A new report from Moody's Investors Service says that in order for agribusinesses to meet rising food demand, new technologies will play an increasingly important role.
The UN Food and Agriculture Organisation anticipates that over the next three decades, agricultural production will have to rise by 70% from current levels to meet projected demand, as the global population grows and emerging market incomes rise.
However, limited available farmland to grow crops, and increased legislation and guidelines to protect biodiversity means that agribusinesses will need to box clever to improve their annual yield, Moodys says.
Yield Per Acre
"Technology that increases the yield per acre on land that is already being farmed will be key," said Moody's Senior Vice President Gersan Zurita.
"The agribusinesses that will benefit most from higher demand for food will be those that can best leverage new technology to gain supply efficiencies, while managing challenges such as the tighter scrutiny of food safety, global trade uncertainties and extreme weather."
A wide range of technologies - from blockchain to autonomous vehicles - will contribute to higher yields in the years to come, as well as lead to sustainable land cultivation, according to Moody's.
Climate Change
Another factor that agribusinesses will face in the coming years is climate change, including the the impact of adverse weather as well as slower moving trends such as rising sea levels and temperatures.
For example, the cattle industry consumes large quantities of water per kilo of beef produced and is therefore exposed to droughts. Moreover, the agricultural sector is a large contributor to global carbon emissions, and therefore may come under pressure to conform with international guidelines on emissions.
"Sustainability will be an ever present consideration for agricultural producers," Zurita added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
