Understanding the Importance of Food Security
Most people who grew up in prosperous and stable Western societies after World War II took food security for granted. Rapid advances in the production of industrial fertilizers, pesticides, the widespread availability of advanced farm vehicles, and cheap commodities drove an agricultural revolution.
Baby boomers in the US, Europe, and other industrialized economies usually enjoyed an abundance of affordable and high quality food. Famines occurred sporadically throughout the 20th century, but were restricted to the developing world and - beyond harrowing images on news reports - barely impacted the West in any meaningful way.
In recent years, global food security has become a more pressing issue. Food security is no longer the exclusive concern of strategic planners in government or organizations like the United Nations and a small number of NGOs. A confluence of recent events has shaken public assumptions about food supplies. Ordinary consumers are suddenly realizing the vital importance of food security.
Climate change and extreme weather events
The COVID pandemic and associated lockdowns
The War in Ukraine and other conflicts
The commodity crisis and high energy costs.
Inflation and the cost of living crisis.
Each of these factors has a variety of ramifications that affect food supplies and food prices. Many of these events are interconnected, and could theoretically have caused a downward spiral that resulted in a food security crisis across the developed world.
Western shoppers were shocked to see empty supermarket shelves during the panic buying that accompanied the COVID lockdowns. Many families have been forced to make significant cutbacks as food costs rose and disposable incomes fell. Dependence on food banks is now a fact of life for many in the US and UK.
In the developing world, hunger is nothing new, and the average person has a visceral understanding of the importance of food security. The World Health Organisation reports that an estimated 828 million people suffered from hunger in 2021 - and the numbers are rising.
With 1 in 10 people facing hunger on a daily basis, we urgently need advances in food security and sustainability. Fortunately, new agricultural technology (AgTech) is beginning to deliver practical food security solutions. Many believe that we are on the cusp of a massive agricultural revolution that will deliver an abundance of nutrient dense food, feed the world, and end hunger for good!
The emerging Agtech sector is one of the most exciting scientific trends in human history. Agtech is beginning to transform the global farming and food production industries, integrating data-driven precision and high tech efficiency all the way down to field level operations. It is also enabling a rapid (and fairly painless) transition to sustainability and new levels of environmental protection.
Agtech is also a highly profitable sector. Each new technological innovation generates new agtech products and opens new markets for leading companies like the ICL Group, John Deere, and Archer Daniels Midland. There are also hundreds of new agtech startups and major companies and institutions are increasingly keen to finance ground breaking agtech research and development projects.
The Role of AgTech in Food Security
It’s clear that Agtech is driving fundamental advances in food security and providing agronomists with effective solutions for sustainability. If the technological advances meet expectations, this decade may come to be seen as one of the defining periods of human history. The potential exists to guarantee food security and eliminate the threat of famine and starvation that has haunted the human race throughout its history.
Although agtech is a revolutionary sector, the public - and most investors - know very little about what it actually consists of. It’s worth taking a minute to explore the agtech phenomenon and see how it is transforming agriculture on a practical level. A convenient definition of agtech is a basket of digital tools and technologies that are applied across the entire spectrum of farming and food production.
These tools include big data (in conjunction with cloud servers and smart algorithms), the Internet of Things, 5G Internet, artificial intelligence, and advanced robotics. The agtech sector also encompasses innovations like slow-release fertilizers, the creation of drought and pest-resistant crops, improvements to the wider supply chain, market analysis, and the efficient recycling of agricultural waste and food packaging.
It’s already possible to see farms and plantations where remote sensors monitor crop growth and health, irrigation, and soil health. Drones and UAVs can deliver precise real time data on hundreds of acres of crops and spray them with calibrated fertilizers and pesticides, while AI-driven robots selectively harvest ripe crops. Farmers and agronomists are already using mobile apps to access big data and create niche crop nutrient plans and planting strategies.
Agtech is fueling a quiet revolution across the agricultural world. The rapid advances in the search for global food security and greater sustainability are creating exciting new business opportunities. Companies of all sizes are investing considerable resources in breaking into the new markets - and making their own contribution to global food security.
