Agriculture is Not Adapting Fast Enough to Changing Environment and Society, says World Bank’s Sadler

March 21, 2017

Agriculture investors need to manage the risks of the agriculture industry today, prepare for increasing volatility tomorrow, and also adapt to fundamental changes in the industry in the future, says Marc Sadler, an adviser on risk and markets to the World Bank’s Agriculture Global Practice.

Sadler, who’s due to speak at the Agrimoney LIVE conference in May in London, believes the changing dynamics of the food and agriculture industry globally present both challenges and opportunities for investors and practitioners, but there’s no silver bullet.

These changing dynamics include shifts in consumer diets, particularly the increasing demand for meat in developing nations, and climate change, he told AgFunderNews.

“Agriculture has been adapting for hundreds of years since we first started doing it, and we used to adapt more quickly than other societal and environmental variables,” said Sadler. “But the challenge today is that we’re lagging behind those other variables, and that’s putting the industry under great pressure.”

In North America, for example, changing temperatures are already impacting what farmers grow today. This produces opportunities and challenges for agribusinesses and investors.

“Increasing temperature variations in North America are pushing corn acres further north, with farmers in Canada starting to grow corn where they would never have dreamed of doing so before,” said Sadler. “This is a great opportunity for Canadian farmers, but for US farmers, where the weather is getting too hot for corn in some parts, it’s a big challenge.”

He pointed to the 2012 corn crop where drought was believed to be the culprit of a poor corn harvest, but it was actually high overnight temperatures during the silking season — when the functional stigmas of the female flowers of the corn plant emerge —which meant they never silked and so the ears of corn were never produced.

“The future of agriculture in the US does not look strong as the weather is getting hotter,” he said.

Agriculture technology innovation will certainly help to adapt to these changing shifts, particularly biotechnological developments such as gene-editing and other biological products. But there is no silver bullet, he argued.

“It’s more of a silver buckshot, which will take a combination of new technologies to cope in the new normal,” he said.  And even then, there’s only so much a biotech product can withstand.

“Ultimately, even if you have a seed coating that helps withstand water stress if you don’t have access to water at the right times during the growing season, you still can’t grow the crop,” he said. “Drought resistance is useful when you have a reduced amount of water, but no drought resistance technology will save a crop when there’s no water.”

When thinking about adopting new technologies, farmers, and investors need to think across three different time horizons –the near term, the medium term, and the long-term — and prepare for what the industry will look like at those different times. That might mean investing in infrastructure such as waterways today to prepare for the long term, or deploying a technology now to mitigate or adapt to shorter-term risks.

“It’s very clear that farming globally is in a transition and the early agtech adopters will be the long-term winners,” said Sadler. “Farmers should step forward, and the next generation of farmers will be more about technology and precision agriculture. Let’s be really blunt, for the last 100 years it was grandad’s agriculture.”

Not only will the younger generation soon be running the farm, but there have also been noticeable shifts in the sex of farmers globally, and Sadler says there are now more female farmers globally, particularly in developing countries but also noticeably growing in OECD countries too.

“That presents another change for agriculture which needs to be addressed;  we have an industry set up by men and now run by women who will have new demands and approaches to the sector, and views on climate change,” he added.

Investors, innovators, and farmers also need to meet consumers where they are and answer their demands, he added. Demand for more meat protein is challenging with a finite amount of farmland globally, but there are opportunities for new producers or sources of protein beyond meat.

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