Every few weeks it seems I end up in conversation about Denmark – typically being told about some avant-garde agriculture investment approach the country has adopted.
This week, an agtech company producing animal feed that fights disease without antibiotics told me that the Danish government banned antibiotics from livestock feed completely over 10 years ago — a very progressive move. The idea is still gathering momentum in Europe and the US, where antibiotics are banned in some instances such as growth promotion, but not altogether.
The Danish ban resulted in an increase in disease and a decrease in production in the short term, but this has steadily improved; Denmark’s experience is proving a great case study for other nations to follow because large pharmaceuticals are now taking the alternatives seriously.
Bovicor Pharmatech, a Canadian firm that develops non-antibiotic antimicrobial drugs, is currently in talks with a few pharmaceutical firms and any resulting deal will facilitate a later round of fundraising targeting investors such as venture capital firms.
Denmark’s establishment of a public-private agri investment fund dedicated to improving the agriculture sector in Africa is another forward-thinking move of note. The fund, which was established a few weeks ago, is part of a broader governmental initiative to encourage green growth globally using their own expertise at home.
The initiative is a fantastic model for encouraging public pension funds to invest into agriculture because under governmental auspices, the investors will effectively receive due diligence on the projects for free. ESG norms will be strictly adhered to, and each investment will have the backing of the country’s large database of agribusinesses through the Danish Food And Agriculture Council, a body representing the farming and food industry in Denmark. These agribusinesses will either be co-investing alongside the fund, or supplying technology and machinery to the projects on the ground, enhancing their effectiveness.
With such a big governmental player involved, development finance institutions are also expected to take part, and as discussed in previous letters and articles, their blessing of a project goes a long way in convincing other investors to commit. One would hope that other governments might follow Denmark’s example in this respect.
Some of the country’s pension funds have also been agri investment leaders. AP Pension, as I mentioned last week, has established an attractive farmland investment platform to young farmers, and PKA, the country’s largest pension, last year committed A$75 million to a regenerative farming fund, SLM Partners.
While we must not forget other early agriculture investors from Europe such as the Dutch and Swedes, Denmark’s alignment between the government and private sector is very appealing and something to look up to.