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Food boom with a twist turns screws on farmers

07 Nov, 2012 08:04 AM
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THE first thing to realise about the rise of Asia is that our farmers are about to join our miners in the winners' circle. The second is that climate change and other environmental problems may greatly limit our farmers' ability to exploit this opportunity. The third is that what we see as a looming bonanza, the rest of the world sees as a global disaster.

According to the government's white paper on the Asian century (which, be warned, shares economists' heroic assumption that there are no physical limits to consumption of the world's natural resources), continuing population growth and rising living standards in Asia will cause global food production to grow 35 per cent by 2025, and 70 per cent by 2050.

Rising affluence is expected to change the nature of Asia's food consumption, with greater demand for higher quality produce and protein-rich foods such as meat and dairy products. This will also increase the requirement for animal feed, such as grains. There'll also be demand for a wider range of processed foods and convenience foods, and for beverages, including wine.

But environmental and other problems will prevent the Asians from producing much of the extra food they'll be demanding. Unlike in the past, Asia is likely to become a major importer of food. And, of course, any delay in increasing food production to meet the increasing demand will raise the prices being charged.

You little beauty. ''Australia's diverse climate systems and quality of agricultural practices position us well to service strong demand for high-quality food in Asia,'' the white paper says. After all, Australia is one of the world's top four exporters of wheat, beef, dairy products, sheep, meat and wool.

''As a result, agriculture's share of the Australian economy is expected to rise over the decade to 2025,'' we're told, something that hasn't happened for many, many decades.

So, a new age of growth and prosperity for Aussie farmers? Don't be too sure. The environmental constraints the white paper expects to bedevil Asian farmers will also limit our farmers' ability to cash in on Asia's growing affluence.

Also published last week was a determinedly positive but franker assessment of our agricultural prospects, Farming Smarter, Not Harder, from the Centre for Policy Development.

It says ''winners of the food boom will be countries with less fossil fuel-intensive agriculture, more reliable production and access to healthy land and soils''. That's not a good description of us.

The first question is climate change - the problem so many Australians have been persuaded isn't one. Although other countries - including China - are doing more to combat climate change than the punters have been led to believe, we don't yet know how successful global efforts to limit its extent will be.

What we do know is we're already seeing the adverse effects - hurricane Sandy, for instance - and can expect to see a lot more, even if global co-operation is ultimately successful in drawing a line. At present we're focused on efforts to prevent further change; before long we'll need to focus on how we adapt to the change that's unavoidable.

This non-government report says climate change is projected to hit agricultural production harder in the developing world than the developed world - ''with the exception of Australia''.

''Rainfall is forecast to increase in the tropics and higher latitudes, and decrease in the semi-arid to arid mid-latitudes, as well as the interior of large continents,'' the report says. ''Droughts and floods are expected to become more severe and frequent. More intense rainfall is expected with longer dry periods between extremely wet seasons. The intensity of tropical cyclones is expected to increase.''

So, without action to reduce or manage climate risks, Australia's rural production could decline by 13 per cent to 19 per cent by 2050, it says.

And it's not just climate change. ''One of the biggest challenges for Australian agriculture is that our soils are low in nutrients and are particularly vulnerable to degradation … every year we continue to lose soil faster than it can be replaced.''

The productivity of broadacre farming used to grow by 2.2 per cent a year; since the early 1990s it's averaged just 0.4 per cent. Australian farmers use a lot of fertilisers and fuel, the cost of which is also likely to rise strongly. And that's not to mention problems with water.

Meanwhile, those who worry about how the world's poor will feed themselves - or about the political instability we know sharp rises in food prices can cause - don't share our hand-rubbing glee at the prospect of Asia's greatly increased demand for food.

Almost as bad as high food prices are highly volatile prices. The three world price spikes in the past five years each coincided with droughts and floods in major food supply regions. Extreme weather events are likely to become even more frequent. (The growing diversion of grain to produce biofuels is another contributor to higher food prices.)

After the food price spike in 2008, 80 million people were pushed into hunger. But the growing concern with ''food security'' is often a euphemism for resort to beggar-thy-neighbour policies: countries that could export their food surplus to other, more needy countries decide to hang on to it, just in case.

The Asians' attempts to continue their (perfectly understandable) pursuit of Western standards of living are likely to be a lot more problem-strewn than the authors of the white paper are willing to acknowledge.

