The world is currently facing a food shortage. The primary reasons are: greater demand for a more varied diet from a growing middle class in emerging nations; a switch to biofuels as alternatives to gasoline and other fossil fuels that is competing for acreage; and a recent history of more difficult weather conditions than usual (e.g., droughts and floods) in some major producing regions around the world.

Here are some of the ideas that I have come across in my reading that are being proposed as means to raise agricultural output. These involve better use of existing resources and technological improvements, as opposed to relying on government action such as altering subsidies paid to farmers in order to change the terms of trade between richer and poorer nations. In world trade talks, agricultural subsidies − mainly in place in rich nations − have proven to be hard to dislodge, for political reasons.

(Another recent obstacle to freer international flows of agricultural product has been export taxes imposed by some countries to protect their own domestic supplies. This distorts the market in several ways, as outlined in an earlier blog entry entitled “Soft Commodities, Food Riots and Export Taxes” and dated May 16, 2008.)

An issue that is proving to be quite contentious is whether or not the shift to biofuels is taking away from crop production meant for consumption. One way to avoid this controversy is to plant crops specifically for biofuel production on land that is not currently being utilized. This can be accomplished in several ways.

1) Some lands are lying barren that should be more heavily utilized. For example, according to the Cuban government’s own studies, as much as half of that nation’s farmland is lying idle or underutilized.

2) There is a good reason that so many people are excited about recent developments in bio-technology and bio-engineering. These hold out the potential to solve, or at least ease, many of our problems. New scientific advances offer tremendous potential.

For example, by tracing the DNA sequencing of plants, the genes that are most or least desirable can be turned on or off. As a result, new plant strains can be developed that will grow where the weather is colder (or hotter) than normal, or where the chemical composition of the soil has never supported crops before. Such crops are often referred to as genetically-modified (GM).

The problem for GM foods is in determining that they are healthy, when it comes to consumption. This involves a lengthy government approvals process. However, it is not as big an issue when the crop is intended as a biofuel. But even when the GM crop is meant for consumption, there are clearly long-term potential benefits in developing strains that are:

1) More disease resistant;

2) More weather resistant (e.g., able to withstand more days without rain); and

3) That yield a higher concentration of what is most desirable from the plant (i.e., sucrose from sugar cane);

Some other ideas for raising agricultural output include the following:

1) More fertilizer production and more effective usage. The former is being accomplished through the natural force of higher prices and the latter is a matter of education.

2) Also, when cost-competitive and productivity-enhancing, more mechanization to replace manual labour.

And in the case of livestock:

1) GPS tracking of livestock, for less dependence on fences and greater productivity; and

2) Turning over excess grazing land to crop cultivation whenever and wherever possible.

This listing of ideas just scratches the surface. A sharper plough edge, and a science degree, would be needed to furrow much deeper.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

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