Monday, February 25, 2013

To Feed The World, We Need To Fix The Politics, Not The Environment

They say there will be 9 Billion people in 2050. The popular question is "how can we feed that number of people?"

There is literally not a day go by where I'm not confronted with some sort of report, program or video about the challenge of feeding the world.

The common theme is we need to increase agricultural productivity to meet this massive demand. The view that we have limited resources that will make food production more expensive or difficult in the future is widely popular.

Some people who belong to the environmental movements, like to use the growing demand to push their causes, one such cause is to promote the vegan lifestyle as less cattle will reduce CO2 emissions. 

Businesses also jump on the band wagon, because it allows them to get subsidies that keep their business profitable when it otherwise would not be, solar panel manufacturers spring to mind. 

Other people are advocating genetic modification as the answer to the worlds food problems. This is often promoted by the GM companies or farmers. I wonder if both groups real interest is just to make more money.

It seems to me that no matter if you are politically to the left or right, environmentalist or smoke bellowing capitalist. All these groups can use the claim that "we have to feed the world" to meet their particular agenda.

I don't believe we have a food production problem. At least not in the sense that the earth can't produce enough food.

The real restraint on food production is political. It's the policies of governments that restrict the production of goods & services, of which food is one.

Zimbabwe Take my former home country, Zimbabwe. In the 1970's it was hailed as the bread basket of Africa. Yet the agricultural output of that country today is a fraction of what it was in the 1970s. This is despite all the technological advances that have taken place over the last 30 years.
This from Wikipedia
The University of Zimbabwe estimated in 2008 that between 2000 and 2007 agricultural production decreased by 51%.
Robert Mugabe is to blame. The president of Zimbabwe has created an environment in Zimbabwe where doing business/farming is very difficult and investor confidence has evaporated.

The single biggest initiative that Mugabe undertook was the "land reform programme". It was essentially a plan to expel white farmers from their land and redistribute it to Africans (aka war veterans from the 70's war of independence). I'm all for promoting more African land owners, but there are much better ways than this to do it.

The result was nearly all the farmers with the capital and knowledge were driven from Zimbabwe. These were the farmers that produced Zimbabwe's exports.

My Uncle was one of them. He purchased a cropping farm as a young man, the farm supported a whole village of African workers and funded many of their children's education. The farm was effectively closed over night.

The farm is now derelict, with the irrigation system, the buildings & other infrastructure all in disrepair. The farm now occupied by subsistence farmers.

The environmental conditions have nothing to do with the reduction in Zimbabwe's agricultural output.

Ukraine The Ukraine is another example of political decisions harming production.
This article from the Kyiv Post explains:
Ukraine is naturally endowed with 42 million hectares of agricultural land, 25 percent of the world’s richest black-earth soil, favorable and predictable climate conditions, and warm sea ports as well as other transportation links relatively close to export markets.
Yet, for example, the nation’s annual grain yields remain below the Soviet era, while former republics Russia and Kazakhstan now exceed those levels, according to the International Finance Corporation, the for-profit arm of the World Bank.
The article goes on
an October 2011 IFC survey found. It takes 375 days to deal with construction permits and 274 days to get electricity, according to the World Bank’s 2012 Doing Business report.
 And since Ukraine doesn’t have a single agency approach to food safety, agricultural producers must deal with multiple compliance regulations and messages from various government agencies.According to the IFC, only 1 percent of 13,000 food businesses have implemented global food standards such as HACCP, and 77 percent of agribusinesses interviewed in the IFC survey had no idea what GLOBAL.G.A.P standards were.
“Outdated product quality standards are one of the main barriers keeping local agricultural commodities and food products from gaining access to foreign markets, European in particular,” stated the IFC survey findings.
The Ukraine is famous for it fertile dark soils, yet the country is producing less grain than it did as a communist state. 

Farmers are held back by red tape and horrendous bureaucracy from government agencies more concerned about their power and jobs than the economy.

I read a story a while back, of a farmer who bought a tractor in Europe, disassembled it and brought it across the border as "parts" and then reassembled it again in the Ukraine. This was because he could not get a permit to import a tractor.

Import tariffs simply discourage technology uptake by Ukrainian farmers.

The Ukraine doesn't need the latest ground breaking agritech, it just needs some basic equipment and sound management.

Massive production gains can be made in the Ukraine, if the political problems can be fixed.

Canadian Dairy Industry The Canadian dairy industry cartel is another example of how government regulations restrict reasonable production by using subsidies and tariffs.
This article by FullClip Finance explains
Canadian dairy is a cartelised industry in that it is comprised of enterprises which restrict competition — through both import tariffs and output quotas — to fix the price of their products. 
OECD figures indicate that the amount that Canadian consumers over-pay for dairy products hovers around $3 billion (CAD) annually; we pay twice the world average.
If I were to wake up tomorrow and decide that I want to buy my own cow and charge my friends a buck for every litre of milk, someone would most certainly show up at my door and inform me that what I’m doing is illegal because I haven’t been issued a government quota. Lacking the $30,000 necessary to purchase such a quota, I would be forced to sideline my entrepreneurial ambitions. As for buying milk for my personal consumption, I’m not willing to take my chances of buying cheaper milk in Vermont only to have a 300% tax slapped on at the border.
Again Canadian dairy produce could flourish by simply adjusting government regulations. 

Argentina is another example of government policy getting in the way of agricultural production. This article from elaborates

What does all that mean? Well, take a look: once the breadbasket of the world, Argentina’s wheat exports are sinking – indeed, the International Grains Council forecasts its 2012-13 wheat exports will be half the previous season’s levels.
Argentina’s romantic image of gauchos roaming the plains herding the cattle destined to become sizzling steak endures, but beef production is 25 per cent lower than it was three years ago and Argentina has failed to meet its Hilton Quota of high-quality beef to the European Union.

I could find examples all day long of government policy restricting agricultural production.

So I conclude, traditional growing areas of the world may be finding it difficult to continue to increase productivity, but thats not an indication of the planet not being able to sustain a larger population.

The view that the planet is maxed out and producing all it can is just not true.

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