Farming News - Investing in natural capital and agrifood tech as a solution to food insecurity in times of conflict and inflation

Investing in natural capital and agrifood tech as a solution to food insecurity in times of conflict and inflation

27 Jul 2022

A regenerative farmer and experienced financier, Rob Appleby – Founder and CIO at The Cibus funds (one of the world’s leading sustainable food & agriculture investment firms), provides a unique view on food security and natural capital in the context of conflict and inflation. Rob shares his views 

Today, the food and farming industries are facing a daunting task. It is estimated that they will need to produce more food in the next 40 years than humankind has produced in its entire history, whilst working with more limited resources. At the same time, they are under pressure from consumers and regulators to make production healthier for people and the planet, particularly as our food system currently contributes one-third of global greenhouse gas emissions. COP26 has accelerated pressure, with governments around the world pledging to hit net zero, but there is still a long way to go.

Meanwhile, Russia’s invasion of Ukraine has exposed the vulnerability of global supply chains. One-third of global wheat exports come from Russia and Ukraine, as well as crucial crop inputs such as fertilisers. With exports halted, fertilisers and natural gas prices have dramatically increased, becoming unaffordable for farmers, which in turn, has impacted output. The global yield of rice - the third largest crop in terms of calorific provision - could drop by 10% this year. Inflation is a factor unlikely to abate soon, resilience of supply chains is being put to test and the availability of labour is now a global consideration. In the US, there are currently 11.5 million vacant job positions with the agriculture sector hit particularly hard. 

Rob Appleby, Founder and CIO at the Cibus Funds says: “A perfect storm of crises is hitting food and farming, highlighting the immediate need to move towards self-sufficiency in order to achieve global food security. We believe we are at the start of a tech-driven food transition, much like the energy transition we’ve seen unfold over the last 20 years. We are convinced that investing in technology is the most important enabler of an agricultural revolution, which is why it’s more important now than ever to channel capital to sustainable projects, embracing technological innovations to improve agriculture and food value chains around the world. At a time when the resilience of global food supply chains is increasingly under threat, this tech-driven food transition offers an incredible investment opportunity.

“Rather than the farmer being cast as the villain, farming is increasingly seen as a solution to climate change. We can move towards regenerative practices that promote carbon sequestration, nature recovery and biodiversity whilst rewarding the farmer for his or her contribution. Agricultural policy reforms, including the transition from area-based payments to subsidies that reward environmental stewardship, are incentivising farmers to adopt regenerative measures to help the industry achieve Net Zero targets.

“In parallel, the private sector needs to continue to rapidly invest in natural capital assets for the purpose of emission offsetting, biodiversity net gain and corporate ESG commitments. At a farm and forest level, this brings new income opportunities for landowners looking to capitalise on what is set to become a multi-trillion dollar industry.”