Food and Water

4 priorities in the race to build a sustainable global food system

Farmer David Barton holds an example of his barley crop in his hand at Manor Farm in Middle Duntisbourne in south west Britain, August 1, 2018. Picture taken August 1, 2018

We can build a sustainable global food system - but we need to take radical action today Image: REUTERS/Toby Melville

Juergen Voegele
Senior Director, Food and Agriculture Global Practice, World Bank
Jane Nelson
Director, Corporate Responsibility Initiative, Harvard Kennedy School of Government
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Food Security

This article is part of: World Economic Forum Annual Meeting

Finding solutions to provide nutritious food to nearly 10 billion people by 2050 without destroying our planet is one of the greatest leadership opportunities of our generation. The global food system is the least disrupted sector in terms of technology, policy and business model innovation. It lags far behind energy and health in attracting commercial investment and blended finance. It is rarely near the top of priorities for policymakers. Yet its impact on the wellbeing of people and the planet is unsurpassed.

Nearly every second person on the planet is malnourished and all trends, besides child stunting, are heading in the wrong direction. Hunger is on the rise, one in three women is anemic, and food insecurity is manifesting itself in a rise of overweight and obesity. The Global Burden of Disease 2017 report highlights the challenge, with most of the top five early-death risk factors related to diets that are badly out of sync with our bodies’ basic needs.

The world’s roughly 500 million smallholder farmers are among the poorest and most malnourished groups. And the environmental challenges are equally stark. The agri-food sector currently accounts for some 30% of greenhouse gas emissions and 70% of freshwater withdrawal. This is unsustainable - and we still we need to significantly increase food production even if we get on top of the food loss and waste challenges.

The World Resources Report on creating a sustainable food future, produced by the World Resources Institute in partnership with the World Bank, UN Environment, UN Development Programme and the French agricultural research agencies CIRAD and INRA, rings the alarm: "If today's levels of production efficiency were to remain constant through 2050, then feeding the planet would entail clearing most of the world's remaining forests, wiping out thousands more species, and releasing enough greenhouse gas emissions to exceed the 1.5°C and 2°C warming targets enshrined in the Paris Agreement — even if emissions from all other human activities were entirely eliminated.”

There is nothing like a crisis to focus our attention.

Luckily, we’re beginning to see plausible, scientifically rigorous solutions emerge to make the food system more inclusive, sustainable, efficient and nutritious. This month, the EAT-Lancet Commission will release targets for achieving healthy diets and food production within our planetary boundaries. The previously mentioned World Resources Report also outlines a 5-course menu of actions to reign in the land and climate footprint of food without exacerbating poverty.

Below are four areas of urgent action for policy makers and private sector leaders to make the next harvests work for our collective future:

Leverage technology innovation

The World Economic Forum and its partners have identified a set of 12 transformative agricultural technology areas with the potential to generate significant positive impacts along food value chains. These range from innovations to change the shape of food demand, such as alternative proteins and nutrigenetics, to those that can make food systems more resource-efficient and climate-resilient such as precision agriculture, gene-editing and biological-based crop protection, and technologies that improve traceability.

Trade-offs between different goals and technologies undoubtedly exist, and technological solutions alone can be detrimental in the absence of contextual understanding and relevance. Yet there is no doubt that breakthrough technologies offer one of our greatest hopes for making progress in a long-neglected sector.

The leadership challenge is to agree on their appropriate combination for different food value chains and geographic contexts, and to develop the supportive policies, investments and capacity-building to scale their implementation in ways that are equitable, efficient and environmentally sustainable.

Turbo-charge food research hubs and networks

Closely linked to the technology agenda is the need to rev up the ambition of agricultural and nutrition research facilities and alliances. Both national institutes and global institutions are required, and both the public and private sectors have crucial roles to play.

The CGIAR network has made impressive progress in this field over the past decade. It has transformed itself from a largely agronomy-focused and government-dominated alliance to a more responsive, partnership-led international research network that produces cutting-edge evidence, technology, data, analysis and policies. One example of CGIAR’s change-making contribution is in the area of wheat, where its research has generated between $2.2-$3.1 billion in annual economic and social returns between 2004 and 2014. But challenges remain, including the need to focus research on a wider range of commodities such as fruits and vegetables, animal-source foods, legumes and nuts.

