Following on from our article “How to Save the World with SAP” , which discussed how SAP consultants could use their skills to help businesses achieve carbon accounting and sustainability goals, this week IgniteSAP is taking a look at how to use SAP for food security.
We hope by this short introduction to inspire some members of our community to use their SAP superpowers for good: not just for the good of their careers (which may be long and fruitful), but for the good of the whole planet.
Worldwide food production, processing and transportation contributes substantially to the total amount of carbon in our atmosphere, and to other problems such as the reduction of plant and insect biodiversity, chemical pesticides in water courses and plastic packaging.
Many of the environmental problems made worse by agriculture stem from the need to control the farming environment in order to maximise productivity and reduce waste.
Farming is an industry which is economically precarious: the farmer often has to compensate for events outside their control. Extreme weather events or pest infestations can completely destroy a year’s worth of work in a few days. This uncertainty is increased by the volatility of market prices for products like grain, and many farming products are perishable so they need to be transported to the point of sale and sold in a very limited period of time.
These problems can affect large and small-scale producers: from multinational agribusinesses to organic small-holdings.
Because of the combined effect of so many pressures on the business of agriculture it is understandable that farmers are slow to take up new, more environmentally sustainable agricultural practices as they can introduce more uncertainty: at least over the short term.
One way to mitigate this uncertainty is to make the whole process of food production more transparent: to introduce more data points by which the functioning of the food production process can be measured and analysed, with the intention of improving efficiency and reducing waste.
As we know this method of reducing uncertainty is common to many businesses, who solve the problem to a great extent with ERP systems. We will take a look shortly at industry specific agribusiness solutions provided by SAP that can supplant the use of fertilisers and pesticides as a means to achieve optimum production, but first let’s just lay out in more detail why agricultural production and food security in particular is such a fundamental issue for humanity to resolve.
As of January 2021 the world population was 7.8 Billion and is expected to reach about 9.9 Billion by 2050: an increase of more than 25%. In 25 countries the population is expected to double at least.
According to Action Against Hunger, although more than enough food is produced to feed the current global population 811 million people still go hungry.
“After steadily declining for a decade, world hunger is on the rise, affecting 9.9 percent of people globally. From 2019 to 2020, the number of undernourished people grew by as many as 161 million, a crisis driven largely by conflict, climate change, and the COVID-19 pandemic”.
So we are producing enough food but it is not getting to those that need it most. Given that we are unable to get food to those that need it despite producing enough for everyone, we can say that as the population of the world increases, the number of hungry people will also increase. “Hungry” in this case means unable to consume the 1800 calories required daily to sustain health. This measurement does not take account of nutritional imbalance resulting from a lack of sufficient dietary variation, known as malnutrition. In this case someone can get enough calories, but not of sufficient nutritional density and variety, as with a balanced diet.
A person handicapped by a poor diet is unlikely to be able to help themselves or their community to improve their current circumstances when their primary concern is to get enough to eat: so hunger has secondary effects on the development of societies and economies. Malnutrition is the largest contributor to disease, and impairs brain development.
Other reasons why we need to control our agricultural production are more to do with environmental problems. These problems will be made worse as climate change has more extreme effects on global weather systems.
All agricultural processes require huge amounts of water resources. Globally, agricultural use of water accounts for 70% of all usage. As global warming and drying increases of the next decades many farmers will struggle to maintain operations purely due to a lack of water.
Food production, processing and distribution contributes to 21% to 37% of all greenhouse gas emissions depending on how it is measured.
Agriculture is the main reason for deforestation, and forests are a crucial carbon storage and protector of biodiversity.
The fact that perishable food is constantly transported hundreds of miles in distribution to supermarkets is another reason why food production is a major contributor to climate change. Modern food consumers expect foods to be available in a local supermarket that do not naturally grow in the same hemisphere, and so these products are transported. Sometimes food is produced in one country, processed in another, and then transported back in the form of a new product to the country of origin: multiplying the carbon footprint.
According to the Intergovernmental Panel on Climate Change (IPCC), observed climate change is already having an effect on food production. Yields of some crops have been affected negatively, global warming and drying has reduced yields in the mediterranean regions, and particularly in drier climates like some areas of Africa, Asia and South America.
This will cause rising food prices even in those areas which are not affected directly.
Although not all forms of agricultural production will be influenced negatively by climate change, it is necessary to plan and put in place new farming practices that can compensate for climate change now: to take advantage of the potential for increased yields for some crops and to maintain yields that would otherwise decline. Any crop has optimum conditions for growth, and so as these changes take hold so will the change in choice of crops and the methods of farming.
A report issued jointly by the World Bank, the UN Development Program and the UN Environment Program has produced a set of 22 solutions that fall into 5 key areas: to reduce the growth in demand, increase food production without expanding agricultural land, increase fish supply, reduce greenhouse gas emissions from agricultural production, and protect and restore natural ecosystems.
The IPCC recommends a combination of adapting food production practices as well as changing behaviours around the consumption of foods.
