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What will the world eat? |
Today’s entry will be one that strolls across some of the larger issues that encompass agri-business as a sector, both at a national and international level. These random thoughts may seem a tad disjoint, but we intend to fill in the gaps that link them together as the days go by, and help you understand the story behind the story, for a most interesting and intricate story it is.
The next forty years will be ones of great change. That may be amongst the most generic (some will say ‘globe’) statements you’ll even come across, but in the agri-business world, it's a particularly prescient summary of what is to come.
We all know that our population as a race has been increasing rapidly, it’s blared across to us in our classrooms, in our media, and in innovative ads for a particular 3G service. The rather logical extension of that thought is that a growing population needs to eat. What we eat, and how much we eat is closely related to what we can grow, how much we grow, and how many people can afford it. Amartya Sen’s Food Aggregate Demand theory, the one that won him a Nobel Prize in Economics, explained how even in times when the food supply is abundant, if people cannot afford food, artificial famine will ensue. Today we are seeing a sort of inverse of this theory taking hold; in a burgeoning middle class with a new found hunger for better food, and the money to demand it, we see a rise in the demand for more exotic foods such as Goji berries and Broccoli, as well as a newfound preference for better varieties of existing produce.
In short, the people want more to eat, more choices in what they eat, and to eat better food. To meet this growing demand, new food has to come in to the system, but from where exactly is a billion dollar question. It’s worth observing that as population pressure accelerates as it is predicted to, the stress on existing resources will only ever grow, and there is already a branch of thought that believes that our current agricultural output is coming at the cost of the future fertility and productivity of the soil, so just how future growth is attained is a very serious question. For the record, some interesting ideas that have been offered as long term solutions include growing food in vertical farms (think transparent skyscrapers as farms), growing food in what could be described as a spaceship, and just growing normal food more sustainably. At some level the organic food movement tried to follow that third path.
As a good marketer or entrepreneur knows, a demand unfulfilled is money passed by. Till now, most of the business world has been content with leaving the status quo intact, and not taking any major effort to reform the agricultural sector, both due to a lack of infrastructure, and also because of the risk inherent in agriculture. In ‘first’ world nations, agriculture is largely mechanized, and the output per farmer and farm is high, allowing economies of scale in the supply chain. In less developed nations such as India, until farmers can be linked and co-ordinate their efforts, economies of scale will continue to elude us as a nation.
A revolution is coming, one that will decide how tomorrows society grows, and we will be the generation to witness it. A stable and nutritious food supply is the foundation our entire civilisation, since the Sumerians to the sultans to our senate. As resources dwindle, the most basic ones like food and water will be what the next wars are fought over, unless of course, a revolution in the fields precedes one in the streets.
Sanjit Singh