Replies to This Discussion

Permalink Reply by Russell Paul Luck on July 28, 2010 at 3:35pm

She seems to have a fair grasp of the range of problems affecting all consumers and producers of "food" and agricultural products.

What then is her angle on improving Australia's agricultural security?

Permalink Reply by Bob Stewart on July 28, 2010 at 5:27pm

Russell and Peter,

The Greens also want all energy, from renewables by 2030. The collection of stupid things now emanating from the Greens are reminding me of Hitler who is quoted declaring, "If you wish the sympathy of the masses, you tell them the crudest, most stupid things"
see, freedomdomain.com/misquote.htm

Permalink Reply by Roger Rankin Crook on July 28, 2010 at 5:47pm

I make no apology for again posting this paper written by John Bartle. It presents another, I think, well researched opinion, on the future of global food supply and global land utilization. It was originally posted on my now neglected site, The Global Farmer.

We need to guard against politically motivated global food supply Armageddon.

The global agricultural surplus and the case for non-food crops


John Bartle Department of Environment and Conservation and Future Farm Industries CRC.

I recently did a straw poll amongst colleagues to test perceptions about the medium term outlook for agriculture. I did this after having read FAO’s perspective on agriculture to 2050 (FAO 2003, 2006a). FAO indicates continuing weakness in the terms of trade for agricultural products and this seemed to be in contrast to the relatively optimistic outlook most of my colleagues expressed about technological advance and the potential for Australian farmers to remain competitive. Furthermore, both of these positions sit uncomfortably with the common perception that food supply remains a factor in combating the problem of global hunger.

Overly optimistic or pessimistic perceptions about future agricultural economic conditions, perhaps more than ever before, could result in misguided global policy settings and substantial under-utilisation of global agricultural lands. I aim here to present a balanced overview of projections for the future of agriculture and demonstrate that there appears to be potential to divert some agricultural land into non-food crops.

o set the scene to discuss these issues lets look at what happened in global agriculture in the period 1960 to 2000.

1. World population doubled from 3 billion to 6 billion. The population growth rate peaked in the 1960s at over 2% and declined to 1.35% by 2000.
2. There was a very strong increase in food commodity supply. The extra 3 billion people were not only fed, but global food production per person increased more than 20% and in developing nations by more than 50% per person. The average calorific intake in food deficient regions increased 31%, although hunger hot spots affecting some 10% of the global population remain. Global consumption of meat (on a per person basis) more than doubled.
3. In 2000 food commodities sold for less than 35% of what they did in 1960. This is part of a much longer term real price decline for food evident in an index constructed for wheat that shows a 90% decline from 1800 to 2000 (Lomborg, 2001).
4. Some 80% of the extra food came from improvement in the intensity (multiple annual crops) and productivity of agriculture, and only 20% came from the development of new land.
5. Europe and the U.S. were forced to ‘set aside’ up to 20% of their agricultural land to avoid surpluses that might have been difficult to quit on world markets.
6. In the final decade of this period the clearing rate of native forests (for food production and infrastructure) was 13 million ha/year but, corrected for the area of reforestation (for plantations, conservation and natural regeneration), the net conversion was 8.9 million ha/year or about 0.2%/year of the more than 3.9 billion ha of global forests (FAO 2006b).
7. The diversion of food crops to industrial use grew rapidly from a small base, most notably the production of ethanol from sugar cane in Brazil and industrial starch products from maize in U.S.

Looking forward into the new century FAO (2006a) predicts that population growth rate will continue to decline to 1.1% by 2015, 0.7% by 2030 and 0.3% by 2050. Global population will reach 8.9 billion by 2050 and peak at 9.2 billion in 2075, taking about double the time to add the next 3 billion increment as it took to add the previous 3 billion.

So growth in demand for food is declining and may disappear or reverse within a couple of generations. Producing a supply of food for the additional 3 billion, over double the time period as for the last 3 billion, and from the existing area of agricultural land, appears to provide only a modest challenge to the science of agriculture. Indeed it appears likely that a substantial global surplus of land for food production may emerge well before population commences to decline.

