The world's population is growing and more and more people can afford more luxury. This has consequences for raw material markets in general and perhaps most of all for the raw materials we eat. How do we ensure that everyone has sufficient and affordable food?
With Russia's invasion of Ukraine, world food supplies are once again high on the agenda in many countries. In Europe, the fear of shortages has subsided somewhat, but that is not the case everywhere. The world population is growing and food production must do everything it can to keep up with that growth. Particularly in North America and Europe, there is a lot of room for improvement. Just take the yield figures from, for example, the USDA or the European Commission. As an example, below is a graph showing the wheat harvests in the US in recent decades. Soy and corn production in the US has increased during this period.
In South America the picture looks different. Several countries can show downright impressive figures. Soy production in Brazil, for example, was 2013 million tons in the 14/86,2 season, according to USDA figures. That has almost doubled in ten years to 163 million tonnes in this 2023/24 season. This is partly due to a growth in the area from 30.100 hectares to 45.600 thousand hectares, but the yields per hectare were also on the rise. Brazil is the most extreme example, but there are more countries that show higher yields per hectare. Take Bolivia, for example, where the trend line in average corn yield has risen in ten years from just above 2,2 tons to more than 2,6 tons per hectare. By the way, it's not all gold that glitters. Argentina, for example, has seen crop yields decline in recent years due to extreme drought associated with the La Niña weather phenomenon.
Innovation
In the Netherlands we like to pride ourselves on having a highly innovative agricultural sector that leads the way in the world. There are certainly arguments for this in certain subsectors such as greenhouse horticulture or dairy farming. But in the field of what is internationally seen as arable farming (pretty much everything that can go through a combine), it is now better to ask the question whether we in the Netherlands and more broadly the EU have not completely missed the boat. South America is, so to speak, the playground for the large chemical and seed companies, where they can test to their heart's content with the latest resources and techniques. And if it works in South America, the procedures can be initiated to obtain admission to other parts of the world.
Critics are quick to point out that much of the growth in food production in South America is due to large-scale deforestation in the Amazon region. Of course that cannot be denied. In Brazil, for example, previous president Jair Bolsonaro did not restrict land reclamation. This has angered many environmental clubs, but also indigenous tribes, for example, who are unceremoniously evicted from their land by large landowners. You can and should ask critical questions with regard to both deforestation and a very liberal admission policy for crop protection products and new breeding techniques. But whether this all happens on equally fair grounds is another point to be made.
Livestock farming not decisive
Environmental clubs, for example, are quick to point out (Dutch) livestock farming as a major culprit that consumes enormous amounts of raw materials that can also be used for direct human consumption. Simply put, with your glass of milk or ham steak you contribute to deforestation in the Amazon. And let's be honest: the environmental lobby has also achieved some success with this. It remains to be seen what the practical effect of this will be. World soy production is 402 million tons. Of this, approximately 166 million tonnes are traded on the world market and less than 10% of world trade, namely 14 million tonnes, is destined for Europe. By far the largest part, 99 million tons, goes to China.
For any exporter, it is quickly possible to provide Europe with soy that is deforestation-free on paper (and then we started talking about the definition of deforestation-free soy). And while we want to reduce the livestock herd, the lights are green for expansion in China.
Dilemmas
Regardless of what you think about deforestation, livestock farming and other issues related to food supply, a more practical and realistic approach can't hurt. Going back to the US wheat production graph. In the mid-XNUMXs, production in Western countries had to increase to provide the world with food according to policy. And the policy subsequently implemented was not without success, as evidenced by the butter mountain, wine lake and full granaries in the EU and the 'farm crisis' in the US in the XNUMXs. There were no longer large surpluses around the turn of the century. In fact, Russia and Ukraine emerged as major grain producers at the beginning of this century. However, those countries have already experienced the greatest growth and now it is South America that is in the growth phase. And the extra production from Brazil, for example, is in great demand. From this we can conclude that the world is waiting for extra food and we cannot deny progress to an emerging middle class in China or India.
This does not mean that we should simply sacrifice the Amazon region for agriculture. But leaving everything as it is and cutting absolutely nothing, that is not really an option. In other words: you may want deforestation-free soy, for example, but then you must also be able to offer an alternative. No matter how you look at it, it is a complex issue for which there are no easy answers, although some people pretend otherwise.