Earth's population is 5.8 billion. More than 800 million
people - enough for 25 Canadas - go to bed hungry every night.
And already, the price of corn has passed $6.50 a bushel.
Who can imagine the price of corn in the year 2020, when
humanity will number 7.6 billion, or in 2050, when there will
be two billion more?Across Ontario, farmers are gearing up to feed a hungry world. Land is selling as fast as it's put on the market. Landlords are signing long-term rentals at $150 an acre and more. Equipment dealers can't keep up with demand.
Some farmers, like the Holland Marsh's John Boris Horodynsky, are calling in the bulldozers, re-learning the forgotten skills of clearing land. It's a job most of today's farmers know about only if they heard their grandfathers talk about how their grandfathers hitched a yoke of oxen to a tree stump. The year 1996 feels like a brand new beginning for agriculture. But is it a safe bet?
Glenn Fox doesn't think so. Fox, economist at the University of Guelph, believes that by expanding too fast, many Ontario farmers are echoing the boom of the 1970s, and will fall victim to a repeat of the 1980s crash.
"We should know better," Fox says. "In the 1970s, Paul Erlich (author of The Population Bomb) was telling everybody the world would explode by 1985....It didn't happen then. It's not going to happen now."
Also in the 1970s, U.S. Agriculture Secretary Earl Butz told his country's farmers their futures would be assured by $4 per bushel corn. Butz told farmers to plant fencerow to fencerow and to rip up their front yards. And they listened.
The result was US90-cent corn in the 1980s, and a quarter generation of American farmers wiped out by bankruptcy. Grain and livestock markets will grow into the 21st Century, Fox predicts. Prices probably won't. Profits are possible, he says, but only for farmers who are shrewd. And Fox wonders whether the farmers who have bid western Kent county prices back up to $4,300 per acre, and Prince Edward county prices up towards $700 per acre, are shrewd enough.
For Bob Down, there's a powerful sense of deja-vu. "The banks are very willing to lend, just like in the 1970s," says Down, Huron county cash crop, hog and beef farmer, and president of the Ontario Corn Producers Association.
Down doesn't like what he's seeing. "Agriculture moves in cycles, and there's absolutely no reason to believe that's going to stop," Down says. "We're at the very upper end of the up cycle right now. For God's sake, if you're expanding and taking on debt, make sure you can make the payments when we hit the lows...it's going to happen."
Farmers aren't the only ones in danger of losing perspective, however. Politicians are also gripped by the global food panic. Experts such as Germain Denis, executive director of the International Grains Council, are warning the world could easily tumble back into the pre-GATT protectionist world, with countries turning to border controls in an attempt to build food self-sufficiency without having to pay their farmers international prices.
Two things are clear: Many people don't get enough to eat, and the world's population is booming.
But what's also obvious to hunger experts is that farmers are already winning their part of the battle. Even though the world population keeps getting bigger, humanity is better fed today than ever before.
According to documents from the United Nations Food and Agriculture Organization (FAO), farmers are producing 15 per cent more food per mouth-to-feed than in 1975.
The average person needs 2,700 calories a day for normal body function. Through the mid-1990s, farming and fishing industries have produced an average 2,720 calories per person. What's wrong is distribution, not production. Today, developed countries consume 3,350 calories per person per day. Developing countries get 2,520.
Still, the number of severely malnourished people has dropped. In 1970, 1.7 billion people were struggling to survive on under 2100 calories a day. Today, that number has been cut to 411 million. The total percentage of the Earth's population that is underfed has dropped to 20 per cent from 35 per cent over the same decades.
Yet 800 million people, mostly women and children, aren't getting enough. In November, the United Nations will hold a world food summit in Rome, site of the FAO's head office. It's the first such summit since 1974, when the world was reeling from the 1972 food scare.
Al Doerkson, executive director of the Canadian Foodgrains Bank, says the burgeoning world population can't sustain today's high prices.
Price hikes this year are costing the developing countries of Africa an extra $7 billion for grain imports, Doerkson points out. "It's money they can't afford to spend," he says. "It's a cost that eats away at their economies, so they'll be even less able to pay for their imports next year."
Farmers and community groups gave the foodgrains bank 14,225 tonnes of grain in 1995. Combined with cash donations, it added up to $4.23 million. Ontario co-ordinator Jim Papple says 1996 projects in the province amount to 1,700 acres, up from 1,250 acres the year before.
Doerkson says that if the world's poor are going to get Canadian grain, it's going to be through food aid, not the markets. "Because of high grain prices, their chronic hunger problems are getting deeper, not better."
Even with $3 corn, many African countries have been falling behind. Average income in central Africa is $716, down from $806 in 1980. And food production is falling, bearing out Doerkson's view that these countries are selling their futures to buy today's food.
African agricultural output rose an average 2.9 per cent per year through the 1960s. In the 1990s, it's falling at an annual rate of 5.3 per cent.
Director general of the Washington-based International Food Policy Research Institute, Per Pinstrup-Andersen, predicts that world grain demand will rise 55 per cent by the year 2020. World meat demand will rise 75 per cent.
But real food prices will continue to fall, Pinstrup-Andersen says. Prices for wheat, corn and beef will fall significantly by 2020, largely because the biggest growth in demand will occur in the poorest countries.
