PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | SPEECHES & EDITORIALS | 1999 | THE APEC FOOD SYSTEM

The APEC Food System — A Comprehensive Approach to Reform Raymond Cesca Managing Director -- World Trade, McDonalds Corporation APEC CEO Summit Auckland, New Zealand September 11, 1999 Thank you. You just heard two excellent presentations outlining the APEC Food System and its resulting benefits -- if applied. But right now, the Global Agricultural Community is in a chaotic condition. It is one of the most unorganized, fragmented and protected sectors of industry on a global basis. Many companies and countries are to the most part agriculturally organized and efficient, but on a whole the global community has a lot to be desired. For one, a handful of companies and organizations have risen to become global in their structure, attempting to serve the global consumer, but the agricultural infrastructure supporting them still remains very much local, unproductive, inefficient and expensive. They act counter to each other causing tension and fear. The effect of this lack of global organization, cohesion and teamwork is a shortage of food for those who need it and cannot get it. And for those who can get it the cost is so high making it almost prohibitive to purchase. Our old systems or ways of working are archaic. They are just not working. We need a paradigm shift that will resolve these situations. We need to change our way of thinking and our behavior. It seems like a sad state of affairs, but yet it sheds light on an obvious opportunity for us in the food or agricultural businesses to enhance food security and affect, promote, and participate in the upgrading of the entire agricultural industry. We should be the catalysts for reform, by aligning ourselves with a common mission to change the way we operate globally and to redesign how we produce and distribute food as we move into the new millennium. We can raise our horizon, and let our motivation drive us to do something that benefits mankind, while at the same time retain our individual profitability, growth, and competitiveness in the market. We, at this time, right now, have an immense opportunity to make such an impact on the way that food is produced, processed, and delivered to the vast majority of people in the APEC region. The only thing preventing this from happening is our own frailties. Ernie Micek, who is an authentic and sincere global leader in the agricultural world, and Fran Wilde, an aggressive agricultural reformist, gave us the tools and the resulting benefits of a well thought out system -- the APEC Food System. A system that can be the comer stone of the reform and paradigm shift we are seeking. Now what else can I add to this subject but to say that we can make a difference in our lifetime as to who survives and who doesn't. Having food to eat, and having enough of it, is the most basic of all needs that we all have. There are no exceptions to this. We are all the same. Except that, in realty, we control the string that could prevent those not in a position to afford the food from getting it. We can decide to support a system that has at its base root an interest in efficient agriculture or decide not to. I believe if we are going to run a business profitably, I guess we should do it with a sense of purpose and maybe that purpose should be to feed the APEC region with the best possible food at the most affordable prices. Okay, so we do this, what will it all mean? Ernie alluded to the redirecting of disposable income to other things than food. I refer to it as the multiplier effect. The multiplier effect is the synergic effect that happens when we put to play the elements in a different way and let the dynamics of the system take on its own direction or path and that path will lead to greater efficiencies than if it we just left it alone. The path adds elements and the elements are in multiplies and the multiples are gigantic compared to where we started. We look at the entire agricultural value chain and we see that every link is important and that every link is more efficient, and that every link may be a new business that was not there just a few years ago. The multiplier effect for the food system can affect every sector of agriculture. If we had a working APEC Food System, then the creativity of each nation moves to the forefront. Why? Because they would be driven by the challenge, the challenge to make the market efficient and one where they could use their talents in an extraordinary way. This is basic motivation. Not one that is contrived or forced, but one that is driven by the shear nature of the entrepreneurial spirit that it encapsulates. The champions of the industry are the ones that will drive the System to new heights. They will raise the bar. They will complete the task. If we block that avenue by not creating the environment of an open system, then we will stifle creativity. If we stifle creativity, then we hurt advancements. If we do that, then no one benefits. We will not achieve what Ernie and Fran outlined for us. We will fall behind or at least stay in the same rut that we began with. We cannot be fearful during this process; we must to have faith that what we are supporting is good -- and good for all of us. The APEC Food System is not geared to benefit only a select few. Now let me give you a quick briefing on what has transpired since the vision of an APEC Food System was established. For example, PBEC, the Pacific Basin Economic Council, sponsored and led a major twenty-member country study on the best practices in the poultry industry. It was approached from a value chain point of view, so each link along the entire chain, from farm to consumer, including the major supporting functions like food safety and financing, were analyzed. The contributors were from six nations and the results highlighted the best the industry had to offer. The study is now complete and the application phase is now underway for those nations that have a competency to produce poultry efficiently. What this means is that the consumer will eventually have access to more poultry products and at a price that will be more affordable to more people. This is the spirit of the APEC Food System. Over the coming year, the best practices will be applied to create two working models, one in Malaysia and one in Mexico. They will be used as prototypes for others to follow within their respective regions. We will also capture the learning's during the process to share with the other Pacific Basin Economies as they begin to implement their own process. Also over the coming year PBEC, will take on an additional best practices effort for oil seeds, an important and extensively used commodity and utilize the same model we developed for poultry. A second initiative coming from the APEC Food System is the joint efforts put forward by PBEC, PECC, USASEAN Council and the Center for APEC, and ABAC to create a roadmap for accomplishing the goals of the APEC Food System. A strategy forum, hosted by PBEC, was held earlier this year that did just that. The forum drew participants from the 20 member economies. The end results included a directional and functional work plan that we all can ascribe to that will help align resources and put more efforts behind the things that are important. The forum generated four critical strategies: Rural Development, which is far more than road and power plants, but capacity building and job creation in the rural communities. It also dealt with Food Security, Technology and Technology Transfer (including Food Safety and Biotechnology), and Trade and Investment Liberalization. These four are the cornerstones of how we will proceed under the APEC Food System umbrella. All the work going forward will be aligned with these strategies to gain synergies. Results should be quicker and more meaningful and above all sustainable. A third initiative that PBEC is undertaking is to grapple the very important issue of biotechnology and its application. There has been very little cohesive coordination and leadership in the international arena. Our consumers in the Pacific Basin are confused and misinformed. So our first step is that PBEC will host a Forum early next year to address and clarify the issues surrounding biotechnology. Then we will lay out a plan to resolve these issues, and then to actively participate in its implementation. This issue is critical to the APEC Food System in that it will provide the tools to help accelerate the process. A fourth initiative came out of the just mentioned Forum, where the major trade groups like PBEC, PECC, USASEAN Council, the Center for APEC and ABAC have aligned themselves to put resources behind Rural Development, which is considered one of the most important strategies. The outstanding work from PECC helped put color, depth, and focus to this initiative. It is called RISE, which stands for Regional Integration for Sustainable Economies. The main goal here is build rural capacities through economic activities that increase the livelihoods of the rural communities, allowing them to remain where they are, thus slowing the process of migration into the urban areas. This initiative deals with both farm and non-farm activities. Economies are now preparing their letters of intent relative to this initiative, so keep an eye out for the opportunities to participate. So, the APEC Food System gives us a vision to work under. I hope we all have the opportunity to participate and drive it over the coming year. We need your collective support to make it happen. Thank you.