long will we accept not only to waste food, but also all the water, the energy resources, the inputs, the time and the money that have been used to produce it in the first place? 

Christophe Pelletier is a food and agriculture strategist and futurist from Canada. He works internationally. He has published two books on feeding the world’s growing population. His blog is called “The Food Futurist”.

Read the magazine HERE.

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