Media reported this week that Pepsi together with the Chinese Ministry of Agriculture plans to assist Chinese farmers with the latest techniques in agriculture. In 2010, Pepsi started a $2.5 billion investment plan in China, on top of an investment worth $1 billion in 2008. Those investments will notably fund agricultural development.
While Pepsi’s snack foods—such as Frito-Lay potato chips and Quaker Oats—may seem far removed from the farming sector, one would be mistaken to forget that the giant venture’s products do indeed stem from nature and a lot of nature at that: it takes as much as 396 gallons of water to grow about 2.2 pounds of potatoes.
Wait, why is Pepsi, along with numerous other corporate giants, funneling cash into agriculture? Pergam Finance’s Olivier Combastet knows the answer. Since 2005, through Campos Orientales, the agribusiness management division of Pergam Finance, he has acquired fertile but underperforming farmland in Argentina and Uruguay that has great transformational potential and has been successful in delivering efficient and sustainable production.
For years, educators, academics, and NGOs have been issuing research papers about China’s water and resource shortage and the future of food security. As Olivier Combastet at Pergam Finance knows, as early as 1994, World Watch published an article signed by Lester R. Brown issuing a wake-up call: “Who will feed China?”
At the time of the publication, the logic was that China was capable of being self sufficient. However, the article drew the attention to the fact that China’s fast growing middle class population combined with a shortage of irrigation water and paving over of cropland to build housing and roads, meant the future of food security for the country,—not to mention others,—was at risk.
Keeping China in mind, Pergam Finance sees agricultural investments as a way to stand out from the crowd in the current economic turbulences as it delivers high profitability whilst being ethical and sustainable.
In an increasingly hungry world, we need more companies like Pergam Finance to keep their eyes on alternative investments to be able to address the pending food shortage crisis, in China and elsewhere in the world.