Congress Summary Claude Lafleur,

IFMA, Québec city, Julyby 17, 2015 With the support of : Nicolas Mesly, journalist (research and redaction) And Kathleen Jolly (English revision)

Good morning everyone!

Last week I overheard a rather lively conversation between a Greek man who was visiting his family in Montréal (the city has a strong Greek community) and someone who looked to be a German tourist. Although I said it was a rather lively conversation; I should have said a very emotional discussion dotted with high pitched expressions. At one point, the German seemed fed up with this nonsense and said: Listen young man, I’m very proud to be European. I was born in Germany, but also in Europe. I’ve lived my whole German life as a European and I will die as a German in Europe! To which the young Greek quickly replied: Don’t you have ANY ambition?

First and foremost, I want to thank the organisation for their kind invitation.

They asked me to wrap up the week’s powerful and highly informative events, which I will try to do over the next 25 minutes. You are forewarned, this will not be a technical or scientific summary…. It will be more of an essay, albeit a provocative one.

As I listened to the conference speakers over the past five days I have yet to find an absolute answer to these questions:

 Is climate change real?  Are GMO foods bad for you?  Do vaccines cause autism?  Was Mankind born a mere 2000 years ago?

Ladies and gentlemen, we live in an Age of Disbelief where any kind of scientific knowledge is confronted with hostile disbelief. And yet, facts have proven that evolution did occur, climate change is happening right now, and vaccines save lives. As for GMO foods, they’re safe if you believe that altering genes in a lab is no more dangerous than wholesale modification through traditional breeding.

Scientists have a long track record for getting things right – well, most of the time! - so why do so many people doubt science?

It may be that doubt is simply a human characteristic; it may also be that the Internet has made it easier than ever for sceptics to find information and experts that support their own theories. Gone are the days when a small number of powerful institutions, elite universities, and major news organisations served as the gatekeepers of information. Internet has made information more democratic… and that’s a good thing, however it is also easier to live in your own “truth bubble” that only lets in information that supports and agrees what you believe.

Not only is this an age of disbelief, but we live in an era where big brother is always watching and there is always some kind of plot threatening our way of life!

Vincent Cloutier, chief economist at la Coop Fédérée, explained that there are only a handful of key players in the seed and agrochemical business. This is also true for the grain trade, farm machinery and retail food industries. This kind of business concentration is not specific to the agrifood sector, it’s happening everywhere and in every field of activity, from the media to the aerospace industry.

We also live in a world in which there is no common agricultural or social project like the one we had with the Green Revolution. Back in those ‘glorious’ days we knew why we were working. The Green Revolution first began in the early sixties thanks to a worldwide network of public institutions backed by government subsidies and political elites.

Nowadays, academics, producers, and farm management advisers such as yourselves need to find your way through the all the smoke and mirrors. Even I, as a former CEO of La Coop fédérée and now CEO of IFFCO Canada, find it hard to see through the confusion, but we must press on to make the best decisions based on our circumstances. For those of you who didn’t know, IFFCO Canada is an indo-Canadian partnership that is looking to build a $2.3 billion dollar world class urea plant in Bécancour, while La Coop fédérée is a federation of 100 agricultural and consumer cooperatives with combined sales of $9.3 billion dollars.

As I listened to each speaker, and ignored the bells and whistles, I discovered what I would call breaking points, in other words, defining moments that will shape the future of our industry. And I believe that any organization that chooses to ignore them will eventually become irrelevant and disappear. I identified 8 breaking points with the first being:

1-Animal Welfare

As a boy raised on a farm, the life cycles of animals were exactly that: cycles! On the dairy farm there was ongoing population control of cats and I don’t remember any intervention on the part of Animal control!

Nowadays, it’s a whole other story. David McIinnis, from the Canadian Agri-food Policy Institute, reminded us how retailers are driven by consumer expectations. Take Tim Hortons’ for example, calling on the pork industry to end gestation stalls for sows by 2022, and Sobeys launching “Certified Humane” meats. Another example is Saputo, the world renowned Quebec dairy processor. Last month they announced the implementation of a new Animal Welfare Policy in the 4 countries in which it operates. This was a direct response to the California-based Mercy for Animals’ video that was filmed in a 3,000 head dairy farm in British Columbia. This same animal advocacy group did a similar enquiry in one of Quebec’s veal farms.

