By Louis Mark
Tsinghua University saw its first ever interdepartmental collaboration between the School of International Relations and the School of Economics and Management (SEM) on December 9th, 2015. NexGen Global Forum, together with the Net Impact chapter of SEM, co-hosted Shanghai consulting group Collective Responsibility’s sustainability series, “Creating the Business Case for Sustainability.” Sustainability is becoming a major concern in China. With a rising middle class averaging an income growth of $100,000 per every five years since 1990, private companies are paving the way in innovative approaches to food service, agricultural practices, and going green. We were fortunate enough to host three experts from companies that are doing just that in China: Senior Strategic Manager for China at Alltech, Inc., Michael Woolsey; Area CSR & Sustainability Manager of Shangri-La Hotels & Resorts Group, Zhang Yi; and Chief Technology Officer at Alescia Life Technologies, Christopher Dossman.
2015年12月9日，清华大学社科学院与清华大学经管学院开展了一次跨院合作。清华国际关系学院青思智库、经管学院Net Impact chapter共同主办了上海咨询集团，共同责任的可持续系列讲座——“创造可持续发展的商业案例”。可持续发展业已成为中国的主要关切。1990年以来，每隔五年，崛起的中产阶级的个人年收入的平均增幅为10万美元，民营企业以创新方法提供食品服务，从事农业并做到绿色环保。我们很幸运地请到了三位正在中国投身于上述事业的人士：奥特奇公司中国区高级战略经理Michael Woolsey；香格里拉酒店集团CRS可持续发展经理张艺；爱勒康首席技术经理Christopher Dossman。
Mr. Woolsey underscores one of the most pressing issues China faces today: the food supply is not meeting the exponential demand with the rise of the middle class. Now China out ranks the world in global agricultural imports totaling $136 billion. From 1990, Chinese consumption of meat and dairy increased 4 times the pace of rice and wheat. It is no surprise that in 2008 due to the fierce competition of dairy supplies, the Shijiazhuang-based Sanlu Group contaminated baby formula with an overdose of melamine, commonly found in dairy at benign levels. The procurement process of the dairy was overlooked as growing competition gave way to unauthorized levels in the milk, resulting in over 40,000 sickened babies diagnosed with kidney failure.
By 2023, Alltech predicts the meat demand will increase by 15.3 metric tons in beef, pork, poultry, and sheep. China's arable land has shrunk by 10% from its coverage in 1990, and the average farm size is less than 1 hectare. The results are staggering, with yields of meat, grain, and milk less than all other world leaders’ outputs. Europe alone produces 32 piglets per sow per year while China continues to produce half that at 15. Additionally, China’s aging population is bad for its farmers, who are on average older at 60 years of age while potential young replacements often migrate to big cities to find jobs.
To combat the inefficiencies in China’s growing food crisis, Alltech studies two major aspects of the business: labor and technology. The Advantage Series at Alltech focuses on performance and profitability of livestock-rearing on Chinese farms. For example, Alltech puts a magnifying glass on the health of the sow or mother pig as well as the weaners or babes until adulthood by looking at the feed. Starting in a given September, Alltech conducts a harvest analysis on corn, conducts a risk assessment, evaluates the storage of the farmer, and by the following July conducts harvest scouting, preparing for the final harvest before the cycle begins again. Together with farm oversight, they combine yeast-based feed technology to ensure healthier animals on the farm, improving farm profits.
The food is just as important to livestock health as the digestive tract of the animal. Currently, a big hurdle for animal health in China is the inadvertent ingestion of inorganic materials, which find their way into the feed by way of waste water. These inorganic materials include heavy metals in the forms of cadmium and arsenic, which are toxic. In fact, 38% of pigs in Asia (out of 488 samples) were contaminated with high levels of heavy metals. Using international standards, Alltech ensures reliable manufacturing and traceable ingredients that inject organic minerals like Zinc and Copper into the food. Mr. Woolsey notes that adding enzymes to the feed would indeed support health initiatives for farm animals. Currently China does not emphasize this practice domestically. As a result, the process is expensive with much of the technological oversight outsourced to Japan at a high price.
Because of expensive outsourcing, Alltech has developed several in-house methodologies as well. First, in-vitro screening is used to see how effective the feed is. By utilizing samples of the feed, researchers simulate real life conditions of the pig’s digestive system. They use the feed sample plus an acetate buffer to mimic the saliva break down of the pig which is followed by a stomach digestion and small intestine simulation. The energy release is carefully studied by tracking amino acids, vitamins, and other key ingredients. The simulation further reveals how much of the feed is actually wasted in energy. China sees 70% of production costs at risk with daily wasted feed, which in turn equals less money. Every bite of the feed not digested by the animal represents a loss for the producer. Secondly, small training programs are available through programs like Alltech’s Premier Pig Program where they gather local farmers and advise them on new management and nutrition tips based on international standards.
Private companies like Alltech are increasingly serving as guides to improve agriculture in China. Their international expertise seems to give them a certain amount of freedom in research and experimentation under the umbrella of the Chinese government. What role then, do private companies play in policy changes and how does the government react to the data they find? Does the Chinese government actually depend on outside, privatized companies to fix these domestic issues using international standards? Are we seeing China adopt more international standards as international imports of food make their way into the country? Mr. Woolsey’s final commentary poses food for thought: the majority of China’s beef, is, yes, imported, but mainly through the black market of India where cows are openly sacred, but secretly killed. While Indian beef exporters benefit from large profit gains, China closes the deficit gap between its supply and demand by using cheaper Indian imports. We can’t help but question the oversight and standards being used to check these imports. Are we waiting for another melamine-like crisis in the midst of rapid food demand and is it truly a win-win for China and its people?
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