Jeremy's Blog 5th July 2024: Bigger Issues
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 4th July 2024
This last day of the 2024 general election allows a moment of wider reflection before the business of the new government takes attention.
Speaking to the CAAV National Conference last Friday, Jack Bobo, Director of Nottingham University's Food Systems Institute, saw the next 25 years as the most important 25 years in the global history of agriculture, the period until the still growing world population starts falling.
They will also see the pressure on farming around the world from accelerating climate change. This is not just the well-publicised effect of drought in reducing olive oil production, with large resulting price increases. Pakistan, a major cereals producer, had devasting flooding of farmland in 2022 while this May's floods in Brazil's Rio do Suk have had a major impact of farming.
More widely, Sunny Varghese, the chief executive of Olam Agri, a Singapore-based agricultural trading house, has warned of the potential for disruption, even “food wars”, as areas of pressure on food combine with rising geo-political risk, whether as disorder within failing states (like Sudan) or wider conflict. In turn, those pressures drive further migration and instability.
Aside from the general risks of flood and drought, the areas that see most warming will see most pressure on yields with wider effects on prices. The Energy and Climate Change Intelligence Unit suggests that a third of the UK's food price increases in 2023 came from climate change while HSBCs Frederick Neumann foresees repeated events having “a permanent impact on the ability to supply food” (Financial Times, 3rd July). Major wheat growing areas in the US and China are seeing spring temperatures above the 27.8oC when yields fall. So far as this may support prices for the more temperate and less risk-prone UK, the challenge will be to hold the greater margin over costs needed to accept the increased risk.
The rising wheat price was a major factor in the 2011 Arab Spring while one way of viewing Russia's invasion of Ukraine is as a war to control commodities, including food – much as our nineteenth century Crimean War was in part about the supply of grain to an urbanising Europe. With immediate effects on grain and fertiliser prices, it then mattered that Ukraine has successfully re-opened its Black Sea grain export routes. There are now warnings of Russia using its natural gas to corner nitrogen fertiliser markets.
Varghese warned of a major risk in states applying export barriers to protect domestic food supplies, as seen in 2011 and again in 2022 (when he said 154 countries applied 1,266 non-tariff barriers), many for wheat, rice, oils, tomatoes and other produce, disrupting prices and re-allocating supply shortages. Countries like India and China intervening to build buffer stocks added to the pressures – but it may become prudent to follow Switzerland in doing this.
Varghese concluded by urging the supply chain to “wake up” and take more action on climate change and governments to tax carbon: “Carbon is free today, so we are polluting indiscriminately.” On cue, Denmark has announced a prospective emissions tax structure for livestock, expecting that farming will form 46 per cent of its national emissions by 2030, illustrating how farming will become a more obvious part of this discussion as other sectors reduce their emissions.
Not only does our farming need to reduce its emissions but it needs to build resilience in the face of the extreme weathers brought by climate change. This will be about the management of greater risk, adapting how we operate and providing the infrastructure for tomorrow's farming. That may be about technology or refreshing old works such as drainage but also protecting or moving fixed equipment from flooding, all needed for the essential improvement in productivity required for food security, producing more from less. As in the War, when we drew heavily on the then Empire as well as on increased home production, food security also depends on an economy strong enough to bid for food in a world where climate change may make that more precarious and expensive. Competitive farming can itself contribute to that economy.
Such larger issues, along with economic productivity and defence, will be the real challenges for the next government, more than many of the topics and stunts of the campaign.