Biotech Values

[DewDiligence]

Agricultural Productivity Must Increase to Feed World’s Growing Population

[In a nutshell, this is the long-term premise for owning such ag stocks as MON and DE.]

http://www.reuters.com/article/idAFN1311617020101013

›Wed Oct 13, 2010 1:00pm EDT
By Carey Gillam

KANSAS CITY, Oct 13 (Reuters) - Farmers around the world must ramp up food production dramatically to feed a rapidly expanding global population, a coalition of agricultural groups said in a report on Wednesday.

Meeting the needs of a global population estimated to jump roughly 50 percent to 9.2 billion by 2050, will require public and private investments in "science and technology" to boost agricultural productivity, the groups said.

"We need to do more with less and we must start implementing measures and policies that increase productivity today," said Bill Lesher, executive director of Global Harvest Initiative, the consortium of major agricultural companies, including Archer Daniels Midland (ADM), Monsanto (MON), DuPont (DD) and Deere & Co (DE) that issued the report.

The group developed the agricultural productivity report in conjunction with the Farm Foundation, NFP, a public policy group, and the U.S. Department of Agriculture's Economics Research Service (ERS).

The report said doubling agricultural output to meet global demand by 2050 will require an annual average growth of at least 1.75 percent in "total factor productivity" - defined as the increase in output per unit of total resources employed in production. Between 2000 and 2007, USDA's ERS estimates global agricultural total factor productivity growth averaged 1.4 percent per year.

"To close the gap without additional land and resources, we must increase the rate of productivity growth an average of 25 percent more per year [i.e. 1.75/1.4=1.25] over the next 40 years," said Neil Conklin, president of the Farm Foundation.

The groups said rising per capita wealth will lead consumers in developing countries to increase not only the quantity but also the quality of food they consume.

Today, cereals and root and tuber crops make up more than 60 percent of the global diet, but by 2050 the United Nations Food and Agriculture Organization expects those staples will make up only 54 percent of food consumption, while animal proteins like meat and dairy, and vegetable oils will rise to nearly 40 percent of the global diet from about one-third today. [Meat requires 2 to 6 times as much grain per calorie consumed as does grain itself.]

The groups said increased agricultural production should not be pursued by bringing more land into production and using more water or chemicals but through increased backing for technology that increases crop yields. They cited the need for strategies to use water more efficiently and improve infrastructure for water distribution, as well as improving labor productivity through mechanization.

"We have 40 years in which to double agricultural output, but we have to do it in a sustainable fashion with the same amount of land, less water and reduced inputs," said Lesher.‹