Global Agricultural Expansion

This is an excellent overview from Agri-News out of Ontario (my boyhood stomping grounds) of the rampaging expansion of the global economy and its direct impact on agriculture. The slack has obviously been taken out of the system and the period of intense investment has begun. As you read through this, keep in mind my many postings on terra preta.

All the evidence to date suggests that implementing the terra preta protocol will permit a wind down of the usage of chemical fertilizers by the mere fact that they will be held in the soils and at worst recycled there while not escaping to the sea.

While I have been emphasizing the carbon sequestration aspect, since that is closest to my readers’ hearts, I personably am much more excited by the remarkable fact that the soils created in the Amazon are fertile and productive 500 years after their creation with no addition of modern chemicals. This is in an environment were non terra preta soils are only good for perhaps three years.

Obviously, the prime farm lands throughout China and India is a natural for turning into terra preta, as are all the tropical soils that get enough rainfall to permit the production of high volume crops such as corn, sugar cane and cassava.

As I posted earlier, the areal extent of the Brazilian terra preta culture was similar to that of China and India. Obviously the entirety of the Indonesian Archipelago and large swathes of tropical Africa are wide open to the development of a similar agricultural regime. Astonishingly we are addressing the infertile tropics with this protocol.

Of course, it will be first implemented fully where industrial scale farming is taking place and the financial resources are available. Curiously, terra preta is best practiced first by the subsistence farmer (earthen kiln) and the agro industry farm (industrial kiln). The folks in between will need special equipment built for them.

Interesting times ahead for world farming

By Nelson Zandbergen - AgriNews Staff Writer

MAXVILLE Along with its growing wealth and population, China has picked up a thirst for milk and an insatiable hunger for meat and other agricultural products.

On a globe where grain stocks are already declining because of crop failures in Australia, surging Asian demand for all sorts of foodstuffs will have implications not only for Canadian farmers, including dairy producers but serious consequences for the planet as well.

Ted Bilyea, keynote speaker at the 42nd annual Dairy Day conference here Feb. 14, reprised a sobering message he had also delivered at the Dairy Farmers of Ontario AGM a month earlier. Fittingly, his presentation took its name from the old Chinese curse, "May you live in interesting times."

And interesting times are precisely what’s ahead for world agriculture and the environment, according to Bilyea, a retired executive vice-president of Maple Leaf Foods and current co-chair of the Canadian Agri-Food Marketing Council.

With earth’s population expected to hit nine billion by mid-century, "virtually all of that growth is going to occur right there," he said, showing an overhead image of Asia and the Indian subcontinent.

As incomes rise in China and India, large segments of their populations are shifting away from the starchy Third World diets typically ingested by the planet’s three billion people living on $1 a day or less.

"Half the people in China are making $2 a day, and three quarters of the people in India are making $2 a day," said Bilyea, emphasizing the importance of this milestone. "Between $2 and $9 a day is when people eat more animal protein, vegetables and edible oils. And after $10, people buy more processed foods."

He maintained that the planet’s "interdependent" agricultural industry will face even more pressure to "intensify" production to meet the demand of the 53 per cent of the world’s population in China and India whose countries have only 29 per cent of the arable farmland.

East Asia alone, including the Korean peninsula, has 31 per cent of earth’s population but only 14 per cent of the arable land, he noted, while China itself has 100 cities of a million or more people. "And those cities don’t grow any food," he observed.

As its GDP rises, China already imports "a lot" of food to meet demand, he said, adding pointedly that there was a lesson to be taken from the fact that Chinese imports are going up "even despite high tariffs."

To further illustrate growing Chinese prosperity, he noted the recent opening of Starbucks 500th outlet in that country "on their way to 8,000" and remarked that those cups of coffee aren’t retailed at a cheaper price than in the west. In larger urban centres, demand for very high-end consumer products such as those offered by LVMH already exceeds the Canadian market. "We’re relatively down market here compared to Shanghai."

