The future of agriculture in the post COVID-19 era
By Endeavor Greece Jun 14, 2020
Discussion with Alkiviadis Alexandrou, Dimitris Evangelopoulos, Stylianos Theodoulidis, Konstantinos Baginetas & Sotiris Bantas
Continuing its webinar series which aims to shed light on the impact of the Coronavirus crisis, on Wednesday, June 3rd, Endeavor Greece, in partnership with Piraeus Bank, hosted a webinar called “The Future of the Agri-food Sector in the Post Covid-19 Era: Challenges and Innovation Prospects”.
The discussion revolved around the opportunities and the risks, as they have newly been shaped by the pandemic, but also around the state of readiness for anything new. In spite of the uncertainty pervading all the data and the fact that planning at all levels is under constant revision, the participants expressed their concerns along with their optimism for the future of the agri-food sector in Greece.
Alkiviadis Alexandrou, Deputy General Manager of Agribusiness Sector in the Piraeus Bank Group, Dimitris Evangelopoulos, Founder and General Manager of Augmenta, Stylianos Theodoulidis, General Manager of Venus Growers Agricultural COOP, Konstantinos Baginetas, General Secretary of Agricultural Policy, and Sotiris Bantas, CEO of Centaur Analytics participated in the discussion, which was moderated by Marianna Skylakaki, Founder and Editor of a8inea.com news site.
An Unprecedented Crisis, New Prospects
Opening the discussion, Marianna Skylakaki referred to the crisis we are experiencing, which showed us how vulnerable to external risks our economies are, how interconnected our planet is, and how fragile our presence is, when we do not respect the natural environment. “In the agri-food sector, the supply-chain security, the benefits of certification, and the prospects of innovation are of primary importance. At the same time, as we realize that the overdependence of our economy on tourism, the so called main industry of our country, can be proved problematic, we could be motivated to develop an interest in reviving other sectors in terms of business, investments and technology, especially those ones that have considerable potential for development, such as the agri-food sector,” she pointed out.
“If one ring is disconnected, then the whole chain is broken,” Alkiviadis Alexandrou
In his effort to assess the current state of affairs, Deputy General Manager of Agribusiness Sector in the Piraeus Bank Group Alkiviadis Alexandrou pointed out that the Greek agricultural products survived the crisis, in fact they were not severely affected by it, and he highlighted the need for cooperation of the different parts that constitute the industry, because “if one ring is disconnected, then the whole chain is broken.” He also referred to the prospects arising from the new Common Agricultural Policy of the European Union, as the performance of the agricultural property will more important than the agricultural property itself. This is a major shift that we should prepare for.
“In fact, although the current situation bore all the characteristics of a disaster, it did not evolve into it,” Stylianos Theodoulidis of Venus Growers stated about the pandemic with regard to the Greek agricultural products. He also made a specific reference to the prospects emerging from the crisis. He shed light on the positive aspects, such as the climate of confidence that was created on the part of the consumers and the great opportunity arising from the successful management of the pandemic. This was in favor of the branding of all the Greek products and of the Agri-food products as well. He also said that in the global market there is a new tendency of protectionism, but on our part we should avoid repeating the mistakes of the past, such as responding exclusively to the occasional demand, because in such a case the credibility of the producers and the suppliers would be hurt. We should not be carried away by the occasional demand,” he highlighted.
“The age of the producers is suggestive of the extent of the use of financing tools and technological means. Just 6,8% of the ‘leaders’ of a agricultural sector have had basic training on their sector, while the European average is 32%,” Konstantinos Baginetas.
Dimitris Evangelopoulos of Augmenta characterized the period of the pandemic as “hard,” because it generated a state of uncertainty in the market and in the companies, which were put on “survival mode.” “We realized that it is an opportunity for us to improve our online presence and we performed a massive planning to support our clients,” he added, and he referred to the positive response of the clients of Augmenta, who stayed at home and spent time in front of the computers, got informed and made questions about various technological products that can make a difference to their production process.
