Giles: Climate change is the biggest issue

Climate change will be one of the biggest issues for the agriculture investment market in the next 10 years, delegates at a recent summit in London told John Giles, divisional director with Promar International, the agri food value chain consulting company.

Giles is also the current chair of the Food, Drink & Agricultural Group of the UK-based Chartered Institute of Marketing.

The biggest issue to contend with over the next 10 years will be climate change, the majority of delegates said in a poll at the recent Agricultural Investment Summit in London.

As chair of the event, I asked some 100 delegates to vote on the issues they believe will be the biggest over the next decade and after climate change,  delegates voted for macro issues: food security and growing global population, and agricultural prices and regulations.

The poll proved how much the issue of the environment and sustainability has forced its way on to the international agenda for governments and industry alike despite the pressing issues of food security and price volatility.

Climate change is expected to impact both large and small scale farmers and will touch on all producing countries regardless of geography or sector, argued delegates. There are examples of projects where climate change risks are being mitigated, but if we get it wrong, we might be faced with a long term collapse in food production.

The climate was not the only hot topic of the day – Africa has increasingly crept into the minds of agri investors as its huge area of uncultivated land cannot be ignored.

Africa  has gone from being seen as ‘hopeless’ to ‘rising’ to ‘aspiring’ in a matter of years. While a good deal of work needs to be done in terms of investment in the infrastructure, with 54 countries on the Continent, the opportunities for building successful  projects in both agriculture and added value food are strong. There is still a good deal of misunderstanding about the situation in Africa; land grabbing was cited by some delegates as good example since less than 10 percent of arable land is actually controlled by international investors.

A few stand out phrases from the day, that attracted a mix of bankers, investors, advisors, academics and farmers, particularly stuck in my mind: “These days, farmers can be King,” said an Australian fund manager, speaking to the importance of looking after farmers, not the investment managers, throughout the investment process.

“From some sources there is unlimited money for investing in agriculture,” said another speaker in a hopeful nod to the $80 billion investment that the sector needs to feed the 9 billion population by 2050, according to the FAO.

But the one phrase that stands out for me? “The next generation of billionaires will come from agriculture, not oil,” said one delegate, highlighting the opportunities in emerging markets to farm at scale and take advantage of the booming world population growth and rising disposable incomes around the world.

Giles can be contacted at the following email: john.giles@genusplc.com