A food chain is a complex organization, coming a long way from input suppliers to farmers, till the final consumer at the end. At the middle, we have farmers, industry, wholesalers, retailers, foodservice and service providers, like storage companies, transport companies, bank, institutions and organizations. If you imagine the orange juice chain, it comes from input suppliers to orange farmers, and goes till the final consumer. A lot of people, a lot of organizations...

The objective of our article is to show how innovation is important to keep a food chain competitive. Nowadays, competition is beyond a company, since it is a chain that competes against another chain. I will start with input suppliers and farmers in this article. These companies have a huge responsibility, since there is a pressure over limited resources all over the world.

Inputs play a key role on a food chain. When properly produced and used, they help farmers to reach good yields, produce high quality products and larger revenues, and help consumers to have safer, tastier and cheaper food on their tables. In the other hand, inappropriate production and use management may lead to resource overexploitation, negative margins to farmer, and more expensive or unhealthy food to families around the world. Therefore, input management is one of the biggest challenges when it comes to food security.

In order to overcome such problems, researchers from private companies, universities and governments around the world have been seeking innovation on input production and application. Among the major challenges, I list at least thirteen points...
Need to develop renewable production inputs that replace not-renewable ones, such as today’s fertilizers. Fertilizers will become a threat for humanity, and we should come with something new.

Innovation that allow the reuse of resources and the use of byproducts in order to reduce pollution

Innovation that reduces costs for farmers, saving some operations and improving their margins

New technologies that lead to less residual effect of chemical products used in agriculture

Better, more efficient and more economic machinery, that saves fuel

Genetically modified varieties in order to increase results

Better grain to protein (animal) and sun to energy (plant) conversion

Biotechnology and natural control in order to use less chemical products

Innovation that reduces losses on input transport and application

Genetically modified plants more adapted to droughts and water restrictions

More efficient feeding technologies for animals

Innovation towards use of more resistant plants

Innovation on breeding that lead to precocity, which would reduce the cycles and there enhance production.

There is a huge list of demanded input innovations by farmers, in order to be more competitive. These are the starting points, but there are several others.

In the last couple of decades world agricultural production has experienced extraordinary improvements, especially regarding yields, cost management and, mostly recently, quality as well. Much of these improvements are a direct result of the ability of farmers to face external competition since deregulation, using modern technology and production systems. Nevertheless, there is still a lot to be done in this field, even regarding yields.

The major areas of improvement in which innovation plays an important role are sustainability, with the development of technologies that allows, for example, lower water consumption; new crop varieties that present better energy conversion, are more resistant or more precocity, which would reduce the cycles and there enhance production; animal welfare; certifications and reuse of by-products.

Innovation on crop and land use decision to keep sustainability, resource conservation and on other hand, have the maximum possible use of the land. Some areas of the world allow three different crops per year;

Use of equipments that allow better usage of land, which helps increasing yield;

Innovate in water usage, developing and applying technologies that reduce consumption per area of water;

Animal welfare techniques;

Innovations in governance structures, allowing to share equipments with neighbors, selling services, better using all assets of the property, in order to be as more efficient as possible.

Competition is driven by several factors, being one of the most important innovations. To create new solutions that are winners in solving problems is the pathway for companies to profitability and sustainable advantage building. In food, where we have all the production pressure discussed in previous articles, is an area where financial resources should be more applied towards research that will provide innovations. In the next article, I will discuss needed innovations for food industry and food distribution.

The author is professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker.

(Source: China Daily)