24 August 2020
7 minute read
Popping from the office to the supermarket, with gardening gloves in hand, unearthing your favourite vegetables and then continuing your journey home could become a reality for urban living.
Marks & Spencer in London’s Clapham Junction launched its first urban farm1 using technology to create controlled eco-systems last month in a bid for fresher, more sustainable produce.
Indoor farms, also known as hydroponic farms, are automated systems designed to produce maximum yield in a controlled environment.
They’ve been gaining traction in the UK and beyond with Ocado investing £17m in indoor farming in June 20192.
The food industry has mushroomed into the world’s largest sector over the last decade, accounting for around 10% of global GDP3, and employing over one billion people4.
Although this mass industrialisation of the global food system has created huge economic development and globalisation, the benefits have come at a huge cost: 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’s long-term needs. While this presents an enormous global challenge, it is also an immense opportunity for sustainable innovation, going far beyond hydroponic gardens.
We’ve looked at four key areas that pose a threat as well offering huge potential for innovation. Select each tab to find out more.
Much of our planet’s ability to feed us is based on having soil. Healthy and productive soil is one of the few natural renewable resources available to us. It can store more carbon than all of the earth’s vegetation and the atmosphere combined5 and is an essential source of nutrients.
However, intensive agricultural practices have degraded the physical, biological and chemical quality of soil quicker than it’s been able to replenish. In fact, the world’s top soil, where 95% of food is grown, is on course to be completely drained of fertility within 60 years if current practices continue. This has also released large amounts of carbon from the soil in the process6.
It’s no secret that forests are being cut down at an alarming rate. As much as 73% of global deforestation between 2000-2010 was done to make space for commercial agriculture7. Rice, maize and wheat make up more than half of all human calories8. The lack of genetic variability between these three grains combined with changing climates or a new pathogen strain could leave the entire crop at risk.
Dying of the flu was not uncommon before the first antibiotics were discovered in 19289. Today we face a reversal of these life-giving advances in medicine. Excessive antibiotics use in animal farming means antibiotics are becoming less effective in treating human ailments, as pathogens develop resistance to the drugs.
Previously treatable diseases are already killing 700,000 people per year and predicted to rise to 10 million by 205010, as the antibiotics we previously used to treat them are no longer effective. If new highly-resistant super bacteria emerge that we’re unequipped to medicate, humanity will be left exposed.
The jarring contradiction of having over 815 million people suffering from malnourishment at the same time as 700 million being obese is hard to escape when looking at The United Nation’s global food security report11. The same report found famine was rising again in 2017. But still, a third of all food produced is uneaten. The equivalent to six rubbish trucks of food is wasted every second, according to the Ellen Macarthur Foundation12.
Nearly one tenth of the greenhouse gas emissions in the West are released by growing food that will never be eaten. Indeed, 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 alone13.
By 2050, the world’s population is expected to hit nine billion. This means that, despite the challenges mentioned above, agricultural productivity must increase by over 60% if we’re to eat. If we carry on using the same farming practices that we do today, it will push our unsustainable agriculture industry to its limits14.
If we carry on using the same farming practices that we do today, it will push our unsustainable agriculture industry to its limits.
Fortunately, the shift to technology-enabled, environmentally-friendly, sustainable farming is already well underway.
One example of this is sustainable chemical company Croda15. It believes that the population growth and changing demographics happening today are leading to a dramatically different landscape, offering huge opportunities and scope for radical innovation.
Croda is re-designing the way we think about crop protection using advanced technology. Instead of harmful pesticide and fertilisers that are applied en masse, it’s developing active bio-ingredients that can be directly applied to each seed for priming, upgrading, disinfecting, pelleting, encrusting and film coating.
Giving each plant protection and stimulation during early development gives each crop the best chance of reaching its full yield potential. Direct seed application is also a more sustainable way to protect and nourish crops as it dramatically lowers the amount of substance needed.
Croda’s technology can lower the risk of a climate emergency. In anticipation of the more frequent intense weather conditions that climate change is expected to bring, Croda is also developing bio-stimulants. These can prompt or mitigate chemicals in the crops, depending on the weather and plants’ natural responses. This can help crops to direct more resources into creating yield, even in difficult conditions such as drought, heat and changing climates.
The opportunity for innovation in agriculture is also being seized upon by Hexagon - a pioneer in sensor, software and autonomous technology. The company started converting farming data into actionable information in 2014. This allowed for smarter planning, efficient field execution, precise machine controls and automated workflows, making operations far more efficient.
One example of this is the company’s HxGN AgrOn Auto Steering technology16. Using satellite signals to navigate tractors and machines autonomously, it can plant lines of crops with an accuracy of up to 2cm. By having less space between crop lines, the plants have much less risk of being run over by irregular tractor tracks. Farmers can maximise field resources, use far less soil per plant and grow more food on the same amount of land.
Natural probiotics are being brought to market by Chr. Hansen17, that offer a sustainable alternative to antibiotics. The live bacteria being developed by the company can give livestock stronger immune systems that are more resistant to harmful germs. It may be possible to stop giving livestock antibiotics on a large scale using these solutions.
While the task of feeding the world’s booming population may be daunting, savvy investors are also presented with huge opportunities. As are the companies that are playing a part in developing sustainable future food systems.
If we can develop intelligent technology and precise agricultural processes that sustainably boost climate-resilient crops and higher quality food production, we can overcome the barriers presented to us as a species. The private sector is driving this large-scale creative advance.
The challenges we’ve discussed will undoubtedly lead to disruption across every stage of the agricultural industry over the next decade, but also huge scope for innovation. Leaders in this space are already coming to the fore. However, it’s unlikely that the answers will be found in one solution, but rather many being used together.
Today’s investors can use their capital to support the development of the most radically resource-efficient solutions. Creating a sustainable and prosperous world will depend on learning from inefficacies of today’s food production process and using those opportunities to build back better.
Our sustainable investment portfolio enables clients to invest companies that progress sustainable agriculture - including Croda, CR Hansen and Hexagon – as well as maximising risk adjusted returns. To find out more, please speak to your relationship manager of contact us.
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