Climate Change Will Disrupt the Way Big Agriculture Is Done

(Bloomberg) -- Climate change is set to bring big disruptions to the agriculture world in the coming decades.

Weather volatility is going to throw the sector for a loop, bringing more frequent droughts, flooding and storms, according to a report from BMI Research on agriculture megatrends. As water becomes more scare and global temperatures rise, regulations for agriculture -- the world’s largest contributor to non-carbon dioxide emissions -- are likely to become stricter and farmers will demand more environmentally friendly equipment and farming techniques.

Agriculture will shift from being labor-intensive to being capital intensive, with farmers relying on technology to get bigger yields from their crops, spur profits and solve problems like reduction of waste, the report said. In this scenario, one of the big winners will be precision-agriculture companies and some of their gains will come at the expense of growers, BMI said.

“A larger share of farming profits will be captured by these suppliers,” and the rise of ag tech will mean higher production costs and a strong dependence on the firms providing these services, the report said. As food consumption continues to rise, commodity supplies will be strained.

©2018 Bloomberg L.P.