Y2K and Agriculture -- UN FAO document

[Guest guest]

FOOD, AGRICULTURE AND THE MILLENNIUM BUG;

Potential Problems and Preventive Actions

 

Produced by Mario Nicolai, officer, Food and Agricultural Organization of the

United Nations [18 April 1999]

 

[Text] A GREAT DEAL has been written and said about the Millennium Bug as the

twentieth century draws to a close. And a great deal has been done by

governments and industries around the world to anticipate and eliminate

potentially disastrous problems. But relatively little attention has been paid

to how the Year 2000 problem may affect both agricultural production and food

processing, marketing and distribution systems around the world.

 

Like many parts of society, agriculture has become highly dependent on

computers

in recent years. Even small farmers who till their fields with ox-drawn ploughs

probably rely on supplies produced in high-tech factories and transported

thousands of kilometres over computer-controlled transportation networks. Their

seeds and fertilizer, their irrigation water and electricity, their credit and

marketing facilities may all be vulnerable to Year 2000 computer problems. At

least in the near term, the Millennium Bug could prove to be one of the most

dangerous pests threatening farmers, along with the locusts and brown

planthoppers they have battled with throughout the centuries.

 

The most severe problems for agriculture are likely to occur not in the fields

themselves but in upstream and downstream activities – in the production and

delivery of essential inputs and services and in the processing, distribution

and marketing of farm produce. These problems could have severe consequences

both for agricultural production and for national and household food security.

 

 

##Year 2000 [Y2K] Threatens Farm Supply Lines##

 

[Text] In one way or another, Year 2000 computer problems threaten almost all

of

the supplies and services essential for agricultural production. These include:

 

**fertilizers and pesticides** -- the productivity of many high-yielding crop

varieties depends on regular applications of petrochemical fertilizers and

pesticides. The production of these chemicals could be interrupted by

breakdowns

in their factories due to embedded chip malfunctions. And the transportation

and

financing of shipments to developing countries could also be disrupted, putting

agricultural production in many of the intensively farmed "Green Revolution"

areas at risk.

 

**seeds** -- many farmers in developing countries depend on purchase and

delivery of highly commercialized seeds. Disruptions to inventory, shipping and

transportation systems at a critical time of year for seed deliveries could

jeopardize crop seasons for some farmers.

 

**transport** -- these essential inputs reach the fields at the end of a long

journey by ship, rail and truck. Although most Year 2000 transportation worries

have focused on the risk to air traffic control systems and air safety, the

shipping, rail and trucking systems also rely heavily on computers for

scheduling. One recent report noted that "the maritime industry is just waking

up to the fact that navigation and shipboard systems are in jeopardy of failing

or malfunctioning". This could pose problems for food shipments and also for

the

productivity of some fisheries.

 

**irrigation systems** -- many large-scale irrigation systems depend on

computers to regulate the flow of water. The World Bank warns that "the Year

2000 problem may have serious implications for developing countries where large

investments have been made in building dams and other important infrastructures

aimed at meeting water requirements in agricultural regions".

 

**energy** -- agriculture is energy-intensive. Irrigation pumps, tractors,

milking equipment and many other pieces of farm machinery need electricity,

gasoline or diesel fuel to run. Electrical generating plants and transmission

grids, oil and gas refineries, fuel pipelines and transport systems are all

highly computerized and highly vulnerable. If and where they fail, agricultural

production will suffer.

 

**banks and financial systems** -- farmers large and small frequently need

credit to purchase seeds, fertilizer and other inputs. This leaves them

vulnerable to the threat of Y2K problems in the highly computerized and

interconnected banking and financial systems, where local failures could

trigger

national, or even global, chain reactions and temporarily dry up flows of

credit.

 

**********************************************

{Side bar note}

 

WHAT IS THE YEAR 2000 PROBLEM?

 

FOR YEARS many computers and computer programs have saved space by using only

two digits to represent a year -- 98 for 1998, for example. The first two

digits were assumed to be 19. When the date changes from 31 December 1999 to 1

January 2000, that assumption will no longer be valid. The consequences could

be

dire. Computers rely on dates to time stamp and sort files and data, to make

calculations and to initiate actions. Problems have already started to occur in

many systems:

 

# computers in food processing plants and warehouses have ordered tonnes of

food

to be destroyed after calculating that the period during which they could be

consumed safely had ended almost 100 years ago, in 1900;

 

# cash registers in supermarkets have rejected food purchases on cards that

appear to have expired a century ago. There is a substantial risk that around

the turn of the millennium similar problems will occur simultaneously all

around

the world, affecting both individual transactions and global systems.

 

{End of side bar note}

 

***********************************

 

##Food Processing and Distribution also at Risk##

 

[Text] Year 2000-related computer problems could also bring disruptions in

almost any aspect of food processing, marketing and distribution. The risks are

greater in developed countries with highly integrated industrial systems. But

Y2K problems could also affect developing countries through their impact on:

 

**transportation** -- just as farmers depend on transport to receive necessary

inputs, they rely on trucks, trains, ships and planes to deliver their

perishable produce to processing plants and markets, at home and around the

world. Most experts pinpoint transportation as the weakest link in the food

chain. In testimony before the United States Senate, the chief economist of

Deutsche Bank Securities asked pointedly, "Will the railroads be able to

operate

at full capacity to transport grains, livestock and finished-food products?

