Food prices have reached a ten-year high until the end of last year. Fertilizer prices also reached historic highs when 2021 turned into 2022, exacerbating food inflation.
Prices for both sets of goods continue to rise this year as supply chain disruptions continue, in part caused by the Covid-19 pandemic.
As noted by participants in a recent discussion Bloomberg’s New Economy Forum in Singapore, all this is happening against the background of a long-term trend of increasing population, which requires more food – with a decrease in land and natural resources for its production.
Discussionist Dave McLennan, CEO Cargill, argued that the supply chain of agri-food products “turned out to be surprisingly stable” against the background of all the short-term shocks. But he added that climate change is a big problem in the long run, citing the impact on Hurricane Ida supplies last August, which took out one of his company’s key grain terminals in Louisiana, USA.
“With some exceptions, we were able to get food from where it is produced, to where it is needed,” he told the audience. “Despite the inevitable natural disasters associated with climate instability, the food supply chain has worked relatively well – even in the context of Covid-19. But this is not something we can take for granted. “
McLennan’s employee and colleague BayerWerner Bowman proposed a cautiously optimistic forecast: recognizing the scale of the challenge, he argued that agriculture is experiencing the fastest period of technological and scientific progress today – meaning that we already have many solutions awaiting today. wings.
“Agriculture has become more sustainable. But if you look at the enormous consequences that climate change will have on all of us […] we need to reduce the footprint used by agriculture and also increase productivity, ”he said. “At least [that means] not by increasing the sown area, but by giving more intensification to the existing areas, while freeing up areas for reforestation and carbon sequestration ”.
Bowman also singled out technologies such as biological nitrogen fixation, which can reduce the environmental costs of fertilizer production and application, and selectively bred crop varieties that can provide more predictable yields.
Revaluation of GMOs, soil health priority
As for the latter, one controversial technology that is returning to the spotlight is genetic engineering, including genetically modified organisms (GMOs).
Bowman said he feels “renewed openness” to genetically modified crops in agriculture, especially in emerging markets such as Africa and Asia.
GMOs “absolutely” should be part of the picture when it comes to building a food system with greater resilience and greater resilience, McLennan said; noting that when he became CEO of Cargill in 2013, controversy over technology was at its height.
They got the Frankenfood brand, but eventually they fell behind – from the early 20th century – on increasing yields, expanding access to food, increasing the livelihoods of farmers around the world. They are a tool for sustainability, ”he said.
“Manga has been a GMO since the 1960s, but people have become afraid [of the tech more recently]».
Another area identified by both Bowman and McLennan is soil health and methods that can preserve and improve it.
“The current iteration of sustainable development in agriculture should include regenerative agriculture – whether uncultivated or crop rotation – to improve soil health and use the soil to absorb carbon,” McLennan told delegates.[These] will become more part of the solution to improve farmers ’livelihoods and improve greenhouse gas emissions in agriculture”.
Of course, many of these soil-oriented practices are nothing new; in one form or another they have been used in agriculture for millennia. But this fundamental nature of many solutions for sustainable agriculture shows how the agricultural industry can actually lead the world in adapting to climate change and mitigating, according to panelist Sarah Menker, whose startup Great Intelligence According to her, it seeks to track “the supply and demand of every agricultural product on Earth in real time.”
Record-holder Sarah Menker warns of risk of food inflation amid Covid-19 and climate change – read more here
“There is a trade-off between economic growth and preserving the environment,” she said. “When you monitor supplies in real time, you really have to understand the Earth, our soils, the environment. Sustainability has been a part of agriculture since the Neolithic Revolution. [It’s] not that data is the answer, but people who understand agricultural markets, I would argue, probably understand our Earth, our environment, our climate so that the average person in this world doesn’t understand – because it’s their reality every day. That is why the agricultural sector can play a big role in the talks on sustainability – not only in the markets, but also in education. “
Information is power, and power is money
In this regard, all participants agreed: the key to increasing the sustainability and sustainability of agriculture lies in the person who is at the heart of the industry – the farmer – and make sure they have the necessary tools and know-how.
But for most manufacturers in the world, advanced technologies, such as those outlined by Bowman, McLennan and Menker, remain far from available. While there is hope that access to them can be “democratized”, smallholders around the world with emerging economies have more immediate technological needs in general, according to expert Aloysius Ata, CEO of Ghanaian startup Agtech Farm line.
It is estimated that 84% of the world’s farms are small farms of two hectares or less; studies show that about one-third of the world’s food is obtained as a result of these operations.
