Agricultural sustainability basically means farming done in a way that addresses challenges in the agricultural sector, primarily environmental degradation and the environmental impacts on land, watersheds, vegetation, and animals, as well as the surrounding lands.
This holistic approach towards agriculture is poised to result in better, long-term viability of the industry as a whole: More sustainable farming practices cause less or no environmental degradation, so the land stays more productive longer than conventional methods.
There are many benefits when agriculture is done in a sustainable way. These include monetary advantages. Less chemical-intensive farming means buying less chemicals, as well as using less fuel and/or water to distribute them, which can lower operating expenses.
Sustainable agriculture also has many non-financial advantages, or advantages that don’t have a financial impact on the owner, but on a society-wide basis:
- A smaller negative impact on biodiversity compared to conventional agriculture
- Prevention of pollution, with pollution being potentially responsible for healthcare costs
- Lower CO2 emissions as less fossil fuel is being used
- A reduced likelihood of outbreaks of diseases, such as avian flu or e coli
An increased focus on sustainability when it comes to how we farm has many advantages. As many consumers are increasingly conscious of how their food is grown, harvested, and distributed, it’s very likely that sustainable agriculture is a major trend that will only grow in size over the coming years and decades.
How To Benefit from the Sustainable Agriculture MegaTrend
While there are not a lot of dedicated, sustainable agriculture pure-play companies that investors can pick from, there are companies from different industries that seek to leverage or benefit from this MegaTrend.
International Business Machines (NYSE: IBM), for example, isn’t a company that immediately springs to mind when talking about agriculture, but the tech company, which acquired the Weather Company a couple of years ago, seeks to help farmers with its technology by optimizing planting, watering, and so on with their extensive environment and weather data. Increased food production and lower operating expenses are just two of the advantages IBM promises farmers that work with the company and utilize its technology.
Deere & Company (NYSE: DE) is a leading manufacturer of agricultural equipment. The company has been working on introducing battery-powered tractors, which promise lower CO2 emissions, as well as lower SO emissions and so on.
Food companies, such as Chipotle Mexican Grill (NYSE: CMG), could also benefit from an increased focus on what we eat and how our food is produced. The company has branded itself as a more environmentally conscious restaurant company compared to McDonald’s (NYSE: MCD) and others and should benefit from more attention for the theme.
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