FBA Issue 31: March / April 2010

 

 

 

 

If there was any corner of agribusiness that has been impacted by issues dogging our day and age, it is the feed supplement sector. Water pollution? It leads back to the usage of metal and mineral supplements. Emerging, uncurable diseases? Antibiotic growth promoters (AGPs) are to blame. Protein feed shortfalls? Get around them with clenbuterol and melamine. Not enough clean water for aquaculture? Give the fish heavy doses of antibiotics. In all the above instances, benefits immediately accrue to an integrator's bottom line. The cost in food safety and public health comes much later and is difficult to trace…or so it once was.

 

 

Over the last decade, meat safety problems created by the abuse of traditional feed supplements and AGPs have generated an uncountable number of headlines. Pork was made pleasant to look at and sickened people by the presence of clenbuterol. Thanks to AGPs, many kilometres away from US chicken farms, mosquitos carried antibiotic resistant bacteria in their mouths, ready to bite people. On the farms themselves, livestock manure transferred both AGPs and antibiotic-resistant bacteria into soil, grains, vegetables and ultimately, into human intestines.

 

On the other side of the world from China, the addition of melamine in gluten caused that plastic to appear in the fish raised at American aquaculture farms. And by now, everyone knows that you can fraudulently boost the protein level and white colour of watered down milk by dissolving plastic powder into it.

 

For this reason, despite stiff resistance from global agribusiness, these dangerous, mounting side effects of traditional supplements were already changing the industry's model. Even if legislators had not taken action, consumers in more highly developed markets were already beginning to do so. Goaded by the EU's 2006 ban on AGPs, European supplement makers were the first to understand that the role of feed additives was changing. Once designed to cut livestock production costs, supplements are now about legal compliance and environmental sustainability as much as they are about boosting feed conversion ratios.

 

 

Unfortunately, any accountant can tell you that a short-term expense is far easier to understand and evaluate than a long-term investment. –And no issue has a longer-term horizon than the one at the heart of traditional supplements: sustainability. It is inevitable that sustainability issues will conflict with the short-term agribusiness model where, depending on the livestock species, one year contains anywhere from two to eight profit and loss cycles.

 

Moreover, much of the industry's resistance ignores the promise inherent in the new generation of supplements. In studies, oregano has been proven better at managing harmful toxic intestinal bacterial than the traditional antibiotic monnesin. Lemon grass has been found to be an excellent AGP replacement for tetracycline in weaning pig diets. Butyric and Caprylic acid, which are ubiquitous in butter, have been found to boost livestock performance more than their AGP equivalents. Similarly, rather than treat sows with infertility problems with synthetic drugs, clay and charcoal-based toxin binders can prevent such conditions from even arising.

 

In sum, numerous herbs have been found to be more than adequate replacements as growth promoters for dozens of antibiotics. Along with their capacity to promote new dangerous human infections, the increasing difficulty of creating new antibiotics ones ahead of inevitiable bacterial resistance against older ones was already putting into doubt their long-term use. Herbal-based supplements never encounter bacterial immunity, nor do they drive the creation of pathogens dangerous to humans.

 

With respect to metal supplements, organic versions have been found to deliver more of the trace metal to the livestock while less is excreted back into surrounding fresh water ecosystems.

 

Yet, considerable resistance remains. Despite the global availability of such supplements, Asian agribusiness is as resistant to the phasing out of AGPs and other traditional additives in favour of new, sustainable supplements as the United States itself. There, for the third time in at least 20 years, a bill to ban AGPs was introduced and rejected by Congress.

 

 

To understand their present predicament with respect to traditional supplements, agribusiness should look at what happened earlier in the energy sector. Because of the environmental problems they created, in the 1970s, US and European coal-fired power plants were forced by law to install pollution abatement equipment. At that time, utilities complained that it would boost their production costs. Twenty years later, when communism fell, American and EU coal-fired power plants were producing electricity more efficiently and leaving the surrounding air breathable. In ex-communist Russia and eastern Europe, power plants, due to the fact they burnt coal less efficiently, produced more expensive electricity while creating a fog of toxic air pollution around their resident communities.

 

In retrospect, the power utilities executives, much like today's agribusiness leaders in Asia and America, were an older generation that 'just did not get it.' Like today's feed and livestock makers, they were brought up on one business model and could not change their values to accommodate the new way of doing things. Like supplements today, back then, pollution abatement technology was seen as an expense, not an investment. In the future, the new generation of natural supplements will be seen as a necessity, not a burden. Without a doubt, the first stakeholders who complete the learning curve that comes with intelligently using supplements will benefit the most.

 

Consequently, the question for Asian agribusiness is the following: Will it wholeheartedly adopt the new agribusiness supplement model like the EU, or deny its necessity, as the US currently does, or grudgingly adopt it for export, in the fashion of Thailand? Below, we examine how the situation is unfolding in some of East Asia's largest agribusiness markets.