"almost 1 billion people today are either hungry or suffer from malnourishment."

Feeding the world is already a challenge. According to the Food and Agriculture Organisation (FAO) of the UN, almost 1 billion people today are either hungry or suffer from malnourishment.[1] And while strides have been made in the past half century to improve the world’s crop yield, the question remains of whether we will continue to be able to feed the world’s growing population in the 21st century. Estimates carried out by the United Nations Population Division suggest that the earth will be home to over 9 billion people by 2050.[2] This rise in population will require a drastic increase in crop yields. Environmental Reports forecasts “that crop production will need to increase between 60 and 100 percent” to sustain a “business as usual” system.”[3]

 

What’s more: with the growing prosperity of many of the world’s developing countries has come a dramatic rise in the consumption of meat, eggs, and dairy. It is likely that 40 percent of the world’s population will transition into a meat-heavier diet by 2050.[4] Jonathan Foley, the Director of the University of Minnesota’s Institute on the Environment, in an article for National Geographic, advised that “only 55 percent of the world’s crop calories feed people directly; the rest are fed to livestock (about 36 percent) or turned into biofuels and industrial products (roughly 9 percent).”[5] The result is that roughly half of the calories produced by arable agricultural systems reach human mouths.

At the same time, the traditional method of increasing agricultural yields is becoming unsustainable and increasingly ineffective. While in the past simply increasing the amount of land available for agriculture has worked, as competition for space on earth becomes more and more intense, both the environmental repercussions of expansion and the rising economic costs associated therewith are making further expansions untenable.[6] Estimates reveal that we will have to feed a growing population with little more than the current agricultural land we have available.[7] Alternative solutions need to be explored.

One such solution is vertical farming, the cultivation of crops, usually in urban areas, in stacked rows of artificially regulated environments. Interesting Engineering, in a recent article on vertical farming, described it as a “revolutionary and more sustainable method of agriculture than its counterpart as it lowers the requirement of water to up to 70% and also saves considerable space and soil.”[8] Others are more skeptic. Andrew Jenkins, in an article for The Independent, points to the considerable energy vertical farms consume: “The energy demand associated with vertical farming…is much higher than other methods of food production. For example, lettuces grown in traditionally heated greenhouses in the UK need an estimated 250kWh of energy a year for every square metre of growing area. In comparison, lettuces grown in a purpose-built vertical farm need an estimated 3,500kWh a year for each square metre of growing area. Notably, 98 percent of this energy use is due to artificial lighting and climate control.”[9] Jenkins instead advocates for systems that make use of available natural light.

"vertical farms could produce a sustainable supply of fresh produce with little external input required"

Vertical farming is swiftly capturing the imagination of Silicon Valley and beyond. In 2017 unicorn vertical farming start-up Plenty raised $200m from tech super-investors Softbank, alongside funds who invest on behalf of Amazon’s Jeff Bezos and Alphabet/Google’s Eric Schmidt. Last year they announced a plan to build 300 indoor farms in China, as well as opening its first vertical farm in the United Arab Emirates this year. For harsh environment countries such as the UAE where sunlight is in abundance and water scarce, vertical farms could produce a sustainable supply of fresh produce with little external input required.

Others have turned their attention to improving the quality of crops and agricultural systems. Studies show that in many agricultural regions, there is a large “yield gap” between the volume of foodstuffs current agricultural lands could conceivably produce, and what they are actually producing. According to Environmental Reports, the yield gap is caused by differing factors across the globe. “In Southern Africa, Eastern Europe, and throughout much of Asia, a lack of fertilizer or irrigation water” is to blame, while in Australia, factors include “heat stress, high night temperatures, depleted soils, erosion, and.”[10] The report concludes that, while combating these inefficiencies will increase yield, it will, by itself, ultimately not be able to double crop production.

"An investigation by the FAO found that almost a third of all foodstuff produced is lost or wasted."

Alongside yield increases, researchers are advocating for reducing the agricultural sector’s dramatic waste. An investigation by the FAO found that almost a third of all foodstuff produced is lost or wasted.[11] In developed countries, waste occurs primarily post-production, with food thrown out by supermarkets, cafeterias, and restaurants.[12] In developing countries however, the majority of waste occurs before food reaches the consumer. David Appel, the President of UTC’s Carrier Transicold & Refrigeration Systems business, in an interview with The Guardian, blamed much of this waste on improper cooling systems.[13] A lack of a “cold chain,” or a constant chain of cooling running through harvest, transport, and stocking not only allows a proportion of foodstuffs to perish en route, but reduces the shelf life of surviving produce.[14]

Combating waste is both an effective and achievable solution. In developed countries, small changes such as serving smaller portion sizes can have huge repercussions.[15] While in the developing world, innovative, scalable solutions are becoming more widely implemented. In a piece on low-tech African cooling systems, Quartz Africa highlights the potential of FreshBox as one such solution, a “solar-powered, walk-in cold room that provides retailers with storage facilities to preserve perishable products.”[16]

 

Despite the wealth of options being explored, feeding the world’s growing population at a minimal environmental cost is a work in progress that will require continued research, technological innovations, and international collaboration. While we possess many of the tools to produce the food that the world’s enlarging population will require, no one solution will work in isolation, but it is unlikely to be the calamity that some are predicting.

[1] Food and Agriculture Organization of the United Nations, [2] United Nations Population Division, [3] Environmental Reports, [4] Environmental Reports, [5] National Geographic, [6] ScienceMag, [7] ScienceMag, [8] Interesting Engineering, [9] The Independent, [10] Environmental Reports, [11] United Nations, [12] National Geographic, [13] The Guardian, [14] Quartz Africa, [15] National Geographic, [16] Quartz Africa

This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. If something has piqued your interest and you would like to find out more or discuss what investments might be suitable for you, please contact one of our Investment Managers on 020 7337 0777.

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