#1 Rethinking Food Security in a Changing World – with Elli Köstinger

00:00:08: One event, one decision or one shift can completely change the world as we know it.

00:00:16: Whether its a political shift A sudden supply chain disruption New technologies like AI Or climate Every moment shapes how we think What We decide and How We act.

00:00:32: The World is evolving fast And the choices we make today will define tomorrow.

00:00:38: This podcast brings together leaders from economics, politics technology and science to explore the crucial decisions of our times connecting dots understanding risks an empowering resilience To build a world of compassionate growth.

00:00:58: Every challenge is a choice.

00:01:00: Wait or act And when we act this changes everything.

00:01:13: When we look at the latest headline from the war in Ukraine to conflicts in Middle East and Strait of Hormuz, once again energy prices are up.

00:01:24: And immediately we connect this with fuel heavy industry or inflation.

00:01:29: but there is a much delicate link that should start paying attention to fertilizers Because when the energy prices are up, fertilizers become more expensive.

00:01:42: Therefore farming and agriculture becomes a more expensive tool.

00:01:46: Eventually food on your table as well!

00:01:49: To explore this and to see how we could actually feed the continent today with me is Eli Kostinger.

00:01:56: Pleasure have you here former Minister of Austrian Agriculture, Environment & Energy and recently high-lingaged investor.

00:02:06: Thank

00:02:08: you very much for having me.

00:02:10: I'm looking forward to our very interesting topic!

00:02:13: It's right and i would say we could start with making something really important clear is it time to stop thinking now of agriculture as a slow old-fashioned sector but actually rather vital one, critical when an interruption in it can hurt the whole economy entirely?

00:02:35: Yeah, absolutely.

00:02:37: I fully agree when it comes to energy especially nowadays oil and gas industry therefore also media becomes a lot of emotional to discuss this topic because everybody knows that industry production costs alot more in rising energy cost.

00:03:01: but it's the same with food production and especially agricultural farming we are having in Europe.

00:03:14: It should be considered... same as a critical infrastructure, like we have it for our telecommunications or the energy production.

00:03:27: Food supply is extremely important to all of us and won't stop eating

00:03:33: due to this crisis That's right.

00:03:36: We won't stop eating, it is actually an essential need and we have seen this during Covid I would say.

00:03:43: Covid gave us important lessons so... ...we were able to build a system global trade that works perfectly fast and cheap but in times where everything else works when the moment the borders were closed, transportation slowed down.

00:04:01: We saw that this system was struggling too.

00:04:04: so one side or one element is food becomes expensive.

00:04:12: but another element is foods become unavailable as you say and it's really critical.

00:04:20: Do you think then we have built systems that can work great only in great times and are not prepared for interruption or crisis?

00:04:31: Well, actually I don't think there is much use to crises.

00:04:39: Only in the last five years.

00:04:41: So you mentioned a Covid pandemic, then Russian aggression against Ukraine The whole situation and the Middle East which is also affecting us if we are talking about the closure of the Strait of Hormuz a lot of unpredictable geopolitical incidents.

00:05:07: We sometimes fear when one of the world leaders is taking this stage, so what will come next?

00:05:16: And on the other side and I'm truly convinced we really have to keep our strength as European Union.

00:05:28: The EU has a great history over decades in growth, developing very fair social systems and taking care of the environment on educational programmes.

00:05:48: a bit of feeling that we've lost this compass.

00:05:51: We are only jumping from one side to the other, but people do not see there's really resilience behind and vision in great plans for on-the-one sides keeping way of success with Europe as well as preparing for multiple crises.

00:06:18: Right, and when we talk about resilience especially climate comes into a big play.

00:06:26: Especially in Central Eastern Europe area I think we have seen lot of events intense weather events flooding the borys flooding droughts unexpected freezing spring days Especially in this region, the Pannonian basin across Hungary down to southern Romania.

00:06:52: these droughts have already destroyed a lot of crops.

