The Role of Agribusiness in Enhanced Nutrition, October 12-14, 2005

Warren R. Staley - Chairman and CEO, Cargill, Incorporated
Address to the World Food Prize International Symposium, Des Moines, Iowa

Introduction

This session is about the challenges of “over nutrition and obesity.” The conference overall, however, is looking at the dual global challenges of malnutrition and obesity. Under- and over-nutrition are linked, for a very simple reason: public discussion of both issues too often poses a false dichotomy.

For the under-nourished, the debate seems to be trade versus aid, when clearly both are needed. For the over-nourished, critics replay a version of “nature versus nurture.” “Nature” advocates pit personal responsibility against genetic predisposition. On the “nurture” side, the “food police” want to parse the problem as “good versus bad foods.” They battle those who believe it is the portion, not the food, that is the obesity “poison.”

These false dichotomies conceal the complexity of these issues. They also risk delays and false starts in resolving the problems of hunger and obesity. Rather than “either/ors,” we need to recognize the “both/and.” Ending hunger requires both aid and trade. Resolving obesity means addressing both nature and nurture. Let me elaborate.

Hunger: Both Aid and Trade

Hunger has many faces. It can be temporary or chronic. It can mean caloric inadequacy or nutrient deficiency. It can be rooted in failed governments or poorly performing markets. It can be lessening, as in Asia, or worsening, as in Africa. And so on. The essential point, however, is that ending hunger requires both the alleviation of specific problems and the eradication of its root cause, poverty.

Aid is well-suited for relieving temporary deprivation through emergency assistance. It also can correct nutrient deficiencies through fortification. It often is a necessary response to dislocations from civil unrest, stagnant economies or natural disasters, as Hurricane Katrina so vividly illustrated. Aid is not well-suited for redressing chronic hunger or caloric deficits as donors will weary of it. Moreover, free food displaces commercial production and development. Aid also does not help well-functioning markets get established and grow. And, it can be disruptive to self-sustaining growth where hunger is declining.

On the other hand, trade is ill-suited for emergencies, which by their nature reflect a breakdown in normal communications and commerce. It also is ineffective in serving populations that lack the means to help themselves, whether they are infants and children or the abject poor. Trade works best in jumpstarting economic development, creating wider markets for local production and increasing the reliability of supplies.

Cargill’s approach to hunger issues attempts to reflect these hard-earned lessons. We support emergency relief efforts of all sorts, including through our contributions and volunteer activities with the International Red Cross, Second Harvest, and the like. We also have launched major partnerships with CARE and the World Food Program to target vulnerable populations – like women, infants and children in impoverished regions.

We also have collaborated with the Center for Disease Control on their Flour Fortification Initiative (FFI) and with the World Initiative on Soy in Human Health (WISHH). The FFI goal is to fortify with iron and folic acid 70 percent of global flour produced in roller mills by 2008. Our WISHH project in Honduras seeks to demonstrate the value of increased soy protein in the diets of women, children and HIV patients. Helping ensure accessible, nutritious, safe food supplies is the primary goal of our corporate philanthropy.

Moving from aid to trade, Cargill has long sought ambitious agricultural trade reform. The Doha Development Round represents the best opportunity of a generation to make real progress. It is clear that developed countries have much to contribute to this process. They are being called on to reduce trade-distorting domestic supports through cuts in levels and changes in the structure of their own farm programs. They also are being asked to end export subsidies and monopolies and to lower market access barriers.

But we need to avoid a false dichotomy here, as well. Too many believe that developing countries have nothing to contribute to liberalization and little to gain from their own reforms. Nothing could be further from the truth. While the average U.S. agricultural tariff under the WTO is 12 percent, it is over 30 percent in the EU, over 50 percent in Japan, 66 percent in Korea and more than 110 percent in India. The world average is more than five times the U.S. level.

A recent World Bank study by Kym Anderson and Will Martin starkly underlines the need for mutual reductions in trade distortions:

Market access reforms by developing countries increase their own welfare; they also will help prompt the developed-country reforms poor countries seek. It is a potential win-win for them. Developing countries should not be resisting market access concessions. Rather, they should exchange them for what they can gain in both trade and aid from agreeing to the reforms they need to make to accelerate their own development.

Obesity: Both Nature and Nurture

Let me shift now from hunger to obesity. There has been growing recognition of the scope and threat of obesity. In the United States, one in four adults and one in five children are obese. And obesity has been steadily increasing. The health threats – heart disease, diabetes and cancer – are similar to those of smoking, and they tend to concentrate among the poor. These threats, too, are trending upward: one in three Americans born in 2000 is likely to develop diabetes. Direct and indirect costs of diabetes to the U.S. economy already were $132 billion in 2002.

