The FINANCIAL -- Policymakers plan tomorrow’s agribusiness --
Farming is humankind’s oldest occupation. People were already gathering wild grains more than 100,000 years ago, and by 10,000 years ago were planting them and domesticating pigs, sheep and cattle.
Technological advances over the centuries have very slowly made us better at more intensive cultivation of what we need to eat. In the Middle Ages, for instance – both in the Islamic world and in European Christendom – agriculture was transformed both by improved techniques and the diffusion of crop plants such as sugar, rice, cotton and fruit trees.
The most exotic of these was the orange tree, brought to Europe via the Moorish land of Al-Andalus in today’s southern Spain. After the European discovery of America, New World crops such as maize, potatoes and tomatoes were added to the mix.
The past two centuries have seen the development of irrigation, crop rotation and fertilisers. The 20th century brought large rises in productivity with human labour being replaced by mechanisation and assisted by synthetic fertilisers, pesticides, selective breeding, and genetically modified crops. Although about two billion people worldwide still depend on subsistence agriculture, industrial agriculture based on large-scale monoculture dominates output.
But is time now running out? Rapid modern population growth, economic development and the threat of climate change are putting heavy new demands on the land we live off. According to the European Bank for Reconstruction and Development’s latest Agribusiness Strategy covering the years 2018-23, to keep pace with rising population, 70 per cent more food will have to be produced worldwide over the next 30 years. Yet the amount of land available to grow it on is finite.
Concerns have been raised that current levels of intensive farming are already damaging the environment and that intensifying our agricultural practices further will only worsen that damage.
So recent years have seen the beginning of a reaction against industrial farming, emphasising the benefits of organic, regenerative and sustainable practices. This is especially true in the European Union, which first certified organic food in 1991.
The questions at the forefront of today’s debate on the future of agriculture are about how to promote sustainability and resilience in the sector. If we are to keep eating in the style that we – at least those of us in affluent countries – are accustomed to, the coming decades will have to bring radical changes in the ways we produce our food.
The world’s population grew from one billion in 1800 to 7.6 billion in 2018. It is expected to go on rising this century. Estimates put the total population at 8.6 billion by mid-2030, 9.8 billion by mid-2050 and, according to the United Nations Population Division, 11.2 billion by the end of the 21st century.
The economic development of the 20th and 21st centuries has also brought more prosperity to an increasing number of people, many of whom have moved, or will move, from the countryside into the city in pursuit of better-paid jobs. Their rising incomes mean they will want a higher quality diet.
And one of the things tomorrow’s city-dwellers will want more of is meat.
According to the Organisation for Economic Cooperation and Development, “meat demand is associated with higher incomes and a shift - due to urbanisation - to food consumption changes that favour increased proteins from animal sources in diets.”
Worldwide meat production has tripled over the past four decades and increased 20 per cent in just the past 10 years, says a 2011 study by the US Worldwatch Institute’s Nourishing the Planet project. Pork is the most widely consumed meat, followed by poultry, beef and mutton. People in the developing world eat 32 kg of meat a year on average, compared to 80 kg per person in the industrial world. As living standards rise, so will meat consumption. Emerging markets are driving the growth: China is the largest consumer of meat, with protein consumption expected to grow three to four per cent a year thanks to a rising middle class.
In 2010, 30 per cent of the planet’s ice- and water-free area – and 70 per cent of agricultural land - was used for meat farming, with the sector employing about 1.3 billion people. In the past half-century, livestock production has increased significantly. More and more meat production in industrialised countries relies on confined animal feeding operations, sometimes called factory farming, where disposing of the manure produced by billions of animals a year becomes a challenge as well as a source of pollution.
The 2006 report by the United Nations Food and Agriculture Organization said the livestock sector generates more greenhouse gas emissions as measured in CO2 equivalent – 18 percent – than transport (13.5 per cent). It is also a major source of land and water degradation.