Addressing the audience of 150 milk producers, he commented, "These people want products we’re producing, so it’s going to affect you one way or the other."

Aided by official Chinese government policy promoting milk consumption as well as domestic production Bilyea displayed a billboard image of a Chinese child gazing up at a milk-swigging athlete demand for that commodity is "soaring at the rate of one New Zealand dairy industry per year due to urbanization and rising disposable income," he said.

Intensification

Meat and milk production is ramping up in the Third World (particularly South America) to meet the growing global hunger for those products, and Bilyea painted a worrisome picture of the impact on the planet.

Backed by a slew of charts and statistics, he questioned how already high animal population densities in Asia could go even higher into the future. In China, the related pollution has already led to massive phosphate-fed algae blooms visible from outer space. Drinking water contaminated by agricultural and industrial activity is also responsible for "rapidly rising mortality rates in rural China," he said.

That country also lacks bio-security controls, creating the potential for even greater animal to human disease transfer, according to Bilyea.

Meanwhile, 26 per cent of the "ice free terrestrial surface of the planet" is used for the grazing of livestock. Pasture accounts for 70 per cent of the deforested areas of the Amazon, with the implication that ever more of the South American jungle will disappear with the rising global appetite for beef.

Who will produce the wheat?

Compounding the planetary challenge, China has been switching its available farmland 10 per cent of which is now contaminated by pollution, according to the Chinese government into labour-intensive crops things like fruits and vegetables and out of land-intensive crops like wheat, according to Bilyea. Since 1985, Chinese wheat and coarse grain production has dropped 70 million tonnes, "equivalent to the entire Canadian harvest," he said.

At the same time, worldwide demand for wheat has begun growing at a robust two per cent a year, up from the usual 1.2 per cent, he noted. The situation has created not only record high commodity prices but the real prospect of shortages.

"Consumption has outstripped production seven of the last eight years ... We’re all counting on a bumper crop this year and next. If we don’t get the bumper crop, people are not going to eat, because the product does not exist."

Ethanol contributes to global warming

From a global perspective, demand for grains is "not ethanol-driven," said the speaker, though he did identify ethanol production as an environmental problem.

Referring to an article produced by Nobel Prize-winning chemist Paul Crutzen last year, he declared, "We now know that ethanol produced from crops that require nitrogen fertilizer contributes to, rather than abates, global warming."

He added, "The more corn and ethanol we use, the warmer the environment will get ... so we’re subsidizing global warming."

Reliance on nitrogen fertilizer and pesticides to feed the planet was one of the major points of the presentation, and the speaker suggested mankind must figure out a way to double food production without a corresponding "unsustainable" increase in those inputs.

Reducing pesticide use falls in line with the demands of consumers anyway, he suggested, showing a 2007 statistic in which only 66 per cent of U.S. shoppers were confident in the food purchased in grocery stores.

Regardless of the science, "what that shows you, is that people don’t want to eat residues," he advised the audience.

Concern over safety and the environment can work to the advantage of domestic farmers, according to Bilyea, who pointed to the example set by the European Union, where the long established Green movement and farmers worked together to achieve a ban on Brazilian beef.

"As of Feb. 1, there is no more Brazilian beef going to Europe. The Europeans shut them off," he said. "Consumers are really interested in sustainability."

The Starter's Gun

I hate playing the role of Cassandra at the great oil party when it is clear that no one wants to hear. It is just that the direct impact on our lives will be so great that it is wrong to not get the message out. We are producing 85 million barrels of oil a day of conventional oil. That means that on average we were able to add 1million barrels of oil production a day every year for the past century. We have been able to do this using resources discovered over forty years ago that have now slid into natural decline. Those resources have not been replaced in the form of conventional oil.