3 Agtech Connected Companies to Watch
1. ICL Group Ltd. (NYSE: ICL)
ICL is a leading global specialty minerals company and one of the largest fertilizer manufacturers in the world. ICL is deeply embedded in the global food supply chain and makes important contributions across the broad agronomical and food production spectrum. ICL is also deeply committed to the concept of sustainability and invests heavily in social initiatives and community projects wherever it maintains a corporate presence.
ICL is a major supplier of sustainable PK/NPK fertilizers, including controlled-release fertilizers. Its advanced crop nutritional solutions are having a significant impact on farming around the world. ICL is also an innovator in the field of food production and provides phosphate-derived ingredients for improving the taste, texture, and shelf-life of food products.
The company is also behind the innovative Growers software platform and the respected AI-driven Agmatix data hub platform. ICL also launched more advanced agtech platforms, including the online fertilizer recommendation tool AngelaWeb2.0, the Nutrient Deficiency Guide, and a variety of other apps. ICL is keen to advance the United Nations Strategic Development Goal of Zero Hunger and to offer direct assistance to farmers and farming communities in the developing world.
2. John Deere (NYSE: DE)
Most investors probably recognize John Deere as an iconic US corporation that manufactures farm machinery and heavy vehicles for forestry and logging. John Deere is almost a symbol of American agriculture and has supplied farmers with equipment since the 19th century. DE is still a household name when it comes to tractors and combine harvesters, but it's John Deere's Agtech innovations that are breaking new ground in the 21st century.
John Deere is built on innovation and was one of the first leading manufacturers to really see the potential of advanced farming machinery like autonomous tractors and drones. The company didn’t just have the vision to invest in new research and development, it also had the resources and the human expertise. John Deere is now focusing on precision agtech and the integration of new technologies and data analytics to optimize farm processes, reduce costs, and increase yields.
John Deere can draw on a couple of centuries of close relationships with farmers to design the products that they actually need. Innovations like AutoTrac™ hand-free guidance and remote management software for machinery, make a profound difference at field level. Data management tools and concepts like Variable Rate Applications are saving farmers time and money and helping them to adapt to new crops and markets.
3. Archer-Daniels-Midland Company (NYSE: ADM)
Archer Daniels Midland is usually just referred to by its NYSE ticker ADM. The Chicago based company has deep roots in food production, beginning as a linseed crushing company in 1902. Today, ADM is a huge multinational food processing company that runs almost 700 facilities and operations worldwide. The company handles and processes millions of tons of cereal grains and vegetable oils every year and is a major presence in the global food supply chain.
ADM is deeply committed to promoting sustainable farming practices and eliminating wastage and environmental damage from every phase of its operations, from the growth and sourcing of food staples, through production, shipping, packaging, and distribution. Not only is the company focused on reducing costs and improving profitability, it is working towards a 25% reduction of its carbon footprint by 2035.
One area in which ADM excels is its bold approach to bioengineering and GIS technology. The company is also investing in R&D into alternative proteins and plant-based proteins. It is also researching ways to improve microbiome health and improve the presence of healthy bacteria in food products. The goal is to deliver high value food products with a minimal environmental impact.
Promoting Food Security for a Sustainable Future
Major companies with connections to agriculture and food production are quickly realizing that agtech can transform their own operations and open up profitable new markets. As agtech delivers greater sustainability and becomes a gateway to circular economies, companies also have a unique opportunity to meet public expectations for environmental accountability.
Companies that previously focused simply on producing and distributing food products, or supplying agricultural professionals are now contributing to the goal of achieving global food security. Predictive analytics, autonomous farming through robotics and AI, and the ability to adapt rapidly to extreme weather events and climate change are all transforming over 12,000 years of human agricultural practices.
There are still challenges ahead, but precision agriculture can vastly reduce farming costs and increase profits for farmers. In the West, this can mean the difference between prosperity and bankruptcy. On marginal lands in the developing world, it can mean the difference between life and death for farmers and their families, and the stability of societies around the world.
