It’s Time to Re-imagine Food and Agriculture in Asia

As the global population heads toward a peak of close to 10 billion by 2050, food production is under pressure to increase its output by 70 per cent. This will need to be achieved despite constraints and risks such as climate change, by which crop yields could be cut. This would not only lead to more hunger, which impacts 815 million people worldwide, but also an increasing number of challenges resulting from the dual burden of malnutrition (both over- and under-nutrition).

It is therefore time for agri-businesses to re-imagine the status quo, for business leaders to reframe private sector orthodoxy. And the United Nations’ Sustainable Development Goals (SDGs) are a strong starting point.

In Asia, the regional food industry landscape comprises of fragmented businesses and far-stretching supply chains, as well as the predisposition of governments to shape market activity and investments to achieve nation-building goals. We also have strong cultural values of protecting the environment and promoting education. Many business pioneers are already using innovative models and technology to unlock sustainable opportunities that align with the SDGs. As such, the Better Business, Better World: Asia report commissioned by the Business & Sustainable Development Commission (BSDC) points out that Asia is poised to reap more than 40 per cent of the US$12 trillion in global development opportunities associated with the implementation of the SDGs, creating almost 230 million new jobs in the region by 2030 – equivalent to 12 per cent of the Asian labour force.

Sustainability: A shift in paradigms to tackle key challenges

When it comes to the food industry in particular, the BSDC report states that this shift can be transformative, with major impacts throughout the food and agriculture value chain, leading to the emergence of a number of disruptive business opportunities worth more than US$1 trillion in Asia in 2030. Key opportunities in this sector lie in areas such as reducing food waste in the supply chain (US$260 billion), technological innovations to support smallholder farm production (US$55 billion), and reducing plastic packaging waste (US$20 billion).

Uniting behind the UN SDGs also opens up a wealth of opportunities through collaboration with customers, peers and civil society – whether through public-private partnerships, cross-sector bodies like the World Business Council for Sustainable Development (WBCSD), or specific sector platforms such as the Cocoa & Forests Initiative. Not only does collaboration mean that we are pooling shared resources for greater impact – we continually learn from our partners and bring more expertise in-house. It also opens up new avenues of finance that are linked to sustainability metrics.

Last month, Olam signed loan agreements worth US$163 million with the Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA), as a significant step in our overarching aim to improve agricultural value chains around the world. Olam, ADB and JICA share the mutual aim of supporting the economic prosperity of farmers, and helping them become stewards of the environment, which is essential for the future of agricultural production. The loans will help to boost inclusivity and sustainability across value chains, directly benefitting up to 20,000 smallholder farmers in Indonesia, Papua New Guinea, Timor-Leste, and Vietnam.

We also secured Asia’s first sustainability-linked club loan, a three-year sustainability-linked revolving credit facility aggregating US$500 million. Under the Facility, we have committed to meeting improvement targets for a comprehensive range of environmental, social and governance (ESG) metrics. The metrics are tested on an annual basis, and if the pre-set improvement targets are achieved, the interest rate on the Facility will be subsequently reduced. Sustainability really does reap financial rewards.

These are just a few ways in which companies can re-imagine how we conduct our businesses so that everyone – people, planet and shareholders – benefits. I am sure we will see many more at Food Industry Asia’s inaugural Food for the Future Summit, and I look forward to participating in this year’s Forum.

Mr Sunny Verghese, who is the Co-founder & Group Chief Executive Officer of Olam International Limited, and current Chair of the World Business Council for Sustainable Development (WBCSD), will give a keynote address at Food Industry Asia’s inaugural Food for the Future Summit, taking place on 26 April at the Grand Hyatt in Singapore. This invitation-only event for CEOs and senior leaders will feature debates around some of the biggest food trends and issues relating to food innovation, reformulation, sustainability and product packaging.

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