TRANSFORMATION OF THE FOOD SYSTEM MODEL

TRANSFORMATION OF THE FOOD SYSTEM MODEL Transformation of the FOOD SYSTEM Model

Eating is an agricultural act

–Wendell Berry: farmer, poet, author and activist

Figure 13: The Pleasures of Eating (Berry 1990)

Above is a statement of individual empowerment (Figure 11), because it seems to suggest that every time we make choices about what we eat and who we purchase products from, we are voting on the direction in which we want our food system to move. Importantly, from the farmers to the consumer’s perspective, the journey from farmgate to the Point-of-Sale (PoS) and into their home needs be more transparent, secure and inclusive (Berry, 1990). Across the food system journey, there is incredible potential and unlimited opportunities to empower producers, cooperatives and companies to transform the antiquated business model towards a dynamic and adaptive demand-pull model of the circular economy. And therefore, capitalizing on the various benefits of transparency and open information exchange. A demand-pull model with the added value of traceability and trust: Production –to create more accurate forecasting and confirm proper/ optimal practices Logistics –to verify correct deliverables (deadlines, volumes, product conditions) Storage –to guarantee conditions to store the SKUs in the Distributions Centers Shelf-life –to control the time of each SKU stored on the shelves and collecting the products about to expire to effectively process, for example, to donate to food banks Best Practices –the proper use of products, machinery and software solutions: pesticides crucial for health and environment, food security, sustainable agriculture and forestry, marine, maritime and inland water research and the bio economy, operational safety, upkeep and maintenance, and precision agriculture practices (European Commission, 2019a and 2019b; European Commission, 2018).

And across the food value chain, the absolute consensus is that the system needs to bring consumers and producers closer together to improve inefficiencies in producing our food and protecting our environment.

Introducing the Data Smart Farmhand Platform: Soil Fingerprint

The Data-smart Farmhand is an automated, organized, and open-sourced database platform to help users search, sort and analyze the forest of data and metrics - tracked in real-time - so users can make more intelligent decisions and to create impact. This platform offers all shareholders (token holders) access to the marketplace to use its technology to solve their pain points of connectivity, digitalization and harmonization of data to further open collaboration applying those insights. In the current atmosphere, where there is no one blueprint for working with a blockchain ecosystem and DLT solutions. Most existing DLT supply chain solutions focus on tracking across the entire chain by forcing stakeholders to adopt top-down methods leading to resistance, and slow or no adoption, which hurt both producers and consumers. However, as we previously noted, our research shows that individual stakeholders process information in different ways and based on their own experiences, which leads to the results being often unsatisfactory and creating more damage than good. Obtaining significant progress in terms of food production requires changing people´s hearts and minds. As it happens with any significant change, we need to understand the unique reality of each case and show our ability to help the users be successful, using technology effectively and intelligently. Only then, will organizations will be able to collaborate in a way that will deliver optimum output, viable economical models and open collaboration. As a consequence, the Data-smart Farmhand platform will start with a minimal viable soil and first mile environmental data to model a soil information fingerprint for producers, providers and consumers to align with existing agriculture cooperative governance in the European Union (EU). By starting with a more focused approach on the first mile, the intention is to include all stakeholders in the process of scaling up the product and ecosystem towards a human-centric governance model for access and financial inclusion. In the future, we will scale the Data-smart Farmhand to include after-the-farmgate logistical data, retail and consumer data, and continue towards connecting all data throughout the entire value chain, from across the world. But, by building the platform step-by-step will help achieve adoption and confidence in the industry. However, the first step will focus on is soil in the European Union.

Within the EU, we could potentially work hand-in-hand with, for example: the European Crop Protection Agency, any existing soil certifying organization, a European Agriculture Cooperative Organization (e.g. COGECA), the European Institute of Technology (EIT Food), European Council of Young Farmers, University of Cambridge Global Food Security program and a variety of EU Commission environmental data sets to model a soil fingerprint using:

(i)

(ii)

(iii)

(iv)

(v) Soil Microbiome, important for the ecosystem’s nutrient cycling, organic matter turnover, and the development or inhibition of soil pathogens. Carbon Footprint, calculation identifies the quantity and source of carbon dioxide, methane and nitrous oxide emitted from the farm, highlighting areas where improvements or changes can be made to reduce greenhouse gas emissions. Variable rate fertilizer application, matching applied fertilizer to fertilizer requirements represents a significant input cost saving for the grower and a reduction in potential pollutant loading to ground and surface water (Schumann, 2010). Maximum pesticide residue, sustainable use of pesticides in the EU by reducing the risks and impacts of pesticide use on human health and the environment and promoting the use of Integrated Pest Management (IPM) and of alternative approaches or techniques, such as non-chemical alternatives to pesticides (European Commission, 2019c). Water Usage, different crops are subject to irrigation at varying levels of intensity. Four main categories are distinguished by the Institute for European Environmental Policy (Eurostat, 2019a).

