Global Land Limitations

6 April 2011 FDI Team

1 ISSUES IDENTIFIED

a.Population

The issue of population growth focused primarily on the nature of growth, its geographical location and its effect on food security. 

The world’s population growth is estimated to reach almost 9 billion by 2050. This is an increase of between 40 and 45 per cent on current levels and will represent a considerable additional demand for food in the coming decades. Furthermore there will be an expanding middle class with greater living expectations which will only heighten demand.

It is predicted that projected population growth will not be consistent across nations but will concentrate in areas which are already suffering from food scarcity. Population growth in the developed world is likely to stabilise as a result of urbanisation, and a growing trend towards smaller families, which can be partly attributed to rising levels of education and affluence. 

By 2030 it is projected that China’s current population growth trend would plateau, population growth in Europe would be negative, and Australia’s net population growth would be the result of immigration rather than internal growth. Urbanisation will be responsible for eventual population stabilisation, but the growing trend of urbanisation compounds the problems of urban encroachment on arable land. The Punjab region in India, recognised as India’s food bowl, was cited as an example of arable land being undermined by industrialisation and urban encroachment. 

Furthermore starvation remains prolific in countries with food surpluses, with 78 per cent of impoverished persons currently living in food-surplus nations and 1 billion people confronted with starvation globally. This figure indicates that food supply is a matter which is also economic and political in nature and compounded by a variety of other concerns which require attention, such as the need for better infrastructure and the rule of law. Thus addressing the question of meeting increased food demand will require a multifaceted approach, with an important emphasis on governance and planning. 

It was generally agreed that the planet would be unable support this growing population and subsequent demand at current levels of production. It is estimated that between 0.5 and one billion extra hectares of land must be cultivated in order to provide for the growing population (The current cultivated area is about 2 billion hectares). 

It was decided, however, that the increase in population would not exceed the world’s carrying capacity and that increases in efficiency and output should ensure that future demand be met. Technological innovations, addressing wastage issues and good governance were all described as being necessary elements to meet the growing demand for food. It must be noted, however, that current levels of production were considered to be more than adequate to support current population levels, and that present inequities in food security were the result of political and social issues as well as problems with distribution.

In order to estimate global food security, the key issues are population and resources. The following formula, introduced by Austrian 20th Century geographer, Walther Penck, identifies the maximum level of supply required. 

Global Population =  Productive area x Production per unit of area

          Average nutritional requirement of a single person

 

b.Arable land

Arable land was defined as freehold, unpopulated, nonforested land with good quality soil and rainfall, which was profitably farmable. Fundamentally, it is land that can be sustainably cultivated.  Land that supports more than 25 persons’ per square kilometre is subject to land rights or requires deforesting is no longer considered arable. While this definition provides a broad representation of arable land, the nature of arable land does differ significantly across regions and is also dependent on the types of agriculture that are cultivated, as many environments are uniquely placed to support specific crops. It is for this reason that self-sufficiency is neither an attainable or desirable goal. As some countries are predisposed by their natural endowments to specialise in one crop over another, it is advantageous from a land maximisation perspective to encourage specialisation, with surplus amounts to be traded for alternate goods. 

In the past arable land has been developed through the application of technological innovations and improvements in farming methods. This has included the introduction of irrigation schemes to areas which previously did not have the requisite rainfall to support agriculture. Given the current and projected scarcity of water, however, the amount of land that can be viably rendered arable (and profitably farmable) by use of irrigation is questionable. Large areas of land, particularly in Africa, Brazil, Argentina, Russia, Ukraine and Romania all have the potential to be used in food production and increase existing levels of arable land. But the problems with many of these nations are political and economic in nature, and these uncertainties represent the primary obstacle to recapturing arable land. 

There is a question as to whether the world is currently experiencing declining levels of arable land. However, despite the lack of consensus on the question of declining levels in real terms, there is still a need to protect existing arable land against degradation. 

c.Peak oil

Peak oil represents not just a significant issue for farmers and food producers, but one that will require readjustment of the global economy. In particular oil depletion poses a problem for farmers in the form of scarce liquid fuels which are required to produce, transport and distribute food.  Western farmers have in recent decades have become depend on oil in order to produce food and the realisation of peak oil will require a fundamental shift in the practice of agriculture. 

The question of peak oil is also one of timing. Currently there is disagreement as to when the world is likely to reach peak oil supplies, with some commentators allowing for decades of continued oil extraction and other predicting that the situation is likely to be imminent. This timing debate overshadows the need for action to address oil dependency. 

