rethink sustainability
How Asia can address its looming food crisis
Asia is facing a significant food crisis, one that needs to be addressed urgently
Food insecurity is a major challenge in many parts of the world, but for Asia, the situation is stark. Asia and the Pacific has the highest number of people facing acute food insecurity worldwide, three times higher than before the Covid pandemic and due largely to its fallout, as well as from climate-related events and macroeconomic stresses, according to the Asian Development Bank (ADB).i
An estimated 375.8 million people in the Asia Pacific region faced hunger in 2020, which is nearly 54 million more people than in 2019. More than 1.1 billion people did not have access to adequate food in 2020, an increase of almost 150 million people in just one year. Meanwhile, the high cost of good quality food and persistently high levels of poverty and income inequality mean that 1.8 billion people cannot afford healthy diets in Asia and the Pacific, according to UNICEF.ii
Asia will require another USD 800 billion over the next 10 years in order to produce sufficient food for the region, according to a report from PwC, Rabobank, and Singapore's sovereign wealth manager Temasek.iii
The food crisis is not happening in isolation. Food security is interlinked with energy security as most fertilisers are produced using fossil gas both as a feedstock and energy source. Most importantly, food security depends on limiting biodiversity loss and the impacts of climate change, whether floods, droughts, or changing temperatures. Agriculture itself uses up 70% of the world's water resources, 50% of habitable land, and causes up to 80% of biodiversity loss.iv Now, more than ever, innovative solutions and future-proofing agricultural models are vital for a sustainable future.
Read more of Lombard Odier's 10 tips on adopting more environmentally-conscious lifestyles 2023.
Fostering innovation
The good news is that there are many initiatives transforming food systems and food security in Asia. For example, there is a growing emphasis on sustainable farming, and a rise of new crop innovations. In what is now known as the 'fourth industrial revolution', digital technologies are having a substantial impact. For example, agronomy and agricultural biotechnology are allowing for innovations in crop and animal agriculture, such as new means of pest control, seeds with new genetics, microbiome support, and animal health interventions.v Additionally, mechanisation, robotics and equipment such as on-farm machinery, automation, drones, environmental sensors and crop-growing equipment are also having an impact.vi
Moreover, farm management software and the Internet of Things (IoT) – web-connected systems with sensing and intervening capabilities – are playing a part, as are novel production methods such as indoor farming, plant factories and aquaculture systems.vii
Digital technologies, including mobile phones and applications, can increase technical knowledge among the region's 350 million smallholder farmers, helping them adopt innovative practices and get up-to-date market information, according to the ADB.viii
The ADB has called for government policies to transition away from traditional production support and to focus more on investing in research and development, encouraging innovation, and pursuing market-oriented development.ix
Read also: Emerging Asia-Pacific's infrastructure plans.
The rise of agritech and edible tech
Innovation is also coming from further afield. One of the challenges the food industry faces is that a third of the food produced for consumption globally is wasted each year.x As a result, agritech solutions could have the power to transform food systems and food security in Asia.
One example is Apeel Sciences, which develops plant-derived rot-reduction coatings for produce, doubling or tripling the shelf life of many fruits and vegetables without the need for refrigeration.xi The California-based firm is backed by Singapore's Temasek, among others.xii
Elsewhere, the development of 'edible tech'xiii in markets like Singapore, where 90% of food is imported due to land scarcityxiv, are truly offering something new. Some examples include lab-grown milk from TurtleTree Labs, Shiok Meats' cultured shrimp and Life3 Biotech's plant-based proteins.xv
These innovations look set to grow substantially as the agritech and edible tech market matures. 2020 was a landmark year for agri-food technology companies in the region, with more than 360 investment deals totalling more than USD 5 billion in the first half of the year.xvi
This is welcome news for a region that faces myriad challenges around food security. At Lombard Odier, we believe that transforming food systems will have a profound impact on both food security and the global economy. In the transition from old to new food systems, existing profit pools will be disrupted and new ones created, generating a market with annual revenues of USD 1.5 trillion globally by 2030xvii These innovations are directly addressing the food systems challenge: how to feed a growing population while staying within or helping to restore our vital planetary boundaries.xviii
Discover our views on the supply chain challenges of the sustainability transition in the region.
[i] https://blogs.adb.org/blog/confronting-asia-s-triple-threat-climate-change-biodiversity-loss-and-food-insecurity#:~:text=Asia%20and%20the%20Pacific%20has,%2C%20and%20macro%2Deconomic%20stresses.
[ii] https://www.unicef.org/eap/reports/asia-and-pacific-regional-overview-food-insecurity-and-nutrition
[iii] https://www.cnbc.com/2019/11/27/asias-food-crisis-a-800-billion-investment-needed-in-next-10-years.html#:~:text=%E2%80%9CAsia%20is%20unable%20to%20feed,on%20Trade%20and%20Development%20report.
[iv] https://blogs.adb.org/blog/confronting-asia-s-triple-threat-climate-change-biodiversity-loss-and-food-insecurity#:~:text=Asia%20and%20the%20Pacific%20has,%2C%20and%20macro%2Deconomic%20stresses.
[v] https://www.scidev.net/asia-pacific/opinions/disruptive-technologies-transform-asian-agriculture/
[vi] https://www.scidev.net/asia-pacific/opinions/disruptive-technologies-transform-asian-agriculture/
[vii] https://www.scidev.net/asia-pacific/opinions/disruptive-technologies-transform-asian-agriculture/
[viii] https://www.adb.org/news/transforming-agriculture-key-asia-and-pacific-future-and-survival
[ix] https://www.adb.org/news/transforming-agriculture-key-asia-and-pacific-future-and-survival
[x] https://www.theecoexperts.co.uk/home-hub/food-waste-facts-and-statistics#:~:text=%E2%9C%94%20One%2Dthird%20of%20food%20produced%20globally%20goes%20to%20waste&text=We%20produce%20enough%20food%20across,tonnes%20of%20food%20thrown%20away.
[xi] https://news.crunchbase.com/startups/new-250m-round-helps-apeel-sciences-make-saving-food-more-appealing/
[xii] https://www.techinasia.com/temasek-backs-producepreserving-foodtech-startups-30m
[xiii] https://www.ft.com/content/02fa9c19-ab64-4311-aeb2-39e2b50dd3d0
[xiv] https://www.cnbc.com/2020/09/21/singapores-food-tech-startups-serve-up-lab-grown-milk-fake-shrimp.html
[xv] https://www.cnbc.com/2020/09/21/singapores-food-tech-startups-serve-up-lab-grown-milk-fake-shrimp.html
[xvi] https://foodtechnews.asia/a-brief-insight-into-some-investments-in-agri-food-technology-in-the-asia-pacific-region/
[xvii] https://am.lombardodier.com/gb/en/professional/asset-classes/equities/sustainable/new-food-systems.html
[xviii] https://am.lombardodier.com/gb/en/professional/asset-classes/equities/sustainable/new-food-systems.html
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