The Fourth Industrial Revolution is changing how we grow, buy and choose what we eat

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Juergen Voegele, Senior Director, Food and Agriculture Global Practice, World Bank

Technology has revolutionized agriculture at regular intervals, from the invention of the ox-drawn plough in ancient Egypt, to the first gas-powered tractor at the beginning of the 20th century. In the 1960s, the Green Revolution rolled out high-yielding cereal seeds, chemical fertilizers and pesticides.

The Fourth Industrial Revolution is no different. In 2017, a robotic farm in the UK harvested its first fully machine-operated crop. Five tons of barley were sown, fertilized and harvested by autonomous vehicles. In the next two to three years, digital technologies in agriculture will have a sizeable market coverage around the world, estimates suggest.

In January, a World Economic Forum report developed in collaboration with McKinsey & Company identified 12 emerging technology buckets that have the potential to do good across several dimensions of the food system. They could change the shape of demand for food, through alternative proteins and personalized nutrition, for example; promote linkages along the food value chain, through mobile service delivery, big data, the Internet of Things and blockchain-enabled traceability; and create effective production systems, through water sensors, gene-editing and other scientific advances that make agriculture more precise and high-yielding.

Together, these innovations will transform a sector too often characterized in too many parts of the world by poverty and waste. But the potential of Fourth Industrial Revolution technologies to advance sustainable development in rural areas cannot be taken for granted. Although world food production quadrupled between 1960 and 2010, in large part thanks to technology and an expansion of trade, this did not lead to uniformly better outcomes for food producers, consumers or the environment. Farmers increasingly find themselves in a high volume/low price equilibrium, where the gains in productivity that lift them out of poverty are partly eroded by the lower prices associated with increased supply.

Although rising rural land and labour productivity helped countries such as China and Vietnam move millions of people above the breadline, poverty remains an overwhelmingly rural concern. About 80% of the world’s extreme poor live in rural areas and 65% of poor working adults make a living through agriculture, a 2016 World Bank analysis found. Paradoxically, the very people who spend their lives growing food are some of the world’s most food insecure. Globally, hunger still affects 815 million people.

While food production has successfully kept up with population growth, diet-related diseases have emerged as a leading cause of premature death. Obesity is on the rise in virtually all regions of the world. Sub-optimal nutrition now affects the health and prospects of approximately three billion people. That’s nearly one in two people on the planet. Stunting holds back one third of the children in sub-Saharan Africa and South Asia, and robs them of their future potential in an economy that will increasingly value brain over brawn.

Modern agriculture is also responsible for an enormous share of environmental degradation. “With current diets and production practices, feeding 7.6 billion people is degrading terrestrial and aquatic ecosystems, depleting water resources and driving climate change”, states a recent article in Science magazine. In other words, our unchecked appetites are causing havoc. Food production is responsible for 26% of anthropogenic greenhouse gas emissions, 32% of terrestrial acidification, 78% of eutrophication and two thirds of freshwater withdrawals. It occupies 87% of the world’s ice-free and desert-free land.

The real question, then, is not whether Fourth Industrial Revolution technologies will help us grow more food. It’s whether they have the potential to shift the current model to a smarter system that could leave producers, consumers and the planet better off. Some of the most exciting developments may not be on the farm at all. While much attention has been focused on farm-level improvements, an equal if not greater amount of disruption may be occurring in supermarket aisles, online and through aggregation apps.

The potential for change becomes apparent once you consider the complexity of the food system. It matches the 570 million farms that produce our food with the 7.6 billion people who consume it. Add to that picture roughly 100,000 upstream enterprises that supply farms with inputs such as seeds, fertilizer, finance and crop insurance, and millions of downstream enterprises moving, processing, and selling their outputs, and it’s no wonder that data-driven companies including Amazon and Alibaba are getting into the food business.

“It’s beginning to become clear why Amazon bought Whole Foods”, CNBC reported in June, one year after the acquisition of Whole Foods by Amazon. “For one, it’s getting its hands on lots of shopping data, which will come in handy as Amazon expands its online grocery business and private label offerings.”

Digital technology is a game-changer for the agri-food system, because it dramatically reduces the cost of matching buyers and sellers in markets. In turn, greater efficiency in upstream and downstream markets could result in higher prices for farmers and more competition between middlemen.

Cargill, the American grain trader and beef packer, is reportedly having to rethink its business model and move toward more integrated food operations as a result of digital disruptions, including the democratization of crop pricing information. By connecting agri-entrepreneurs directly with buyers, the Chinese tech, e-commerce and artificial intelligence company Alibaba is reportedly reducing poverty in remote villages. A future in which rural communities are fairly rewarded for cultivating and conserving local resources would be a welcome development indeed, upending decades of rural to urban migration.

A new food volume/price equilibrium would also leave the planet better off, by reducing the water and land used, greenhouse gases emitted and other pollution streams generated to produce the staggering amount of food that is never eaten. (Experts estimate that about one billion tons of food are thrown away every year, accounting for 8% of global greenhouse gas emissions.)

The food sector is currently so riddled with inefficiencies (otherwise known as “market failures”) that it has started to attract serious tech business interest and solutions. In the past few years, fora such as Seeds & Chips in Milan and the EAT Forum in Stockholm have become hot spots of creativity, where entrepreneurs who are rethinking food mingle with advocates, policy-makers and researchers. Winnow is a start-up zeroing in on food waste in commercial kitchens by connecting scales and data analytics. Protix is betting that it makes more sense to feed insects, raised locally on food waste, to Dutch poultry, than to use Peruvian anchovies, shipped halfway across the world then ground into fishmeal.

While times are exciting for ag-tech entrepreneurs, it’s too early to declare victory for inclusive and sustainable development. Disruptive technologies could help distribute food, wealth and data, reduce hunger and waste, and empower farmers to produce more valuable, climate-resilient and nutritious foods for their clients. Or they could spur a consolidation of the food sector, allowing a few companies to dominate the market, limiting food choices and expanding bad practices rather than correcting them.

Some of the policy choices that can steer the food system toward better outcomes have been clear for years. Green certification schemes, user-friendly nutrition information, local procurement rules and incentives for conservation all have a role to play in the battle for more nutritious and sustainable food systems. Reforms of the European Union Common Agricultural Policy have led to reduced fertilizer use, more crop diversification and payments for ecosystem services while continuing to support farmers’ living standards and high productivity. In July, four of the world’s largest food companies – Danone, Mars, Nestlé and Unilever – announced they were forming an alliance to advance sustainability and nutrition food policies in the US.

What’s less obvious is the policy framework that governments should adopt in relation to farm and consumer data, and how to support a healthy, diverse, competitive and truly sustainable food economy well into the future.

Change is about more than technology. Policy innovations are urgently needed. At stake is the depth of agricultural transformation and the maximization of its dividends for millions of small-scale food producers, as well as for food entrepreneurs and consumers around the world.

This article is part of the World Economic Forum’s Fourth Industrial Revolution for the Earth series, which explores how innovative technologies are beginning to transform the way we manage natural resources and address climate change and other environmental challenges caused by industrialization.