Global Warming Is Pushing Humanity Toward Hunger. Can It Be Stopped?

which we're going to play in a second. But just so you know who you're listening to, I should say the first speaker was Aloysius Atta, co founder and CEO of farmer Line, company that works with hundreds of thousands of farmers across Africa. And then next it was David mcclennan, chairman and CEO of Cargill, one of the world's biggest agricultural conglomerates. Then Walter Bowman, chairman and CEO of the German pharmaceutical giant Bayer, and finally Sarah Menka, CEO and

founder of the data intelligence company grow Intelligence. How do we feed the world? The tools we have as a planet for answering that question, like so much else we've been discussing over the last few days, has had changed radically in the last ten or twenty years. The technology, the underlying technology, the data, the intricate global supply networks

have all changed. But we know that the climate, the environment has also been changing before our eyes, and it's changing almost by the day, making the challenge harder in in many ways, we've already got crop yields affected, severely affected by climate change, and some of the most vulnerable economies in the United Nations predicts average crop yields could fall by thirty if we don't change, even as the demand for food by increases by So that's the long

term challenge. But as I've increasingly realized talking to our panelists, there is a short term crisis in the agricultural supply chain that has just unfolded in the last few months. Is now raising real questions, particularly for for farmers on the ground, not just for thirty percent rise in food prices that we know about, but fertilizer prices going to an all time hi how do we feed the world

in this changing environment. We've got all pieces of that agricultural supply chain represented here, the science behind the resources that farmers use. Someone who works closely with farmers, the businesses that get the food the crops from farms around the world, and now the data we have to try and solve that question more intelligently. Eloss I mentioned at the start this this crisis related to fertilizer prices that I think some people at least in this room would

not be fully aware of. Just paints a picture of that. What's the situation right now, what's the challenge that farmers are facing today? Thanks thanks for the question, um so our focuse my opinion on small skill farmers in places like Africa. The reason is that they are often not in the middle of most conversations and they struggle to ask us high quality fertilizing seeds just to give contest. Fertilizers like mp GE were invented like of our hundred

years ago. African farmers currently only able to apply about wing kilograms pertector while their counterparts in the rest of the world apply overwhelming twenty kilograms. So they struggle, but at the same time they are tasked with this in the most responsibility of feeding one tail of the world today. If you look at the situation happening in Madagascar right now, where for the first time in our modern history where there is farming and there is a fear of food

insecurity for close to a million people. And this is not caused by war, but it's caused entirely by climate change. The time is now to come up with innovation and services that actually ensures that small scale farmers in places like Africa actually get high quality of tidence is on time and the support that they need to grow more food to feed the future. And Davian mclearend just thinking about to say that the short term situation, how how bad is it? I think the food and egg system

has proven to be very resilient, perhaps surprisingly resilient. I think it underscores the importance and the benefits of an interconnected food supply system. So we've been able to get food from where it's produced to where it's needed, with some exceptions that have been spot shortages. There's been disruptions. But you talk Stephanie about the impact of climate change and you think about reduced yields, there's also the components

of climate volatility, for example, increased hurricanes. So one disruptive event that we were impacted by was the hurricane that hit the Gulf of Mexico and Louisiana early in the fall, which we lost two of our facilities where we load the grain that comes down the Mississippi River put it onto barges or two ships to get it out, and we were shut down for several weeks. We have one

facility that is still getting up and running. So, notwithstanding the inevitable natural disasters coming from climate volatility, by and large, the food supply chain has worked pretty well in the last year or so with COVID, But nonetheless it's something we cannot take for granted. Berna Berman, I've talked about people at different stages of the fire chain. New fundamental to the science, the products that farmers are putting into their ground. How is how is that piece of the

challenge changed in recent years. There are three things that are really important. Number one is that agriculture has become more sustainable. Yeah, now more than ever if you look at the massive impacts that climate change is going to have on all of us, and that means that climate that agriculture has to contribute its part to remove of

greenhouse gases. So we have to find these solutions. The second one is um that we have to reduce the footprint that is being used by agriculture while at the same time increasing yields because as you mentioned, we need to produce much more food in the next twenty thirty

years in order to feed to growing population. So increase while at the same time, as a minimum, not increasing acreage, but ideally bringing more intensification on existing acreage, while at the same time freeing up acreage for reforestation and comments aquestration.

