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Future of Ag in a Global Market

The United States will have a major role in supplying global agriculture needs.

All soils are not equal, and North America is blessed with fertile soils. These soils will play a key role in feeding a burgeoning global population, said Paul Genho, retired president of Farmland Reserve Inc. and chairman of the board of AgReserves Inc. Food security has much to do with optimizing soil use, he told attendees of the International Livestock Congress (ILC–USA) in Houston, Texas, March 5.

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Agriculture consultant Paul Genho said that North and South America will meet the growing food demand because those two continents are best equipped with resources and infrastructure.

The United States is a blessed land, with 6.7% of the world’s land area, 4.2% of the population and 31% of the two most fertile soil types, mollisols and alfisols. Additionally, the United States has a river system that penetrates most of its farmland, providing cheap transportation and a competitive advantage. North and South America, primarily, will meet the growing demand for food, he claimed, because these continents have the resources to produce enough.

However, 40% of the world lives in India, China and the continent of Africa, most of which have subsistence-level soils, he said. Additionally, these areas have the most prevalence of undernourishment and are projected to have the most population growth in the near future. Starvation is a reality around the world.

“During the time of my presentation — one hour — 1,000 children will die from hunger and malnutrition. That is unacceptable,” Genho said.

Factors that aggravate the food insecurity issue include population growth, a growing middle class, international unrest, nonfood use of commodities like using food for fuel, and political, financial and transportation barriers, he said. Population growth is adding 80 million people per year annually, which he likened to adding the population of Germany each year.

Commodity prices are rising. He explained that oil is king, and energy prices affect all commodities. In this example, corn is queen and gold is the joker. All food commodities follow corn, and the food-to-oil price correlation is incredibly strong at 0.96. Food prices and political instability are also highly correlated.

Countries that spend the greatest percentage of their disposable income on food tend to also be those that have social and civil unrest. There is a vicious circle of hopelessness with food insecurity, which includes higher food prices, civil unrest and higher oil prices.

“We need to take the hopelessness out of food-insecure nations, not just send more military,” he suggested.

Political barriers contribute to the problem. He cited Argentina’s export quotas, Mexico’s Zapata agrarian laws, Brazil’s ban on foreign ownership of farmland, and the United States’ inheritance laws and other regulations.

Additionally, water is becoming an issue of monumental importance. He said the infrastructure is decaying, and water is moving from agricultural purposes due to environmental concerns. The need to grow 70% more food with the same amount or less water is an unrealistic demand at this point, he noted. The United States needs a national commitment to water management.

Despite these multiple obstacles, Genho suggested four solutions.

  1. 1. Need a global free-market agriculture system. We need to get the government out of the way of free trade of commodities.
  2. 2. Viable, profitable agriculture is the best assurance of an abundant and reasonably priced food supply. Excessive regulations and taxes block farmers and ranchers from producing necessary food and making a living wage.
  3. 3. Meaningful production ag research pays big dividends. “With the growing desperate need for more food worldwide, how can we not make this investment?” he asked.
  4. 4. Facilitate the entry of bright young people into production agriculture. He recommended assuring excellence in teaching at ag schools and minimizing barriers to enter agriculture for young farmers.


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