73. When marketing becomes policy

Lessons from Sri Lanka

Hi. If you are new here, I am Rhishi Pethe, and I am excited you’re in the “Software is Feeding the World'' community. Every Sunday, you will receive this free newsletter at the intersection of technology and agriculture systems. I am a product manager at Project Mineral (focused on sustainable agriculture) at X, the moonshot factory. The views expressed in this newsletter are my personal opinions.

This week’s newsletter has fewer topics due to a shorter week here in the US.

  1. Tragedy unfolding in Sri Lanka: It brings up issues of marketing, vested interests, policy making, and adoption of new technologies.

  2. Supply chain infrastructure improvements in India. Will the business model work?

  3. Around the coffee shop: Short takes on consolidation in AgTech (AgThentic), new Agtech venture fund, cotton & regenerative farming, and many other topics.

  4. Listen, and watch recommendations. 

“Vistas of Prosperity and Splendor”

There is a tragedy unfolding on the beautiful island of Sri Lanka.

The government of Sri Lanka instituted a ban on the import of all chemical fertilizers and agro-chemicals from the end of April 2021. The ban was based on a policy document from 2018, “Vistas of Prosperity and Splendour,”, mandated by 2/3rd of the voters in the 2018 election. It stated that Sri Lankan agriculture will promote and popularize organic agriculture during the next 10 years. The intention is to protect the health and environment that deteriorated due to agrochemical usage in conventional agriculture.

Image source: Google Maps

Note: Sri Lanka’s area is about 25K square miles, less than half of the state of Iowa (56K square miles)

The sudden ban has had devastating effects on productivity, and food prices.

An island-wide survey of farmers found out that 90% use chemicals for farming and 85% expected sizable reductions in their harvest if disallowed to use fertilizers. Moreover, the survey said that only 20% farmers had the knowledge to transition to completely organic production. It also found that 44% farmers are experiencing a decline in harvests, and 85% are expecting a fall in the future.

Prices of daily food items like sugar, rice and onions have soared over twice.

This was not unexpected.

Professor Saman Dharmakeerthi,  Soil Fertility and Plant Nutrition at the Faculty of Agriculture, University of Peradeniya had warned about the policy changes in no uncertain terms (“Organic-fertiliser-only policy will plunge Lanka into a food crisis”), and unfortunately his warnings have come true.

In a detailed article, the professor had laid misconceptions about organic only fertilizers and their impact on Sri Lankan agriculture.

Misconception 1:  Chemical fertilizers are responsible for health and environmental concerns in Sri Lankan agriculture. Close look at the causes of issues related to chemical fertilizers; one could find that it is mainly due to the poor quality of the imported fertilizers and their incorrect usage. 

Image source: The TImes

Misconception 2. Organic only nutrient management technologies are always environmentally friendly:

Misconception 3.Organic-fertilizer-only approaches can always sustain crop productivity:

Misconception 4.Nutrient requirement of the crop can be provided through organic fertilizers: 

Misconception 5. Biofertilizers can supply deficient plant nutrients in organic only agricultural systems

Rather than adopting such feasible strategies step-by-step, the government has banned chemical fertilizer importation overnight. This could plunge Sri Lanka into a food crisis in the coming years due to lowering of land productivity. 

The professor highlights the challenges with transitions, especially for Sri Lanka.

It is prudent that the production of high-quality organic fertilizers and effective biofertilizers is a prerequisite to cut down even a fraction of chemical fertilizers used in Sri Lanka. Much research is still required to be carried out on organic agriculture to identify the most appropriate technologies to make agriculture more environmentally friendly and sustainable. And then, farmers need to be educated on such advanced technologies.

The policy from the Sri Lankan government, speaks to the challenges with adoption of different practices, without due diligence, and not allowing for time to make any transitions.

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When marketing becomes policy

The incidents in Sri Lanka reminded me of Shaun Haney’s post from June 2021, “When marketing becomes policy: the trouble with regenerative agriculture.”

Agriculture is a big tent covering many different facets of food and commodity production. When you have such diversity in soil types, water availability, and crops grown it’s difficult to say “this is how you should farm.

“Policies that ban or limit practices instead of encouraging outcomes could have a serious negative impact on agriculture. Policies like significantly reducing synthetic fertilizer use, curbing use of crop protection technology, or assuming cropping systems are constant across the country have reared their ugly head in Europe and are finding their way to North America and here in Canada.