One of the more interesting recent ideas for sidestepping this damage is a nascent industry in alternative “clean” meat: “meat” made from plant-based products, seafood substitutes, insect protein or protein grown from meat cells in labs. Among US companies in this field are food giants such as Tyson, valued at US$ 26 billion – a response to growing ethical and environmental concerns about meat-eating in its domestic market. But many others are innovative start-ups. One, Exo, produces cricket-based protein bars. Another, San Francisco-based Memphis Meats, produces meat in a lab from self-reproducing cells (it introduced its first synthetic meatball in 2016). This is both an “animal-based” product and can be produced without breeding, raising and slaughtering animals.
Yet, while vegan products are more widely offered in supermarkets in developed countries than they were a decade ago, it is not yet clear how far these initiatives will be adopted worldwide.
Over-farming is also cited as a factor in both deforestation and land degradation. In the Amazon basin two-thirds of previously forested areas are now pastureland and the rest is used for feed crops for animals. About 40 per cent of the world’s agricultural land is seriously degraded, as a result of both animal and other farming altering ecosystems and reducing the earth’s ability to regenerate itself. The UN has ranked this among the world's greatest environmental challenges, claiming it risks destabilising societies, endangering food security and increasing poverty.
A first answer: a broad focus on sustainability and resilience
It will be the poorest in developing countries who bear the brunt of the resulting negative impact on climate and land fertility. A 2014 report by the Intergovernmental Panel on Climate Change (IPCC) report, showed food production is already damaged – with lower wheat and maize yields, and diminished fish catches – and said the impact for the poorest could worsen in the future.
So international bodies such as the UN Food and Agricultural Organisation (FAO) and OECD want to promote food security. But with other environmental concerns becoming mainstream – mainly the need to prevent climate change - there is an increasing tendency to frame this issue very broadly in terms of resilience and sustainability.
The 2018 edition of the FAO/OECD Agricultural Outlook, sets out this joint focus. It looks in detail at the Middle East and North Africa, where conflict and political instability have worsened food insecurity and malnutrition in a region that already has limited land and water resources and expects more climate-related problems as a consequence of global warming. “We need to improve the resilience and sustainability of food systems in times of conflict, to valorise resources which are becoming ever more fragile and scarce,” comments OECD Secretary-General Angel Gurria and FAO Director-General Jose Graziano da Silva.
Organisations and pressure groups such as IFOAM – Organics International see the solution to feeding the people of the future in a return to organic smallholder agriculture, not just to tickle the palates of the rich but to protect the poor.
Can this happen? A move away from industrial agriculture to something more like the traditional mixed farm, with its Old-MacDonald mix of crop rotation, pasture-fed animals and self-replenishing soil, may just be nostalgia. Or it may be tomorrow’s world.
One imaginative venture in organic farming gives a taste of practical ways elements of tradition could be reintroduced into modern farms. In August 2018, the EBRD became a shareholder of Lithuania’s AB Auga Group, an organic food producer. The EBRD will help Auga transform itself into a closed-loop organic farming company – an updated version of Old MacDonald’s farm. The Bank will fund the installation of biogas plants to produce bio-methane from the manure at Auga’s cattle farms. The bio-methane will be fuel for tractors and farming equipment, thus reducing the use of polluting diesel. Its by-products – known as digestate – will be used as fertilizer on Auga’s crop fields.
The EBRD’s new Agribusiness Strategy is all about finding balance. EBRD Director and Head of Agribusiness Natalya Zhukova is very aware of the potential costs of today’s desires for meat and giant-scale monoculture, and the waste involved, pointing out that “it takes 1500 litres of water to producer one kilogram of wheat, and an astounding ten times more to produce one kilogram of beef.”
The Bank’s five-year strategy identifies what she calls “triangle of tension” between three competing needs in agribusiness today. One is to efficiently close the food gap brought about by increasing demand and dietary shifts. The second is the need to add value to production and produce more of better quality, preserving natural resources and addressing climate change problems. The third is improving the environmental and social impact of agribusiness, including for smallholders.