An additional 70-80 million hectares of cropland, equivalent to all of Brazil’s cropland, will be required by 2030 to sustain the world’s demand for food, feed, fuel and natural capital, a new report by global consultants McKinsey and Co says.
The report, Striking the Balance: catalyzing a sustainable land use transition, notes that most of the demand is driven by three factors: feedstock, food and fuel.
McKinsey anticipates that producing feed for livestock production may account for around 70% of all incremental cropland needed by 2030; crop production for human consumption around 20%; and biofuel production the remaining approximately 10%.
While the requirement calculated by McKinsey’s model represents less than 10% of additional cropland for feedstocks compared to today, it is a significant ask when competition for available and suitable land parcels in other vital areas is intensifying.
Hotspots of competition are already emerging in Latin America and sub-Saharan Africa, which are likely to be the source of most additional cropland, where land and food prices could increase.
“Today 60% of the earth’s habitable land is in use by humans,” said Amandla Ooko-Ombaka, a partner at McKinsey.
“The appetite for land – particularly for food and fuel – is putting pressure on arable land. But unlike in previous decades, new cropland cannot come from deforestation. We need to change how we use land to meet our commitments to climate and nature, and feed a growing global population.”
To meet and, where possible, offset additional land demand, McKinsey says conversion of degraded land, stronger yield growth and efficiencies from increased trade will be required.
However, it’s likely this alone won’t be sufficient, and actions to reduce land demand such as behavior change, reducing food waste and seeking alternative offshore resources are most likely required for a sustainable land transition.
The report notes that these actions would require substantial investment from both public and private stakeholders. For example, converting 70-80 million hectares of pastureland to cropland could cost an estimated $300 billion.
The value of these investments is likely to be significant, accounting for the higher market price of cropland over pastureland and the added value related to the protection of climate and biodiversity. However, this will require intentional collaboration between public and private sector.
McKinsey senior partner Nelson Ferreira said the world will need both sides of the supply-demand equation to strike a balance.
“Adverse climate conditions and other shocks to market dynamics could put even more pressure on supply than our conservative case assumes. Striking the balance is critical for both public and private sector players. Input providers need to know that land prices will increase by the end of the decade. Farmers’ margins will decrease, and input providers need to understand what it means for farmers.
“Funds investing in land need to know that some of the hotspots for food, fuel and biodiversity are the same. There could be a race for prime spots of land – so they have to decide where to go now. Similarly, governments can help create the right incentives and investment in public infrastructure to support a sustainable land use transition, for example irrigation to support restoration of degraded land.”
To start to deliver a solution, McKinsey says, a mix of rigorous land use analytics that create an evidence base for net-zero and nature-position transitions and a pragmatic approach to quickly act on yield, trade and land conversion levers are important.
The report identifies 10 “acceleration actions” that target specific sectors, with potential to offset more than half the land need to 2030 – for example scaling up resilient agricultural practices, including double-cropping, increasing energy and power crops like brassica carinata, and implementing nature-based solution carbon credits through reforestation and conversion of pastureland to forest cover.
“With just six harvest cycles until 2030, the risk of passing crucial climate tipping points on the path to net-zero could be substantially higher if we do not act now. Every organisation that uses land in any way – or that is concerned with food security, energy security, or the protection of the environment – should be part of the solution.”
