The last decade saw the end of cheap oil, the magic growth ingredient for the global economy after the second world war. This summer’s increase in maize, wheat and soya bean prices – the third spike in the past five years – suggests the era of cheap food is also over.
Price increases in both oil and food provide textbook examples of market forces. Rapid expansion in the big emerging markets, especially China, has led to an increase in demand at a time when there have been supply constraints. For crude, these have included the war in Iraq, the embargo imposed on Iran, and the fact that some of the older fields are starting to run dry before new sources of crude are opened up.
The same demand dynamics affect food. It is not just that the world’s population is rising by 1% a year. Nor is it simply that China has been growing at 9% a year on average; it is that consumers in the big developing countries have developed an appetite for higher protein western diets. Meat consumption is rising in China, India and Brazil, and since it takes 7kg of grain to produce 1kg of beef (and 4kg to produce 1kg of pork), this is adding to global demand.
Farmers have been getting more efficient, increasing the yields of land under production, but this has been offset by two negative factors: policies in the US and the EU that divert large amounts of corn for biofuels and poor harvests caused by the weather.
If the World Bank’s projections are anything like accurate, further massive productivity gains from agriculture are going to be needed over the next two decades. There will be an extra 70m mouths to feed every year
By Karen DeYoung, Thursday, March 22, 4:19 AM
Fresh-water shortages and more droughts and floods will increase the likelihood that water will be used as a weapon between states or to further terrorist aims in key strategic areas, including the Middle East, South Asia and North Africa, a U.S. intelligence assessment released Thursday says.
Although “water-related state conflict” is unlikely in the next 10 years, the assessment says, continued shortages after that might begin to affect U.S. national security interests.
The assessment is drawn from a classified National Intelligence Estimate distributed to policy-makers in October. Although the unclassified version does not mention problems in specific countries, it describes “strategically important water basins” tied to rivers in several regions. These include the Nile, which runs through 10 countries in central and northeastern Africa before traveling through Egypt into the Mediterranean Sea; the Tigris-Euphrates in Turkey, Syria and Iraq; the Jordan, long the subject of dispute among Israel, Jordan and the Palestinians; and the Indus, whose catchment area includes Afghanistan, Pakistan, India and Tibet.
“As water problems become more acute, the likelihood … is that states will use them as leverage,”
THE news from this Midwestern farm is not good. The past four years of heavy rains and flash flooding here in southern Minnesota have left me worried about the future of agriculture in America’s grain belt. For some time computer models of climate change have been predicting just these kinds of weather patterns, but seeing them unfold on our farm has been harrowing nonetheless.
My family and I produce vegetables, hay and grain on 250 acres in one of the richest agricultural areas in the world. While our farm is not large by modern standards, its roots are deep in this region; my great-grandfather homesteaded about 80 miles from here in the late 1800s.
He passed on a keen sensitivity to climate. His memoirs, self-published in the wake of the Dust Bowl of the 1930s, describe tornadoes, droughts and other extreme weather. But even he would be surprised by the erratic weather we have experienced in the last decade.
In August 2007, a series of storms produced a breathtaking 23 inches of rain in 36 hours. The flooding that followed essentially erased our farm from the map.
Storm Felicia Menaces Hawaii Sugar, Coffee Areas
New York, Aug 10 – Tropical storm Felicia is churning toward the Hawaiian islands on Monday and may threaten the sugar and coffee farms in the area.
The National Weather Service said in a statement that Maui, one of two areas growing sugar in the state, faces the threat of heavy rains and floods.
The other sugar growing area on Kauai and the Big Island of Hawaii may also be targeted by Felicia.
The Big Island is the only producer of Kona coffee prized by the specialty coffee market and connoisseurs around the world.
According to the U.S. Agriculture Department’s monthly supply/demand report, Hawaii is seen producing 160,000 short tons of sugar in 2009/10, down from last season’s 200,000 short tons.
Sugar industry analysts said any downfall in Hawaii’s output as a result of storms would come at a time when the United States would need to import sugar in the spring of 2010 to meet a domestic shortfall.
There are about 600 Kona coffee farms in Hawaii that produces about 2.0 to 3.0 million pounds of coffee per season.
How Prepared is Your Farming Operation?
Maui Extension Office
Monday, November 26, 2007
11 am ? 1:30 pm
Natural disasters, such as droughts, floods, wild fires, hurricanes, pests, and diseases, can cause excessive economic damage to agricultural production. In addition to crop damage, disasters can also affect farm buildings, machinery, animals, irrigation, family members and employees. Disasters along with marketing difficulties can lead to serious downturns in your farm income.
How prepared are you? This workshop is designed to provide you with information on:
1) preparing your operation for a natural disaster and
2) available and affordable crop insurance programs that minimize risk associated with economic losses.
Note: Now that the “Adjusted Gross Revenue” (AGR) insurance is available for 2008, in effect all Hawaii crops can be insured to some degree ? not just bananas, coffee, papayas, macnuts & nursery.
? USDA Farm Service Agency (FSA) administers and oversees farm commodity, credit, conservation, disaster and loan programs. These programs are designed to improve the economic stability of the agricultural industry and to help farmers adjust production to meet demand.
? USDA Risk Management Agency Western Regional Office, Davis. USDA RMA helps producers manage their business risks through effective, market-based risk management solutions.
? John Nelson from the Western Center for Risk Management Education (Washington State University) on the new Adjusted Gross Revenue (AGR) Insurance.
? Dr. Mike Fanning, Executive Vice President, AgriLogic, is a specialist in Agri-Terroism, crop insurance, farm policy analysis, and individual farm risk management.
? Dr. Kent Fleming, an agricultural economist with the University of Hawaii’s College of Tropical Agriculture and Human Resources (CTAHR), is an Extension Farm Management Specialist with a focus on risk management education.
The workshop is FREE and lunch (sandwiches or bentos and drinks) will be provided. For more information, visit the website http://www.ctahr.hawaii.edu/agrisk/ You may also contact Kent Fleming @ 989-3416 or email@example.com or Jan McEwen @ 244-3242 or firstname.lastname@example.org
Please call the Maui Extension Office at 244-3242 by November 21, 2007 to register for this seminar.