CDP at the Finance in Common Summit 2021: the report on the sustainability of agri-food systems presented
The world population will increase by about 25% over the next 30 years, reaching a total of around 10 billion people, but the current agri-food system it is unable to respond with adequate levels of output. This is the worrying figure that emerges from the report “Moving towards sustainable agri-food systems: analysis and strategic scenarios”, study on sustainability in agri-food systems supported by Cassa Depositi e Prestiti and presented last week at the Finance in Common Summit 2021, an event organized in collaboration with the International fund for agricultural development, the specialized agency of the United Nations for the increase of agricultural activities in backward countries, the World federation of development finance institutions, the International development finance club and the Agence Française de Développement.
The report collects a preface by Cassa Depositi e Prestiti and three papers written by Martin Kenney of UC Davis California, Rob Vos of the International Food Policy Research Institute e Laura Viganò of the University of Bergamo. Important researchers engaged in the imminent challenge of the agricultural system, which needs an immediate reconversion in terms of sustainability. Current food systems, in fact, contribute substantially to harmful emissions, accounting for about one third of the global production of climate-altering gases.
The report shows that the growing digitization and use of digital platforms have the ability to provide not only tools, but also resources and opportunities to generate innovation. Innovation with positive environmental impacts, such as reducing the use of harmful chemicals and less soil erosion, and social impacts, such as increasing farmers’ income. To understand the extent and complexity of digital technologies that will affect agriculture, their omnipresence must be considered. Consider that if a modern car contains more than 3,000 semiconductors, a modern tractor is likely to have an equal or greater number of them. Likewise, in 2020 it was estimated that 40% of the value of a modern car was in its electronics, including parts and software and this is certainly the case with agricultural machinery.
Exemplary is the case of data collection platforms, that the private actors of the agricultural system are implementing to make the products and, above all, the processes of the agri-food systems more efficient. In this context, global platform giants such as Amazon, Google and Microsoft are also exploring how to enter the agri-food system. To seize these opportunities and avoid distortions, however, the public sector and BPS must ensure adequate infrastructure and fair data management to ensure that the value created is not completely monopolized by the most powerful actors in the production chain.
However, the new technologies and innovations that can contribute to reducing the negative environmental impacts of the agricultural system are not enough on their own as a solution. Enabling factors are in fact the greater investment in research and development, the incentives to allow private actors to adapt, the adoption of technological advances and, not least, the change in current consumer nutritional habits.
An important step towards a more sustainable agricultural system could involve a reallocation of the current support for public agricultural policies, which – counting for more 700 billion dollars year around the world – offers an excellent opportunity as a source of public funding for innovations in the agri-food system and for incentives for producers and consumers. In this context, the need for international coordination clearly emerges, if only because climate change and environmental sustainability are global priorities that transcend borders and because national policies have strong international “spillover” effects.
The Public Development Banks, which together with the Develpment Finace Insitution hold total assets of 11.5 trillion dollars, play an important role as resource catalysts and promoters of innovative financial instruments. However, improvements in processes, risk management, accounting and accountability mechanisms are still required.
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