European Primary Food Processors Forum 2009 Turning challenge in - - PowerPoint PPT Presentation

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European Primary Food Processors Forum 2009 Turning challenge in - - PowerPoint PPT Presentation

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European Primary Food Processors Forum 2009 Turning challenge in opportunity ? 19 November 2009 EPFP Forum 2009 - Brussels 19/11/2009 1 Competitiveness of EU Agricultural sector : How to reconcile policy objectives and business

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19/11/2009 EPFP Forum 2009 - Brussels

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European Primary Food Processors Forum 2009 Turning challenge in

  • pportunity ?

19 November 2009

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Competitiveness of EU Agricultural sector :

How to reconcile policy

  • bjectives and business

realities ?

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In few words…

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An international Farmers owned Group

  • &

1st in EU

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Key Figures : Revenu = 1.2 B€

80 % Seeds > 6 000 employees 20 % Cereal Products

Subs in 36 countries

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A growing research effort

10% of consolidated sales 12% of professional sales € 170 million with our partners

18 36 42 77 100 111

1985/86 1990/91 1995/96 2000/01 2005/06 2007/08

111 M€ M€ M€

84 research locations

125

100 M€ 77 M€ 42 M€ 2008/09

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A strong conviction :

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Why innovation ? Cereal facts !

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1 000 1 100 1 200 1 300 1 400 1 500 1 600 1 700 1 800 1 900 2 000 2 100 2 200 2 300 1 9 7 3 / 7 4 1 9 7 5 / 7 6 1 9 7 7 / 7 8 1 9 7 9 / 8 1 9 8 1 / 8 2 1 9 8 3 / 8 4 1 9 8 5 / 8 6 1 9 8 7 / 8 8 1 9 8 9 / 9 1 9 9 1 / 9 2 1 9 9 3 / 9 4 1 9 9 5 / 9 6 1 9 9 7 / 9 8 1 9 9 9 / 2 1 / 2 2 3 / 4 2 5 / 6 2 7 / 8 2 9 / 1 200 400 600 800 1000 1200 1400 1600 1800

  • Source : WASDE Mai 2009
  • Cereals : 70% world food & feed !

2010 : 6.8 Billion people

  • !"

# $%" & '("

  • ' "

Carryover – 449 MT Utilizations – 2178 MT Production – 2187 MT Trade – 260 MT

600 MT more last 20 years !

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1 000 1 100 1 200 1 300 1 400 1 500 1 600 1 700 1 800 1 900 2 000 2 100 2 200 2 300 1 9 7 3 / 7 4 1 9 7 5 / 7 6 1 9 7 7 / 7 8 1 9 7 9 / 8 1 9 8 1 / 8 2 1 9 8 3 / 8 4 1 9 8 5 / 8 6 1 9 8 7 / 8 8 1 9 8 9 / 9 1 9 9 1 / 9 2 1 9 9 3 / 9 4 1 9 9 5 / 9 6 1 9 9 7 / 9 8 1 9 9 9 / 2 1 / 2 2 3 / 4 2 5 / 6 2 7 / 8 2 9 / 1 200 400 600 800 1000 1200 1400 1600 1800

  • Source : WASDE Mai 2009
  • Cereals : 70% world food & feed !

2030 : 9 Billion people ?

  • !"

# $%" & '("

  • ' "

Carryover – 449 MT Utilizations – 2178 MT Production – 2187 MT Trade – 260 MT

~ 1200 MT more next 20 years !

With less land and resources…

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&

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  • )*

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  • *.#4.-*
  • )/5*6*

– *

07 & 87

A challenge : producing more & friendlier

5.*+ ,) .*

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Cereal production annual growth rate

2,1 3,9

  • 0,3

3,9 2,2 1,1 2,5 1,7 1,9 1,6

  • 4,3

2,1 2,7 2,0 1,7

  • 1,4

2,6 0,6 3,3 3,8 1,8 3,5 5,1 2,3 0,1 4,9 2,8 3,3 3,7 2,9 4,0 2,9 6,4 2,3 3,5 World USA EU Ex-USSR China India Rest of the world

  • !!

!"#! ! #" !$#

%

) )9 9 4 4: :

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Cereal productivity watch

maize in USA vs wheat in France

  • !"

)7 )79 9 /* /*

  • )***
  • )*** 7;

7;

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Evolution maize yield Landes (F) / Iowa (USA)

#$ %&' ( %)'

  • *
  • !

"

  • Cereal productivity watch

)7 )79 9 /* /*

  • )***
  • )***

**5/+ **5/+ 0*<* 0*<* 5)/5*5/+ 5)/5*5/+

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60 65 70 75 80 85 90 95 100 105 1995 1997 1999 2001 2003 2005 2007 100 kg/ha

France Italy US Linear (Italy) Linear (France) Linear (US)

Maize yield trend : USA vs EU The technology issue !

Q/Ha

Cereal productivity watch

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Which innovation ? Plant biotechnology… And more !

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Biomass

Photosynthesis

That’s Life !

Carbon cycle

Ressource Ressource

6 CO2 6 O2 6 H2O C6H12O6

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Genetic Resources

Phenotyping Phenotyping Genotyping Genotyping

  • =*+
  • Transgenesis

,.* ./.* +*.

