Robert was the Enterprise Sustainability Leader for Agriculture and Head of Environmental Markets at Cargill. Previously, Robert served as the managing director of the company’s European oilseeds business and as the global head of trading for its vegetable oils refineries group.
Robert is an Associate Fellow of the Erasmus Commodity and Trade Centre at Erasmus University Rotterdam.
Robert, could you briefly sketch out your 30-year career with Cargill?
Like most people in the oilseed business, I started as a trainee in Amsterdam. I’ve moved around a lot. I was in Fargo, North Dakota. I spent five years in Asia, three in China and two in Singapore. I also worked in Switzerland.
I spent 25 years in trading, primarily in oilseeds and refined oil, as well as in business development on the bio-industrial and energy sides. I spent my last four years in sustainability at Cargill, although sustainability was already part of my remit when I led trading for our refineries. I had had enough of trading. I wasn’t bored with it, but after 25 crop cycles, I wanted to make an impact on topics such as food security, deforestation and human rights. I also wanted to do more teaching, writing and researching.
You recently mentioned on LinkedIn that 800 million people go to bed hungry each night. Why is that? And what can be done? Isn’t there enough food in the world to feed everybody?
We already produce sufficient calories in aggregate to feed everyone, including the addition of between 500 million and a billion people over the next 25 years. Acres are expanding, and yields continue to grow. The system has many imperfections, though.
Waste is the most significant. It includes crop waste from farmers who do not store their crops correctly, as well as waste from kitchen tables and supermarkets. It adds up to a generally accepted estimate of 20 per cent of the world’s food supply. A third of that occurs on the farm, so we need to consider improving infrastructure and warehousing for perishable goods and ensure that farmers can get their crops to market quickly. The FAO estimates that 14 per cent of all food waste occurs between the farm and the retail market.
Approximately 9 to 10 per cent of global arable land supplies biofuels: virgin vegetable oils are used for biodiesel, while sugar and corn are used for ethanol. There are government mandates in Brazil for ethanol and in Indonesia for palm oil. Europe utilises rapeseed oil as a feedstock for biodiesel production. We burn food in our vehicles. I’m not saying it’s wrong. I’m not passing judgment.
Meat is the third imperfection. When I say sufficient calories, I include some conversion of arable crops into meat. If meat consumption increases beyond what is currently projected in our models, more crops will be required to feed these animals. It takes 8 kg or more of feed ingredients to produce one kg of beef. The feed conversion rate for lamb is five to one.
Access is the fourth imperfection: geographical and economic access to sufficient nutritious food. For example, when Russia invaded Ukraine, enough food was available, but much of it (stored as grain or oilseeds) became landlocked.
Climate change is the fifth element. If you talk to 100 people, you’ll get 100 different opinions about what food production will look like in 2050. I believe you will have more food production due to longer growing seasons, but that’s only in places where there is already enough food. You’ll have less food in areas where it’s needed. You will have a problem not only with affordable food but also accessible food – a dislocation.
Therefore, we can envision a scenario in which sufficient calories are produced in aggregate, but a proportion of them remain unavailable for consumption due to these five factors.
Don’t governments deserve some of the blame for these imperfections?
In part only. Waste isn’t necessarily a government problem. The private sector could solve waste. In America, I could only buy family packs in the supermarket. The problem with perishable goods is that you often throw away half of them.
Biofuel mandates are government initiatives.
Meat consumption is an interesting one. People initially eat more meat as they become richer, as seen in countries like China, Indonesia, and Nigeria. Meat consumption in America and Europe is levelling off. But I always ask my students, ‘Will you tell the people who’ve just reached the middle class that they can no longer eat meat?’ Meat consumption is endogenous to the model. It’s going to increase. I don’t see how governments can change that.
North America and Europe have a billion consumers. It wouldn’t necessarily move the needle if they switched to becoming vegetarians. For every consumer in America and Europe combined, you’ve got two in Asia who are just reaching the level of a middle-class consumer.
Governments can play a part, particularly regarding tariffs, but a significant portion is the responsibility of the private sector, and some is endogenous to the system. You can’t change it.
Does food security focus too much on consumers and not enough on ensuring farmers get a decent living?
