Published on LinkedIN 2016
The mission of Katarsis Ventures, is to demonstrate to others, that it is possible to nurture innovation, enable enterprise and pipeline investment in hard places.
At the heart of our partnership with Oggro Dairy in Bangladesh, is a desire to seed agriculture with innovation. We aim to commercialise what works to create sustainable solutions for food security, nutritional intact and rural livelihoods. We might be the only team trying to scale up a dairy production company, in a region where the perceived wisdom is to invest only in co-operative models for small-scale production, and centralised processing. In this situation imports are used to fill the gaps, and the weaknesses in the efficiency and efficacy of the models goes unanswered or considered just the way it goes in these parts.
These models don’t learn lessons from dairy industry practice elsewhere, either where cooperatives have been transformed into efficient, scaled social enterprises, or the right commercial and societal mix has been found to make the system sustainable. What is the reason why so little of our international development practice is influenced by learning from our own mistakes? Is it because we don’t consider that our own industries did not develop in sustainable ways yet leaders within them are pioneers of sustainability today?
Rightly, one of the strategies investors have requested from us, is our plan and ideas to reduce the negative effects on the environment. As a fair-profit enterprise, all the outputs and outcomes of our models are important to us. Shareholders can only become such stakeholders if they buy into this fully. We cannot escape that climate change influences dairy farming, and dairy farming influences climate change. We have considered that the scale of the problem is connected to the way dairy systems in emerging economies themselves scale. When the environmental cost of producing milk and dairy products needs to be shared across the entire sector, existing models are flawed, partly because the environmental impact is disaggregated and therefore almost uncontrollable.
Global dairy herds produce in excess of 2,000 million tonnes of CO2 annually. 86% of this is generated by the production of feed and the natural process of cows producing milk and waste. Associated with these are the production and distribution costs of both the feed and the dairy products. Then there is the change in land-use ranging from deforestation, overgrazing, and how waste products are managed. The footprint of the dairy industry in developed economies shouldn’t be coming down, only for it to be going up in harder places.
There is quite a romantic view of a family with a two or three cows. There is an assumption that even when multiplied across a region, this is the only sustainable way of producing milk, and imports from Australia for example can meet Asia’s demands. Where there is a large dependency on imports, food production becomes even less positive for the environment. We challenge this frame of development this because from our own research there are significant efficiencies possible in the dairy production and processing but no champions for them. There is a direct link between higher production productivity and the health of animals, because the capacity of a cow to produce milk is directly linked to its level of stress. There is a direct link between the safety of dairy food stuffs, timing, the cold chain and treatment such as pasteurisation and efficiencies from decentralising processing.
Within these efficiencies is a profit margin and that creates a profit motive to really push for change. In a fair-profit model, this is the fuel for the social, economic or environmental impact model of the enterprises. The systems that deliver these improvements, in production and processing, are scalable. Within these scaled models there is the space to adapt to and mitigate environmental impact.
Within our design we would like to use sand bunks for the cattle, proven to be the most inert and comfortable place to rest. This choice negates the need to incorporate a complex waste channelling system, which however sophisticated, will become blocked by the sand. Only at scale would we be able to choose vacuum-based systems which enable us to recycle sand and remove all waste efficiently. This makes the waste the ideal input for either organic pesticide and fertiliser production in association with our lab, or at a later stage, used in combined heat and power units. Scale creates the conditions for better animal health, more efficient waste control, and a local improvement in land management and pollution control, even reaching homes with electricity and other fuels, where currently the grid suffers.
Scale is important in design too, not just to create the economics to enable the integration of technology. Consider the picture for example.
A long cow shed with a very high pitch roof, is ideal for the warm and humid conditions in Bangladesh. It has the size to create cool and comfortable conditions for cattle. The natural climate-control facilitated by this design, creates additional space for solar panels or tiles and reduces the need for fans or other cooling methods.
As the developing world begins to meet the scale of its challenges, the scale of the solutions, and what these look like, plus the new ethics that link those systems together, becomes even more important. A rush to scale without this balance, has of course had disastrous consequences in other places. Focusing climate change on changes in individual behaviour is a distraction and pretending the systems in developed countries grew up perfectly is a deception. Some of this learning can only happen in the context of scale. Scaling new models in agriculture can be part of a sustainable solution to climate change if indeed investors are brave enough to support entrepreneurs with vision, as well as supporting models that feel more comfortable. The dividend for hard places, is that they benefit from the hard work and learning, from years of getting it wrong elsewhere.
Scale is critical for real social impact. Perhaps the same applies for our environmental breakthroughs.