This scenario seems to present considerable risk to Australian farmers. It will tighten global competition in commodity food markets and decline in the terms of trade will accelerate. This would inflict particular pain on Australian farmers because our comparatively poor agricultural environment will mean that we cannot benefit from the advances in agricultural productivity to the same extent as our competitors. This suggests a need for radical change by Australian farmers over the next couple of decades.

So lets us look more closely at this future scenario. Many global scale projections of future agricultural land use are available. Here Hoogwijk et al (2003 and 2005) are used because they deal coherently with the combined impacts of new agricultural technologies changing diets and population growth projected to 2050 against a bioenergy background (see Table 1 below). Note that in this analysis:

* the most recent FAO population projections sit between low and medium levels.
* the diets are in ‘grain equivalents’ in kg/day with moderate (2.4), vegetarian (1.3) and affluent (4.2)
* the agricultural systems are intensive (best technologies available) and low input (organic systems with no chemical fertilizer or pesticides).
* the projections assume universal adoption of the specified diets and intensities of agriculture by the whole global population and food production land area of 5 billion ha (1.5 billion ha mainly cropped plus 3.5 billion ha mainly grazed). They exclude food production from the global forest area of nearly 3.9 billion ha (even though some 0.5 billion people live within forests).

Table 1: Projected percentage of global agricultural land surplus to food production in 2050 using a food security factor of 2 (ratio of production to consumption to account for supply chain losses) for three diets, three population projections and two intensity levels for agricultural practice (adapted from Hoogwijk et al 2003).
Type of diet Vegetarian Moderate Affluent
Population growth rate Low Med High Low Med High Low Med High
Intensive agriculture 74 72 66 52 48 38 16 9 3
Low input agriculture 26 20 3 0 0 0 0 0 0

Table 1 says that we would all need to become vegetarians if we wish to conduct agriculture at the low intensity level defined by Hoogwijk et al (2003). On the other hand, if we are to aspire to an affluent diet we could accommodate it on the existing area of agricultural land, but only if we universally adopt intensive agricultural technologies. However, the forces of global economic competition and issues to do with human health and environmental sustainability (amongst other things!) are likely to push us into adopting moderate diets and the best of technology. In this case the very striking consequence is that it will only require about half of the current area of agricultural land for food production.

Of course there will not be any future actual surplus of agricultural land. Universal adoption of moderate diets and intensive agriculture is unlikely to occur. Also, as the terms of trade for food products declines, alternative enterprises will emerge. The most likely large scale use for surplus agricultural land will be to produce feedstocks for industrial products and bioenergy. The attraction of industrial commodities is that demand is linked to economic growth (~4% projected to 2012, ABARE 2007) whereas food demand is constrained by population growth (<1.3% over the same period and declining). There is rapidly emerging interest in bioenergy (FAO, 2006a). This is now apparent in global and US grain markets with a recent sharp lift in prices due to diversion of grain into ethanol production, especially in the US. Set-aside land in the US corn-belt is now being withdrawn to go back into production.

Hoogwijk et al (2003) showed that if 50% of world agricultural land was diverted into growing crops to produce biomass for energy (i.e. bioenergy) this could provide more than double the current world primary energy consumption from all sources. Even with only a moderate surplus of agricultural land it seems likely that globally significant bioenergy industries could develop - without infringing on the prerogative of food. This possibility seems to be commonly overlooked by policy-makers world wide and in Australia.

