Dr Allen Featherstone, Professor and MAB Programme Director of Kansas University, highlighted that the key drivers for agribusiness were: population, income, food demand, connectedness of economics and opportunities.

 

He noted that global population will increase from 6.9 billion to 9.1 billion by 2050, and there will be a shift from 4.8 billion to 6.0 billion in the middle income level.  Further to this, the per capita income in Southeast Asia would be bolstered dramatically over the next 20 years.  This would translate to a much higher demand for food. Demand for animal feed is projected to increase, whilst demand in meat production is projected to reach 470 million tonnes.   These demands would therefore lead to an increase in demand in agribusiness.

 

Dr Allen also highlighted that due to chemical and physical restraints to develop land coupled by the lack of infrastructure, has posed challenges for the agribusiness.  Southeast Asia has reached or is close to reaching its limits in available land.  In light of this, the recent trend is direct investment, as brought up by guest speaker, Mr Oscar Tjakra, Assistant Manager - Food and Agribusiness Research and Advisory, Rabobank.  Mr Oscar stressed that direct investment is two-pronged.  Governments have shown particular interest in food safety whilst private investors are seeking more accessibility.

 

In terms of connectedness and economics, Southeast Asia is primed to see a demand in agribusiness due to its geographical location.  As supported by guest speaker Mr Tanna Tan, a consultant, who underscored that Asia's purchasing power, buoyed by its rising middle class, has made it the key fundamental price mover.  This affects how companies organise and structure themselves based on various factors – product versus location, origination versus distribution or intra-Asia trading.  Mr Tan also stated that the current trend is supply chain management where consolidation occurs at the origin, is now slowly working its way through to destination.

 

There is also a potential in increasing the efficiency in grain production as new methods in farming technology has brought on increasing yields year after year.