More investment is needed if the agricultural industry is to meet growing demand as increasing urbanisation within an expanding middle class are boosting demand for food.
Increasing the amount of land under cultivation and improving yields from existing land by irrigation, increasing the use of fertilizers and pesticides and using improved seeds are the classic supply side responses in the food and agribusiness industry.
The desire to increase yields (in particular in the face of extreme weather events) has stimulated debate around the use and production of genetically modified foods with GMOs (genetically modified organisms). Many respondents stressed that crops have to become more weather resistant and hardy and they expect that there will be a greater use of food incorporating GMOs in coming years. Consumer sentiment in this area appears to be changing, with more receptive attitudes developing in markets that were once quite opposed to GMOs.
Public opinion (particularly in the developed world) is still not sufficiently informed about the value of GMOs or how the use of genetically modified crops could in fact reduce the need to use chemicals to prevent disease or damage from pests.
When asked about the factors that affect price volatility in the agribusiness industry, respondents emphasised that it is the fluctuating balance between supply and demand that most impacts price volatility. It is then important to look at the factors which affect supply and demand to understand the price volatility seen in the food and agri industry in recent years.
In turn this is putting pressure on the agribusiness sector to be more productive, innovative and efficient to meet increased demand.
53% of respondents identified that consumers and retailers have become more receptive to genetically modified food over the last two years. 71% of respondents expect an increase in utilisation of genetically modified foods or inputs over the next two years. 67% are looking to increase investment in food safety in the next 12 months.
