Infographic: How to manage the food and water crisis?

While energy insecurity remains a major problem for many countries, the food and water crisis poses more challenges. But what are the implications of this crisis?
Since the pandemic, greater emphasis has been placed on the world’s resources and how to preserve them as temperatures rise, the population grows and the sustainability of the food and nutrition supply chain. water is under pressure.

The conflict in Ukraine has increased pressure on food production and supply and exposed the vulnerability of many resource systems.
Adding to existing fears, during the spring and summer of 2022, many countries in Europe experienced the greatest drought episodes ever observed. However, this is a historically very rare phenomenon in this region. Low rainfall, pollution and over-consumption have contributed to these droughts – almost 30% of Europeans currently face water shortages each year.

The vice-president of the World Bank declared in 2009 that “the wars of the 21st century will be about water, unless we change the way we manage this resource”.
The expenditure required to ensure the sustainability of the food and water system as a whole is estimated at around 30 trillion dollars.

Mark Lacey, Head of Natural Resources Equities, said: “If we don’t change anything, we will see increasingly negative negative spirals. In the scenario of a global warming of two degrees, corn harvests, for example, are destined to decrease by 20%. At the same time, if nothing changes, we will have to use more land for agriculture to feed the growing population. This means more deforestation, which in turn leads to species extinction, and an acceleration of climate change and global warming.

We will witness massive desertification in several areas of Africa, generating food crises and mass immigration, foreshadowing the harshest scenarios. The conclusion could be massive food price hyperinflation. It’s a terrifying prospect, one that hasn’t happened in generations. »
Despite this grim scenario, change is possible. Many businesses and consumers themselves can provide practical solutions to this crisis.

Felix Odey, Portfolio Manager, Natural Resources Equities adds, “We are seeing a lot of data tracking technologies and applications emerging that are helping to boost agricultural yields. Practices like gene editing and genetic modification are controversial in some markets. But if it allows continents like Latin America to leapfrog some of the more advanced agricultural markets, ultimately using fewer pesticides and less fertilizer, the positive impact will be colossal.
The consumer is the keystone of this evolution. If we already started by adopting a slightly more frugal diet, this could have considerable effects on greenhouse gas emissions throughout the food and water sector. »
In this infographic, we examine the main problems and solutions related to the food and water crisis, and observe what collective efforts society can make to solve them.

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This document is for informational purposes only, it expresses the views and opinions of Schroders which are subject to change. This information is believed to be reliable, but Schroders does not warrant its completeness or accuracy. The opinions and information expressed therein should not be relied upon to make individual and/or strategic investment decisions.

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Written by Schroder Investment Management (Europe) S.A., 5, rue Hohenhof, L-1736 Senningerberg, Luxembourg. RCS Luxembourg B 37.799.

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