Sotiris Bantas of Centaur Analytics pointed out the need for outreach, and he explained that the Agri-food sector and technology have great outreach potential. He described the way the use of technology reduced the losses caused by the pandemic, and as a result the producers became more resilient. “We link our potential to produce GDP with our potential to produce goods in our field,” he stated, and he placed emphasis on the advantage our country has in the development of Agri-food technologies, as Greece can experiment on and implement innovative methods on its own primary sector.
Konstantinos Baginetas, General Secretary of Agricultural Policy & European Funds Management, agreed with the other participants and talked about the importance of credibility of the primary sector in the society during the crisis. He made a specific reference to the figures that present the condition of the Agri-food sector in Greece at the moment, such as the average arable land which is 6 hectares per person, whereas in Europe it is 160 hectares per person, the average income of the farmers which amounts to 11,000€ per year, whereas in Europe it is as high as 35,000€. He claimed that it is essential the agricultural sector is disconnected from monoculture and he repeated the need for a reasonable distribution and modernization of the agricultural sector. He gave the profile of the Greek farmer whose average age is 57 years, and only a percentage of 3,5% of the Greek farmers are below 34 years of age. “The age of the producers is suggestive of the extent of the use of financing tools and technological means. Just 6,8% of the ‘leaders’ of a agricultural sector have had basic training on their sector, while the equivalent percentage in Europe is 32%.”
“The crisis creates new prospects, but we do not always have the time and the nerve to promptly react and change our planning,” Mrs. Skylakaki pointed out. In view of this condition, she asked the participants to what extent they changed their planning so as to respond to the changes caused by the crisis and the developments on the European level. Assessing their actions in the past months, the speakers presented the actions they took and the changes they had to make in order to respond in the best possible way to the new conditions.
“Crises can trigger fast-forward changes,” Sotiris Bantas.
Mr. Alexandrou highlighted that Piraeus Bank preserved its medium- to long-term planning, but proceeded to corrective actions in view of the new conditions. The bank approached its clients in order to realize their pressing new needs and to “have a head start” regarding the issue of restricted liquidity, instead of waiting to see what happens. He referred to the 500m euros approved for the Agricultural Development Program, for which more than 15.000 applications have been submitted, and Piraeus Bank is ready for direct investments within 2020.
Mr. Evangelopoulos presented the way Augmenta made investments in order to improve the means of communication with its clients, as the trips, which used to play a critical role in its selling process were prohibited due to the measures taken to deal with the pandemic. The hardest decision was to timely turn to those markets, with which they had no difficulty communicating, that is the English-speaking countries or at least the European ones, as it was extremely difficult to issue user manuals in Spanish or Portuguese at such a short notice, to cover the markets of Latin America.
Mr. Theodoulidis claimed that the cooperatives and the vertical model had the chance to develop. “We tried to implement our planning more quickly. In view of the shortage of workers, we are in favor of limiting work in the production process by using automation programs and programs to communicate with the farmers so as to increase production.” He said that a more flexible production process will be suitable to the needs of the market as they are defined today.
Mr. Baginetas stated that the planning of the Ministry of Rural Development and Food was not affected, only the needs grew bigger. The agricultural program went ahead and was enriched by new bills. Cooperation was promoted on two levels; working with the EU and with the Minister of Rural Development and Food. We communicated closely with people from different sectors in order to determine the losses and cooperate with the Ministries of Development and Finances.” There has been a great effort to effectuate quickly the coupled payments and provide the money for the implementation of action plans in several sectors, such as fishing and fish farming. “We did everything in our power to take immediate measures so that the farmers who have already applied to receive money in order to implement investment and processing plans. We come second behind Italy in approving money, as we have sent fast reliable data for the affected sectors.”
Mr. Bantas agreed with the other participants that “crises can trigger fast-forward changes,” and he talked about several ideas he had had in the past and in the current occasion they became a priority. He agreed with Mr. Theodoulidis on the shortage of workers and he added that it can be dealt with remote monitoring. “Modernization and technology were nice-to-have but all of a sudden they became must-have,” he stated. In conclusion, he said that digital visibility in production, increased profitability and financing tools will raise trust and investment interest for the Agri-food sector.