What’s more, most of these small farms are located in regions such as sub-Saharan Africa, which are also likely to see the biggest increase in food demand in the coming decades.
“They are often not at the center of most conservations, and they have difficulty accessing high-quality fertilizers and seeds,” Atah said of the continent’s smallholders. “We need to find new ways to make capital more accessible to farmers so they can afford all the tools they need to grow more food to feed the future.”
This is part of a bigger problem with capital in the Agtech space, Menker suggested.
“It will all cost money. And that money comes with risk and you have to price [that risk]”she said.
In the early 2000s, Menker was a trader in energy goods. She noted that at that time many producers wanted to insure against oil for the next two years, but that selling on the markets for such a long time was difficult.
But by the time she went to start Gro, she was able to sell oil futures contracts for 10 to 20 years.
“It funded a variety of innovations in the energy market that created things like shale oil [and] shale gas is possible. Gas prices have fallen, coal has gone out of the market, renewable energy has become possible. Really long-term changes have happened because capital has gone well; and capital flows well if there is good information, ”she said.
“Therefore, data is becoming a necessary infrastructure for transition and change. [This] The changes will require a lot and a lot of long-term capital, and today’s capital is too short-term. “
At the farmer level, Atah also said that information – or lack thereof – constrains the cause of food sustainability and resilience.
“The biggest problem is that the information today is in English, it is online; it is not in a form that is easy for most farmers to understand, ”he said, pointing out that in Nigeria alone, more than 200 languages are used daily, apart from English; while many farmers in poor or remote regions do not have access to the Internet.
Although these language, capital and technological barriers remain in place, there is no hope that the latest, sustainable agricultural products and knowledge will be adopted in such communities – not to mention the advanced Agtech .
“So there’s a lot of room to figure out how to use data tools to give information to farmers,” Atah said. “If you want to be able to report how well to use the seeds, reduce the impact on the soil and so on, then the local language [products and services] this is one of the ways. “
McLennan noted that he visited farms in Zambia, where producers applied fertilizers using a cap from a soda bottle. “Are we spending enough time and capital? I think the answer will not be […] You can double, triple [those farmers’] gives only modern methods, ”he said.
Spending Ilona $ 6 billion
Shortly before the event in Singapore, the multibillionaire and Tesla CEO Elon Musk wrote on Twitter that he would sell shares of his electric car company for $ 6 billion. direct money to eradicate world hunger – but only if the UN World Food Program could tell him exactly how it would be spent.
Musk responded to comments from World Food Program Director David Beasley, who said CNN super-rich – including, in particular, Musk and Amazon CEO Jeff Bezos – should “get out now, on a one-time basis [and donate $6 billion] help 42 million people who are literally dying [of hunger] if we don’t reach them. “
Asked by the moderator how they would spend the money, Ata and McLennan chose to invest in infrastructure.
“You and I can go to Amazon and buy what we want. But small farmers often “take away” services, ”Atah said. “In their village, one guy is making fertilizer, and that’s it […] They need more options and choices where people compete for quality and price. The infrastructure will give people more services on the farm. ”
Looking more at the macro perspective, McLennan said investing in infrastructure such as ports and waterways can help get much more food from where it is grown, to where it is needed – for example, in South America.
“You have this massive region of growing crops in the world that does not yet have the proper infrastructure to deliver it from the fields and to consumers. It is of no use if you increase yields and increase the training and education of farmers if you cannot get [food] where it is needed, ”he said.
Bowman singled out a number of areas that should get Mask’s money – from carbon cultivation to analytics and tracking technology – but he stressed that “everything we do should be farmer-oriented. The solution there is farmer ».
For Menker, a $ 6 billion donation would be more than welcome, but it would still be a drop in the ocean if the goal is to make food systems more resilient and sustainable in the long run, not just solve the world’s immediate hunger problem .
“It will take well over $ 6 billion,” she said. “If you look at small-scale farming, the scale doesn’t exist, so the cost of infrastructure is artificially inflated. So how do you create aggregation methodologies for communities in parts of the world where this scale does not exist? ”
Her response would be to use the $ 6 billion mask to create a new financial institution focused on the sustainability of agri-food products.
“It’s [could] help create mechanisms to start funding all the changes that need to be made, ”she said.
https://agfundernews.com/sustainability-bayer-cargill-startup-ceos-talk-in-singapore The CEOs of Bayer, Cargill and startups are talking about sustainability in Singapore