Kishor’s Agri-business

Tashi now turned to Kishor and initiated his queries.

“Kishor, agriculture has been one of the priority sectors in most countries and you are aspiring to establish a foothold in it. Can you think of any specific example of climate change impacting agri-businesses?”

“Now that I think of it, there are such cases I know of. I think we all have heard of the recent locust plague and climate change was a key driver of it (The World Bank, n.d.). A long stretch of unusually wet weather, including several rare cyclones that struck eastern Africa, South-West Asia, and the Arabian Peninsula, created ideal conditions for locusts to breed and spread. Experts fear that locust swarms will become more common as oceans warm and more frequent tropical storms create favorable breeding conditions. The world’s most destructive migratory pest, locusts can travel up to 90 miles a day, from 80 million-strong swarms and eat the same amount of food per day as 35,000 people (The World Bank, n.d.).

In Pakistan, agriculture accounts for ~20% of Pakistan’s gross domestic product, and desert locust-induced damage reduced economic agricultural productivity by 2% in the fiscal year 2020 (Showler, et al., 2022).

In India, the losses were valued at US $2.5 billion, (The World Bank, n.d.). During 2020-21, locust incursions were reported in 10 states of Rajasthan, Madhya Pradesh, Punjab, Gujarat, Uttar Pradesh, Maharashtra, Chhattisgarh, Bihar, Haryana and Uttarakhand. The Rajasthan government reported that a total area of 1,79,584 hectares of 8 districts of the state was affected by a locust attack during 2019-20 (PIB Delhi, 2020).

With such a significant impact on the agricultural economy, the effects of climate change really can mean disastrous results to businesses. This rings a bell to me – if I establish agrovets in South Asia, I must be aware of the potential climate-induced risks that each region faces. Such a massive loss in agriculture in a short period will severely impact the business operations of agrovets in the region where farmers have lost their income and farmland produce.”

Tashi was impressed by his word as he conveyed.

"Great example – the locust plague was big news, I remember, and as you said, when there is such a sudden loss in agricultural productivity, agri-businesses in the region will struggle to hold up. The entire agricultural supply chain will be disrupted. This means the businesses that are working in different stages of the supply chain, for example, those supplying seeds, fertilizers, other agricultural inputs, producers, wholesalers, retailers, and many others will lose their business value as well. Wow, this gives me chills.”