Feeding 9 billion in 40 years

Although world agriculture has met the food demand of growing populations and expanding economies over the last half of the 20th Century, U.S. growers and their counterparts worldwide face a “continued challenge” to meet the continued growth in food demand over the last half of the 21st century, according to Iowa State University emeritus ag economist Don Hofstrand.

“We must be diligent in meeting this challenge and make the necessary public and private investments of resources. We cannot simply assume that, although we met the food needs of the last 50 years, we will easily meet the food needs of the next 50 years,” he contends.

“The inclusion of renewable fuels from biomass sources further complicates the situation. In general, biofuels may have a difficult time competing with food demand from developed countries. Conversely, the food demand of developing countries may have a hard time competing with biofuels. This may be particularly evident for Sub-Saharan African populations that have low incomes, high population growth rates, stagnant economies and dwindling food production per person.”

Rising incomes of people in developing countries allows them to compete for food more effectively, but it also increases overall world food demand-making the competition between food and biofuels more intense. On the other hand, rising incomes will also increase the demand for energy, which will in turn impact biofuels demand.

“The corn ethanol industry has been criticized for moving corn from food to fuel uses. However, we must remember that even producing non-food energy crops (i.e. switchgrass) impact food production. Total cropland area is relatively fixed and increasing the acres of energy crops will displace acres of food crops. So the competition between food and fuel continues,” says Hofstrand, who discusses additional issues like rising incomes, urbanization, food waste, ag productivity, international trade and hunger.

As noted in the main story this week, world population just passed the seven billion mark and is projected to increase to over nine billion people by 2050. The Food and Agricultural Organization (FAO) projects food and feed production will need to increase by 70 percent; FAO baseline projections indicate the world should be able to do it with realistic rates of land use, water use and yield increases. However, Hofstrand cites University of Minnesota research indicating food demand will double by 2050.

In addition to population growth, world food need will rise due to increasing incomes in developing countries, especially for meat. Seeing as how it takes multiple pounds of grain to produce a pound of meat, total pounds of grain consumed per person-directly as grain and indirectly through meat-increases substantially, Hofstrand points out.

Rise in incomes will continue as long as economies continue to grow. “Although projections of future economic growth are more tenuous than projections of population growth, there is general consensus that the world economy will expand in the long-term-in spite of the current financial problems in the developed world,” says Hofstrand. World Bank baseline projections indicate world Gross Domestic Product will grow at an annual rate of 2.9 percent from 2005 to 2050, high income countries growing at 1.6 percent but developing countries at 5.2 percent. This will tend to narrow the income gap between developed and developing countries. Developing countries share of global output is expected to increase from 20 percent to 55 percent in 2050, he adds.

‘URBANIZATION’ WILL MAKE MARK

Currently, about half of the world’s population lives in rural areas, the other half in urban centers. Over the next 40 years, there’ll be a large rural-to-urban. Hofstrand says that by 2050, over 70 percent of the world’s population is expected to be urban. Urbanization combined with rising incomes will result in less consumption of grains and other staples and more meat, dairy products, vegetables, fruits and fish. There’ll also be an increase in demand for semi-processed and ready-to-eat foods.

Hofstrand reports that 75 percent of the poor in developing countries live in rural areas and are directly or indirectly tied to agriculture. Despite the large movement from rural to urban over the next 40 years, population growth in rural areas is expected to increase faster than employment opportunities in primary agriculture. So, rural areas in many developing countries will need to transition to non-agriculture employment.

Food waste is another issue as agriculture attempts to feed the world for years to come. It’s estimated 30 percent of food is wasted along the food chain from growing to consumption. In low-income countries it’s primarily in storage after harvest. In high-income countries it’s primarily at the point of consumption, like at restaurants and discarding excess food to insure food safety. “The magnitude of this problem should not be underestimated,” states this analyst. If it’s assumed the world will need to increase agricultural production by 70 percent by 2050 to meet the food needs of nine billion people, cutting food waste in half over the next 40 years (seemingly a reasonable goal), means agricultural production will only need to rise 45 percent instead of 70 percent-a much easier goal to reach and less draw on the world’s resources.

