The pressures are growing to meet the constant demands and keep the global larder full

Whilst food prices are determined by supply and demand, affluence, personal taste, transportability, shelf life, exchange rates and ease with which one commodity can be substituted for another also all play a part. These factors are playing havoc with global markets at present, and the crystal ball is a little steamed up.

However, the prospects are for strong prices for the foreseeable future, largely due to the gargantuan task which world farmers face in feeding the global population in the years ahead.

At the moment, although consumption is rising rapidly, production has also jumped up a gear and a small excess of output has depressed commodity prices. Nevertheless the balance is pretty tight. We have only two months’ supply in the larder and the prospects for future output to grow at the same rate as demand are bleak.

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To start with, one must not underestimate the growing importance of China, which to date has hardly featured in world markets. They represent a fifth of the world’s population – 1.3 billion people to feed. Average meat consumption has already risen from 9kg per year in 1970 to 55kg now and since the mid-1990s China has lost around 8.3 million hectares of arable land to urbanisation.

China is not the only country on a huge food shopping spree. Other net importers of food include Russia, Italy, Germany, Saudi Arabia, Egypt, Japan and the UK: we are only 62 per cent self-sufficient and only 76 per cent sufficient in indigenous type food. Developing countries in West Africa have potential to hugely increase imports as their economies grow.

So, who is producing this food? America is the largest producer of grain – although Argentina is the country with the highest proportion of net exports of food, $23 exported for every $1 of food imported – and Canada and Australia also deserve mention. It is extremely worrying then that American scientists published research evidence in October (Dust to Dust: Science magazine) which concludes that our high input farming systems are unsustainable, causing a collapse in soil microbia – which might take many decades to take effect but, once the topsoil crosses a critical threshold, is very difficult to reverse. “In the past, great civilisations have fallen because they failed to prevent the degradation of the soils on which they were founded” Dr Mary Scholes cautions.

“The modern world could suffer the same fate on a global scale.”

One per cent of global land area is degraded every year – in Africa, erosion has reduced yields by 8 per cent. Chemicals can keep crop yields high for a while but the complex ecology beneath becomes compromised and our naïve assumption that we can just keep adding fertilisers and an armoury of chemicals and all will be well is hopelessly flawed.

As Professor Robert Scholes, joint author, points out: there comes a point when terrified governments make a Faustian pact, sacrificing their future to stop their people starving today.

If you are a farmer, be excited… but also beware!

James Farrell is a Partner at Strutt & Parker. Based in Harrogate, he is National Head of the Rural Consultancy business and can be contacted on 01423 706770 or by email at [email protected]