How are we go­ing to feed Asia?

Progressive Grocer (India) - - Contents - By Nimisha Gau­tam

Cargill, along with FICCI and The Econ­o­mist In­tel­li­gence Unit (EIU), launched Fix­ing Asia’s Food Sys­tems, a five-part re­search pro­gram that ex­plores a range of is­sues and is cen­tred around a sur­vey of 400 busi­ness lead­ers in the re­gion. The first re­port, “Sep­a­rate Ta­bles: Bring­ing to­gether Asia’s food sys­tems”, is a deep dive into six key mega­trends: ur­ban­iza­tion, the dou­ble bur­den of un­der­nu­tri­tion and obe­sity, tech­nol­ogy con­straints, the need for trans­parency and sus­tain­abil­ity, and the pol­i­tics sur­round­ing food.

The re­port was un­veiled by Smt. Har­sim­rat Kaur Badal, Hon’ble Union Min­is­ter for Food Pro­cess­ing In­dus­tries, GOI, and high­lighted the need for re­gional co-op­er­a­tion to make food sup­ply chains smarter, bet­ter in­te­grated and more ef­fi­cient. The launch of the re­port set a piv­otal dis­cus­sion in mo­tion, en­com­pass­ing in­dus­try cap­tains and pol­i­cy­mak­ers and re­vealed the cen­tral gov­ern­ment’s agenda for en­cour­ag­ing in­vest­ment in the food pro­cess­ing sec­tor.

The food sys­tem to­day is fac­ing the pres­sure of pro­duc­ing about 70% more food to feed a pop­u­la­tion that will cross 10 bil­lion peo­ple by 2050. We need to do this with di­min­ish­ing re­sources. Pro­duc­ing more with less and en­sur­ing the high­est safety stan­dards are key chal­lenges fac­ing the food and agri­cul­ture in­dus­tries to feed Asia. Track­ing the mega­trends driv­ing the di­vides in Asian food sys­tems and find­ing cre­ative so­lu­tions to the chal­lenges faced in im­prov­ing food-se­cu­rity in the con­ti­nent is a Her­culean task.

That’s be­cause Asia en­com­passes a com­plex mix of coun­tries, di­vided by bor­ders, poli­cies, cul­tures, un­even de­vel­op­ment and other so­cioe­co­nomic dif­fer­ences. How­ever, as ex­ist­ing food sys­tems evolve and Asia ur­ban­izes to grow ever more pop­u­lous, dis­cus­sions around diet, food sup­ply and food se­cu­rity of­ten fo­cus on Asia as a whole. The con­ti­nent will be home to nearly half the world’s pop­u­la­tion by 2030, with China, In­done­sia and In­dia ac­count­ing for three-quar­ters of Asia’s new ur­ban dwellers. This will have sig­nif­i­cant ef­fects on food pro­duc­tion and de­mand, as ur­ban con­sumers have more di­verse di­ets and typ­i­cally con­sume more con­ve­nience food.

Di­ets will be­come more en­ergy-dense and will move away from con­sump­tion of car­bo­hy­drates to in­clude protein and sugar rich foods as in­come growth and ac­cess to higher-value cat­e­gories of food in­creases. This in­creased di­etary di­ver­sity will cause di­ver­gence be­tween de­mand and do­mes­tic sup­ply, in­creas­ing re­gional com­pe­ti­tion for food im­ports. Trade lib­er­al­iza­tion is likely to ac­cel­er­ate the con­ver­gence of health out­comes in Asia as nu­tri­tional con­cerns pivot to­wards un­der­nu­tri­tion and obe­sity. The con­ti­nent is likely to have sig­nif­i­cant lev­els of un­der­nu­tri­tion in 2030, and this will con­tinue to be driven pri­mar­ily by South Asia, where 35.8% of chil­dren un­der the age of five saw

The cen­tral gov­ern­ment plans to in­vite pro­pos­als from pri­vate play­ers to set up a non-bank­ing fi­nan­cial com­pany (NBFC), which will ex­clu­sively cater to the credit and lend­ing needs of the food pro­cess­ing sec­tor. The NBFC will be set up with an ini­tial cor­pus of Rs. 2,000 crore. — Har­sim­rat Kaur Badal Hon’ble Union Min­is­ter for Food Pro­cess­ing In­dus­tries, Gov­ern­ment of In­dia

stunted growth in 2010-16. Cur­rent es­ti­mates of over­weight/obe­sity ex­ceed global av­er­ages in many East Asian coun­tries like In­done­sia where 12% chil­dren are over­weight.

To tackle th­ese prob­lem ar­eas, there is an ob­serv­able in­ter­est in greater trace­abil­ity and sus­tain­abil­ity in food sys­tems. So­cial me­dia and glob­al­iza­tion have ren­dered the mod­ern con­sumer more aware of what goes into mak­ing a pro­cessed food item in the mar­ket. This has ex­ac­er­bated the need for trans­parency and clean la­bel brands in var­i­ous food seg­ments. Aid­ing farm pro­duc­tiv­ity, re­search and de­vel­op­ment in food pro­duc­tion in Asia will re­main a key driver of agri­cul­tural de­vel­op­ment. How­ever, the de­mand and abil­ity to im­ple­ment in­no­va­tive food pro­duc­tion tech­niques will vary across and within coun­tries, de­pend­ing on their level of eco­nomic and in­dus­trial de­vel­op­ment.

