November 11, 2011

Future food shortages: consumers, retail, farms, energy industry, biofue...

Future food crisis and why there are global food shortages. Population growth is often blamed but we have enough food to feed the world without hunger of famine. Food price crises of 2007-8 and 2011-12 were caused by many factors including flood, drought, failed harvests, damaged crops, disease - but the biggest single change was burning food as biofuels. In 2011 over 40% of all wheat grain grown on farms in America was burnt in vehicles. Over 5% of all petrol / gasoline / diesel sold in Europe is now biofuels, much of it made from food. Biofuels have linked energy prices with food prices with land prices with forestry prices. We have one global market now for energy and food. So if energy prices rise, more food gets converted into energy - or biowaste, or trees.... but all these things affect land use at the end of the day. So if you expect (as I do) continued energy shortages, and rising oil prices, then it is logical to expect rising food prices. The trouble is that while wealthy nations suffer a little, individuals in the poorest nations suffer hugely. History shows clearly that rises in food prices and hunger amongst the population are the fastest ways to destabilise government. No surprise then that in 2007-8 we saw food riots in 33 nations and the fall of one government, and that in 2011 we saw riots and revolution in many nations (Middle East - so-called Arab Sprint). One of the factors that brought street protests was that ordinary people were finding food price rises were the last straw on top of so many other hardships, partly linked to to the global economic downturn, national debt crisis and banking crisis which in turn followed the original US sub-prime crisis. Lesson: global trends are complex, interlinked and minor trends can be amplified rapidly by globalisation and the digital village into radical forces for change. What does this all mean for farming, farmers, agriculture and land ownership? Expect prices for farm land to rise, in line with energy prices. Expect many farmers to switch crops from those supplying food direct to retail food chains, to crops which will find their way into biofuel manufacturing. Video of retail industry future trends by Futurist keynote conference speaker Patrick Dixon - for UK retail industry executives at client event organised by Hermes.
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