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EEP101:Challenges and opportunities


EEP101:Challenges and opportunities David Zilberman University of California Berkeley – PowerPoint PPT presentation

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Title: EEP101:Challenges and opportunities

EEP101Challenges and opportunities
  • David Zilberman
  • University of California Berkeley

  • Major challenges
  • Energy
  • China and india
  • Opportunities
  • New IT
  • Biotech
  • Lessons of adoption in ag
  • Implication

Energy income growth and increased demand
  • The good new- income world wide is growing
  • The bad news- so is demand for energy
  • Current unutilized capacity of oil are at less
    than 5 percent
  • One million barrel reduction in production of oil
    generates immense pressure and raises prices
  • Should the upper price gasoline be 3,3.50 or

Fuel choices -from bad to worse
type Positive Negative
Oil cheap Non renewable dirty
Gas Clean Non renewable
Nuclear No climate change Dangerous Non renewable
Wind Cheap clean Birds, location
Solar Clean renewable Need development
Biofuel renewable Needs land
Hydro Cheap renewable Fish, investment
Hydrogen clean Need RD

Energy and Resources Energy Consumption
Consumption per capitaUnits Kilograms of oil
equivalent (kgoe) per person per year
AustraliaAUS 5,974. CanadaCAN
7,999.5 FranceFRA 4,458.6 GermanyDEU
4,263.5 GreeceGRC 2,622. JapanJPN
4,091.5 Korea, RepKOR 4,131.8 KuwaitKWT
6,956. NorwayNOR 5,920.6 PortugalPRT
2,465.1 SingaporeSGP 7,103.0 SwedenSWE
5,762.3 .United KingdomGBR
3,993.8 United StatesUSA 7,920
Factors Income Population density Fuel price
Energy and Resources Energy Consumption
Consumption per capitaUnits Kilograms of oil
equivalent (kgoe) per person per year
AngolaAGO 662.1 BangladeshBGD 144.9 EthiopiaETH
284.9 GeorgiaGEO 461.9 HaitiHTI 257.4 IndiaIN
D 514.3 IndonesiaIDN 710.5 YemenYEM 190.9 Zam
biaZMB 607.7 ZimbabweZWE 774.
Chinas pork production
China water situation
China from exporter to importer of petroleum
New Waves of Information Technology
  • CommunicationInternet, video
  • Enhanced computing
  • Remote sensing/ Geopositioning
  • NetworksWeb
  • Wireless
  • MiniaturizationMicro and Nano

Expanding Capabilities Meeting Latent Demand
Identification and Tracingin regulation and
  • Who did it ? Identification of source of
    pollution, etc. Transition from non-source to
    source-point pollution control policies.
  • Who made it ? Identity preservation and product
    differentiation. Value capture in retailing and

Differentiation Discriminatory Treatment in
  • Transition from uniform treatment of
    heterogeneous elements within the system to a
    precision system, where heterogeneity and
    variability are recognized and treated over space
    and time.
  • Enhancement of productivity by
  • Improving quality
  • Increasing yield
  • Reduced cost

Aggregation Creating Markets
  • Building a critical mass for differentiated
  • Match-making
  • Resale
  • Cooperative buying and selling
  • Enhanced price discovery
  • E-marketing is in its infancy and worth 150
    billion annually.

Overcoming Barriers of Space and Time in
production management
  • Video conferencing
  • Remote monitoring and treatment of living system
    applications in
  • Veterinary medicine
  • Pet control
  • Wildlife management
  • Water resource systems

Elements of Agricultural and Environmental IT
  • Package Multicomponent
  • Requires multidisciplinary cooperation in
  • Information science
  • Natural science
  • Decision science
  • Engineering

Determinants of Technology Specification
  • Technological feasibility
  • Cost
  • Demand
  • High quality premium --gt investment in
    sophisticated quality control system
  • Low value of saved inputs / minimal gain in
    output --gt reduces incentives for precision

You can guess the use, impact, and value of a new
technology ahead of time but you cannot know
Research on adoption aims to understand
Who adopts and when How to market new
technologiesHow policies affect adoption
  • On the Adoption and Impact of Information
    Technologies in Agriculture, Resources, and the

Adoption-Dynamics ProcessS-Shaped Function of
Adoption within Diverse Populations
  • Early adopters have most to gain from technology,
    tend to be younger and more educated.
  • Adoption is triggered by crises, higher prices,
    or regulation.
  • Credit constrains adoption.

