Saturday, November 10, 2007

Big picture: Agriculture grows in appeal

Global commodity prices have been rising to record highs, and some predict the beginning of a 20-year bull market driven by increasing world popularion, the changing diets of developed countries, and demand for biofuels. This according to the Financial Times.

High prices are also driven by shortages in supply, according to the Economist. 'After recent glitches to wheat supplies in North America and Europe, hopes were riding on the Australian crop, due for harvest by December, to help fill a gap in global demand. The hopes now seem forlorn.' Australia, one of the world's biggest wheat exporters, is in its worst drought in a century.

Climate change? One Aussie farmer is quoted stopped believing in it, 'because it hasn't rained in eight years.'


kevin said...

Cheap no more: Rising incomes in Asia and ethanol subsidies in America have put an end to a long era of falling food prices.

kevin said...

Here is a good article abut the origins and influence of agriculture.

kevin said...

The Economist believes the key lies in smallholders: those who farm just a few acres, of which there are some 450m in developing countries. Raising their productivity is environmentally friendlier and possibly more cost effective than big ag producers.

However in E. Africa, smallholders are cutting back instead, due to high fertilizer prices (driven in turn by high oil prices). More here.

Chemical fertilizer is controversial. It raises yields easily, but also has environmental impacts. See here,

kevin said...

In Kenya, locally grown rice satisfies only a third of the demand; the rest is imported from Asia, according to this article. Production has gone from 25 bags per acre to 10; however, rice fields in Western Kenya have not been affected.

kevin said...

However, dairy farming is yielding good returns. Finding the right price for stock is difficult. "This is where the Internet becomes useful, many farmers are using it to seek cheaper semen and other information related to dairy farming." More here.

kevin said...

Genetically modified crops are banned in Kenya. This is under debate however, according to this article.