00:06:56: So should we continue to justify its temporary bad season or are talking about something permanent that we need pay attention and build resilience for?

00:07:10: Well actually it is most important thing.

00:07:14: We were used to crisis.

00:07:16: So there are always some incidents, but as you said they're normally temporary.

00:07:25: what we are seeing now is that it comes much more permanent especially when it comes to climate change.

00:07:34: extreme weather effects agriculture in every kind of their production and this is something we have to keep in mind.

00:07:49: Normally if you had one incident, You easily cope with it.

00:07:56: but within the last years We saw more or less multiple crisis In front us And especially when It comes To The CE countries It's very important to know that together with Ukraine, this is the bread basket of the world for decades.

00:08:17: So it not only feeding Europe but especially very important food programs in the United Nations.

00:08:27: We see a lot of refugee crisis due to lack of food and supply chains.

00:08:37: So this is something we have to keep in mind.

00:08:40: It's not only about rising prices in Europe, it's really about feeding the world.

00:08:49: Right when we talk about food insecurity... We've connected that with being far from Europe but having such a interconnected system, being on a global trade it affects as a domino the whole chain in the end.

00:09:07: This is something we have to keep in mind also when it comes to rising energy prices.

00:09:14: this effects the fertilizer production.

00:09:18: As we said before We had very interesting situation that one of biggest fertilizer producers in Europe due to the Russian aggression against Ukraine stopped their production and imported fertilizer, they then sold it at a lower price than the actual European costs were.

00:09:43: So this offers us an entire crazy situation we are now in!

00:09:51: Yeah...

00:09:52: We're not

00:09:53: used to.

00:09:53: We didn't see this before.

00:09:57: This is also an issue for policymakers, I see the commercial agriculture policy in the European Union as one of the most successful policy frameworks.

00:10:14: we were able to produce more or less.

00:10:24: It's the only common policy we have within EU member states.

00:10:31: And a major goal from beginning was overall food supply for European citizens in an affordable way, and within last years as tackling climate change became more important There was a second framework which were put over the common agricultural policy, Green Deal for example.

00:11:02: So European farmers had lot of restrictions in producing food and standards rose.

00:11:11: on one side always welcome, especially for consumers.

00:11:17: But on the other side we lost a lot of production in Europe and then we started importing more from South America also from Asia countries And this is something that has to be kept in mind.

00:11:34: We are much more dependent than external factors than having food production at our own hands.

00:11:44: The common European policy is quite interesting, and I would like to know a little bit more on that.

00:11:51: But before that... ...I'd be interested to check from the resilience point of view since agriculture system in Europe quite mixed, I would say.

00:12:03: And being such is also more complicated.

00:12:07: so we have a mix of many family farmers all together with giant farmers but agriculture itself it's quite vital for Europe.

00:12:18: One point seven million people are involved in agriculture, and out of them one point two million are in Poland only.

00:12:28: So having this concentration from the other side The mixed system I would guess that way they handle crisis is different.

00:12:41: so Are companies prepared to be resilient or to withstand?

00:12:47: and such interruptions also on soul level.

00:12:54: In my perception, yes because especially when it comes to family farms.

00:13:00: this is not only a profession its really passion Its DNA.

00:13:07: It's their DNA And sometimes Especially in Austria Sometimes we are used to smile about farmers but they with their families, not only responsible for the food production.

00:13:24: we could never be such a successful tourism country without this beautiful landscape.

00:13:32: Without high quality of water and also the whole forest industry which leads to family farms.

00:13:44: so in my way In my perception, this mixture is crucial and we have to take care about our family farmers.

00:13:56: They are extremely resilient.

00:14:00: Not only give their land to the next generation, they give a whole passion and do not count hours when to start or stop... ...they live there profession!

00:14:15: And food production is their purpose more-or less.

00:14:22: And it's also the amount, so when it comes to giant farms they were run by a CEO.

00:14:30: They have more or less like all industries their structure.

00:14:38: but when it come financing KPIs are important.

