maverickag

Cheap food or value-added products: the choice is yours

In Agribusiness, Agricultural Entrepreneurship, Innovation on April 15, 2009 at 2:47 pm

We have a choice to make in this country. It is the choice between pouring billions in government subsidies into a race to the bottom with countries like Brazil and China and pouring billions in investment into the next wave of ag-borne technology.

For too long, we have been enticed by other nations’ “rope-a-dope” strategy. And we’ve been wearing out our banks, our farmers and our soil as we swing away while our competitors wait for their opportunity to deliver a knockout punch.

Now this isn’t to say that we should or will abdicate our position in production agriculture. But the current state of affairs-note the pace of new ag land coming into production in Brazil-should serve as an alarm bell that we need a mix of products that is more robust and diverse.

As one of my good friends and colleagues Dr. Vincent Amanor-Boadu reminded me once, we are actually put into the position of trying to grow commodities cheaply and ship them out of the country only to see them come back to us in the form of value-added products that our consumers then purchase.

We are transgressing our own strengths-innovative thinking, infrastructure, capital-with an antiquated system that focuses on cost instead of profit. Profit is a function of cost AND revenue.

And I’m not going to quote numbers here. I want you to go look them up for yourself.

So what are we to do? Well, first we need to admit there is a problem with the status quo. And second, we need to start spending money at a level of investment that is commensurate with the appropriate product mix of low-cost, heavily-subsidized commodities and value-added products. And I’m not just talking about natural and organic food. I’m talking about polymers, construction materials, household goods and cures for diseases.

It’s time to answer the bell.

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