The Role of Agribusiness in Addressing Food Crisis

It is necessary to look after the global food supply chains to avoid crises in the future and curb existing challenges. Such problems can be resolved by appreciating the role of agribusiness and implementing sustainability-driven tactics.

FREMONT, CA: Hunger levels have worsened due to climate shocks, COVID-19, and geopolitical conflicts driving up food, fuel, and fertiliser costs. Agribusiness will play a crucial role in tackling this crisis. The global population suggests that foods must be produced sustainably and maintain nutrients for people to benefit. Farmers must find sufficient advantages in continuing this production. Efforts must augment current production capabilities to meet the growing population.

Both long-term and short-term implications should be considered to understand the role of finance and agribusiness banks, especially in creating a more sustainable food supply network.

Agribusiness banking firms ensure that the funds are well spent and directed at strengthening the global food supply chain and helping partners create sustainable value through different products, programs, and incentives. For example, farmers' banking companies make loans conditional on their sustainability.

To qualify for financing and fair interest rates, farmers must adopt practices and prove that they are adopting the best sustainability-driven practices. By connecting with nongovernmental institutions, these companies help farmers shift from old, unsustainable methods to more dynamic ones.

However, for the farmer, this transition can be fraught with uncertainty and volatility, as it takes around three years to stabilise a business in such a shift. To help farmers in such situations, banking firms reward them for embracing this transition and have tools to support them. This is because, in the long term, it becomes necessary to implement these tougher transitional practices to yield long-term benefits from the global food supply. For example, banking companies have introduced new techniques to help with the immediate fertiliser shortage with a long-term transitional view to more sustainable practices.

Farmers face the issue of nitrogen deposits in the ground and are demonstrating against measures to curb this. Agribusiness banking helps farmers with financing and knowledge perceptions to incentivise them to be more sustainable. Further, they assist farmers in changing tactics and increasing their income through incentives for various purposes, which will limit biodiversity loss and increase the absorption capacity of the land for water.

Along with agribusiness banking, agri-tech also plays an essential role in reaping higher outcomes. Start-ups are bringing exciting strategies to create more sustainable food supply systems. Platforms like the World Economic Forum help these start-ups grow and receive funding and eventually form part of a very exciting ecosystem. These small-scale businesses are changing how the food world works by inventing innovative tools and solutions for sustainability. For example, companies are importing microscopic chemicals into fruit sprays to expand their lifespan and impact reducing food waste worldwide.