Wednesday, September 25, 2013

Global Food Supply and Demand (a research brief)

I'm the designated food expert in my Government, Society, and Sustainable development class this semester. Anytime the issue of food arises, I'm supposed to be able to speak knowledgeably about the topic and answer a wide array of questions from my professor and from my MBA classmates. I was pretty psyched to get to write a report on a topic that I care so deeply about, and as I compiled my research and wrote the brief, I thought about all of the ways I could share what I was learning. This is a concise brief on the current state of food supply and demand. While it's not a fun recipe or restaurant review, it's important stuff we should all be aware of and with that, I hope you enjoy learning about it as much as I did! If you do, remember knowledge is power, so spread the word!

BACKGROUND
Demand for all resources is increasing exponentially as the world’s population explodes. If current projections hold true, Earth’s population will grow from 7 billion today to 9 billion by 2040. The middle class will also increase by 3 billion over the next 20 years. By 2030, we will require 50% more food than we currently demand. This is especially problematic given environmental changes that are likely to limit supply. The current trajectory will place 3 billion people into poverty and efforts toward sustainable development are not significant enough to change that course. 1

SUPPLY AND DEMAND
As demand grows and production increases slow, prices for the largest food commodity crops are rising sharply. As more commodity crops are being used for biofuels and animal feed, less is available for human consumption. Adverse weather conditions in typically high-producing areas are negatively impacting overall supply. Rising energy and production costs as well as import/export policy changes are also contributing to increased costs. 2

CORPORATIONS
Huge agribusiness companies control much of the world’s food supply by controlling huge shares of global markets for grains, fertilizers, pesticides and seeds. Their involvement starts at the farm and ends at your fork.  Some of the biggest agribusiness corporations include:

Cargill
Multinational producer of “food, agricultural, financial, and industrial products and services”3
One of the largest privately held companies in the world4
Founded in 1865 and headquartered in Minnesota4
Employs 140,000 in 65 countries
Operating Income of $1.17 Billion in FY 20123 

Nestle
Largest food company in the world measured by revenues, which exceed $92 billion
Founded in 1866 and headquartered in Vevey, Switzerland
Employs 339,0006

Monsanto 
Multinational agricultural biotechnology corporation and producer of genetically engineered seeds and of the popular herbicide Roundup
Founded in 1901 and headquartered in Creve Coeur, Missouri
Revenues of nearly $12 billion
Employs 20,6007

ConAgra
Packaged foods company whose portfolio of brands include Slim Jim, Hebrew National, Egg Beaters, Orville Redenbacher, Hunt’s, Healthy Choice, and more
Founded in 1919 and headquartered in Omaha, Nebraska
Revenues exceed $13 Billion
Employs 26,1008

Archer Daniels Midland
Global food-processing and commodities-trading corporation
Founded in 1902 and headquartered in Decatur, Illinois
Revenues of $89 Billion
Employs 30,0009

Other Corporations:
Farm equipment manufacturers and food retailers also influence the food supply.  Hedge funds and investment firms help shape global markets. 

All of these companies and their interest groups shape government food policy.  They are often criticized for their negative impact on small farmers and promotion of energy-hungry industrial agricultural operations. For this reason, they are often blamed for helping to create an unsustainable system of production and distribution.10

DOMESTIC POLICY
In the United States, most of our agricultural policy is set forth in the Farm Bill, which is renewed every five years by the US Congress. The Farm Bill dictates the USDA’s priorities and has included funding provisions for everything from food stamps and subsidized school lunch to government subsidies and purchasing of surplus commodity crops. The Farm Bill also funds research, international food aid, crop insurance, and farmer loans. The 2008 Farm Bill is set to expire this month; congress has been unable to pass the 2013 Farm Bill due to ideological differences. 11

GLOBAL POLICY
The Food and Agriculture Organization of the United Nations strives to achieve food security for all. Their mandate is to improve nutrition, increase agricultural productivity, and raise the standard of living in rural populations while contributing to global economic growth. Headquartered in Rome, FAO is active in over 130 countries and employs nearly 4,000.12

The FAO Budget is $2.4 billion, 42% of which comes from assessed contributions paid by member countries, while 58% comes from voluntary contributions.13 According to the FAO, one in eight people are undernourished and 852 million of those 870 million people are in developing countries.14

The Committee on World Food Security (CFS) is another intergovernmental body which partners with FAO and that serves as a forum in the United Nations System for review and follow-up of policies concerning world food security including production and physical and economic access to food. 15

There are many other international NGOs focused on food access, agriculture, and sustainability. Many of them collaborate with the United Nations’ World Food Programme.16