Within this global context Australian farmers have the potential to become substantial producers of industrial and bioenergy feedstocks. However, this potential is poorly recognised even though there are important national issues at stake including:

* large scale economic diversification of agriculture to provide some respite for farmers from persistent decline in the terms of trade in food products;
* introduction of a range of perennial woody crops that would complement conventional annual crops and bring better environmental performance to agricultural systems;
* agricultural systems with considerable potential for carbon sequestration and reduced carbon emissions;
* creation of a new class of processing industries that incorporate integrated harvest and processing to fully utilise feedstocks through multiple product industries, e.g. a single harvest of whole crop biomass with the wood fraction going to higher value manufactured products and the leaf and twig residue for bioenergy (Bartle 2006);
* the new woody crops all require local value adding for viable export products thus locking in regional economic development;
* regional and national energy security.

The risk is that Australian farmers might be tempted to settle for a brief period of improved gain prices driven by the rapid escalation in grain ethanol production. In this pursuit they may miss the parallel opportunity to be building a more viable long term component to their bioenergy options. The problem is that grain does not have a very attractive energy ratio, i.e. the ratio of energy content in the grain to energy input to growing that grain. This ratio is less than 10 for grains whereas Wu et al (2006) showed that for a perennial woody crop like mallee the ratio was greater than 40. As the competition in energy markets intensifies the advantage of the system producing four times the energy product for the same energy cost will be irresistible. The only impediment is that the technologies for conversion of woody biomass (consisting of cellulose, hemicellulose and lignin, commonly called ligno-cellulosic or just cellulosic biomass) to biofuels are not yet commercially well established. But the momentum is gathering rapidly (Regauskas 2006, Schubert 2006). Too large an investment in grain ethanol may be short sighted! In its review of biofuels options Single Vision Grains Australia (2006) strongly supported ‘second generation’ cellulosic ethanol development in the medium term.

The opportunity for Australian farmers is that given their propensity for rapid adoption of new technology they could become world leaders in developing new woody crops, the new sustainable agricultural systems incorporating these crops and in the industries that process them. The new Future Farm Industries CRC will have a program dedicated to facilitating the emergence of these new non-food crops and industries.
References:

ABARE 2007. Australian commodities: Volume 14 no 1. ABARE Canberra 264 pages.

Bartle JR (2006). New Non-Food Crops and Industries for Australian Dryland Agriculture.

Proceedings Third International Conference on Sustainable Processing of Minerals and Metals Newcastle, 5-6 June 2006.

Food and Agriculture Organisation, 2003. World agriculture - towards 2015/2030, an FAO perspective. Available from www.fao.org.

Food and Agriculture Organisation, 2006a. World agriculture - towards 2030/2050, Prospects for food, nutrition, agriculture and major commodity groups. Available from www.fao.org.

Food and Agriculture Organisation, 2006b. Global forest resource assessment 2005 – progress towards sustainable forest management. Forestry paper 147. FAO Rome 350 pages.

Hoogwijk, M, Faaij, A, van den Broek, R, Berndes, G, Gielen, D and Turkenburg, W, 2003.
Exploration of the ranges of the global potential of biomass for energy, Biomass and Bioenergy, 25:119-133.

Hoogwijk, M, Faaij, A, Eickhout, B, De Vries, B and Turkenburg, W, 2005. Potential of biomass energy out to 2100 for 4 IPCC SRES land-use scenarios , Biomass and Bioenergy. 29: 225-257.

Lomborg B, 2001. The skeptical environmentalist: measuring the real state of the world. Cambridge Uni Press

Ragauskas, AJ, Williams, CK, Davison, BH, Britovsek, G, Cairney, J, Eckert, CA, Frederick WJ,
Hallett, JP, Leak, DJ, Liotta, CL, Mielenz, JR, Murphy, R, Templer, R and Tschaplinski, T, 2006. The path forward for biofuels and biomaterials. Science, 311:484-489.

Schubert 2006. Can biofuels finally take centre stage? Nature Biotechnology 24 (7): 777-784.

Single Vision Grains Australia 2007. Prospects for a viable grain based Australian biofuels industry – there is no single solution. Green paper. 78 pages.

Wu H, Qiang Fu, Giles R and Bartle JR, 2005. Energy Balance of Mallee Biomass Production in
Western Australia. In proceedings Bioenergy Australia Conference 2005 – Biomass for Energy, the Environment and Society, Melbourne December 2005.