And the last thing is that we have to find much more resilience in agriculture systems, which means, um you know, better varieties that can stand drought, your other properties that will plan make plants more resilient, and with that create

your better and more predictable harvards all together. So the two examples I would give, since you also touched on on fertilizer, is that your fertilizer has been a real blessing to modern society because without the invention of nitrogen fertilizer about hundred years ago, we wouldn't be able to feed the people that we have on the planet today.

Having said that, after a hundred years, there may be you know, the next big revolution coming that is informed by biology on one side and bio technology and on the other side by artificially intelligence. That's what people call

the bio revolution. And what we're working on specifically is to find ways to teach plants to fixate nitrogen out of the year rather than having it produced and then put on the acre, which is a huge contributor to global warming because that alone accounts for about four percent of greenhouse gas production annually. The second piece that is

equally important is when it comes to resilience of plants. Um. You know, in the sixties there was you know, one of the big then called green revolutions that was driven by the inventions of sir normal bollock with a shorter growing and more resilient wheat that tripled the yield in India.

Today we are working on something similar in corn. We are a short statue of corn which is less susceptible to lodging and which can be planted much more denser, yeah, and can also yield Other agriculture practice is the next big thing to come, and you know we've started that with your some preproduction launches in um in Mexico and we are scaling up over the next years to come. So those are the answers that we're working on with

with our people, Saramanca. When we think about sort of squaring the circle, where does where does data and where does where does grave intelligence come in? Yeah, I mean in some ways, I think the answer is capital. Right, all of this is going to cost money, and that money comes with risk, and you have to price the

risk associated with the capital that gets deployed. And uh, you know, the example I gave you was I was in my past life and an energy trader, and when I first started trading oil and gas, if a producer came and wanted to hedge oil two years forward, it was very difficult for us to go out into the market and sell that two years forward. By the time I left to start grow, we could sell it ten

twenty years forward. That funded all sorts of innovations in the energy market that made things like shale oil, shale gas possible. Gas prices went down, coal got priced out of the market, renewables became a possibility, so that there was really long term changes that happened because capital flowed well.

Capital flows well when there is good information, and so data becomes necessary infrastructure for driving transformation and change, because this change is going to require lots and lots of capital and lots of long term capital, and agriculture capital today is too short term. I mean I think that and and data is infrastructure, which is just view it

as a highway. Probably Bloomberg is the one company that you don't have to give elected to about the importance of data and the impact the power of data and transparency in pricing, in in fueling a whole global company. Let's lean anything else that the capital piece. I know, Alosius, you're that's one of the things that you're focused on trying to bring to farmers, So just explain that. But well, so the lists of funding for most farmers, and you

know in place like Ghana is mostly banks. Banks required farmas to bring some form of cola trying in order to ask as capital. That alone is a limiting FATA on how much money farmas can get. And farmasing need money for front a few things they need money to ask as deferiti, Lisa and seats um and without affordable capital, without enough blended capital around, farmers alre often constrained on the amount of fertilize that they can get to tell

the alliance grow more food and make more money. So there's a massive opportunity, you know, to food a gap and that's what farmer Line does. We digitized O by million farmers and we finance farmers and we use alternative data sources to give us information about the farmer and that allows us to take risk in giving them money to purchase fertililliance seeds. That allows us to purchase their food cross at the end of the season so that they can make more money. But were one company, we

can't do it all. So there's a need for governments. There's a need for BEERFCE corporations to come together and find new ways to make capital affordable for farmers so they can be able to get all the tools that they need in order to grow more food, you know,

