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Sustainable agriculture is paramount to global prosperity

Between 2000 and 2010, 73% or deforestation was to make room for agriculture

World population is predicted to rise to 9bn by 2050

As the world’s largest sector, the food industry accounts for around 10% of global GDP1 employing over one billion people2. The widespread adoption of farm machinery, high-yielding crops and synthetic fertilisers in the 1960s has allowed for increasing food production to feed the world’s rapidly expanding population.

Although this mass industrialisation of the global food system has fuelled economic development and globalisation, the productivity gains have come with enormous costs – from climate change to food waste, wellbeing to biodiversity loss, water unavailability to inequality. Today’s global food system is no longer a viable model for the world population's long-term needs. While this presents an enormous global challenge, it is also an immense opportunity for sustainable innovation.

Soil degradation

Soil presents one of the most important risks, and opportunities, for the sustainability of our planet. Fertile soil is one of the few natural renewable resources available to us, with the capacity to store more carbon than you would find in vegetation and the atmosphere combined3.

However, as a result of large-scale intensive farming practices over the last 60 years, the world’s soil has been eroded faster than it can be replenished, releasing significant amounts of stored carbon in the process. If current practices continue, the world’s top soil – where 95% of food is grown – is on course to be completely drained of fertility within the next 60 years, depriving us of both the world’s most essential source of nutrients and an important carbon store4.

Biodiversity loss

Between 2000 and 2010, 73% of global deforestation was caused by the need to make room for commercial agriculture5. More than 50% of all human calories come from just three plants: rice, maize and wheat, according to the UN’s Food and Agricultural Organisation (FAO). This means we rely on a slender thread of genetic diversity6. This becomes particularly worrisome if a vulnerability to changing climates arises or a new pathogen strain emerges, as the lack of genetic variability could leave the entire crop at risk.

Antimicrobial resistance

Even if the impact of climate change is limited and yields are bolstered, the excessive use of antibiotics in animal farming means they are becoming less effective as pathogens develop resistance to treatment. This leaves humanity vulnerable to new, highly resistant super bacteria that we’ll be unequipped to medicate. The inefficacy of many antibiotics against previously treatable diseases is already killing 700,000 people per year, and this is predicted to rise to 10 million by 20507.

Food waste

Of the edible food produced, an appalling third is uneaten. The Ellen MacArthur Foundation estimates that the equivalent of six garbage trucks of food are wasted every second8. Nearly one tenth of the greenhouse gas emissions in the West are released growing food that will never be eaten9. And still, 11% of the world’s population is malnourished8. What’s worse is that the world’s nearly one billion hungry people could be nourished on less than a quarter of the wasted food in the US and Europe alone9.

The United Nation’s global food security report found famine was rising again in 201710. Jarringly, the same report exposed the alarming rise in obesity; 815 million people are malnourished while more than 700 million are obese.

With the global population expected to reach nine billion by 2050, agricultural productivity must increase by over 60% if we’re to be fed – stretching our unsustainable agriculture industry to its very limits2.

Fortunately, the shift to technology-enabled, environmentally-friendly, sustainable farming is already well under way.

Portfolio case studies

Hexagon

Hexagon, a leader in sensor, software and autonomous solutions, is recognising the increasing opportunities for innovation in agriculture. In 2014, Hexagon began utilising its unprecedented expertise in converting data into actionable information to enable smart planning, efficient field execution, precise machine controls and automated workflows to optimise operations.

One example of the many efficiency-gaining software tools that Hexagon has developed is the company’s HxGN AgrOn Auto Steering technology10, which uses satellite signals to navigate tractors and machines autonomously to ensure the alignment of planting lines with an accuracy of up to 2cm.

This precise auto-steering optimises the planted area by ensuring a smaller spacing between the lines, a considerable reduction in the loss of plants caused by the irregular passage of tractors, and better use of inputs – including both seeds and fuel consumption of the machines. The technology makes it possible for farmers to maximise field resources, significantly decrease soil compaction and increase productivity, growing more food on the same amount of land.

Croda

Sustainable chemical company Croda11 believes that the unprecedented population growth and changing demographics we’re seeing are creating a dramatically different landscape for the future. A landscape that offers unparalleled market opportunities and scope for radical innovation.

The company is pioneering technologies to optimise quality and yield of vegetables and field crop, starting by re-designing the way we think about crop protection. In a move away from damaging large-scale pesticide and fertiliser application, the company is developing active bio-ingredients for seed priming, upgrading, disinfecting, pelleting, encrusting and film coating that can be applied directly to each seed before planting.

Providing protection and stimulation to each plant during early development ensures optimum emergence, allowing each crop the best chance of reaching its full genetic yield potential. As well as improving crop yields by enhancing the quality of the seeds that are planted, direct seed application is a sustainable way of delivering protection and nutrition, considerably reducing the amount of substance needed.

Planning for the more frequent intense weather conditions, expected with changing climates, Croda is also developing bio-stimulants that stimulate or mitigate chemicals, depending on the climate and natural plant responses. This can help crops to direct more of their resources to creating yield, even in high-stress conditions such as drought, heat and climate variability, lowering the risk of a climate emergency.

Chr. Hansen

Chr. Hansen12 has developed natural probiotics that are a sustainable alternative to antibiotics. The company’s preparations using live bacteria can give livestock healthier immune systems and more resilience against harmful germs. These solutions could make a widespread phasing out of antibiotics in animal production possible.

Investors’ chance to redraw the world

While the challenge of feeding our growing population may seem formidable, there are tremendous opportunities available to companies pursuing a new sustainable vision of the food system of the future. ultimately, if there is any sector that is capable of being inherently regenerative, it’s the food system.

Agriculture’s future lies in harnessing intelligent technology and precise farming methods that sustainably enhance climate-resilient, higher quality food production. Currently, this is being driven by large-scale advancement and creativity from the private sector. The inevitable disruption across every stage of the agricultural industry over the next decade dramatically expands the scope for innovation. 

And, while leaders are already emerging, the answer will probably not lie with one single solution but rather many being implemented together. pertinently, it’s investors that have a transformative role to play by channelling capital to ingenious companies offering the most radically resource-efficient solutions. Realising the vision for a sustainably prosperous world depends on realising the opportunities presented to us by the inefficacies of today's agriculture.

There is everything yet to play for.

Portfolio holdings

Agricutural companies Areas of innovation
Chr. Hansen Bacteria for food and farming
Croda Seed encrustment, bio-stimulants and spray formulation
Hexagon Precision agriculture
Microsoft Internet or Things, infrastructure
IDEX Agricutural technology
Unilever Sustainable food

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