Food prices around the world are at a historic high, and as of 2021, an estimated 2.3 billion people are either moderately or severely food insecure1. The Ukraine crisis has made this even worse, cutting the world’s wheat supply by 10 per cent, corn by 15 per cent and sunflower oil by a shocking 50 per cent.
Food price spikes around the world (July-October 2022)
There are more long-standing pressures such as population growth driving up demand, climate change impacts lowering outputs, and inefficiencies in food systems. As a result, every third meal goes to waste.
The changing environment brings new challenges for farmers. They need to adapt to survive economically. We need to rethink how to make this transition easier for everyone. If we do not address the underlying issues, the food crisis will stay with us and the next generations.
In the short term, higher input costs, lack of skilled labour and increasing international competition may put many farms in developing countries out of business.
In the longer term, farmers worldwide face even higher costs as they transform their businesses to comply with increasingly stringent environmental and social regulations and standards for the transition to a sustainable economy.
Food security is a complex problem and requires short-, medium- and long-term solutions. We need innovations in the food industry based on sustainable input supplies, local value addition, digitalization and new financing solutions.
Industrialization needs to be part of the solution
We can only end hunger by tackling these short and long-term challenges together. This is where sustainable industrialization comes in. We cannot talk about a food secure future without sustainable industrialization playing a key part.
Developed economies heavily rely on their own well-established service sectors to enhance their food systems, for instance in certification and logistics. Although low-income countries have already started to benefit from industrialization, they still often depend on services from OECD countries.
In the development context, agribusiness plays a crucial role in uplifting national economies. Transforming food production practices can solve food security issues from both an economic and an access perspective.
Assuring food self-sufficiency and food security through green and low-cost agricultural production and food-processing is essential for sustainable industrial development.
Innovation in agribusiness
Through emerging production technologies such as regenerative methods and vertical farming.
By enhancing value addition through technology and knowledge transfer.
By using digital and data-driven solutions to allow more informed decision-making.
Such solutions can bring higher profit margins, less land shortage, more biodiversity. But we cannot guarantee access to food for those who need it most with improvements in agricultural output alone. Affordability must be a clear priority. Low-cost, green and innovative processing technologies like food irradiation lower the cost of energy-dense, nutritionally-fortified and safe foods. They help food-insecure people meet their dietary needs. Nevertheless, this must not come at the expense of the climate.
Producers also have other opportunities to diversify their output and income sources. Enabling and promoting healthy diets that use more local ingredients reduces exposure to external shocks. This however relies on investment in R&D and innovation. Larger producers in industrialized economies can already leverage their advanced technical capabilities, access to expertise and financial liquidities. But SMEs in developing economies need partnerships, access to local expertise and innovative financial solutions.
Local policies need to make sure incentives, taxes and trade tariff regimes combine to support local innovation. Local farmers benefit from formalized commodity exchanges, grading schemes, quality control schemes and market transparency to ensure fair payment for farmers.
As it stands now, data-driven innovation, such as blockchain and electronic certificates, will further be in the forefront to ensure safer food and a fairer trade system. UNIDO in collaboration with Australia’s Department of Agriculture, Fisheries and Forestry (DAFF) and the Standards and Trade Development Facility (STDF), discussed such options during the Vienna Food Safety Forum 2022 on “Data-driven innovation in food safety.”
Collaborating from farm to fork
We need to accelerate the sustainable transformation of food systems and regional and local value chains. We at UNIDO facilitate knowledge and technology transfer to transform value chains through regional and national innovation hubs, like rural transformation centers and integrated agro-industrial parks.
We need wider partnerships for innovation among governments, development institutions, industry and academia to coordinate our efforts. Cold chain logistics, packaging and traceability solutions are some of the essential services, which should be accessible regionally.
This will reduce costs, carbon footprint and vulnerabilities to global supply chain disruptions. It also supports agricultural and non-agricultural skills development and livelihoods for rural workers. Such diversification of economic opportunities, together with added value and labour productivity, promotes resilience among rural communities, which currently account for over 70 per cent of the world’s poor2.
Environmental and social sustainability
Agriculture currently accounts for 11 per cent of greenhouse gas emissions3, yet it is one of the sectors most vulnerable to the effects of climate change. Implementing climate-adaptive farm practices that protect biodiversity, facilitate carbon sequestration and produce non-food crops for renewable energy will present technical challenges as regulations inevitably become stricter.
More efficient use of farmland is also key here. Reducing the need for land clearance preserves biodiversity and protects the soil – which stores more carbon than the atmosphere and all the world’s vegetation combined4. Industrial policymakers need to consider how agribusiness can support farmers to overcome the many challenges ahead.
The digitalization of food production and supply chains has an important role to play. Data solutions can trace commodities throughout the supply chain. They ensure compliance with environmental, social and safety requirements. Data analysis can also help reduce food and energy waste by monitoring production practices.
These should be a particular focus of knowledge transfer, skills development and infrastructure investment. Not only will it bring benefits to local production processes, but digital solutions for regulatory compliance allow small and emerging producers to participate in international markets.
A world without hunger is possible
The unfortunate truth is that the world is currently sliding away from achieving Sustainable Development Goal 2: Zero Hunger by 2030. It is true that emergency relief is needed the short term. But the pressures of a growing (and urbanizing) population, climate change and the recent pandemic make it clear that we need to think and above all act long-term:
We must develop a more systemic approach to food security and agricultural resilience to transform our food systems.
A world without hunger is only possible if we accelerate innovation, have more international solidarity and create new partnerships and financial solutions.
Sustainable industrialization is a key part of the smart mix of solutions to tackle long-term challenges.
The knowledge and the technologies exist, the resources exist. What is necessary is the political will to leave behind a better world for the next generations.
- Gerd Müller is Director General of the United Nations Industrial Development Organization (UNIDO).
Disclaimer: The views expressed in this article are those of the authors based on their experience and on prior research and do not necessarily reflect the views of UNIDO (read more).
- FAO (2022) The State of Food Security and Nutrition in the World 2022.
- United Nations (2012) Feeding the World Sustainably.
- World Resources Institute (2019) 5 Questions About Agricultural Emissions, Answered. Based on ClimateWatch data trackers.
- International Union for Conservation of Nature (2019) Conserving healthy soils.