Like Shaun Haney, I do love the passion within the regenerative and carbon movements. The passion and the desire to  make meaningful change will create more conversations, and hopefully will lead to better outcomes.

There are two risks to watch out for whenever there is (ir)rational exuberance. First risk is that people believe that their solution will solve ALL problems. Given the complexity and divergence in agriculture, I wrote in edition 39 (No Silver Bullets) that no silver bullets exist in agriculture. If the right people (or should I say wrong people!)get convinced, it can lead to devastating changes and results, as seen in Sri Lanka policy changes.

Second, people will lose trust when the overhyped solution does not live up to its hype. In edition 28 (Regen Ag: Don’t be Icarus) I wrote that regenerative agriculture should not make the mistake made by Icarus.

Given the complexity of agriculture systems, and established practices, switching to these practices is not as easy as flipping a switch. Research and experimentation are required, along with policy changes, corporate involvement and most importantly, adoption by farmers. The risk lies in overselling it as the panacea for climate change. Climate change is a massive problem, and agriculture is definitely a part of the solution, but it is not the only solution.

The policy change in Sri Lanka was driven by overwhelming support from the electorate, though the implementation was completely botched by the government. (The policy called for changes over 10 years, and not sudden change in 2 years, without any preparation.)

Last week in edition 72 (Tail wagging the dog?), I had written about demand driven agriculture and food systems. The Sri Lanka example is a warning sign that consumers could be misled into believing something by vested interests. The explosion in different types of consumer labeling which let consumers buy into certain value systems can be challenging. Shaun Haney said,

The vagueness of best practices has resulted in buzzwords being attached to production ideologies which are then used to market to consumers. Words like artisan, craft, sustainable, and now regenerative are used to promise something better to the consumer.

Even though there are challenges, I strongly believe that consumers have, will, and should continue to play a vital role in shaping the future of our food and agriculture systems. Helena Leurent, Director General of Consumers International says, (Consumers International is a membership organization for consumer groups throughout the world.)

There is a new place for consumers to play a part in building a sustainable, fair, inclusive, and safe marketplace. We need consumers to make that shift so there is a tipping point in the economy. In the future the role of the consumer is going to be quite different, the consumer is going to have more agency.

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Logistics improvements in India

In edition 72, (Tail wagging the dog?) I had written about Amazon India’s infrastructure and agronomy play in India.

Amazon’s strategy to establish a footprint of retail locations, connected to the online shopping experience, leverages the trust of local human relationships. It connects the local trust with the supply chain and technology infrastructure of Amazon.

India’s logistic and food supply chain infrastructure leaves a lot to be desired, and different players are moving in to fulfill that need. Ergos in India, is a grain bank that helps farmers convert their product into tradable digital assets, and access credit facilities against those assets from non-banking entities.

Ergos has set up 150 grain banks (each warehouse has a capacity of 700-800 tonnes) and plans to have 450 grain banks in Bihar and Uttar Pradesh. They chose the states of Bihar, as it does not fall under the purview of APMC laws. The warehouse facility helps farmers to get a better price, as they are not under pressure to sell the grains as soon as they are harvested. The grain storage and transportation network, along with grain marketing is a given in the United States, but not so in India.

Ergos connects the warehouses with food processors. The food processors now can get a smoother supply of grain, and they can do a better job of matching it with the demand for their products. Ergos can store the grain for 6-9 months. Ergos charges on both sides of the transaction. They charge a storage fee to farmers, a fee from buyers, and food processors for trade facilitation. Ergos also changes lenders for a sourcing fee for getting them securitized commodities. In 2021, they handled 100K tonnes (up from 13K tonnes in 2019) and plan to handle 2 million tonnes by 2025.

The numbers are minuscule in comparison to the total grain production in India, but if entities like Ergos can show that it is a sustainable and scalable business model, it could bring in more investment.

Around the coffee table

Sarah Nolet on the coming consolidation in Agtech: “The continued focus on supply-chain-oriented solutions and the desire from farmers for fewer, better-integrated offerings will ensure that the consolidation trends we’ve seen of late will continue at pace.” 

Image source: Agthentic blog on Medium

New agtech fund venture fund in the midwest. “There’s a graveyard full of AgTech companies from the last decade [that] have failed because of a lack of understanding of their customers: agriculture producers.”