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READER COMMENTS

john from tamworth
7/11/2012 9:56:26 AM

Apart from this poor old plodder's climate change scaremongering he misses a few basic facts.Asian countries are are highly supportive of their farmers.They value food security so tariffs,quotas,subsidies,income support,very soft loans are used to ensure farmers stay on the land and keep producing.Their ability to feed themselves is grossly underestimated.Gittins like many before him(Malthus,The Club of Rome,Limits to Growth etc)totally miss the impact of technology on increasing food production.This is mainly driven by free markets and the private sector.
Jen from the bush
7/11/2012 1:08:31 PM

May it roll on - I want to see this thing called PROFIT. When one makes a profit, things like being able to look after our cattle how we would like too BECOMES REAL When one makes a profit, things like looking after our country BECOMES REAL When one makes a profit, things like having children wanting to return to the land BECOMES REAL instead of average age of farmers being retirees. When one makes a profit, things like reasonable work hours and odd things like holidays BECOME REAL Reality now is we are old, work horrendous hours and still posting losses. I need to see PROFIT.
Simon
7/11/2012 1:49:58 PM

An precisely where are the professional people who can facilitate scientific and business innovation for food production in a changing climate going to come from? The Asian Century White Paper talks of TAFE. Yeah, right! Meanwhile, Australian governments, both state and federal, oversee the closure of our university agriculture faculties
holisticmick
7/11/2012 4:57:19 PM

The white paper is a blight on current agricultural practices and farmer to take on change. Basically "business as usual " is not going to cut the mustard. I believe we can take advantage of the Asian century, through regenerative farming practices and making our farms resilient to the effects of climate change. And Jen there are farmers that are achieving good profits now, and have worked out that it is only going to happen by looking after the land NOW. Because it is the foundation for all the things you talk about.
Hijacked
7/11/2012 5:19:33 PM

I bet theres a better chance australia will be importing food from the asian boom than exporting thanks to the endless parade of people that produce nothing.do nothing and there media fleas that are whiteanting our industrys.Whats left {Australian Grown} when you get your way will become expensive but the taxpayer will keep them in there cushy out of this world jobs and the poor old tax payer { the people} will be eating out of the asian night bucket because it will be cheaper
young farmer
7/11/2012 6:53:23 PM

Jen if the 60 something old farmers would RETIRE then more young farmers would be returning. The fact is there are many farmers of the older generation that wont change and wont let the YOUNGER GENERATION HAVE A GO! Theres profit out there through innovation and a succession plan.
VivKay
8/11/2012 8:14:51 AM

There are physical limits to just how much land there is for food production, and how fast food such as plants and "meat" can grow. Dr Norman Borlaug, the "father of the green revolution", warned as much in his 1970 Nobel prize acceptance speech. The "population monster" of massive population growth growth, he warned, must be addressed. The planet is not going to be able to produce 70% to 100% more food by 2050, as economists demand! The growth model of humanity will end, whether we like it or not. An infinite world is a cruel fantasy.
Bushfire Blonde
8/11/2012 8:45:03 AM

Jen how right you are! The cost of operating in Australia compared to international standards, has become a joke, thanks to actions of those beyond the control of Farmers & Graziers. We have the highest Interest Rates in the Western World, the level of the Aussie $ is killing Exporters, our beef processing costs are a joke compared with America, the animal liberationists are hell bent on putting live cattle and sheep Exporters out of business and so it goes on.
mouse
9/11/2012 3:34:26 PM

Hey Young Farmer - From watching what my parents have had to endure over many years I reckon they would have had a way cushier time in jail. And another thing - where do young people get money from- the Tooth Fairy perhaps? And why would you leave the sort of job that would finance entry into cattle business or invest funds into the same to work longer hours for bottom rate pay? A fool and their money.....
Bushie Bill
12/11/2012 8:38:31 AM

Aussie farmers are not interested in any opportunities unless there is an up-front iron-clad guarantee of delivery of truck loads of cash before the first sod is turned. High time for turfing out the peasant-farmers with their defeatist "you owe me a living" mentality and replacing them with some professional profit-orientated innovative risk-taking optimists who are capable of thinking for themselves.
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Sorry Chops, but the reality is already here, we have been relegated to a nation of price takers
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I am in Dubai at the moment staggered by the price for Australian beef at any one of hundreds
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Rob an underpinning principle of a spot market that needs to be embedded is that the producers