Will

ships move freely in and out of ports to deliver the imported and exported

foods

that are so important to global trade?"

 

**processing plants** -- like other industrial activities, food storage and

processing plants rely heavily on equipment that may be vulnerable to failure

of

either computer control systems or embedded processors. Even if the food

processing activity itself is not disrupted, flaws in computer systems

responsible for managing inventory and shipments could create production and

delivery bottlenecks.

 

**telecommunications** -- farmers, traders in agricultural commodities and

government ministries rely on national and international telecommunications

links to deliver a steady flow of information on weather, prices and shipping.

"If the phones don't work," one Year 2000 expert asked, "what might be the

impact on food production, distribution and exports?" In many countries, the

computerized telephone switching systems are considered among the most likely

to

fail.

 

**marketing systems** -- trade in agricultural commodities depends on massive

computer systems, high-speed exchanges of vast quantities of data and transport

of produce across countries, continents and oceans. Food marketing and

distribution systems are highly vulnerable to breakdowns in telecommunications,

financial systems and transport. "If you don't know who needs grain," asks

biologist Geri Guidetti, who moderates an Internet forum on Y2K and

agriculture,

"if you don't know what global prices are ... what's going to happen to the

normal grain commerce?"

 

 

*********************************************

{Side bar Note}

 

Y2K AND EMBEDED SYSTEMS

 

IN ADDITION to computer hardware and software, Y2K problems could also affect a

significant percentage of an estimated 10 to 25 billion "embedded systems" --

microprocessors built into all kinds of equipment and appliances, from cameras

to nuclear power plants.

 

Experts have estimated that up to 250 million embedded systems failures could

occur as a result of Year 2000- related problems. In the worst case, an

embedded

system failure could cause another Chernobyl or Bhopal disaster.

 

Even if catastrophe is averted, studies warn that embedded system problems

could

result in "a lack of electricity, a working telephone system, radio, drinkable

water, food, and fuel for heating and cars and all other forms of

transportation".

 

# # # # # # #

 

{Side bar Note}

 

PREDICTIONS

 

Y2K PROBLEMS will certainly not occur in all places, nor will they occur

simultaneously at midnight on 31 December. In fact, experts point out that

Y2K-related failures started to appear many months ago, will increase in

frequency and severity during the months leading up to and immediately after

the

turn of the year, and will continue to crop up well into the year 2001 and

beyond.

 

# # # # # #

 

{Side bar Note}

 

THE FEAR 2000 PROBLEM

 

IN SOME CASES, fear of the Millennium Bug may pose a greater danger than the

computer problems themselves. Panic-buying and hoarding of agricultural inputs

and food could create severe, artificial shortages and price distortions.

 

As K. Poulsen warned in an article in Wired magazine, "the dissemination of

misleading, partial, erroneous or speculative information about Y2K risks may

cause social distress. the public may stockpile food or withdraw savings from

banks. The potential effects of a "new millennium" paranoia can be crippling

and

endanger the public order".

 

The best antidote to panic and paranoia is information. Providing accurate,

timely and sensible analysis of potential problems will allow farmers and other

key participants in food production and distribution to protect against --

rather than create -- short-term problems of prices and supplies.

 

 

# # # # # #

 

{Side bar Note}

 

CHECKLIST FOR ACTION

 

TO PREVENT OR MITIGATE Year 2000-related problems in agriculture and food

availability, farmers, the agricultural and food industries and governments all

need to focus priority attention and adequate resources on the problem. Action

must be taken to:

 

** inventory critical functions and evaluate risks of failures

 

** identify suppliers and delivery channels for all critical inputs, obtain

information on Y2K compliance and evaluate risks

 

** assess options, time required and costs for:

 

1. correcting problems;

2. replacing equipment or suppliers; or

3. preparing contingency plans and materials to cope with likely failures

 

** adopt approaches that will eliminate or minimize the impact of failures

 

** assign clear responsibility and priority resources to implementing the

agreed

plans.

 

{End of side bar notes}

 

********************************************

 

**Meeting the challenge**

 

[Text] Disruptions in agricultural production, processing and marketing could

threaten income for farmers, food supplies for families and essential foreign

exchange resources need-ed by governments to finance imports of food and

agricultural inputs. Both food secu-rity and future agricultural production

could be affected.

 

The possible impact of Year 2000 problems on agricultural production, trade and

transport poses a particular threat to:

 

# countries that depend heavily on exports of agricultural commodities as a

major source of income; and

 

# countries that rely on food imports and food aid to meet the needs of their

populations.