In an effort to overcome its bad reputation in animal welfare, the Quebec government is sponsoring a law to provide animals with a new definition and legal status. They will be promoted to “sentient beings”. The government stated that the bill will apply to all domestic and farm animals and a few wild animals. Even goldfish won't escape the proposed new regulation.

What this bill means is that from now on, farmers, transporters, and even slaughterhouses need to take better care of the animals under their watch and make sure these animals are "treated with as much dignity as possible" from the time they’re born to the moment they die.

There is no doubt that issues of animal welfare, transparency and sustainability will become very important. Companies and organizations will not only have to reduce production costs and compete for market share, but they’ll have to fight to gain social recognition.

2- Food Safety/Bio Security

The early nineties’ Mad Cow crisis changed the game forever. In Canada, there’s the infamous “Food Inspection Agency” that, over the years, has become increasingly obsessed and paranoid. But they might have a point! In some countries, government agencies failed miserably, such as in the UK, where food retailers have had to take over the responsibility of food safety and bio-security.

Then again, private companies aren’t infallible. And that is any business’ worst nightmare. Remember the 2006 tragedy with the E. Coli spinach outbreak in California that killed 3 people? How about Canada’s Maple Leaf in 2008 where the Listeriosis outbreak killed 22 Canadians?

We should keep in mind that our mission is to feed people, not kill them! I commend my colleague, Michael McCain, CEO at Maple Leaf, for the way he handled that situation 7 years ago. He was straightforward and transparent. I remember him saying on national media: “Going through the crisis, there are two advisers I've paid no attention to. The first is the legal team, and the second are the accountants. It's not about money or legal liability - this is about our being accountable for providing consumers with safe food.”

Unsurprisingly, Louise Wendling at Costco- the second largest retailer in the world - placed Food Safety as a key priority. Breaking point.

3- Food Security/Food Waste

I am no expert on Food Security. I’ve never lived in China, India or Africa. Although I have visited these countries briefly, this does not make me an expert. But what I do know is that, according to a UN report, there is 1.3 billion tons per year of food waste that is estimated at $750 billion dollars US. In the US alone, 30% to 40% of the food supply is lost. This means about 20 pounds of food, per month, per person. I expect the numbers to be rather similar in Canada.

So I ask you: Would General Motors survive if they wasted 30 to 40 cars for every 100 produced?

This is one of the most significant issues and it is frankly unsustainable. "In addition to the environmental impact, there is also a moral one: We simply cannot allow one-third of all the food we produce to go to waste when hundreds of millions of people go hungry every day.”

Although the costs to our businesses are considerable, many remain reluctant to take the necessary measures to fix the problem because they believe it’s just not worth the effort. If I had to rate this breaking point, due to the pervasive indifference, I would unfortunately give it a 2 out of 10.

4- Productivity and size

Size, growth and productivity: too many people hate these economic terms and see in them only dread and depression. I for one have struggled to provide clear explanations, to engage employees, to foster their support for economic productivity and growth, it was a difficult task indeed.

You probably know that a business can be small and highly competitive, and it can also be a giant and totally inept. Take the environment for example, you can be small, organic, inspired by the sun, the moon and the stars and be totally unsafe, whereas you can be a multinational conglomerate and, believe it or not, eco-friendly.

Over the years, I’ve learned three things in terms of size and productivity: First: Productivity is paramount to your business’ survival, regardless of size! It requires huge investments, both public and private. It requires lots of knowledge and more and more big data. Players must become more professional and transition from farmers to business leaders. Actually, I was quite apprehensive when I realized how low the skill set was. Many are still working with assumptions and suppositions rather than solid strategies and instruments.

Second: some people say that critical mass and growth are helpful but not essential to gain access to new technologies, the right people and financial resources. But I’m telling you : having these makes life a little easier!

Such is the market economy’s paradox: the rules of the game are driving everyone towards concentration. In 2009, the USDA was reporting that the largest four firms in the crop seed, agricultural chemical, animal health, animal genetics/breeding, and farm machinery sectors accounted for more than 50 percent of global market sales in each sector. Imagine what their share is now, six years later?

The largest agricultural input firms are responsible for a large and growing share of global agricultural research and development, and higher input prices paid by farmers partially reflect the higher quality of inputs created through private-sector Research &Development.

