Day 2 opened up with Edwin Van Raalte who is business manager for the Executive Board of the Rabobank Group. His bio stated that he is responsible for ‘developing the international food & Agri strategy (Banking4Food) at Rabobank’ and his presentation was a captivating journey through the opportunities and challenges global agriculture has going forward.
Some of the highlights from my notes were:
The Challenge is avoiding the next GFC (Global Food Crisis)
There are 4 parts to fixing food security:
- Increased food availability
- Improve access to food
- Stimulate balanced nutrition
- Enhance stability
1/3 deaths worldwide are related to diet. Either too much food or not enough.
Africa used to be an exporter of food. It’s now an importer because Europeans are paying more money for maize and oilseeds for ethanol than food. So that’s what Africans are growing, which has reduced food production.
World losing 1% of its arable land annually due to desertification and urban sprawl.
World agricultural land per capita is declining.
You need to engage with consumers because they are your market. If they support you that will enable your business growth.
Succession – Scale is important but big is not always beautiful. Over a certain size overheads eat away at returns.
Family farms are the most successful farms around the world.
Sustainability – Food wastage not a good thing for agriculture because it maintains consumption. People throw away what they don’t value.
The rest of the days sessions served as an introduction to agriculture and agricultural policy here in the European Union.
Learning about the Common Agricultural Policy (CAP) was like looking through a window into a strange parallel world for this Aussie producer. The CAP, as it’s commonly referred to, is the legislation that deals with agricultural subsidy programs and payments to farmers here in the European Union. Learning that farmers received direct payments from the government EVERY YEAR good bad or otherwise was one thing. Learning that as of last year that payments were being de-coupled from production and based around environmental outcomes was another. EU farmers over a certain size are now getting paid to do NOTHING with 5% of their farmland. They must set that 5% aside for ecological outcomes. Surely incentivising not working is a bad thing for people and an economy.
Finland and Bulgaria are the only European Countries in which the public has a negative view of farm subsidies. Majority also support direct payment to farmers.
CAP is now used for completely different reasons to when it was begun. Form of social control of agriculture.
Our day finished up with an introduction to some of the facts and figures around French agriculture. My overall impression of the figures presented was that France has some wonderful farmland and produces very high yields and great quality produce. Food is a part of French culture in a way that is hard to describe. The French people support their small farmers and few want to see them grow. Emphasis here is on the artisan and quality small scale production. This attitude seems to work against those looking to expand. As the following shows, farm sizes here are quite small by Australian standards.
French agriculture has an overall positive balance of trade. Contrasts with most of the rest of the economy. France has a balance of trade problem.
Trends in agriculture in France are similar to those in the rest of the world
- Decreasing employment in the industry.
- Farm rationalisation (fewer farmers)
Breakdown of French farm sizes by annual production (Euros)
- 36% >$25k – Small
- 31% 25-100k – Medium
- 33% – > 100k – Large
France loves farmers. They support the subsidy programs and want small farms. They’re distrustful of large corporate producers. French consumers value quality over commodity.