Food shortages, caused by supply chain disruptions emanating from various events across the world such as the Covid-19 pandemic and the Ukraine-Russia conflict have amplified long-term challenges to the sustainability of global food production which include population growth, climate change, and increased reliance on resource-intensive farming.
Fortunately, positive change is happening across the food production value chain, Dale adds. Sustainability concerns are increasingly being understood and recognised across the continent, with food producers and their partners beginning to look at new sustainable agricultural practices. We are also seeing a shift with regulators beginning to shape new requirements and consumers calling for change.
* Organic farming: Moving towards more diverse and less intensive forms of food production comes with profit potential. A recent academic study on the performance of 55 crops grown on five continents showed that, despite higher labour costs and lower yields, organic farming is up to 35% more profitable than conventional high-intensity farming due to the premium price organic products command.
“To fix this, supply chains need to become more transparent as societies are increasingly demanding reliable information on where their food comes from,” says Nqaba Ndiweni, PwC Africa Consumer Industrial Products & Services leader. * Environmental, social and governance requirements: The intensification of environmental regulation will impact food companies directly in at least two ways: mandated reporting on ESG performance will become an increasingly important factor in investor allocations, lowering the cost of capital for ESG-compliant businesses; and the emergence of hard targets for greenhouse gas emission reductions by 2050 will increase the cost of carbon intensive agriculture.
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