Smallholders to Help Guarantee Food Production
Deutsche Bank Foundation | September 2009
The world population will reach nine billion by 2050. The international community will face a daunting task in sustaining such a corresponding rise in consumption. Indeed, it is estimated that the production of foodstuffs worldwide will have to double in order to guarantee sufficient food supplies. But the problem is not an insurmountable one. An enormous increase in production can be attained, but only if one pays heed to the demands of sustainability and environmental friendliness. This however requires that the manner in which food today is produced and consumed changes radically.
Experts anticipate that smallholders in the developing world will be central to the problem's solution. Their productivity could increase substantially, if they were granted easy access to bank credits and agricultural know-how. The organization of farmer cooperatives would facilitate the flow of information between producers and markets. Managers of co-operatives could help farmers find out what best to produce and what prices to expect on world markets. Moreover, they could instruct farmers how to produce "bio products" in an environmentally friendly and sustainable manner. This "green" approach is just as productive as established methods, but far more labor-intensive. These methods could then help to reduce unemployment rates and improve the accessibility to food for the poorest. New insurance models would also benefit farmers primarily in the developing world, where the impact of global climate change is expected to be the most severe. These programs would compensate farmers for declines in production, as a result of drought for example, and thus provide for their social security.
The consumer plays a no less vital role in assuring sufficient amounts of food are produced, by deciding what is produced and in which manner. Globalization and urbanization have changed consumer behaviour throughout the world. As incomes rise, so does the demand for dairy and meat products. Unhealthy diets and the resulting worldwide obesity epidemic have raised costs for national health care systems and waste of scarce resources such as water and energy. Livestock moreover produces green house gases on a massive scale, even more so than traffic. The food industry, as well as national governments, are hence called upon to re-educate the public as to healthier and more sensible consumption choices.
As consumers once had to learn to save energy, they will now have to grow accustomed to dealing with foodstuffs in a more economical manner. Costs can be minimized, for instance by recycling leftovers to be used for "soup kitchens" or for animal feed. From production to marketing to consumption, business opportunities for inventors and investors abound. However, the entire food-cycle can only be made more efficient if international trade is liberalized as quickly as possible and when all participants can access existing markets. Combating worldwide hunger is a necessary task that also affords businesses and banks new and highly profitable spheres of activity.
This summary was prepared by the Atlantic Community editorial team from "The global food equation: Food security in an environment of increasing scarcity" published here by Deutsche Bank Research.