Syngenta’s CEO Michael Mack talks strategy for meeting the challenge of food security
Officials are reporting a sharp spike in wheat, rice and corn prices, which are now selling on commodity markets at three times what they were a year ago. The price build-up comes on the heels of record droughts across North America and Russia this year that wiped out close to 50 percent of crops and prompted Russia to embargo exports until spring. Russia’s announcement touched off panic and riots in Egypt this week, and analysts say more violence is likely to spread throughout the continent as food shortages lead to large-scale starvation. Describing the situation as desperate, UN Secretary General Ban Ki Moon called on member states to “spare no expense” in mobilizing against the crisis. Meanwhile, at a press briefing in Washington, President Obama vowed to hold Wall Street accountable for its role in the events and “bring new regulatory tools to bear on Big Agriculture.”
That’s a fictional account, but for farmers, people living in food-insecure countries and somebody like Michael Mack, who heads the Basel-based global agriculture company Syngenta, certain of its details are eerily close to the reality of a few years ago, or even today. Recalling the price spikes of 2007- 2008 and wheat and rice embargoes in the following years, Mack told Swiss Style, “It was a stark reminder to us that even a world with abundance biologically could get unruly.”
Mack is responsible for a company with revenues of more than 14 billion dollars, 27,000 employees worldwide and customers in around 90 countries. He has an MBA from Harvard and worked in management roles at major global enterprises before joining Syngenta in 2002 and becoming chief executive on January 1, 2008. He understands risk, and what he saw in 2008 worried him and his executive committee.
They saw that each day a billion people go hungry and another billion are malnourished, as well as the likelihood that those numbers will increase as world population rises to 9 billion by 2050. The United Nations Food and Agriculture Organization reckons farmers will have to increase production by 70 percent to meet that demand and, at the same time, a burgeoning urban middle class is demanding more food and more variety.
One of the easiest examples of how you can grow more with less is seed care. You can take a seed and treat it with a minute amount of insecticide. When you plant the seed and it germinates, the soil immediately around it has that insecticide protecting the early shoots from invasive insects. The plant gets off to a more robust start than it otherwise would have. The alternative to that is, if you didn’t have that treatment, up comes the plant, down come the insects, and you spray a lot more insecticide then to combat a bigger problem which could have been averted in the first place. — Michael Mack
On the other side of the equation they saw farmers’ ability to increase production facing unprecedented challenges in water, energy and land scarcity. Agriculture already uses 40 percent of land surface and 70 percent of available fresh water. Farmers also face the challenges of climate change and the need to protect biodiversity.
This prompted them to start asking ”what if?” What if we reached out beyond our natural allies, the growers? What if we engaged stakeholders concerned with biodiversity or worker safety? And finally, what if we were to make the seemingly counterintuitive statement that the world can have all of the food it needs, but with fewer inputs such as water, fertilizer and pesticides? Syngenta had long viewed itself as being at the intersection between three tensions: land, people and technology. This was their system-wide approach and they could see it as the foundation of a sustainable production system deploying Syngenta’s human and technology competencies to unite strong rural economies, resource efficiency and innovative solutions.
What they finally created and launched in September 2013 was “The Good Growth Plan,” committing to six objectives aimed at growing more food with less waste, creating more biodiversity with less degradation, and sustaining more health with less poverty.
The way we got here was we took our system-wide approach to growing more from less, which combines technology, land and people and created specific goals we thought our people could deliver. And if others in the industry came up with their own sets of goals, and committed their people to doing things more sustainably, then we would wake up in 10 years’ time and two things would have happened: the world would be a directionally more sustainable place; and the quality of the conversation about the things that work, and good-better-best methods for measuring sustainability, and good-better-best KPIs that people can agree to, would be much farther down the road.— Michael Mack
“While I don’t think our business model is going to elementally change from what it is today, an R&D business model,” said Mack, “I do think we will substantially preference inventing products in the context of growing more sustainably.”
The commitments are backed up by rigorous metrics and independent monitoring to measure progress, with results published annually. The measures, which will track impact on objectives such as biodiversity, fair labour conditions, or crop productivity versus land, water and pesticide inputs, will be tied to more than 700 reference farms around the world.
Mack, along with his executive committee, is taking leadership of the initiative and insists it is not just paying lip service to the global food security challenge. But where does it rank among other important business imperatives?
“Growing more with fewer inputs is our core business strategy,” he said. “When you have your business heads and your country heads and your marketing people telling investors how we are using The Good Growth Plan to guide our engagement with customers, that’s pretty powerful.”
Mack thinks sustainability will soon be “precompetitive,” or part of the earliest stages of product development. It will, essentially, be baked into all offerings. This will be driven by the demands of an increasingly urbanized global population and the massive footprint and cost of human activity. Governments, too, are going to become increasingly demanding as they run short of essential inputs such as water.
“I think sustainability, over time, will be the driving force for everybody’s business,” he said. “That’s not going to happen by 2015, but it will surely happen by 2030, and why wouldn’t a leading company want to be anticipating taking their very best customers there? First of all, it’s good for business, it’s good for the planet and, if and when this becomes urgent in the minds of regulators, why wouldn’t we want to be way out in front on this?”
Article by Peter Carson