The World Food Summit of 1996 defined food security as the condition that exists “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life.”
There are both nutritional and economic dimensions to food security, as is clear from this definition. The Food and Agriculture Organization of the United Nations (FAO) outlines four dimensions of food security: physical availability of food, economic and physical access to food, food utilization and stability of the other three dimensions over time.
The conditions do not exist the world over, and certain areas are less food-secure than others. A lack of food security leads to malnutrition and other health issues, which are problems that can shape a person’s life from childhood onward. It also has economic consequences for communities and nations that experience food insecurity, as those who are malnutritioned cannot do productive work. Furthermore, economic development and global trade can influence whether an area enjoys food security or not.
There are many organizations working to improve food security worldwide. These organizations work from several different angles to address the issue, from emergency interventions to educational and economic efforts to improve a location’s ability to keep itself food-secure.
Factors influencing food security
The World Food Programme asserts there is currently enough food in the world to keep every one of its inhabitants healthy and active – the problem is access. Infrastructure, trade and economic conditions, then, are the culprits of food insecurity. There are 795 million people in the world that are undernourished, meaning one in nine people aren’t getting enough food to be healthy and live an active lifestyle. Many organizations seek to address these factors.
According to the FOA, the world will need to produce 70 percent more food to feed an additional 2.3 billion people by the year 2050. However, crop yield growth rates are declining, seed technology is reaching its limits and agricultural improvements are slowing. The bulk of population growth is expected to occur in less developed countries, to boot, where access to the benefits of advanced agricultural technology is even more limited.
Existing arable land is shrinking as well, making an increased rate of crop yields seem even less likely. The FAO reported that arable land per person decreased from 0.38 hectares in 1970 to 0.23 hectares in 2000 and is projected to drop to 0.15 hectares per person by 2050.
Available arable land is largely located in developing countries – of that amount, around 80 percent is in Latin America and Sub-Saharan Africa. In fact, South Asia is using 94 percent of its potentially arable land. In contrast, in sub-Saharan Africa only 22 percent of potentially arable land is under cultivation. According to the FAO, there is almost no spare land in South Asia, the Middle East and North America, which are the regions with the highest rates of population growth.
Growing strain on resources due to population growth is also a factor in food security, particularly in making food available that fits the changing diets of those in developing countries. Rising incomes in some markets are creating an overall improvement in diets, but the addition of more grain and protein puts strain on agriculture. For example, 21 kilograms of grain are necessary to get 1 kilogram of lamb meat, and the ratio is not much more favorable for other non-poultry meats.
Improving food security through investment
Research by the FAO shows investment in agriculture is one of the most effective ways to help reduce hunger and poverty. Investment in agriculture in developing countries is necessary to bring vital infrastructure to them, like roads, warehouses and irrigation to make food accessible through successful farming. Investments around the world in better land management, more efficient water use and accessible resistant seed types can also bring huge returns.
This investment can come in many forms. For example, the United States Department of Agriculture’s food security programs have disbursed more than $20 million in microloans to farmers in targeted countries and regions. Other investments are of a more traditional type, with some companies and investors interested in putting their capital into agricultural companies that are using unique business models to address issues of food production and access.
How to invest in agriculture
Another way that investors can invest in food security is through natural resources like potash and phosphate. Both minerals play a large role in the food security as they provide the nutrients that are required to keep arable lands fertile enough for crop cultivation to take place.
For potash, there are several large producers who currently have dominance over the market. Potash is produced primarily in Canada, Russia and China, though other regions have their own reserves.
Since food security is a long term issue, investing in exploration and development companies is an option that will ensure the continued production of potash. There are plenty of companies developing potash projects all around the world, listed on the TSX and TSXV, as well as ASX-listed potash companies. Some examples
Like potash, phosphate is also a necessary fertilizer for certain soils. However, unlike potash where reserves are found in many places globally, phosphate is a little more scarce. The bulk of phosphate production stems from Morocco which adds a component of jurisdictional risk to the story. Still, there are still a fair amount of phosphate mining companies to choose from, such as Aguia Resources (ASX:AGR), Arianne Phosphate (TSXV:DAN) and DuSolo Fertilizers (TSXV:DSF).
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.