Soil and Agriculture First Mile Needs

In 2013, the European Parliament and the Council formally adopted the Common Agricultural Policy (CAP), which was developed to help farmers produce a sufficient food supply for 500 million European citizens. According to the CAP (2013) directive, the policy would “provide a stable, sustainably produced supply of safe food at affordable prices for consumers, while also ensuring a decent standard of living for 22 million farmers and agricultural workers.” Importantly, the European Commission (2019a) stated three priorities which the industry should be focusing on: “(i) viable food production; (ii) sustainable management of natural resources; and (iii) balanced development of rural areas throughout the EU.” Note, when considering the management of natural resources, agriculture production today accounts for:

70% of all freshwater consumption; 80% of all pollution released to waterways and oceans; more carbon than all the oil burned to date; and is the most impactful human activity to wildlife populations, genetic diversity and degradation of natural infrastructure. Mateo-Sagasta et al, 2017 In addition, the European Environment Agency (2015a) considered the global perspective of environmental status, trends and prospect assessments and subsequently has published a European Environment — State and Outlook Report (SOER) which described implementation practices to improve the environment outlook of Europe. And moreover, allows citizens to

have a clearer understanding of how to improve and better attend to a sustainable EU environment.

The Europe-wide thematic assessments of the SOER report focused on 13 important metrics, their observations about soil as a key environmental indictor is what demands a closer look in the paper, especially given that almost all fuel, fibre and food resources that humans use are produced on soil. There are many organisms that inhabit the soil which maintain a vital function in the planet’s biodiversity. Due to soil acting as one of the largest carbon sinks, healthier soil usage could significantly affect water and environmental health and reduce the rate of climate change. Not surprisingly, studies of relevant data show that improving and maintaining soil quality has enormous positive impacts on our entire societal network (Figure 14). Impact factors affect every user, such as access to clean and uncontaminated water, improvements in nutritional outputs, biodiversity regeneration, pollination, pest control or nutrient recycling, and environmental and climate change. Unfortunately, findings suggest that most soil health comprehension for maintaining environmental standards is severely limited (Jones et al, 2012).

Figure 14: European Environment -- state and outlook (EEA, 2015) Therefore, climate change is inflating soil erosion, intensive agriculture management is increasing the degradation of soil in our croplands, as well as the effects on water, wind, piping and tillage erosion. Consider that it can take the Earth up to one thousand years to generate one inch (2.54 cm) of quality topsoil, much more attention must be given to soil erosion prevention techniques and strategies (Poesen, 2018). Much of what we think we know about soil is limited by the lack of data or more specifically by the lack of organized and sortable data, but there is momentum to make significant advancements in this regard. In 2018, the European Commission’s Joint Research Centre

started one of the most important features, the LUCAS ((Land Use/Land Cover Area Frame Survey) soil project, which is completely opened access. It contains large-scale soil data to improve evidence-based decisions on the EU environmental and economic agenda for scientist and policy makers (European Commission, 2018a). The Bill Gates, and his Gates Foundation, have also recently focused on soil microbes and the effects on climate change. They maintain that synthetic fertilizers may have changed agriculture in efforts to feed the world, but unfortunately microbes in the soil consume the nitrous oxide in these fertilizers, and release enormous amounts of greenhouse gases. To reduce the amount of greenhouse gases released into the atmosphere, their research suggested an increased focus on “collective crop storage”, a strategy which producers collaborate to manage and sell their output at the optimal time to minimize negative environmental effects (Gates Foundation, 2019).

European Producers and Cooperatives

Farming is a romantic and tradition-rich industry, and nowhere more than in Europe, where agriculture and livestock output has shaped the culture and its citizens identities for thousands of years (Figure 15). The Mediterranean diet is known throughout the world because it is considered by many nutritional experts to be the healthiest in regards to reducing chronic diseases and the effect of aging. (Romagnolo and Selmin, 2017).

