Despite concerns, agro investments on the rise
Investment and innovation are needed to meet the demand for agricultural products. This is one of the conclusions of a survey carried out by global legal practice Norton Rose Fulbright.
For the survey, entitled ‘Risks and opportunities in a changing global market’, 80 senior executives from organisations across the sector in the period December 2013 to March 2014 were included. Respondents included agricultural producers, chemical producers, equipment suppliers, major food retailers, commodity traders, banks, consultants and not-for-profit organisations. The survey was conducted via individual telephone interviews and online and respondents were given the option to remain anonymous.
The survey revealed that the fundamentals of supply and demand are causing concern. Increasing consumption in emerging markets, climate change and natural disasters affecting supply, and urbanisation in emerging markets leading to a decline in the agricultural workforce are seen as significant factors.
Despite concern, 59% of respondents expect to increase their investment in agribusiness in the next 12 months with 48% considering investing in transport and other infrastructure to support food production. This is necessary to suffice a continually expanding middle class and growing appetite for meat, dairy and protein rich foods, which have a significant impact on demand.
Furthermore, 71% say there will be an increase in take up of genetically modified food over the next two years as consumers and retailers become more receptive. 51% say the availability of finance has improved in the last 12-18 months. Regarding meeting the renewable energy targets; 80% of the respondents believe it is possible to increase food productions while meeting these targets.
Also, 97% say BRIC nations will continue to have a significant or very significant impact as producers and consumers, and note the roles of Africa and South East Asia becoming more prevalent.
