Sunday, 23 June 2013

Why grain demand will outstrip supply - or not?

There has been plenty of discussion about "food security" in recent years. For example, Julian Cribb led the charge with his book "The Coming Famine", after a spike in wheat prices from 2007.
This debate has revived the old Malthusian doomsday forecasts, and a current example is an article in "The Conversation" which has stimulated plenty of discussion -


Certainly, to any biologist, world population growth would suggest a looming crisis -


On the demand side of the food supply equation, this graph hides the fall in fertility in the developed world in recent decades. This change could contain or reverse patterns of population growth.

As for the supply side, the decline in productivity discussed in "The Conversation" article is quite real, certainly in our local experience. This decline has several causes, starting with "difficult seasons" (for those who can still deny "climate change").

Less apparent is the failure of agricultural research institutions to deliver productivity improvement. In fact, even farm leaders are calling for more R&D expenditure - usually by government. This has been suggested as a glib solution to farm debt problems.

The positive for the supply of food is that we now have a lot more people thinking about ways to increase food supply. As well, communication across the world is now possible to an extent unimaginable in Maltus's day. Though we may be experiencing a plateau of productivity in food production, this is probably only short-term ("market failure"?). In the medium term, humanity has demonstrated remarkable ability to solve problems if it can focus on the issue.

We can therefore hope that this discussion will help focus on the complex economic and social issues that lie behind food production businesses.

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