Can cooperatives innovate?

Three news items stood out this week: KPMG’s global leader for agribusiness and food predicts New Zealand’s ag-exports could grow to $100 billion in 20 years, if we move away from commodities into riskier value-added products; as if to underscore the inability of farmers to control volatile commodity markets, global dairy prices dropped another 8%; and a research project was launched to study the contribution cooperatives make to our economy.

Like many New Zealand ag-exporters, Fonterra is owned by farmers through a cooperative ownership model. And like many of these exporters, it is constantly accused of failing to innovate and move along the value chain, away from its reliance on bulk commodities into more brands and consumer products. It’s easy to level this accusation when farm-gate prices have crashed in line with the global commodity price, but farmers must get sick of being price-takers afloat on such a volatile sea.

The study into cooperatives, particularly their ability to innovate and add value to the raw product, could be telling. To reach the $100 billion target, KPMG estimates we need to increase the compound annual growth rate of ag-exports from 4.5% to 5.4%; Sounds easier than it is. Can we make this leap under the dominance of the cooperative model?

To understand how co-operatives contribute to the economy, a team from The University of Auckland Business School and Erasmus University’s Rotterdam School of Management is undertaking a series of case studies and a major survey of co-operative businesses.

Researchers Dr Frank Siedlok and Dr Lisa Callagher say it is time to find out how the 149 Kiwi companies registered as co-operatives tick, what they are doing to improve their competitiveness here and abroad – and what lessons can be learnt to help all co-ops to do better.

“Several high profile co-operatives, such as Zespri and Foodstuffs, show that through strategies focused on added-value products or services, innovation and knowledge-sharing, they can successfully compete against large private sector organisations and multinationals. Yet, there are many misconceptions about just how innovative and entrepreneurial they are. We want to better understand the mechanisms that can make co-ops more competitive” says Dr Siedlok. 

'Government should regulate GMOs, not local councils'

With some New Zealand councils trying to regulate genetically modified organisms, Federated Farmers is backing a move by the Minister for the Environment, the Hon Amy Adams, to clarify who has regulatory responsibility for the management of GMOs.

“Federated Farmers would welcome amendment to the Resource Management Act to “clarify the respective functions and roles of the Environmental Protection Authority (EPA) and local government,” as the Minister put it,” says Katie Milne, Federated Farmers Local Government spokesperson.

“We are not overly impressed with some councils wasting ratepayer resources on trying to ape the EPA. As Minister Adams put it, councils should not “set up their own independent states where they write their own rules and ignore the national framework”.

“Especially when those rules are based on what seems to be ‘pub-talk’.

“Regarding the Northland inter-council working party’s draft section 32 analysis recommending ‘local regulation’ to restrict GMO’s, the critical section on risk and benefits only references one website known for its anti GMO stance, one anti-GMO book and one of the key proponents for local regulation.  None of these references are peer reviewed and there is no mention of reports from agencies, such as the European Commission.

“A section 32 analysis should be based on sound science but this analysis is neither unbiased nor rigorous. The intercouncil working party appears to ignore its own legal advice, which is qualified by the need for a robust section 32 analysis which could withstand challenge in the courts.

“It puts these councils on a collision course with the EPA, which does possess the brainpower and resources to test more than an internet search engine.

“Bizarrely, the Northland inter-council working party’s analysis makes no mention of the GMO based “equine influenza vaccine”, which is currently approved for conditional release in New Zealand.

“Nor, I must add, what the cost to Northland’s bloodstock and racing industries would be if councils tried to block its use.

“That’s why the legality of councils regulating GMOs is highly questionable.

“Federated Farmers view, shared by Minister Adams, is that the only appropriate way to make these decisions is through careful scrutiny of the science. We entrust the EPA with the scientific and funding resources to make these types of scientific assessments.

“Councils need to stick to their knitting and regulating GMO’s is not it,” Katie Milne concluded.

- Supplied release from Federated Farmers

South African seed market shake up

DuPont Pioneer has scaled up its efforts to bring technological innovation to agriculture in Africa by acquiring a majority stake in Pannar Seed, a South Africa-based seed company with operations throughout Africa and in other parts of the world.

The companies hope the partnership will increase the pace and scope of research and innovation in the African seed industry, giving farmers on the continent more product and better products.

DuPont Pioneer President Paul Schickler said the partnership represents growth opportunities for both businesses and for the productivity of small-scale and commercial farmers.

