Can we farm without harm?

Ingrid Kukuljan August 11, 2023 10:15

The cost of feeding the world’s human population is taking a significant toll on our biodiversity. The world’s population reached eight billion in 2022 and it is expected to be between ten to twelve billion by 2050. Sub-Saharan Africa’s population is projected to increase by 1.8 billion people during the next 50 years while the rest of the world’s population is expected to grow by 0.9 billion.

Based on current trajectories, thirteen Sub-Saharan countries would need four-times their 2010 cropland by 2060. Some countries in Latin America and Southeast Asia would need to more than double their cropland area.

This in turn means that the Earth’s most diverse ecosystems, the tropical and subtropical ecosystems of Asia, Africa and the Americas, will experience accelerating agricultural land clearing and habitat fragmentation, greatly increasing extinction risks for their mammals, birds, insects and plants.

The decline in biodiversity that will be inevitable in the face of this land clearance will be catastrophic.

Commodity-driven deforestation means that once the forest is lost, it is unlikely to ever be a forest again meaning loss of natural carbon sink and loss of habitat for animal species. Of the approximately 25,000 species that the International Union for Conservation of Nature (IUCN) has identified as threatened with extinction, nearly 13,400 are threatened by agricultural land clearing and degradation alone.

On top of that, industrialised farming practices, while designed to boost yields, are having a devastating effect on the environment. It favours monocropping – growing a single, profitable crop year after year on the same land.

This degrades the topsoil by sapping it of nutrients and microorganisms that promote healthy growth as well as carbon sequestration. As a result, more chemicals and pesticides are required and the run-off, in turn, pollutes rivers and seas. It is estimated that 30% of global productive farmland soil has been degraded through over-farming and the use of inorganic pesticides and fertilisers

These factors make it harder, and more costly, for farmers to achieve a reliable yield. When crops fail, we see devastating regional famines as well as a global knock-on effect of shortages and price shocks.

So what can be done? Can we start to farm without harm?

Fortunately, the answer is yes. The technology does exist but it needs policymakers and financial support to scale it. It is anchored in regenerative agriculture, a system of farming principles and practices that increases biodiversity, enriches soils, improves watersheds and enhances ecosystem services. It seeks to restore the soil’s natural ability to absorb and retain carbon, minimises chemical inputs and integrates crops with animals and forestry.

We have come across a number of companies leading the drive in regenerative agriculture. Bioceres is an Argentinian company that was founded to address the demand for higher crop yields and productivity in “sustainable and environmentally-conscious ways.”

One of their key products is the most advanced seed technology, HB4. It helps increase yields by an average of 10% to 20% for soybean and wheat crops under various growing seasons and conditions, including sporadic drought episodes.

Higher yields decrease the need to exploit new virgin land and therefore mitigates the need for further deforestation. Higher yields also decrease the use of fertilisers and pesticides, which have been the main cause of deterioration of biodiversity, like plants, ground beetles and birds in wheat field, in Europe.

Another example is a well-known name, Deere & Co, a leading player in precision agriculture whereby farmers are adopting new technologies in order to increase crop yields and profitability while lowering the amount of traditional inputs used to grow crops, such as land, fertiliser, herbicides and water.
Over 300 million acres of land are using Deere & Co precision agriculture solutions which help farmers improve efficiency and produce more at a lower cost via products which address all of the growing stages – planting, fertilising and harvesting.

These sorts of firms and their technology will be crucial to addressing the biodiversity crisis but we need an intensely collaborative approach from industry, governments and investors if we are to seen real impact.

We believe that the Kunming Montreal Global Biodiversity Framework, which was agreed in Montreal in December 2022, and agreed by 188 governments, is the first step in right direction. The 23 targets are ambitious and call for, among others, protection of 30% of our lands and waters by 2030, 50% reduction in harmful subsidies and reduction in harmful subsidies and pesticides.

These are encouraging commitments but whether it is supporting new technologies or industries, or legislating then enforcing stricter laws on land use, we need governments to take action today to save and feed our world in the future.

COP28 – the UN summit convened to address how member countries address climate change – will be another vital moment to advance this agenda.

In the meantime, investors will continue to play a crucial role by deploying capital, via such vehicles as impact funds. The Global Impact Investing Network (GIIN) estimates the size of the worldwide impact investing market – that which generates positive, measurable social and environmental impact alongside a financial return – to be more than USD1 trillion.

This is a meaningful number and illustrates the scale the investment industry can bring to bear. With real and swift action from governments and regulators I am hopeful we can turn the tide on our decreasing biodiversity and, still, feed our growing population.

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Ingrid Kukuljan

Head of Impact and Sustainable Investing, Lead Portfolio Manager, Federated Hermes