Rebecca Bartels, Director of Business Development, Trust In Food talks about sustainable agriculture.  “​​Sustainability requires a marriage of traditional and new approaches.

Transforming cotton into a regenerative crop. Rebecca Burgess talks about Fibershed, which is “trying to figure out an agronomic recipe that reduces, or eliminates, these chemicals if possible.” They have developed a Climate Beneficial Verification program which helps farmers to come up with a carbon farm plan, tailor it to their crop and geography of their farm, and help create connections between farmers and buyers.”

Logan Hailey writes about the connection between soil health and human health. “The soil is the great connector of lives, the source and destination of all. It is the healer and restorer and resurrector, by which disease passes into health, age into youth, death into life. Without proper care for it we can have no community, because without proper care for it we can have no life”

Biobest raises $ 22.5 million to support global commercial roll out. “They are a global leader in biocontrol and pollination and ecoation, and a pioneer in robotics and artificial intelligence technologies for horticulture. The robots and sensors deliver an incredibly fine-mazed data-matrix with unrivalled detail in time and space. Sensors allow us to pick up early signs of stress and disease in plants and interpret these signs before they are even noticed by a human scout.”

CarboWay resurrects ancient crop and brings it to your kitchen table. “Food and agri-tech start-up CarobWay is bringing the age-old crop carob to the modern table as a super-nutritious, highly sustainable food crop. The Israel-based start-up cultivates locally grown carob trees to boost carob-based product development, noting its potential as a new source of protein and how it can be used in food applications like pasta and bakery.

Montana-based indoor ag company Local Bounti announced it has closed on a previously announced $200 million debt financing facility with Cargill. The project called Project Sunshine will include 32 greenhouses on 28 acres in Pasco will produce 7 leafy greens, and expand into 40 different products like basil, cilantro, and green leaf, red leaf, butter, and romaine lettuce varieties.

Radicle Growth announced a partnership with UPL, a global provider of crop inputs, and sustainable agriculture products. They will run “The Radicle Carbon and Soil Challenge by UPL” to invest $ 1.25 USD in two startup companies that can “positively impact and reduce the carbon footprint and improve soil health of the food value chain. The Challenge provides a platform to explore disruptive and innovative technologies across the entire food value chain, covering soil health, digital tools, supply chain tech, biologicals, plant nutrition, fintech, carbon markets, MRV, new business models, and livestock management.”

Soil moisture sensors in fields can increase average net income by almost 20%, based on research from Clemson University. “Based on agronomic and economic data collected, we found the increased net income ranged from $87.30/acre to $641.19/acre or 7.6% to 63.5%. The average increased net income for all the six farms was $202.28/acre or 19.42%.”

Small agricultural robots map the growth and germination performance of plants and identify pests in soybean and cotton plantations, and avoid compaction due to their light weight. The new prototype uses artificial intelligence (AI) to monitor crops, distinguish effective crops from weeds and move between rows autonomously.

The new prototype uses artificial intelligence (AI) to monitor crops, distinguish effective crops from weeds and move between rows autonomously. Photo: PUC of Rio de Janeiro.

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Listen, and Watch

🎧 Iowa farmer shares his life story, and experiences with adoption of sustainable farming practices on the AgTech So What? podcast. “Loran shares how his drive for innovation has  come from a series of difficult and life-changing events in his personal life. This, coupled with his love of  tinkering with machines has helped him unlock new ways of farming, such as cover cropping, interseeding and relay cropping, that have not only won him awards and improved profitability, but also caught the attention of machinery manufacturers and helped him spend more time with his family.”

🎧 “Mark Messmer with CoverCress which is a new startup company, trying to develop a new crop out of a field pennycress mainly for bio renewable fuels and potentially food use in the future” on Season 3 Episode 3 of the Plant Breeding podcast.

📺 Amazon Prime show “Clarkson’s farm” from Jeremy Clarkson (Top Gear fame). Some of the episode titles are “Tractoring” and “Sheeping.” Need I say more? “An intense, arduous and frequently hilarious year in the life of Britain’s most unlikely farmer, Jeremy Clarkson. Join Jeremy and his rag-tag band of agricultural associates as they face-up to a backdrop of unhelpful weather, disobedient animals, unresponsive crops and an unexpected pandemic. This is Jeremy Clarkson as you’ve never seen him before.” Epi

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