EFFP’s approach to increasing productivity and sustainability in the food chain

EFFP's approach to increasing productivity and sustainability in the food chain

The food chain with its heavy reliance on the world's natural resources has for many years made significant progress in increasing output per unit of input, and this has become more urgent as prices for agricultural products and energy have risen in recent years. This is normally described as productivity growth and we take the view that productivity not only underpins business efficiency but also, when aligned with the signals inherent in market prices, it is central to social and ecological sustainability.

Continued gains in productivity over the next few decades are now required as the food industry enters a new era. In this new era balanced sustainability demands the highest possible levels of productivity generated by modern production systems that minimise the demands made on the world's resources. And this can only be achieved through the medium of new science and technology applied collaboratively across the supply chain.

Figure I sets out our view of a new practical approach to sustainability It refers to the whole food chain and requires a truly collaborative approach to unlock it where there is a long term commitment from all supply chain partners with the aim of delivering against a common set of goals and objectives. As can be seen it starts with scientific research and just like the first Green Revolution in the 1960s this stage requires a partnership between the government, research institutes and the industry. New science is needed to reduce the amount of fresh water and carbon based energy used in producing a unit of food, while maintaining soil fertility and reducing the emission of gasses that contribute to the greenhouse effect.

Figure I: A Practical Approach to Sustainability

New science and technology can only practically contribute to more efficient production at the business level through investment and in this respect it is important to grasp the importance of scale. There are enormous economies of scale in food production and certainly at the farm level these benefits are nowhere near being realized. From the perspective of sustainability, scale provides the means to economise on the use of fuel, fertilizers and crop protection, in part by making it viable to use larger, more technically sophisticated plant and machinery. But most importantly large scale enterprises have greater access to managerial and financial resources than smaller enterprises – in part through self-generated profits –and a volume of output that allows the costs to be spread more widely.

The larger an enterprise the greater the managerial demands or put another way, successful larger scale businesses need high quality mangers capable of applying the latest knowledge including advances in organizational design. In this respect organizational science is increasingly being applied to the management of relationships between firms in the supply chain. Collaboration is the lynchpin of integrated supply chains and larger, better managed enterprises are likely more easily to deliver the benefits of collaboration which includes waste reduction, a major focus for sustainability.

Figure I then moves to the benefits for society and indicates that via investment at the business level, scientific and technological advances can be brought to bear on the triple bottom line. Social welfare is enhanced by the availability of a plentiful supply of affordable food and better paid jobs. But the important addition is that the figure implies that these benefits are more likely to be delivered in a way that minimises, if not reduces demands on natural resources because it embraces scientific and technological advances. Inherent in the diagram is the potential trade-off between economic growth and ecological sustainability but it implies that this trade-off is mitigated by higher productivity. The extent to which higher output will result in greater demands being made on natural resources depends critically on the pace and nature of productivity growth.

Case Study: Camgrain – a catalyst for productivity

This case study highlights the development of Camgrain, a progressive farmer owned central storage cooperative based in Cambridge, England who have led the way in providing a catalyst for productivity increases amongst both their farmer members and customers alike.

Camgrain's purpose is to maximise returns to its farmer members by storing and processing combinable crops and then by optimising market returns through unrivalled customer service. It operates three sites across central England and has recently started to develop a fourth, which once completed will give Camgrain the capacity to store, process and market over 500,000 tonnes of grain annually into the food and drinks sector.