Webinar Recap: Building Agriculture Resilience during Periods of Uncertainty

Fresh Lemon

India

Published Oct 31, 2022

Host: Ben Lategan, Global Market Analyst, Tridge
Panelists: Giovanni Causapruno, AgriFood Business Unit Manager, xFarm
Presenter: Bojan Mijatovic, Global Market Analyst, Tridge
Agenda:
-Risks in agriculture
-Strategies to Increase Resilience in Agriculture
-Panel Discussion

The global population is expected to increase from roughly 7.7B to nearly 10B by 2050, and demand for cereals to be used as food for both humans and animals may grow to roughly 3B mt by that point from about 2B mt of 2009. Agricultural systems must better address climate change, water, and land resources that are becoming scarce and increasingly volatile food prices as they seek to feed a growing global populace.

A lack of resilience amplifies the impact of shocks like food price spikes.

Risks in Agriculture

Examples on Tridge

Weather/Climate

US Weather Impacts - According to the National Centers for Environmental Information (NCEI), weather/climate disaster event losses exceeded USD 1B before Hurricane Ian. Orange production in Florida and cereals in Charleston and South Carolina were most affected by severe storms and heavy rainfalls of Hurricane Ian.
EU Weather Impacts- between 1980 and 2000, heat wave damage in 32 European countries amounted to USD 71 B. In 2022, extreme drought affected corn production in France, decreasing overall yield by 25% YoY to 11.6M MT. With less corn production, EU imports are expected to rise to meet the increasing demand.
China Weather Impacts - Climate change poses a significant threat to China’s agriculture, with rising sea levels and risks related to coastal flooding, storm surges, and coastal erosion. Losses from natural hazards averaged USD 76B over the past five years. Since China provides food for 22% of the world’s population, a new approach to agricultural policies is needed to reach sustainable goals.

High Input and Labour Costs

Although fertilizer and oil price indices are down, levels are still high compared to the beginning of 2021. N and P are the main ingredients of fertilizer used in agricultural production.
With increased global demand for food due to rising population numbers and changing diets, demand for P could increase by 50–100% by 2050, leading to an even greater impact of agriculture on the environment.

Agricultural Policies - Obstacle of a solution?

A European Green Deal aims to reach net zero greenhouse gas emissions within the EU and deliver a pollution-free environment by 2050. This could impact major agri-food exporters to the EU in the case of possible Carbon Border Adjustment Mechanisms or other restraining measures. Meanwhile, farmers in the EU are struggling with increased costs for packaging, a plastic ban, and a lack of pesticides for crop protection.
Greenhouse Gas Emissions - The top five countries emitting GHGs are China (28%), the United States (18%), India (7%), Russia (5%), and Japan (3%).

Strategies to Increase Resilience in Agriculture

Crop rotation, cover cropping, no-till agriculture, precision farming, biodiversity conservation, and agroforestry systems are methods to increase sustainability.
Tridge's role in helping farmers and traders is providing value chain insight on agricultural topics and various data regarding prices, trade movement, regulation, and market guides to improve their decision-making skills.

Sustainability Development

EU and Sustainable Development -agroecological approaches help farmers develop more sustainable and resilient farming practices that combine stable yield with enhanced biodiversity and ecosystem services
India, the US, and China and Resilient Agriculture Systems

Indian Ministry of Agriculture started implementing Climate-smart agriculture (CSA) to lower GHG and methane emissions, mainly due to paddy rice cultivation to maintain both food security and economic growth and to lower impact on the environment.
In California (US), climate-smart agriculture methods are also being implemented to sustainably manage water resources, which are becoming scarce yearly. Agriculture is a major user of freshwater, and the government in California is introducing lower taxes, incentives, subsidies, and new tools and technologies that are driving continuous improvement in the agriculture sector.
China is enhancing climate resilience and adapting rural landscapes and urban areas to lower the impact on the environment and GHG emissions. Policy framework involves using scientific methods, natural-based solutions, forestry sector reforms, and other government regulations within the public sector. Still, livestock, synthetic fertilizer use, and rice paddies remain China's largest sources of agricultural GHG emissions.

Panel Discussion

How can farmers/farms be connected to technology that allows for monitoring sustainability?

