BGP 204M
Food Policy and Agribusiness
Spring 2013
Mondays & Wednesdays, 11:40-1:00
Starr Lecture Hall
Rev. Apr. 10, 2013
Instructor: Ray Goldberg
Email: rgoldberg@hbs.edu
Office: Cumnock 300, HBS
Phone: 617-495-6496
Fax: 617-495-8736
Faculty Assistant: Rosita Scarfo
Email: rosita_scarfo@harvard.edu
Office: Belfer 127, HKS
Phone: 617-496-1739
Fax: 617-495-0996
Course Assistants:
Karan Chopra
kchopra@mba2013.hbs.edu
404- 663-0465
Alicia Harley
harley@post.harvard.edu
720-215-6008
Description of Course
Managing the World's Largest Industry - Agribusiness - the interrelated and interdependent land
and water based food, feed, fiber, fuel and pharmaceutical complex.
This course deals with public and private management of an industry sector that encompasses half
the world’s labor force, half the world’s assets, and 40% of consumer purchases. The public policy
challenges of economic development, trade, nutrition, food safety, environmental protection,
maintaining limited natural resources, protecting plant and animal diversity, intellectual property
rights, genetics, and social and economic priorities will be developed in case study format.
Positioning public agencies and private firms within the developed and developing economies will
be an integral part of the course.
Important course themes include:
•
•
•
•
•
•
Changing agricultural trade, nutrition, food safety, and
economic development policies of national, regional and global institutions
The emerging role of biotechnology in agriculture
Information and logistic revolutions
Consolidation and partnering within the industry that leads to borderless private and public
firms.
Development of government, private, No-profit, and farm cooperative policies and
programs
The convergence of the food, health, energy and pharmaceutical industries
The course employs the HBS Case Method. Whenever possible, the chief executive officer and/or
the leading government official involved as the decision maker in the case will be a guest at each
class session to provide feedback, interchange, and a recent update on the issues.
The course will cover six weeks and have l2 one hour and twenty minute sessions with a voluntary
brown bag luncheon to follow in Taubman 301. An additional research paper can be submitted on
May 8th for an extra ½ credit, making the course the credit equivalent of a traditional semester-long
course.
Grading
• Grading for the semester is based on class participation (65%) and two written case study
analyses (35%).
o First Written Case Study Analysis Due April 1
o Second Written Case Study Analysis Due April 15th
•
500 word response paper on commodity markets (in place of futures game)
•
Students may do a research report for an additional one-half credit (making the course the
equivalent of a semester-long course). Due May 8th.
About the Professor:
Professor Ray Goldberg has been the Moffett Professor of Agriculture and Business at the Harvard
Graduate School of Business since 1970.
His research interests include developing
strategies for managers as they position their firms, institutions or government in the global food
system and the major biological, logistical, packaging and information revolutions that affect global
agribusiness.
Teaching Methodology
The teaching methodology for this course is the case method. Each case is focused on current and
future challenges facing private and public managers in the industry. Cases are developed from all
continents of the globe and from developed and developing nations.
Given that each student’s contribution to the class discussion plays an integral role in everyone’s
learning, we will adhere to a strict attendance policy. Therefore, please notify the course assistants
in advance if you are to miss a class. We ask that you submit a brief case analysis of the required
reading for any class that you miss. If you are unprepared for a class for health or other reasons
please let the instructor know this before class. The course begins and ends on time.
BGP 204M SYLLABUS
March 25
Required Reading:
Friona Industries: Delivering Better Beef
Friona Industries, L.P. (December 1, 2000)
Agribusiness Management for Developing Countries, Chapter 1 –
Introduction and Approach
New Margins for Each Sector of the Value Chain 2013
N9-906-405
N-901-009
Assignment Questions:
• What do each of the participants in the vertical food chain expect from their
joint venture?
• What are the advantages to each and what are the disadvantages?
• And is this model applicable to the whole food chain?
• Why have margins changed?
Guest: James Herring, President & CEO, Friona Industries
Please skim if you have time:
The Global Farmer and the Future of Soybean Production
McDonald’s Corporation: Managing a Sustainable Supply Chain
Additional Readings for background on entire course
Introduction to Financial Ratios and Financial Statement Analysis
Learning by Case Method
Choices Biofuel Issue
Fluctuating Food Commodity Prices
Causes and Implications of the Food Price Surge
Access to Affordable, Nutritious Food is Limited to “Food Desserts”
Food Policy: Check the List of Ingredients
Food and Agricultural Policy, Taking Stock for the New Century
Small Farms in the United States
Million-Dollar Farms in the New Century
March 27
Required Reading:
Wegman’s: The Work Scholarship Program
The Electronic Product Code: The Future Impact on the Global
Food System
Wegman’s Food Markets: Diabetes Counseling
N9-904-402
N9-907-414
9-193-029
9-376-241
9-953-030
N9-905-409
Assignment Questions:
• If you were a food retailer, are these activities the ones that you would give a
high priority to, and if so why?
