A Food Fight for the Holidays
This post is about a thought-provoking new book that would make a nice gift. It is not about family discontent during Christmas dinner.
The last 100 years have seen truly remarkable advancements in our agriculture and food system. The wonders of international trade bring fresh pineapples and grapes and corn and carrots to our grocery stores year round. Advances in plant breeding mean that supermarket brussels sprouts and apples taste so much better than they used to.
American farmers now produce almost five times the output they did in 1910, yet they use about the same quantity of inputs (similar amount of land, more machines, fewer workers). This increased productivity means that our food has gotten cheaper. In 1901, Americans spent 42.5% of their budget on food. Now, it’s only 10% — and that includes eating out.
Is the cheap-food era over?
My former UC Davis colleague (and current co-author) Rich Sexton just published an excellent book that sounds the alarm on the future of agriculture and food. The changing climate, growing population, rising incomes, biofuels, and environmental damage are making it harder to produce high-quality cheap food. Misguided policies are exacerbating these challenges.
Rich is an esteemed agricultural economist. He is a former editor of the flagship academic journal in the field (AJAE) and a former president of the premier professional association in the field (AAEA). He is a fellow of the AAEA and a multi-term chair of the UC Davis Agricultural and Resource Economics department. When he speaks, it is worth listening.
The book begins by outlining the four factors that will drive demand for agricultural products in the coming decades.
Population. More people means more mouths to feed.
Income. As people rise out of poverty, they typically eat more meat. To produce a calorie of beef, farmers have to produce to 25 calories of food for the cow.
Eating habits. Our food preferences evolve over time, typically moving away from basic grains and towards things that require more resources to produce. An acre of corn or rice produces about 15 times the number of calories as an acre of broccoli or spinach.
Biofuel. About of quarter of the world’s corn is used to make ethanol for cars, and almost 10% of the world’s vegetable oil is used to make biomass-based diesel for trucks. Land used for biofuel is land not used for food.
Rich emphasizes the massive uncertainty in how these four demand factors will evolve, which is honest and refreshing. He walks through the arguments for and against large future increases in each factor and concludes that “forecasting models are likely underestimating demand for agricultural products in the twenty-first century.”
Of the four factors, my money is on income and biofuels being the two things that drive demand skyward. But, there are plenty of other arguments in the book to consider.
Can the food system meet future demand?
Now we get to the pessimistic part of the book.
Rich describes the many reasons to be worried about future food supply. For example, productivity growth appears to be slowing following a slowdown in public R&D spending, climate change causes more extreme heat that damages crops, and pushing people to buy local, organic, or GMO-free means less food produced with more resources. Many of the constraints on supply are driven by counterproductive government policies that seem to be expanding.
I think I’m a little more optimistic than Rich. I am optimistic that new technology will improve agricultural productivity and environmental outcomes. I am optimistic that economic forces will keep inefficient practices on the edges. I am optimistic that producers in the developing world will become massively more productive as they modernize……
OK, I feel seen. Optimism is worthless if no-one takes heed of the warnings and prioritizes solutions. Avoiding high food prices in the future requires much better policy and significant investment, as Rich describes in the book.
One thing I am not optimistic about is that we’ll stop using cropland to produce biofuels. Since that is the topic in the book I am closest to, perhaps I should take the lesson that my optimism in other areas is naive. Food for thought.
Buy Food Fight. Amazon can deliver it to your house tomorrow (or right now if you buy the kindle version). It’s a quick read, but densely packed with facts and thought-provoking insights, only a fraction of which I mentioned here.
Ugh. We currently throw away at least 30-40% of the food we produce. We DON'T need to produce more, but to better use and distribute what we already produce. Also, climate change will be a major drive of food production (or loss) in the coming years -- much bigger than population, eating habits or income.
I am a grain producer in the Midwest US. Grain production is not currently profitable. If you want to remove biofuel production from the mix (i.e. cheap food policy), who is going to produce crops at a loss? Farmers buy at retail and sell at wholesale. Input providers for ag now determine pricing not on cost, but on how much they believe the farmer can pay, and price accordingly. Who is going to regulate that?
If it is unethical for a farmer to sell his product to the highest bidder (energy), shouldn't it also be unethical for a myriad of others, like unions, to be allowed to engage in cost increasing pursuits at the expense of the end consumer? Take, for example, a teacher's union. Is it ethical for teachers to go on strike and not educate children, just to raise wages and benefits for teachers? Is education more important than food that farmers are not allowed a reasonable standard of living in producing food? Or is it that teacher's unions pool enough money to buy favorable legislation from politicians? Should farmers start doing the same?
The system is not sustainable as it exists today. Do you want all food production to be shifted to countries with lower labor costs? Or do you want to make Bill Gates a trillionaire by paying politicians to legislate you can only eat his lab grown meat?