to feed the future. But how much is so when Berna Berman talks about the technological solutions of how do you use you want to use less acred, you want to reforest, you want to have the how much does that figure in the day to day calculations of the farmers that you work with, your your count down to training you know, and and giving our information to farmers. Right, So, the biggest challenge today is that the information that actually exists is in it's in English, it's in its online,

it's not informers that farmers can easily understand. And if you pass information down to a farmer and you don't train them properly, um, if there's no proper training, there can be in a change in behavior, and there's no training in behavior, they will not be any adoption. So the transition from both practices to climate smart practices actually

slows down. So there is massive room to figure out a way to use digital tools to offer information to farmers in the language and the format that they can easily understand. GNA alone has fifty eight local languages, fifty

Nigeria has two hundred. So if you want to be able to communicate, um, you know, you know how to use SIS well, how to uh you know plants to reduce the impacts of climates on the soil, and you need to be able to meet it from a way they are and look, our language is one of the ways to go giving them information in the language I understand and leriaging. They trust network that is around farm is the agents in their community destination officers. Those are

still very relevant. David, I mean I think that the problem is often that the resources will go to the developed markets. You go where the money is. And actually when it comes to something certainly we know the environmental challenges is the greatest in the places where perhaps the market opportunity has been smallest in the past or less obvious. So how I mean, are we doing enough to help

farmers do this kind of innovation? Are we spending enough time in capital where it's near the most answers know?

And particularly in Africa, I mean Ala Wishes a very descriptive spokesperson of what can be done in Africa for example, So years of guys in Zambia where we are, we have we had a farmer training program at the time and they apply their fertilizer with a bottle cap from a soda bottle, and so you can, you can and you can triple and quadruple yields by here's modern fertilizer technique. Here's when you should bring your crops to market, Here's

how you can store them effectively. Here's modern watering techniques, building up burms so to prevent erosion. But the scalability at a small scale, working with farmers, and so I've listened to each one of the panelists, it all comes back to the farmer, whether it's data or seed technology. To Sarah's point about getting better data to help to

allowish is talking about training. That's where it begins. It's not just yields, but it's also in terms of sustainability, which is a topic I would imagine we'll start we'll talk about in a few minutes. I feel like we're talking about it now. Um. But then you mentioned the revel green Revolution, and obviously there's been at stages in the last thursy or forty years where that kind of innovation has been called introversial. That's been questions about the

impact of it GMOs whether sort of latest round of that. UM. I would say the debate has been reopened by the urgency of some of the challenges that we're facing on the climate front. Yeah. Yeah, that that that's an interesting one. Stephanie. The first question is has that controversy been going on

for the right reasons or not? And if you die back to when the controversy around GMO began, it was actually a discussion that originated a green piece when it came to the next big campaign, yea that you could spook most people with, Yeah, and which better area to do that. Then with food that's where had started. You said, hey, we have to go after that or against that technology because that's a frank and foods that's that's a fantastic

fundraising opportunity. And what they did with it. Yeah, and depending on who you talked to today, they will also acknowledge it is that they prevented an awful lot of people, you are, from having the benefits of that technology. In particularly if you look at, for example, vitamin A and rich rice golden rice that has been deregulated and improved in a number of countries by now, that would have prevented many, many many kids from you know, getting blind

because of that vitamin deficiency. So having said that, I think there's an increasing acknowledgement of how important that technology is for a number of reasons. Also when it comes to so standable farming practices and obviously today both with traditional gmore and then on the horizon new modern breeding technologies, which means applying new technology such as crisper cass gene editing for position breeding that is quote unquote nature identical

and not translandic. Uh. This is something that we see with let's say renewed openness also when it comes to deregulation. And before we entered the stage, I was talking to a large use that we see that now happening in Frica, which is interesting that Africa takes the lead here is some of these approvals now in in Ghana and I area were actually Europe is falling behind. We have it in North America, we have been Latin America, and Europe has been which has been a little bit agnostic to

some of these modern technologies for the wrong reasons. It's falling behind. But there's hope that we'll catch up also with new legislation that might be uh, you know, coming over the next years. David on the just on the g M A piece and if it's not everyone's popular favorite subject, but when you think when you talk about the long term picture is it does it have to be part of the story for all of the discomfort somehow it absolutely does. So, I mean, I'm about to

start my ninth year in this job. So when I first started in this role, GMOs were the hot topic, whether it be protesters and literature, and we could not figure out why because ultimately GMOs I mean they got branded frank and food, but Ultimately, they have been behind since the ninth you know, early part of the of the twentieth century, increased yields, increased access to food, increased farmer livelihoods around the world, and they're a tool for sustainability.

