World is Green

How the World Works - Salon.com

According to the FAO, “Average world rice consumption per person is set to increase by 0.5 percent to 57.3 kilo per year, up from 57 kilo in 2007.”

Whether that means going from one meal a day to two or three, or a Western-style epidemic of ballooning portion-sizes, the FAO doesn’t say. But it should give some pause to those who would blame the spread of biofuels for everything that is suddenly awry in grain markets. While it is true that competition from other crops (corn, soy) is depressing rice production in the United States, almost everywhere else in the world, rice harvests are booming — including Africa, where the FAO reports that “large expansions” are “anticipated in Ivory Coast, Egypt, Ghana, Guinea, Mali and Nigeria.”

Sreenivas Ghatty points me to a interview with Thomas M. Connelly, Executive Vice President & Chief Innovation Officer of DuPont. The main important part of the interview is the discussion on the food vs fuel debate in bio fuels.

But how is it that DuPont, which thinks much ahead of others, was caught on the wrong foot on this issue of using food crops?

It is not a question we did not recognise. We thought the timescale on which we will move there would be different. Keep in mind, for example, that certain other agricultural commodities were trading at low prices for decades. And frankly, many farmers were looking for additional markets for their products.

So while we recognised that in time the supply trends would become a limiting factor, that the grand plan would accelerate in a matter of five years we never anticipated. We thought it would be at least ten years. The pace at which this has been progressing has been surprising to us.

I think it is because of the global emphasis on climate change, run up in the prices of petroleum. All these are pushing us to non-food crop sources of carbon material for the production of fuel.

I should say we anticipated the direction but not the speed at which we would reach there.

This is the interesting part. How fast the food prices have gone up and the increasing ban on exports from various countries. In some cases, countries like India are ready to sacrifice growth to curb food inflation.

Sustainability is a good thing. Everybody agrees on it. However, what is the process of achieving this?

Previously we reported that 9 Indian states are looking at organic farming to tap into the $37 billion
global market. That is good. The Mint reports that Kerala is planning to get into the field by converting all its cultivable land into organic farms in 5 years.

“The policy will be ambitiously aimed at freeing Kerala of all chemical fertilizers and pesticides in five years. This is with a long-term vision of ensuring that future generations here do not consume food contaminated by toxic pesticides and fertilizers. The strategy is clear: Convert 20% of the cultivable land to organic farming using biofertilizers and biopesticides every year so that total conversion can be achieved in five years,” adds Vijayan. Currently, there are around 7,000 certified organic farmers covering a minuscule area of 5,750ha, when the net sown area in the state is 2.13 million hectares.

To begin with, 100 villages across the state will soon be organized as organic farm villages. Mullakkara Ratnakaran, state agriculture minister, says the government will set up an Organic Agriculture Authority of Kerala, which will be the nodal agency to interact with grass roots level groups, and also national and international agencies.

The authority will have a governing council headed by a chairman, to be elected from representatives at the pan chayat and village levels, where organic farmer interest groups will be formed. The council will also have officials, scientists, farmers’ representatives and non-governmental organizations (NGOs) promoting organic farming, he adds.
[...]
Vijayan admits that a major stumbling block will be funds and the lack of a market for this produce.

For the first three years, conversion to organic farming means a drop in yields, putting farmers to hardship. It is for this that the authority will have funds both from the Union and state governments to support the farmers. Financial support from international agencies can also be looked at, Vijayan says. As part of the marketing thrust, the authority will look at independent retail outlets and also tie up with others to market these products, which will include rice, vegetables and fruits.

It has been clearly demonstrated around the world that centrally managed economies do not work.

Even though organic farming may be a good thing; the process of converting all lands compulsorily without figuring out the market for the produce and creating more hardship for already poor farmers is totally unacceptable.

This is the exact kind of economic nonsense that has troubled India all these years. If this is the same thinking used for “sustainability issues” then it will not make any difference and can actually harm the people and the environment. Economic sense matters.

Organic farming seems to be the new growth area for Indian farmers.

So what exactly is a Cash crop?

In agriculture, a cash crop is a crop which is grown for money. The term is used to differentiate from subsistence crops, which are those fed to the producer’s own livestock or grown as food for the producer’s family. In earlier times cash crops were usually only a small (but vital) part of a farm’s total yield, while today, especially in the developed countries, almost all crops are mainly grown for cash. In non-developed nations, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.

The Mint reports that 9 India states have applied to the “Agricultural and Processed Food Products Export Development Authority (Apeda), a government-run export promotion body, asking for accreditation to do the same.”