Part of the challenge of meeting the growing global demand for food is lack of international agreement and the impact that large-scale agribusiness operations have on the global, not local, environment. Excessive use of pesticides, for example, has been linked to colony collapse disorder17 while runoff of herbicides has killed life in rivers, river deltas, and gulfs.18

Some countries are working hard to increase agricultural productivity without using genetically engineered seeds, which threaten self-sufficient farming operations. Meanwhile, in the US, corporations like Monsanto routinely file suit against farmers for patent infringement, which the farmers are unable to prevent against due to the nature of seed pollination. 19 Traditionally, farmers saved and cleaned seeds from prior years’ crops to replant them, a self-sustaining model that farmers have relied on since the beginning of agriculture. Today, because of seed patents, farmers are forced to buy new seeds every year and need to buy the pesticides and fertilizers that go with those seeds if they want to maximize their yield.

SUSTAINABLE AGRICULTURE
Sustainable Agriculture Research and Education (SARE) defines sustainable agriculture as profit over long term; stewardship of land, air, and water; and quality of life for farmers, ranchers, & communities. SARE spotlights farms achieving higher yields & better overall land use with added benefit of long-term sustainability. 20 Critics of sustainable agriculture cite lower yields, higher land use, and question sustainable agriculture’s ability to feed exploding world population. 21

Methods used in sustainable agriculture include:
       Ecological pest & weed control
       Diversification of crops, livestock, & landscape
       Energy conservation & production
       Direct marketing/sales

The consequences of unsustainable (industrial-scale) agriculture include:
       Top soil erosion
       EWG found erosion to be 2x the rate deemed sustainable by the USDA in parts of Iowa 22
       Groundwater contamination
       groundwater supplies ¼ of US drinking water
       EPA identified carcinogens from fertilizers & pesticides in groundwater 23
       Concentrated farm ownership
       Results in higher prices and less choice (~38% increase in food costs 2002-12) 24
       2007: 4 companies controlled 83.5% of beef, 66% of hogs, 58.5% of chicken, 50% of seed markets 25
       Antibiotic resistance
       Overuse in livestock contributes to antibiotic-resistant infections
       1 such strain of bacteria linked to hog farms results in more US deaths/year than AIDS 26

CONCLUSION
There is no easy answer to the question of how we will meet the growing global demand for food as the population explodes and arable land erodes. On the one side, large agribusiness claims that GMOs and genetically engineered seeds plus pesticides, herbicides and fertilizer are the solution. On the other side, advocates for sustainable agriculture encourage the use of organic methods to reduce pollution. What cannot be disputed is the simple fact that as people move out of poverty, they consume more meat and that it can take up to 13 pounds of grain to produce just one pound of meat.



References:

1: World Food Demand to Outpace Supply in Coming Decades, UN Claims http://www.huffingtonpost.com/2012/01/30/world-food-demand-population-growth_n_1241435.html
First Posted: 01/30/2012 8:56 am Updated: 03/31/2012 5:12 am
2: Trostle, Ronald, Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices. A Report from the Economic Research Service. Outlook No. (WRS-0801) 30 pp, July 2008.
3: Cargill, Inc. 2012 Annual Report: Essential work in a changing world. Minneapolis. 2012.
6: "Annual Results 2012" (PDF). NestlĂ©.
11: Neuman, Scott. Why The Farm Bill's Provisions Will Matter To You. June 13, 2012
17: Wines, Michael (28 March 2013). "Mystery Malady Kills More Bees, Heightening Worry on Farms"New York Times.
18: Helfrich, LA, Weigmann, DL, Hipkins, P, and Stinson, ER (June 1996), Pesticides and aquatic animals: A guide to reducing impacts on aquatic systems. Virginia Cooperative Extension.
19: Haitian Farmers Commit to Burning Monsanto Hybrid Seeds Posted: 05/17/10 12:44 PM ET
20: “What is Sustainable Agriculture?” from Sustainable Agriculture Research and Education, http://www.sare.org/.
22: USDA webasite, http://www.nal.usda.gov/afsic/pubs/agnic/susag.shtml. 
23. Environmental Working Group website, http://www.ewg.org/losingground/report/executive-summary.html.
24: Environmental Protection Agency “Citizen’s Guide to Groundwater Protection,” http://water.epa.gov/infrastructure/drinkingwater/sourcewater/protection/upload/2007_11_29_sourcewater_pubs_citguid.pdf.
25: United States Department of Agriculture, http://www.cnpp.usda.gov/usdafoodcost-home.htm.

Other sources of information not directly used:
Agricultural Sustainability Institute at University of California – Davis, http://www.sarep.ucdavis.edu/about/def#animal-production-practices.

“Sustainable Agriculture: An Introduction” from the National Sustainable Agriculture Information Service, http://www.attra.ncat.org.

McNally, Jess. “Can Vegetarianism Save the World?”