As a result of the deal, Pannar receives access to the Pioneer genetics library and its maize breeding and biotechnology capabilities. Pioneer will tap into Pannar’s expertise and reach across Africa, and its maize genetics developed specifically for the region.

“This is good news for Pannar customers, for our employees and for Africa,” said Brian Corbishley, chairperson of Pannar. “This partnership will ensure long-term growth as we deliver improved products to farmers in South Africa and across the continent.”


Technology Hub to be Established for Africa Under a Unified Research Strategy

One of the key outcomes of the partnership will be the establishment of a world-class technology hub for Africa through which South Africa will become a center of innovation in seed breeding, said Schickler.

Pioneer committed to investing R62 million (South African Rand) by 2017 to establish a technology hub in South Africa to serve the region, similar to the research hubs that Pioneer has established in Brazil, India and China. The Africa technology hub will comprise a network of research facilities and testing locations in South Africa and around the continent in which Delmas, South Africa, will serve as a technology center of the network. The network will be infused with leading R&D technologies which shorten breeding cycles and improve accuracy toward breeding targets, such as doubled haploids, ear photometry and the proprietary Pioneer Accelerated Yield Technology or AYT™ System, as well as genetic breeding technologies like marker-assisted selection.

“A critical benefit of this partnership will be the newly energized product pipelines for Pioneer and Pannar that will flow from combining the companies' complementary germplasm pools and leveraging the expanded research infrastructure and network under a unified research strategy,” said Schickler.

The technology hub will incorporate key Pioneer and Pannar research and testing locations, combined germplasm – or plant genetic resource collections – talent and experience to improve cultivar breeding and development for Africa. Data sharing and analysis will be elevated to a new level as the Africa technology hub is connected to the Pioneer global R&D network. Research efforts will support all crops for which Pioneer and Pannar currently maintain breeding programs, including maize, sunflower, grain sorghum, forage sorghum, wheat, dry beans and soybeans.

“Pannar has long been known as leader in plant breeding in Africa, boasting a rigorous multi-location research trial program,” said Corbishley. “Applying the advanced breeding technologies and data-sharing infrastructure of Pioneer to our breeding programs will greatly strengthen the capacity of both brands to continue to meet farmers’ demands for high yielding varieties that offer improved disease resistance, drought tolerance and the ability to withstand varying degrees of insect pressure.”

Pesticide phase out too slow for Indian kids

The tragic incident in Bihar, India, where 23 school children died after eating a school meal contaminated with monocrotophos, is an important reminder to speed up the withdrawal of highly hazardous pesticides from markets in developing countries, says the UN Food and Agriculture Organization (FAO).

Monocrotophos is an organophosphorus pesticide that is considered highly hazardous by FAO and the World Health Organization. Experience in many developing countries shows that the distribution and use of such highly toxic products very often poses a serious risk to human health and the environment.

The incident in Bihar underscores that secure storage of pesticide products and safe disposal of empty pesticide containers are risk reduction measures which are just as crucial as more prominent field-oriented steps like wearing proper protective masks and clothing.

The entire distribution and disposal cycle for highly hazardous pesticides carries significant risks. Safeguards are difficult to ensure in many countries.

Among international organizations, including FAO, the World Health Organization and the World Bank, there is consensus that highly hazardous products should not be available to small scale farmers who lack knowledge and the proper sprayers, protective gear and storage facilities to manage such products appropriately.

FAO therefore recommends that governments in developing countries should speed up the withdrawal of highly hazardous pesticides from their markets.

Non-chemical and less toxic alternatives are available, and in many cases Integrated Pest Management can provide adequate pest management that is more sustainable and reduces the use of pesticides.

The International Code of Conduct on Pesticide Management, adopted by FAO member countries, establishes voluntary standards of conduct for all public and private entities involved in pesticide management. This Code has been broadly accepted as the main reference for responsible pesticide management.

The Code states that prohibiting the importation, distribution, sale and purchase of highly hazardous pesticides may be considered if, based on risk assessment, risk mitigation measures or good marketing practices, are insufficient to ensure that the product can be handled without unacceptable risk to humans and the environment.

For monocrotophos, many governments have concluded that prohibition is the only effective option to prevent harm to people and the environment. This pesticide is prohibited in Australia, China, the European Union and the United States, and in many countries in Africa, Asia and Latin America.