By 2030, Asia is pro­jected to need 65% more wa­ter for in­dus­trial use, 30% more wa­ter for do­mes­tic use and 5% more wa­ter for agri­cul­tural use. Wa­ter scarcity will be­come a key is­sue as na­tional in­ter­ests di­verge, with the ad­van­tage rest­ing with up­per ri­par­ian coun­tries. The head­wa­ters of six of Asia’s ma­jor rivers are lo­cated in Ti­bet, giv­ing China sig­nif­i­cant con­trol over wa­ter flow to lower ri­par­ian coun­tries. With no for­mal trans-boundary wa­ter­shar­ing agree­ments in Asia be­tween China and down­stream coun­tries, diver­gent po­lit­i­cal in­ter­ests will con­tinue to drive wa­ter na­tion­al­ism.

The chal­lenge for pol­i­cy­mak­ers and com­pa­nies will be to iden­tify spe­cific hur­dles and op­por­tu­ni­ties in each mar­ket, ar­eas of risk and eval­u­ate ex­ist­ing poli­cies based on pro­jected chal­lenges to the food sys­tem. As a food sys­tem cov­ers end-toend ac­tiv­i­ties, from pro­duc­tion to con­sump­tion, re­tail­ers ful­fill a vi­tal role in the value chain. The mar­ket pen­e­tra­tion of cer­tain prod­ucts is con­trolled by al­lo­ca­tion of shelf space at re­tail out­lets and om­nichan­nel ap­proaches adopted by re­tail­ers to reach out to prospec­tive buy­ers. “We see a need to up­grade in­ven­tory man­age­ment sys­tems to pre­vent spoilage and wastage of goods. To ad­dress the prob­lem at its roots, the in­dus­try will ben­e­fit from part­ner­ing with farm­ers in re­spec­tive sup­ply chains and in­struct­ing them on the kind of de­mand present in the mar­ket. Farm­ers must know what crop to plant and in what quan­tity to avoid over­plant­ing and un­har­vested pro­duce. We also need to chal­lenge stan­dard store prac­tices and man­age per­ish­ables bet­ter. This can be done by adopt­ing a more ef­fi­cient way of de­ter­min­ing the best be­fore and ex­piry dates of cer­tain goods.”, said Kr­ish Iyer, CEO and Pres­i­dent at Wal­mart In­dia.

The re­port re­leased by EIU also rec­og­nized the fact that food se­cu­rity can be more broadly de­fined to in­clude re­silience, di­ver­sity and af­ford­abil­ity, rather than just self-suf­fi­ciency. The rise in de­mand for food in Asia has made it dif­fi­cult for most coun­tries to re­main self-suf­fi­cient, par­tic­u­larly China. The so­lu­tion in­cludes set­ting up re­gional com­mit­tees to aid greater col­lab­o­ra­tion and col­lec­tion of more sig­nif­i­cant data. Gov­ern­ments could fo­cus on build­ing ro­bust data­bases that would help them to bet­ter de­sign and ex­e­cute poli­cies us­ing the de­vel­op­ment of met­rics assess­ing spe­cific pop­u­la­tion groups’ char­ac­ter­is­tics, nu­tri­tional qual­ity, crop pro­duc­tiv­ity by re­gion, food wastage and even vul­ner­a­bil­ity to cli­mate change.

“Cur­rent es­ti­mates show that we process only 10% of the food we pro­duce and most of our food is wasted dur­ing har­vest­ing, trans­porta­tion and stor­age. Stake­hold­ers need to come to­gether and com­mit to zero tol­er­ance of food wastage and pro­vide all play­ers in the food sys­tem the tech­nol­ogy they need to make pos­si­ble a food sys­tem that al­lows no wastage,”said Food Pro­cess­ing Min­is­ter Har­sim­rat Kaur Badal. Dur­ing an in­ter­ac­tion with me­di­a­per­sons at the side­lines of the re­port launch, the Min­is­ter also re­vealed that the cen­tral gov­ern­ment plans to in­vite pro­pos­als from pri­vate play­ers to set up a non-bank­ing fi­nan­cial com­pany (NBFC), which will ex­clu­sively cater to the credit and lend­ing needs of the food pro­cess­ing sec­tor. The NBFC will be set up with an ini­tial cor­pus of Rs. 2,000 crore “Many in­ter­na­tional funds have shown in­ter­est. We will be able to put to­gether a con­sor­tium of in­vestors for this NBFC. While the gov­ern­ment will hold a mi­nor­ity stake in the com­pany, the ma­jor­ity stake will be held by pri­vate play­ers,” she said. This ven­ture will func­tion as a part­ner­ship be­tween the In­dian gov­ern­ment and the in­dus­try to col­lec­tively ad­dress fix­ing Asia’s food sys­tems in a holis­tic man­ner.

The in­dus­try will ben­e­fit from part­ner­ing with farm­ers in re­spec­tive sup­ply chains and in­struct­ing them on the kind of de­mand present in the mar­ket. Farm­ers must know what crop to plant and in what quan­tity to avoid over­plant­ing and un­har­vested pro­duce. — Kr­ish Iyer CEO and Pres­i­dent, Wal­mart In­dia

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