Ecclesiastical’s Patel: Food, glorious food?

Ketan Patel 160 byline

It is worrying that by 2050 food production will need to increase by at least 70 per cent to feed the world’s ever growing mouths. The numbers are quite simply staggering; with the United Nations forecasting an increase in the world population, from its current 7 billion to a staggering 9.3 billion by 2050.

Unfortunately, this will have to be achieved with less land, water and people.

The figures make it clear that our current food supply is unsustainable in the medium to long-term and that this can only be solved through extensive investment in global agriculture, which will help increase crop yields.

Interestingly, the relationship between food and rising wealth is creating a gap between supply and demand, between the rich and the poor. In the developing world help is desperately needed to alleviate hunger, while on the other hand the developed world is battling against an obesity epidemic which threatens to drive down life expectancies.

The figures themselves are quite shocking:

  • The average global body mass is 62kg-81kg for North America
  • North America has 6 per cent of the world’s population, but 34 per cent of the world’s biomass mass due to obesity
  • If all countries had the USA body mass index average, there would be the equivalent of another billion people on the planet*.

This rapid acceleration of population coupled with higher rates of urbanisation and changing dietary requirements will be one of the major challenges this century. This will also have to be achieved with less water, less land and a declining labour force directly employed in the agricultural sector. Overcoming this will require huge levels of investment.

As investors we can go some way to turning the future of the world’s food chain around. It is a big opportunity but we all have a responsibly to help alleviate this situation. Investing in well run companies which are focused on mechanisation, crop protection, seed technology and fertilisers, will go a long way towards strengthening the global food supply chain. This can also ensure that investors can profit, alongside their principles.

From an investment perspective, I believe that now is a very exciting time for the industry. There are ample opportunities cropping up across the whole agricultural value chain for investors hungry to make a difference. How we satisfy the ever higher demand for dairy, protein and aquaculture should be a consideration for investors worldwide.

*Source: London School of Hygiene and Tropical Medicine 2012


Ketan Patel, Senior Socially Responsible Investment Analyst at Ecclesiastical Investment Management