-Source: FAO

Farm awards about sustainable production

Ballance Agri-Nutrients Chairman David Graham says that alongside increasing demand for global food production is a growing expectation for food to be produced sustainably.

“All around the world producers are responding to the growing demand for food to feed an expanding world population. At the same time, there is more emphasis being placed on producing this food sustainably – and we are seeing that sentiment flow through to regulations on how we farm here in New Zealand,” he said.

Mr Graham, who recently attended the Ballance Farm Environment Awards national showcase ceremony, believes sustainability is about ‘doing the right thing’, but doing what’s right has to contribute to farming profitability – if farmers cannot make a living there will be no farmers, no food, no future.

“The need for sustainability is understood by farmers all around the country. The challenge is determining how to go about achieving the balance between improving our efforts to look after the environment and maintaining, or better still improving, our economic success.”

The Ballance Farm Environment Awards have existed since the mid-1990s and are much more than an annual celebration of farming excellence. They have created opportunities for farmers to benchmark themselves and their environmental practices against their peers – and learn something along the way.

“Ballance has been a long-time supporter of these awards, and we are working hard to help New Zealand food producers to farm more productively and sustainably.

"We have taken note of the growing interest in sustainable farming practices and the demand for good advice and good science to support decisions on-farm.”

“As a co-operative, owned by farmers and here for farmers, it is only natural we would increase our ability to respond to this demand. We have expanded beyond fertiliser to offer complete farm nutrient management advice, technology, services and products backed by sound science.”

As part of this work the co-op is looking to the future, with its research and development programme finding new ways to support sustainable, productive farming.

“We’re building a comprehensive toolkit including the products, services, technology and advice that will enable the pastoral sector to lift profitable production with reduced environmental impacts.

“This includes new forms of nitrogen and phosphate fertilisers to reduce nutrient losses, along with new systems and models to help farmers use fertiliser only on areas of their farm which will benefit most from nutrient application.”

As Ballance looks to better support farmers’ needs they can expect to see some of the results of the research roll out of the lab and onto the farm once the co-operative has worked through user trials and validation.

Cereal production heads for historic high

World total cereal production is forecast to increase by about 7 percent in 2013 compared to last year, helping to replenish global inventories and raise expectations for more stable markets in 2013/14, according to the latest issue of FAO's quarterly Crop Prospects and Food Situation report.

The increase would bring world cereal production to 2 479 million tonnes, a new record level.

FAO now puts world wheat output in 2013 at 704 million tonnes, an increase of 6.8 percent, which more than recoups the previous year's reduction and represents the highest level in history.

World production of coarse grains in 2013 is now forecast by FAO at about 1 275 million tonnes, up sharply (9.7 percent) from 2012.

World rice production in 2013 is forecast to expand by 1.9 percent to 500 million tonnes (milled equivalent) although prospects are still very provisional.

Cereal imports of Low-Income Food-Deficit Countries for 2013/14 are estimated to rise by some 5 percent, compared to 2012/13, to meet growing demand. Egypt, Indonesia and Nigeria, in particular, are forecast to import larger volumes.

International prices of wheat declined slightly in June with the onset of the 2013 harvests in the Northern Hemisphere. By contrast, maize prices increased, supported by continued tight supplies. Export prices of rice were generally stable.

Next generation needed for food security effort

WASHINGTON, May 21, 2013 – DuPont Pioneer President Paul Schickler (pictured below) urged leaders from across government, business and non-profit organizations to invest in today’s youth to solve the greatest challenge of tomorrow’s generation – feeding 9 billion people.

Schickler spoke at the Chicago Council on Global Affairs Symposium and shared stories of outstanding students who have made a commitment to feeding a growing world population.

“My parents’ generation put a man on the moon; my generation put a computer in every pocket.  Feeding the world will be the great challenge of generations to come,” Schickler said.  “It is a challenge that will need to engage the best minds in information technology to food processing, international trade to water and land resources, political reform to culinary sciences.  Together, I know we can feed the world.”

This year’s symposium, for the first time, included university students nominated by leaders in food and agriculture to represent the future scientists, engineers, policy makers, and more who are critical to increasing food production worldwide.  Schickler shared several students’ stories of how they will combat world hunger in their lifetime at the conference.

“We must ask ourselves what we are doing to support today’s leaders, scientists and farmers who are feeding the world, and that next generation who will take our place,” Schickler said.  “The collaborations and innovations that will increase global food security will be fueled most of all by the enthusiasm of generations to come.”
-Release by Du Pont