7 November, 2017 - 11:16 By News Desk

Food wants to be free

Susan Krueger, founder of Agricultural and Nutritional Research in Royston, examines the challenges facing the agri-food sector as information technology poses a threat to everyone involved in farming and food processing – and creates a big opportunity for agri-tech in Cambridge.

Technology designed to provide transparency and authenticate transactions in the financial sector may be about to revolutionise the agri-food industry. Blockchains could improve our diet, encourage sustainable land use and even help destigmatise food banks.

It was writer Stewart Brand, founder of The WELL and editor of the ‘Whole Earth Catalog’, who first used the expression ‘Information Wants to be Free’. Like other technology activists, he believed information shouldn’t be hoarded by intellectual property claimants but, instead, should be accessible to all. Technology did indeed liberate terabytes of information but that freedom was short-lived as a popular revolution was hijacked by global IT companies. Still digesting the publishing industry, these companies sought out their next meal. Financial services, health care, entertainment and transport, even the giants of the motor industry, have been devoured. 

Today a large percentage of a car’s value is IT related and the motor industry’s centre of gravity has shifted from Detroit to San Francisco. So, what’s next on the menu for IT? Why not food itself?

An IT engineer designing a food supply chain from scratch would start by minimising the resources that needed to be extracted from land under cultivation to provide the end user with a balanced diet. 

If this goal was met the agri-food industry would have sufficient resources to feed everyone on the planet. However, balancing supply and demand remains a secondary goal. What good is feeding the world if you can only do it for a year? 

So the system designer would also have to consider environmental sustainability. There is no reason, given the technology currently available, that these two goals should be mutually exclusive. Despite this, as with everything else the IT industry touches, financial sustainability remains a challenge.

The agri-food industry, however, is anything but a ‘clean sheet.’ The network engineer would be confronted with a series of black boxes – opaque to both the consumer and the companies making up an increasingly complex supply chain that is dysfunctional from start to finish. 

Farmers, merchants, food processors and retailers work in an environment that is adversarial, uncoordinated and plagued by a lack of transparency. As a result, the food industry is wasteful, inefficient and unable to share value equitably. 

Retailers and food processors battle each other to squeeze the prices paid for produce, then attempt to maintain earnings by driving up volumes and trading off diversity against economies of scale. 

Farmers, for whom environmental sustainability should be a primary goal, find themselves irreparably damaging an irreplaceable asset just to stay in business.

To date, on only two metrics has the food industry been able to demonstrate success; it has delivered relatively low-cost food to a mass market and has been incredibly profitable. However, food banks have recently appeared on the streets of Britain’s cities, like oases springing up in expanding food deserts. Some see the increased use of technology as the solution, while others believe this is part of the problem. 

The truth is, as in the information industry, the Internet changes everything. Part of that change is driven by the IT industry’s desire to create end-to-end connectivity and then take control of everything in between. And contrary to popular belief, IT companies abhor complexity.

One way to rid a supply chain of complexity is to shorten it. Both farmers and retailers are already using IT to ‘cut out the middlemen’. Farm shops provide direct access to the consumer; they allow the farmer to retain most of the value in the food supply chain and at the same time diversify. 

To a limited extent they can escape the curse of the mono-crop agriculture that is having such a devastating impact on their land. Supermarkets work their way along the food supply chain from the opposite direction, taking control of every process from the fork back to the farm. 

For farmers the Internet, or more specifically the Web, lowers the cost of promoting themselves to a wide audience. Some supermarkets have begun using networking technology to manage what were once complex uncoordinated processes. 

Cattle are monitored remotely throughout their journey through the supply chain. Animals each have an electronic tag from which data is collected in real time. 

The amount of feed the animal is given is automatically calculated and the supermarket itself decides on what day the animal is to be collected and slaughtered. 

Copyright Well Cow Ltd
Image courtesy – Well Cow Limited

Matching the rearing and slaughtering of the animal to demand in the store reduces waste. It drives down costs as the whole process is less labour-intensive. The retailer also takes the lion’s share of the value in the food supply chain. Ultimately it is merely renting land from the farmer on which to rear cattle.

As it is fought today the battle for control of the food chain is one the farmer is slowly losing. No amount of online promotion will give them the audience the major supermarkets reach through their stores and online shopping sites. 

By their very nature farms are rural enterprises with little direct access to customers living in the major cities. However, food hubs aim to tilt the market in the farmer’s favour. 

