TWC Lesson 7: BioBusiness Revolution - Agriculture and the Environment

Brief Overview/Summary

Given the projected rise in global populations in the years to come and the accompanying strain this unrelenting growth phenomenon would place on Earth’s limited natural resources, the need for humankind to raise productivity of its use of these resources is gaining extreme urgency.

 We can no longer afford to remain ignorant of the destructive nature of our historical exploitation of Earth’s resources. As Mahatma Gandhi puts it succinctly: “There’s enough on this planet for everyone’s need but not for everyone’s greed.” The impetus for mankind today is to pursue sustainability with coherence, commitment and ingenuity. As Prof Shahi observes, “when we are able to grow the resources we need, we will finally be on the road to sustainability.”

The lesson touched on the particular relevancy of BioBusiness innovation in the environmental and industrial sector where it presents great potential to raising resource productivity. For instance, farmed fishing as an example of innovative biotechnology in boosting the supply of seafood and meeting growing demand, has contributed to mitigating the adverse consequences of over-fishing and marine ecological damage. Growing consumer demand for organic produce has also encouraged increasing use and development of innovative, environmentally-friendly farming technologies, which opens the door to alternative sources of sustainable food supply. Not only would it contribute to greater food security in the face of growing demand, but it also promises sustainability.

Another important application of biotechnology is in the production of Genetically Modified food (GM food). The World Health Organisation defines GM food to be food derived from organisms whose genetic material has been modified in a way that does not occur naturally (e.g. through the introduction of a gene from a different organism). Most existing GM crops have been developed to improve yield, through the introduction of resistance to plant diseases or of increased tolerance of herbicides. The WHO posits that in future, genetic modification could be aimed at altering the nutrient content of food, reducing its allergenic potential or improving the efficiency of food production systems.

There is no lack of controversies surrounding GM food, with some countries demanding for greater consumer awareness to be enabled through the labelling of GM food. In some countries like the United States, such discriminate labelling is subjected to an outright ban. In the discussion in class, Prof opined that there is no reason why labelling of GM food should be banned, given that there is little reason to assume people are all adverse to consuming such foods. It is only reasonable that consumers should be aware of their choices. At the very least, accurate attribution of causation may be made in an event that there are negative consequences from the consumption of such foods and precaution may be subsequently taken.

As with all other innovation, it is important to bear in mind the need to identify and exploit ‘summit’ opportunities and to invest in research and development of ‘cloud’ opportunities.

Interesting Observations and Ideas

Reading 1 provided an overview of agrobiology and environmental sciences – taken from the draft manuscript of BioBusiness in Aisa.

Some of the key points I got out of the reading are summarised as follows:

Chapter 8

1. Agribiotech promises to greatly accelerate economic growth and wealth generation for farming communities and societies that see its potential and choose to apply it wisely.

2. New developments in agribiology and agribiotech promise the potential of newer and better ways to feed the world’s population, and to provide farmers with the knowledge and skills they need to substantially increase the value of agricultural output. This will only have its maximum impact through enlightened efforts by governments to achieve agricultural sector reform, and to ensure greater productivity while enabling the creation of newer and more viable options for farmers and farming communities.

ª      Application of new tools and technologies and the identification of high value-added agricultural produce in response to market interest and demand

ª      E.g. selective breeding introduces drought-resistant, faster growing and higher yielding crops

ª      Combining classical and modern biotech à potential to contribute to substantial value creation in terms of crops that will yield substantially greater output for less input; are more environmentally friendly (requiring reduced/no pesticides or tillage); more beneficial to consumers in terms of greater nutrition and longer shelf-life

ª      Recent advances offer powerful tools for the sustainable development of agriculture, fisheries, forestry and food BioBusiness industry sectors

ª      Potential biotech benefits:

› Higher yields on marginal lands

› Improvement in food quality and consistency

› Approaches provide new research methods that can assist in the conservation and characterization of biodiversity – enable greater efficiency in conducting selective breeding

› Reduced dependency on the need for chemical insecticides and herbicides that can be toxic and hazardous to human and animal health and the environment

ª      Potential biotech risks:

› Possible effects on human and animal health

› Potential environmental consequence

ª      Article’s response to the identified potential risks and resistance shown by consumers towards GM foods:

› Reality is that modern approaches to biotech are little different from traditional approaches for selective breeding and cross-breeding of species that have been used for hundreds of years

› Need to adopt a cautious case-by-case approach to addressing legitimate concerns

3. The application of new technologies and approaches to agriculture will enable innovators and entrepreneurs to identify and create new product and service opportunities, as well as find newer and better ways to reach their markets.