00:14:44: they are not that much resilient, especially when it comes to multiple crises.

00:14:50: And we've seen this in the animal production last year.

00:14:57: so its very important to have a mix and take care of family farms at all.

00:15:07: KPIs show high costs sometimes and maybe then based on the size not everyone can afford having losses from one side, but also investing in innovation.

00:15:27: It's good to have resources.

00:15:29: I think Europe as a continent is well blessed But you need modern technology to that.

00:15:37: In this perspective, would you see a country more vulnerable in Central Eastern Europe?

00:15:47: Well, actually my perception especially the CE countries are doing very well.

00:15:52: There was a lot of progress made in the last two decades and Especially when it comes to education And this is a very important section.

00:16:05: you have to Have a closer look on that because only if you had well educated people on farms They know what to do, especially when it comes to different crises or situations.

00:16:22: And therefore the CE countries did a lot of progress in the last years... ...when it comes more professional ways of producing And therefore also the standards of the common agricultural policy were made when it comes to animal welfare, for example.

00:16:42: There was a lot of progress made... ...when it also came to grain production less fertilized and less pesticides used.

00:16:55: so there really was a transformation process Very obvious.

00:17:02: In which country did this started?

00:17:05: Because I know for instance, Austria is a really great example.

00:17:10: They are number two worldwide for green farming.

00:17:16: So they built the smart system where can keep small farmers alive and also using green methodologies And modern technologies from the mixture that you also mentioned, small farmers together with more advanced ones.

00:17:35: Is there a country who takes lead or other countries can learn?

00:17:41: And since we are part of policy...

00:17:44: Well actually there is lot technology transfer and whole structure.

00:17:53: Austrian agricultural industry is due to the Austrian landscape.

00:17:58: So we were never ever able to produce on that flat, arable land.

00:18:10: Austria's a mountain country with lots of mountains pastures and very small structures.

00:18:18: so Austrian farmers did the most out of it and went to back then a niche on organic farming.

00:18:31: There was not that much demand consumer-wise, but it grew within the last decades And this is very important.

00:18:44: so we see initiatives sometimes from NGOs, sometimes media-driven.

00:18:55: Whether it's the trend of vegan food or organic food whatever it is farmers can produce.

00:19:03: It needs consumers who buy it and pay a price for where farmers can't produce.

00:19:12: So this is something we may often miss in the political debates when it comes to agricultural policies, very ideologically but not on substance.

00:19:28: I think now there are three percent vegan people year, but sometimes when you hear the debates.

00:19:36: You get an impression that ninety seven percent are vegan.

00:19:41: so no they aren't.

00:19:43: and it's a bit the same with organic farming.

00:19:46: It is more or less you could produce everything in an organic way But uh...it will be more expensive than the conventional food production And people have to afford this in the end and the free markets reality.

00:20:10: And therefore we always have to keep that in mind when we see media debates or debates of NGOs,

00:20:18: right?

00:20:18: But I think the most critical part of the debate is who pays the price.

00:20:22: as you

00:20:23: say

00:20:24: it is open market and free trade.

00:20:27: but if food industry critical and or resilience is becoming critical for the industry.

00:20:37: And those business owners, not only from Austria but I don't know Romania south to Balkan countries as well would say okay i have to go green But how can I invest then with lower return?

00:20:57: It's always about the markets.

00:20:59: If there is a demand, if somebody pays it let us go for it.

00:21:05: but this something we do not see and also some of my advice.

00:21:18: In the end, you have to watch geopolitical debates in the same intention like you watched weather forecasts.

00:21:31: It's not about some clouds on the sky it is about a storm coming.

00:21:39: Do I have security measures to take care about my whole entity?

00:21:46: And this becomes more and more important, especially also for big companies or institutional investors.

00:21:57: Right, and sometimes the funds actually exist.

00:22:01: And they are ready to be taken from the market because there is no information enough.

00:22:08: companies do not know how attract, how to approach this fund.