The ‘Cambridge Sustainable Food Hub’ has been set up by the Cambridge branch of the Sustainable Food Cities initiative. It is the brainchild of Duncan Catchpole who, 12 years ago, began selling home-delivered boxes of locally grown organic vegetables. The hub initially sought crowdfunding, and Catchpole set a target of £150,000. SmithsonHill, a joint venture between Russell Smith Farms and Hill Commercial Investments, offered 90 per cent of the funding required. The hub will also lease space on an agri-tech park the company is developing to the south of Cambridge.
 
When complete the hub will have a storage and distribution facility, shops, a café and kitchens. Catchpole also hopes to attract grant funding from EIT Food, a pan-European partnership set up by the European Institute of Innovation and Technology, and is also continuing with the crowdfunding initiative, which to date has attracted £16,000.

The Cambridge Sustainable Food Hub is fortunate in having a committed backer with a hands-off approach to funding. Giaime Berti of the University of Florence, who has written a paper on the role of food hubs in creating sustainable regional and local food systems, sees the Hub’s donation-based funding model as a fundamental weakness. 

He feels hubs relying on contributions from diverse groups with varying aims and differing interpretations of sustainability end up with unwieldy management structures. 

The profit motive, which drives the agri-food sector, is partially responsible for the waste and environmental damage caused by overproduction. However, it does provide diverse organisations with a common purpose. Sustainability and resilience are not one and the same.
 
Members of the Sustainable Food Cities Network include the Soil Association, Food Matters and Sustain; all have potentially conflicting agendas. As the Cambridge Sustainable Food Hub is a commercial venture there is also the question of how any profits are used. 

Catchpole’s plan assumes the influence of each participant will be proportional to the amount of business they conduct via the Hub. The views of a large grower of organic vegetables, who sells a tenth of their output through the hub, carries less weight than those of a small bakery based in the Hub’s own kitchen.

While supermarkets can monitor meat at all points within the supply chain this doesn’t work for more complex items, ready-made meals for example, with unwieldy supply chains. Food hubs guarantee the quality and environmental impact of any food products they supply. 

They can do this because the ethos of the hub is based on openness and transparency and because all participants are known to each other. However, when hubs attempt to scale, usually by distributing products via other hubs in the Sustainable Food Cities Network they, like supermarkets, find their business model vulnerable to the problems that occur in extended supply chains.

In autumn 2016 chickens that had come into contact with an insecticide called Fipronil were delivered to 180 farms in Holland. This error, by a single supplier, was amplified as eggs travelled through a labyrinthine network of merchants and food processors and used in a variety of products. Because of the opaqueness of this particular agri-food supply chain, retailers only became aware of the error nine months after it was first discovered. Even then retailers were left uncertain about which products were contaminated. 

Some erred on the side of caution, disposing of all eggs and egg-related products in their stores. It is unlikely that a food hub, or for that matter the supermarket that manages the farm to fork production of beef, would encounter a similar problem – until, that is, they attempt to expand this concept. 

Now some within the IT industry believe they have an answer for both the supermarket and the food hub – a technology called ‘blockchain’.

Explanations of blockchains often come across as complex, but in essence the concept is relatively simply. Imagine every document relating to the production and supply of food is accessible to everyone along the supply chain, including the consumer. 

So, a bakery that uses a batch of eggs in their cakes will have, on the day they purchase them, copies of all the electronic documents those eggs have collected from the day the chicken was purchased until the eggs were shipped by the merchant. 

These ‘transactions’ would be merged with those the manufacturer generates and added to a ‘block’ that is then shared with the retailers who buy the cakes. Ultimately these would be accessible by the consumer – not in their raw form, but via a mobile app. 

This app would look much like those which access Nielsen’s Brandbank, the service that currently provides nutritional data on supermarket products. In blockchained applications, however, rather than being generic, product data would relate to the actual item the consumer was placing in their basket.

The blockchain is the IT industry’s answer to the lack of trust inherent within conventional networks; giving up on ways to reproduce it the blockchains simply remove the need for it. 

Everyone participating in a market has copies of all transactions carried out between participants, providing complete transparency and limiting opportunities for deception. 

While it would still be possible to use a banned pesticide on chickens, the ability of retailers to track contaminated eggs back to source within a matter of minutes of it being discovered might give the farmer pause for thought.

Blockchains are used to support cryptocurrencies, such as Bitcoin, a currency that has been ‘set free’ from banks and the State by IT activists – some would say a little too free. Despite the Wild West image of Bitcoin companies, they are now touting applications for blockchain outside of the financial services sector. In its presentation of the future of blockchain technology, bankers Goldman Sachs point to the authentication of organic vegetables. 