Our variety creation process

=*/

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Biotechs breakthrough

>?( >@% >@( >A% >A( >>% >>($%%%$%%($% %$% (

**

  • **

A)- '.4

''**6B

?)- '. !5 *+-/ 05*+-/ / /5<

+

?** ( )- C %%; < 0***;

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European Technology Platform

« Plants for the Future ».

2025

A European vision for genomics and plant biotechnologies

SRA 2007 www.plantetp.org

“ “Plants Plants for for th the Futur e Future e” ”

%

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Why regulation ?

Because volatility jeopardizes

  • ur businesses !
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Why highly volatile prices hurt ?

Highly volatile prices

  • lack of visibility

Lack of visibility & too low prices

  • less revenue & less income for farmers
  • lack of investment by farmers
  • less productivity
  • less production & less quality of production
  • sourcing problems for food industries
  • Etc.
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Why highly volatile prices hurt ?

Highly volatile prices

  • lack of visibility

Lack of visibility & too high prices

  • sourcing costs for food industry
  • dispute

along the production chain

  • more demand
  • more planting & more investment
  • more

production

  • (dramatic ) price decrease
  • less

revenue for farmers

  • lack of investment
  • Etc.
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USA - 1841 – 2001

(%% (%% $$% $$% '?% '?% D6 D6 A% A%

2 4 6 8 10 12 14 16 1 8 4 1 1 8 5 1 1 8 6 1 1 8 7 1 1 8 8 1 1 8 9 1 1 9 1 1 9 1 1 1 9 2 1 1 9 3 1 1 9 4 1 1 9 5 1 1 9 6 1 1 9 7 1 1 9 8 1 1 9 9 1 2 1

$%% $%% A! A!

>'' >'' >@' >@'

Are highly volatile prices a new story ?

No ! From an historic stand point, farmers where hurt, often dramatically, for centuries ! Then Ag policies came …

25* 25* -

  • 7

7

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Are highly volatile prices a new story ?

No ! From an historic stand point, farmers where hurt, often dramatically, for centuries ! Then Ag policies came … Yes ! In European Union Since CAP market regulation tools were abandoned, European farmers and Ag industries are facing again highly volatile prices… ANIA : “Volatility is our worse enemy”…

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Wheat: EU caught back by volatility

  • !"

!# $# $% #% & '# !(% !$ ) ( !#" !*" !*% !#" !# ") $% !## !"* )% * !"" $' !&" !&' !' 134 €/T 238 €/T

1 %% 1A% 1?% 1!% 1$% % $% !% ?% A% %%

> A $ 6 A ' > A ' 6 A ! > A ! 6 A ( > A ( 6 A ? > A ? 6 A @ > A @ 6 A A > A A 6 A > > A > 6 > % > > % 6 > > > 6 > $ > > $ 6 > ' > > ' 6 > ! > > ! 6 > ( > > ( 6 > ? > > ? 6 > @ > > @ 6 > A > > A 6 > > > > > 6 % % $ % % % 6 % $ % % 6 % $ $ % % $ 6 % ' $ % % ' 6 % ! $ % % ! 6 % ( $ % % ( 6 % ? $ % % ? 6 % @ $ % % @ 6 % A $ % % A 6 % > *

1 ( $% (( >% $( ?% >( $'% $?( '%% ''(

D)E6*

+!,-. +/0,&!12-345. +/02-645.11

183 €/t 121 €/t 198 $/t 201 €/t

PAC 2003 Retour volatilité PAC 1992 Baisse des prix

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Should we welcome free trade ?

Yes, in case of adequate regulation! Market driven economy is definitely the best option ! No, in case of deregulation! Free trade without rules means value destruction and therefore is not an option ! Which data to support these views ? See model June 2009 results !

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The « momagri model»

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60 100 140 180 220 260 300 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

  • Simulation introducing 100% liberalization

in 2010 (momagri model, March 2009) Effect on agricultural prices (cereals)

Intraday volatility from 1 to 3 Yearly volatility from 1 to 4,5

Free Trade

Céreals, Price composite index (100 in 2001)

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Indice CA, base 100 en 2003

  • !"

# $ %%

  • &%'%%$!

(

100% liberalization in 2010 : negative impact of agricultural revenues (cereals) in developed countries

Trend 2003-2023 Trend 2010 – 2018 Going down !

Free Trade

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100% liberalization in 2010 : strong impact on revenues for grain producers in developing countries

Revenues index (base 100 in 2003)

  • )*

+," ,"- ** Trend Africa Trend South America Trend China & India

Free Trade

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Are highly volatile prices avoidable ?

Yes, we can ! But ambitious Ag policies are needed !

Yes, we can meet the goals of the development cycle, but only if adequate global regulation principles are adopted ! And then regionally implemented… EU CAP 2013 + should reintroduce regulation tools allowing prices floating inside a tunnel (see monetary tunnel…) and around target prices defined for each production.

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See web site :

Editorial (updated) News Reports

  • « momagri model»
  • « momagri rating agency»

Analyses & Comments

  • Alert memos
  • Contributions
  • Symposiums, events, etc…

www.momagri.org More about « momagri » ?

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Thanks for your attention