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The Rising Food Crisis1. Problem OverviewIn a University of Cambridge’s Institute for Sustainability Leadership study conducted with Mirova, the Responsible Investment division of Natixis Asset Management, researchers predict:
Before 2025, the world will need an extra 1.5 billion tons of food and water to feed the planet’s population.The Socially Responsive Investing Investment Counsel reports that several investment groups are showing interest in sustainable agricultural solutions due to several economic, political, and social justice reasons.2. The Rising Food DisparityAccording to the Global Food Security Index (GFSI) developed by DuPont and the Economic Intelligence Unit:
The top 29 ranked countries, with the United States ranking number one, has 0% of their global population living below the global poverty line.The bottom 20 ranked countries, which are primarily in Sub-Saharan Africa, have 79% of populations living below the global poverty line.This food index evaluates food based on 3 components: affordability, availability, and quality/safety. The methodology is explained in a video here.3. Further Considerations Regarding Food AvailabilityIn considering the GFSI availability component, the following structural aspects were further considered:
Political Stability and CorruptionAgricultural Infrastructure, Research and Development, Food LossUrban Absorption CapacityWhile it makes sense that countries with higher GDP have higher food security rates, many institutions still wonder: Is it ethical?
Food Gap Challenges1. From the Supply Side Limited Arable Land Access (Urbanization and land conflicts)Limitations on Yield from Climate Change (Water scarcity and Rising CO2 levels)Depletion of Resources (Erosion, soil, biodiversity losses)Biotic Factors (Fungi, insects, rodents and weeds)2. From the Demand SidePopulation Growth (Increase of about 1 billion expected by 2025)Shift in Consumer Diets (Increased consumption of resource-intensive animal proteins)Increased Demand for Crops (Non-food uses)
Solutions for Closing the Food GapAccording to Mirova, solutions will likely come from production innovations and changes in consumption trends. Thus, we should increase the food supply but reduce demand for certain commodities.
1. Irrigation Expansion Should Account for 62% of Production IncreasesIrrigation Expansion (Better irrigation and precision agriculture)Soil Fertility ManagementRainwater Harvesting2. Consumption Habit Changes Should Account for 38% of Production IncreasesAvoidance of supply chain losses (Postharvest, transport, storage, shelf life)Reducing demand for biofuels that compete with food3. Yield Increases Will Account for 44% of Increases from Both of the Above Categories
Sustainable Agriculture Investing Statistical InsightsAccording to the UNCTAD (United Nations Conference on Trade and Development), the annual investment gap for the 2015-2030 period is around US $260 billion in the developing world.
Below are the proposed solutions and their estimated contribution of impact.
* Mirova believes that while mechanisation and genetically modified (GM) breeding can be part of the solution, they do not anticipate these methods to be highly important in future advancements.
Mirova has further evaluated potential solutions for cost-effectiveness and sustainability using the 10 Principles for Responsible Agricultural Investment (PRAI), in the cost curve below.
* Cost curve valuations have been calculated to monetize environmental as well as social benefits and subtract these amounts from the estimated cost of implementing the solution itself.
Mirovo’s screening discovered that innovative sustainable solutions are usually developed within small divisions of large corporations with diverse operations or by small, sometimes unlisted, companies.
Food Solution CategoriesThe following are the three categories of food security solutions that Mirova has identified as prominent in debates today.
1. Post-harvest Losses:According to the United Nations, 1.3 billion tonnes, or around 1/3 of food production is waste or lost each year, especially in the developing world. 170 kilograms per year per capita could be saved by eliminating postharvest losses in Sub-Saharan African and Asia.Solutions in Developing Countries: Integrated pest management, mechanisation, cooling and packaging, combined harvesters and threshers machinery, storage improvements
Solutions in Developed Countries: Modified atmosphere technologies, cold chain and packaging solutions
2. Biotechnologies3. Water Management Solutions:Water conservation: Smart irrigation, water loss reduction strategies, conservation agricultureProviding alternative sources of water suitable for agriculture: Desalination, wastewater treatment, and water reservoirsTo view more statistics about the food gap progress from the Global Food Security Index, check out the following infographic.