By 2050, the global population is expected to increase to 9 billion people — a dramatic increase of more than 35 percent. Given scarce natural resources and the uncertainties of climate change, feeding that growing population means food production will need to increase by 70 percent, according to the Food and Agriculture Organization.
Florida, where agriculture ranks as the second-largest industry, is perfectly positioned to take the lead in combating world hunger through investments in agricultural research. One strategy for doing so involves attracting innovative agricultural technology companies to the market. There is no better ally to enlist in such an effort than the state of Israel, which is known for its innovation in this area. Many of these Israeli food and agricultural technology companies are actively seeking opportunities for U.S. expansion.
Israel has been investing in food and agriculture innovation since its inception 68 years ago. The result: the country is a leader in this area, despite the fact that the geography of Israel is not naturally conducive to agriculture. Israel’s climate, geography and lack of water resources, provide many parallels that would be relevant to Florida. Those success stories include leading Israeli Agtech companies like Kaiima, a genetics and breeding company that utilizes technology to enhance crop productivity. The work of Netafim, a leader in smart drip and micro irrigation solutions, helps to reduce water usage and increase yields. And, Afimilk provides technology that helps dairy farmers increase yields and profitability.
Florida already has a great foundation on which to build. The state ranks ninth nationally for total agricultural sales in the U.S. with 10 million acres used for farmland, and boasts highly regarded academic institutions such as the University of Florida’s Institute of Food and Agricultural Sciences (UF/IFAS). Florida is also home to some leading food and agriculture companies like Fresh del Monte and ConAgra. The industry has grown, most recently, with an increase in organic farms and food accelerators.
The business case for investment in the U.S. agriculture industry exists. Nationally, the industry, which is estimated at $5 trillion, represents 10 percent of global consumer spending and 40 percent of employment, according to a July 2015 report by McKinsey & Company. The McKinsey analysis shows that since 2004, global investments in the food and agribusiness sector have grown threefold, to more than $100 billion in 2013.
For a model of the economic growth that innovative food and agriculture companies can bring to a community, St. Louis, Missouri is a good example. Through BioSTL, the St. Louis organization dedicated to growing the region’s bioscience and innovation ecosystem, the city lured leading Israeli Agtech companies focused on genome research and genetic technology in the area of plants. Among other inducements, companies were provided with incentive packages. In return, those rapidly growing companies have created new jobs.
Investing in Agtech takes patience. Uncontrollable elements like bad weather can impact field trials. Agriculture is a tightly controlled regulatory environment. But the reward potential is there. Strategic and financial investors are racing to capture value from technological innovations in food and agriculture. Leading food companies are also reaching out directly to Agtech entrepreneurs through incubators and corporate venture capital funds.
Dr. Sonny Ramaswamy, director of the U.S. Department of Agriculture’s National Institute of Food and Agriculture, said earlier this year that economic analyses demonstrate that for every dollar spent on agricultural research, the return reaches $20.
Florida’s existing agriculture industry and location as the gateway to the Americas could greatly benefit from collaborating with Israeli companies. By working together, there exists tremendous opportunity to test and deploy solutions that will ultimately bring innovative food and agricultural industry growth to Florida, while also helping to solve the looming global food crisis.
Meital Stavinsky is a Miami shareholder with Greenberg Traurig’s Israel Practice and Government Law & Policy Practice.