- A resilient, environmentally-friendly food system will require a shift away from our current fragmented supply chains.
- A coherent, traceable supply network is key to ensuring food is safe, nutritious and sustainable.
In May the EU revealed its new Field to Fork strategy, a comprehensive plan to overhaul food production at every stage to make it more resilient and environmentally friendly. Its success would make the EU a global leader in sustainability, helping to protect its food supply from threats such as climate change and pandemics. For that to happen, however, we need to see an even more fundamental change: a conversion of the current, fragmented tangle of food supply chains into a coherent and traceable supply network.
What is the World Economic Forum doing to help ensure global food security?
Two billion people in the world currently suffer from malnutrition and according to some estimates, we need 60% more food to feed the global population by 2050. Yet the agricultural sector is ill-equipped to meet this demand: 700 million of its workers currently live in poverty, and it is already responsible for 70% of the world’s water consumption and 30% of global greenhouse gas emissions.
New technologies could help our food systems become more sustainable and efficient, but unfortunately the agricultural sector has fallen behind other sectors in terms of technology adoption.
Launched in 2018, the Forum’s Innovation with a Purpose Platform is a large-scale partnership that facilitates the adoption of new technologies and other innovations to transform the way we produce, distribute and consume our food.
With research, increasing investments in new agriculture technologies and the integration of local and regional initiatives aimed at enhancing food security, the platform is working with over 50 partner institutions and 1,000 leaders around the world to leverage emerging technologies to make our food systems more sustainable, inclusive and efficient.
Tackling big challenges
The Field to Fork strategy sets out a number of targets that it wants to achieve by 2030 – notably, to cut the use of pesticides by 50%, fertilisers by 20% and antimicrobials in farmed animals by 50%. On top of this, it wants organic farming to account for a quarter of farmed land within its borders and is calling on member states to cut, monitor and report on food wastage levels across the supply chain. This would ensure good quality food reaches more people at fair prices and in a more efficient way.
The targets could certainly be achieved well within the allocated time frame. The technology and the budget are there. The main problem threatening this vision is a basic trust and safety issue in the food and agriculture sector. At the moment, all stakeholders in the agricultural system must trust that the players upstream of them are operating in a compliant way – and this reaches as far as the end consumer.
Despite extensive compliance and audit management processes, this system has often failed to ensure safety and quality along the supply chain. Each year thousands of tonnes of fraudulent food are seized within the EU. By the time it is discovered, the contaminated or inappropriate product has usually already made its way into the human food chain. Fraudulently labelled seeds and the use of unauthorized pesticides on organic farms add to the picture of an insufficiently robust and accountable food chain.
There are currently examples of agro-chemical manufacturers, distributors and growers collaborating on trials to cut counterfeiters out of the equation and to ensure near real-time identification of product location to ensure faster recalls. Some of the most successful projects we’ve seen are built around QR codes and smartphone apps.
The main problem is that these initiatives are taking place in isolation and are limited to certain market segments. They don’t capture the system as a whole. Tracking two or three stages upstream in a supply chain, in the previous case from input manufacturer to distributor to grower, can be relatively straightforward. However, things become very much more challenging once the produce leaves the field.
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Understanding risks in food networks
There are numerous variables that come into play when taking into account the ecosystem around producers and manufacturers. As it stands, there are numerous stages that even the smallest of consumables – let’s say a grain of wheat – has to go through before it becomes a ‘product’ – with different sets of concerns for particular stakeholders.
First off, growing a basic commodity has natural risk: for example, is the person applying crop protection products to the wheat field following health and safety compliance rules? Are the appropriate employee and environmental conditions in place? These issues could impact many downstream, directly or indirectly, in the case of non-compliance.
At the next stage in the process, food processors and manufacturers processing that wheat into bread or breakfast cereal need to be sure that the wheat conforms to the standards and specifications set out for the particular recipe as dictated by the client. This requires the manufacturer to verify that each source of the wheat is the right variety; that all the fields from which the wheat has been harvested have been treated with chemicals in a verifiably appropriate way; and that the type and volume of pesticides used complies with the legislative requirements or guidelines set out in all of the territories in which the grocer operates.
Clearly, in this process, there are a lot of considerations, with little transparency requiring an awful lot of trust.
A potential solution
Data needs to move up and down the supply chain; the requirements of those downstream need to be met with geo-specific compliance advice from chemicals manufacturers, from product distributors and from agronomic advisors to farmers. The farmers themselves can share data to demonstrate their adherence to best practice.
A safe food production system needs to offer full traceability and a centralised means to track and recall bad batches in real time. One way to achieve this would be to gradually turn multiple, fragmented supply chains into a smart supply network that is monitored through digital technology. This network would offer transparency across all segments – literally from seed to fork.
A digitised network would offer a clear audit trail and peace-of-mind to all stakeholders. However, its success would depend on all those players being comfortable enough to grant third-party access to their data.
While some may be willing to collaborate, others may not. For instance, some farmers and input product distributors/retailers are naturally wary of ceding too much on-farm or customer data to input manufacturers for fear of disintermediation (meaning the middle-people will be cut out of the chain) and potential implications for future price negotiations.
An alternative would be the establishment of multiple siloed supply chains, but this would become hugely expensive and time-consuming to manage.
The best option by far is to convince all relevant supply chain stakeholders to collaborate. Their individual interests and independence can be protected by a trusted, independent party connecting these players and their separate data systems into a digital network. From here, it would be possible to standardise and - crucially - anonymise that data. The benefits of being able to analyse and interpret the data would help to raise the bar for all.
National governments collaborating on common standards, through an entity such as the EU, could take the lead and assume responsibility for the implementation of such a network. This would be more efficient than trying to unify multiple initiatives from individual states, trade bodies or large businesses.
Undoubtedly there will be challenges in overcoming entrenched thinking. However, it’s far easier to change mindsets when the business value held in the data becomes clear and there are tangible outcomes for the whole sector – or at least for the responsible actors. Given the global cost of food fraud - estimated at around €30 billion each year - the benefits should be immediately apparent across the industry.
While the need to simply the current system is clear and the technology exists, getting this system off the ground will be a challenge. The most sensible approach would be to set interim goals on those elements that are most achievable. Success would demonstrate the value for other players and build traction throughout the ecosystem for particular market segments that would recognise immediate benefits.
A good example would be crop protection. Commercial pesticides are tightly regulated in many markets. In the EU residue levels in foods need to be kept below the limits laid out by the European Food Safety Authority. In the event of a product recall or a change in usage directions, the imperative is to rapidly geo-locate each relevant batch and container within the supply chain, right down to the farmer. A joined-up approach would play an invaluable role in minimising the risks of potential health implications for the consumer while aiding farmers in their efforts to do the right thing.
In such a scenario, a range of players – traders, packers, wholesalers, food processors & manufacturers, grocers, food outlets - would be more confident that their suppliers are meeting their specifications: for example, that organic products are genuinely defined as organic.
Most significantly, the supply chain would no longer be too big for any one player to police. In time, this approach could all but eliminate fraud across the entire supply network.
There’s little time to lose if the EU wants to make its vision a reality. It’s absolutely in the interests of the agricultural sector to get behind the strategy. There is greater scrutiny on the food supply chain than at any time in living memory and such scrutiny exposes weaknesses that shall no longer be acceptable.
Moreover, with a growing consumer focus on factors such as provenance and sustainability, the pressure is on to maintain public trust. The potential benefits far outweigh the costs. If the EU succeeds in creating a robust, resilient and accountable food network, it could serve as a model for the rest of the world, and ultimately pioneer a safer and more resilient food production system for everyone.