Lettuce grows on vertical racks in the UP Vertical Farms facility in British Columbia, Canada. James MacDonald / Bloomberg
Lettuce grows on vertical racks in the UP Vertical Farms facility in British Columbia, Canada. James MacDonald / Bloomberg
Lettuce grows on vertical racks in the UP Vertical Farms facility in British Columbia, Canada. James MacDonald / Bloomberg
Lettuce grows on vertical racks in the UP Vertical Farms facility in British Columbia, Canada. James MacDonald / Bloomberg

UAE-US agriculture initiative doubles fund to $17 billion


Daniel Bardsley
  • English
  • Arabic

A fund set up by the US and UAE to promote climate-friendly innovation in agriculture and the food sector has more than doubled to $17 billion.

More than 600 government and non-government partners have now pledged their support for the Agriculture Innovation Mission (AIM), which was launched by the two countries in 2021, it was announced at Cop28.

The cash injection is about double the total of $8 billion that was pledged when Cop27 took place in Egypt last year.

"We are witnessing tremendous progress in transforming the global food and agricultural systems at Cop28, which has placed the theme at the heart of the presidency agenda," Mariam Al Mheiri, Minister of Climate Change and Environment, said.

We are witnessing tremendous progress in transforming the global food and agricultural systems at Cop28
Mariam Al Mheiri,
Minister of Climate Change and Environment

She added that "the world has rallied together" to implement the Cop28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action, with 134 nations plus non-state partners in support.

"The significant traction gained by AIM for Climate is another step in promoting climate-smart agriculture, driven by innovation and advanced technology, which is critical to strengthening productivity and building sectoral resilience," Ms Al Mheiri said.

Of the $17 billion invested, a total of $12 billion comes from governments, among them those of Bahrain, Bangladesh, Canada, Germany, Honduras, Israel, Mexico, Morocco, the Netherlands, Philippines, Singapore, US, UAE, UK and Vietnam.

A further $5 billion comes from what are termed innovation sprints, which are initiatives led and self-funded by partners "to achieve expedited results in agricultural and food systems innovation".

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There are now 78 of these, more than twice as many as were announced at Cop27, and they align with priorities such as emerging technologies, agroecological research and methane reduction.

The total number of partners supporting AIM for Climate is now more than 600, including businesses, academic institutions, not-for-profits and think tanks, as well as governments.

Ms Al Mheiri said in the UAE "there are a lot of things we have to change with behaviour and habits" around food, particularly in terms of waste.

"We’re throwing too much food into the bin," she said. "It’s really important every bit of edible food does not end up in landfill."

She said efforts to reduce food waste in the UAE included "a lot of interactions with schools", adding that she herself had to "start reflecting on what I’m doing as a person" with respect to food.

Consumers were being "nudged" to be more climate-smart in terms of their eating habits, she said, such as by being shown photos with examples of smaller portion sizes.

"There’s a lot we have to do with consumer behaviour," she added. "This will have to be ongoing. It’s not a six-month plan. This is a vision of changing habits."

Tom Vilsack, the US Secretary of Agriculture, announcing the increase in funding alongside Ms Al Mheiri, said that the US, UAE and global partners, were "dedicated to meeting our climate goals, enhancing food security and building a sustainable future".

"This partnership embodies our shared commitment to accelerating investments in transformative food systems and climate-smart agricultural innovations and we look forward to working with everyone on the road to Cop30," he added.

"Our joint efforts are not just about climate-smart agricultural advancements but about nurturing ambition, catalysing action, and fostering hope towards a more sustainable, resilient, and prosperous world for all.”

Mr Vilsack said agriculture has an opportunity to reach net zero "quicker than some of the other industries".

"The ability to have access to soil, land as a strategy to sequester carbon. The ability to have partners with major agriculture companies, major universities, allows the farmers to embrace climate-smart practices," he said at a press conference.

He said a challenge was asking farmers to embrace technology that had a cost to them, but said this could be overcome by showing that retailers could charge more for food produced in a way that has reduced impact on the environment.

AIM for Climate was launched at Cop26 in Glasgow in 2021 with an initial announcement of $4 billion of funding.

Decarbonising agriculture is seen as crucial to the world meeting its climate goals, because the agro-food system is responsible for as much as 34 per cent of greenhouse gas emissions when changes in land use – such as the replacement of forests by agricultural land – are taken into account.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: December 08, 2023, 5:27 PM