We live in a world where food prices are at their highest levels in a decade and fertilizer prices are at record highs; food inflation has intensified further into 2022, while commodity prices continue to rise. All of this is taking place against the backdrop of a long-term trend in which more people in the world need food, but less land and natural resources are used to produce food.
At the recent Bloomberg New Economy Forum in Singapore, Cargill CEO Dave MacLennan noted that in short-term turbulence, agri-food supply chains are proving surprisingly resilient; however, climate change is a major challenge in the long-term. Hurricane Ida devastated Cargill's key grain cargo terminal in Louisiana last August.
While climate volatility inevitably brings natural disasters, the food supply chain works relatively well. As it turns out, even during a global pandemic, existing agri-food supply chains are able to move food from where it is produced to where it is needed.
Bayer's CEO, Werner Baumann, is cautiously optimistic about the outlook. Although the future of agriculture is arduous, agriculture is experiencing the fastest technological and scientific progress since modern times, and there are already many solutions to make agriculture more Sustainable, reducing agricultural footprint while increasing yields. This does not mean more planted area, but more intensification of existing planted areas, freeing up farmland for afforestation and carbon sequestration. For example, technologies such as biological nitrogen fixation and selective breeding can reduce the environmental costs of producing and applying fertilizers and ensure more predictable crop varieties.
The agricultural sector, especially from emerging markets such as Africa and Asia, has reopened to GM crops, allowing GM crops to be a part of it as they build a more resilient and sustainable food system. Although in 2013, the controversy surrounding GMO technology reached its peak.
Another area of agricultural technology is soil health, and technologies to protect and improve soil health. Dave MacLennan said: “Current agricultural sustainability must include regenerative agriculture to improve soil health and use soils for carbon sequestration. This will be more of a part of the solution to improving farmers’ livelihoods and improving agriculture’s greenhouse gas footprint.”
Many practices focused on regenerative agriculture are nothing new, they have been used in agriculture in one form or another for thousands of years. There is a trade-off between economic growth and ecological protection that requires understanding soils and the environment, and agriculture can actually lead the world in adapting and mitigating climate change. The key to making agriculture more sustainable and resilient is ensuring farmers have the tools and technologies they need.
But advanced technologies like GMOs and soil health may remain out of reach for most of the world's growers. An estimated 84% of the world's farms are small farms of two hectares or less; research shows that about one-third of the world's food is produced by these small farms, so smallholders in general have more direct skills need. What's more, most of these small farms are located in areas with poor infrastructure, such as sub-Saharan Africa, and their food needs are likely to see the greatest growth in the coming decades.
The problem smallholders face is that they have limited access to high-quality fertilizers and seeds, which means finding new ways to give farmers the tools they need to affordably grow more food to feed the future. That's part of a bigger problem with agtech capital, because all of this costs money, and that money comes with risk, and there's a price to pay for that risk.
As such, data becomes the necessary infrastructure to drive transformation and change in agriculture. Such a change would require a lot of long-term capital, and current agricultural capital is too short. At the farmer level, the lack of data and information is hindering the establishment of sustainable and resilient agri-food systems. Especially for small farmers in Asia and Africa, the biggest challenge is language. A great deal of agricultural technical information is now in English and can be found online; but this form is not understood by most farmers, and many farmers in poorer or more remote areas lack internet service.
Such farming communities have little hope of adopting the latest, sustainability-oriented agricultural products and knowledge, let alone cutting-edge agri-tech products. So there is a lot of room to look at how data tools can be used to provide farmers with up-to-date information, and products and services in local languages are one way.
David Beasley, director of the World Food Program, has told the media that the super-rich like Tesla CEO Elon Musk and Amazon CEO Jeff Bezos should stand up now and donate 6 billion at a time US dollars, helping 42 million people. If we don't help them, they will die of starvation.
Billionaire Elon Musk responded on Twitter that he would sell $6 billion worth of Tesla stock and promise to use the money to solve world hunger, but only if the United Nations World Food The planning agency can tell him how the money will be used. Now a filing with the U.S. Securities and Exchange Commission shows that the world’s richest man donated about $5.7 billion worth of stock to an unknown charity between Nov. 19 and Nov. 29, a total of more than 5 million shares.
At the Bloomberg New Economy Forum, CEOs of Cargill and Bayer, as well as two other agtech startups, were asked how the donation will be used to tackle world hunger. In response, Cargill CEO Dave MacLennan and Ghanaian agtech start-up Farmerline have both opted for infrastructure investments.
Dave MacLennan points out that growers in Zambia also fertilize with soda bottle caps, so with just modern technology, those farmers could double or quadruple their yields. On a larger scale, investments in infrastructure such as ports and waterways can help move more food from where it is grown to where it is needed. It doesn't do any good to just increase production and increase the training and education of farmers if they can't get food to where it's needed. Farmerline chief executive Alloysius Attah believes that small farmers need more choice in terms of quality and price, and infrastructure will provide more services to small farmers on the farm.
Bayer CEO Werner Baumann singled out several areas that should get Musk's donation, from carbon sequestration in agriculture to analytics and traceability technologies, but he emphasized that no matter what you do, farmers should be at the center, and the solution is farmers.
For Sara Menker of agtech startup Gro Intelligence, Musk's donation is still a drop in the bucket if the long-term goal is to make agri-food systems more resilient and sustainable, not just to address looming hunger. Sara Menker believes that the scale of small farms does not exist, so the cost of artificial development of infrastructure is too high. So, how can smallholder communities be brought together to develop? Her answer is to use Musk's $6 billion to build a new type of financial institution focused on agri-food sustainability that could help create new mechanisms to fund all the changes that need to be made in agriculture.
Same question, how would you like to use the money?