Well... Malaysia is an agricultural country.. Do we import food for our survival? No we don't... yes we do.. we do????
Thestar: Saturday April 23, 2011Dr Lin See-Yan analyses how the world can feed its burgeoning population of 9.6 billion in 2050.
The world's population is likely to reach 9.6 billion by 2050 from about seven billion today, an increase of 38%, mostly concentrated in poor nations.
Today, up to one billion people are so undernourished they can't do modest manual work. Can the world be fed? That's the challenge. Food prices reflected the Malthusian vision of population rising too fast to feed itself.
Rising consumption of grains is draining global stocks fast and pushing prices to levels that fuelled riots four years ago, and widespread discontent more recently. In 2007-08, food prices soared and led some 30 poor nations to deal with food-price related riots, and Russia started to restrict exports.
Again in the summer of 2010, world wheat and rice prices spiked. Riots resumed and Russia once again banned wheat exports. The oil price is at its highest since October 2010, just shy of US$127 per barrel in early April this year. By end-2010, world food prices were already back at their July 2008 peak. Beginning in mid 2010, world grain prices exploded. Prices rose to an all time high in February this year.
High prices were among the triggers of street protests and even revolutions that recently swept North Africa where wheat dominates the region's diet. Egypt is the world's biggest importer of wheat. The Middle East import more than 50% of their wheat needs. Despite massive subsidies and price controls, high prices still filtered through to consumers, building a tinderbox for unrest and discontent. In Tunisia and Egypt, housewives are shown screaming on TV about high food prices. I believe this marks the end of cheap food.
The US role in keeping a global food shortage at bay hinges, in the short run, on the weather and harvests from US farms, the world's biggest agricultural exporter. Most expect world wheat supply to recover later this year as drought conditions ease in the Black Sea region, which should moderate prices. But the long term expectation is still for food prices to remain high. Climate change has set the stage for severe weather disruptions. Importers have limited places to shop: the US controls 55% of world trade in corn, 44% in soybeans and 28% in wheat. What lies ahead abounds in the US farm belt. February farm products price index (covering 48 commodities) was 24% higher than a year ago; but has since risen further. China gobbled up about one quarter of US soybeans crop.
Due to rising oil prices and government mandates, 40% of its corn is brewed into ethanol which a US senator described as not a green fuel: “it consumes as much energy as is used to make it, as when it is burnt.” By the time the 2011 fall harvest begins, the US is left with enough corn to satisfy only 18 days of the nation's appetite the tightest position since the Dust Bowl' era of the 1930s.
This is despite farmers producing larger record crops of wheat, soybeans and corn. Demand for corn is so strong that a 10% rise in harvest will lengthen reserves by only five days. If the long overdue drought hits the US mid-west's corn and wheat output, food prices will skyrocket again. The 1988 drought slashed US corn crop by as much as one-third. Major wheat producers (Canada, Australia and Russia) saw output fall 5.5% last year. Food demand is confronted with strained supply. High prices or shortages could further destabilise poor countries, and trigger a global scramble for scarce foodstuffs. The bad experience of '08 remains fresh.
In essence, growing global affluence underlies the squeeze. The FAO estimated wheat prices rose 60% so far this year; corn gained 92% and rice recorded new highs in Indonesia, Thailand, Vietnam & Bangladesh. With modernisation comes a diet change - shift from eating grains directly to consuming them indirectly as meat and dairy products.
From 2000-'30, per capita meat consumption is estimated to rise 50% in China, 80% in India and 22% in Brazil. This in turn will boost grain demand as feedstock. Research shows for cattle, it takes eight pounds of feed grains to gain one pound of beef; for chicken, it's between two to three pounds. This simply means demand for food will continue to outpace supply. In the last seven of 10 years, world wheat consumption outpaced output. Grain reserves have since grown very, very thin. I believe the era of crop surpluses is over.
Food supply needs to rise sharply by 2050 to feed a global population of 9.6 billion people. The FAO estimated in 1996 that the world could produce enough food to provide for everyone with 2,900 calories a day, well above the minimum required. The Lancet (a British medical journal) indicated that people need 90 grammes of meat a day (they eat more than that now). Scientists believe the world can feed itself. Allowing food for biofuels and wastage along the way, farmers are already producing enough. So what's the problem? In a 1981 essay, Harvard Nobel laureate A. Sen concluded that the main reason for famines is not a shortage of basic food but problems on wages, distribution, storage, even democracy.
This is still valid today. Part of the answer lies in prices. When output falls below demand for whatever reason, prices rise. That happened in '07-'08 and it's happening today. Volatile prices are bad for producers (not knowing what and when to invest) who need high and stable prices to keep investing; and for consumers, especially the poor who risk not affording basic food. Second, it's a daunting task to improve distribution (storage, logistics, refrigeration). Often, food is not available where it's needed most.
In the end, it's the balance between production and consumption. By 2050, another 2.6 billion mouths need to be fed, equivalent to two extra Chinas. If you add the billion odd people who are hungry today, we are talking of another three Chinas! Putting this in perspective: by 2050, world population will rise by 38%, that's much less than in the 40 years to 2010, when it rose over 80%. Consumption of wheat, corn and rice historically tracks people growth but at a higher level. So demand will add at least another billion tonnes to the two billion produced in 2005-07. That's much less than in the previous 40 years when cereals output rose by 250%.