Permalink Reply by Roger Rankin Crook on July 28, 2010 at 5:57pm

I also made this contribution to a discussion Dumb and Dumber - ABC started by John Fairfax. Again I make no apology for re-posting it here, I do so in the interests of continuity. The very nature of this 'beast' Agmates, the same topic can appear in several places at the same time. I hope it adds to the debate over the current 'concern' being expressed by some with regard to 'foreign ownership' of Australian farms:

For those of us who have a somewhat longer memory, because of the passage of time, this debate about foreign investment in Australian farming land is an interesting one.

Since the beginning there has been 'foreign' investment in Australian agricultural land. Foreign capital developed a great deal of the infrastructure of early Australian agriculture. How many 'Australian' farming families can trace their ancestry back to 'foreign' capital that came from England, Ireland, Scotland, Wales, France, Germany, Italy?

Sure, the produce from that investment was exported, very often by other foreign investors back to the lands from where that agricultural capital originated, because as now, we produced more than we could consume ourselves.

We exported our wool to the UK and a massive industry was built in that country.

Our dairy industry grew and we exported butter and cheese to the UK.

We exported wheat and meat to the UK because they couldn't grow enough for themselves. Their agriculture was in recession because Australia and the USA were a source of 'cheap food' for the UK. Think about that, we, Australia, were the source of cheap food that plunged British agriculture into recession following the repeal of the Corn Laws.

Australia is still here. Foreign investors can export produce but they can't take the land away. Unlike say, iron ore, the resource is not finite.

In the 1960s and the 1970s there was a massive investment in Australian agriculture from foreign investors. Many of them were from Europe and the United States. Some have stayed some have gone. It is wrong to claim that 'Australian Agriculture' has always been in the hands of Australians.

In the 1980s Fund Managers invested in Australian land. I make the distinction between land and agriculture deliberately. It is an accepted fact, that despite the trials and tribulations of farming, the land on which that farming takes place, doubles in value every ten years. I know for a fact that some fund managers were quite happy with a break even budget for the farming operation, simply because their 'investment' was appreciating at a rate greater than they could expect has they invested the money elsewhere.

At the end of ten or twenty years they sold ans showed a handsome profit.

I do not have the figures, I am trying to find out if anyone does, to compare the rate and size of foreign investment in Australian agriculture over time.

In my own working lifetime I have managed properties for overseas investors. Within that management company, and I'm quoting the 1970s, there were investors in the West Australian wheatbelt from the UK, Malaysia, USA, Ireland and Argentina. The company managed over twenty properties in WA. There may have been 500,000 acres in WA managed by this one company.

The company that I worked for was one of several in WA and certainly not the biggest. In Esperance, foreign investors bought and cleared millions of acres, many were from the USA.

Currently twenty five per cent of exports from Australia are from agriculture.

Our problem, the problem with Australian agriculture, is that we have not changed. Our wool industry is now almost totally reliant on the Chinese. Just as we were on the British 200 years ago until the 1950s, and then Japanese, for a while the Russians and now, the Chinese.

All we do, as we have always done is keep the sheep, shear them, put the wool into bales and export them - as we have always done. What is worse, in my view, is that Australian merino wool, a fibre that has no peer in the world is still sold at auction - just as it has always been. That is how we value our 'unique' product.

I think I am right there are now just two commercial knitting mills in Australia, just two. One in Tasmania and one in Victoria. Talking to the owner of the Tasmanian mill last year, he told me he now has to send his wool to China to be processed. Machine washable wool was an Australian invention. Machine washable wool is now only available from China.

I could go on. How much control to beef producers have on the 'chain' from paddock to plate? The same goes for lamb. Five hundred cents a kilo is a good farmer price according to the producers - then they see what it is being sold for in the shops - and they wonder.

I will finish with wheat. Australia producers 5% of the world's wheat exports 10 to 15 million tonnes of wheat a year.

