How are we going to feed Asia?
Cargill, along with FICCI and The Economist Intelligence Unit (EIU), launched Fixing Asia’s Food Systems, a five-part research program that explores a range of issues and is centred around a survey of 400 business leaders in the region. The first report, “Separate Tables: Bringing together Asia’s food systems”, is a deep dive into six key megatrends: urbanization, the double burden of undernutrition and obesity, technology constraints, the need for transparency and sustainability, and the politics surrounding food.
The report was unveiled by Smt. Harsimrat Kaur Badal, Hon’ble Union Minister for Food Processing Industries, GOI, and highlighted the need for regional co-operation to make food supply chains smarter, better integrated and more efficient. The launch of the report set a pivotal discussion in motion, encompassing industry captains and policymakers and revealed the central government’s agenda for encouraging investment in the food processing sector.
The food system today is facing the pressure of producing about 70% more food to feed a population that will cross 10 billion people by 2050. We need to do this with diminishing resources. Producing more with less and ensuring the highest safety standards are key challenges facing the food and agriculture industries to feed Asia. Tracking the megatrends driving the divides in Asian food systems and finding creative solutions to the challenges faced in improving food-security in the continent is a Herculean task.
That’s because Asia encompasses a complex mix of countries, divided by borders, policies, cultures, uneven development and other socioeconomic differences. However, as existing food systems evolve and Asia urbanizes to grow ever more populous, discussions around diet, food supply and food security often focus on Asia as a whole. The continent will be home to nearly half the world’s population by 2030, with China, Indonesia and India accounting for three-quarters of Asia’s new urban dwellers. This will have significant effects on food production and demand, as urban consumers have more diverse diets and typically consume more convenience food.
Diets will become more energy-dense and will move away from consumption of carbohydrates to include protein and sugar rich foods as income growth and access to higher-value categories of food increases. This increased dietary diversity will cause divergence between demand and domestic supply, increasing regional competition for food imports. Trade liberalization is likely to accelerate the convergence of health outcomes in Asia as nutritional concerns pivot towards undernutrition and obesity. The continent is likely to have significant levels of undernutrition in 2030, and this will continue to be driven primarily by South Asia, where 35.8% of children under the age of five saw
The central government plans to invite proposals from private players to set up a non-banking financial company (NBFC), which will exclusively cater to the credit and lending needs of the food processing sector. The NBFC will be set up with an initial corpus of Rs. 2,000 crore. — Harsimrat Kaur Badal Hon’ble Union Minister for Food Processing Industries, Government of India
stunted growth in 2010-16. Current estimates of overweight/obesity exceed global averages in many East Asian countries like Indonesia where 12% children are overweight.
To tackle these problem areas, there is an observable interest in greater traceability and sustainability in food systems. Social media and globalization have rendered the modern consumer more aware of what goes into making a processed food item in the market. This has exacerbated the need for transparency and clean label brands in various food segments. Aiding farm productivity, research and development in food production in Asia will remain a key driver of agricultural development. However, the demand and ability to implement innovative food production techniques will vary across and within countries, depending on their level of economic and industrial development.
By 2030, Asia is projected to need 65% more water for industrial use, 30% more water for domestic use and 5% more water for agricultural use. Water scarcity will become a key issue as national interests diverge, with the advantage resting with upper riparian countries. The headwaters of six of Asia’s major rivers are located in Tibet, giving China significant control over water flow to lower riparian countries. With no formal trans-boundary watersharing agreements in Asia between China and downstream countries, divergent political interests will continue to drive water nationalism.
The challenge for policymakers and companies will be to identify specific hurdles and opportunities in each market, areas of risk and evaluate existing policies based on projected challenges to the food system. As a food system covers end-toend activities, from production to consumption, retailers fulfill a vital role in the value chain. The market penetration of certain products is controlled by allocation of shelf space at retail outlets and omnichannel approaches adopted by retailers to reach out to prospective buyers. “We see a need to upgrade inventory management systems to prevent spoilage and wastage of goods. To address the problem at its roots, the industry will benefit from partnering with farmers in respective supply chains and instructing them on the kind of demand present in the market. Farmers must know what crop to plant and in what quantity to avoid overplanting and unharvested produce. We also need to challenge standard store practices and manage perishables better. This can be done by adopting a more efficient way of determining the best before and expiry dates of certain goods.”, said Krish Iyer, CEO and President at Walmart India.
The report released by EIU also recognized the fact that food security can be more broadly defined to include resilience, diversity and affordability, rather than just self-sufficiency. The rise in demand for food in Asia has made it difficult for most countries to remain self-sufficient, particularly China. The solution includes setting up regional committees to aid greater collaboration and collection of more significant data. Governments could focus on building robust databases that would help them to better design and execute policies using the development of metrics assessing specific population groups’ characteristics, nutritional quality, crop productivity by region, food wastage and even vulnerability to climate change.
“Current estimates show that we process only 10% of the food we produce and most of our food is wasted during harvesting, transportation and storage. Stakeholders need to come together and commit to zero tolerance of food wastage and provide all players in the food system the technology they need to make possible a food system that allows no wastage,”said Food Processing Minister Harsimrat Kaur Badal. During an interaction with mediapersons at the sidelines of the report launch, the Minister also revealed that the central government plans to invite proposals from private players to set up a non-banking financial company (NBFC), which will exclusively cater to the credit and lending needs of the food processing sector. The NBFC will be set up with an initial corpus of Rs. 2,000 crore “Many international funds have shown interest. We will be able to put together a consortium of investors for this NBFC. While the government will hold a minority stake in the company, the majority stake will be held by private players,” she said. This venture will function as a partnership between the Indian government and the industry to collectively address fixing Asia’s food systems in a holistic manner.
The industry will benefit from partnering with farmers in respective supply chains and instructing them on the kind of demand present in the market. Farmers must know what crop to plant and in what quantity to avoid overplanting and unharvested produce. — Krish Iyer CEO and President, Walmart India