As we said before, the use of emerging technologies will mitigate the social impacts of climate change on the global food production system. They are particularly necessary as some previous means of improving yields such as fertilisers and pesticides have been shown to be highly problematic for the environment and even human health. Decades of widespread pesticide use have decimated the insect population because they are not targeted to individual species but also affect over insects that pollinate plants like bees. Excess fertiliser usage runs off the land into waterways and interferes with aquatic ecosystems, and the plants produced for livestock feed which utilises high nitrogen fertiliser causes cows to produce even more carbon dioxide and methane during digestion.
So what can technology do to fix the problem? Some solutions being tried already include plant-based meat substitutes, using natural compounds to extend shelf-life of food products, changing to livestock feeds that reduce the emission of methane in digestion, producing compounds to allow soils to retain a higher level of nitrogen rather than using fertilisers, and many other innovations.
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For subsistence farmers mobile phones are an excellent resource which provides access to data on up to date farming methods and weather patterns, allowing them to make more informed choices on planting and harvesting, identifying pests and diseases, and connecting them to a wider network of peers for advice. But the application of technology when farming for profit has become far more complex.
In all cases a higher number of measurements concerning the soil and plant welfare, and biometrics for livestock, and weather monitoring will result in an extremely large amount of data.
This data can be fed into a database like S/4HANA and accessed in real time just as a manager of a manufacturing facility would do. The ability to interpret the data and get real time insights in the status of the crop or herd will mean that farmers, or in the case of large agribusinesses, agriculture managers can make informed management choices and react to threats to productivity as they occur, or even predict and avoid these.
ERP software such as SAP will also facilitate the profitability of agribusiness in all of the other ways that we are more familiar with. Dairy products for example have an extremely limited window from production to sale to the end-user, and so a sophisticated just-in-time delivery schedule must be organised for each buyer. If a dairy company finds it has a sudden surplus then it may be able to find a buyer for the surplus through an online business network. They may even be able to predict the surplus and find a buyer ahead of time. This case study of the food and beverage vendor Doehler provides an example of what can happen when business operations are improved with the implementation of a database like S/4HANA, and complimented with related SAP solutions.
Precision agriculture methods use data networks that extend to IoT endpoints and use machine learning to make recommendations to optimise agricultural processes: resulting in more efficient use of land and water resources. These can include soil monitoring and weather monitoring, but can also extend to the logistics network: ensuring a minimum of waste along the supply chain. Recent initiatives include the use of drones with visual sensors that can determine by the difference in the colour of plants when individual plants in a field need attention.
SAP Farm Management by Vistex is designed to support fam management decisions. It facilitates operational planning by the use of production orders to schedule farm activities. It gives managers a field and activity-specific task management platform. Irrigation, procurement, storage and crop input materials can all be integrated into an overall management system, and measurements can be taken or information can be retrieved using mobile applications connected to the database.
While we can see that this level of systemisation of farming in large agribusiness is to some extent turning the rural landscape into a factory production line, these same tools can be used in smaller implementations to support organic and sustainable farming methods. The question is, can they be made sufficiently affordable?
The Committee on World Food Security (CFS) has highlighted a form of farming called agroecology, which attempts to maintain the links between human, animal , and plant health and the wider environment.
While emphasising a more holistic approach to food security that encourages governments to undertake regular reviews of the sustainability of agricultural practices, the CFS also recommends the use of evidence-based scientific assessments, and particularly digitalisation. This could be called smart farming.
“Digitalisation can support family farmers and small scale producers in improving their resource management and competitiveness. At the same time, concerns about access and benefit-sharing, capacity-building, equity, digital divide and appropriate safeguards regarding data privacy, access, control and ownership signal the need to consider potential risks to food security and nutrition, which could be addressed by a regulatory policy framework to create a safe and level playing field for the sector.”
So while large agribusiness has embraced technological solutions, access to technology in agriculture is becoming democratised, but still needs to be more accessible. Roughly a third of the world’s food production originates in small farms, and five out of every six farms is less than two hectares in size.
In the EU for example of the 10.5 million hectares of agricultural land, two-thirds were less than five hectares in size (in 2016). 39% of the land area of the EU is made up of farmland so if we are to ensure this land is used efficiently and sustainably, then these farms should be able to utilise farm management software. As the need for sustainable food production increases with each year this will create a larger market for IT consultants who can implement software systems in these farms.
Certainly, even if smaller farms may be unable to finance IT systems, this leaves a considerable number of European farms who will require a farm management system in order to compete in a notoriously competitive market. These farms will increasingly require a database like S/4HANA and integrated applications which collect and make the data available for analysis, even if they do not opt for a high level of automation, machine learning, and IoT systems.
So while there is a need for software systems like SAP for farm management in order for farming to become more sustainable, and particularly for it to reduce uncertainty to the point where environmentally damaging farming practices are no longer required in order to maximise yield, the current market for IT consultants is limited to the larger agribusinesses. This will change as the public demand for products with sustainably sourced ingredients increases, and as the climate becomes more volatile.
We can be sure however that the key to food security in the future is going to be to offset the uncertainty inherent in the agricultural sector with carefully implemented software systems designed to monitor, and make transparent and accessible all aspects of agricultural production so that farm managers can keep the world’s increasing population fed. With the global digitisation of farming, we can be sure that world food security is going to need the skills of talented IT professionals.
