Why we need a pragmatic approach to food
Rahul Bhushan
Managing Director, Europe at ARK Invest (Co-Founder of Rize ETF) ? Thematic Investing Strategist ? Author ? Angel Investor ? Father of Two ????????
Putin’s war in Ukraine is the latest in a long list of events that have exposed the precariousness of our food system.
The consequences of Russia’s invasion have raised deep questions about how we tackle our food crisis. In particular, do we continue down the path of endless symposiums and navel-gazing? Or as a society do we adopt a pragmatic path forward and take actionable steps to address the system’s various challenges (as we’re doing in energy)?
Russia’s invasion of Ukraine has already pushed many parts of the world toward famine. As our food supply chains have come undone due to the pandemic and its aftermath, the impact has been felt most acutely by our world’s most vulnerable. Countries of the global south are no longer guaranteed their annual calorie intake.
Needless to say, these attributes don’t indicate a “sustainable” food system. Something clearly needs to change. Our system needs reform.
The inflection point
The good news is that we now appear to be at an inflection point. NGOs, policymakers and investors are waking up to the fact that interconnected supply chains aren’t the most resilient, and that we must reimagine their centralised and inflexible nature. Food sustainability even took up a full day at COP27 with government officials recognising that any goal setting around food sustainability cannot come at the expense of food safety and security.
We believe this is the beginning of our pragmatic transition in food. One that is able to simultaneously ensure that the world’s expanding population is fed, with healthy calories and carbohydrates, but in a way that maximises renewable resource use, is climate-adapted and localised and which minimises the large-scale negative externalities of our current industrial agriculture.
At the same time, however, we believe society must come to terms with the trade-offs required to achieve not just a sustainable transition in food (which seeks to maximise our environmental objectives) but also a just transition in food (which seeks to ensure our social objectives are met too.
Practically speaking, for example, on the one hand, we cannot simply halt protein production, or ban chemical fertiliser use or say no to all crop science (e.g. gene editing). On the other, ecologically speaking, the world can’t afford to scale these industries in unfettered, unregulated ways.
The solutions lie in the pragmatic middle. Here, we examine what a pragmatic approach to food could look like.
Our history with food is steeped in pragmatism
It’s worth taking a step back and considering just how far our food system has come in the past one hundred years.
It often comes as a shock to people to learn that our Earth’s annual biocapacity for food is for about 4 billion people.[1] This means that, without manmade support, under normal circumstances, Earth can feed just about 4 billion people. This also means that, somewhere along the line, some smart people came together and conceived of a way to surpass this limit. We’ve just passed 8 billion people so the solution clearly worked.[2]
This two smart people were German scientists named Fritz Haber and Carl Bosch. Both eventually won Nobel prizes for their work and are crucially credited today for their invention of the Haber-Bosch process – a process for converting hydrogen and nitrogen to ammonia at extremely high temperatures close to 500°C.?
Indeed, the Haber-Bosch process may be one of the most important chemical reactions ever synthesised.
Why?
Because it made ammonia widely available.
Why ammonia is important
Ammonia is the world’s most commonly used fertiliser. About 50% of the world’s food production relies on ammonia.[3] Fertilisation improves plant nutrition, promotes plant growth, improves crop quality and ultimately maintains and even enhances soil fertility.
Without ammonia, food production would (within our current system) rapidly collapse. Indeed, some historians maintain that the invention of Haber-Bosch in the mid-20th century is the reason why civilization didn’t collapse in the mid-50s. This was a time where the world was heavily reliant on imported manure from Latin America for fertilisation, the availability of which wasn’t keeping pace with the ever-expanding population.[4]
The Haber-Bosch process helped us feed the planet then, and has allowed us to continue feeding our planet since. Its invention is a true testament to human ingenuity and how it thrives in times of turmoil.?
Fuel, fertilisers and food
So how is ammonia made?
What often comes as a shock to people is that ammonia is made from natural gas.?
A typical modern ammonia-producing plant?will first convert natural gas into gaseous hydrogen. The method for producing hydrogen from hydrocarbons is known as steam reforming. The hydrogen will then be combined with nitrogen to produce ammonia via the Haber-Bosch process.
