October 31, 2011 / 6:57 PM / 8 years ago

Corporate role in future food security on the rise

* Food demand on the rise as global population expands

* Global food companies head upstream to ensure supplies

* Investment may help to improve storage, cut food waste

By Nigel Hunt

LONDON, Oct 31 (Reuters) - Food security concerns as the world’s population surpasses 7 billion have prompted global companies to become more actively involved in ensuring future supplies, participants at an agricultural conference said on Monday.

The increased role has come at a time government involvement is hampered by the global financial crisis and led to fears a private sector-led expansion may focus on products with profit potential and neglect more effective alternatives.

“Corporates are getting worried about supply issues they are seeing and are now going upstream. They are working with farmers, working with trading companies,” Cyrille Filott, who heads European food and agribusiness research for Rabobank said.

“They want to increase productivity...You see Nestle planting cocoa trees, there are many examples we are seeing where corporates are actively playing a role,” he said at the CropWorld 2011 conference.

Filott told Reuters on the sidelines of the conference that many food companies in 2008 and again this year were hit by a spike in prices and had started to think about how to get more control over increasingly scarce commodities.

“Unilever as an example are interested in soybeans and are setting up their own supply chain and having control over production, crushing, the whole thing,” he said.

Phil Bloomer, Director of Campaigns and Policies at charity Oxfam said, however, private companies may neglect valuable options which do not generate profits.

“Many poor farmers gain most by the introduction of new techniques rather than simply new technologies. Many private sector companies are not interested because there is not a package of techniques you can sell,” he said.

Food demand is increasing as the global population continues to expand with the 7 billionth person expected to be born on Monday and some forecasting it could rise to 9 billion or above over the next few decades.

MORE FOOD NEEDED

“We need to produce more food. The figures are debatable but we clearly need at least 50 percent more food in the next two or three decades,” said Ian Crute, chief scientist at Britain’s Agriculture and Horticulture Development Board.

Governments are investing in research and development but the global financial crisis has provided a challenge.

“I cannot in all honesty say there is going to be any significant increase in spending on research, not in this spending round. The country is broke, let’s face up to it,” Britain’s farming minister Jim Paice said.

Rabobank’s Filott said there was a “lack of urgency at the government level.”

“From government it is not high on the agenda except in China and the Middle East,” he said.

Hans Herren, president of think tank the Millenium Institute, expressed concern about the leading role played by the private sector.

“We are dealing with a human right here, food. How can you leave all the new ideas in the private sector,” he said.

Filott said private investment could have a key role in expanding and upgrading storage, particularly given the rising value of food.

“I know that some investment funds are looking into storage because they see an immediate return,” he said.

In some countries, about 10 to 15 percent of food crops can be wasted in the very early stages due partly to poor storage and losses mount out as food moves along the supply chain.

“It is important we tackle the amount of food wasted. It has been estimated that as much as 30 percent of all food grown worldwide may be lost or wasted,” UK minister Paice said.

“I think we have a moral obligation to help to reduce this waste by deploying existing technologies on storage and infrastructure to low income countries,” he added.

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