There is some confusion these days about what SRI actually stands for. It used to mean Socially Responsible Investment, but then people decided that the ‘social’ bit was rather misleading, particularly when many funds in the sector were focused on sustainability, so it was changed to Sustainable and Responsible Investment. However, an article in February’s edition of the Observer Food Monthly provided yet another key to the acronym: In latest agricultural thinking, SRI stands for a new method of growing crops called System of Root Intensification.
The article explained that in Bihar, the poorest state in North-East India, farmers have been beating world records for rice yields, using only farmyard manure as fertilizer and without recourse to herbicides or pesticides, and certainly without genetic modification. They achieve this as follows: Instead of planting three-week-old rice seedlings in clumps in waterlogged fields, as rice farmers traditionally do, they carefully nurture only half as many seeds and then transplant them into fields when much younger, spacing them evenly, keeping the soil much drier and weeding around them to allow more air to their roots. While perhaps more labour intensive, the resultant yields are so impressive for the smaller farmer that world record yields are being attained.
It is not just rice that can benefit from this approach to plant husbandry. It has also produced dramatically improved yields from wheat, potatoes, sugar, yams, tomatoes, garlic, aubergines and many other crops.
SRI, as in System of Root Intensification, was originally conceived by a Jesuit priest and agronomist called Henri de Laulanié in Madagascar in the 1980s, based on decades of observation and research. An American, Professor Norman Uphoff from Cornell University, then took the idea and started to promote it in Asia where it is slowly but surely gaining credibility. Uphoff estimates there are now 4-5 million farmers using SRI worldwide. Training a few hundred people to teach SRI methods in Bihar, Northern India, has resulted in a 45% increase in that region’s yields, according to Uphoff. Wider research studies documenting its impacts on a wide range of agricultural systems is also available. The potential for transforming agriculture in the poorest parts of the world is tremendous.
So what is the connection between SRI, as in System of Root Intensification to SRI, as in Sustainable Responsible Investment? Well we are regularly asked why we don’t have an agricultural theme in our fund. After all, our mega-trends, which include rising population and resource scarcity, focus on challenges about how the increasing global population is going to feed itself. Already over 1 billion people are going hungry.
The difficulty is that if one attempts to take the global food shortage crisis and turn it into an investable theme, the majority of large companies that theoretically offer ‘solutions’ are the likes of Monsanto and Syngenta (frequently found among the top ten holdings of ‘sustainable’ agriculture funds). Other popular holdings include CF Industries, Bayer and Dupont, manufacturers of fertilizers and pesticides. However, at WHEB we have taken the view that genetic modification and the use of chemicals in food production do not constitute a solution to this sustainability challenge, or at least not one that isn’t beset with contention and problems. We therefore do not include them in our investment universe. (The impact of nicotinoid pesticides such as Bayer’s Clothianidid on bee colony survival and development is just one of the latest revelations about the negative impacts of artificial pesticides on the natural environment, but is far from the only one.) We do have holdings such as Trimble Navigation, which enables large-scale farmers to plough and spray much more efficiently, and Pentair and Suez Environnement which promote water efficiency. But the paradox about the agricultural theme is that the ‘solution’ to food shortages in many parts of the world may involve a small-scale, back-to-basics approach, rather than major corporations.
Reading the article about SRI, as in System of Root Intensification was grist to my mill: better plant husbandry offers a higher yielding, more sustainable alternative to intensive farming. The farmers are not forced to take loans to invest in pesticides or herbicides, or to buy branded, genetically modified seeds. Their water usage is reduced. It seems that the ‘choice’ between the world not being able to feed itself if it continues to cling to traditional farming methods and being able to feed itself if it opts for mass use of chemicals and/or GMO is a false one. There are alternatives, and one just happens to be called SRI. How neat is that?