In the seven years since the National Programme for Organic Production was notified by the government, only 11 accreditations have been issued by Apeda, of which only one is to a state government organization, the Uttaranchal State Organic Certification Agency. The rest are international private agencies.

“Now, nine states, Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu, have submitted proposals for approval (for accreditation),” says K.S. Money, chairman, Apeda.
[...]
According to a study by the US department of agriculture, consumers in the US and the European Union account for 95% of the world’s retail sales of organic foods, estimated at more than $25 billion (Rs1.03 trillion).

In 2005-06, India exported organic products worth $228 million.

Currently, India ranks 33 in the world in terms of total land under organic cultivation and 88 in terms of the ratio of agricultural land under organic crops to total farming area. With an eye on the market, a few states have begun to take organic farming seriously.

Interestingly, the state of Orissa, which has no policy for Organic farming has the largest organic farming production. Why?

“If you see, organic farming is working out in states which have a higher percentage of smaller farmers. It is difficult to push farmers, who own large tracts of land, to go organic. These farmers have been using pesticides for years and years,” says Arun Chandra, executive director, Chetna Organic Farmers Association, a group representing 7,500 organic farmers across five states.

The market is clearly there for the taking.

The Australian Financial Review (AFR) carried yesterday an article by Scott Gallacher about Food Miles. It is a very balanced look at an idea which is gaining high recognition by consumers around the world; but especially in the UK and Europe.

(Unfortunately, I cannot link to the AFR article as the paper has decided to restrict its online content, even to its paper subscribers. For a paper subscirber like me; I need to pay additional monthly fees to access a online software version which cannot be linked. Think about the decision. Which publication in the world creates a online non-linkable, non Googlable edition in the year 2007. Considering the monopoly of the business paper in Australia it may last for a while but slowly its ability to influence matters will come down especially with similar coverage by its sister publications and increased online coverage by The Australian and other News limited papers.)

Coming back to Scott’s article.

Food Miles is the idea of calculating the distance travelled by a particular food item (fruit, veggies, meat, dairy products, wine) from farm/production to table. The contention is that; the greater the distance the higher the transport emissions and hence, less sustainable.

This perception of carbon content of food is very important for companies engaged in the export of food
products.

The Guardian article in 2003 suggets this:

our food is transported further than ever before, often by air. That makes it a major contributor to greenhouse emissions and climate change. It also means a heavy dependence on a resource that is not only finite but also highly politically-charged: oil. So our food supply is more vulnerable than before. By blockading a few depots during the fuel strike in the autum of 2000, protesters were able to bring the system perilously close to collapse.

Similar ideas in The Independent in May 2007.

When I pick up a carton of organic Chilean blueberries, Argentinian blackberries, or Zambian sugarsnap peas, all air-freighted from their countries of origin, my carefully constructed rationale for buying organic is shot full of holes. Only the most stubborn climate-change deniers still challenge the notion that air-freight, with all its CO2 emissions, is contributing to global warming and helping to heat up the planet towards the point of no return. Air freight emits more greenhouse gases per food mile than any other mode of transport. This is what I am aiding and abetting when I pick up any air-freighted product - whether or not it carries an organic stamp.

However, what is the truth? or should I say the ’whole truth’. Clearly transportation is not the only aspect of food production and distribution. Water, fertilizers, energy, production efficiencies and much more go into any food production.

Scott suggets two studies which have a different opinion.

The first study is by Defra, the UK Department for Environment, Food and Rural Affairs, titled “The Validity of Food Miles as an Indicator of Sustainable Development” conducted in 2005.

The study suggets that “a single indicator based on total food kilometers is an inadequate indicator of sustainability“. It provides data on the economic, social and environmental impact of food transport including pollution, congestion and noise. The interesting thing it finds is that most of the impact of transport is for food within UK (cars to supermarkets, trucks to distribute around the country etc) compared to international transport. In the international area, if transported by sea or rail it is much better than Air.

Coming to the life cycle of food Defra’s study suggets that “a case study showed that it can be more sustainable (at least in energy efficiency terms) to import tomatoes from Spain than to produce them in heated greenhouses in the UK outside the summer months. Another case study showed that it can be more sustainable to import organic food into the UK than to grow non-organic food in the UK.” Again this can change from case to case depending on the type of international transport used.

