How to deal with the global food crisis

Already this is being seen in some areas. Sheales says the global market for grains and commodities is very healthy and Australian crop farmers have responded. “At the moment we’re looking at quite a substantial increase in the size of our harvest this year.” But he is quick to point out it is all weather dependent. “If we can get decent sorts of average rain when we’d normally expect to get it, we’re looking at a very large wheat harvest: about double last year’s.”

Graeme Robertson, director of Muresk Institute, Curtin University’s School of Agriculture and Environment, agrees the price hike for grain and commodities is good news for the nation’s farmers. There has been a general downward trend in food prices over the last few decades and he says food has become too cheap to produce in the quantities the world needs. “[Price rises are] changing the direction of the trend and it probably has to happen if farmers worldwide are to produce more food.

“In Australia I think the price of some of our food products for several years has been at or below the cost of production and there hasn’t been much incentive to do more.”
This is at the heart of Stoeckel’s argument to allow market forces to play their role. The danger, he says, is when governments intervene by introducing subsidies, tariffs and trading restrictions: “That is the biggest risk we face in all of this: governments get in there and try to fix things.”

This protectionist attitude can be seen in countries around the world. In Europe and the United States, farmers are protected with government subsidies, Argentina put a tax on its food exporters so they couldn’t take advantage of higher world prices and force food prices up at home; some countries banned the export of rice and, in other regions, governments have subsidised fuel, keeping the cost artificially low. “Subsidies on fuel to shield consumers from the price rise means there’s no incentive to use less,” Stoeckel says.

Price increases lead to conservation and innovation, while trade protection leads to waste and inefficiencies and no incentive to evoke change and find solutions. “The problem will not be solved by some government bureaucrat, it will be solved by the actions of private individuals in the competitive market place,” he adds.

But even if that is the case, producers are limited by the world’s finite resources. There is only so much room for expansion. The ability of farmers to respond to the food crisis is going to be impacted by climate change, land availability and land quality according to Peter Dart, a scientist at the University of Queensland’s School of Land, Crop and Food Sciences. “The land availability for agriculture is very limited in the world,” he explains. “We’re at pretty much the maximum in many situations.”

The quality of that agricultural land is also an issue. Robertson says the area of arable land is decreasing due to erosion, salinity and changing water tables. The loss of topsoil through erosion can happen very quickly, but will take 500 to 1,000 years to replenish. Dart says that once topsoil goes “we’re in trouble” and remarks that “erosion is horrific in some countries”.

In China, India and Spain, the water tables are dropping rapidly and he predicts this will impact on the ability of those countries to irrigate crops. A decade of drought in parts of Australia has already taken its toll on the nation’s production levels, but Dart says climate change is expected to create a drying effect in southern Australia, the nation’s major food producing basket. “Although the opportunity’s there, the means of responding to it are going to be limited,” he explains.

He predicts an escalation of the food crisis and a return to famines. The food crisis has been further exacerbated by peak oil and expansion of the biofuels industry. Oil prices have pushed up the cost of production. “Australia’s position to take advantage of any increased food commodity price is really limited by our agriculture’s high dependency on petroleum,” explains Jane O’Sullivan, a research fellow at the University of Queensland’s School of Land, Crop and Food Sciences.

High use of fertilisers, diesel machinery and the tyranny of long transport distances are all part of the equation. “All of those factors are going to make our agriculture products increasingly expensive and may counteract any benefits,” O’Sullivan says.

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