It’s part of the equation. I recently discussed palm oil with somebody from an NGO. Palm farmers earn just enough to make a living. The same is true for cocoa farmers in the Ivory Coast or cotton farmers in Malawi. They cover their costs and provide food for the family, but they have insufficient funds to invest in their farms, replace trees, or buy fertiliser.
You’re going to see a doubling of the population in Africa, one of the places where food production is not keeping up. Increasing the living income of Africa’s farmers would enable them to invest, rather than just providing for their families.
A living income is part of the solution to ensure food security.
Is food security now more important than environmental sustainability? Has the green agenda taken a back seat to economic nationalism?
Yes—and increasingly so. However, food security and the environment cannot be considered separate issues. We must produce more food using less water and emitting fewer greenhouse gases.
It’s a mathematical equation. You maximise food production while minimising water use and greenhouse gas emissions. Agriculture uses 70 per cent of fresh water, accounting for 25 per cent of greenhouse gas emissions. If you expand food production, you will emit more greenhouse gases and use more fresh water. Fresh water will ultimately be a more restricting factor than greenhouse gas emissions, as climate change will lengthen the growing seasons in the Northern Hemisphere. You’re going to have beans in Manitoba and Far East Russia. They will need to find their way to the end consumer.
If you were the World Dictator, what three things would you change to make our food system more sustainable and secure?
One, I would tackle waste by getting governments involved in improving infrastructure from the farm to the distributor. Unfortunately, I’m unsure how much you can influence consumer behaviour, but I would also dictate smaller packaging sizes. A one per cent reduction in waste would significantly increase the amount of food available.
Secondly, I would focus on the environmental impact of agriculture and the need to produce more food sustainably. I would double down on more sustainable forms of agriculture to make crops more resilient against climate change and improve yields. Technology plays a crucial role in regenerative agriculture, enabling the production of more food with reduced emissions and lower freshwater usage.
You asked me for three things, right?
Yes, you still must find one more.
I’ve addressed infrastructure, reduced waste, and transformed agricultural production. The third thing I would do is review biofuel mandates.
So-called first-generation biofuels are not, in my view, the saviour in terms of transportation emissions. I can see how virgin vegetable oils, as feedstock for biodiesel, are included in the energy transition, but I don’t know how that can be a long-term solution. I would ultimately discourage the use of virgin oils to produce biofuels and promote the use of waste oils instead. Technology, again, is part of the solution.
I have another three-point question for you. What three lessons would you like your students in Rotterdam to take away?
First, I want my students to think about food security. I don’t mind how they feel about it, but I want it to be on their radar screens. I want my students to understand what factors go into the equation without necessarily solving it.
Second, I want my students to think about their connection to food. If I asked my 17-year-old niece where food comes from, she would reply, “The supermarket.” It’s not her fault. We don’t know where our food comes from or how it’s grown. We don’t know our ingredients because we don’t read the labels. When people understand where their food comes from and have a connection to it, they waste less of it. They care about it. That’s what I want my students to take away. I want them to ask themselves where their food comes from.
Third, I want my students to ask why hunger exists. Why do 800 million people go to bed hungry every night? What are the five or six factors that contribute to this?
Penultimate question: What do you know now that you wished you knew when you started as a trader?
I wish I had familiarised myself earlier in my career with the institutions that make our trade possible: commercial contracts, the arbitrage process and the applicable law governing our contracts, market organisation and price discovery, trade policy, the legality of supply (think land rights and regulatory compliance), etc. I learned them on the job, but only late in the game. Admittedly, the theory is a bit dry, but it is indispensable. More than once, I have thought, ‘If only I had known this earlier …’.
Last question: what question should I have asked but didn’t?
You should have asked why people pay little attention to agricultural commodity trading. When people discuss commodity trading, they typically refer to metals and energy. Agriculture is almost an afterthought. I understand it from an economic perspective, considering the dollars traded and trade flows, but agriculture fills such a fundamental need. You can do without your car, but you can’t live without food.
However, I am glad you didn’t ask that question, as I don’t have the answer!
Thank you, Robert, for your time and input.
The above is an excerpt from the second edition of my book, Commodity Conversations – An Introduction to Trading in Agricultural Commodities, available on Amazon.
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