A second study by the New Zealand based Lincoln University (PDF) in 2006 shows that the carbon footprint of lamb, dairy products and apples are far less than that of their european equivalents even after the long journey from New Zealand to Europe. A simple reason is that NZ products are produced more efficiently than European ones.

They have undertaken a detailed anaylsis of a various inputs and outputs in farm in NZ and compared this to the ones in Europe and then arrived at this conclusion.

This entire exercise is important because from a business point of view if customers start buying their products based on “food miles” then; a large number of exports from countries like NZ and Australia and other places could be effected.

Considering that between the 2003 Guardian aricle and the 2007 Independent article, the above two studies have been published the explanation of Food Miles has not changed.  This is dangerous territory. Like the push against nuclear power; this suggets that there could be a strong idealogical notion around food miles.

A simpler explanation to all this is to look at the price of a product. If a product is cheaper; in general;
it means that it would consume lesser resources. The price of a product would encapsulate the energy, transportation, inputs, labour costs and other resources used in creating and distributing the product.

A much better explanation of this comes from the economic concept of Comparitive Advantage; which was first suggested by David Ricardo.

Lauren Lansberg explains:

Someone who is the best at doing something is said to have an absolute advantage. Lance Armstrong has an absolute advantage at cycling. For all I know, Lance Armstrong may also be the fastest typist in the world, giving him an absolute advantage at typing, too. Since he’s better at typing than you, can’t he type more cheaply than you? That is, if someone has an absolute advantage in something, doesn’t he automatically have a comparative advantage in it?

The answer is no! If Lance takes time out from cycling to do all his own typing, he sacrifices the large income he earns from entertaining fans of the Tour de France. If, instead, his secretary does the typing, the secretary gives up an alternative secretarial job—or perhaps a much lower salary as a cyclist. That is, the secretary is the lower-cost typist. The secretary, not Lance Armstrong, has the comparative advantage at typing! The trick to understanding comparative advantage is in the phrase “lower cost.” What it costs someone to produce something is the opportunity cost—the value of what is given up. Someone may have an absolute advantage at producing every single thing, but he has a comparative advantage at many fewer things, and probably only one or two things. (In Lance’s case, both cycling and also as the entrepreneur behind the yellow LiveStrong wristband.)

[...]

The moral is this: To find people’s comparative advantages, do not compare their absolute advantages. Compare their opportunity costs.

The point is simple. If NZ has a comparitive advantage in producing lamb meat; then it provides UK the opportunity to spealize and create another product at a lower cost. The result from a carbon point of view is that it will decrease the carbon footprint of both the products.

This case underscores the point that it is important to question the agreed upon wisdom of the experts and be open minded in our thinking.

What if the employees of an organization start making sustainability personal? What if the organization can help employees in making this happen? What could be it mean for the employees and the employer? These are some of the questions that I am grappling with daily in my job.

One main issue we were struggling with was to create a compelling sustainability theme which should resonate with all our employees and make them change their behaviours at work. What we hit upon was providing them with a “sustainability lifestyle at work” or “sustainable work practices” program. The best part of this program - it will provide the employee with ideas and solutions to become environmentally friendly at their home and save some money!

Our’s is a state government organization with 7000+ employees spread over 300 offices and other buildings all over the state. Add to this the diversity of the workforce and the reluctance to change and we have a big job at hand.

Sarah Rich at World Changing writes about the “personal sustainability project”. Here, she connects sustainable workplace practices with the example of the personal sustainability project of Walmart. This is exactly what we are planning to do at the Department of Families and Communities in South Australia.

Sarah provides evidence about how “energy -efficient” work practices have increased the productivity of employees at various organizations. According to the Cool Companies report for United States Post Office branch in Reno, Nevada, when the management renovated the lighting system for greater energy-efficiency it has resulted in multiple benefits.

Energy savings projected for the whole building come to about $22,400 a year. The new ceiling also saved $30,000 a year in maintenance costs. Combined energy and maintenance savings came to $50,000 a year, a six-year payback. But the productivity gains were worth $400,000 to $500,000 annually - paying for the renovation in less than 12 months.

The inspiring example to me is however, Wal-Mart.

According to the NyTimes:

In the last year, Wal-Mart has quietly introduced an ambitious program in the United States — in equal parts self-help class, corporate retreat and tent revival — that tries to turn its 1.3 million workers into a model for its 200 million customers on issues ranging from personal health to the environment.

In extensive workshops held nationwide, the company is teaching its employees the benefits of carpooling to work with three colleagues (for a savings of $400 a year on gas), quitting cigarette smoking ($1,500 a year) and turning off a television ($40 a year in electricity, plus more time to spend with family).

