“The farm. Best home of the family. Main source of national wealth. Foundation of civilised society. The natural providence.” The time that Charles W. Elliot, the President of Harvard University, acknowledged the importance of farming at the turn of the 19th Century, the sector represented a large proportion of global wealth, making up 10% of the US national GDP.
1940’s – 2000
War induced food shortages and famines spurred on rapid advances of agricultural technology and underpinned large scale taxpayer funded support for the industry to increase output. Agriculture entered 40 years of a “green revolution”. High yielding crop varieties, new pesticides, a better understanding of soil chemistry and fertilisers, and improved machinery all contributed to increased production. Cereal production more than doubled in developed agricultural economies between 1961–1985. This rapid growth in farm productivity led to large inventories and the farmer suffered from price drops in their produce. It was a tough time for the farmer. Embedded government support for the industry, directly encouraging innovation and output, undermined the normal market signals through until the mid –‘90s. Support was not removed, but was increasingly disconnected from production, and output growth began to fall behind.
2000 – present
At the turn of the century, productivity advances slowed and we are now at a “production possibility frontier”. The global population, now at over 7 billion is likely to reach 9bn, and with that is a growing population of wealthy middle class. Not only is more food being consumed, but more “land hungry” proteins are being consumed, putting great pressure on farmland and its supply. Responding to a draw down in stocks, farm commodity prices have shifted onto an upward and more volatile trajectory. The prospect of significant stock rebuilding is low.
With the rise of the Asian middle class to 500 million came a shift in prices. A
rise to 3 billion will be transformational. The future in farming is bright,
but the industry has to ensure not just food production for today, but has to
grasp the principles of sustainability to sustain food production for the