(Giovanni) Connecting farmers and farms to a food supply chain is a key topic for food sustainability and resilience. Sustainability – we need primary data to compute CO2 emissions precisely and understand sources and intervene. In the food sector, the vast majority of CO2 comes from agricultural production, so it is important to get data from farmers. Similarly, the data are necessary for food resilience. Imagine having yield analysis and estimation months in advance. We can know how much wheat, soy or corn, etc., will be harvested and understand if it is necessary to source from other parts of the world and balance the food supply chain to guarantee proper volumes. When crisis puts the AgriFood system under pressure, it’s like a boat during a storm, we need to follow the right direction, and to do so, we need a compass to identify the right direction. The direction can be determined by using data that will allow us to predict where we are going. We need to provide farmers with a solution simple, scalable, and useful for them. Some key items cannot be avoided: the app must be mobile first and therefore be fully usable from the smartphone, from farmers’ pockets. It must provide them a value-added, so they are willing to use it (economic benefit, better farm organization, or other). And it must be extremely simple to be used, not an old-style database, but rather an appealing app with wonderful graphics where we can make any action in just a few clicks.
(Ferhat) Technology is essential in our efforts to understand the environment, adapt to climate change, mitigate risks, and support the decision-making process. Tridge is a platform that collects and processes data to generate insights, supporting thousands of suppliers and buyers, including farmers, in making data-driven decisions and overcoming the uncertainty of agri-food business changes. Tridge’s recent network of suppliers through our employees around the world aggregates information that continuously improves the quality of the insights provided and supports the companies in the whole food system to be more productive, sustainable, and climate-resilient supply chains.

How can digital transformation be applied in the agricultural supply chain?

(Giovanni) This is the most challenging point and is where most projects fail. This is a digital transformation project, and like other projects of this type, it goes with the typical change management approach. There will be pioneers willing to use this application, but there will also be a lot of farmers who don’t want to change the way they work and will put obstacles against this project. How do we overcome these resistances? Provided that we give the technology simple and useful, as I was saying before, we need the most important part of training and a clear rollout program. Projects that work the most are usually organized in a multi-year rollout in the following way: In 1st year, we create a pilot project with a few farms, the pioneers. These will use the app and demonstrate that the program allows them to save money or increase their yield. This will be fundamental to guarantee the next steps. In the second year, we scale the project on larger volumes of ha and farms. Training is fundamental, we need to ensure all farmers understand how to use and benefit from the app. During the third year, the app is rolled out to the entire supply chain, and it must be accompanied by a rule in the production protocol where the use of this system is mandatory for farmers to participate in the supply chain. Here supply chains might think to provide a bonus to farmers for this activity, as an increased value of the commodity bought or any other compensation scheme. Farmers that started the first become ambassadors and guarantee that the tool benefits them.
(Ferhat) Lots of tech companies are working with both farmers and corporations to support transitional food systems with IoT and Artificial intelligence technologies, including embedding finance in their platforms which is a key support to adaptional technologies and sustainable practices. This accelerates more productive, sustainable, and climate-resilient food systems. On the other side, a secure digital documentation system for cross-border trading is a hot topic these days which would increase its rating security efficiency. It is expected that the new feature and supply chain data will be upgraded with sustainability measures. We strongly advise farmers to adopt this technology as soon as possible.

Case Studies/Examples

(Giovanni) European case with Italian company Barilla, the most important pasta producer in the world. We worked with them in the biscuits sector under the brand name Mollino Bianco, focused on sustainability. On all the packaging, there is a sustainable agriculture indication. Farmers that want to produce soft wheat for the biscuits for Barilla have to follow the rules. We have been working with them to go fully digital and to provide farmers with all the technology to reduce their carbon footprint. This has been an ongoing project running for three years to cover 2600 farmers in all of Europe. In 1st year we started with ten farms and provided them with software and IoT technology, weather stations, and soil sensors. These ten farmers become our champions, and 2nd year we moved from ten to 250 farmers and provided 200 hours of training to use technology in the best possible way. This becomes a mandatory rule to provide soft wheat for Barilla. Last year we have been involved with 2600 farmers. The main thing is the education of farmers, training, and support 24/7 to use these technologies and their advantages. Barilla engaged with farmers and streamlined the project in two ways. The project was fully funded by Barilla (IoT, tools, etc.), this was much less than purchasing carbon credits. And the second part is that wheat is produced sustainably and has a premium price concerning the market price of wheat, a 6% higher price.
(Ferhat) Just like Giovanni's project, there are some companies in Turkey as well These smart agriculture companies provide digital solutions in ways of weather value, weather anomalies, advice for fertigation and fertilizer amount, early warning for diseases and pests, and choosing the right crop according to their soil and climate conditions. There has been a project in the city of Iden in Turkiye, pilot regions 2020. The company has laid probes and sensors and, after a year showed a 20% reduction in irrigation plant and animal production costs reduced in this pilot region. It is a proven technology and a new feature in agriculture.

To view the slides, click here.