Projections that world food production must double by 2050 hinge on a very big assumption — billions of poor people getting richer, says Greg Page, Cargill’s executive chairman and former CEO.
“The only way for the… 100 per cent increase in food production is if the population grows by two billion and the proportion of the population earning $10 a day expands dramatically,” Page told the Canadian Global Crops Symposium April 15 in Winnipeg. “Clearly this is something we hope happens… for the demand for agriculture and it would signify a prosperous world and the fact that governments made a lot of very good decisions.”
World population is expected to hit nine billion by 2050, up two billion from today. Currently two-thirds of the world’s seven billion people earn less than $6 a day, Page said. People need to earn at least $10 a day before they start improving their diets, seeking more meat, eggs and milk.
“And that is what drives global grain demand much quicker than population,” Page said.
If all the new two billion people remain poor, world food production will only have to increase 20 per cent, he said.
“Now that’s glacial growth.”
If earnings follow the same proportion as today, food production will only need to increase by 30 per cent, Page said.
The world can double food production by 2050, Page said, especially if it embraces open markets, develops Africa’s agricultural potential and invests in science, including publicly funded research.
“We all need to be voices for increased research, but also for increased acceptance of consumers of science in their food system if we’re going to deploy the outcomes of those research investments,” he said.
Opposition to genetically modified crops is well known in Europe, but it’s growing in the United States, Page said.
“I can’t tell you how far backwards we’ve gone in the U.S. in the acceptance of genetically engineered crops in the last two years,” he said. “It has been enormous. I probably spend a third of my opportunities to be at podiums trying to convince skeptical audiences of the safety and environmental soundness of genetic engineering as a way to feed ourselves. We are at this moment thoroughly in the U.S. under threat of losing some access for this science.”
Page told reporters later that investment in research is declining. Private companies are investing, but co-operating with government researchers is a way to win the public’s trust on GM crops.
- More from the Manitoba Co-operator: Waste not, want not
Feeding the world
The world can be fed now too, even though annual demand for the 16 major crops grows by 50 million to 60 million tonnes a year, Page said.
“To put that in context all the world has to do is create one Western Canada every year,” he said.
“We clearly today produce more than enough calories to nourish every single person on earth, we’re just not electing to do it. We have 840 million undernourished, but it’s not because farmers didn’t grow the required foodstuffs to nourish the world.”
World grain prices will prevent grain gluts and shortages from occurring, Page later told reporters. In 2013 a 2.5 per cent increase in world crop production saw some crop prices, including American corn, drop 50 per cent, he said.
“Price has been very sensitive to relatively small changes in supply. The elasticity has changed dramatically from what we saw 20 years ago,” Page said.
The world needs to commit around 1.6 per cent of its collective Gross Domestic Product to food production, he said. Earlier this decade it was closer to one per cent but hit two per cent in 2008 when many poorer people rioted over high food costs. But back in 1975, 3.75 per cent of world GDP went to food, so relatively speaking, food is cheaper now.
Page also doesn’t see world grain prices plunging to the lows of the past as governments bolster demand through mandates for biofuels made from crops.
The United States’ country-of-origin labelling (COOL) is bad for North American livestock producers, Page told reporters.
“It has cost us a lot of money,” he said.
“It is one of the real tragedies in the relationship between our… three countries (including Mexico).”
The legislation is couched as providing American consumers with information about their meat but “it was designed to restrain trade rather than inform consumers,” Page said.
The Canadian government is threatening sanctions. If implemented some companies in Minnesota will be hurt, but not Cargill, he said.