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Rabobank: Global food system on unsustainable track
The current global food system is on an unsustainable track, which poses a threat to long-term global food security. This is the overall conclusion of the Rabobank study entitled 'Sustainability and security of the global supply chain'. 'This Rabobank study highlights the key challenges involved in striving for food security and sustainability of the global food supply system and encourages the business world to become involved in the discussion,' said Piet Moerland, Chairman of the Executive Board of Rabobank Nederland, at the Duisenberg Lecture that was presented during the 2010 IMF Annual Meeting in Washington, D.C.
The global food system needs to be transformed in order to secure the long-term food supply. The pathway is variable and could be radical. Co-ordinated action at many levels by multiple partners is needed in order to establish the conditions required to move the global growth of the food supply onto a more sustainable track. This will require major changes in terms of farming systems, sourcing, regulations, markets, consumer preferences, pricing and measurement of profit and loss. Large investments are required to improve current agriculture with respect to both downstream and upstream activities in order to secure the sustainability of the global food supply. Driven by these fundamental changes, new markets and business opportunities will emerge. Piet Moerland: 'The objective of growing our business and profitability is to ensure the sustainable development of wealth for all. After all, a co-operative bank such as Rabobank is by nature focused on people, while planet and profit are essential to a sustainable future.'
There is sufficient global potential to produce the food required to feed the world population that will total more than nine billion in 2050. A continually growing international agricultural commodity trade will be a consequence of the increasing imbalance between food demand and supply between countries. The local food supply chains of individual countries should be integrated into a sustainable global food supply system and the global food trade needs price signals and rules in order to maintain stable global agricultural markets based on the future trends and outlook.
An implication of the international food trade is that social and environmental concerns and issues, such as local living conditions and scarce natural resources, regarding food production in the country of supply have also become part of the international food trade system. Sustainable food supply chains are consequently vital for the mid-term survival of the producers and companies in question.
This means balancing global food surpluses and shortages among the different regions and countries, and meeting the needs of dietary change do not constitute the foremost challenge for future food security. The main challenge instead involves working incrementally towards enhancing the sustainability of the global food system. Achieving sustainability within the long supply chain that encompasses different countries and numerous participants and stakeholders is, however, not an easy task. Moreover, there are numerous uncertainties and constraints that must be tackled on time in order to produce the 70 percent more food that will be needed to feed the world in 2050.
All these developments will affect the current economic and business models and even the long-term strategies and market/competitive positions of companies in the global food supply chain. The valuation of social and environmental issues will, sooner or later, be factored gradually into costing and companies' balance sheets. The key message of this view is that new business opportunities will arise as part of the build-up to the internalisation of the new costs of resources.
Piet Moerland: 'To survive in tomorrow's world, companies are forced to develop a long-term vision and action plan. Businesses will continue to play a leading role in linking food demand and supply, while at the same time tackling sustainability issues throughout the global food supply chain, now and in the future.'
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For more information:
August Sjauw-Koen-Fa, tel. + 31 30 213 1406, email a.r.sjauw@rn.rabobank.nl
Please download this study by clicking on www.rabobank.com/kennisbank
Press office
Roelina Bolding, tel. + 31 30 216 4304, e-mail r.bolding@rn.rabobank.nl
www.rabobank.com/pressroom
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