Even so, the blockchains most likely route into the food industry is on the back of cryptocurrencies. The Russian Republic of Tatarstan launched a cryptocurrency for use in the beef industry. It then decided to use the underlying blockchain technology to support a managed supply chain, much like the one operated by Tesco in Britain. 

However, in Tatarstan the meat is trackable all the way from the farm to the restaurant. In Africa the mobile phone-based currency M-Pesa is used in areas where there is no conventional banking infrastructure. This has created a market which is more receptive to cryptocurrencies. 
And it is in developing countries, where the large agri-food companies are not so entrenched, that blockchain technology is likely to appeal to early adopters.

So far so easy, but organic cabbages are not Bitcoins; they don’t change hands for £4000 each. As Pradeep Debata of the Judge Institute Business School explains: “Funding the IT technology to support blockchains to support Bitcoin works because it is paid for in Bitcoins that are constantly increasing in value.” 

And Debata, like Berti, points out that ‘blockchaining’ the agri-food supply chain will create a lot of data that in turn will require a lot of powerful servers in very large data centres. 

Amongst companies in the agri-food sector only supermarkets currently have the IT infrastructure capable of supporting blockchains. Even so, why should they implement the technology? 

While blockchains are a perfect fit for food hubs, providing the transparency on which their business model is based, they are less well suited to retailers who are secretive, adversarial and keep data close to their chests. 

Tesco outsourced its loyalty card until it realised the analytics underpinning it was strategic as opposed to merely nice to have – at which point the whole operation was brought in-house. If supermarkets created blockchain networks who would they share them with? 

Not, as in the case of food hubs, with everyone else in the market – not with suppliers and customers and definitely not with potential competitors. It happily exposes data that guaranteed cabbages it sold were organic but not how much it paid the farmer for growing them. 

This is probably academic, as while loyalty cards are ‘big data’, blockchains are extremely big data. Perhaps only a handful of IT companies have the data centres capable of hosting agri-food blockchains. One of these is Amazon, the company that, as anyone in the book industry knows, has already taken ownership of the publishing supply chain from author to reader. Should Amazon’s purchase of Wholefoods worry the agri-food industry? Probably.

How does an IT engineer view the future of frozen peas? Much like this. Your refrigerator detects you are running low on frozen peas so automatically sends an order to Amazon. 

The peas have been planted, weeded, sprayed and finally harvested by robotic GPS-guided agricultural machinery. They are frozen and then transported via self-drive trucks to distribution points around the country, awaiting those orders from your refrigerator, at which point they are delivered by a drone to your house and dropped on the patio (sorry, you will have to carry them by hand to the refrigerator, but no doubt the IT engineer is working on this with help from a colleague at Dyson). 

As far as the engineer is concerned there is no difference between a packet of peas moving along the food supply chain and a packet of data travelling across the Internet. So, the IT industry ate the automotive industry for breakfast and now it is eyeing up the food industry for lunch. Blockchains could be the strategic piece of technology IT uses to prize open the agri-food supply chain to liberate the data that lays within. This is one food utopia; the food hub is another. Then there are dystopias – one of these involves food banks.

Follow the trajectory of the food industry and we discover the point at which the arrival of food banks became inevitable. Trace its arc from the intersection of the agricultural and industrial revolutions and it ends where we are today, at the intersection of the industrial and information revolutions. 

Starting when people abandoned the countryside to seek work in cities they became separated from traditional sources of food. Malnourished, they were often too weak to complete a day’s work. 

A poor diet often contributed to premature death; the worker’s skills died with them. Enlightened self-interest on the part of factory owners saw the introduction of in-house shops selling subsidised food, and canteens serving breakfasts and midday meals. 

Medium- and large-sized companies also had their own medical centres. The idea that the industrial worker’s health and diet was partially the responsibility of the factory owner persisted until the 1940s.

After the Second World War the State took over the role of healthcare provider. With rationing still in place, the State also took a keen interest in the nation’s diet, with a constant stream of public service broadcasts and printed publications explaining nutrition and the preparation of food. Girls were taught ‘domestic science’ at school and most were able to cook by the age of 16. 

However, while the State has retained responsibility for healthcare, which is still free at the point of care, educating the public about food and nutrition has been passed to the food industry itself – in retrospect not such a good idea.