“Higher food prices are probably the best way to reduce waste,” says this economist. “Much of the waste in high-income countries stems from the fact that food is cheap when compared to the consumer’s income levels. However, higher food prices place a burden on consumer’s in low-income countries and low-income consumers in developed countries.” In high-income countries like the U.S., he thinks the place to start is with information campaigns to make people aware of the magnitude of food waste and the financial benefit of reducing it. New technologies like sensors can detect spoilage, and extending shelf life would also be helpful.

Referencing USDA’s Economic Research Service, Hofstrand examines changes in agricultural productivity. Global agricultural output grew by about 2.2 percent per year from 1961 to 2007-about half of the growth from increased use of production inputs, the other half due to increased productivity of inputs. In other words, a substantial amount of the growth in agricultural output was due to better efficiency of inputs. An “important ingredient” in meeting the world’s food demand in 2050 (while minimizing the impact on world resources) will be maintaining or increasing productivity, states Hofstrand. That’ll take “sufficient investments in agricultural research and Extension across the world,” and seeing as how there’s a long lag time from initiating research to the actual application of new technologies, “investments need to be made soon for the impact on productivity to emerge by 2050,” he adds.

INTERNATIONAL TRADE EYED

Countries with large areas of arable land relative to the size of their population tend to have the most food security. The amount of arable land per person is highest in Oceania (3.85 acres per person), North America (1.68 acres) and Europe (0.96 acre). However, this is not where population will be increasing over the next 40 years. North Americas’ population is expected to grow by only 4 percent, while Europe’s is expected to decrease by 1 percent. Half of the population growth is expected to occur in Sub-Saharan Africa where arable land per person is currently only three-quarters of an acre. Assuming arable land area doesn’t change, land area per capita will drop to half of an acre by 2050. Asia’s population is expected to grow 41 percent with arable land currently only a third of an acre. The larger population will decrease per capita land area to less than a quarter of an acre by 2050. So countries in these regions will need to either substantially increase their agricultural productivity or import a larger portion of their food needs Hofstrand discusses.

FAO projects developing countries will be able to meet most of their consumption growth by increasing domestic production. Regardless, the net imports of cereal grains are expected to increase from 135 million metric tons in 2008/09 to 300 million metric tons by 2050.

Currently there are over one billion chronically undernourished and malnourished people in the world. FAO expects this number to decline by 2050, but hunger will still exist for a large number of people-even if there are ample supplies of food in the world. “Although notable exceptions exist, most hunger situations are not caused by an actual shortage of food. Rather hunger is caused by the financial inability to buy food. About 20 percent of the world’s population lives on less than $1.25 per day. So this problem is more a sign of poor worldwide income distribution rather than a world-wide shortage of food,” Hofstrand explains, noting that “the situation is exacerbated if there is a shock to the food system and commodity prices escalate. Volatile prices can lead to disruptions of international trade and have a significant impact on food distribution and prices, especially during periods of low reserves. Low-income food deficit countries need to reduce their vulnerability to international agricultural market shocks such as happened in 2008 when the price of commodities rose rapidly.”

The average U.S. consumer spends only 10 percent of disposable income on food. The situation is much different for consumers living in low-income, food-deficit countries, where half of a consumer’s disposable income may be spent on food. Seventy percent of their food expenditures are for staples compared to 20 percent in high income countries. If prices of commodities increase 50 percent, the amount of disposable income spent by consumers in high-income countries will only increase by 10 percent but by 35 percent increase in low-income countries. Thus people in low-income countries, who already spend a disproportionately large amount on food, are hardest hit by increased commodity prices, notes Hofstrand.

“There are many moving parts in determining our ability to feed over nine billion people by 2050. How these parts unfold will determine whether we are successful,” he says, concluding that “we are not helpless bystanders of this unfolding story.” He recommends championing funding of ag research and Extension to increase productivity, minimizing international trade distortions, improving rural education and job creation in developing countries, reducing food waste and finding ways to alleviate hunger.

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