A Map of Investment Attractiveness in Agribusiness InfrastructureA STUDY BY STEFANO GATTI, CHAIR OF ANTIN INFRASTRUCTURE PARTNERS IN INFRASTRUCTURE FINANCING, CHARTS LONGTERM TRENDS AND COMPARES VARIOUS APPLICATIONS IN AN INCREASINGLY IMPORTANT SECTOR
Investments in the agribusiness sector can be considered a subset of the broader class of infrastructure investments. Keeping in mind some long-term trends, it is therefore necessary to provide potential investors with analytical tools that can decrease the degree of uncertainty and indicate which subsectors are the most attractive. This is the subject of a study edited by Stefano Gatti, Antin IP professor in Infrastructure Finance, with the help of a research team including Carlo Chiarella (CUNEF Universidad, Madrid), Vitaliano Fiorillo, Aristea Saputo and Marianna Lo Zoppo (all from SDA Bocconi). The study, which will be presented this afternoon at a conference (click here for information and registration), previews some of the contents of a book due for release in early 2023.
The study, which includes the results of the fourth in a five-year research plan, consists of two distinct sections. The first is devoted to an examination of social, political and environmental phenomena that will impact agribusiness, the so-called "megatrends", grouped into four themes. The first is the growing demand for food, caused by both the increasing world population and changing lifestyles, including in developing areas. The second theme is climate change, which is already having very significant consequences for agriculture. The third concerns technological change, the positive influence of which is reflected in the increased productivity and efficiency of the sector. The fourth and final theme is that of global trade integration, which has been put at risk by well-known recent geopolitical events.
The second section, the result of field research, aims to map the different areas of agribusiness in order to assess their attractiveness in the medium term. It should be noted, however, that the investors most interested in this sector are precisely those most active in infrastructure in general, which suggests that it is now established that agribusiness belongs to the class of infrastructure investments. Cross-referencing the stage of technological development of the various agribusiness sectors with their social and regulatory acceptability, Stefano Gatti's study classifies them into three different categories: high, medium and low attractiveness. For example, innovative aquacultures are part of the high attractiveness group (along with algae farming, agritech, plant-based products, smart traceability and food delivery) given their high social legitimacy, while at the other extreme, intelligent agrovoltaics, among others, finds obstacles related to the visual impact on the environment that limits its social acceptability in addition to a still ill-defined legislative framework.
As Stefano Gatti explains, “technological advances (and consequent costs reduction) and normative framework evolutions are fundamental indicators to predict the future diffusion of most of the above-mentioned applications. In addition to this, legitimacy with consumers and more in general the public discourse play a major role in determining a technology’s success or failure.”
by Andrea Costa