kj poppe an intro on dutch agro for foreign delegations
DESCRIPTION
Presentation that I used in 2012 and 2013 to inform several foreign delegations (a.o. South Korea, Taiwan, Malaysia) on Dutch agricultureTRANSCRIPT
Technology Intensive Agriculture:
The Netherlands’ Experience
Presentation used in 2012 and 2013 for several international delegations visiting the Netherlands
Krijn J. Poppe
2
Content of the presentation
Challenges in food security: technology needed
The performance of Dutch agriculture and food industry
Explanations of the Dutch success
GRIN technologies determine the future
European and Dutch innovation policies
Foresight(s) 2050: Scarcity & Transition
The food security issue: Can we feed 9 billion (with higher income levels) with less environmental impacts?
The debate focuses on scarcities:
• Climate change (and the role of livestock)
• Environmental impact and biodiversity loss, eco system services
• Energy supply, biobased economy
• Phosphate supply
• Water availability
• Declining productivity
• Resistance to industrialisation of agriculture in Western countries (incl. animal welfare issues)
3
The end of declining food prices? © Niek Koning et al. Wageningen UR
Food index
EU’s SCAR Foresight: two narratives
Productivity:
Science has the potential to develop technologies that can boost
productivity whilst addressing resource scarcities and environmental
problems
Massive investments needed in R&D, technology adoption, rural
infrastructure, access to markets
GRIN technologies (Genetics, Robotics, Informatics, Nano)
Sufficiency:
Science has the potential to develop technological solutions that are
productive, reduce resource use, preserve biodiversity
However, demand increases need to be mitigated, through behavorial
change, structural changes food systems
Appropriate governance structures to internalise externalities
It is clear we need high tech: the delta of
the Netherlands can be an interesting case
NL: a city state and a big agricultural exporter
-60 -40 -20 0 20 40 60 80
Japan
Germany
United Kingdom
Russian Federation
Italy
South-Korea
Hongkong
Taiwan
Saoudia-Arabia
Algeria
Ireland
New Sealand
Thailand
Denmark
Brasil
Argentina
Australia
France
Netherlands
United States
Trade value in billion US$
Total import value
Total export value
Net trade value
Destination (%) of Dutch agricultural
exports, 2009
55%
12%
9%
3%
2%
19%agriculture
nature andforest
built-on area
traffic
recreation
water
Land use in the Netherlands, 2006
42.000 km 2
52%42%
3%3%
grassland
arable land
vegetables & fruit
flowers,ornamentalsand seeds
Agricultural land use, 2009 - 1.9 mln ha.
Location of the dairy farms and industry
Location of arable farming
Location of intensive livestock complex
Location of the vegetables and fruit sector
Location of the floriculture sector
Technical results / land prices
Milk production per cow: 8.000 kg
Cows per ha: 1.7
Wheat: 10 ton per ha
Piglets: 26.5 per sow per year
Land prices: 35.000 – 75.000 euro / ha
0
20000
40000
60000
80000
100000
120000
140000
1985 1990 1995 2000 2009
mixed
pigs and poultry
arable crops
horticulture
grassland basedlivestock
Agricultural holdings by type, 1985-2009
0 20 40 60 80 100 120
EU-27
Netherlands
Poland
Spain
Italy
UK
France
Germany
Denmark
Belgium
acreage (ha)
economic size(ESU)
Farm size in the EU, 2007
Distribution of total income / ag. household
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009
> 100.000
50-100.000
25-50.000
0-25.000
< 0
20
4.7
10.6
5.2
6.9
4.6
8.9
3.3
6.3
value added Dutch agro complex, mrd euro, 2008
Distribution inland
Ag Services,
Forestry
Inland supply
Supply
import
Primary
Agricutlure
Food Industry
Inland
Food Industry
import
Distribution
import
Total € 50,4
bln. (9,5%),
incl. 20,4
based on
imports;
685.000
annual
labour units
21
Innovation as basis for competitiveness
R&D expenditure as % of value of production in food products, beverages and
tobacco
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
NL Dk D F USA
1992
1997
2002
2007
PM 2007:
High prices
Efficient capital market
image abroad
Large NW European
consumer market
Climate, light
High level of knowledge
Financially healthy
Diversity in production +
trade: complete offer
International oriented
Multifunctional landscape
High land prices
Cooperatives
Efficiency of scale
Lobbying power
Knowledge system
High volume
Infrastructure rural area
Results Supportive
general policy
Competitive advantage
Specific Competences Investments
Homogeneous, highly educated
population
High productivity and low cost
price
Good in product-differentiation
Cheap capital
Strong export position
High Market- share