Demographers say that the basic rule of population growth is that poor families have lots of children. Rich families don't. The birth rate in the developed world has dropped to 1.7 children per woman. Without immigration, the populations in these countries will wither. Although they're rich, their growth in food demand is limited.
Meanwhile, birth rates in the Third World hover at 3.2 children per woman. As a result, most new mouths will be born in countries that have the lowest ability to buy Canadian grains and meat.
Furthermore, an increasing number of population forecasters agree that the world isn't growing as fast as Erlich and the other 1970s doom mongers predicted. Erlich said that by the year 2000, the world population would be on its way to 20 billion. Today, the United Nations predicts that population will level off at 10 billion by the middle of the next century.
Birth rates in the developed world, at 3.2 children per woman, are just half the 6.3 rate of the 1960s. The University of Guelph's Fox says that together with smaller than expected population growth, food prices will also be pressured by increased output, Fox says.
"There is enormous excess capacity. Huge areas of the some of the world's most productive land, in Russia, the Ukraine and China, are being stifled by the remnants of socialism. Sometime soon, these countries will get serious about agricultural reform and privatization."
That's not to say there won't be opportunities for Ontario agriculture. Federal Agriculture Minister Ralph Goodale has staked his reputation on raising Canada's food exports to $20 billion a year by the year 2000, nearly double the rate of the early '90s.
Jim DeGraaf, economist with the agriculture department's market and industry services bureau, is part of a team that is identifying a list of priority countries.
None are in the hungry, developing world, DeGraaf reports. "Remember, over half our food exports go to one country, the United States," he explains. Most of the rest goes to Europe and Japan.
"The real issue is, which countries have the hard cash to pay for imports?" DeGraaf says. "It sounds crude, but these are the facts."
Yet DeGraaf sees long-term hope. Over the next 10 to 20 years, he thinks the list of Canada's priority export customers will swell to include some developing countries.
For almost two decades, DeGraaf has been senior director of a Canadian International Development Agency (CIDA) project in Algeria, helping to set up a tissue culture lab to produce virus-free, higher yielding potato seedstock.
With that help, Algeria's potato imports have stabilized at 120,000 to 200,000 tonnes a year, even though the country's population has grown to 29 million in 1996, six million more than 10 years ago.
With Algeria approaching self-sufficiency in potatoes, DeGraaf says, it can use its meagre foreign currency reserves to buy grains, oilseeds and skim milk powder, foods that Canada can supply.
The United Nations predicts that world grain trade will increase 30 million tonnes - about the size of a bumper crop on the Canadian Prairies - by the year 2020, mainly due to Asian countries such as Malaysia that are pulling themselves out of poverty.
In central Africa, food aid will continue. Africa was a net exporter of food in 1960. Today, it is producing only 75 per cent of its food requirements, and the level is still falling. Jim Whitelaw, marketing manager of the Ontario wheat board, sees this province's farmers getting a larger share of the food aid sent to Africa.
Ottawa is trimming food aid spending, but also trying to get more efficient, Whitelaw points out. "You can't get much more efficient than our soft wheat," he says. "It's one of the very few grains you can eat raw...just try eating some hard red and you'll see what I mean."
The advantage for the Ontario crop is that poor countries that receive soft wheat don't need flour mills to give their people a ration with enough calories and protein.
Ottawa is taking a serious look at expanding Ontario wheat purchases. Initial talks this year aimed at buying 200,000 tonnes, double the historic rate. Figures of 400,000 tonnes for future crops are being floated, equal to Ontario's total soft white exports in some of its best years. The advantage for farmers is that Ottawa pays the same rate as domestic millers when it buys food aid supplies, shielding farmers from fickle export markets.
China is touted as another great hope for Canadian food exports. Brian Doidge, economist at Ridgetown college, warns, however, that China's leadership has a well-earned reputation for cunning.
"I wouldn't bet everything on China," Doidge says. "They can switch from importer to exporter overnight...you know darn well that they don't intend to become the world's biggest importers at the world's highest prices."
Instead, Doidge sees China's buying patterns adding to the volatility of markets that are already poised for wild swings because of globalization and the breakdown of domestic food policies.
Washington, for example, tried over the past 20 years to prop up prices by forcing farmers to take extra land out of production when global grain gluts started to develop. With the 1995 farm bill, however, Washington is abandoning the tactic, effectively unleashing American farmers. They'll plant every available acre next year, Doidge says.
With good weather, prices could crash. But because supply and demand are so tightly matched, poor weather could drive prices back up.
For Ontario farmers, the route to failure starts with the assumption that a hungry world is going to force prices to stay high. The path to success, Doidge says, is to manage the farm's finances and the marketing plan to survive the sharp price downturns, while taking advantage of price spikes. The corn association's Bob Down is confident Ontario will be a key food producer into the future. But he's not saying that all of today's farmers will be there to share in the profits. "Timing is everything in agriculture," Down says. "If you want to get out of farming, I'd have no hesitation telling you that now is the time to sell.
"If you're looking to expand, I sure wouldn't suggest now is the time to buy. But if you do decide to buy, you need to realize that you're buying at the top of the market...be careful."