Agricultural R&D, Technology And Productivity to Feed 9 Billion by 2050
For much of 2008, soaring food commodities prices were a major news item. Rising prices are the market’s signal that supply is not keeping pace with demand, so the events of 2008 have led to a reappraisal of the world’s ability to feed itself. Food prices attracted attention to agriculture and agricultural science, which had been neglected during the preceding decades of plenty.
World population is expected to grow by one third (from 7 to 9.1 billon) and, allowing for increased income and changes in diet, global demand for food, feed and fibre is expected to grow by about 60% by 2050. Can the planet produce enough to meet these demands?
The answer is a qualified yes, but that does not mean that hunger will be banished. Producing enough food does not mean that it can be distributed in such a way that all 9.1 billion will eat adequately. Further significant obstacles to continued progress in agricultural production include lack of the right investment into research on increasing yields, adverse environmental conditions and climate change, the growth of patenting of robust engineered crop varieties, and the rise of biofuels.
At a global level, since the Second World War food output increased faster than population and income growth and demand, so that the long term trend in food prices has been downward. This resulted from the application of science to agriculture on the biological side, first in the developed countries. Then, partly due to considerable public sector interest, transmission to less developed countries was followed with the success of the green revolution in Asia.
Even so hunger remains widespread, affecting some 925 million people who lack sufficient major macronutrients (carbohydrates, fats and protein). Another billion suffer a debilitating lack of important micronutrients (such as vitamins and minerals). At the other end of the scale, a billion people eat too much, resulting in obesity, type II diabetes and cardiovascular disease.
As world population and global demand for food grow, how can we address these imbalances? What are the opportunities and obstacles for innovation in developing efficient food production and distribution networks?
Taking R&D for Granted
In the developed countries agricultural R&D generates new technologies at experimental stations and extension services transmit them to farmers. This process is only as good as the weakest link: better educated farmers screen and adapt technologies better, so that all of these components play a role in adoption that leads to increased
Historically, the majority of biological technologies, like new plant varieties, were developed by public sector institutions and were available to any less developed countries that could adapt them to suit their own soils and climate. Thus, the breakthroughs in basic science were passed on to the countries with less scientific capacity and high yielding, fertiliser responsive plant varieties spread across Asia.
Population will not outrun food
production, in the manner
predicted by Thomas Malthus.
Like most other doomsayers he
did not take technological change
into account, but we are now
taking it for granted at our peril
India embarked on this process in the early 1960s and doubled yields (output per hectare) in the following 25 years. This was just as well, as that is how long it took for India’s population to double. If this process continues, population will not outrun food production, in the manner predicted by Thomas Malthus. Like most other doomsayers he did not take technological change into account, but we are now taking it for granted at our peril.
As Ye Sow, So Shall Ye Reap … and Eat
Rates of increasing yields, however, are at risk. Investments in agricultural R&D across the world have been successful on aggregate and have produced high rates of return, but the level of spending has not been maintained. From the 1970s onwards, public expenditures have been growing less fast and in the high income countries fell from $10.534 billion to $10.191 billion in the 1990s. This fall is minor, but R&D was also retargeted towards public interest areas such as the environment and food safety, so the allocation to productivity enhancing research declined far
The old adage says, as ye sow, so shall ye reap. For the most important cereal crops the growth rates in the developing countries were 3% or better at the height of the green revolution in the early 1980s. Since then growth rates have fallen so that by 2000, the rates for rice and wheat were about 1% and maize a little better at around 1.5%. There seems to have been a slight recovery since 2000, which is surely needed as these growth rates are less than population growth and per capita food availability would be falling.
Getting Food to the Hungry
Obviously estimates with such a long time span are imprecise but the amounts can be roughly calculated. The current output growth rate is 0.53% per annum and this needs to be raised to 1.55% to meet demand by 2020. To do this agricultural R&D investment in the developing country national agricultural research systems (NARS), and in the network of public bodies associated with World Bank, may need to double from $5 billion per annum to $10 billion. If the investments are allocated to maximise output, the impact of seven years of doubled R&D ($35 billion total) is a 1% increase in output by 2020 and a reduction of 203 million in the number of people in $1 per day poverty.
The scientific revolution in
agriculture is in danger of
sinking into the mire of
rent seeking, with the
growth potential snuffed out
The bulk of the increased R&D is allocated to East, Southeast and South Asia, which have the highest payoffs. If poverty reduction is the target, much more is allocated to Sub-Saharan Africa (SSA) and South Asia and by 2020 output is increased by only 0.58%, but the number of people taken out of $1 per day poverty is 282 million. In SSA 144 million would be taken out of $1 per day poverty, practically halving the poverty rate, from 48% to 25%. For South Asia, the equivalent figure is 124 million, with the poverty rate reduced from 35% to 26%. If these targets could be met, the costs may fall somewhat after 2020, as demand is expected to grow less rapidly.
Thus, the scientists predict that there need not be a world-wide shortage of food and mass starvation, but producing enough and ensuring that it is distributed in such a way that hunger is eradicated is not the same thing. Getting sufficient food to the poorest people is a far more difficult problem. For this to happen, the poor need to gain entitlement to sufficient supplies of food. Here, expert opinion is more varied, but there is a consensus that while Asia has turned the corner and per capita incomes are growing, SSA is unlikely to follow this successful path.