To Produce More and To Produce Smart
In the last section of the discussion, Mrs. Skylakaki asked Mr. Alexandrou about the way of channeling sums destined for investment to the Agri-food sector. He referred to the direct implementation of programs, such as deferring payments of instalments, the working capital program, the Greek Development Bank and the Guarantee Fund. He highlighted the need to “develop more specialized products for contractual agriculture and livestock farming by joining forces.” The next step needs to be the contractual production destined for exports with the support of the banks and the practice of factoring. Furthermore, he suggested that farmers should be included in the energy production process, so that they could experience a reduction in their costs and secure a secondary source of income. He pointed out that Piraeus Bank has a very good knowledge of the Agri-food sector and said that “we need to support the farmers, to finance, to intervene, to there for them.”
“It is inconceivable to have Greek Agri-food products that are so popular abroad, and the domestic tourist sector completely ignores them,” Stylianos Theodoulidis.
When asked if the new technological means available in the market can be adopted and used by the Greek farmers and farm workers, Mr. Evangelopoulos found out that “it is rather difficult that they are used and adopted. The problem is the mentality which revolves around the concept of what one can save from the production process and not around where one could invest in order to gain more money.” This mentality, whatsoever, can change with the cooperation of the state, the banks and the private companies.
When asked if there are any synergies between the Agri-food sector and other sectors, such as the tourist one, that would be worth looking into, Mr. Theodoulidis answered that it would be possible and it should ultimately take place. He made it clear that there are nowadays more young people in farming, agronomists and other scientists, and the profile of the farmers is improving. This fact could favor a discussion between the Agri-food and the tourist sectors, so that we could develop synergies with tourism, because at the moment the tourism sector operates independently of its Agri-food needs.” He also added that “it is inconceivable to have Greek Agri-food products that are so popular abroad, and the domestic tourist sector completely ignores them,” and that the current conditions are favorable for such synergies.
When Mrs. Skylakaki asked them about the motives that should be given by the state, Mr. Baginetas answered that “the current juncture is suitable for laying new foundations” because we have all realized that the primary sector is a priceless value in time.” He agreed with the other participants that mentality and culture constitute fundamental structural elements and that the new data include a money box and a number of actions and programs, such as the new Common Agricultural Policy, the European Green Deal, the Leader Programme, the Convention of Biological Diversity, the Strategy from Field to Plate.” Along with all this, there is innovation, technology and the empowerment of young farmers, while discussions have been held with other ministries to build a network of incentives aimed at both protecting the environment and the competitiveness of the agri-food sector.
With respect to the concerns of technology companies, Mr. Bantas answered that the fundamental problem is the security of the undifferentiated transport of food products, as “there have been long delays, so that we do not know where these products were piled, especially in Latin America, and who is going to consume them.” He underlined that the crisis demonstrated the logistics chain is not so advanced as we thought, as there is no clarity as to where these products are. This problem could be resolved with the aid of technology and it could constitute a business opportunity. To the question whether Greece could be turned into a hub of developing new technologies that provide new solutions to all the Agri-food value chain, he answered emphatically “yes.” “The Greek companies have potential, the human resources and the technology,” and they can create employment opportunities for new people in relation to the production.
In conclusion, Mr. Alexandrou reminded us that we are obliged to take action so that we take advantage of the emerging opportunities. Mr. Theodoulidis noted the importance of the agri-food sector for the man, a fact that was made more evident by the pandemic and he suggested that it would be worthwhile to re-examine the sectors that are worth investing for in the Greek economy. Konstantinos Baginetas was particularly pleased with the innovative practices included in the submitted files for funding under the Rural Development Program, while he was in favor of mixed farming to reduce farmers’ risk. Mr. Evangelopoulos referred to the need to intensify communication with Greek farmers, as Augmenta’s device improves performance and is in high demand in the investment portfolios. Finally, Sotiris Bandas wished for the future of the Agri-food sector in Greece “to produce more and produce smarter.”