Food for Thought: Why VC Investment in Sustainable Agricultural Practises is Essential
This article will focus on Future Planet Capital’s (FPC’s) approach to the agricultural ‘Challenge Area’, first defining the scale of the problem, and then showing how our approach can help encourage the implementation of best practices that allow us to sustainably produce more food, whilst consuming fewer finite resources.
Food Security: The Growing Demand for Food.
As the global population rises to a projected 10bn by 2050, the demand for food will also increase. The difference between the total global agricultural land area used in 2010 and the projected total area required to feed the global population by 2050 is 593 million hectares. This is an area nearly twice the size of India.
Today, almost 800 million people face hunger on a daily basis. Unless the food supply can be increased, the number of people suffering from hunger will increase. However, arable land is finite. Thus, we must develop solutions that allow us to produce more food, from the same amount of land, whilst consuming fewer resources.
This means that new technologies and practices must be developed to ensure a sustainable increase in agricultural yields. Globally, 75% of farms are smaller than three football fields. These new technologies must be low-cost, to allow them to be adopted by these small-scale farms. Researchers and alumni at the world’s top universities are providing such solutions. At Future Planet, we know that impact drives returns. The growing companies in the Sustainable Agriculture space, emanating from innovation dense ecosystems, promise not only meaningful impact, but also profitable future opportunity.
Sustainable Agriculture: The Rising Demand for Food Must be Supplied Sustainably.
Agriculture is responsible for 19% of green-house gas (‘GHG’) emissions. The proportion of total global emissions for which agriculture is responsible is set to increase. As the global population grows in size and wealth, consumers will demand more meat and dairy. Thus, the projected increase in population is not proportional with the expected rise in meat demand. Indeed, ruminant meat demand is projected to grow by 88% between 2010 and 2050. To meet these changing patterns of growing demand, the business-as-usual outlook will see agricultural emissions increase by 15-20% by 2050. Green protein solutions can help supply this increased demand sustainably, by offering plant or cell-based alternatives. Ruminant animals are almost 10 times more carbon intensive than alternative animal protein and more than 30 times more carbon intensive than vegetable protein. FPC is helping to connect researchers and spin-outs from top universities in the Green Protein production space with growth funding to increase their scale and marketability. This will help abate emissions from carbon intense protein production.
Alongside Green Protein solutions, we need new Agri-Tech methods that enable us to produce higher yields, whilst consuming fewer resources. Knowledge gaps are being plugged by promising Seed and Series A start-ups and spin-outs from universities. The Agri-Tech solutions that FPC are looking to fund not only help to ensure that farming becomes more sustainable, but also that revenue streams are maximised for farmers. Take, for instance, Genetic Engineering. By enhancing the genetic resistance of crops and livestock to disease, the companies that FPC are investing in will help increase yields and thus revenues for farmers, whilst also increasing the food supply and thus food security for consumers.
For current and future generations, embracing sustainable agriculture is a matter of survival. Farming is significantly less consolidated than other sectors; reducing emissions requires action by the more than 2 billion people employed in agriculture. New low-cost, high-impact solutions that increase yields and reduce emissions are essential. Innovative ideas that fit these parameters are being developed at top universities. However, many are yet to be commercialised. At FPC, we provide growth financing to scale these innovative solutions. In doing so, we ensure that these companies realise their growth potential, whilst assisting with the creation of the sustainable agricultural systems that must characterise the industry on our future planet.
Thank you for joining us on this journey.
By James Derham