This problem has been building over time. Over the last 30 years American women have increased their daily caloric intake by 21 percent, or 325 calories, while men have added 170 calories to an already significant 2,450 calorie-base. Public awareness, however, has really wakened only in the last few years, with U.S. media coverage of obesity tripling since 2001. It is not surprising, therefore, that a sudden discovery of a steadily growing problem has generated false dichotomies and visible villains.

The overriding false dichotomy is nature versus nurture. Are American society’s obese tendencies rooted in our physical or psychic make up, or are they based on changing eating habits and foodstuffs? The clear answer is: “both.” We are eating more but exercising less. There also is mounting evidence of genetic drivers toward obesity. Similarly, we are taking more meals out of the home – and not just at “fast food” restaurants. And we’re eating more processed foods, in larger portions.

None of this finger pointing is likely to help us as a society get out of this situation. Fewer jobs require physical labor, so we must find more ways to burn up calories, whether in the gym or just climbing more stairs. Labeling foods as inherently good or bad ignores taste and common sense; all foods in moderation can be fitted into a slender figure. Nor does blaming portion sizes make sense; it ignores the thought processes that see bigger as the better bargain.

No single solution exists, nor should any single culprit be seized upon. We need to see obesity in all of its complexity, if we are to sort out solutions that work for all of us.

Food manufacturers and service industries need to be – and, I believe, are becoming – part of the solution. They are recognizing that their products contribute to the problem. So, there are things they can do to help.

We are seeing a lot of work going into two quick but effective responses – controlling portion sizes and reducing caloric density. Food companies also are doing more to educate consumers about the energy content of various foods and how to make more appropriate choices. For example, we are launching a mini grant program to encourage schools to use the Center for Disease Control’s School Health Index to identify and close gaps in nutrition or physical fitness programming.

Another example is what the food industry is doing to encourage a better energy balance through more exercise. As one example, we are partnering with the National Institute on Media and the Family and with the Coalition for a Healthy and Active America on a childhood obesity prevention initiative in Cedar Rapids, called “Switch.” Through classroom education and community awareness, we hope to “switch down” children’s “screen time,” “switch up” their physical activity and “switch to” more fruits and vegetables.

But, we are facing some real challenges in terms of consumer preferences. As this survey shows, consumers are most interested in foods that provide more convenience. That ranks well ahead of changing diets in pursuit of better nutrition. And before either of these comes preserving good taste for the things we voluntarily put in our mouths.

An important tool in addressing the complexity of obesity is technology. Biotechnology and new processing methods are helping food companies capture useful ingredients and putting them in new places. Nanotechnology may help us engineer flavors and bioactive ingredients that will be satisfying to consumers and better for them. Cereals can be a great source of fiber and other healthful ingredients like:

Soybeans are a great source of these ingredients and protein. These nutrition-enhancing ingredients can be extracted from grains and soybeans. They can be put into familiar products like breads, juices and the like in order to promote heart health, digestibility, bone strength, joint comfort and a feeling of satiety.

Technology, however, is not a cure-all. First, there are problems in finding the right regulatory environment for new technologies and products. There are issues around rights of invention and proprietary ownership. And there are added costs in building many of these attributes into foods.

Food also touches other sensitive chords. New products can be safe without being accepted by consumers. New processes can be proven to work without being trusted by consumers. And, weight gain is a gradual process; dealing with it – or its effects – can always be put off to another day.

The convergence of knowledge, causal linkages to wellness or disease and food preferences may best come together in nutrigenomics. This field tries to understand at the molecular level the relationship between what we eat and what happens to our body. Properly applied, it can deliver better health, higher quality of life and a longer life at a lower cost than conventional lifestyles plus conventional disease treatments. It is the ultimate in disease prevention and health-care cost reduction. And, if we can combine this knowledge with ways to make foods taste good, have attractive mouth feel, provide convenience and offer variety, it could be a real winner. That’s a big reason why we recently acquired DeGussa’s food ingredients business, which has great experience in some of these areas.

Between just letting obesity spread and nutrigenomic-designed diets will lie a host of incremental strategies. Food manufacturers will develop novel ingredients and ingredient combinations to deliver more nutrition tastefully. Even conventional agricultural products will be engineered or bred to offer health and appeal. And, growing awareness will lead to better choices for wellness – whether it is new foods, new self-discipline, new activity levels or some combination.

What I expect will emerge is a strategy built on three pillars: balance, choice and responsibility. We must achieve good balance in what we eat; Aristotle’s counsel of all things in moderation still makes sense. We will need choices to cover the differences between men and women, children and adults, young and old. Choice also helps make healthfulness a complement to taste, not an alternative. And we will need to take responsibility for our own behaviors. Technology and food service innovations can support good behavior, but success still starts with giving consumers what they want.