>GLOBAL FOOD EQUATION (DEUTSCHE BANK)

Food security in an environment of increasing scarcity

New and ongoing driving forces are redefining the world food situation. Their combined effect, although impossible to quantify, stands to be a challenge for future food security.

Scarcity is expected to define food production in the coming decades, scarcity of water, and energy, exacerbated by climate change. Competition for land will also be fierce, due to land degradation, urbanisation, biofuel crops and potential carbon sinks.

Demand for food is growing, in line with population and income growth. Globalisation and urbanisation are also contributing to dietary preferences switching towards more resource-intensive food.

Still we believe the growing population (nine billion in 2050) can be fed, provided the right actions are taken. This requires sustained productivity growth in the agricultural sector in an environmentally and socially sustainable manner.

Innovation through a cross-sectoral approach is essential. Particularly promising are the fields of ICT and biotechnology, but also ecologically integrated approaches. The latter work with whole systems rather than individual crops and distribute knowledge, power and autonomy to farmers.

While it is critical to boost food production, the world’s systems for producing and distributing food will also need to change, so they can better cope with shocks and stresses, make more considerate use of resources and ensure more equitable access to food.

Smallholder production is one important key. 1.5 billion people live in households depending on small farms. In order to move from subsistence to commercial farming, smallholder farmers need access to education, knowledge, assets, credit, markets and risk management.

Reforms are essential in the areas of agricultural support, food aid, trade liberalisation, support regimes for biofuels and intellectual property rights. The possibility of better global governance mechanisms for food security should be examined. Watching what we eat and what we waste can also go a long way to this end.

Multiple business solutions are available along the food chain for various sectors of industry. For banks, lending to small farmers is an area with untapped potential. And investment opportunities exist all along the supply chain.

To see full report: GLOBAL FOOD EQUATION