Ben Funk Liongate - More people to feed with less land conundrum

With each passing year, there are more people to feed with less land to farm. Rapid population growth is driving the interest in agricultural productions as an investment.

Agriculture industry is huge. In the US alone, there are over 8500 companies generating $1.3 trillion of revenue per year. The volume of transactions in the sector goes above and beyond $15 billion per year. Positive industry outlook and relatively stable ROI make it an ideal sector to explore said by Ben Funk Liongate. Over the past few years the market for agricultural funds saw a growing number of investors. New-comers are turning to agricultural real assets for the first time while existing investors are increasing their allocation to the asset class.

Agriculture is undergoing a major shift to provide cheaper and more plentiful food. In order to do so, the sector has to become more productive, sustainable, and efficient. Food scarcity is a looming threat. Agricultural production needs to at least double to successfully combat hunger and match the growing food demand from developing countries. The population growth during the past 200 years grew sevenfold. In 2011 the world’s population passed 7 billion mark and now stands at about 7.3 billion.

Despite high number of developed countries with negative population growth, the world’s overall population is growing at 1.13% a year. This dramatic increase is associated with major changes in fertility rates, increasing urbanisation, and accelerating migration. The United Nations estimates that the combined population of China, Pakistan, India, and other big Asian countries will grow by 1.5 billion by 2050, doubling the continent’s demand for food.

Food and Agriculture Organisation (“FAO”) calculated that the grain production alone will need to double by 2050 to give the world a fighting chance to feed everyone. “We will need to increase food production by between 60% and 100% by 2050 in order to keep up with changing dietary patterns and to feed an estimated population of over 9 billion people.” To achieve this, agriculture has to undergo a pivotal change. Necessary reduction in food waste and natural resources calls for integration of new technologies and innovative methods to replace current environmentally damaging industrial landscape. A radical change is needed, as the systems in place are overly complex and suffer from many inefficiencies.