Ten years ago now, and I am sure not much has changed, I spent a couple of hours in a UK supermarket looking for Australian wheat products, biscuits, cakes, breakfast cereals and so on. I didn't find one, not one. I asked one of the floor staff management and received a blank look. I think he thought I was stupid.

Now, next time you go down to your favourite supermarket scour the shelves. You will find biscuits and cakes from Europe. You will find breakfast cereals from Canada and or the USA, same product, different place of manufacture. I have even found biscuits from Saudi. The list is longer than that when you go into say, the range of biscuits and breakfast cereals.

Now before anyone says those manufacturers in the EU are subsidised so that is how they can do it - well that is wrong. The farmers under the CAP receive the subsidy. The millers and bakers buy their wheat at market price and the market price is international. Yet they can manufacture European wheat into product and export it to the other side of the world.

The EU and the USA have been known to subsidise grain exports when there have been massive surpluses. I accept that the Saudi wheat that was used to make the biscuits may have been bought at a subsidised price. But what if it had been Australian wheat?

So, you have every right to be concerned, if you believe that foreign investment is buying up the 'Australian Farm'. I suspect if we look back 100 years there has been an ebb and a flow of foreign investment. Some have gone and some have stayed and become, within a generation or two, 'Australians'.

If you were a Chinese wool merchant and currently buying Australian merino wool for 900 cents and manufacturing that into fine wool garments, or even yarn to sell on to the Italians and Germans to make suits costing over $1000, would not a few hundred thousand sheep in Australia appear to be an attractive investment. Particularly if you could employ Australians to manage and shear them - as they have always done?

I suspect our real concern, our real paranoia, as it has been since the first gold rush, is the nationality of the investors from that Inscrutable Kingdom to our North.

Permalink Reply by Roger Rankin Crook on July 28, 2010 at 6:29pm

I have no wish to be accused of dominating this subject. I would just like to add this. I left farm management when I was recruited by what was then ICI (Aust) Pty Ltd, Rural Division. I left that company eight years later.

During that time I had the privilege to be part of, and eventually lead in Australia, an international team of scientists and marketers that brought products and systems to Australia that had been invented in other countries. Those products enabled Australian agriculture to make a step change in farm management and crop protection. The costs involved were enormous, the investment from the UK was huge. And yes, it was profitable for ICI Australia and I believe to this day, to Australian agriculture.

To name just a few products and systems:

1. Spray-Seed. The pioneer product of what is now common crop establishment No-Till. Departments of Agriculture around Australia, told us face-to-face, that it could not be done. That farmers would never give up the plough. How wrong were they?

2. Ambush. The first synthetic pyrethroid, followed by Cymbush (that is a story in itself) that revolutionised Heliothis sp control in cotton and other crops.

3. Fusilade. The first of what are now many herbicides to control grasses in a variety of crops.

My point is that there have been others, over time, that have made many major investments into Australian agriculture from which Australian agriculture has materially benefited. And yes, they have made a profit.

Permalink Reply by Bob Stewart on July 28, 2010 at 6:39pm

Roger,

Even I can see the sense of some of the agricultural lands being utilised for timber being the planet's main source of oxygen in the process of photosynthesis to consume the carbon. Yet, this natural phenomenon to support life is taken so much for granted that I cannot see it anywhere in the hellbent rush to impose a tax for the sole purpose of reducing the carbon instead of increasing the acreage of timber to do so.

My time in Asia, some 22 years, witnessed severe destruction of tropical forests and in other parts of the world. Is there a quiet danger of not enough oxygen for the additional 2.8 billion souls by 2040? Our own bushfires have consumed huge quantities of oxygen to sustain the fire. destroyed oxygen production from the burnt vegetation and thereby the natural ability to consume the carbon, all in the one conflagration.

A very simple explanation is the death of the mother and her two children a few years ago who jumped into the family swimming pool to escape a bushfire. They died, not from drowning but from asphyxiation, the fire having consumed the oxygen from the local atmosphere long enough to cause their deaths.

