Firms involved in agricultural and food production, processing and distribution face unique challenges and opportunities resulting from globalization. Their capacity to respond will have great significance for their communities. The development of new relationships in the research community will assist with their ability to adjust and to capture more of the opportunities available.
The current challenges are the result of shifts in food production and distribution, trade, economic growth in developing countries, climate change and related policy responses, including those related to food security concerns.
As a result, five interrelated fundamental forces are driving global food policy:
- Concerns about security of the food supply, including food availability, access and affordability as demand grows and diversifies, and in the face of limited natural resources and reductions in R&D spending.
- Concerns about the health and nutrition of all economies. Chronic, non-communicable diet-related diseases now account for nearly 20% of deaths worldwide and the link between food, nutrition and health is now a global public policy concern.
- Emerging trade barriers including standards imposed by both government and private firms, such as those imposed in response to climate change and food safety issues, including the GMO debate, may affect market access and change the existing competitive nature of the market.
- Pressures to reduce costs in the food supply chain while also meeting diverse market demands has lead to increased coordination and connectivity, however, the market structure is changing as a result of integration and consolidation leading to concerns about market efficiency (market power, inter-firm rivalry etc.) with respect to farming inputs and outputs.
- Political expectations that all parts of the community, including those in agriculture, will benefit from globalization and growth.
Undoubtedly, part of the response to these pressures is technological. Productivity growth from all inputs (that is, multi-factor productivity, MFP) through R&D leads to:
- increased yields per acre,
- switching to crop varieties that are resilient to climate change,
- enhanced food quality and safety, and
- adoption of technological innovations and management practices that utilise scarce resources more efficiently
All of these technological responses remain important.
Yet, technological innovation is only one part of the answer to deal with the dynamic food issues discussed above. Some technological solutions (e.g., modern biotechnologies, genetically modified crops) have been rejected outright by the same consumers who were supposed to benefit from them. Increases in crop yields and food supplies are not necessarily associated with increased MFP, higher profits, improved health or enhanced social welfare.
Consequently, researchers and policymakers must gain an understanding of the fundamentals of these dynamic food markets including the supply systems (chains) underpinning them.
- Specifically, how information, products and finance function and flow between end-consumers and producers and how external factors (economic, social, political and cultural issues) affect these chains. Central is an understanding of how value is created and distributed along the food supply chain. Specific analytical methods are important, including those from academics in business and economics, as well as analysis of the context in which particular markets operate.
Social science research can enhance cutting-edge research in the fields of agricultural, food and health sciences in many ways, including determining areas of high financial, social and environmental returns. To contribute to the ground-breaking innovations, social scientists must be able to connect with their colleagues in these fields to fully understand the emerging frontiers of research. These sorts of connections between multi-disciplinary scientists are familiar – for example agricultural economists have long collaborated with agronomists working on farm-level technologies.
The relationships proposed here encompass the food supply chain (not just changes to the farm gate) and intersect a variety of topics in agricultural and health sciences and in economic policy analysis.