Free flowing natural gas, therefore, guarantees ammonia production each year, which in turn guarantees half of our global food availability.[5] Some would even go as far as to argue that our food, today, in its current form, must be seen as a fossil fuel product.
Our sustainable food transition must therefore recognise this complex interplay between fuel, fertiliser and food. By recognising it, we can start thinking pragmatically about the food transition and the types of solutions that are needed to address our most critical food challenges.
One, because the challenges of the next century won’t be the same as the challenges of the last century. And two, because as we transition our food system, we need to be considerate about which levers to pull (and when) so as to manage a prudent transition, as opposed to a foolhardy one.?
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Sri Lanka Case Study: How not to transition
We’ve seen what happens when a pragmatic approach isn’t followed.
Sri Lanka is a case in point.
In the spring of 2021, the country banned farmers from using chemical fertilisers on their farms in an effort to advance agri-sustainability. The move forced farmers to immediately switch to organic fertilisers overnight.
The result?
Production of rice – the country’s food staple – collapsed by nearly 40% in the ensuing 8 months. At the same time, inflation shot up, forcing the treasury to spend an extra $USD 450 million importing rice to make up for the shortfall at home, which collapsed confidence in the incumbent government. A social crisis took hold as Sri Lanka’s foreign reserves were rapidly depleted, resulting, ultimately, informer President Rajapaksa’s famed escape by military jet to the Maldives in the summer of this year.
Today, the country faces its worst economic crisis in decades. Around 30% of the Sri Lankans are currently coping with food insecurity.[6]
The road to hell is paved with good intentions
The Sri Lanka example shows that, even if intentions are benign, light-switch policymaking can have catastrophic consequences where based on moralist decree versus hard science. It’s an example that makes clear the fact that transitions, whether they’re in energy or in food, must be executed with care and level-headedness.
So how do we carve a path forward in food? Especially with the frailty and fragility we’re now witnessing in our food system?
One answer is decentralisation/localisation.
Consider that Russia and Ukraine account for nearly 27% of the world’s wheat exports and 16% of the world’s corn exports. Consider that Russia accounts for almost 60% of the world’s sunflower oil exports. Imagine the kind of external reliance this creates.
Then, there’s the issue of fertilisers. Consider that Russia practically dominates the global ammonia market. Together with Belarus, it provides for nearly 20% of the world’s fertiliser demand. China, too, provides for around 15% (China banned exports of fertilisers in July 2021). What we’re talking about here is one-third of the world’s demand provided for by just 3 countries.
Transitioning to greater decentralisation/localisation can help address this “exposure”. By solving for less external dependency and greater internal autonomy, we can solve for everything from unsustainable cost-inflation, the security of our own food supply and greenhouse gas emissions (e.g. carbon dioxide, methane and nitrous oxide).
Another answer is adaptation.
What we eat is a major driver of climate change and the rapid degradation of our environment. The global food system is estimated to account for around 30% of global greenhouse gas emissions and more than half of those are attributable just to meat.[7]
Adopting?diets that deliver good nutrition to us all without transgressing planetary boundaries can significantly reduce the amount of land we use currently for animal agriculture. This land can then be returned to nature for eventual sequestration.
Consider that agriculture currently uses about one-third of all ice-free land; three-quarters of which is taken up by livestock grazing and/or livestock feed production.[8]
Without significant adaptation to our diets, it’s unlikely we’ll be able to meet the targets set by the Paris agreement.
Conclusion
We are confident that science and technology will be able to solve for today’s food challenges just like Fritz Haber and Carl Bosch conceived a paradigm-shifting invention in the mid-20th century.
As long as we have human ingenuity, we will have ways to scale food (in particular healthy food) and create an abundance of it for everybody on the planet.
However, unlike in the mid-50s, our challenge today is dual in nature. This is because we’re solving not just for food security, but also for food sustainability.
The latter cannot happen without a sensible degree of decentralisation and adaptation, not just supported by the likes of governments and businesses, but also by consumers. With rising food costs this year, incidentally, we’re already seeing a convergence between ‘sustainable’ diets and ‘pragmatic’ diets. And as our consumption patterns begin to reflect our Earth’s biological limits, our sustainable food transition will start to take form.
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