Monday, October 18, 2010

Walmart to save the world

The stumbling by politicians world wide on how to put meaningful things in place to address the strains on natural resources leaves the door open for giant commercial players to set the pace. Who knows if governments will ever gain consensus or make the necessary strides in cross-generational leadership to ensure we can feed the world’s populations in future.

The United Nations’ FAO outlook into the challenge to feed the world in the medium term has elevated the issue. Globally, with a booming population, FAO reckons food production must increase about 70 percent to feed 9 billion people in 2050, with only marginally more arable land and far less water to play with.

The giant US retailer Walmart reckons the reality of developing world farming communities means that we can’t rely on scale and technology to solve the global food gap. A large part of the answer lies in helping small-scale farmers – where farming is a way of life rather than a business – produce more, higher quality food.

Walmart last week launched its new “global commitment to sustainable agriculture” that it says will help small and medium-sized farmers expand their businesses, get more income for their products, and reduce the environmental impact of farming, while strengthening local economies and providing customers around the world with long-term access to affordable, high-quality, fresh food. The company reckons it is uniquely positioned - given the size of its retail footprint and its spreading global empire - to make a positive difference in food production for farmers, communities and customers. Walmart says that by five years time it will help many small and mid-sized farmers gain access to markets by giving as many as 1 million small farmers access to Walmart customers. It says it will train a million farmers and farm workers in crop selection and sustainable farming practices, and expects half of those trained to be women. It will increase the income of small and medium farmers it sources from by 10 to 15 percent. Does this mean they’ll pay more? Probably not – it will just teach them some basics and give them access to a bigger market so they can grow more.

The plan goes further to also focus on waste at the other end of the chain – in the latter stages of the supply chain between suppliers and customers. It reckons it can take out 15% of the waste in the US over that same period, which is probably a very tame objective in the scheme of things. Walmart claims it will also cut out supply which results in the chopping down of rainforest – curbing the use of palm oil and Brazilian beef that incurs those outcomes.

Feed the world? Don’t think so. But win the hearts and minds in the developing world which has a much larger role to play in the future Walmart global model? It’s a cautious step in the right direction.

It seems a fairly meek effort in totality, playing at the edges to ensure it doesn’t create a supply chain that results in it having to pay much more for its produce. Saving the world has a double edge – Walmart is also highly focused on remaining a cheap as it can be in its homeland market where the consumer is likely to be tight-fisted for many years.

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