How tech and investment could help feed the many

Last year, 124 mil­lion peo­ple around the world faced food crises that required human­i­tar­i­an action. The fig­ures from the Unit­ed Nations Food Pro­gramme show that more than 39 mil­lion peo­ple starved as a result of droughts.

With so many peo­ple affect­ed, it would be easy to assume that there is not enough food to feed the world’s grow­ing pop­u­la­tion, but this sim­ply isn’t true. While there is suf­fi­cient food to go around, many devel­oped coun­tries lack the farm­ing and sup­ply chain tech­niques to ensure that each har­vest gets to the peo­ple who need it, before it spoils.

“Under nour­ish­ment doesn’t hap­pen from pro­duc­ing insuf­fi­cient quan­ti­ties of food,” explains Guil­laume Bon­nel, head of impact invest­ing at Lom­bard Odi­er Invest­ment Man­agers. “It hap­pens because of logis­ti­cal prob­lems.”

All the while, the poten­tial for food short­ages con­tin­ues to grow, due to the increas­ing glob­al pop­u­la­tion. The UN esti­mates that the world’s pop­u­la­tion will rise from the cur­rent lev­el of 7.6 bil­lion to almost ten bil­lion by 2050.

Grass­roots pres­sures are the first step in get­ting the glob­al investor com­mu­ni­ty behind this

Huge amount of food needlessly wasted every year 

Accord­ing to the UN’s Food and Agri­cul­tur­al Organ­i­sa­tion, around one third of the food pro­duced in the world gets lost or wast­ed each year. This breaks down as 30 per cent of cere­als, 40 to 50 per cent of root crops, fruits and veg­eta­bles, 20 per cent of oil seeds, meat and dairy, and around 35 per cent of fish.

“In devel­op­ing coun­tries, 40 per cent of loss­es occur post-har­vest,” says Stephane Sous­san, a fund man­ag­er at CPR Asset Man­age­ment.

In the poor­est coun­tries, har­vest­ing tech­niques are often not as sophis­ti­cat­ed as those in devel­oped coun­tries, Mr Sous­san says. This means that food spoils dur­ing the ear­ly stages of the sup­ply chain or because stor­age and cool­ing facil­i­ties are not as effi­cient as the they could be.

Resolv­ing these recur­ring short­ages will require a com­bi­na­tion of invest­ment, tech­no­log­i­cal inno­va­tion and edu­ca­tion, accord­ing to the invest­ment com­mu­ni­ty.

Smart investment could help restructure the supply chain 

Fund man­age­ment groups believe they can make a sol­id invest­ment return for investors while simul­ta­ne­ous­ly help­ing devel­op­ing com­mu­ni­ties that are the vic­tims of poor food sup­ply chains.

For Swiss fund man­ag­er Lom­bard Odi­er, one such invest­ment has been in Kenyan com­pa­ny Twiga Foods. Kenya’s poor road infra­struc­ture meant that farm­ers saw high lev­els of spoiled fruit and veg­eta­bles when they trans­port­ed their pro­duce to mar­ket.

Hav­ing received invest­ment, Twiga launched a smart­phone app that enables buy­ers to order the food they need in advance of mar­ket day. Twiga set up a series of ware­hous­es in strate­gic loca­tions to keep the pro­duce fresh and deliv­er it right at the time it is required.

Twiga Foods employ­ee deliv­er­ing bananas to a stall in Nairo­bi, Kenya; Twiga ven­dors are able to order exact­ly the food they need in advance of mar­ket day via a smart­phone app to cut down on waste post-har­vest

The world’s fund man­agers are also keen­ly aware of a shift in the way that peo­ple look at invest­ing. Numer­ous indus­try sur­veys have found mil­len­ni­als are increas­ing­ly keen to see their invest­ments play a part in improv­ing soci­ety, par­tic­u­lar­ly in areas of pover­ty or food scarci­ty. This could yet lead to fur­ther invest­ments in improv­ing food sup­ply chains in devel­op­ing coun­tries.

Mr Sous­san recog­nis­es that such investor pres­sure is not yet at the lev­els wit­nessed for oth­er sus­tain­abil­i­ty invest­ment pri­or­i­ties, such as cli­mate change, but he believes there is poten­tial for investor appetites to have a mate­r­i­al impact.

“Investors, in allo­cat­ing cap­i­tal, can play an impor­tant role in true restruc­tur­ing of the food chain,” he says. “Grass­roots pres­sures are the first step in get­ting the glob­al investor com­mu­ni­ty behind this. Any glob­al restruc­tur­ing will be depen­dent on how pow­er­ful these forces can become.”

Precision agriculture could transform how we farm

While resolv­ing sup­ply chain issues are a part of the prob­lem, farm­ing tech­niques will also need to be improved if they are to meet demand or serve impov­er­ished com­mu­ni­ties, accord­ing to experts.

Pre­ci­sion agri­cul­ture – the use of tech­nol­o­gy to improve farm and pro­duc­tion prac­tices – will have a trans­for­ma­tion­al effect in devel­op­ing nations that cur­rent­ly wit­ness the high­est lev­els of food loss­es post-har­vest.

“Most of the increase in agri­cul­tur­al pro­duc­tion over the com­ing decades will come from yield improve­ment as increas­ing arable land is dif­fi­cult,” says Mr Sous­san. “Pre­ci­sion agri­cul­ture will prob­a­bly play a role in boost­ing pro­duc­tiv­i­ty while pre­serv­ing some resources by opti­mis­ing or reduc­ing the use of inputs like seeds, fer­tilis­ers and crop-pro­tec­tion prod­ucts.”

New technology set to improve every step of food production

Encour­ag­ing­ly, the use of pre­ci­sion agri­cul­ture goes way beyond pure crop pro­duc­tion and man­age­ment. Advance­ments in tech­nol­o­gy could also enable live­stock farm­ers to improve their results.

Dr Ste­fan Weiskopf, chief exec­u­tive of farm­ing intel­li­gence group Antelliq, says he expects adop­tion of pre­ci­sion agri­cul­tur­al tech­niques to be rapid in the years ahead.

He explains: “There are sev­er­al attrac­tive sec­u­lar growth dri­vers for ani­mal pro­tein pro­duc­tion with pre­ci­sion agri­cul­ture: increas­ing demand for pro­tein and smart farm­ing adop­tion, con­straints on pro­duc­tion dri­ving the need to pro­duce more with less, food safe­ty and sup­ply chain effi­cien­cies, and ani­mal wel­fare.

“Unques­tion­ably, these trends require the use of and invest­ment in smart farm­ing solu­tions, which can accu­rate­ly mon­i­tor and cal­cu­late how much water or feed is nec­es­sary to oper­ate farms in a cost-effec­tive and envi­ron­men­tal­ly sus­tain­able way.”

The lat­est inter­na­tion­al sta­tis­tics on mal­nu­tri­tion make for uncom­fort­able read­ing, but evi­dence shows that the solu­tions exist through sup­ply chain man­age­ment and pre­ci­sion agri­cul­ture tech­niques.

For these solu­tions to be suc­cess­ful, there will need to be buy-in at glob­al lev­el form both gov­ern­ment and investor stake­hold­ers. Ulti­mate­ly, it is these two groups that have the great­est oppor­tu­ni­ty to ban­ish mal­nu­tri­tion for good.