Hunger Game: Lessons for Feeding 9 Billion People

February 17, 2016

David W MacLennan, Cargill President and Chief Executive Officer
Harvard Club of New York City

Good evening everyone.

I’m grateful to the Harvard Club of New York City and the Harvard Business School for the opportunity to talk with you tonight about the global food system, Cargill and the challenge of feeding 9 billion people by 2050.

Cargill’s goal is to be the global leader in nourishing people.

Partnership is critical to achieving that aim. Tonight, I’d like to explore how we can work together to sustainably feed the 9 billion people that are projected to live on this planet by 2050.

So, to address that question:

  • I will highlight the new reality we all face – greater volatility and uncertainty,
  • I’ll share evidence for optimism when it comes to nourishing the next generation,
  • And I will close with some practical steps we can all take to build strong economies, ensure food security and work together toward a more sustainable future.

At Cargill, we work in 70 countries with the growers, producers, manufacturers and retailers that put food on our plates.

In fact, it’s likely that each of you consume something produced by Cargill every day.

  • But we are not a household name.
  • That’s partly because we are privately owned, focused on business-to-business relationships which largely support the consumer brands of our customers around the world.

But nonetheless, we are helping produce food with smallholder farmers and large-scale agriculture every day.

This vast global food system is interconnected and influenced by millions of individual actions.

We have seen that the relationship between agriculture, government policy, energy, climate and other factors are linked and interdependent.

We know these issues are top-of-mind for business and world leaders in Moscow, Beijing and other capitols around the world. Because when people are hungry, civil unrest can quickly follow.

At Cargill, we have been managing volatility for more than 150 years. As commodity traders, we see how fluctuations in one area have follow-on effects in others.

Because our food, water and energy systems are inextricably linked, disruptions in one unleash a cascade of consequences in the others.

Those consequences can extend beyond the food system and become triggers for economic and political instability and civil unrest. For example:

  • In 2010: Russia experienced a heat wave that saw the highest temperatures in 130 years.
  • The heat wave reduced Russia’s wheat crop by one-third.
  • Russia instituted ban; impacted prices
  • 2 percent change in global wheat supply drove a nearly 60 percent increase in prices around the world.
  • At the time, Russia supplied Egypt with the majority of its wheat. The rapid shift in supply led to price increases, and when combined with broader political tensions, were a contributing factor to the 2011 protests in Tahrir Square.
  • Similar scenarios have played out in Syria and some 60 other countries in the last decade.
  • In very real terms food security, climate and political stability are linked.

Behind the headlines there is a simple truth: Producing food is an outdoor activity and climate change is making challenging work of feeding a growing population.

But given that no one in this room tonight is in much danger of missing a meal, why should we care?

Three reasons:

  • First, disruptions in the global food system can trigger bigger problems that can have socioeconomic consequences that will hit us here at home.
  • Second, the world is having a new conversation about the food we eat. Here and in other high-income countries we care about gluten-free, sugar, GMO labeling and more. In low-income countries, we are also focused on nutrition – that’s why in India we have started fortifying cooking oil with vitamins A and D. Around the world, Cargill is working with its customers to respond to consumer preferences, reformulate products and explore new ingredients.
  • Finally, the private sector can, and must play a role in making the global food system more sustainable and resilient. We know that that climate, land, water and farmer livelihoods are all a part of the food security equation.

Despite these complex issues, at Cargill we are optimistic about the world’s ability to sustainably feed itself. History has proven that our optimism is warranted.

Past predictions of population growth outrunning our ability to produce enough food have persistently proven to be wrong.

  • This chart demonstrates that food costs as a percentage of household spending have gone down steadily in nearly all parts of the world since the mid-70s.
  • Since 1970, total production of food has also doubled while using very little additional land.

That trend, however, masks the reality we see in the headlines all too often – in Ethiopia, Syria and other parts of the world people are hungry because of conflict, climate and other factors.