Breeding material
Cheap (water) transport
New land (polders)
Important in export en GDP
Delta with good soils
Social capital
High wages
Environmental issues: pressure
to innovate
The model of value creation
for Dutch agriculture
(c) Poppe et al, 2009
23
Agricultural Knowledge and Innovation Systems
Wageningen University and Research centre: university, innovation driven applied research and 2 experimental stations
University Utrecht – Veterinary science
TNO (-Applied Food Research)
Agricultural Schools
(managed by
Ministry of
Agriculture)
Extension service
(privatised),
agribusiness –
advise and
accounting offices
Government: clear regulations, system responsibility
RABObank
Agribusiness (coops and investor owned firms)
Demanding consumers
commodity boards: co-finance
Highly educated farmers
Re-search
Business
A golden triangle
Govern-ment
Public-Private Research partnerships –
(‘a golden triangle’ from the polder)
25
Our agro-innovation system and theory
Innovation happens in a social system: “an institutional clustering of practices among the participants (not necessarily implying consensus)” (Anthony Giddens)
Long-term infrastructural investment in ‘mental capital’ and its improvement is crucial for successful economic development and for competitive trade performance (Chris
Freeman for OECD, quoting List, Keynes, and investigating historical cases in Europe and Asia)
‘Coupling mechanisms’ between the education system, scientific institutions, R&D facilities, production and markets have been an important aspect of the institutional changes introduced in successful ‘overtaking’ countries. (Freeman)
Dutch agro-innovation system: PPPartners, linking principles en connection mechanisms (process design)
26
Insti-tutes
Know-ledge
NGO’s
Businesses
Government
Inter-mediates
Linking principles: • Openness • Proximity • Synergy • Absorption capacity external info
Connection mechanisms: • Fora like Knowledge rooms etc. • Strategic agenda sector • Strat. Knowledge & Innovation
Agenda • Public-private investments • Supporting institutional changes
Linking public and private interests
27
Part 4: GRIN Technologies
Genetics
Robotics
ICT – information and communication technologies
Nano technology
How more data contributes to current business models
Transport
loyalty Small Cost price GRIN
Transport Transport
Input industries Farmer Food processor Retail / consumer Software
Provider
Logistics solution providers
Service cope with retail
Sustainability Health Food Safety Feed the growing world
Precision Farming: better control
Better management decision
Sophisticated Technology, More advise
Segment products and
input suppliers; Benchmark with
competitors
Consumer decision support (pre- and after
sales)
Better service concepts, e.g. in store replenishment
Programmability Low High
Asset specifity Low High Low High
Contribution
partners
separable
High spot long-t. spot joint
market contract mrkt venture
Low coope- coop./ inside vertical
ration vertical contract owner-
© Boehlje ownership ship
Organisational arrangements in the food
chain are changing
Development of farm systems
Net value / ha
Time
Agricul-tural
Family Firms (sme) Family
farming
Lati-fundia
socialist state farms
Subsis-tence
farming
Ag. policy
AKIS.gov
Food supply networks
3rd gen. uni
Urban farming
Residen-tial
farming
Metro
polita
n a
gric
ultu
re
Scenarios: qua vadis?
Strong government
Room for markets and networks
Con-
serve Develop
(c) Poppe et al, 2009
32
Part 5: Innovation policies
The EU and Dutch government try to increase the level of innovation
For economists and others: 2 views on innovation policy
A recent report on Agricultural Knowledge and Innovation Systems is available (see EU’s website SCAR)
Increased relevance in EU policy:
• Europe 2020 strategy: growth strategy for the coming decade. It
wants the EU to become a smart, sustainable and inclusive
economy.
• The Innovation Union is one of the seven flagship initiatives of the
Europe 2020 strategy:
• turn Europe into a world-class science performer;
• remove obstacles to innovation
• revolutionise the way the public and private sectors work
together, notably through Innovation Partnerships
• Within the Innovation Union, Horizon 2020 is the financial
instrument 2014 to 2020, proposed budget €80 billion (the EU’s
new programme for research and innovation)
• CAP post 2013: Reinforce the role of the Farm Advisory Service
(FAS) and to create a ‘European Innovation Partnership (EIP) for
agricultural productivity and sustainability’. 33
34 Ministry of Economic Affairs, Agriculture and Innovation
Economics: thinking on equilibrium and dis-eq.