Regardless of the timing issues both countries and corporations are cognisant of a future realisation of our peak oil reserves. Saudi Arabia, as an oil-rich nation, has in recent years diversified its income base so as to reduce dependence on oil sales. International energy firm, GE, is currently the largest single financial investor in alternative energy as a way of hedging against the scarcity of oil. 

d.Water

Water scarcity represents a more significant hurdle to food security than land availability and is agriculture’s most critical limiting factor. Whereas there currently exists enough land to support the world’s growing population, current consumption levels of water by industry, agriculture and individuals will deplete water resources in the near future. There is no other resource, including oil, with the capacity to limit food production like water. With the agricultural sector currently responsible for approximately 70 per cent of world water consumption, water scarcity will impact critically on the crop sector. Moreover, by 2030, it is estimated that farmers will need 45 per cent more water, which they are unlikely to receive. Cities are the second-largest users of water after agriculture and are growing exponentially. 

The Middle East, for example, is currently undergoing a water crisis which has led Saudi Arabia to consider terminating all of its wheat production and investing in other countries to ensure food security. 

e.Food prices

Food prices will increase in tandem with growing demand and the rising the cost of oil. In the past food prices have been shown to rise higher than incomes in real terms. The rise in food prices is also likely to be the result of the increased emphasis on biofuel technology which diverts resources and materials away from food production. The crisis faced by the food industry in the early months of 2011 supports claims that the era of cheap food is now over. This is the result of rising demand in India and China, dietary shifts towards more meat and vegetables, the increasing use of maize as biofuel and developments outside agriculture such as the fall in the US dollar.

The cost of food has already been demonstrated to have long-reaching impact, with the current civil unrest in Tunisia, Egypt, Libya, Bahrain and Yemen all being partly caused by the rising cost of food. In developing countries such as these, 40 per cent of a household’s income is spent on food, with rising food prices causing a significant decline in individual’s purchasing power. 

However a fall in food prices is likely to result in a decline in the quality and value of the land as diminishing returns for farmers lead to necessary cutbacks and cost-cutting measures, such as the non-usage of soil improver and inadequate land fallow.  

f.Food supply

The discussion of food supply focused mainly on the inhibiting role of the human component in supply. As poverty remains endemic in countries with a food surplus, it is evident that the question of food supply is largely one of governance. Work must be done to address the systemic and political factors which are impeding supply as well as work on capacity-building in developing nations.

Furthermore wastage represents a significant problem for optimising food supply. Currently the developing world is oversupplied with food and, as a result, up to 50 per cent is wasted. In the developing world, insufficient infrastructure is responsible for food spoilage. Food wastage is partly the result of the current business model of food production which fails to recognise the significance of food as a global commodity. In both rich and poor countries, it is estimated that between 30-50 per cent of food produced is uneaten. 

The question of food supply in the future must also take into account different levels of consumption. Currently it takes 14.5 hectares to support an average West Australian in contrast to the 1 hectare that is required to support a Somalian. This poses not just a logistical question, but also one of social justice. The rapid expansion of the middle class and growing lifestyle expectations will place further strain on existing resources and necessitate greater efficiencies in production and greater yields per hectare. This is particularly true with regard to meat consumption and the demand for meat, which has historically increased with rising standards of living. 

However, the rhetoric of food supply remains largely one of grains. This is a result of their role as dietary staples and as a necessary input in other industries such as for biofuels or as feedstock for livestock. 

g.Peak phosphate

Peak phosphate also represents another impending obstacle to the future of food production. Phosphate is projected to run out in the coming decades and is currently used globally in agriculture. In particular phosphate is used in fertiliser, which enables higher yields through enrichment of existing soil quality. The usage of fertiliser in agriculture was partly responsible for the growth in crop yields during the Green Revolution. The production of fertiliser is also energy-intensive and so will be adversely affected by the rising cost of oil. Research and development into the alternatives for phosphate and the way in which phosphate shortages and dependence will be addressed in the short term forms a vital element of the investigations into future food security. 

The problem of peak fertiliser also highlights the need for changes in agricultural methods and food production to be done in consultation with farmers. The complications resulting

from the depletion of phosphorous and the increasing price of phosphate – based fertilisers will require extensive consultation with farmers to devise coping strategies. 

h.Science and technology

Advancements in science and technology play a critical part in meeting problems of future food security. The ability of science to deliver is demonstrated by the phenomenal leap in efficiency that occurred with the Green Revolution. Now a second Green Revolution will be required which must combine conservation, new technology and sustainable practices to ensure global food security. The role of science and technology in expediting and restructuring food production is also evident in the field of aquaculture, a relatively modern phenomenon which already supplies 50 per cent of the world’s seafood needs. 

Vertical farming exists as one part of a future strategy of food security. Practiced and perfected in the Netherlands, vertical farming allows for the production of high value crops with higher than average yields in tiered glass houses, thus mitigating the growing demand for more arable land. Vertical farming and other cutting-edge developments provide evidence of the increasingly technological landscape of agriculture. 