• How would you evaluate the Work Scholarship Program?
• Is this program a model for others?
Guest: Danny Wegman, President and CEO, Wegman’s
9-599-057
Please skim if you have time:
Wegman’s and the Produce Revolution
April 1
9-594-082
Required Reading:
Chiapas in Mexico
9-587-089
Amul Dairy in India
9-599-060
Transforming Life, Transforming Business: The Life Science
Revolution, Harvard Business Review, Goldberg & Enriquez
Assignment Questions:
• What action would you take in Chiapas given the needs of that part of
Mexico?
• What lessons can you extract from the Amul Dairy case?
• What will science do to the global food system?
Guest: Juan Enriquez, Managing Director in Excel Venture Management
and President & CEO of Biotechonomy
First case study Due April 1
Submit tentative ½ credit paper title
April 3
Required Reading:
The Full Yield, Inc.
N9-910-421
Assignment Questions:
• What do you think about what The Full Yield is trying to achieve?
• Is TFY a typical startup? Is it a typical food company?
• What should she do next?
• What does success look like for TFY and its stakeholders?
• Where does TFY fit into the food system?
Guest: Zoe Finch Totten, Chairman and CEO, The Full Yield, Inc.
April 8
AB IN BEV in China: To Hedge or not to hedge?
Guest: Anson Frericks HBS ‘11 –Director of Commodity Risk Management of
Anheuser-Bush In Bev
April 10
Required Reading:
Jain Irrigation
9-912-403
Can the small-scale farmer be a viable participant in the global food system?
Assignment Questions
• What will be the trends that affect the global food system over the next 10
years? How will these trends impact the company’s priorities?
• How will the company—and its customers—manage uncertainty in their
ability to access water in India, which comes mainly from rainfall stored or
used during the relatively short monsoon season?
• Micro irrigation technology is still in its infancy. What will be the next
technological advancement in this industry?
• Given the financial pressures on governments across the globe, how much will
be dedicated to support new types of agriculture in the future?
• How fast can new technologies be understood and adopted by the small scale
producer?
• How fast does JISL have to change to provide a total production marketing
systems approach to their operations?
• How important will the company’s non banking financial company (NBFC)
be in the future and what kind of management will it require?
• Where does risk management fit into their future operations?
• Thus far the company has developed a number of partnerships with financial
institutions, governments, and technology market leaders, and has done so in
a manner that constantly renews its management and farming partners. How
does it continue to provide this leadership in the future and what are the needs
to do so?
• What would you recommend as action and implementation plans?
Specifically, how should management address the following challenges:
o There is a possibility for growth in India as well as the rest of the
world. How should these opportunities be prioritized?
o Various businesses within the company (e.g., Micro Irrigation,
Food Processing, Renewable Energy, etc.) are demanding capital
for sustained growth. How should capital be allocated across these
businesses?
o In order for JISL to grow to the next level, it has to find associates
who are willing to buy into the founder family’s vision and work
ethic. How can it find this talent? Can it hire from the outside or
must it be created internally? How can it create sustained
commitment?
o As a listed company, JISL has to fulfill its “Dharma” of quarterly
results which may not be in tune with the cyclicality of the business
as well as the cherished vision of its founder. How can it reconcile
this dilemma on an ongoing basis?
Guest: Anil Jain CEO of Jain Irrigation
April 15
Required Reading:
Cargill (A)
Cargill (B)
CHS Inc. Cooperative Leadership in the Global Food Economy
Nestle S.A
903-402
N2-907-415
911-409
902-419
Assignment Questions:
• Why was it necessary for Cargill to develop a new strategic intent for the
company?
• What elements of their strategic intent do you like? And what elements would
you change, and why?
• What difficulties do you see in implementing their strategy?
• In what way is Cargill a model for others in the global food business?
Guest: Ruth Kimmelshue- President Cargill Value Added Meats
4/15 Second analysis of a case study is due today
April 17
Required Reading:
Monsanto
N9-912-419
Assignment Questions:
• How does Monsanto communicate its strategic intent and its emphasis on
sustainability to all the stakeholders in the global food system?
