We imagine the farm of the future and the dining table of tomorrow.
- We believe that, while real agricultural risks should not be ignored, technology and science should provide opportunities to avoid some of those risks.
- Technological solutions are unique in that they allow for both adaptation and transition to a more secure and environmentally conscious agricultural future.
- As vital resources become scarce and production issues arise, agriculture prices are expected to become more volatile and react with upward pressure over the long term.
Agriculture is now, as it’s always been, the basis of civilisation.– Theodore Roosevelt
There are few things as essential to humanity as food and water, and yet as history has observed, the market remains strangely complacent about the supply and demand dynamics of these necessities. Few appreciate the enormity and fragility of the food supply chain or recognise the growing risk factors that threaten global agriculture affordability, availability and stability. Growing agricultural issues are only just being understood, and it would be an easy prediction to say that the next 30 years will be nothing like the last 30 years. Here, we revisit some big-picture developments, growing challenges and emerging long-term trends:
- Demand set to increase, with the global population expected to grow from eight billion to almost ten billion people by 2050, with increases expected in calorie and protein density[i]
- Erratic weather caused by climate change and increased water volatility
- Increase in resource nationalism
- Increase in food-competing needs like biofuel
- Fragility of current system to disruptions from a wide range of factors, whether they be supply-chain or pathogenic disruptions
The farm of the future and tomorrow’s dining table
Consider the farm of the future. Imagine rows of gene-edited crops, designed to withstand drought and pestilence, or a new variety of corn that requires fewer nitrogen fertilisers. GPS-guided machines lumber painstakingly over each row, applying precise amounts of natural fertilisers to the soil, and providing real-time data to the farmer who uses leading-edge data analytics to maximise yield and profits. Bee populations, once decimated by viral infections, are replaced by miniature hordes of drones. Nut trees are planted on border lands, helping to prevent soil erosion, encourage more biodiversity and limit runoff; and, additionally, they provide extra cash flow thanks to carbon sequestration and nut production. Closer to the city centre, small high-rise buildings dot the surrounding urban centre, where floors of vertical farming are powered by renewable energy and controlled with micro-precision.
Further down the supply chain is the dining table of the future. A family tucks into their dinner, enjoying produce that was cultivated at the farm of the future, all tracked from source to mouth by blockchain technology, ensuring quality and efficient logistics. On the plate is an appetising portion of protein that closely resembles beef in texture, taste and nutrition but is created synthetically.
Peering further into this idealistic ‘future’, we can see that agriculture is produced more sustainably and contains more nutrients than ever before. Preferences shift, and the now-archaic practice of consuming animal-based protein comprises a small portion of an individual’s total diet. Agricultural product packaging and transportation is improved with extended freshness and limited contamination. Finally, food waste is recycled and reprocessed, furthering its useful life. No calorie or resource is wasted.
The future and ‘what ifs’?
What will the real future look like? Will it be a Malthusian doom and gloom scenario, filled with massive crop failures and starvation? Or will the future be the science-fiction-inspired, agrarian utopia described above. We expect reality will be a mix of each, with real agricultural risks that should not be ignored. However, we believe that technology and science should provide opportunities to avoid some of these threats.
Over the last several decades, vast tracts of land were converted into industrial farms which, combined with mechanisation and synthetic fertilisers, unleashed a record volume of agricultural products for human consumption. From inventions as simple as the common plough to complex gene editing, technology can be a major foil to the Malthusian trap. Technological solutions are unique in that they allow for both adaptation (such as drought-resistant seeds) and transition (such as fermented/synthetic protein) to a more secure and environmentally sustainable agricultural future.
However, nature typically has a way of surprising, and despite its elegance, the technological path is also lined with potential pitfalls and unintended consequences. The list of potential limitations is long. What if synthetic proteins or organic, nature-based crop chemicals cannot be produced in sufficient amounts? What if yields fall as we shift away from synthetic fertilisers or crop chemicals? What if gene editing unleashes similar concerns to genetically modified organisms? What if vertical farming requires too much energy and cannot produce food products to match consumer trends (it would be hard to grow avocados vertically)? Finally, what if a healthier diet actually requires more water consumption than currently realised?
No silver bullets
Like all markets, the agriculture sector is an evolving feedback loop – as vital resources become scarce and production issues arise, prices are expected to become more volatile and react with upward pressure over the long term. Combined with appropriate and adequate government policies, we believe the sector should become more efficient; supply chains should evolve, waste should be trimmed from the system, and new technologies and consumer trends should emerge. However, the path is unlikely to be smooth – scarcity and price volatility is expected to play an important role in triggering innovation. There is no panacea. First, we must understand the forces that are now forming behind both agricultural supply and demand. All-hands-on-deck solutions are needed; current systems will need to be displaced and new ones will have to emerge, which we think will give active investors opportunities to benefit from these newly created structural trends.
[i] United Nations Department of Economic and Social Affairs. Accessed 3/1/2023. https://www.un.org/en/desa/world-population-projected-reach-98-billion-2050-and-112-billion-2100
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