ARTICLE: The world is said to be producing plenty of food, still the number of undernourished has been rising since 2014. One in five children under the age of five is stunted producing lifelong negative consequences on productivity. Some two billion people are overweight or obese, resulting in non-communicable diseases of dietary origin that compromise resistance to new diseases such as the coronavirus.
World-wide agriculture contributes 24 percent of greenhouse gas emissions, consumes 70 percent of fresh water, and has caused the loss of 60 percent of vertebrate biodiversity since the 1970s. The cost of these negative externalities is $12 trillion, according to the Food and Land Use Coalition, outweighing a market value of $10 trillion.
Now, an additional 100 million people are under threat of poverty because of the economic impacts of the pandemic, according to the June 2020 Global Economic Prospects report, pushing us further from our goals by shrinking incomes and creating food and nutrition access challenges that may result in large-scale famine, according to the World Food Programme.
In a World Bank Newsletter dated August 6, 2020 (Beyond the Pandemic: Harnessing the Digital Revolution to Set Food Systems on a Better Course) Julian Lampietti, Ghada El Abed, and Kateryna Schroeder have tried, using digital technology, to set a new course for the food system - one that reduces hunger and delivers healthy people, a healthy economy, and a healthy planet.
Digital technology is said to drive change on multiple fronts at accelerated rates by collecting, using, and analyzing massive amounts of machine-readable data about practically every aspect of the food system at nearly zero margin cost.
Digital platforms from Alibaba to YouTube are said to be already disrupting traditional business models across the system and Venture capital investors poured $2.8 billion into agtech startups across the globe in 2019.
Pakistan, essentially an agricultural country, faces an enormous amount of similar problems which on occasions produce shortages amidst plenty, threaten drought during good monsoons and pose health hazards amidst abundant rich food. Perhaps digitalization is the answer to these problems. One would, therefore, expect 'Digital Pakistan', a recently set up public organization to take a closer look at this article in more detail for ideas to put to profitable use in the local environs.
The three authors of the World Bank Newsletter focus on three recommendations to accelerate the digital shift towards a more sustainable food future. Public policies, according to them, should seek to Deconcentrate markets and supply chains, Decentralize traceability, and Disseminate data.
Deconcentration can take many shapes and forms - from concentrated physical markets to concentrated market shares. Both are known to be perilous, particularly in times of crisis.
Digital platforms are said to help deconcentrate and increase the number of markets up and down the food system leading to better outcomes at either end of the supply chain.
A study that compared transaction data from a digital platform with physical commodity auctions held weekly, and farm-gate prices in the coffee producing regions of India, found that producers obtained significantly higher prices when they sold the commodity through the digital platform rather than at the farm-gate through brokers. Alibaba's Taobao online marketing platform is another case in point. The county of Shuyang, where 86 of China's 4,310 Taobao Villages are located, has undergone "a dramatic transformation from one of the poorest counties in Jangsu province to a well-off landmark for agricultural e-commerce in China." Thanks to a thriving horticulture industry backed by e-commerce, the county's GDP surpassed $11 billion in 2018 and 41,000 people were lifted out of poverty.
India's Odisha Rural Development and Marketing Society, initiated a system for doorstep delivery of vegetables by producer organizations, using point-of-sale machines for digital payments and electronic weighing machines. Working in partnership with Odisha Livelihoods Mission, Mission Shakti, partner NGOs, and district officials, the society quickly put in place a delivery model and arranged vehicles and passes from the police for transporting the vegetables, giving more people access to fresh vegetables while protecting farmers' livelihoods. Launched in 2014, Twiga Foods, for example, is a mobile-based business-to-business digital commerce platform that matches small-scale supply and demand for fruits and vegetables and cuts out layers of middlemen, thereby eliminating waste and reducing food prices for mass market end-consumers.
The key going forward is to carefully consider the balance of private and public interests in the deconcentration of platforms in the food system. This is not a new issue - consider traditional farmer's markets or wholesale food markets. Both provide physical platforms where producers and consumers interact. If this is scaled up and the entire process is made virtual the number of markets will increase, affording producers and consumers more options, and so will efficiency through cost reductions. Consider cattle auctions, where traditional physical exchanges are being replaced by on-farm cameras and in-house monitors facilitating greater market participation and significant logistical and animal health costs savings. At the same time, the increased flow of information on every process and customer along the agri-food value chain, underpinned by digital verification, will make it easier to certify the trustworthiness of an economic agent and strengthen trust in transactions.
In this digital agri-world the role of public policy is said to be to prevent accumulation of market power by digital platforms. Economist Barbara Engels makes the case that digital platforms support competition. She argues that product ranges (such as sales of varieties of apples by different producers) provide for competitive conditions and that platform market conditions are regularly disrupted by innovation (new varieties of apples displacing established ones as market reach expands) and so are perhaps less susceptible to the accumulation of market power.
Decentralizing traceability: Tracing food throughout the supply chain in a decentralized manner creates opportunities for safer, more sustainable food. Safer sourcing of food is important because some 600 million people fall ill after eating contaminated food each year, costing low and middle-income countries $110 billion in lost productivity and medical expenses each year.
Knowing where food comes from and how it was produced allows consumers to make more informed decisions about the impact of the food they consume on their health and the health of the planet.
More sustainably sourced food also earns a price premium from environmentally and health conscious consumers who can afford it. This price signal, when transmitted to various actors along the value chain, could in turn incentivize sustainable production practices.
Critical to the long-term success of this system is the de-centralized design of the distributed ledger, meaning anyone can access the system and use the data, reducing information asymmetries, increasing competition at different nodes, and increasing resilience to fraud and falsifying information. In the case of livestock the system assigns an identification code to each animal, letting you know its treatment and location on the production chain in real time. Information on individual cows is tracked from farm to freight-on-board, including their travel, feed, medicine and weight-gain, among other indicators.
Open access distributed ledger technologies have the potential to transform food supply chains, fingerprinting location, animal welfare, environmental and social inputs, contracts, processing and many other key areas.
Given the complexity of the food system, in addition to technical issues associated with scalability, privacy, and data architecture, this can, it is said, only be fully realized by ensuring that traceability is fully inter-operable (i.e. the different parts can talk to each other) and governance prevents a race for concentration of market power.
Open data dissemination throughout the complex food system is also said to be essential to correct information asymmetries, encouraging innovation, and increase the efficiency of public spending.
The impact of breakthrough technology such as the Global Positioning System (GPS) developed by the US Department of Defense to assist military forces and now distributed for free is an example of open data delivering significant positive impacts in everything from precision agriculture that allows farmers to put just the right amount of fertilizer in just the right place and with just the right amount of water, to reviews which allow tourists and foodies to locate restaurants in a matter of minutes.
Open data also promises to enhance the efficiency of the public sector's support for the food system, at a time when more than a half trillion dollars is invested annually in countries tracked by the OECD.
Open data enables sharing data between different public agencies, improving the performance of public processes and increasing efficiency of providing public services.
Data from farmers helps track the implementation of various measures such as sustainable production and land use plans. And consumer-reported data can help authorities identify food safety issues in close to real time.
In conclusion, the authors advised: "This is a call for all hands-on deck now, to make sure the policy environment is conducive to digital solutions that bring us closer to achieving our Sustainable Development Goals by favoring deconcentration, decentralized traceability and dissemination of open data."
Copyright Business Recorder, 2020