So, while we are optimistic about the world’s ability to feed itself sustainably, we are by no means complacent about the future.

As part of our 150th anniversary last year … we joined with the World Wildlife Fund, the Center for American Progress, Mars and others to stress test the global food system in a simulation called Food Chain Reaction.

The objective was to explore how the food system might respond to extreme – but not implausible – global crises.

The 65 participants in Food Chain Reaction included senior government officials, multilateral institutions and the private sector.

Here’s a short video that will give you a sense of how the game was played.
CUE VIDEO

Our premise going into the game was that prevention is the best cure and that the world will be better off if global leaders consider extreme scenarios and reactions rather than waiting for them to happen.

While Food Chain Reaction compressed a decade’s worth of developments into two days, the scenarios the players addressed were not unrealistic.

Here is some of what the game designers threw at the participants:

  • In round one … Food prices rose to 150% of long-term averages as global weather patterns disrupted crop production.
  • Food shortages produced escalating social unrest in Africa and Southeast Asia.

That got the attention of the players … but not enough to motivate strong action, so the game designers further ratcheted up the stakes.

In round two, droughts ravaged China, India and Europe.

Meanwhile, in the U.S., flooded rivers and labor disputes in transport terminals resulted in decreased U.S. food exports.

In response, food prices rose to 400% of their long-term averages.

The good news in our crisis simulation is that the dire conditions did drive action.

And the even better news was that as conditions eased, the global experts stayed focused on long-term solutions.

Chastened by strains in earlier rounds, the players began to look for ways to prevent future crises.

Here’s what the players of Food Chain Reaction found:

Climate change looms large. As the game unfolded, teams implemented policies to address the links between climate and food security. They worked to increase agricultural productivity through climate-smart practices and began negotiating a global carbon cap, carbon taxes and other means to move toward a lower carbon economy.

Sharing information is critical. The game showed that we all need more and better information to avoid disruption in the global food system. While that sounds easy, the devil is in the details when it comes to managing privacy, governance and other key considerations.

Crisis can drive collaboration. Crisis can bring together parties with divergent self interests.

At the same time, we know that it is harder to make good long-term decisions when the house is on fire. So we need to continue to build a sense of urgency about the future of our food system.

Private-sector leadership is critical. In the context of the games, the players convened an emergency summit but, very tellingly, did not invite the private sector. That is a significant problem and one we need to work together to address. The private-sector has to be have a seat at the table with governments, NGOs and civil society.

So here are some steps we need to take to sustainably nourish 9 billion people by 2050.

Advocate for open trade. Trust-based open trade mitigates the impact of regional crop failures. In a future where extreme weather will be more frequent, the ability to move food with as little friction as possible from areas of surplus to areas of need will be critical.

Integrate sustainability measures into our operations and supply chains. This includes collaborating with others to end deforestation, being more responsible with water and natural resources and developing practical solutions to curb carbon emissions.

That’s why just over a year ago, in this city, Cargill signed the New York Declaration on Forests that states we will work with governments, NGOs, competitors and indigenous people to end deforestation by 2030.

Apply innovation to strengthen the tools farmers need to make the most of their land, especially in Africa. This includes ensuring farmers have access to market and credits, improving transport and storage, expanding the use of climate resistant seeds and other sustainable approaches to agriculture.

There is a critical role for all of us in the private sector to play in sustainably feeding 9 billion people. We can break through barriers, drive investment and inspire the innovation that will ensure the private sector has a much-needed seat at the table.

Cargill helped lead Food Chain Reaction because we know we cannot wait to act, and we can’t go it alone.

Advocating for improvements in global food security and operating sustainable supply chains are core to our mission to be the global leader in nourishing people.

Food Chain Reaction showed that climate change won’t break the global food system … if we work cooperatively to make that system more resilient.

By working together we can strengthen our economies, our food system and our planet.

We can ensure that by 2050, the 9 billion people on this planet are not just surviving, but thriving.

Thank you.