00:22:12: So they still need to evaluate how resilient there are that show these financial institutions and how resilient in order to obtain the funds.

00:22:22: but it should be an opportunity because demand is growing.

00:22:27: I also remember with plant based milk A few years ago, you see only one famous brand who is known for being plant-based.

00:22:39: And now we all the milk company offering a variety so normal cow milk and plant based milk.

00:22:49: So yeah demand can grow.

00:22:50: they should see this as an opportunity.

00:22:52: I'm fully with you but there's still need to to be aware where do they stand, to do their resilience exercise.

00:23:01: To check the effect out of climate and how stable are their operations?

00:23:10: And then I think maybe government goes second, market first!

00:23:17: That would be the most intelligent way, but sometimes we see it in other ways.

00:23:26: But if markets are following political decisions ticked a box and they're all happy... In recent years I think there were lots of decision-making.

00:23:42: We should not forget that We have to preserve the social system.

00:23:49: In the end, market can be more advanced but we have to preserved a social system for everyone.

00:23:56: Okay...we are now in middle of twenty-twenty six and talked about many events expensive energy, erratic weather.

00:24:09: Food security are all now part of our daily routine and has become a structural risk.

00:24:16: so looking ahead... Now in the few years later how do you see this market or industry itself grow?

00:24:27: I

00:24:30: think there will be a lot of change, especially due to climate change.

00:24:36: But

00:24:38: also

00:24:39: in my perception is the big chance because when we have one core strength in Europe then this innovation technology science and i've seen so many interesting projects to breed resilient seeds, for example.

00:25:04: Whether it's in crop production or fruit production whatever is there are a lot of transformation and all knowledge made in Europe more-or less.

00:25:20: This could be also a big opportunity for new enterprises, startups to find their way in that very specific food industry.

00:25:39: I'm really convinced we have to take care about our European system of family farmers.

00:25:49: Also when it comes to negotiations around the common agricultural policy, It's so important... ...to help them through difficult times.

00:26:01: To give incentives for innovation and educate them And appreciate their work because In my perception, this is one of the most important things.

00:26:14: It's a treasure we have and maybe these are also good inspirations for youth to go through such startups be part.

00:26:24: those who're outside on the field help them with research new technologies collaborate together

00:26:32: Absolutely!

00:26:33: And especially everybody nowadays talks about artificial intelligence.

00:26:39: How does this affect this industry, by the way?

00:26:41: This will

00:26:43: also effect many different ways of food production as such.

00:26:49: Especially when it comes to meteorology data.

00:26:53: there's so much science behind and whole systems becoming more efficient but sometimes about very easy technology like water management for example.

00:27:08: So there are so many different ways which can help being more efficient and sustainable in food production, this is really a call from young entrepreneurs to find their way into the food and agriculture industry.

00:27:29: I said in the beginning you are a highly engaged investor and i know that your passion lies in this area.

00:27:37: What is something you're working on right now?

00:27:40: That would like to share because, events where you introduce this idea.

00:27:50: Well, actually I'm a very big fan of circular economy.

00:27:55: the idea any kind of waste is very interesting because otherwise you're really wasting a lot of resources.

00:28:15: and we have so many smart companies, startups within Europe.

00:28:23: And I'm also working with them in creating new value streams huge and big impact for the future in tackling climate change, but on the other side it's really a business.

00:28:41: So we are using waste several ways to earn money with it.

00:28:50: that is very interesting especially where smart.

00:28:53: Okay, any very much thank you for joining today and sharing all these great insights.

00:29:00: Thank You so much!

00:29:02: I hope weather stays manageable.

00:29:07: We wish for

00:29:09: rain.

00:29:09: This is also important And Europe was not used to this heat.

00:29:20: But yeah, I hope it stays manageable.

00:29:23: And there will be this maybe as a topic in another episode since there are many business implications out of that.

00:29:31: but until then stay tuned.

00:29:33: thank you for being with us!

00:29:57: Bye.