For the urban poor, rising incomes can provide access to imported food, but for the rural poor it seems unlikely that there is an answer. The increasing rural population will neither be able to grow enough themselves to be self sufficient, nor earn sufficient incomes to make up the deficit. This is perhaps the biggest challenge facing the world, but there are other complications.
In the past few years, energy prices have risen dramatically and there is unlikely to be a return to cheap oil. Indeed, all the commodities used in industrialisation will tend to increase in price when India and China, which account for over 40% of the world’s population, resume their building booms and rapid growth. For agriculture, expensive oil and gas means expensive fertiliser, yet increased fertiliser use was the leading cause of yield growth. Labour productivity grows with mechanisation, which again is fuel intensive. Water use is already unsustainable, and reduction of emissions is required to reduce global warming. So, we need new technologies that are energy and water saving at the same time as being cleaner.
Global warming is already taking effect, and in the poorest counties the effects are negative. Weather has been more variable and droughts and floods more common. SSA will mostly become hotter and drier and humanitarian disasters will continue and become more common. In this situation, protecting natural resources is essential. Soil erosion and loss of fertility, waste of water and food losses in storage must all be addressed. More efficient natural resource use can improve productivity. For instance, drip irrigation uses scarce water very parsimoniously and is labour intensive, which suits poor areas with high unemployment.
Much is expected of a Gates and Buffet funded initiative in which Monsanto and BASF, major biotechnology companies, are providing the biotechnology, in collaboration with CIMMYT (the conventional plant breeding) and several NARS (trials and extension to farmers), to develop water efficient maize for Africa. The expectation is that, by 2020, the project will lead to two million extra tons of grain, better feeding 14-21 million poor people. As climate change increases the incidence of drought, the gains from such research and investment will clearly increase further.
Some aspects of biotechnology are already in use. Herbicide tolerant genetically modified (GM) maize was developed in the USA to save on expensive labour, but with some ingenuity it is now preventing erosion in KwaZulu Natal (a province of South Africa), where white maize is being used with “planting without ploughing”. It is both high yielding and prevents soil erosion. GM maize has also been shown to have less carcinogenic toxins and insect resistance, with Bacillus thuringiensis (Bt) modified cotton also doing well in South Africa.
The driving force behind this GM revolution is the huge multinational companies, in this case Monsanto is the dominant player – it is responsible for 39 of the 54 GM events that have been approved for commercial use. The great majority of these involve Bt or herbicide tolerant (or both) soy, maize or cotton. Technically, the development of genetic markers played a key role in moving the public private boundary as they allowed the identification of specific traits in biological material that was not previously possible. Hence, patenting became more prevalent and the courts pushed the process forward with decisions in its favour.
and enabling technologies are
patented and since genetic
improvement is a derivative
process, each incremental
improvement adds a further
layer of IP constraints
In the rich countries, private R&D is now greater than that of the public sector – this is one of the biggest changes of the last few decades. The table shows that over 90% of less developed country (LDC) R&D is public, whereas most developed country (DC) research is now private. 20 years ago universities and public labs in the DCs did all the basic and strategic research that created a global commons of intellectual property (IP). Now the multinationals lead and the NARS and the international public system try to follow.
Thus, a consequence of extending patents to plants, in combination with the huge costs of biotechnology research, is that the NARS, whose size led to their ascendancy over small private seed companies in the last century, are losing ground to massive multinationals. Biotechnological discoveries and enabling technologies are patented and since genetic improvement is a derivative process, each incremental improvement adds a further layer of IP constraints. Mergers increase a company’s IP portfolio, giving it more freedom to operate and hence an advantage over smaller rivals. The building blocks and the tools all come with IP constraints and are commercially useful only to companies with portfolios covering most inputs. For example, Golden Rice – developed as a fortified food to be grown in areas where there is a shortage of dietary vitamin A – required forty patents and six material transfer agreements.
Thus, the scientific revolution in agriculture is in danger of sinking into the mire of rent seeking, with the growth potential snuffed out. The common property in agricultural technology, which fed the NARS in poorer countries is becoming a thing of the past. This will make growth harder to maintain. IP may have killed the goose that laid the golden egg.
Plants into Fuels
A final spectre lurking in the background is the most drastic change in agriculture since man first started keeping animals and planting crops. After decades of falling prices, a new market for agricultural output developed when the US decided to reduce its dependence on oil. The current forecast is that as much as 40% of the US maize crop may be used to produce bioethanol, which is added to gasoline. So now, agriculture not only reacts to the oil price because of fertiliser, fuel and transport costs on the input side, but also due to the energy industry’s demand for its output.
With oil prices at around $100 per barrel, this will not go away and agriculture has become a minor part of the massive energy industry. This is both a threat and an opportunity. Farmers need no longer worry about falling prices if all surpluses can be diverted to the energy industry. Indeed, agricultural output can expand as fast as possible to meet the bottomless demand for energy. But the threat to food security is very real in a world where filling gas guzzling vehicles in the USA will surely take precedence over feeding the rural poor in SSA. Hopefully world leaders are becoming more aware of the global and interconnected nature of food and energy problems.
Prof. Colin Thirtle is Emeritus Professor of Agricultural Economics in the Centre for Environmental Policy at Imperial College London and Visiting Professor at the University of Stellenbosch, Republic of South Africa. He contributed to the government’s Foresight: The Future of Food and Farming.
Piesse J. & Thirtle C. (2008) Three Bubbles and a Panic: An Explanatory Review of the Food Commodity Price Spikes of 2008. Food Policy. 34(2), 119-29.