But that the dialogue, the storyline got into the system, which is they're bad for you. There you shouldn't consume them. But things like um, you know what Warner talked about cross breeding or you know, they're mangoes have been gmo engineers since the nineteen sixties, but I think people became

fearful of them. To the follow up, Stephanie about soil health, you're absolutely right, and this next iteration or I'll say, the current iteration of sustainability in farming has to include regenerative agriculture, whether it be no till, whether it be crop rotation, but to improve soil health, and you soil for carbon sequestration is becoming more so and will become more so part of the solution to improve farmer livelihoods

and to improve the greenhouse gas footprint of farming. Sustainability has been part of agriculture since agriculture ever started, right

like since the Neolithic revolution. Essentially and so I think sustainability is is is a core part of the agricultural ecosystem, and so it's not the data as an answer, but that it is actually agriculture and people who understand agricultural markets, I would argue, probably understand our earth, the environment, and climate in ways that the average person in this world don't understand because their reality. Every single day. There was a there was a famous quote I had seen once

that said eating is an agricultural act. And it was a T shirt actually at a coffee shop, and I I bought it. Then I went and I got my team to make a new version of that t shirt, which was living as an agricultural act. Because if you ask people the question what's your first interaction with agriculture when you wake up in the morning, most people say

my cup of coffee. They forget about the sheet of cotton they slept in, They forget about the fact that the soaps they used have oils, they forget about the mint in their toothpaste. It is so a core part of our life and every part of the way we live, and we don't understand it. And I think I really believe that sort of the contribution that the agricultural industry as a whole can have two dialogues around sustainability and to driving change in sort of the world is large,

and I think we're only just beginning. Feeding the world is partly, but the more you get into this debate is partly about not throwing food away. We're throwing away a third of our food. I mean, David, isn't that a How does a as a business like you would

address that issue? Yeah, it's I mean food waste exists at all parts of the chain, and so if anybody who is American or has dying in American food service knows the portions are obscene um and rarely get fully consumed or they shouldn't be consumed for for health purposes. But I think it's what we're focusing on is waste

on the front end of the supply chain. So I think when you focus on improving farmer education, modernizing farming techniques, the use of GMOs to better utilize the resources that go into production of food, to production of everything. To Sarah's good point, that's where I think waste can be eliminated, and it's not as visible. People don't see the front

end of the supply chain. They see how a to waste they you know, as I said, in food service and restaurants, or it might be in food has gone bad. But I think there's various parts, and it might be in the middle part of the supply chain where it gets shipped or processed. But there's a lot of parts of the egg and food supply chain where waste contributes to inefficiency and high costs. But I think what the

consumer sees is just one part of it. From Cargio standpoint, we're focusing where we're gonna have a bigger impact, which is on the front end, where where and when it's being produced. It couldn't help noticing that Elon Musk had a bit of money to spend on solving the problem of global hunger. I think it was six billion, six billion, So always says, how should he spend his six billion? What was your plan for him? I'm sure you sent it to him. You tweeted, well, you know, I wish,

I wish i'd threaten him. Um, I'm sure you tweet back. Yeah, Like, if I gets six villain, I would invest in infrastructure, right like because fundamentally, like our invest in moving farmers, small skill farmers from takers to a place where they have more options and choices. You and I we can go on Amazon, Google and or whatever we want. Farmers are often takets of services. We have one guy in the village that specialized and that's it. There will be

some eight projects that comes and that's good work. That would last for three or four years and then they'll go away. Right Like, what has to happen is that they need to have more options and choices where people compete on quality and price. UM. So I will build infrastructure that will give them more services on the farm, and that will give the more services in life too, because farmers are humans and they um In order to for them to keep growing food, to take care of us,

they need to be healthy. They need to be well in life. So that's what I will invest money on. And if you're build infrastructure, if they have good roads, they have good storage facilities, they would be able to reduce both others lots. Right, they will maintain quality of food. When they maintain quality of the food, they get paid more.

