By the looks of it, the global food supply chain hinges on
just one country. Like other outdated systems of production currently breaking
down as a result of years of pandemic and geopolitical recalibration, the way
we produce and distribute food needs radical change. The centrality of
Ukrainian wheat production is one particularly extreme demonstration of the
weak links in the food system.
اضافة اعلان
Ukraine, Russia, and Belarus are major food producers that
are facing a deep crisis as a result of the conflict in the region. The
International Monetary Fund said last week that this food crisis will have a
dramatic effect on the global economy.
“In emerging markets and developing economies,” the IMF
warned, “increases in food and fuel prices could significantly increase the
risk of social unrest.”
As a result of the Ukrainian crisis, global food prices are
forecast to spike, leading to food shortages across many emerging market
countries. The political and economic fallout is already revealing itself in
Sri Lanka, Egypt, Tunisia and Peru.
The crisis has been made worse by Russia’s position as a
major energy exporter. Countries trying to increase their own food production
are running into additional energy and fertilizer challenges. The system is
breaking down and developing nations are going to pay a heavy price for months,
if not years to come.
The gravity of the situation has led to calls for
intervention. Leading western newspapers such as the Financial Times have
called for wealthier countries to step in and help poorer nations through this
crisis.
“Rich countries were seen to let down the poor during the
pandemic over vaccine supply,” the FT proclaimed in a recent editorial. “They
must not fail on the food crisis.”
Production levels and prices will eventually stabilize but this moment of crisis is the perfect catalyst for a revolution in how food is produced and distributed.
In February, a global initiative called Agriculture
Innovation Mission For Climate led by the US and the UAE kicked off an $8
billion effort to make farming cleaner and more efficient. The initiative will
focus investments in agricultural technology (agtech) areas such as
nanotechnologies, biotechnologies, robotics and AI.
This initiative is key, but rich countries throwing money at
the problem and reinforcing the existing supply chain alone is not going to
solve the situation in the long term. At best, it will be a temporary measure
to stop immediate suffering but a solution is going to require much deeper
thinking.
Production levels and prices will eventually stabilize but
this moment of crisis is the perfect catalyst for a revolution in how food is
produced and distributed.
Just like electric vehicles are a sustainable alternative to
oil shocks and climate crises, agtech holds the answer to solving the problem
of food shortage. The challenge is that many of the startups driving the sector
forward still lack critical investment and mainstream acceptance needed to
transform food production.
A shift in consciousness about food such as the one we are
watching because of the Ukraine conflict is needed for agtech companies to
raise levels of capital required to challenge outdated models of food
production. But it is not going to be easy.
Just 20 years ago, electric cars seemed out of reach for
most people. The cost of producing and operating them was prohibitively
expensive. But with the exponential leaps in technology, the cost of electric
vehicles have come down. Tesla’s remarkable earnings over the past couple of
years is proof that change is possible.
Where is the Tesla of agricultural technology? There is not
such a unicorn yet, but there are many companies emerging across the world that
could evolve into a powerhouse.
Given its natural challenges with food and water production,
the Middle East is the ideal testing ground for the agtech company of the
future. There is already a vibrant agtech sector stretching from Israel to the
UAE. The Gulf, in particular, has had great success with urban farming
techniques such as vertical agriculture that are able to produce food with very
little water. Israel is a world leader in water irrigation techniques designed
to get a lot of food production from little water.
While there has been a lot of talk about agtech in the
region, the sector is still ripe for additional investment. Right Farm, a UAE
company that has created a business-to-business digital platform for sourcing
fresh produce, just raised $2.8 million from investors including Abu Dhabi
state holding company ADQ’s venture platform. But that is not enough investment
to truly revolutionize the sector.
The Ukraine conflict is a wake up call that the global food
supply chain is broken beyond repair. The problem of food insecurity will only
get worse as climate change and population expansion create more pressure on
the supply chain. Whoever cracks the agtech code has the opportunity to become
the Tesla of this critical sector. Given its investment potential, food
insecurity and geographical proximity to other food insecure countries, the
Gulf could be leading this vital sector. The Tesla of agtech is out there. Will
it be based in Dubai?
The writer is based in South Africa and the Middle East. He
has been reporting on the Middle East for over a decade with postings in
Jerusalem, Ramallah, Cairo, Istanbul, and Abu Dhabi. He was formerly the
editor-in-chief of emerge85, a media project based in Abu Dhabi exploring
change in emerging markets.
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