Facing the Lesser-known Challenge: An Over-Abundance of Agricultural Productivity

Everyone knows about the difficulties of feeding 9-10 billion humans by the year 2050: so many more mouths in many developing countries and not enough locally available food.
But in Canada and several other developed countries we have the reverse problem: an over-abundance of agricultural and food productive capacity. About 40% of available food is not even eaten, we’re told, and still we have the potential to produce much more. That’s the subject of this column: what it means to agriculture and consumers in years ahead.

World population growth 1950-2050 (2)Figure 1. Growth in human population, 1950-2050. Source is here.

 
The obvious solution to these two challenges according to some analysts is very simple – just ship the surplus from places like Canada to countries in need. It’s a global distribution problem, they say, not one of supply.
But, readers should recognize that this approach has been used extensively in the past and it has not worked very well.
For much of 25 years, between the early 1980s and the mid 2000s, world grain and oilseed production, which represents about 75% of global food caloric intake, was dominated by excessive productivity in places like North America and Europe. This led directly to depressed global prices – often magnified by government subsidies and other trade-distorting policies – and major shipments of cheap, subsidized grains and other food commodities into lesser developed nations.
This seemingly boundless international supply of cheap imported grain and food led to complacency and serious long-term damage to agriculture in many developing countries. There was a reduction in international agricultural research and a general shift away from local food production as a national priority. Countries which were formerly nearly self-sufficient in food production, like Nigeria and Mexico, became major importers, positioning them as highly vulnerable when the food price crisis of 2008-09 occurred. For more discussion on this topic see a 2010 review by Headey and Fan of the International Food Policy Institute or my own chapter called “Background on hunger” available here.
That crisis, triggered by a combination of factors but primarily weather disruptions in several major grain producing countries causing reduced crop yields, meant lower world grain reserves and sky-rocketing grain prices. You all know the story.
The one positive from that disaster has been a resurgence in political and financial support for agricultural development especially in food-deficient countries, plus recognition that heavy dependence on imports is not the wisest strategy for ensuring domestic food security in poorer nations. Since 2009, international research agencies have received increased funding, and local governments have shifted priorities. Agencies like the Gates Foundation have provided major leadership and support.
However, scarcely a few years later, we’re seeing signs of a return of the former complacency: the use of superior technology for food production is not deemed a priority, claim some pundits. They say better distribution, not production, is what’s needed.
Twenty-five years of pre-2008 experience says they are wrong.
This is not to argue against any grain and food shipments to the so-called Third World. Emergency food assistance such as that provided by the World Food Programme during regional crises is essential. There are attractive and legitimate international market opportunities with affluent consumers in developing countries; efforts by Canadian agricultural and food exporters to serve these markets are timely. Large shipments to China of commodities like soybeans also make sense. We sell to China what we produce best (agriculture and food products); they sell us low-cost consumer products. That’s trade balance.
But major imports of cheap grains and surplus food to feed the 800 million poor and hungry in least developed countries is different. Rather than depending on imports, they need to learn how to grow their own food. We should provide them with money, education and training, good science, advanced technology and expertise if we are truly genuine about reducing third world hunger – but not cheap grain to undermine their farmers.

Teach a man to fishFigure 2. The quote could as easily be, “Teach a person to farm…”

 
So that leaves agriculture in countries like Canada facing a critical dilemma of a much different nature.
Thanks to a steady influx of superior farming technology, our potential to produce more food commodities – crops, farm animals, and foods derived from them – continues to grow.
Some suggest that climate change, new pests, loss of farmland, ‘ecological collapse’ or combinations of these and other factors will curtail future growth. However, there is ample evidence that biological and technical potential exists for much higher productivity, not withstanding these constraints. Indeed, we may be only beginning to see the gains possible through genetic improvement and superior soil and crop management. Potential productivity will grow even as the number of farmed acres declines.
But at the same time, domestic demand for food – measured in terms such as total caloric and protein intake – is leveling off. Unlike some other developed countries, the Canadian population is still growing somewhat (in fact, largely because of immigration), but the rate is slowing. And as the average age becomes older, people are inclined to eat less. Indeed, health stats suggest we all should eat less: Being overweight is a far bigger problem in Canada (and many other countries too) than hunger.
This imbalance between growth in agricultural productive capacity and domestic food consumption has meant benefits for consumers which, surprisingly, are rarely acknowledged. Real farm commodity prices (i.e., after adjusting for inflation) have trended downwards for most of the past century in Canada. The percentage of family income spent on food has declined to about 10% and that includes a much greater percentage of spending on restaurant meals and pre-purchase food preparation than was the case a few years back.

Canadian husehold spending on food

Figure 3. Canadian average household spending on food. Source: Statistics Canada via CBC.

