As a
general rule, the most successful man in life is the man who has the best
information
Over the next fifty years, as we add another 4.5 billion people to the
world’s population, global demand for food will increase almost 70% if population
growth predictions are correct.
Already approximately 1 billion people go to bed hungry each
night. Somewhere in the world someone starves to death every 3.6
seconds - most are children under the age of five.
Migration is defined as: the long-term relocation of an individual,
household or group to a new location outside the community of origin. Today
the movement of people from rural to urban areas is most significant.
Migration cause can be explained two ways:
Push factors – conditions in the place of origin which are
perceived by migrants as detrimental to their well being or economic
security.
Pull factors – the circumstances in new places that attract
individuals to move there.
Unemployed, poor and hungry (push factor) people from rural
areas are attracted to cities because cities are perceived to be places where
they could make more money and have a better life (pull factor).
During the 19th and early 20th centuries urbanization heavily
contributed to industrialization. Job opportunities in the cities caused the
mass movement of people from the country to the city. These rural to urban
migrants provided cheap and plentiful labor for emerging factories.
Nowhere is this rural to urban migration - and a higher degree of
industrialization - more evident today than in China and India.
Chinese urbanization
- At the end
of 2009 mainland China's total population was 1.334 billion. 712 million
people or 53.4 percent of the population were residing in rural areas
while 622 million or 46.6 percent were residing in urban areas - Chinese
urban dwellers are the largest such population in the world
- City's
Blue Book: China's Urban Development Report No. 3 said China's urban
population is twice that of the population of the United States, one
quarter more than the total population of 27 countries of the European
Union and that the urban economy would continue to drive domestic demand
- The UN has
forecast that China's population will have about an equal number of
people, the 50-percent point phenomenon, living in the rural and urban
areas by 2015
- China has
set a goal of 65 percent of urbanization rate in 2050. Over the coming
40 years that means 20 percentage points of urban growth per year, that
translates into 300 million rural residents becoming urban residents
over this time period
- By 2025
China's urban population is expected to rise to 926 million. By 2030 that
number will increase to a billion
- China's
current urbanization rate of 46 percent is much lower than the average
level of 85 percent in developed countries and is lower than the world
average of 55 percent
- In 2010
the disposable income of the urban population stood at 17,175 yuan per capita - the net income of the rural
population was 5,153 yuan per person
- 221
Chinese cities will, by 2025, have one million people
Indian Urbanization
India's GDP growth has averaged an impressive 6.5 percent a year since
the economic reforms that began in 1991.
“Every major
industrialized country in the world has experienced a shift over time from a
largely rural agrarian-dwelling population to one that lives in urban,
nonagricultural centers. India will be no different. However India’s
urbanization will be on a scale, that outside of China, is unprecedented.”
McKinsey Global Institute’s report India’s
Urban Awakening
- India has
1.2 billion people and the second largest urban system in the world - currently 340 million people.
- The share
of the urban population in India is expected to reach 40% by 2021, and
by 2011, urban areas could contribute around 65% of GDP.
- India
Urban Awakening predicts that 590 million people or 40% of the
population will live in cities by 2030 up from 340 million today. By
that time, Asia’s third largest economy would have 68 cities with
populations over 1 million, up from 42 today.
- With less
than 1/3 of the population India’s urban areas generate over 2/3
of the country’s GDP and account for 90% of government revenues.
Climbing the Protein Ladder
The change of diet among newly prosperous, urban populations in
developing countries is the most important factor stoking the rise in global
food demand.
A rising income means more money in the household budget. The new
middle class consumers forgo plant based calories in favor of adding more
protein from meat and dairy products to their diets. It takes up to 8
kilograms of grain to produce one pound of beef - less for pork, chicken,
milk or eggs - between 2kg and 6kg. As meat consumption soars, more grain is
needed to feed more livestock.
In 1995, the Chinese ate an average of 25kg of meat per person, by 2007, the Chinese were consuming 53kg of meat per person.
