Global commodity prices have increased dramatically due to supply chain disruption related with the pandemic and the war Ukraine. Increasing energy end fertilizer prices are creating additional risk for food production and thereby increasing vulnerabilities in many regions.
FAO Food Price Index reached its highest levels since its inception in 1990. According to FAO’s State of Food Security and Nutrition Report 2021, malnutrition rates increased and a healthy diet is out of reach for 3 billion people.
According to the Global Report on Food Crises by World Food Programme, 193 million people were acutely food insecure and in need of urgent assistance across 53 countries. This represents an increase of nearly 40 million people compared to the last year.
Diversification of supply chains, improved efficiency in local production, conserving natural resources and last but not least elimination of food waste have gained critical importance. For the short term it is vital to support vulnerable communities with access to fertilizers, seeds and other inputs. Yet, achieving a sustainable agriculture and food ecosystem requires actions beyond humanitarian assistance schemes. An enhanced cooperation and innovative solutions will be key in lasting recovery and resilience.
Financing initiatives that has potential to contribute for better production, supply chains and consumption will be key actors of change. Impact investors have an historic opportunity to take part in supporting innovation in agriculture, building new business models and preventing food crisis.
Some key pillars which are promising to deliver positive results are
- Improving small scale farming
- Technology adoption
- Eliminating food waste
- Producing environmental friendly alternatives
I would like to refer a bunch of impact startups from different regions who are committing to contribute improve food production and consumption.
Let me start with Farmerline from Ghana. Farmerline, partners with agribusinesses and farm associations to support African farmers with high-quality fertiliser and seeds, free education on climate-smart farming practices, and access to markets. Farmerline has a marketplace which combines digital tools with logistics, field agents, farm resources and strategic partnerships. They have secured a US$6.4 million pre-Series A investment led by Acumen Resilient Agriculture Fund (ARAF) and FMO, the Dutch entrepreneurial development bank, plus another $6.5 million in debt to help it expand.
IFarmer, a Bangladesh-based agritech startup provides financing for farmers and access to high quality agricultural inputs through partnerships. Field agents of the company support farmers with their needs while their app provides supportive analytics. Pilot projects are implemented to test and benefit from agriculture insurance and sensor based monitoring systems for analysis, fertilizer recommendation, and weather advisory.
Another remarkable initiative is dedicated itself to alleviate food waste. Reduced, a Copenhagen-based foodtech startup uses vegetables, protein and other sources of nutrition left over from the food industry to create high-quality food products (ingredients and flavour enhancers). Reduced uses the food that is rejected by supermarkets simply due to their shapes or similar reasons. They recently closed a funding round with €2.9 million.
Bosque Foods, founded in Berlin, works in fermentation tech and alt protein markets. They aim to lower carbon footprint of animal breeding and meat industry by providing diverse healthy alternatives. They have raised about €2.8 million to advance their production and business.
I believe expansion of such startups will have a major impact in achieving an agri-food ecosystem, which is financially, environmentally and socially sustainable. I think it is the right time for impact investors and impact startups to step in and commit more to create a better agri-food ecosystem.