Despite its value to the food security debate, science and technology does not exist as an investment priority; for governments or for corporations. This is because the of the long term nature of such an investment which offers limited opportunities for return in contrast with other investments. Political myopia about the problems arising from food security further hinder funding, with long term strategic planning existing outside the electoral cycle. 

i.Good governance

The prominence of the role of governments in addressing future food security is irrefutable. The Indian Nobel Laureate, Amartya Sen, quite rightly concluded that “there is no such thing as an apolitical food problem.” Government action is required for the provision of policies and long-term strategic plans. Collective action must be co-ordinated at a national and international level in order to meet the challenges posed by rising food demand. The human element in efficient food production, supply and distribution has already been emphasised. 

Good governance provides the foundation and the stability upon which future action can be built. Investments in agricultural production and methods in both Libya and Yemen have been disrupted by internal political unrest. 

For Australia in particular there is a pressing need for a long term plan for food security. Australia will face a critical period in which the world population is projected to stabilise but the Australian population will double to almost 42 million by 2050. Current levels of growth and demand are unsustainable at current levels of production. Furthermore Australia is financially dependent on the income it receives from the export of its agricultural produce.  A long term strategy would need to include consideration of water management, the

changing nature and increasing corporatisation of agriculture, conservation and the need for greater investment in research and development. 

j.Land grabbing and land security

Landownership by foreign entities can also potentially undermine food security. In many instances there is a lack of reciprocity in foreign land-ownership laws. For example there currently exist high levels of Chinese and Indian ownership in Australia, yet it is legally impossible own land in either country unless the landowner is a Chinese or Indian national respectively. 

There is also a rising incidence of governments and corporations buying up rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long term food supplies. China, for example, has a 50-year food security plan which involves the purchase of agricultural land from other countries such as Argentina to secure food supplies for their growing population in the future. 

k.Demographic changes in the agricultural sector

The future challenges confronting food production, distribution and security highlight the growing need for tertiary educated and skilled farmers. The nature of farming has changed dramatically in the last few decades with the increasing corporatisation of farms and the introduction of sophisticated technology into orthodox farming methods.  Demographic studies of farmers, however, indicate that in the next decade 40 per cent of experienced farmers will retire with no prospective successors to relive them. Efforts to entice educated young people into agricultural studies and to relocate to regional areas will need to be concentrated in order to address this trend. 

l.Conclusions

Two broad schools of thought emerged from the discussions. 

The first suggested that there was sufficient land and other resources, with water being the possible exception, to meet the world’s increasing demand for food. As prices increased, so would supply. Market forces would determine the amount that is produced.

Government commitment is vital in this context to realising food security. A concern was the realisation that those most in need did not have the means to pay for food. In particular issues such as waste, distribution, conservation, planning, investment in science and technology, the need for capacity-building in developing countries and the potential role of price regulation all emerged as underpinning the capacity of stakeholders to address food security.

The second school of thought was more pessimistic in its outlook, finding that many of the challenges which impact on food security in the future are unlikely to be resolved at the current pace of change. In particular the lack of international consensus, money, attention and the self-interest of various stakeholders is likely to inhibit progress. Furthermore it is

difficult to predict the outcomes that some obstacles such as climate change and declining oil production may on efforts to ensure food security. Despite the focus on capacity-building in developing countries, it was concluded that states that have missed out in the past will also continue to miss out with regards to food security. 

Both schools acknowledged the reality of greater food volatility in the following decades as government, corporations and individuals grapple with the increasing demand for food. Whilst beyond the scope of current discussion, genetically engineered and genetically modified foods also bear mention as issues which will play a prominent role in future discussions of food security. 

The question of land availability and its role in food production is both timely and appropriate. Current G20 President Nicolas Sarkozy has pledged to make food the top priority in the next round of Group of 20 talks and the January 2011 meeting of the World Economic Forum saw the launch of ‘a new vision for agriculture’ by 17 global companies.

2. ATTENDEES

Mr Rob Delane

Director General, WA Department of Agriculture and Food.

Professor Carlos Duarte

Director, The University of Western Australia Oceans Institute.

Major General John Hartley AO (Retd)

CEO and Institute Director Future Directions International, Workshop Chairman

Mr Bill Hutchinson

Director, SECAU Security Research Centre, Edith Cowan University, Perth.

Mr Gary Kleyn

Future Directions International Global Food and Water Crises Research Programme Manager.

Mr Liam McHugh

Future Directions International Strategic Analyst.

Mr Peter Nixon

International Chairman, Nuffield Scholars.

Mr Joe Poprzeczny

Journalist, WA Business News and News Weekly.

Mr Geoff Puttick

CEO of Pre-Paid legal and board member of the WA Arab Chamber of Commerce.

Mr Leon Ryan

Nuffield Scholar and York Farmer.

Winthrop Professor Kadambot Siddique

Chair in Agriculture and Director, The University of Western Australia Institute of Agriculture.

Winthrop Professor Richard Weller

The University of Western Australia School of Architecture, Landscape and Visual Arts.

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Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd.
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