The Leak in the Food Chain

It’s a commonly accepted belief that largely due to population growth, insufficient land, water and other agricultural resources, that there is not enough food to feed the world. But is this really true? Has it not been shown over and over again that industry will always rise to meet the demand?

The problems are somewhat complex. While farmers grow plenty of food, the leak manifests itself through various causes. Farm lands and the supply chain are not always optimized or managed effectively. Food is time-sensitive: if not harvested on time – due to not enough farm labor, or lack of  effective and timely ingathering – an estimated 30-40% of food is lost which could be sold to provide profit for farmers (and all the other parties to the food chain) and feed the world population. Less a lack; rather a hole in the chain, or a leak.

If better control existed over food growth, transport, processing, delivery and distribution to food sellers and consumers, this leak could easily be closed, and would likely also translate into substantial profit margins along the entire supply chain. This would also deal with the “food shortage,” since as demand grew, it could be met without having to appropriate more farmland, and would also solve the other value chain pressure – price. If even nearly all of the food grown was harvested and sold, profit losses caused by the leak would be replenished.

Consumers in Search of “Better” Food

There is constant consumer pressure to obtain “better” food for less money, which the aforementioned improvement of processes would help considerably. According to the Start-Up Nation Central 2018 Agritech Report, “better” represents the consumer point of view, indicating three concerns: health, wealth, and environment.

Better Food for Health

Health refers to various food-related conditions: mainly obesity but also allergies and eating requirements, including gluten-free, diabetes, and generally enabling “eating healthier” or finding healthy alternatives, resulting in increased consumer demand for organic produce (food grown without the use of pesticides, antibiotics, and so on). Whether the increased price of organically-grown food is justified is certainly the topic of much discussion, yet the industrialized world feeds into this organic food zeitgeist. Internet and TV food shows promote the use of “beautiful fresh produce” – which sustains the organic buzz, but also broadens the leak. “Beautiful” is perceived as inherent nutritional value, whereas in reality, “beautiful produce” indicates mostly cosmetic value. The bottom line: if food is not “pretty”, consumers will not buy it, resulting in considerable wastage.

Better Food Bought by Wealth

According to the global statistics for industrialized nations, people have never historically spent such a small proportion of their income on food: the current range estimated between 7% – 50%. Global middle classes have more disposable income, and spend largely on leisure, items of personal satisfaction and so on. Furthermore, there is now far greater flexibility regarding where to obtain food, so the industry not only has to meet consumer demand for lower food prices, but also has to find ways to deliver it to consumers, while still somehow making a profit, or “price squeezing”.

Better Food for a Better Environment

Public concern over the way animals are treated has risen in recent years, particularly for animals whose destiny it is to become somebody’s meal. Despite the no less considerable and concurrent rise of veganism and vegetarianism, those who still consume animal products are now more concerned than ever with the humane aspect of animal rearing, preferring that they be treated well, and be allowed to exist for more than ending up as someone’s lunch.

Other environmental concerns include (alleged) deforestation to grow more soy beans, and crop spraying that permeates the soil and gets into the potable water supply. Monoculture is also an issue: when the same crop is repeatedly grown on the same plot of land year in and year out without respite, the soil is eventually depleted of all nutrients.

This is Where Agritech Comes In

Israeli Agritech offers a variety of diverse solutions, which can help close the leak and boost profit margins. Market-analysis platforms that recommend the optimal amount of yield while also guiding farmers to reachable demand; on-farm imaging that reveals crop locations and conditions to growers for size control or dilution; fruit-harvesting drones as a substitute for manual labor green coatings to sustain produce post-harvest; sensor and data-based tracking solutions; and plant-based protein alternatives and other replacement proteins.

Israel is particularly well-positioned to make a real difference in closing the leak, given its experience in building an agricultural industry from scratch with scarce and very limited resources, and is viewed as such across the globe. For example, in Latin America Israel is seen as an irrigation expert, because of the Israeli-invented drip irrigation revolution. Israel has the ability to produce solutions and businesses that are suitable for and accessible to farmers, and by doing so, Israeli Agritech start-ups are making a significant contribution to history.

To read more about the state of Israeli Agritech in 2018, click here  to download the Start-Up Nation Central 2018 Agritech Report.