Lessons of Low-Volume Irrigation Drip,
  • Diffused very slowly over 20 years, currently
    covers less than 10 of farmland.
  • High adoption rates on high-value crops, fruits,
    and vegetables, and in landscaping.
  • Gardeners are farmers too.
  • Spurts of adoption following droughts.
  • Adoption is higher in locations with high prices
    of water, sandy soil, and steep landlocations
    where the technology is most profitable.
  • Drainage problems trigger adoption.

Lessons of CIMIS
  • Benefits in the early 1990s were estimated to be
    15 times the cost.
  • Agricultural water savings, 10 to 40
  • Yield effect, up to 10.
  • Led to adoption of advanced management.
  • Unintended major uses were also in
  • Urban water use
  • Pest control
  • Legal procedures
  • Spawned a private network of weather stations
    with software management strategies.

Computers in Agriculture
  • Slow adoption rates only 25 in 1990, today
    close to 75.
  • Early adopter characteristics
  • larger, with multicrop integrated operations
  • younger, more educated,
  • Adoption enhanced recently by
  • Lower cost, user friendliness
  • network externalities
  • fun factors
  • Most adopters used word processing, billing, and
    business applications much less use of
    managerial application.

Technology leaders
  • Small number of leaders push frontier
  • DRIP,Computers,varieties,crops
  • Innovation is tough
  • Mostly in high value crops
  • Automation
  • Saves labor,chemical water
  • Increase quality
  • Reduce risks-physical financial
  • Cheap inputs reduce incentives to innovation
  • Regulations enhance adoption-
  • Timing matters

Agricultural Practices in the Information Era
  • Software and remote sensing ease compliance to
    pesticide-use registration requirements.
  • Electronic water markets.
  • Web and e-purchasing of inputs.
  • Cooperative electronic purchasing.
  • Electronic consulting.
  • E-marketing of flowers and other high-value
  • And thats only the beginning.

Precision farming potential in irrigation of
Realizing the potential requires perfect
information application
Factors affecting gains from precision
  • Ability to monitor the variables that count
  • Correct reading of information- 5 misdiagnosis
    may lead to losses
  • Timeliness
  • Effective and diverse response options-
    e.g.heterogeneous field conditions may benefit
    from diverse genetic choices (Biotech and
    Precision may go hand in hand)
  • Ability to replace or reduce polluting inputs

Gains from quality
High quality
Price of peaches
Low quality
Quality measured by sugar content flavor and size
can triple prices. Seasonality matters
Willingness to pay for green and clean
  • gt10 of consumers will pay gt25 for pesticides
    free crops
  • Prime markets(Japan) reward minimal chemical and
    biological manipulation of foods
  • Yard care industry grosses gt 40 Billion annually
    nation wide
  • Golf courses gross gt 6 Billions in California
  • Stigma effect of contamination reduce price of a
    unit of housing by gt50K
  • During next decades
  • Several Billions are planned to be spent animal
  • Tens of Billions on water quality

Complementarity of IT and new Biotechnologies
  • New biology will increase varietal choice
  • Need capacity for changing variety and treatment
    within fields
  • Need documentation of treatment,state of plants
    and immediate response to changes

GMO, Separation and tracability
  • Consumers discriminate between products and
    desire purity
  • Need to separate different varieties- in
    particular GMO/Non GMO
  • GMO increases costs of traditional varieties
    -worry about separation
  • Gain from Gmo need to be bigger than cost of
    extra treatment
  • Some Gmo products may be less desirable- others,
    fortified food, more desirable- producers will
    look for differentiation

Putting it together
  • IT and biotech will provide opportunity to
  • Increase productivity to allow bio fuel
  • Conservation of resource
  • If we double or double or triple farm
    productivity - we can use part of our land to
    grow fuel
  • If we reduce energy consumption in US and
    developing world by 50-70 we can accommodate
    increase demand elsewhere

Policies and incentives
  • Aggressive RD
  • Incentive for conservation
  • 2 fuel tax on non renewable
  • Reasonable regulation ( replace fear with reason)
  • Awareness - small is beautiful

Product differentiation and tracability
  • Separation is not sufficient- you need to know
    who made it to assign liability
  • Tracability is needed to address concerns about
    food borne diseases
  • It is crucial for supply chain management-
  • Following products throughout the chain
  • Paying producers for what they actually
    produced- rather an average price
  • It is crucial for environmental friendly high
    quality agriculture
  • It requires new application of It for food and ag

Think Locally act Globally
  • Ag and environmental IT will provide export
    opportunities- most ag and resource problems are
    outside the US
  • With or without Kyoto CO2 emission reduction and
    sequestration will be rewarded- monitoring will
    be required
  • Transition from water extraction to improve water
    efficiency- source of new global demand
  • Development increases demand for environmental
    amenities- It will allow to provide them cheaply