George Chichester, Partner in our Farming department, takes a look at the pressures that farmers are facing in feeding the global population in the years ahead.

Food prices are obviously determined by supply and demand. However, affluence, personal taste, transportability, shelf life, exchange rates and ease with which one commodity can be substituted for another also all play a part.

This witches’ cauldron of factors is certainly playing havoc with global markets at present, so the crystal ball is a little steamed up. However, prospects indicate strong prices for the foreseeable future, largely due to the gargantuan task that world farmers face of feeding the global population in the years ahead.

UK grain production represents less than 1% of the world’s total, and as trade becomes increasingly global, so our internal price is dictated more and more by the world price. That amount is effectively set in dollars and can fluctuate significantly, depending on whether food stocks are above or below what the global housewife deems prudent to keep in the world larder. 

At the moment, although consumption is rising rapidly, production has also jumped up a gear and a small excess of output has depressed commodity prices. Nevertheless, the balance is pretty tight. According to a report by the US Department of Agriculture, we have only two months’ supply in the larder, and the prospects for future output to grow at the same rate as demand look bleak.

To start with, one must not underestimate the growing importance of China, which to date has hardly featured in world markets. Home to one-fifth of the world’s population, it has 1.3 billion people to feed. Average per capita meat consumption has risen from 9kg per year in 1970 to 55kg now, and China accounts for half of the global consumption of pork. While largely self-sufficient in this, it is unlikely to remain so without strong investment. So during David Cameron’s recent visit, China committed to £45 million worth of UK pig semen imports, and is importing £1,000-a-head breeding pigs to bolster numbers.

Having lost around 8.3 million hectares of arable land to urbanisation since the mid-1990s, China has also invested heavily in countries such as Zimbabwe and Algeria to produce crops there for export – and in September struck a deal to rent 5% of Ukraine’s arable farmland for 50 years.

China is not the only country on a food shopping spree. Other net importers of food include Russia, Italy, Saudi Arabia, Japan, Germany and the UK – we are only 62% self-sufficient. Egypt, meanwhile, is the largest importer of wheat in the world, and countries in West Africa have potential to hugely increase imports as their economies grow.

So, who is producing this food? China and the US are the largest producers of grain – although Argentina has the highest proportion of net exports of food ($23 exported for every $1 imported) – and Canada and Australia deserve a mention.
It is extremely worrying, then, that research published last November in Science concludes that decades of agricultural practices are to blame for the near-extinction of tallgrass prairie in the US midwest, as soil microbial diversity has been gradually eradicated.

‘In the past, great civilisations have fallen because they failed to prevent the degradation of the soils on which they were founded,’ cautions Dr Mary Scholes, co-author (with Professor Robert Scholes) of the accompanying article ‘Dust unto dust’. ‘The modern world could suffer the same fate on a global scale.’ She adds that 1% of global land area is degraded every year, and in Africa erosion has reduced yields by 8% and nutrient depletion is widespread.

Chemicals can keep crop yields high for a while, but the complex ecology of the soil becomes compromised and our naïve assumption that we can just keep adding NPK fertilisers and all will be well is hopelessly flawed. As Ambrose Evans-Pritchard comments in the Telegraph: ‘There comes a point when terrified governments make a Faustian pact, sacrificing their future to stop their people starving today.’

If you are a farmer, be excited… but also beware!