What has replaced them is the equally huge heavy oil resources that are only now been mastered. From them we get perhaps three million barrels of production, now that the price of oil makes it viable. I believe it is possible to add a million barrels a day of heavy oil production per year, provided THAI holds up. Otherwise we are hooped as far as the oil economy is concerned.

The red hot problem is that this is still far too late to avoid a precipitous decline in conventional production. The harsh reality of that developing decline will not be minus one million barrels per day. It will be way faster than that for several years until alternatives kick in and take the pressure off.

Imagine a world two decades from now in which production from current producers is only supplying 55 million barrels a day. That is what happened to US production in the seventies and it has never recovered. The point is that this is going to be incredibly disruptive throughout the globe and will be a true global crisis.

North America is actually best able to add new production thanks to THAI and the Bakken formation which operate within a conventional infrastructure and can actually step up activity now. Elsewhere we are looking at deep sea deposits requiring years of construction. It is going to be one hell of a foot race and no one seems to have heard the starter's gun.

And pretending that rapid decline is not imminent is wishful thinking of the worst kind. I babble about a mere one million barrel decline. The fact is that we will stretch every spare resource to put off the decline until it becomes precipitous. The Saudis both reduced production this past year and suddenly became amazingly forthcoming on their production capabilities. This is a clear sign that it is all going into the crapper.

So what else could go wrong? A supply decline of historic proportions in oil production combined with a massive credit crunch in US currency denominated financial assets that must be sorted out we already have happening in slow motion. How about a crash and burn in the Chinese economy, while we are at it, precipitating a radical remake of the Chinese political system. It is way overdue and would likely be beneficial. Can all these difficulties be worked out in slow motion preventing massive real hardship? I keep thinking it is possible, except that it is not possible to replace a sudden loss oil production except through the aggressive rationing of gasoline which will ground a large segment of the economy.

Five years ago these were all future possibilities. We are living there now. We are entering one of the great transition periods of the global economy and it is all tied to new energy sources.

When is that gun going to be fired?

European Forest Recovery

First, a merry Christmas to all. the season is upon us.

I picked up an article this weekend on the subject of European forests. It appears, that without a lot of fanfare and certainly no publicity, that Europe has adopted a policy of financing the retirement of farmland back into forest. By its nature, it is taking out marginal lands. In other words, it is economically driven.

I also get the sense that it is generational. It naturally recognizes that the best time to accomplish this is upon the retirement of the owner operator rather than his displacement.

This has been in place for some time and the effect is already been seen. The disappearance of borders throughout Europe has sped this effect throughout. It is telling that a farmer in Poland can report half his daughter's income working cleaning floors in London is his farm's best source of income.

People are making up their minds a lot faster than when I was growing up when most of my fellow classmates still looked forward to a life on the family farm(1950's).

This on top of similar news out of China, and I suspect even India shortly, means that the modern world is quietly doing the right thing in terms of land use. It is not quick,nor should it be. But we can make a prediction from this. Since it is a largely low cost process and it has little if any impact on production, we can expect that the restoration of natural forests will be maximized over the next one hundred years.

In these lands, the issue of ownership is not nearly the problem, since the land units are generally small and well within the capacity of the owner operator to maximize efficiency.

This is not quite true in North America, were traditional land ownership sizing was already far too large for one family to get the most of. This has been supplanted by the easy assemblage of larger farms and fields to grow certain mono cultures.

It goes without saying that if you are operating a one thousand acre field, you have little time and resources left over to do much about the couple of hundred acres of associated semi waste land. The point that I am making is that the transition to large industrial farms has left a lot of opportunity on the table and has made it harder to do a managed conversion to forestland were warranted. It still will be done, but it will be a little more costly and will require political will.

What we can take comfort from is this global outbreak of common sense when it comes to land management. It is a long way from perfect and we are still a long way from been proactive, but the easy steps are well under way and they are driven by economic common sense.

Perhaps governments can wake up and actually get a little ahead of the curve for once. Good policy is obvious for once.