Companies have a “good opportunity to make money” building the infrastructure needed to feed a world population growing by some 100m people a year, a top executive at oilseeds giant Bunge has said.
While the need to raise crop production by 1.7bn tonnes in the first half of the century to feed the growing population had been appreciated, the problems of transporting and storing the extra had been largely ignored, Carl Hausmann said.
“The infrastructure needs of the world have been underinvested in over the last several year,” said Mr Hausmann, the former chief executive of Bunge in Europe and North America, now head of the agribusiness giant’s corporate affairs.
“But if farmers do not get more facilities to store, deliver crops, they cannot increase their production. Infrastructure is a linchpin of the entire agricultural system.”
Public vs private sectors
Developing the transport facilities and silos needed to meet this demand looked likely to come down to private companies, given the squeezes on public sector finances.
“Most will be done by the private sector,” he said. “Private companies will see this as an opportunity to invest and make money.”
Bunge was exploiting this opportunity through a $200m export facility it was building on the US west coast.
“Think how many more such projects we will need in the coming decade to cope with 1.7bn tonnes in [extra] production,” he added, saying that the world had “five-to-10 years” before the jump in volumes really hit home in terms of logistical needs.
Environmental battles
While infrastructure shortfalls were particularly acute in developing countries, with 70% of Africa’s farmers living more than a 30-minute walk from an all-weather road, they were common in Western countries too.
“Even in nations like the US, things are in bad shape,” Mr Hausmann said noting that Bunge’s new export silo is the country’s first for 25 years.
Companies would be “happy” to invest in new infrastructure “as long as the [government] policies are healthy”.
In many cases, this would mean finding ways to improve relations with lobbies, such as environmental groups, who were holding up the development of many facilties.
“Many investors are not ready to see [manager] in the crosshairs,” Mr Hausmann said.

Via: http://www.agrimoney.com/news/silos-and-transport-offer-good-scope-for-profits–1891.html

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