National and regional research institutes are equally important to the food system because they deliver solutions that are customized to local needs and realities. There is also a need to develop closer links between agricultural and nutrition and health research centers, both nationally and globally.

Leadership in this area can help vastly increase the funding, efficiency, relevance and connectivity of existing research centers and initiatives, to turbo-drive R&D and get the food system where we want it to be.

Unlock finance for small and medium enterprises

The current food system is so riddled with inefficiencies that smart investors and disruptive entrepreneurs have begun to take notice. McKinsey estimates that global food and agricultural investments tripled between 2004 and 2013 to more than $100 billion. The number of investment funds in agriculture and nutrition grew from about 40 to over 440 between 2005 and 2017. More than 60% of the assets under management by these funds, however, are invested in North America and Europe. Only 6% are invested in Asia Pacific and 4% in Africa. Even less money is invested in the small and medium enterprises (SMES) that provide crucial jobs in rural and urban areas alike, and which make up the bulk of the food inputs, production, processing and distribution systems in developing economies.

Exciting alliances and financing mechanisms are starting to emerge to address the challenge of insufficient financing for SMEs in developing countries. They include blended finance initiatives being established by the Council on Smallholder Agricultural Finance and the Global Alliance for Improved Nutrition. Other approaches seek to crowd-in private investments and optimize the use of scarce public resources to achieve sustainable development goals, for example by improving the policy and regulatory environment, reducing transaction costs and risks, and promoting environmental and social sustainability. In Cote d’Ivoire, for example, the World Bank is providing $200 million to support cashew sector policy reform and improve farmers’ access to markets and technology, while the International Finance Corporation - the World Bank’s private sector investment arm - works with local banks to catalyze credit across the cashew value chain.

Leaders should seek to maximize finance for the inclusive and sustainable development of agricultural value chains. Deliberate policy actions that allow food and agricultural businesses of all scales to thrive will make for a more dynamic and responsible sector – a sector that creates jobs, responds to consumer preferences, and is better able to take on health, nutrition and environmental considerations.

Restructure agricultural support to deliver public goods

According to the OECD, agricultural policies and public support provided about $570 billion a year on average from 2015-2017 to agricultural producers in the 51 countries reviewed. Some of these funds are effectively targeted to incentivize the production of more nutritious foods, more sustainable use of natural resources, increased economic efficiency and enhanced incomes for smallholder farmers. However, out of that $570 billion only $86 billion was used for public-good type investments such as agricultural research and extension and food safety. A significant amount of public subsidies have instead had more negative effects, especially when it comes to worsening, rather than improving, climate outcomes. For example, the most distortionary subsidies often result in promoting excessive use of fertilizers or over-pumping of groundwater, which harm the environment and human health.

Good examples exist, as we have seen with the evolution of the European Union Common Agricultural Policy where a shift away from market price supports to direct payments to farmers led to a 20% reduction in fertilizer use from 1990 to 2015 while cereal yields increased by 28%. As a result, nitrous oxide emissions from agricultural soils were reduced by 17% over the same period.

Directing public support towards public good outcomes, specifically climate-smart agriculture, opens up opportunities to create a substantial impact. The same holds for nutrition goals, given that current support disproportionately favours grain and meat over legumes, fruits and vegetables.

Have you read?

The leadership opportunity is for countries to urgently examine the structure of their spending in agriculture in light of their 21st century goals: are public funds helping or making the health, poverty and environmental crises worse? Learning from other countries’ successes and weighing pros and cons, policymakers may consider shifting from market price supports to direct producer payments that better target rural poverty, decoupling payments from production, and incentivizing agricultural and natural resource management practices that are better for the environment – to get the most good out of the public buck.

There can be no doubt: the world’s food system is at a crossroads. How we respond to its multiple challenges will make or break the next generation: our actions and inactions may pave the way for hunger, disease, conflict and migration on a massive scale, or help restore productive landscapes and food to their life-sustaining, carbon-stocking, wealth- and health-giving potential.

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Food and WaterIndustries in DepthHealth and Healthcare Systems
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