A total of 805 million people are chronically undernourished worldwide and hunger and under-nutrition reduce the global GDP by up to 3 per cent, or the equivalent of $2 trillion every year, a report said.

The global population is expected to grow from 7.2 billion today to 9.6 billion by 2050 and 11-12 billion by 2100, added the study entitled “Feed the World: global food security primer” from Bank of America (BofA) Merrill Lynch.

The combination of rising incomes and changing diets mean that by 2050, the world needs to produce 70 per cent more food globally, it highlighted.

“In our view, all potential food security solutions should be considered given that we may have already arrived at peak production for many food categories,” said BofAML in the report.

Global challenges include: declining yields (1.4 per cent pa today vs 3.2 per cent in 1960), limited land remaining to be cultivated (1.4 billion hectares), the protein challenge (+2 per cent meat demand to 2030), food waste (30 per cent of edible food), peak water (agriculture is 70 per cent of water use), and extreme weather and climate change (25 per cent of wheat yields at risk), among others.

The food and agriculture sector accounts for 3 per cent of global GDP, making the sector worth $2.3 trillion. Annual investments in food security and agriculture are estimated at $220 billion with 75 per cent coming from the private sector.

Every dollar invested in agriculture R&D creates $20 in economic activity, with agriculture-related growth two to four times more effective at reducing poverty than other sectors.

Annual investments from 2015-30 would need to reach $480 billion to realise “zero hunger”, the report said.

BofAML highlights eight entry points for investors wishing to play the food security theme: (1) Agricultural Equipment; (2) Agricultural Inputs; (3) Agribusiness, Protein &  Dairy; (4) Farming; (5) Food Safety & Animal Health; (6) Water; (7) Healthy Eating; and (8) Reducing Food Waste.

One-third of food lost or wasted

An estimated one-third of global food produced is wasted (about 1.3 billion tonnes of edible food vs. 6 billion tonnes of all agriculture production (source: FAO). Some stakeholders estimate the amount of waste to be as high as 40-50 per cent in the US and UK.

Food loss and waste result in direct economic costs of $750 billion based on producer prices alone. Vegetables are the largest contributor (23 per cent), followed by meat (21 per cent), fruits (19 per cent), and cereals (18 per cent).

Regionally, the major contributors are Asia (31 per cent of total) and S&SE Asia (18 per cent), the two regions that are also the largest contributors to food wastage volumes (source: FAO).

Positively, the global saving potential from reducing food waste is approximately 50 per cent along the entire food supply chain (source: Lundqvist 2008).

Cutting the rate of food loss and waste in half by 2050 would close up to 20 per cent of the potential food gap. – TradeArabia News Service