A few years ago when prices for corn, wheat, soybeans and rice were half their current levels 850 million people suffered under-nutrition or hunger. The issue wasn’t the price of food, but availability in specific areas and the lack of means to earn enough income to buy food. Populations were increasing in developing countries and per capita demand was growing in middle income developing countries. Due to continued productivity improvements, food supplies were expected to grow slightly faster than demand and keep real commodity prices on a downward path. Complacency in public policy was easy with that type of forecast. The price increases of the past two years have turned that scenario on its head.
The more than tripling of petroleum prices over the past five years has added a new dimension to the food supply challenge. Many productivity enhancing technologies, like fertilizers, pesticides, irrigation and tractors, used in developed and developing countries are energy based. These technologies will still increase output, but the economics will be different from the green revolution of the 1960s and 1970s. A logical fear is that farming more land will be the only way to deal with increasing demands for food with rain forests being cut down and wildlife habitat used to grow crops.
The good news is that increasing productivity on existing farmland can be achieved, and current food price concerns have increased interest in making it happen. The potential was highlighted in a recent Wall Street Journal article about corn production in Ethiopia, one of the world’s poorest countries. About one-fourth of Ethiopia’s corn land is planted with hybrid seeds that produce on average two or three times as much corn as locally saved seed. One farmer said his yields are seven times larger from Pioneer hybrid seed. The extra income has allowed his family to move from a mud-brick house to one made of real brick and concrete. Some farmers are buying small John Deere tractors for their use and to rent to other farmers.
In India cotton farmers are using hybrid seed with a biotech Bt trait for control of insects. Indian cotton farmers plant about one-fourth of the world’s cotton acreage, but have traditionally had low yields. India’s cotton yields had plateaued at about 270 pounds per acre for 1989-2002. Hybrid seeds were introduced about 10 years ago and now account for 80 percent of cotton plantings. In 2002 biotech Bt cotton with resistance to important insect pests was grown on 125,000 acres, about 0.5 percent of the cotton land. By 2007 Bt cotton hybrids were grown on 15 million acres, 65 percent of the cotton land. Cotton yields averaged 510 pounds per acre in 2006 and 580 pounds in 2007. The world average is 780 pounds per acre. India has gone from a net importer of cotton to the world’s second largest exporter. According to estimates by the International Service for the Acquisition of Agri-biotech Applications, 3.8 million small farmers planted an average of 4 acres of Bt cotton in 2007. India had field trials in 2007 for 10 other biotech crops ranging from corn and rice to eggplant and cauliflower.
More yield potential exists in developing countries with higher yields. China has the second largest corn acreage in the world at almost 70 million acres. The average yield is 85 bushels per acre, low compared to the U.S. at 150 bushels per acre and Argentina at 120 bushels per acre, but high compared to Brazil and South Africa at 55 bushels per acre. China’s major corn growing areas are farther north than the U.S. and may not have the same yield potential as the U.S., but among northern states in the U.S. Minnesota has yields of 160 bushels per acre and North and South Dakota are at 125 bushels per acre. Corn is one of over a dozen biotech crops China field tested in 2007; others include rice, wheat, potatoes and papaya. China is a small net corn exporter and may import corn unless yields increase.
If petroleum prices remain high in the years ahead, yields will need to increase without a proportional increase in inputs like fertilizer and water. Corn is the leading drought tolerant biotech crop being pursued in the U.S. by major seed companies with commercialization possibly in four or five years. Monsanto has partnered with the African Agricultural Technology Foundation, the International Maize and Wheat Improvement Center and the Gates Foundation to use the technology for maize in Africa royalty-free. Monsanto is also working with other public and private institutions to develop crops important in specific areas of the world like cassava, cowpeas and papaya. Corn that uses nitrogen fertilizer more efficiently is also being developed. China is working on drought tolerant biotech wheat that may be available after 2010.
U.N. Secretary-General Ban Ki-moon told the delegates in Rome, "We have a historic opportunity to revitalize agriculture." That revitalization can get off to a fast start by using technologies that have already been developed to use existing labor, land and water resources more efficiently. This commitment to production agriculture will not reach its full potential unless markets are freed to direct resources to their most efficient uses. Free trade is needed to link supply with demand. Urban workers need incomes to buy food from outside their home countries. That means trade in industrial products and services needs to be free. Political leaders can use the current “food crisis” to adopt the agricultural and trade policies now that will reduce the potential for another food crisis episode ten or twenty years from now.