 
Even for poorer Canadians, food costs have dropped. Statistics Canada data show that food represents about 14% of disposable income for the poorest one-fifth of Canadians, still below the Canadian average of 30-40 years earlier. By comparison, the portion of income spent on housing has increased and represents about 30% of income for the poorest Canadians. That’s a more likely cause for increased dependence on food banks than inadequate food supply or high prices.

 
Table 1. Canadian household expenditures relative to income level, 2013. Source: Statistics CanadaComponents of Cdn household income

In seeking to address the imbalance between productive capacity and domestic food consumption, farm groups have pursued new non-food opportunities for Canadian crops. Especially attractive are opportunities to replace products traditionally made from fossil hydrocarbons with those made from renewable farm crops. Biofuels are the most high-profile example, but there are many more including base chemicals and organic polymers from plant carbohydrates, lipids and fibres.
The food-versus-fuel debate has modified this shift somewhat in recent years – a result of the 2008-2009 grain price spike and the attendant debate about the role of biofuels as a cause. (In my view, the biofuel effect was minor – reference here – but others disagree.) The debate means uncertainty as to whether future non-food bioproducts are more likely to be made from traditional food/feed crops or from different crops grown on the same land. The effect on grain supply for food is the same either way, but the substitution route may be more attractive politically and to the general public and media. (Main-stream media rarely dig deeply when it comes to understanding agricultural issues.)
In either case, the result will be a continuing diversion of some of the expanding Canadian agricultural productivity away from food production.
There is another route by which the imbalance between agricultural productive growth and domestic food demand may be brought into line in Canada and other Western countries – i.e., by limiting/restricting agricultural productivity.
We’ve seen that trend developing in Europe for some time and there are signs of spread across the Atlantic as well.

Anti GMO Greepeace.JPGFigure 4 NGOs have worked to inhibit the cultivation of genetically enhanced (modified) crops in many countries.

 
One way this is occurring is through increasing restrictions on the use of agricultural technology and inputs – sometime for reasons which have a solid scientific base – for example, proven risks to health or environment – but in some cases not. A prime example of the latter is the EU restriction on the use of genetically modified (GM) crops, not withstanding their proven benefits and safety, and their even greater potential for improving crop yields, pest control and nutritional quality (a good commentary on this by Mark Lynas here).
I’ve written elsewhere about the weak scientific base for bans or de-facto bans on the use of neonicotinoid insecticides for seed treatment in Europe and Ontario. There is a real risk that this could extend to other technologies.
This will not stop the ever continuing search by agricultural scientists, agri-businesses and innovative farmers for new ways of producing more for less. But it will certainly act as a damper, even a substantial restraint in some cases – not to mention a major impediment to the use of some advanced technologies for increasing productivity and quality of specific crops. Consider, for example, how aversion to GM technology has inhibited the use of the same to control critical diseases and mycotoxins development in wheat.

Fusarium head blight.JPG

Figure 5. Fusarium head blight damages both the yield and quality of wheat. Source of photo: North Dakota State University.

 
The other way that technological advancement may be impeded is through changes in consumer preferences and creative marketing – independent of any government policy – which often feeds on consumer fears and perceptions.
Organic agriculture and foods are a prime example. Overlooking for now the question of whether they are actually better for health or environment, organic crops usually yield less per acre – and are more costly to grow per unit of food produced.
But the trend to more costly foods is much bigger than organics. Many people want gluten-free foods, even when they have no gluten allergy. Buyers want cage-free and/or free-range eggs and poultry products. The same goes for “hormone-free beef” and “no antibiotics.” The list goes on. All of this adds costs and restricts growth in farm productivity.
There is a major move afoot globally to certified “sustainably grown” farm commodities and foods. While this is to be applauded from a general perspective, it will mean higher costs and more buyer-imposed restrictions. It will also mean almost certain tradeoffs between what farmers and good science define as “sustainable” and the conflicting demands of activist groups with alternative perspectives. “Sustainably certified” is about marketing as well as environment.
None of this means that Canadians will lack for an ample-to-excessive supply of food in the future – nor will consumers in other advanced countries where a similar trend is occurring. But it will dampen rates of growth in productivity. Perhaps the long-term trend towards ever-decreasing expenditures for food as a percent of disposable income may be reaching an end.
The tragedy in this lies not with Canadian consumers, even for those with low incomes, for food prices here are likely to remain “cheap” by historical standards. Even organic food, while more expensive than regular, is still cheap in price compared to years ago. Rather the injustice occurs when irrationalities about food production spread to less fortunate countries where productivity must go up and where food represents far more than 10% or 14%, of annual income. But that topic is beyond the scope of this column.
In summary, what does this mean for future agriculture in Canada? Will our productivity and efficiency continue to increase, or will it be offset to a large extent by restrictions imposed by governments and market demands? Will growth in non-food and new export markets be sufficient to match growth in productivity? Or will the future bring a return to supply gluts, price depression, pressures for public income support and a resumption of cheap sales into developing countries, as we saw for a quarter decade prior to 2008?
Only time will tell.

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