• Ricardo
• Marshall
• Walras
• Coase
• Hayek
• Friedman
• Ostrom
• F. List: infant industry
• K. Marx: role of capitalist
• J. Schumpeter: entrepreneur / business cycle
• K. Arrow: market failure
• O. Williamson: Inst. Econ.
Adam Smith
35
Two views on innovation policy (Smits et al,
2010) Mainstream macro-economics Institutional and evolutionary
economics: Systems of Innovation
Main assumptions Equilibrium
Perfect information
Dis-equilibrium
Asymetric information
Focus Allocation of resources for invention
Individuals
Interaction in innovation processes
Networks and frame conditions
Main policy Science / research policy Innovation policy
Main rationale Market failure Systemic problems
Government intervenes
to
provide public goods
mitigate externalities
reduce barriers to entry
eliminate inefficient market structures
solve problems in the system
facilitate creation new systems
facilitate transition and avoid lock-in
induce changes in the supporting structure
for innovation: create institutions and
support networking
main strengths of
policies designed under
this paradigm
clarity and simplicity
analysis based on long term trends of
science-based indicators
context specific
involvement of all policies related to
innovation
holistic approach to innovation
main weaknesses of
policies designed under
this paradigm
linear model of innovation
(institutional) framework conditions are not
explicitly considered
difficult to implement
lack of indicators for analysis and evaluation
of policy
36
Knowledge & Innovation System: 7 functions
1. Knowledge development and diffusion
2. Influence on direction of search and identification of opportunities
3. Entrepreneurial experimentation and management of risk and uncertainty
4. Market formation
5. Resource mobilisation
6. Legitimation
7. Development of positive externalities
(c) M. Hekkert et al.
37
Agricultural Knowledge and Innovation Systems
An AKIS should be able to
propose and develop practical
ideas to support innovation,
knowledge transfer and
information exchange.
Policy needs to reflect the
manner in which innovation
actually occurs today: often
through diffuse networks of
actors who are not necessarily
focused on traditional research
and development.
The Food Chain Plays a Role too
38 SCAR Collaborative Working Group AKIS
Learning and Innovation Networks
Thematically-focused learning networks that are made up of different actors, within and outside the formal AKS.
Members can include farmers, extension workers, researchers, government representatives and other stakeholders (Rudman, 2010).
The emphasis is on the process of generating learning and innovation through interactions between the involved actors.
LINSA: LIN for Sustainable Agriculture
The difference between AKS and LINSAs is connected to how knowledge is conceptualized: AKS sees knowledge as a “stock to be transferred”, whereas LINSA emphasizes the processes needed to make knowledge useful and applicable to other actors.
39
Planned results:
• Tools and methods for practitioners that are involved in learning and innovation in
agriculture
• Recommendations on policy instruments and financial arrangements that
support learning and innovation for sustainable agriculture
• Concepts to reflect on learning and innovation processes as drivers of transition to
sustainable rural development
More information: www.solinsa.net; contact: [email protected]
Innovation in
partnership
Market driven R&D
Science
Not a lineair model !
Different motivations for research should be recognised – and interaction managed
Innovation in
partnership • Prototypes // Localisation
• Change business models / finance
• Food chain is co-creator
• (De-)regulation, procurement etc.
• LEARNING AND INNOVATION NETWORKS
• INFORMATION BROKERS
Market driven R&D
• Science for competitiveness or social issues
• Business sets agenda, helps to steer, uses results
• PRIVATE-PUBLIC PARTNERSHIPS
Science
• Science driven knowledge development
• Basic research
• Linear model
• Cross overs sectors
• Society sets agenda
• PUBLIC TASK
Different objectives, methods, and public roles
Innovation in
partnership • AKIS are REGIONAL
• Innovation , not dissemination
• Organise international exchange for spill-overs (farmers, extension)
• Empower innovation groups in CAP
• Don’t forget monitoring (learning)
Market driven R&D
• Collaborate with business in Food Chain in PPP
• Manage spill overs between EU regions
Science
• Countries are too small, large spill overs: pool funds
• Compete and collaborate with US, China, Brazil etc.
• Help re-organisation process in Europe (infrastructures)
Role of EU policy
