Farm output needs to grow 70% by 2050
Since land expansion will cover only part of the increase, farmers need to make long-term investments in productivity growth while making agriculture more sustainable. Proactive entrepreneurship and improved financial and risk management skills will be required to change the entire food value chain and close the productivity gap.
The research suggests the options for growing a rural business are numerous, including maximising agricultural production requires investments to increase acreage, productivity and efficiency. However, farmers will also need to broaden their skills and expertise and become better marketers with improved financial and risk-management capabilities.
Farmers can create more profitable businesses by combining entrepreneurship with responsiveness to the needs of customers in the value chain. Farmers can also grow their business by lowering their cost price by expanding in numbers of hectares or animals, thereby further consolidating the agricultural industry. By integrating upstream or downstream activities in their business models, rural entrepreneurs can further increase margins.
A number of factors will produce an agricultural change including: making land fit for farming; increased efficiency in meat production; and sustainability is also essential.
Author of the research, Dirk Jan Kennes, associate director in the FAR research, division said: “If crop farmers can more than double global output through yield improvements, the 70% increase required to feed 9bn people in 2050 should be achievable. However, a stable economic and political environment is crucial to success. Fundamental long term investments in soil and water management, as well as improvements in sustainable agronomic practices, are needed to ensure that production capacity keeps up with demand growth.”
In conclusion, focusing on improving crop varieties and making better use of mineral fertilisers will initially help farmers to improve profits and provide customers with better value food, but these alone will not help meet the 2050 demand challenge. Farmers will need to maximise agricultural production by investing in productivity growth without compromising sustainability, and become rural entrepreneurs with improved financial and risk management capabilities. Just as rural entrepreneurs adapt their role within the food chains in line with the new business environment, other value-chain participants will need to do the same. Business models will need to be re-evaluated.
