The Future of the Food Industry 2012

Now is the time for action ~ Is it because the warning bells ring so loudly that no one seems to hear them? What with elections and the euro crisis, there are plenty of distractions.

But there will be 200,000 more mouths to feed around the world tomorrow – literally. To meet demand, we will need to produce the same amount of food in the next 40 years as we did in the past 8,000. But global wheat production is expected to fall more than 5 per cent this year, the UN’s Food and Agriculture Organisation (FAO) says.

The challenges of food security – of providing a lot more, with a lot less – are complex, immense, frightening and urgent. They are urgent because our task is not only planning for 2050, when we will need to feed an extra 2bn people. We also have to act for today, when 870m people will go to sleep hungry.

There has been a 20 per cent drop in wheat yields in the US this year. The EU harvest is down by 6m tonnes – in Russia and Ukraine it will be reduced by more than 35m. The FAO predicts global wheat supply in 2012-13 will fall to 661m tons. Consumption stands at 688m tons.

Pressure on the world’s resources is intensifying. Increased competition for these resources has been compounded by the effects of severe weather conditions. Since 2000, food prices have more than doubled because of soaring demand, with desertification, floods and drought adding significant volatility to the trend of food price inflation. To make matters worse, it is countries with already high rates of malnutrition that tend to be worst hit. People in Chad, Ethiopia and Angola spend up to 60 per cent of their weekly budget on food – much of it imported. The most vulnerable are hit the hardest by price rises.

How do we address this? There probably is no perfect answer but I passionately believe there are some very clear actions we should all be taking. The following three, drawn from my experience as the chairman of the B20 Taskforce on Food Security, which provided recommendations for the G20 in Mexico this year, should sit at the top of our collective to-do list.

First, we should eliminate the use of unsustainable biofuels. Most first generation biofuels are neither environmentally efficient nor cost-effective ways to reduce greenhouse gas emissions, and the demand they place on land is destabilising world food supply and increasing prices. I was encouraged to hear the European Commission say in October that it plans to limit land conversion for biofuels, but it is a small step.

Second, we need increased investment in those parts of Africa and Latin America where the last remaining serious agricultural expansion potential lies, or wherever current yields are threatened. Governments and businesses need to direct investment towards strengthening whole value chains and improving support for smallholder farmers, particularly women. In the developing world, they make up 43 per cent of farmers – rising to 50 per cent in eastern Asia and 80 per cent in sub-Saharan Africa – but they have less access to the land, water rights, finance and education that could increase productivity. Aiding smallholder farmers is one of the most efficient ways of alleviating poverty, which makes it even more critical.

Third, developing country governments need to create long-term partnerships with the private sector, donors and civil society, to stimulate investment in commercial agriculture. The Copenhagen Consensus concluded that an investment in fighting malnutrition would benefit people more than any other type of investment – with a return of $30 for every $1 invested. And the World Bank found that an investment in nutrition can translate to a 2-3 per cent increase in a nation’s GDP each year, breaking the cycle of poverty that traps families and nations.

It is only by working together that we can achieve this, and there are good examples of projects to be found. But we need more of them, fast.

Little progress will be made unless we combine the brainpower, energy, commitment and expertise of businesses, governments and NGOs and work in partnership towards these three major ambitions. This will need collective international leadership. Future G8 and G20 presidencies must keep agriculture centre stage.

Business and political leaders must continue to drive initiatives, such as the World Economic Forum New Vision for Agriculture. The UN High Level Panel on the Post-2015 Development Goals – of which I am a member – also gives us a unique opportunity to cement meaningful international targets to support agricultural development.

But, above all, securing the future of agricultural development needs individual commitment and action on the ground. All of us, individuals, companies, policy makers and consumers, have a responsibility to act together, and the time to act is now.

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