Enlarging and diversifying the meat supply is a first step for every
developing country.
The Protein
Ladder:
5.Grain fed beef
4.Grass fed beef
3.Milk, other dairy products
2.Pork
1.Chicken and eggs
Rice, beans and bread
In 1980, the world ate 133 million tonnes of
meat and drank 342 million tonnes of milk. By 2002,
consumption had increased to 239 million tonnes of
meat and 487 million tonnes of milk. The United
Nations Food and Agriculture Organization (FAO) estimates that by 2030 global
annual consumption of meat will stand at 373 million tonnes
and 736 million tonnes of milk.
The more people there are on this planet and the more Asians, and
others, decide they want a western style diet the more grains/oilseeds are
needed to feed them. And many of those very same grains are needed to raise
the animal protein, the beef, pork and chicken they want - they are also the
very same grains the world’s poorest people, the ones who can’t
afford to climb the protein ladder, depend on to survive.
The Cost of Climbing the Protein Ladder
Animal agriculture already takes up 30% of total land area on the
planet and uses over 70% of agricultural land worldwide. If the entire world
population were to consume as much meat as the Western world does - 176
pounds of meat per capita per year - the global land required would be
two-thirds more than what is presently used.
Livestock agricultural reduces the available acreage for direct human
grain consumption in two ways:
- The
acreage necessary to produce a certain amount of calories from any
livestock is drastically greater than the required acreage to produce
the same amount of calories from plants
- Livestock
agriculture requires additional acreage to grow the grains needed for
livestock feed
Currently farmed animals eat one-third of the world’s cereal
production. In the industrialized world, two-thirds of the agricultural land
produces cereals for animal feed. In the United States, farmed animals,
mostly cattle, consume almost twice as much grain as is eaten by the entire
US population. Over 100 million acres of US agricultural land is used to grow
grain for animals and still more is imported.
Food For Fuel
Another systemic cause for the price rise of food is the diversion of
food crops for the production of bio-fuels. An estimated 100 million tons of
grain per year are being redirected from food to fuel.
Economist Dr. Hazell has said that filling
an SUV tank once with ethanol consumes more maize than the typical African
eats in a year.
A World Bank policy research working paper released in July 2008
states: "large increases
in bio-fuels production in the United States and Europe are the main reason
behind the steep rise in global food prices."
The World Bank report says that bio-fuels are responsible for raising
food prices between 70 to 75 percent. Higher oil prices and a weak dollar
were responsible for the rest of the price rise. The analysis disputed the
argument that increases in global grain consumption and droughts were
responsible for food price increases.
An economic assessment report, also published in July 2008, by the
Organization for Economic Co-operation and Development (OECD) found that the
effect of bio-fuels on food prices to be much smaller.
Perhaps more telling is the fact the OECD study said current bio-fuel
policies would only reduce greenhouse gas emissions from transport fuel by
0.8 percent by 2015.
Ironic that:
- Producing
one kilogram of beef is responsible for greenhouse gas emissions (in the
form of methane – cow farts) equivalent to driving a car for
250k’s
- Producing
that one kg of beef uses the energy equivalent of powering a 100W bulb
for 20 days
Population Growth
According to the FAO the world's population will increase from 6.8
billion today to around nine billion by 2050.
World Population
Conclusion
On the demand side of the world grain production equation there are
three sources of growth:
- The
addition to the planet of an additional 80 million people per year
- Three
billion more people moving up the food chain consuming more grain
intensive livestock products
- The
massive conversion of grain to ethanol
Global grain production is under duress - because of aquifer
depletion, severe soil erosion, climate change, severe weather events and the
green revolution has run out of steam with no new technological miracles in
sight. Inventories of most grains have sunk to historical lows.
Our agricultural regime should be on every thinking person’s
radar screen. Is it on yours?
If not, maybe it should be.
Richard Mills
Aheadoftheherd.com
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