And that’s why - and this is the third lesson I learned - we need a strong counter weight to deal with the level of power relinquished to the hands of the few and elude mounting inequalities. Case in point, Pope Francis recently came out hard against the dark side of capitalism. But if we take an objective look at his comment, he is probably right. This phenomenon might also explain the rise of citizens as a counter weight as evidenced by the creation of some 3,400 NGO’s over the past 40 years.

One of the breaking points for any business in the future, big or small, will not be to circumvent NGOs, because let’s face it, it’s our natural impulse to hate them, but it will be to learn how to deal with them, work with them and integrate them via an integrated strategy.

5 – Big Data

Big Data will change the agrifood sector from farm to fork as much as the Internet has changed our daily lives. At the farm level, sensors on tractors, combines and seeders provide us with tons of information.

Miniature sensors could soon be implemented in individual corn seeds so we can monitor, in real time, the plant’s needs while it’s growing. Digital technology now lets us take pictures of insects in the corn field to, within minutes, get the right prescription and prevent an infestation. The same will apply to the animal kingdom where sensors will display the body temperature of a single hog, which could help prevent the spread of a lethal disease to the whole herd.

The combination of data issued from individual farms to thousands of farms, otherwise called Big Data, will propel us to an unprecedented level of health management, and marketing of crops and herds! It will also benefit society as a whole since the data could help identify crops that capture most of the CO2.

Big Data is the new oilfield, it needs to be tapped with the appropriate algorithm to help companies grow and increase farm production. Seed giant Monsanto bought the equipment manufacturer, Precision Agriculture, and then bought Climate Corporation, a company specialized in weather data analysis, for nearly $1 billion US. Monsanto will use the data provided by farmers and their machinery and combine this information with weather data to make agronomic recommendations with unprecedented accuracy. They estimate the American market to be around $20 billion.

I believe that companies or individuals that cannot work with Big Data will go the way of the dinosaur, just like Kodak did when it invented the digital camera and did not market it fearing the cannibalization of its own products. As San Sebastian from Google stated : every company will become a software company driven by technology.

Farm advisers, private consulting firms and local co-ops are all directly affected by this development. Big data changes everything! The way you do business today will be challenged sooner that you think. These changes are not incremental, there are disruptive! How are you going to compete against the John Deeres and Mosantos of this world?

6- Carnivore Dilemma

Dr Scholtten’s presentation showed us how livestock contributes to Europe’s economic livelihood and bio-based economy. He also told us how Healthy Livestock Management, using innovation and fewer antibiotics to prevent zoonoses, could contribute to a healthier planet since the demand for animal protein is growing worldwide.

Right now, beef is at the heart of the debate, particularly in the US where 90% of the land is used to raise livestock. We all know the math: To produce 1,000 calories of consumed meat, beef needs to eat three times more feed than pork. Not to mention that it also uses 3 times more water on irrigated land than all other types of meat? More than any other farm animal it produces almost 5 times more methane gas.

Naturally, some people are worried that the planet can’t support a meat-based diet enjoyed by most Americans, Argentineans and Canadians. Let’s not forget to add animal welfare to this equation, which sets the stage for converting meat eaters into vegetarians and vegans. Will a meat-free diet be the trend over the next few years? I don’t know. I remember when they said that butter would disappear from our shelves a few years ago. And now it’s making a comeback, so much so that the Canadian dairy industry has been caught completely off guard.

That said, we’ve heard rumblings, and although it’s difficult to find official statistics, but according to one source there are 7.3 million vegetarians in America and nearly 23 million flexitarians (vegetarians who eat a little meat) and 1 million vegans, people who not eat any type of animal product or by-product at all.

Some well-known celebrities intend to tap that market, such as Microsoft’s Bill Gates, Twitter’s Evan Williams and Biz Stone, the man who created the company BeyondMeat, who wants to replace animal protein with non-GMO soy. Even the co-founder of Yahoo, Jerry Yang, invested in the Hampton Creek start-up to sell egg-free mayonnaise.

Most observers will tell you that meat-free won’t be a breaking point. But I would be more careful. Let’s say that in this particular case, I’d rather be a Jean-Marie Bonduelle than say… a Smithfield.

7 – Obesity: Whose fault is it?

I have only admiration for America’s First Lady, Michelle Obama, and her fight against childhood obesity. Her “Let’s Move” campaign was designed to eliminate this ailment in a country where one third of its children are obese.

The costs of obesity and obesity-related diseases – diabetes, heart failure, cancer – have almost reached 150 billion dollars US per year. I’ve just returned from a business trip to Wichita, Kansas, - I don’t think there is town more typical than Wichita in Middle America - and I was completely blown away by the size of the average citizen and their daily food intake.