ª      Need to enable developing countries to benefit from new tech and capabilities

› Current investment in biotech research tends to be concentrated in private sector and oriented towards agriculture in higher-income countries where there is purchasing power for end-products

› Growing consensus that efforts should be made to ensure developing countries and resource-poor farmers benefit more from biotech research

› International agencies striving to address this need through encouraging increased public funding and promoting dialogue between public and private sectors – development of a “Code of Conduct on Biotech” aimed at maximising the benefits of modern biotech and minimising the risks; to be based on scientific considerations and weighs environmental, socio-economic and ethical implications of the biotech

ª      Need to prepare farmers for the future

› Real value may be obtained from identifying niche opportunities to provide markets and consumers with produce high in market demand

› Cultivating popular, traditionally hard-to-obtain products; breeding highly desirable livestock, fish and other produce in response to market demand

› As trends and market demand will change with time, farmers need to be innovative and responsive to develop  new products and applications which retaining popular, high income generating products

› Increasing size of farm holdings through agriculture and land reforms and establishment of farming cooperatives à allow economics of scale, mechanization and new technologies to be introduced (e.g. farmer cooperatives which facilitate direct partnership between farmers and end-consumers according to quality and standards sought by the consumer)

› Focus on moving up the value chain by producing in response to consumer and market demand and interest

› Proactive collaboration is key

ª      Responding to changing consumer perceptions and preferences to organic produce (new market opportunities)

ª      Biopharming

› Using plant and animal systems to express vaccines, biopharmaceuticals and antibiotics while still largely experimental à prospect for substantially higher income for farmers

4. Even as we work to introduce and expand the role of innovations and new technologies in agriculture to create products in response to market demand, we need to be ever vigilant about the need to protect the safety of consumers and safeguard the environment.

Chapter 9

1. Investment in environmental and industrial biotechnology and BioBusiness are likely to bring very substantial returns on investment. Such investment can potentially contribute in large measure to converting garbage into valuable resources; cleaning up the environment; and identifying new species for wealth generation.

2. Substantial opportunities exist for industrial application of life science and biotechnology products and technologies for use as industrial enzymes, biofuels, biomaterials, and in application for a range of industrial processes including mining.

3. We have only begun to start capturing the opportunity and potential of “Summit” environmental and industrial BioBusiness opportunities the Asia-Pacific region. This area of focus offers tremendous scope to fuel the growth and development of entirely new technologies, entrepreneurial opportunities, and even new industry sectors

Reading 5 discusses the potential of environmental and industrial biotechnology in developing countries:

Development of modern biotechnology (defined as the application of biological organisms, systems and processes to the provision of goods and services):

ª      Advances mainly in the medical field

ª      Second-largest application: agriculture

ª      Third broad sector of application: in industry and to environmental problems (receives the least attention)

Agenda of paper: overview of the opportunities and barriers to the industrial and environmental application of biotech in developing countries.

Industrial biotech’s application (3 main areas): industrial supplies, environmental, energy.

Assessment of the potential of industrial and environmental biotech in developing countries:

ª      Expected economic benefits of this sector of biotech are much less significant than those found in pharmaceuticals and agriculture – hence development of this sector will be restricted to niche markets

ª      Capital outlays required to use bio-based industrial processes are presently higher than those of traditional mechanical or chemical processes – hence may be difficult to justify starting industries based on biotech, which leaves innovations to existing facilities

ª      Only intermediate developing countries – those with existing industries and some scientific capacity – can realistically consider applying biotech to industrial processes

Opportunities presented by industrial and environ biotech:

ª      Economic: potential for reduction of operating and energy costs through replacing chemical-based production methods

ª      From standpoint of companies: Economic advantage gained from entering or creating a particular niche market

ª      From the standpoint of developing countries: possibility of reducing pollutant emissions at the source – enhance the public image and generally improve environmental conditions of the workforce

ª      Environmental: consistent reduction in hazardous waste products

Potential negative consequences:

ª      Schumpterian concept of innovation: recognises that a new innovation can render its predecessor obsolete while creating new opportunities

Barriers to incorporation of biotech into industrial settings in intermediate developing countries

ª      Financial: bank financing is not an option in developing countries; important viable alternative is private (domestic/foreign) investment à but these face the obstacles of domestic institutional gaps and missing public capital investment resulting from economic stagnation and falling commodity prices.