These headline numbers do not reflect the real situation. Over time, population becomes more urban based, richer and able to afford pricier food, such as meat. So meat demand will rise strongly. In 2000, 56% of all the calories consumed in developing countries was provided by cereals, and 20% by meat, dairy and fats. The FAO estimates that by 2050, the ratio will be 46:29. To match the fast demand, meat production will need to double its current level. The FAO estimates total demand for food will rise 71% between 2006-2050, more than double the demand for cereals. That's still only half as much as the rise in food production between 1962 and '06. On paper, producing enough food to feed the world in next 40 years appear not to be more difficult than in the previous 40. Realistically, it won't be as easy simply because of yields, which have slowed down from 3% a year for staples in the 60s to about 1% today. With advances in plant genetics, producers of staples can push up growth in yields to 1.5% p.a.
The FAO estimates that in both rich and poor nations, 30%-50% of all food produced is wasted, mostly it gets rotten or thrown away uneaten. In poor countries, much food is wasted on or near the farm: mice, locusts and rats eat the crops in the field or in storage. Milk and vegetables and fish spoil in transit.
These are often regarded as losses. They can easily be reduced by one-half, equivalent to raising output by 15%-25%. But it's more an investment matter: building enough storage and silos, better infrastructure, more refrigeration, better logistics. Rich countries waste as much food as the poor ones - up to one-half of production, but differently. Studies concluded that a quarter of food from shops ends up as rubbish or thrown out by restaurants.
Top of the list are salads - about one-half is thrown away; a-third of all bread; a-quarter of fruits; a-fifth of vegetables. If the global rich waste food like the US and UK, roughly 100kg per person per year, that's equivalent to one third of the world's entire supply of meat! If this waste could be halved and distributed to where it is needed, the problem of feeding the world would be much easier. But that won't happen. Spoilage reflects bad behaviour and regulation. In the end it's a matter of prices. Food is cheap. Prices are unlikely to rise enough to change attitudes.
Can it be done?
Environmentalists believe it can't be done. Climate change, declining water tables and eroding top soils limit the possibilities. It's not just weather disruptions. With a real carbon price, farmers will commit fields in terms of carbon embodied in crops and soil. That in turn influences what they grow (perhaps elephant grass instead of wheat). Competition for crops is already keen. Then, there is disease. The return of stem rust (taken as wiped out in the late 20th century), if not dealt with properly, can prove disastrous for wheat, the most widely planted crop providing one fifth of the world's calories. Science offers the solution. Farmers and breeders need every tool including GM (genetically modified) in the constant battle against disease, predation and complacency.
There are structural problems involving market failure. Imbalances in supply and demand reflect the essence of agriculture. In 2010 global wheat harvest was the third largest of all time. Yet, supply shocks often happen, as in the summer of 2010 when harvest failure in Russia (just 8% of world wheat output) led to embargoes and panic-buying.
Markets are supposed to have acted to absorb it. But they failed. This led to headlines: “Don't trust markets”; “Food security begins at home” that are counter-productive. Self-sufficiency is grossly inefficient and shallow markets make prices more volatile. Climate change will worsen volatility. Existing proposals should be seriously considered: (i) the US, Europe and Japan should cut farm protection and release food for trading across borders; (ii) the WTO should provide some insurance against export bans; (iii) create a global system of food stocks as Keynes had proposed after WWII.
On the bright side, astonishing advances in biotechnology have since quintupled corn yields and quadrupled wheat yields. Use of “smart seeds” (making crops more resistant to weeds, bugs and drought), improved fertilisers, better irrigation and efficient farm practices have led to huge gains.
By 2030, smart seeds are expected to double the output of US corn and soybeans. These seeds are being increasingly used in BRICS (Brazil, Russia, India, China and South Africa) as they emerge as significant food producers, while Europe declines. The euro zone's Consumer Agriculture Policy (protection costs 55bil in '09) and the rejection of GM will soften yields further, and thus it is in danger of marginalising itself. But the US will remain the global leader.
Given the strains and politics of food, efforts to feed the world can sharpen geopolitical conflicts and speed up shifts that are already happening. So there are enough reasons to worry about food supply: political uncertainty, volatile prices, continuing waste, and hunger amidst plenty. Success depends on nature and technology restoring a better balance between supply and demand.
All said and done, I sense the emergence of a new agriculture revolution to better feed the world led by technology. Genomes of most major crops have been sequenced and benefits are being felt. BRICS and others like Indonesia and Vietnam have shown use of smart technologies and sensible policies can free more food for global trade and with some luck, they can transform themselves into bread baskets instead of being basket cases. Indeed, the consequences of failure on human suffering and political conflict are fearsome.
Readers wonder why I use a wheelchair. Reminds me of a leading Asian journal's interview with Professor Paul Johnson (bestseller: “Modern Times”) who asked Winston Churchill in 1946: What do you attribute your success in life? Churchill answered: “Conservation of energy. Never stand up when you can sit down. And never sit down when you can lie down.” That's why.
Former banker Dr Lin is a Harvard-educated economist and a British Chartered Scientist who now spends time writing, teaching & promoting the public interest. Feedback is most welcome