There is an increasing number of Canadians following that same pattern. Statistics indicate that one out of every 4 adults in Canada and one out of every 10 children is clinically obese. In 2014, according to the World Health Organisation, there were over 600 million obese adults with another 2 billion overweight adults! Mexico now has nearly 50 million obese adults. Salt, sugar and fat, which are commonly found in processed foods, are just some of the culprits in this death by food epidemic.

Our modern and urban lives require that we exercise to maintain a healthy weight. But being overweight and obese is also about how much food we put in our mouths.

As business people, we can’t ignore the consumers’ desire for healthier products. As McDonald’s struggles to redefine itself; Chipotle, which ironically used to belong to McDonald’s, is grilling historical revenues with its “casual food” offering including higher prices, fresher ingredients and a very different environment.

What this means is that food retailers, such as American Whole Foods with its extensive range of organic products, can show consumers that they are health conscious, and consumers are eating it up! This is a defining moment.

8 – The Joy of Food

Food is much more than scarfing down loads of carbs to get through the day. Food is history, civilizations and empires were built on spices and fortunes have been made. Every country in the world has its own food culture.

Human beings are social animals. To love and to share are part of the human experience and food was and is at the heart of this experience. Researchers are only beginning to understand the psychological relationship between food and health, which might explain why obesity is so prevalent. I was greatly impress by the way Google, the paramount of a modern company, uses food and employee relationship as a competitive advantage

Throughout my long, maybe too long, career, I was often part of national ag committees: stabilisation programs, agricultural research, food policies, and so on. Along with my fellow producers, I attended and sat through long meetings in Ottawa, Vancouver and Edmonton. On a typical day, we had crust-less sandwiches for lunch and ate as fast as we could while downing a Diet Coke. Then at night, right before bed, we would eat a big T-bone steak and baked potato drowning in sour cream!

How can we be sensitive to the needs of our fellow citizens with this kind of behaviour? How can we pretend to feed the world when we don’t even respect ourselves? Ron Lemaire, also from Canadian Produce marketing association, told us about how hard he worked over the past two years to put together an integrated national policy called “Half your plate”, a campaign to promote the consumption of fruits and vegetables from Vancouver to St-John. It has yet to be officially approved by Health Canada. Believe it or not, the main player, Agriculture and Agrifood Canada, is not even in the game! This issue goes all the way to the top with Canadian Prime Minister Steven Harper taking selfies at Tim Horton’s doughnut shops.

Maybe, just maybe, we don’t have a real good agricultural policy because we don’t deserve one?

Conclusion

Health and prosperity were the main themes of this event. I agree with the choice of themes because they are common to everyone and a fundamental value for all humans on this planet.

No one wakes up in the morning with the idea of getting sick and being poor!

I want to close by citing the conclusion of a 75-year long Harvard study by psychiatrist Dr George Vaillant conducted between 1938 and 2009 and involving 268 male undergraduates. This 20 million dollar study identified a range of factors that explained the source of happiness. Was it power? No! Lots of money? Nope. What was it? Love, a meaningful relationship and a moderate intake of food and alcohol! Simple things, indeed!

Earlier this week, Diane Parent reminded us that happiness is not only a consumer affair. She also said that we should be taking a very close look to what is happening with our farmers, especially the younger ones. She told us that farmers have one of the highest suicide rates of all other professions in our society.

If happiness is related to social recognition, why would a young farmer, whose worth is less than a doctor or a lawyer, continue farming? And yet, they have one of the most important jobs in the world, to feed humanity.

We should build a dream! Businesses that will be able to integrate a diversity of high quality foods with health and happiness will be on the winning side of the equation. And this my friends will be the most significant breakthrough in the near future.

Imagine what could be done! Let’s develop a new social contract in which farmers will be acknowledged and respected as food producers and protectors of the environment. Let’s produce foods without tons of sugar, salt and fat. Let’s rein in obesity in our country. Let’s drastically decrease food waste.

Above all, let’s work towards a national agricultural policy that will not only be delimited by private interests, but established through a legitimate political and democratic process.

At the end of the day, the country that succeeds in developing and implementing a real national agricultural policy to improve the wellbeing and happiness of its people through good food will define its own identity and thus, have the highest rating among the world’s nations.

Thank you for your kind attention and have a safe trip home!