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An agriculture that is resilient and sustainable, and provides sufficient safe, affordable food for all, will be built on four cornerstones: comparative advantage, open trade, markets that work for both producers and consumers, and an African continent that contributes positively to food production.
By Harold Poelma, Managing Director of Cargill Refined Oils Europe
There are about 870 million undernourished people in the world today. There will be two billion more people on the planet by mid-century. Most believe feeding this more urban and more affluent population will require increasing food production by an estimated 70 percent.
Such a production increase is not out of reach. Farmers are smart and determined people – they have roughly doubled the amount of grains, rice and oilseeds they produce since 1975. Most of that increase has come from yield gains enabled by a combination of improved genetics, new technologies, better agronomics and increased intensification – producing more on essentially the same amount of land.
This is reason for optimism. Cargill believes there is no doubt we can feed the world. Our analysis is not just a theoretical desk-top view but one based on our practical experience working with farmers in our operations around the world. It is demonstrably true that with current technology the world’s farmers today harness the power of photosynthesis to produce all the calories a world of 9 billion people will require.
“With current technology the world’s farmers today harness the power of photosynthesis to produce all the calories a world of 9 billion people will require.”
Despite these facts, food insecurity persists. The calories the world’s farmers produce are unevenly distributed. Rising food prices, primarily the results of issues of supply and demand – and this year in part due to shortages caused by droughts in key grain-producing areas – threaten to undermine recent reductions in hunger.
What must agriculture look like at midcentury to overcome obstacles to global food security? At Cargill, we believe the model that will meet the objectives of being resilient, sustainable and providing sufficient safe, affordable food for all will be built on four cornerstones: comparative advantage, open trade, markets that work for both producers and consumers, and an African continent that contributes positively to food production.
Producing enough food to feed the world starts with honouring the principle of comparative advantage. Midcentury agriculture will produce the most food in the most economical and environmentally sustainable way if all farmers plant the crops best suited for their growing conditions. This recognizes a simple fact: fertile soil, abundant rain and plentiful sunshine are not equally available across the planet. Rather, nature has endowed certain geographies with the natural resources necessary to produce a surplus of calories in the form of, for example, wheat from the plains of North America, rice from paddies in Southeast Asia or soybeans from Brazil.
“Producing enough food to feed the world starts with honouring the principle of comparative advantage.”
The alternative – the pursuit of food self-sufficiency at a national or regional level – undermines the increases in output a growing global population will require, inefficiently uses scarce natural resources and can cause significant environmental harm. We must continue to improve productivity and importantly bring best practices and technologies to those areas of the world, such as Africa, that currently are not fulfilling their agricultural potential.
A resilient, sustainable mid-century agricultural system will also require an open, trust-based trading system to move surpluses to places of food deficit. Today, only about 15 percent of all the food produced in the world crosses international borders. That percentage will increase. Global population growth is skewing toward areas that are not blessed with the natural resources required to produce food. Growing crops where the soils and climate are best suited for them and allowing open trade will provide the food that is needed, while minimizing overall environmental impacts by reducing the resources and inputs required.
Consider what has occurred to food flows in roughly the last fifty years. Increased food production in North and South America and lately Eastern Europe is providing the food required to feed the growing populations in Asia, the Middle East and Africa. To feed 9 billion people by 2050, we will need another strong food producer like Brazil, as well as open trade so the surpluses flow readily to areas of food deficit. Open and trust-based trade is also a primary means to help offset inevitable but unpredictable crop failures. The global supply of food varies less year-over-year than the local supply.
A third cornerstone will be efficient, transparent and well-regulated markets. The combination of open trade and efficient markets results in prices that signal farmers about what and how much to produce. A price that adequately rewards farmers for their efforts and provides enough money to motivate them to produce again next year is the fundamental ingredient of sustainable agriculture – arguably more important than any other crop input.
“A third cornerstone will be efficient, transparent and well-regulated markets”
By contrast, interfering with the behavior-changing power of price can have unintended consequences. When governments impose price controls on commodities, ostensibly to protect the urban poor, they inadvertently send a signal to their farmers to produce less. Other means to protect consumers from food price increases, such as direct payments from governments, would be less damaging to agricultural interests. While acknowledging the burden of rising food prices on the world’s poor, we must also recognize the energizing power of price to motivate the world’s producers to plant more crops.
The fourth cornerstone that will enable a more food-secure world is an African continent able to exploit its agricultural potential. Africa represents about 60 percent of the potentially available cropland in the world. It has land well suited for agriculture, with fertile soil, adequate rains, plentiful sun. Yet Africa is a net importer of food and has experienced very low agricultural productivity gains over the last forty years.
It doesn’t have to be this way. Changes in policies, improvements in infrastructure and the institution of property rights will be required to overcome the challenges. Clarity about property rights is particularly crucial. Farmers in Africa – and everywhere, for that matter – must have clear rights over the land they cultivate before they can be expected to reinvest in their operations and improve their productivity. Similarly, resolving property rights issues is critical to attracting private sector investment in African agriculture.
Enabling smallholder farmers to fulfill their potential is crucial to the continuing development of agriculture and to global food production. These small-scale farmers need access to better crop inputs, from seed and fertilizer to tractors and other technology, and training in how to use them. Such practical support will increase their productivity in support of our growing worldwide food needs and it will also provide them with means to raise their own living standards. This is no more evident than today in Africa.
“A resilient, sustainable agricultural system that produces enough food for all at a price that can be borne by all is within reach.”
There is more momentum than ever to tackle policy, infrastructure, crop input and property rights issues in Africa. With the support and involvement of the G8’s New Alliance for Food and Nutrition Security and the Grow Africa partnership, the private sector, nongovernmental organizations and African governments are working to develop sustainable markets for food grown on the continent.
In May 2012, Cargill was among 30 multinational companies announcing support for these initiatives, which we believe will foster policy discussions and commitments to accelerate investment and transformative change in African agriculture. The collective intent is to work with governments and nongovernmental organizations to develop public/private partnerships to make change happen.
A resilient, sustainable agricultural system that produces enough food for all at a price that can be borne by all is within reach. This does not mean there is room for complacency. We believe it remains essential that organizations, both public and private, continue to work together to provide the structure, support and investment that will contribute to agricultural development that can meet the challenge of feeding a world on its way to 9 billion people.
Download: Growing a More Food-Secure World