 

The key to minimizing the impact of the Year 2000 problem, whether at the level

of a smallholding farmer, a large food industry enterprise or a national

government ministry, lies in giving priority attention to a three-part strategy

that includes:

 

# assessment of areas of risk and vulnerability

 

# remedial and preventive action to address the most severe threats

 

# contingency planning and preparation to adapt to problems for which solutions

may be impossible or unaffordable.

 

 

**Risk Assessment and Analysis**

 

At the national level, urgent action must be taken to mobilize awareness within

govern-ments, as well as among farmers and the food industry, of possible

threats to agriculture and food security. Priority must be given to

identifying:

 

 

 

1. locally controlled equipment and processes essential to food production and

distribution that may be affected by the Millennium Bug. These might include

national transportation, electricity, banking and telecommunication systems.

 

2. external sources of essential supplies and services that may suffer from

Year

2000 problems, including sources of agricultural inputs, financial services and

food imports.

 

Once vulnerable points have been identified, research and analysis will be

required to determine the degree of risk, the potential impact of Y2K-related

system failures, and the costs and time required for replacement or repair. On

the basis of that analysis, plans and priorities can be developed to minimize

both the risk and the impact of Year 2000 problems.

 

In the case of locally controlled equipment and systems, research and analysis

may be required to determine both the levels of existing Y2K compliance and the

costs of improv-ing it. Problems in banking systems, for example, might not

only

disrupt flows of short-term credit but could have an impact that would be felt

over a much longer period.

 

At the same time, external sources of essential supplies and services should be

required to provide full reports on Y2K compliance. Steps should be taken to

make external parties aware of their responsibilities to provide full

compliance

information and continuity of ser-vices. Contracts and procurement rules should

be modified to include assurances of Y2K compliance and insurers should be

pressed to clarify their responsibilities in the event of Y2K-related failures.

 

**Remedial and Preventive Action**

 

In the case of relatively small computer systems and applications, the simplest

and most effective way of eliminating Year 2000 problems may often prove to be

the replacement of non-compliant equipment. Certainly, the costs of software

revision, which can be considerable, should be weighed carefully against the

costs of purchasing new systems that may offer significant performance

advantages as well as being certified Y2K compliant.

 

But this approach clearly cannot be applied in the case of systems that are

either externally controlled or prohibitively expensive. Similarly, modifying

existing systems and software to make them Y2K compliant may not represent a

viable option because of the very limited time remaining before 1 January 2000.

Modifying systems can be extremely expensive and time-consuming. Many large

corporations started work years ago to achieve Y2K compliance, contributing to

a

total expenditure of some US $600 billion, as estimated by the Gartner Group.

In

the process, qualified Y2K experts have become increasingly scarce and

extremely

expensive.

 

**Contingency Planning and Preparation**

 

Under these circumstances, farmers and governments in developing countries may

not be able to remedy or avoid some Year 2000 problems, particularly those that

may erupt in international financial, production and transportation systems. In

many cases, their most realistic approach may be to concentrate the limited

time

and resources available on developing and implementing contingency plans to

cope

with failures that they do not have the means to prevent. Even these approaches

may entail significant costs and there-fore require careful analysis and

planning.

 

Key elements in such plans may include diversifying sources of supplies and

services in order to reduce the impact of failure by any individual supplier.

Other steps may include adopting procedures to ensure that failures are

identified promptly and that alternative channels for delivery of essential

goods and services are in place and ready to be activated if and when

computerized systems fail.

 

In some cases, without exacerbating the "Fear 2000 problem" of hoarding and

panic-buying, farmers and governments may decide to review the level of their

food security stocks and inventories of essential agricultural inputs.

 

"Should farmers be encouraged to stockpile the basic inputs they need to

produce

food in 2000?" economist Ed Yardeni asked pointedly in testimony before the

United States Senate. "Should we be ready to provide food assistance to nations

overseas that have major Y2K-related problems with their food supplies?" Those

same questions need to be asked and answered at all levels, from the farm to

the

government ministry.

 

**************************

{Sidebar note}

 

MILLENNIUM BUG RESOURCES

 

A VAST and constantly growing body of information and resources is available to

help understand and respond to the Millennium Bug threat.

 

The World Bank has prepared an extensive Y2K ToolKit designed to help

developing

countries develop and implement national Y2K plans. This ToolKit and a great

deal of other information is available from the Bank's Internet site at:

http://www.worldbank.org/y2k/

 

The United Nations Development Programme (UNDP) also has a special Internet

site

dedicated to the Year 2000 problem and developing countries at:

http://www.undp.org/info21/new/n-y-disc. html

 

Many governments have created Internet sites that offer both information and

examples of successful approaches to addressing Y2K problems. A list of these

sites is included in the World Bank's Y2K ToolKit mentioned above.

 

In addition, numerous corporations, organizations and experts have published

information both in print and on-line. The World Bank site includes a page

providing links to a vast assortment of on-line information at:

http://www.worldbank.org/y2k/pages/ english/elinks.htm

 

********************************

 

 

Produced by the Food and Agricultural Organization of the United Nations

For further information contact:

Mario Nicolai (mario.nicolai (AT) fao (DOT) org)

Y2K Coordinator, Information Systems and Technology Division