ª      BUT, less expensive to overhaul an obsolete factory in an intermediate developing country + many industrial tech are scale-neutral, allowing even small businesses to take advantage of them

ª      Structural resistance: lack of biological training or knowledge of potential benefits of biology in the trade amongst the workforce à solution: creation of a local pool of scientists knowledgeable about biotech in the manufacturing process

ª      Structural resistance: nature and context of the targeted industry – whether the absorption capacity wrt fundamental research breakthroughs is sufficient à e.g. investments in order for processes involving biotech to be used effectively, there is a need for certain production standards – impt to bring such industrial processes up to international standards from the beginning to allow for the option of exporting products and to avoid incurring future additional capital outlays from changes in legislation (accommodation of international standards)

Cleaner production processes

ª      Most likely form of industrial biotech that can be introduced in the near future

ª      Need only affect specific parts of a given production process- no need for major overhaul

ª      Potential to show quick economic benefits

ª      Assist companies to conform to environmental obligations

ª      Action plan: need for foreign-owned firms to be convinced of the value of cleaner production given that they are the main perpetrators of ‘dirty’ industrial processes (engage in ventures with high ST yields in order to avoid economic and political volatility within the country)

Policy directions:

1.      Success should be demonstrated by targeting projects to appropriate regions and existing industries

2.      Relating capacity building exercises to international environmental agreements

3.      International agencies can promote private sector involvement by helping mitigate risk through the establishment of mechanisms to identify promising technologies

4.      Microfinancing options for small company owners

Strong local government involvement by publicly displaying a positive attitude to both biotech and entrepreneurship

Reading 7 is a paper presented at a global conference organised by the Food and Agriculture Organisation and examines the issue of food security – how to feed the world in 2050.

Issue: rapidly expanding world population presents the incumbent need to increase food production in order to meet future demand.

Stand: report argues that the required increase in food production can be achieved if the necessary investment is undertaken and policies conducive to agricultural production are in place. Increasing production also has to be accompanied by complementary policies to enhance access by fighting poverty, especially in rural areas, as well as establishing effective safety net programmes.

Key points (from executive summary):

ª      There is a need to increase total annual net investment in developing country agriculture by 50% in order to achieve the necessary production increases. This would require major reallocation in developing country budgets as well as in donor programmes + policies that support farmers in developing countries – encourage them and other private participants in agriculture to increase their investment

ª      Agricultural R&D to reverse the global decline in rate of growth in yields of major cereal crops – Investment in agricultural R&D neglected in most low income countries. Action plan: Currently, R&D in developing countries is dominated by public sector à additional investment to come from government budgets; Encourage increase in private sector investment by addressing issues of intellectual property rights while ensuring a balance is struck so that access of smallholder farmers to new technologies is not reduced

ª      A lack of income opportunities for the poor and the absence of effective social safety nets contribute to the persistence of hunger in the midst of adequate food supplies (economic growth of the country in general does not necessarily successfully reduce hunger; source of growth matters). Action plan: need to focus on growth in the agricultural sector – this sector contributes to the greatest to the poor’s incomes (75% of the poor in developing countries live in rural areas and their incomes are directly or indirectly linked to agriculture); need to implement comprehensive social services (e.g. food assistance, health, sanitation, education and training, with a focus on the most vulnerable)

ª      Dependence on international trade for food security. Action plan: need to move towards a global trading system that is fair and competitive and contributes to a dependable market for food (e.g. measure such as reform of farm support policies); need to provide support and greater access to developing country farmers so they can compete on a more equal footing; countries to establish joint measures to be better prepared for future shocks to the global system through coordinated action in cases of food crisis, etc.

ª      Climate change and increased biofuel production represent major risks for long-term food security à declining yields of food crops. Action plan: need to re-evaluate policies promoting the use of food-based biofuels to reduce the competition this use poses to food production.

Concluding remarks: need to mobilize political will and build the necessary institutions to ensure key decisions on investment and policies to eradicate hunger are taken and implemented effectively. The time to act is now.

Issues for Further Discussion

I felt that the topic of GM food – the impetus, benefits, examples and controversies surrounding the technology could have been more extensively discussed and debated upon. Personally I feel that GM food has a lot of potential, especially where food may be enhanced nutritionally and distributed in places suffering from acute poverty where malnutrition is rampant.

Personal Ratings for Session

I would rate this lesson 8/10