Daily Management Review

Food security and sovereignty: France’s Tereos commits for Europe


10/06/2020


Food security is one of the critical concerns of humanity, representing one of the Sustainable Development Goals (SDGs) adopted by the United Nations. At a time when France's agricultural balance is experiencing lasting deficits, certain players have targeted the issue of food sovereignty and are proposing a global model capable of guaranteeing food security for the French people.



The different faces of food security

Food security, in humanitarian terms, is a situation in which people have physical, social, and economic access to sufficient and nutritious food. Given the rate at which the human population is growing, and the rate at which we are depleting natural resources and altering for the worse the climate of the planet — food security is a massive issue. That is why Zero Hunger is number two on the United Nation’s list of SDGs.

Globally we need enough food for everyone to eat and flourish. This food must be effectively and evenly distributed by population, and supply must be secured against potential risks from war, natural disaster, and economic shock.

At the national level, there are further supply chain considerations — as well as economic and political components — to be taken into consideration. Effective environmental protections and ecological policies are needed that ensure that the planet is not too harshly taxed in our pursuit for ever greater agricultural productivity.

Quantitatively, researchers use an array of indicators in their assessments of food security/insecurity at the individual, household, and national level.

Sampling the bioindicators of sections of the population to determine levels of deficiencies would be one way of assessing individual and national level food security.

In terms of national interests, however, food security takes on clear economic and political overtones.

Just as states must maintain control over the functions of their economies to secure their interests, they must guarantee food security to stave off the pressures of external forces. This is because import dependence can be leveraged against them.

A decline in the domestic agriculture sector can also lead to unemployment and can punish the economy. Foreign price and availability fluctuations also have the potential to wreak havoc on an internationally dependent food supply chain.
 

French agriculture under threat

In France, the agricultural and agri-food sector is one of the strongest export performers. Despite being third largest, behind aerospace and chemicals, the modest surplus is running down. The success of French agriculture depends primarily on a select few strong product areas, namely beverages and cereals.

According to the French Treasury department, “in line with the general trends in its foreign trade performance, France has seen a sharp decline in its export market shares in the agricultural and agri-food sector over the past 15 years, especially vis-à-vis the European Union.”

This stands in contrast to its main European competitors — Germany, in particular — which have shown greater resilience.

Some issues causing problems in France include the increase in commercial deregulation in agriculture at the EU level, such as was seen in dairy and then subsequently in sugar.

Another is that in its efforts to remain at the forefront of climate action legislation and commitments, France hindered the competitiveness of its agricultural industries.

A further concern has been the uptick in emerging economies with lower social costs — in stark contrast to the high workforce costs in France — and lower technical and sanitary standards than those within the EU single market.
 

Tereos answers the call

One company responding to these challenges is France’s Tereos, the second biggest sugar producer in the world. Tereo’s strategy has been characterised by significant development internationally, domestically, and across verticals. Through a synthesis of its processes, the group has managed to outperform the wider industry.

After many years of development, Tereos occupies a number of agricultural domains around the world and, as such, is present at every step of the sugar value chain. Not only does it produce sugar and starch derivatives, but biofuels as well: while it is number one in France for sugar beets, it is also number two in Brazil for sugar cane, with significant investment into a diverse range of products.

Positioning itself in this way contributes to far higher levels of efficiency due to the range of opportunities to harness waste and inter-plant synergies; for example, through the reuse of the mineral-rich water produced from sugar beet refinement for fertilisation and irrigation of crops. Or, similarly, through the use of its own biofuels and biogas to power machines and vehicles. The group recently passed the impressive milestone of supplying 50 percent of its own energy through these kinds of green energy projects.

The virtuous cycle concept is also at play at a higher level in the way the company harnesses its profit streams from different territories and reinvests the capital back into France.

Over the past ten years, Tereos has invested €1.3 billion back into its French industrial apparatus. Through this approach, the group offers a range of outlets for French producers and contributes to the viability of their activities: diversity yielding resilience.

One example of this is the Plant 4.0 project, which aims to leverage industry 4.0 concepts developed from across the groups various territories, modelling them in France.

Testament to the strategy’s success, Tereos’s sugar beet farmers continue to sow beets at consistent rates, despite overall interest declining in the sector. This is because they have seen the effort from the group to reinvest in the industry, and the drive for innovation gives them faith.

While France has seen a 1 percent decrease of sugar beet hectares planted since the end of quotas in 2017, Tereos farmers have increased the amount of land committed to sugar beets cultivation by 22 percent over the same period.

Unlike many of its competitors, Tereos has managed to keep all of its industrial sites in France open, despite the trying situation caused by the crisis. The group continues with plans to expand further into organic produce. Pilot harvests in different organic crops have taken place in 2019, signalling the possibility for further job creation in the future.

The lesson being offered by Tereos is that an international development strategy is, albeit counter-intuitively, a mechanism for strengthening and securing food supply in France. Given the increasingly competitive European market, victories need to be pursued as much overseas as at home: this is the surest route to French food sovereignty and security.