The program, called the personal sustainability project, is voluntary, but it is proving popular, with roughly 50 percent of employees in a dozen states signing up so far. The company may eventually extend the program to its workers around the world.

For Wal-Mart, the payoff could be significant: if it succeeds, the initiative could improve employee morale, and therefore productivity; reduce health care spending on a work force with higher rates of heart disease and diabetes than the general public; and improve Wal-Mart’s reputation with the image-conscious consumers it is courting with costlier merchandise.

The main difference in our program is to change the behaviour of people at home and work both. One should follow the other. By doing it right at home and saving money they can bring the same behaviour to work (hopefully!). As the numbers and ideas in the Walmart example show, the experience can create a huge diffrence to the employees. In the end, this should translate into better performance for the organization.

Health programs were not in my agenda but I guess it is an idea which I can incorporate. The sell to the management has been hard but we have won them over. Now, we are building the resources (website, presentations, brochures, ideas, frameworks) needed to make this happen.

We will not have the massive budget of Wal-Mart however, one way of achieving the goal is to partner with voluntary networks inside the organization working on similar stuff.

I am exploring ideas on “social psychology” and “social marketing” to sell this concept to the employees and the office managers at various offices across the state.

Reading this article has provided me with further evidence that we may be on the right track.

In marketing especially, high-tech marketing it is important to understand the ‘learning curve’ needed by customers to buy or use a product or service. The steeper the learning curve the tougher the sell.

In sustainability it is the same. Lets take the example of the food sector. If customers need to understand the vast amount of information and knowledge required to understand the life-cycle of the food they eat and then compare the various food products on their own it will be a nightmare.

Expecting customers to do the research for ethical and environmental reasons is right in moral terms however, in the harsh reality of the practical world, it is not possible for customers to do this.

In the world of marketing for example Brands provide a easy to understand message. In a similar sense, the CD and MP3 player markets have followed the button design of the cassette player. Why? To make it easy for the customer.

One such product or idea in the Eco world is labelling. A standard label provides information to a customer in terms which is easy to understand and consistent on all products.

David Miliband, the environment secretary in the UK, is suggesting a eco-label scheme for the UK food products and clearly he understands the challenges.

This kind of “carbon labelling” would help both consumers who often felt “confused and powerless” and producers who felt their environmental efforts were going unrecognised and unrewarded, he said.

Tesco, which said in January that it planned to introduce new labels on the 70,000 products it sells to allow shoppers to compare carbon impacts.

It is currently investigating how to develop a “universally accepted and commonly understood” measuring system and has not said when labelled products will be in its stores.

“This is not an easy piece of work and will take time, particularly if this includes the whole life-cycle impact of food from production to distribution,” he said.

“In the shorter term, we want to develop environmental standards specifically for food production. This could cover a range of factors including energy inputs, fertiliser use, soil management, waste management and water pollution.”

The idea to provide a ‘eco label’ similar in design to a nutritional one is a good idea as it means a lesser learning curve for the customer.

The goal should be to create a label which is consistent, adheres to the highest standards and encompasses the entire life cycle and not just the ‘carbon’ cycle of a product.

Additional Resources:

• TreeHugger suggests Eco-labels.org as a fact-checker for all “green label” claims.
• A good introduction to Eco Labels (PDF) from Landcare Research NZ.

The AFP reports that 20% of livestock are in danger of extinction.

Some 20 percent of the world’s livestock species — cattle, pigs and poultry — are threatened with extinction, with one breed disappearing each month, the Food and Agriculture Organization warned.

Over the past five years alone, some 60 breeds of cattle, goats, pigs, horses and poultry have become extinct, the Rome-based UN agency said in a draft document, blaming globalization as the “biggest single factor” in the erosion of livestock biodiversity.

“Maintaining animal genetic diversity will allow future generations to select stocks or develop new breeds to cope with emerging issues, such as climate change, diseases and changing socio-economic factors,” said Jose Esquinas-Alcazar, secretary of the FAO’s Commission on Genetic Resources for Food and Agriculture.

Rearing livestock contributes to the livelihoods of one billion people in the world, the FAO says.

Livestock are the mainstay of human species. Reading livestock is one of the most important aspects of survival and growth in the world for man. Biodiversity is important in generally for a variety of reasons and in this case of global diseases it is far more important.

Business need to understand that like diverse portfolio investments in various financial assets, it is important to have a wide variety of species for overall benefit.