Guest: Michael Frank –Vice President International Row Crops and Vegetable
Business
Please skim if you have time:
Syngenta International AG: Tropical Sugar Beet
April 22
N9-909-404
Required Reading:
Nestle: Agricultural Material Sourcing Within the Concept of Creating Shared
Value (CSV)
N9-913-406
Assignment Questions:
•
How does sourcing become an enabler for Nestle to be the world’s leading
nutritional health and wellness company?
•
How does Nestle manage sustainable and ethical agricultural production?
•
How do they manage social and environmental impacts?
•
How do they develop training courses that incentivize sustainability?
•
How do they imbed creating shared value?
•
How do they develop strategic collaboration?
•
How does Nestle answer the questions noted on page 2 and 3of the case?
1. How does Nestle develop with all other stakeholders incentives on water and land
management that are fair and equitable so that current and future needs of the rural and
urban populations are met?
2. How does Nestle provide new development modes that utilize current and future new
technologies that can be accessible to all at every level of the food chain at every stage of
that development?
3. How does Nestle develop better feedback mechanisms from every sector of the vertical
food chain so that Nestle can be more helpful in encouraging the more urgent
introduction of its improved nutritional components of its products for the improved
health of its consumers?
4. How does Nestle find impartial third party evaluators of its programs who can measure
and provide them valuable feedback as to their impact on health, nutrition, economic
development, and waste management?
5. How does Nestle both compete and partner with those in changing more complex food
system? In addressing the above issue how does Nestle accomplish progress at all levels
of the food chain in terms of efficiency and creativity so that it enables it to remain a
profitable and competitive leader in the global food system?
6. How does Nestle encourage the co-existence of alternative sources of supply from local
unique organize crops to global multinational firms and farm cooperatives?
7. How does Nestle encourage the development of genetically modified crops that both
improve commodity productivity and improve nutrition in an environmentally sound
manner?
8. How does Nestle and its new human nutrition center help the consumer better understand
the importance of food and its relationships to his or her health management needs?
Guest: Hans Johr, Corporate Head of Agriculture
April 24
Required Reading:
Associated British Foods, Plc
9-912-402
Assignment Questions:
• What role does ABF play in the three major commodity systems (sugar, corn
and wheat) in which it is involved? How does it manage the market and public
policy risks in each of these systems?
• Do partnerships play a role in managing these risks? If so, what should they
be?
• In looking at future trends affecting both the food system and the retail
clothing system, how does the board determine its future role in all the areas
in which the company is involved, and how do they look at the balanced
portfolio of the company to maintain earnings in a volatile commodity
market?
• With partners such as BP and DuPont, how does ABF see its leadership role
in technological innovations and in the trends affecting the food, energy and
pharmaceutical systems in which it operates?
• How does ABF maintain its leadership role in so many areas in a rapidly
changing global economy?
• Does being a fourth generation family owned company provide more stability
in managing change and being proactive in creating change, while still
having the benefit of being listed as a public company?
• Does being a low cost, high fashion clothing producer force them to
constantly be the change maker in that segment of retail in terms of fashion
and quality? If so, how do they maintain leadership?
• Much of ABF’s strength has been the continuity of leadership that is soon
coming to an end. How does ABF manage changing managers at a time when
economic pressures are the greatest?
• How does consolidation impact ABF’s future and how will the company
address it?
• What would you recommend as action and implementation plans?
Guest: George Weston, Chairman & CEO
April 25
NOTE OUT OF SEQUENCE CLASS (Thursday same time and place)
Required Reading:
The Safe Food Act: A Consumers’ Group Perspective
N9-900-013
Assignment Questions:
• Should there be one food safety authority rather than a separate for the FDA,
EPA and the U.S.?
Guest: Caroline Smith DeWaal, Director Program on Food Safety, Center for
Science in the Public Interest
Please skim if you have time:
Launching the European Food Safety Authority
USFDA Center for Food Safety and Applied Nutrition EFAS
Aventis Crop Science and StarLink Corp
Technology Crisis and the Future of Agribusiness:
Movie Food Inc.
April 29
Required Reading:
Alleviating Poverty and Nutrition - attached
Current World Bank Ag Action Plan
2013-2015 World Bank Action Plan
N2-904-414
N9-902-411
BSE9-957-036
To be shown in class
To Be Distributed
Assignment Question:
• In skimming these reports, what priorities would you want the World Bank to
have with respect to the global food system and how would you develop plans
and actions based on your priorities for the World Bank?
