Rabobank: New External Pressures on Food and Agriculture Leave Industry Ill- Equipped

Mar 06, 2013

Food and Agriculture Industry Must Enter into Long-Term Partnerships Says New Report

Rabobank’s Global Food & Agribusiness Research and Advisory analysts published a new report on the current state of the food and agriculture supply chain.

The report identifies weaknesses in the system which may leave the industry vulnerable towards new complexities. The traditional pressures that are mentioned include: rising agricultural commodity prices, supply and demand dynamics, population growth, and more. These pressures coupled with newer external forces like the use of agricultural commodities for biofuel production, speculation of commodity markets have exacerbated the weaknesses that are present in the current supply chain model.

Rabobank authors suggest that transferring over to a new supply chain model, one that they call the dedicated supply chain, could transform the food and agriculture industry. In this type of model - upstream suppliers and processers alike would enter into long-term partnerships. The value of this long-term approach would be the sharing of information over an extended period of time. This would ultimately create a culture of a system focused on creating value rather than one that’s centred on chasing price.

The following are the key advantages of a dedicated supply chain:

•Reduced risk
•Improved productivity
•Assess to new markets
•Enhanced brand reputation
•Improved access to capitol

Positioning agriculture and food companies towards long-term growth will better equip the industry to tackle challenges with greater ease, especially when it comes to feeding a growing population.

The report encourages food and agriculture companies to take on more leadership and share their success stories with the industry at large.

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