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Why We Need A New Food System Now


Sloane Ortel

Founder and Chief Investment Officer of Ethical Capital.

Today’s supply chain snafus might be setting the stage for a broader, more complex catastrophe in the global food system. The availability of potash, phosphate, and fossil fuel derived agricultural inputs that we rely upon to feed earth’s growing populations has already been materially reduced, and these stresses could take as long as 3-5 years to resolve.

The timeline comes from to Peter Zeihan, an analyst I’ve been following for close to a decade for his sharp views on geopolitics, energy, and international trade. His YouTube channel is free, and has been illuminating during Russia’s recent war of aggression, so I took the opportunity to dig a little deeper into how his views intersect with something that should be of interest to everyone on the planet: our food system.

He would probably want me to underscore one point at the outset of this exploration: modern agriculture is an industrial process. It’s true that regenerative approaches are growing in popularity, but at the moment only about 5.5 million of the United States’ roughly 900 million acres of farmland is certified organic. That’s well under one percent.

So as a practical matter, synthetic fertilizers are currently supporting about half of the world’s population.

Graph of the world population that our current food system can support with and without synthetic nitrogen fertilizers. Approximately half of the people on earth rely on unsustainable synthetic fertilizers to survive.

The chart above is stark enough before we pause to consider that supply chain disruptions (and the most acute threats to food security) are not evenly distributed around the world.

North America is unique in that we have plentiful sources of potash, phosphate, and natural gas in close proximity to our midwestern “breadbasket.” Only a few other places in the world are so fortunate:

  • Eighty percent of global potash production comes from Canada, China, Belarus, or Russia.
  • China, Morocco, and the United States produce two thirds of the world’s phosphate.
  • Russia and the United States are the world’s two largest producers of natural gas.

You may have noticed that Russia featured twice in that list. Both Mr. Putin’s Petrostate and allied Belarus are now subject to sanctions, which effectively takes a non-trivial portion of the market offline.

It’s too soon to tell what this will mean exactly, but just a few days ago the Interim Chief Executive of Nutrien, the world’s biggest fertilizer producer, said “We are going to run our plants. Run them flat out. Could we see interruptions in exports out of Russia? Yes. Can we see plant closures? We could.”

Such a disruption would be poorly timed, since the northern hemisphere’s temperate agricultural regions will be in the full bloom of spring before too long. And fertilizer only works if you put it on the plants before they grow. So in the short term we’re left hoping that these shipments can make it to their destinations.

The Food System is Unsustainable at Best

Of course, it bears mentioning that none of this is remotely sustainable.

For one thing, potash, phosphate, and fossil fuels are not renewable. They need to be extracted, transported, refined, and then transported again to reach their final destinations.

Upon arrival, they also have an unfortunate tendency to leach into groundwater and literally strangle waterways with out-of-control algal blooms. But even if those negative effects could be contained, farmers would still need to keep spending substantial sums re-applying these treatments every year. And their soil wouldn’t be any better off after all of the expense and complexity involved.

Farmers will do their best to adapt. Some might stop planting corn in favor of soy, which needs less fertilizer to grow than conventional cultivation methods. They might even take steps towards adopting regenerative practices by using manure in place of expensive fertilizers.

But that won’t help the folks in the global south who are already facing food insecurity.

Inequality in per capita calorie intake in 2020 by country. This shows that the global south is profoundly more exposed to disruptions in food supply than the rich world.

It’s hard to pinpoint where on the planet these pressures will manifest, but one can safely and sadly assume that the darkest-tinted countries in the map above are set to carry most of the weight.

This is a policy choice. And delaying our adaptation leaves many vulnerable populations around the world needlessly exposed to famine.

Even if we were to forget how to make synthetic fertilizer, we could still adapt our agricultural system to feed everybody on earth and entirely mitigate the risk of famine by phasing out animal agriculture. This would free up 75-400% of the land currently in agricultural use (depending on the way you measure), substantially reduce humanity’s carbon footprint, and prevent billions of living, thinking creatures from experiencing needless suffering.

It would also create a much more resilient economy, since we wouldn’t have to worry about geopolitical tensions spilling over into famine with the same sort of urgency. The expensive, complicated, and non-renewable inputs that are pushing us towards that extreme situation this time around would be replaced by manure and compost, which can be generated locally.

Can We Accelerate This Transition?

We can sure try. But it will be a complex undertaking, and it’s important to make sure that you’ve given yourself the space and support to take on this kind of challenge. True change starts from within, so this can be as simple as making an authentic commitment to try your best and follow any resulting instincts.

If you do only that, I believe it can make a world of difference. After all, that’s basically how I wound up starting this firm, which has allowed me to help others build financial security for themselves by aligning their capital with companies that are driving positive change in the world.

A little more than 16% of our flagship investment strategy is invested in companies that are making our food system a little bit better and more resilient every day. They do this by:

  • Making low-cost loans available to family farmers and sustainable electric cooperatives,
  • Pursuing cutting-edge research into synthetic biology, and
  • Providing early-stage capital to the next generation of agriculture and food-tech startups.

It’s very, very cool that we’re able to make a professionally managed portfolio of companies like these available to almost anyone who can open an American brokerage account, regardless of how much money they have available to invest.

But I hope to compound my firm’s impact even further by sharing our thoughts openly and regularly through missives like this one. If you’ve enjoyed it, say so! I would love to hear from you.

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