It demonstrates too that carbon densities are not constant in any one place, that cities are more dense than the bush and instruments of measurement and their location to arrive at a scientific conclusion that led to Copenhagen has been the subject of serious doubt.

Should there be a more strenuous replacement of forests of merchantable timber to consume carbon and provide oxygen with incentives to do so? quite apart from the need of shelter construction. Will the extra 2.8 billion souls affect the amount of oxygen available to sustain the total if there be continuous destruction of the forests?

Bob Stewart

Permalink Reply by noel porter on July 28, 2010 at 6:51pm

Ag Biz alliance . Google Search the name ,Read the mission statement .
Join up and be a true blue Aussie supporter.
Power of the people.

Permalink Reply by Bob Stewart on July 28, 2010 at 6:59pm

Well done Roger on two accounts - you got my whole undivided attention and that is normally hard for anyone to do.

Cheers from Bob

Permalink Reply by Roger Rankin Crook on July 28, 2010 at 7:49pm

This business of land clearing is interesting. It is not a well known fact that a major influence on the clearing of forests in the British Isles, that made rural Britain what it is today, was 'Rule Britannia - Britain Rules the Waves'

Even those rolling hills of heather around the Lochs in Scotland were once upon a time, Oak forests. They were cleared, even before Elizabeth I, to build boats and ships for the Royal Navy and the merchant trade on which Britain depended.

Ever wondered about all those strange bent and strange shaped wood used in the Tudor era buildings? I didn't know until the 1980s, but that is all re-cycled timber. Wooden, oak ships, apparently, had a short life due to the time they spent in foreign waters where they picked up all kinds of worms and things.

It was not possible for 'builders' to obtain new wood as it was all the property of the Crown, so they had to make do with the re-cycled timber, hence all the strange shapes in the buildings. If you look at some of them you can see the shape of ribs etc.,

We lived in an old house in Wales, built about 1750, and as a boy I could never understand the uniform square holes in the huge beams. It wasn't until the 1980s that I learned the answer.

Timber was not a main source of fuel, to which the burning of Peat in Scotland and Ireland can attest.

Coal was being mined and transported to London and burnt in fires well before Henry VIII. Probably earlier but that is as far as I have gone back.

Then of course along came the Industrial Revolution and they didn't have all those trees!

It's a big story this business of land clearing, food production, the cutting down of trees and planting them.

Permalink Reply by Rae Billett on July 28, 2010 at 8:14pm

I agree with some of the comments but not all, we should do more regarding water storage, land grabs and the like but people cannot go on believing that this country has changed due to 'climate change'. It has always been thus, it's numbers of people that is changing and the lack of foresight by those trusted with the task to address the issues of lack of water in Australia.

This country's rainfall is not changing due to so called 'climate change', it has always changed due to El Nino and El Nina, it is the way it is. It is a drought ridden land. This is not new. Climate change has always happened and climate cannot be changed.

But the future way it is handled by those who should, is another question. Throwing their hands up in the air and selling off the farm to the Chinese will see these so called leaders wondering what the hell they did in the fullness of time. There will be no accolades for these politicians, the Greens included. They can come out with all the green rhetoric they like to progress their cause.

Permalink Reply by Colin J Ely on July 28, 2010 at 8:28pm

Roger
If you go to Upwey, at the foot of the Dandenongs in Melbourne, you will come across 'Mast Gully Road'. This road was named for a very good reason. In the late 1800's timber cutters worked there cutting down the long, straight trees that grew there (Eucalyptus regnans?) for the repair/replacement of the masts of sailing ships in Port Phillip Bay

Here it is Heart of Oak ! ;-)

Permalink Reply by Roger Rankin Crook on July 28, 2010 at 9:19pm

I, once, lived in Eltham.
I know the Dandenongs well.
I know Mast Gully Road, all I did at the time was assume.
Thanks, Colin.

Roger

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