Agriculture - how much food for a thought?

There is still competition for land resources which means some effect on general food prices will continue; it is after all a market. In most other places though, the diversion of crops into biofuels is probably having minimal impacts on food prices.

With the approach of peak oil production, biofuels have their place. Current biofuels only reduce the overall net energy consumption, but probably do not yet achieve a positive energy balance when all inputs are considered. When the next generation of biofuels, based on using crop residues and other “waste” products are developed, there is then likely to be positive energy balances and also limited effects on the price of food. Those next generation technologies could in fact make marginal crops viable as more parts of the crop would be saleable.

The human population drives these effects. The current six billion people will soon become nine billion, but with rising affluence in many countries they will probably want to consume at the rate that 13 billion people would today. In 30-40 years we would be looking at doubling in demand for world food production. This demand is expected despite a very real increase in those who cannot afford their food requirements. The UN Food program is obviously very worried about the current trends.

Doubling food production is often seen by economists as simply a market problem. I don’t know how they think that would happen without significant price increases, nor where the food would be grown. Land resources and the inputs for agriculture have some finite limits and, or more and more complex and expensive technologies will be required to feed the world.

At present we do not have the viable technologies to double world food production to feed everyone. More and more people will be unable to adequately feed themselves and the great divide between haves and have-nots is likely to get larger. Much of the good land for agriculture is already used and as agriculture extends onto more and more marginal land the costs of production escalate exponentially. Clearing more forests or grasslands for crops is not attractive to many people and should not be done while existing land resources are used inefficiently.

While many may think that the costs of production are adequately built into food costs, the reality is that all of the true costs are rarely incorporated. Good agriculture requires the provision of inputs to replace all the nutrients removed, to restore the biophysical condition of soils and to restore/maintain the surrounding landscape appropriately.

Current market pressures typically lead to a short-term approach where the only inputs replaced are those that immediately lead to an economic return in current crops. Some resources decline slowly over time and their effects may not be apparent for many years. With finite land resources and probably a lower rainfall in much of Australia resulting from climate change, the pressures for quick returns on investments that cost more, will probably lead to declining yields and a run-down in soil resources, reducing the amount of food produced.

If we are going to feed Australians and other populations, a better incorporation of all costs is needed. This will result in continuing rises in food prices. A further consequence could be reducing the quantities of food exports from Australia: the impact on income may be minimal as prices are likely to increase.

Are there any benefits from higher food prices? Agriculture is a viable activity to be in and rising food prices, no matter how small the amount that gets back to farmers, are needed to help farmers sustain their outputs. This would be particularly helpful in sustaining the resource base upon which production depends. Higher food prices should also help to reduce waste in the whole chain from producer to consumer. Plant and animal parts that may not be used very effectively at present could find uses that improve incomes and resource use.

There would be some irony if rising food prices lead to a better consumer acceptance of incorporating all the costs of production and a dramatic reduction in waste, achieving sustainable outcomes that could ensure food production remains viable into the distant future; a goal Australia has been trying to work towards, but a difficult goal in an era of cheap food.

To solve many of the problems associated with rising food prices and scarce resources we need more than a thought. We need lots of them to seek innovations that maintain the viability of agriculture and provide the absolutely essential amounts of food that the world needs. This has been under-resourced for the last decade or so in Australia and throughout the developed world.

Climate change is going to have a big impact on the world and much of the funding for this problem needs to be directed towards finding ways of feeding the world. The Australian skill shortage in agriculture is as dire as in other industries, particularly in people and skills to resolve these longer-term problems.

How though can Australia contribute to viable solutions for itself and to the wider world?

• Acknowledging the integrated nature of agricultural and related production within the whole economy would help. It is not a fringe activity that stops at the farm gate. Better policies can only be developed though a more honest understanding.
• Consumers accepting that higher food prices are good for the sustainability of Australia.
• Acknowledging the central role of agriculture in human existence and issuing the challenge to young Australians to get involved in developing the solutions required to feed the world.
• Using Australian expertise to help developing countries solve their food production problems to reduce to a minimum the existence of malnourished, poverty stricken communities.