Viable Solutions for Hunger

Two-thirds of the world's undernourished people live in seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40% live in China and India alone.

The proportion of undernourished people ( 30% in 2010) remains highest in Sub-Saharan Africa.

What can business students and the private sector do about this reality?

To answer this question lets look at some of the factors impeding progress that could also present commercial opportunities.

1) Food Price Volatility

Food prices reached a 30 year record high in 2008, collapsed the following winter, then rose again - rising 20-30% in this last year, threatening millions.

Moreover, the relative integration of the global economy implies that macroeconomic shocks can propagate to domestic commodity markets more quickly and with more impact than before.

2) Climate Change

An increase in extreme weather events, such as the recent floods in Pakistan and drought in Australia, can encourage hoarding of supply and increase the risks associated with harvest outcomes, particularly for countries with sectors dependent upon rainfall for irrigation, for example.

3) Import Dependence

Some countries, for example Senegal and its rice sector, depend on imports for ~90% of consumption. A given country's reliance on imports to meet domestic food needs increases its vulnerability to exchange rate volatility, foreign monetary policy shifts, and commodity market speculation.

So what are some viable solutions and what are ways to capitalize on opportunities, if any, provided by these factors?

1) With respect to combating hunger in the face of food price volatility and import dependence, one place to start is for businesses to work with governments in countries with the most undernourished populations to encourage increased investment in agriculture, apply western techniques to improve yield ratios, and partner with the public/NGO sector to enhance income generating activities for rural smallholder producers.

2) With respect to climate change clean technology and other innovations in agribusiness, such as solar powered drip irrigation systems, can offer both compelling business models as well as opportunities for impact-oriented investors.

Ultimately, the private sector and students of management should be equipped to collaborate to develop commercially viable solutions to hunger.