They are claims we have all heard many times before: the world will need 70 percent more food by 2050, and the dining boom is about to replace the mining boom.
But at least one rural economist is urging caution, expressing concern at the level of hype currently surrounding Australian agriculture.
Dr Peter Barnard
Speaking at the Livexchange conference in Darwin, Dr Peter Barnard said politicians, industry leaders and analysts were all contributing to an unrealistic belief that Australian agriculture represents a “path to riches”.
“There seems to be a belief that all we have to do is produce more food and the world will buy it, and will buy it at higher prices,” Dr Barnard said.
However, the cold hard facts told a more sobering story: growth in world food demand is in fact slowing down.
Dr Barnard said FAO data shows that the rate of increase in food demand per annum slowed from 2.7pc annually between 1961 and 1970 to 1.7pc annually between 1991 and 2000 and 1.2pc in the current decade.
It was also predicted to drop further, Dr Barnard said, because the rate of increase in the world’s population and GDP was falling.
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China’s population is also set to decline from the mid-2020s through to 2050. While China’s recent decision to abolish its one-child policy may cause that trend to change in time, it will not impact population change in China before 2050.
Dr Barnard said the statement that the world will need 70pc more food to feed the world’s population in 2050 was correct, and was also “easily achievable”.
“We have achieved it in the past,” Dr Barnard said.
“We have had rates of growth well in excess of 70pc and we’re likely to achieve it going out to 2050.
“Without allocating an extra hectare of the world’s land agriculture production all that is required to meet that 70pc target is about a 1pc growth in productivity per year.
“I don’t want to pour too much cold water on this hype, I might have done that in a way, I think at the very least some caution is warranted.”
At last a realistic, authoritative warning relating to investment in agriculture. Anyone brought up on the land knows full-well the effect of a free marketplace governed not only by supply and demand but manipulation of price by traders, particularly for non-perishable or extended-life product. The insidious “two steps forward one step back” life on the land will come under further pressure as capital requirements (land and livestock) escalate and commercial suppliers increase the cost of inputs when the market-place value of a product increases, irrespective as to whether it’s grain, sheep meat, beef or dairy products. A record export tonnage at a record gross price does not translate to satisfactory profit of any investment in agriculture, whether it was made in 2014 or 1914. Compounding the issue of profitability is the focus on “living standards” which are assumed to rise in developing countries. There is a canyon between a standard of living and expenditure on high-value product such as beef and sheep meats.
Well said Peter Barnard…….most commentators and politicians would do well to take notice of a senior statesman .