The growth in agriculture is a tale of universal forces – demographics, globalisation, urbanisation, sustainability and food safety have been the main drivers of change. The global food system has an estimated market value of USD10-14trn, accounting for 16-20% of global GDP. Over 30% of the world’s greenhouse gas (GHG) emissions come from global food sectors. Unless this is tackled, these emissions will continue to increase as the world population is expected to increase from 8bn people to 10bn by 2050 (UN). To feed everyone, the food supply would need to increase by 70% over this period. If not reached, this would have a direct negative impact on society considering events like the natural disasters that have taken place recently, including the Valencia flooding and the most recent wildfires in California, widely accepted to be direct consequences of global warming. 2024 was the first calendar year to pass the symbolic threshold of 1.5C in global warming, and was the world's hottest on record. Investing in sustainable agriculture clearly provides solutions for climate change, population growth, urbanisation, water scarcity and the challenges related to food systems.
More specifically, agriculture already utilises 50% of habitable land, 70% of the world’s fresh water supply and accounts for 25% of GHG emissions. The main challenge is for the world to use less fresh water and agricultural land, fewer pesticides, and heavy machinery. Companies should be using innovation (technology) to make it more efficient for farmers in agriculture. Improved productivity in the fields means more profit for farmers, a more robust supply chain and lower prices for consumers. There are a few sectors that will help agriculture in this transition, namely: crops science, precision farming (use of technology for increased efficiency such as drones and autonomous tractors), meat alternatives (plant-based proteins), engineered microbes, vertical farms and fisheries and aquaculture. We are confident that these technologies and the companies at the forefront of these innovations should outperform the broader benchmarks going forward.