Figure 15: Male producer (Common Usage, 2019)

A century ago, almost 50% of Europeans worked in agriculture and livestock output. Now days, there are approximately 10-11 million people in the EU-28 work in agriculture, 4.4 % of total employment, and three quarters (72.8 %) of those working in agriculture within the EU

28 were located in only seven countries: Bulgaria, France, Germany, Italy, Poland Romania and Spain (Eurostat, 2017). There are significantly fewer small plot farmers and arable land in Europe, but the demand is only increasing. According to the European Commission (EC): Agriculture and Rural Development (2017), the European food supply chain employs 44 million people and many producers work independent from one another, which give them less power to negotiate a better position for their goods and supplies. Furthermore, the EC report stated three specific steps that would improve producer’s power within the food supply chain: “(i) addressing unfair trading practices (UTPs), (ii) market transparency and (iii) producer cooperation.” For one hundred and fifty years, European farmers have been at the forefront of utilizing cooperatives to strengthen their individual transactional position. These cooperatives are broadly defined as a business owned and democratically controlled by individuals who use its services and whose benefits are derived and distributed equitably on the basis of use (Bijman et al, 2012). For the European Agri-cooperative, COGECA, the collaborative value is derived from their selfgovernance model of effective control by its members which leverages its extensive farmersmember community to negotiate improved terms together. The improved terms allow 22,000 Agri-cooperatives to generate €350 billion turnover across the entire European Union. Furthermore, these cooperative agreements generate value for members collecting, processing and marketing produce from their 6 million members, which directly employ over 600,000 individuals (Cogeca, 2015). Cooperatives give all participants greater opportunity to influence the value chain narrative towards one that is more informed at every step. According to Cooperatives Europe, European institutions can help farmers specifically with: Research programmes [that] could be easier to access and more suited to cooperatives. Business transfer to employees could be studied and encouraged through specific policies and financial programmes. Facilitate the participation of co-operatives in EU programmes that encourage the setting up of transnational and national specialist networks and the development of best practices in innovative sectors. The co-operative business model could be recognized as the first choice when speaking about responsible business model and corporate social responsibility (CSR) issue.

Cooperatives Europe, 2019 According to a European Commission Report, Support Farmers’ Cooperatives, spearheaded by Dr Bijman (2012), the three main factors determining the success of cooperatives are how

they relate to “(i) position in the food supply chain, (ii) internal governance, and (iii) the institutional environment.” By using this existing internal governance framework, aligning with the blockchain mechanism and technology that companies build on top of it, cooperatives can broker transactional trust and incentivizes members to further integrate in the ecosystem. Importantly, stakeholders along the value chain could translate consumer expectations into concrete projects to improve their position across the entire value chain. And these improved projects would incentivize more nutritionally valued output and lead producers to seek new collaborations in efforts to use all their resources to maximize profits. Subsequently, allowing producers and partners to profit by reducing food loss and food waste and improve industry practices towards a more fair and sustainable value chain environment (Cogeca, 2015).

Smart Farming and Data Sovereignty –Who owns the data?

We readily acknowledge the value of Smart Farming to reduce the ecological footprint of producers, because it gives a framework and the metrics which can unbridle siloed technologies, antiquated practices and market segmentation that hinders usage. While much more needs to be done to improve implementation, the most pressing question that appears to weigh down much of the adoption is ‘Who owns the data?’ Information and Communication Technology (ICT) that records the input of resources and the output of products does raise questions of property rights and use of data. Business models might create added value by converting spatially explicit big data into information and advice not only for farmers but also for regulatory authorities who may use the data for surveillance and control. Governments must establish a regulatory architecture that guarantees high-quality data while at the same time fostering trust among all actors involved. The potential misuse of data creates additional legal and ethical challenges for regulation and monitoring ICT and data management can provide novel ways into a profitable, socially accepted agriculture that benefits the environment (e.g., soil, water, climate), species diversity, and farmers in developing and developed countries. But this can only happen with the proactive development of policies supporting the necessary legal and market architecture for smart farming, with a dialogue among farming technology supporters and sceptics, and with careful consideration of emerging ethical questions. Walter et al, 2017 Data sovereignty is, or should be, integral to every aspect of decision making by government, business, civil society and individuals. Availability of verified, transparent, reliable, and accurate data can make or break a user’s capacity to make robust decisions that guarantee their quality of life and security (Figure 16).

Figure 16: Investment Opportunities

Governments need data to ensure current and future social services are delivered and built efficiently and effectively. For business, this could be everything from identifying the strategic geo-political risk, to a consultant needing the data to undertake market research. For civil society, it means ensuring their activities have real impact, such as for urban mobility programs to develop sustainable agriculture guidelines. For individuals, it means everything from accessing historical real estate data before they buy their home to a university student undertaking research. Thousands of government, business, and civil society users are working separately or segmented together to use big data to improve decision making; many of the same users generate and provide data, open or otherwise. Data sovereignty empowers all users through direct and indirect engagement with: 1. DATA SERVICES - evidenced-based and fulfills a recognized need for access to global and regional data sets

2.

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4. USER ENGAGEMENT –brings data users and data providers into a community conversation for peer-to-peer knowledge-sharing, data-sharing and feedback DATA POLICY –using and contributing to cooperative initiatives to harmonize data ontology, promote standards and the use of open data DATA LITERACY –improve the capacity of users to use data for decision making