Food has become a fetish and consumption of it a form of entertainment. Its ubiquity and abundance has seen food slip down the hierarchy of needs and become a discretionary consumer product, its nutritional value all but forgotten.

Food has ended up much where it started, with food nineteenth century style deserts in parts of some industrial cities. With manual labourers now paid less than knowledge workers it is possible for someone who exerts themselves for eight hours to consume less protein than an office worker who spends all day sat at a desk. The works canteen has gone, replaced by a vending machine stocked with carbonated drinks and chocolate bars. 

Catchpole sees food hubs as a solution to some, possibly all, of the shortcomings of the modern-day agri-food chain. However, the supermarket’s initial response has been the community food store.

While we have yet to see robots and artificial intelligence create the mass unemployment some predicted, the amount of labour is steadily making up a smaller part of industrial or commercial tasks. 

Talk is of a ‘gig’ economy in which fewer people have full-time jobs. In some cases, even a person who is ‘employed’ can no longer afford basic necessities, such as food. This makes sending tonnes of unsold food to landfill sites seem especially obscene; juxtaposing two of the fundamental failures of the agri-food supply chain, overpricing and oversupply. 

The community store addresses both problems at once. The supermarket’s surplus stock is passed onto the stores, rather than scrapped, then sold at hugely discounted prices to people on low wages or who receive social support. A good idea, up to a point. 

As Shelly Vorster, founder of the SV Food Group, which has worked with Yorkshire-based Community Foods explains: “It tends to be a case of take what is given so sometimes, quality, nutritional value and availability are an issue.” 

Crumbs falling from the tables of the large retailers cannot be regarded as part of a structured agri-food supply chain. As a means of providing people with a nutritious diet this is as unreliable as scouring the Serengeti for anything the hyenas might have missed.

Supermarkets are keen to support community stores because they draw attention away from a much darker cloud on the horizon, the food bank. ‘Bank’ is a rather misleading name for organisations that provide people who are underemployed with food. 

Food banks rely on donations, both for the supply of food and the resources to distribute it. Unlike community food stores they are not commercial organisations – most operate as an offshoot of major charities. 

Like community food stores their stated aim is to feed people who earn a low wage or rely on state benefits. But they also exist to assuage guilt; people drop a few items from their weekly shop into a collection box as they exit the supermarket with their Heston Blumenthal-inspired ready meals. They are used as a political football. The growing number appearing in the food deserts of industrial cities are used to embarrass the Government. Charity is not the ideal model on which to base access to primary human need – not in a developed country such as Britain, the 27th richest nation in the world. 

It institutionalises an injustice instead of fixing it, and anchors the fault line in the agri-food supply chain deep in the economy and society itself. Worst still the modern attitude to food – the belief it is a discretionary purchase – stigmatises people forced to use food banks. 

One way to end this stigmatisation is for all of us to use food banks. Doing so would separate the two roles of the consumption of food – satisfier of basic human need and form of entertainment. At first sight a radical idea, but for a growing number of people blindingly obvious and possibly inevitable.

The NHS provides healthcare free at the point of care, so why shouldn’t the agri-food industry distribute food free at the point of consumption? Perhaps the reason it does not is merely an accident of history.

Catchpole has incorporated the universal living wage within the manifesto for his Sustainable Food Hub. If at some point a government follows Catchpole’s example then why not a universal living diet? Why not a reform to the EU’s Common Agricultural Policy, translating it into an ‘agricultural commons policy?’ Because as more people resort to banks the need for reform becomes ever more pressing. 

Agri-food needs a new business model as the individual consumer’s micro-economic problem translates into the industry’s macro-economic crisis. Fail to adapt and an agri-food supply chain, already ecologically unsustainable, will become economically unsustainable. 

Agri-food companies must choose between a Faustian pact with the IT sector or a gradual erosion of their market by food hubs and other community-based initiatives. If the UK elects a radical left-wing government and food banks continue to proliferate then at some point the State will intervene in the agri-food sector. 

These are all possibilities, but what is certain is a growing need for greater transparency and a more equitable sharing of value throughout the length of the agri-food supply chain. The technology to make this happen is owned and managed by the same companies that set information free. It remains to be seen whether they can now democratise food.

• A relevant conference ‘Saving Waste in Horticulture: Optimising Resources’ (part of Agri-Tech Week 2017) is being held at the NIAB Research Centre on Friday 10th November 2017.

www.aandnresearch.co.uk

Newsletter Subscription

Stay informed of the latest news and features