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The future of agriculture: Value or Volume?

The future of agriculture: Value or Volume?

25 June, 2008

By Dr Andrew West, Chief Executive, AgResearch Ltd

Agriculture arguably represents the number one success story of human development, underpinning all of our major expansions of civilisation and population on Earth. Today, agricultural land supplies nearly 90% of human food requirements while occupying 12% of the Earth’s ice-free surface. During the last 100 years, we have increased the amount of food harvested on Earth by a factor of seven. This has been achieved through agricultural science and technology, such as plant and animal breeding to increase yields and the use of fertiliser Even though the human population grew about four-fold during this time, the amount of food supplied by agriculture for each person on the planet was almost doubled. Undernourishment is defined as having less than 9200 kilojoules of food energy per day. In 2002, the UN Food and Agriculture Organization reported that the proportion of undernourished people in developing countries had fallen from 57% in 1964-66 to 10% in 1997-99.

Despite these successes, new challenges are looming. Barring disasters, the human population is projected to grow to some 9 billion people by 2050. In order to prevent widespread hunger and starvation, agriculture must supply all of these people with enough food. The volume of food produced by the world’s agriculture will therefore be a critical factor in ensuring the well-being of the human population. If we did not increase the volume of food production beyond its level in the year 2000, that would provide about 12,200 kJ of food per person per day. This would deliver adequate nourishment if the food was distributed evenly across the whole world but, as I have noted, some 10% of the population was still under-nourished in 1997-98 when the food supply was 18,000 kJ per person per day. If we were to maintain the same effective level of food supply by 2050, the volume of food produced around the world would have to be about 50% greater than it was in 2000.

At first glance, a 50% improvement in the world’s agricultural productivity between 2000 and 2050 would seem to demand a much smaller rate of improvement than the 400% increase in food produced per hectare that was achieved over the last hundred years or so. However, there are several complicating factors that will make this achievement much more challenging than it might appear.

One factor will be the stress that all human activity, including agriculture, puts on the environment. It is estimated that humans appropriate between 25 and 40% of the world’s terrestrial biological production for their own use. This has had implications for the other species with which we share the planet. The Species Survival Commission and World Conservation Union report that 785 species are known to have become extinct due to human activity in the last 500 years. These organisations also note that this number is probably a substantial underestimate because only a small fraction of the species believed to exist in the world have been described by science.

It is evident that we must not only increase the volume of agricultural production in order to feed the human population of the Earth, we must do so in ways that substantially reduce the impact of agriculture on our environment. This challenge is also evident in New Zealand, where lower impacts due to agricultural activity will be required to prevent eutrophication of lakes and waterways, erosion of hill country and threats to native bird, insect and plant species.

At the same time, if agriculturally-based economies such as New Zealand’s are to grow, we will also need to produce food and textile products for which wealthy customers around the world are willing to pay premium prices. The high international prices that we are receiving for dairy products at present are part of a worldwide phenomenon that saw the prices of internationally-traded foods jump by 61% in the year to the end of February 2008, according to The Economist newspaper. Inevitably, however, agricultural producers around the world will respond by producing more of these foods and this will cause prices to drop. In fact, the Economist food price index has already dropped from its peak, by almost 9.5% during March 2008 alone. There is an argument that sustainable high returns can only be generated from products that are particularly valuable to customers, incorporate elements that are scarce, and have attributes that are difficult for competitors to imitate While some of New Zealand’s current agricultural products have these characteristics, many do not and there are calls for a transition to producing higher-value foods and textiles than we do at present.

With the need to produce more volume as well as more value from our agriculture sector, and to reduce the sector’s environmental impact as we do so, the stage is set for an important discussion – should the agriculture sector’s emphasis be on value or on volume? I expect some of that discussion to take place at the fifth “Horizons in Livestock Sciences” conference, co-hosted by AgResearch and Australia’s CSIRO at the Convention Centre in Christchurch from October 28 to 30 (see www.livestockhorizons.com).


ENDS

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