Please skim if you have time:
Restricting Foods of Minimal Nutritional Value in Texas Public
Schools
Water Policy Priorities along the United States-Mexico Border
Nestlé’s Milk District Model: Economic Development for a ValueAdded Food Chain and Improved Nutrition
Nestlé’s Milk Districts: Case Supplement
Nestle Water Management Strategy EFAS
Fonterra: Taking on the Dairy World
Tobacco and the Future of Rural Kentucky
N9-904-420
N9-903-414
N2-906-406
N9-906-411
N2-903-413
902-412
Guest: Mark Cackler, Manager Agricultural and Environmental
Services World Bank
May 1
Required Reading:
Brazil Sugar and the WTO: Agricultural Reform in the European
Union
Brazil’s WTO Cotton Case: Negotiation through Litigation
N9-906-408
N9-905-405
Assignment Questions:
• Why did Brazil win the sugar case in the E.U. and the cotton case in the U.S.?
• Does this victory change the food policy of the E.U. and the U.S.?
• Do developing countries have a new role to play with the WTO?
Guest: Pedro de Carmago Neto, Agriculture Policy and Trade Consultant
Please skim if you have time:
The New EU Sugar Regime and British Sugar
PLC’s Strategic Options EFAS
Food Security and The Church of Jesus Christ of Latter-Day Saints
May 8
N9-508-002
Optional half credit paper due
Additional Resources By Topic Area
1.
Governmental Food Policy
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
Developing a domestic and global governmental policy for a specific commodity
The relationship of WTO, CODEX, and Food and Agricultural Trade Policy with respect
to GMO’s, organic farming, labeling, traceability and obesity.
The food system as a quasi public utility and the policy implications for economic, social
and political priorities and the interaction between the private and public sector
The development of the 2013 Farm Bill as compared to the development of Common
Agricultural Policies and farm and food legislation in developing countries.
Relationship between trade and agriculture–The Brazil Cotton case
N9-905-405
and the Brazilian Sugar case
N9-906-408
Modernizing America’s Food and Farm Policy: Vision for a New Direction,
a report by the Agricultural Task Force sponsored by The Chicago
Council on Global Affairs
Restricting Foods of Minimal Nutrition Value in the Texas Public School
9-904-420
Food Security and the Church of Jesus Christ of Latter-day Saints
N9-508-002
Water Policy Priorities Along the United States-Mexico Border
N2-903-414
Transformation of COFCO in a Changing Environment
N9-909-403
The Full Yield
N9-910-421
2. Food Safety
BSE in Canada
Launching the European Food Safety Authority
DNA Traceability at Maple Leaf Foods
The Safe Food Act: A Consumers’ Group Perspective
3. The Role of Economic Development
a) Chiapas in Mexico
b) Amul Dairy in India
c) Current World Bank AG Action Plan 2013-2015
N9-904-413
N2-904-414
N2-905-407
N9-900-013
9-587-089
9-599-060
To Be Distributed
d)
e)
f)
g)
h)
i)
j)
k)
Tobacco and the Future of Rural Kentucky
Nestlé’s Milk District Model
Case Supplement
Alleviating Poverty and Malnutrition
Alleviating Poverty and Malnutrition: Successful Models
Nestlé’s Water Management Policy European Food Seminar
Jain Irrigation Systems Ltd. Inclusive Growth for India’s Farmers
Nestle: Agriculture Material Sourcing Within the Concept of Creating
Shared Value
N9-902-412
N9-906-406
N9-906-411
N9-907-409
N9-907-412
N9-912-403
N9-913-406
4. Managing the System
Fonterra: Taking on the Dairy World
Cargill (B)
Friona Industries: Delivering Better Beef
CHS Inc. Cooperative Leadership in the Global Food Economy
N2-903-413
N2-907-415
N9-906-405
N9-911-409
5. Entrepreneurship
a) The Global Farmer and the Future of Soy Bean Production
b) The Full Yield
c) Associated British Foods plc.
N9-904-402
N9-910-421
N9-912-402
6. Technology Leadership
a) Aventis Crop Science
b) Monsanto
c) Electronic Product Code: The Future Impact on the Global Food System
d) Syngenta International AG: Tropical Sugar Beet
N2-902-411
N9-912-419
N9-905-409
N9-909-404
7. Social Responsibility
a) Wegman's cases
b) Nestlé’s Milk District Model
c) Case Supplement
d) Amul Dairy in India
e) McDonald’s Corporation: Managing a Sustainable Supply Chain
f) Jain Irrigation
8. Creating Shared Value
a) Nestle: Agricultural material Sourcing Within the Concept of
Creating Shared Value
9-599-057
9-598-030
9-594-082
N9-906-406
N9-906-411
N9-599-060
N9-907-411
N9-912-413
N9-913-406