Right so, and if they want fertilizer like today last year, but this time the price of mp K was two in two paton today's thousand dollars, right, If they have the infrastructures fertilizer, it's gone up five phones exactly right, and they did nothing to to contribute to that. If they have the if there is an infrastructure that people would be able to easily reach them and they'll compete on quality and price. So that's what I'll use the

money for. If given the chance, Day didn't have to ask you, also, where do you think it's the market failure that six billion would help solve? I would go back to what I was saying about farmer education, training, regenerative agg the points that we're just made soil health to increase syields but also increased livelihoods in places like Africa.

And then I would also say, uh, infrastructure, so oh yeah, the US just passed a bill on that, but does it get to places like ports and river ways South America as well. So you've got this massive crop growing region of the world, South America, which doesn't yet have the appropriate infrastructure to get it out of the fields and to the consumer. Doesn't do any good if you increase yields and increase farmer training and education. If you can't get it to where it's needed. And so, but

that's also true. You know that there's aging infrastructure in the US. What does it take It was the disruption in the Gulf from that hurricane avoidable because of better infrastructure maybe maybe or infrastructure that's going to be able to stand up better to the natural disasters which are inevitably coming with increasing frequency due to climate of volatility. And then I would say whatever is left over to give it to Sarah and Aloish's company to help farmers

and then build the data. Sarah, I suspect a lot of the different pieces have been said, But where do you think would be a really kind of catalyzing investment that Elon could make? Well, I was gonna say, it's going to take a lot more than six billion dollars, and I don't think we want to trivialize the amount of investment it's going to take. When we talk about infrastructure, right, it's infrastructure in terms of storage of grain for farmers, right.

And when you are looking at um small scale farming scale doesn't existence. So therefore the cost of infrastructure infrastructure is artificially too high. So how do you actually create aggregation methodologies that help us develop scale in communities and in parts of the world where that scale doesn't exist, right,

I mean, these are really expensive, like undertaking. And so my my answer to the six billion dollars is I would actually use that to create a financial institution that would help create the mechanisms to start financing all the changes that then need to be made. Right, And I think one of the things to think about when thinking about sort of the financial markets as it relates to agriculture that I had not fully appreciated when I left to start grows. Only a handful of agricultural products are

even traded on a formal exchange. Most agricultural trades happen day to day, week to week. That's it. That's the way most of the market works. And we have to change that because I think and you change that through capital, and I think creating new forms of financial institutions that truly innovate new models of financing agriculture is a place that I think one could put a lot of good use.

You know, the six billion dollars could actually realistically create that sort of next level infrastructure that I think is necessary. You're all in different ways. At the heart of this challenge, do you sometimes wonder you think this is actually the time we're gonna We're going to fail even without all of our expertise. Do you have moments of doubt? No, I would rely on the ingenuity of our people and the power of science. Has said it earlier, Yeah, that

level of confraud is currently as high as it's never been. Yeah, we just have to plan to ride solutions with science and technology to solve the problems of society and the planet. And I have absolutely no doubt that we are going to succeed. Well, I guess if there was ever a twelve months that showed us the rightness of being confident in science and the miraculous nature of science, but also the humility we need in face with some of these

rising challenges. It's the last twelve months, but thank you to all of you, and thanks for listening. That's it from the special edition of Stephonomics. We'll be back next week with a bit more from Singapore and from other parts of the world. This episode was produced by as Hendrickson as Ever and the head of Bloomberg Podcast is Francesca Levie m h m hm m m