Farming smarter, not harder—presentation for launch
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Presentation to attendees at Parliament House cross-party briefing, 1 Nov 2012. By CPD Sustainable economy program Research Director Laura Eadie.
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Farming smarter, not harder—presentation for launch
- 1. Farming Smarter, Not Harder: Securing our agricultural economy By Laura Eadie and Christopher Stone November 2012
- 2. The era of cheap food may be over food and grain price indices – 1960 to 2011 Long-run Real terms, 2005 dollars 350 300 Rising prices as demand 250 continues to grow, but productivity growth slows 200 2005 - 100 Grains 150 Food 100 Declining or flat prices as food supply grew 50 faster than population 0 Source: World Bank, 2012
- 3. The global food boom is a challenge and opportunity • Food prices projected to be higher and more volatile • Farm input costs are also likely to rise • Countries with less fossil-fuel intensive agriculture, and more reliable production likely to benefit from times of high prices • Winners and losers will emerge due to the uneven distribution of land, water and economic wealth • Demographic pressures and climate change
- 4. Resource constraints are significant in some areas Human-induced soil degradation
- 5. Australia has greater opportunities, but similar challenges to the rest of the world Top exporter of Projections we could grains, meat, sugar, wo double food-based ol exports by 2050 Agriculture = 10 per cent of exports 2 per cent of GDP 307,000 jobs Productivity growth slowing, Twice as much land natural limits to land and water, now exposed to soil degradation extremely hot years Australia’s challenge = increase production per hectare, minimise dependence on fuel and fertilizers
- 6. Improving soil could increase wheat production by up to $2.1 billion per year Wheat production Additional $1.1– 2.1 billion 2007 A$ billion value of wheat production ? 0.3 0.8 Low water 1.1 permeability 4.8 Acidic soils (reduces available (reduces root moisture or Dense subsoils growth, leads to (reduces root nutrient and water-logging) growth) water efficiency) Increased yield from removing soil constraints Current production Full potential Source: CPD analysis
- 7. Australian farmers already benefit from improved soil Dryland cropping • 20 years of no-tillage and crop rotations • Soil carbon maintained, erosion limited • Gross margins up 9-fold Grazing • Stocking at 75 per cent of long-term capacity • Pasture growth with almost any rainfall • Profits up 7-fold since 2001 Irrigated Horticulture horticulture • Soil carbon maintained • Improved efficiency of irrigation water use • Aim to double or triple fruit yields
- 8. Further innovation is essential to increase productivity • From the mid 1990’s, broadacre productivity growth slowed - climate effects, slower growth in innovation funding • Up to 35 year lag from investment to benefits of innovation • Need to invest now to adapt to climate change – Match inputs, products and farming practices to soil and climate conditions
- 9. It pays to invest in natural capital • Healthy ecosystems sustain long- term agriculture - e.g. trees and groundcover insure against erosion • Knowledge shared over time and across landscapes maintains healthy soils and productive land • The benefits of investment in land, soils and other natural capital are greater when co-ordinated across the landscape
- 10. Farmers’ stewardship is essential, and deserves support Australia has made good progress putting in place policies that support farmers as active stewards of land and soils. However, further policy change is needed in four key areas. 1. Increase investment in knowledge: 20 year endowment for the National Soil Health Strategy; up to 7 per cent a year increase in agricultural R & D 2. Provide more stable funding for natural resource management:10-year joint government commitment to fund NRM bodies 3. Enable accountable community governance of land and soil management: support farming communities to develop voluntary stewardship standards 4. Align financial incentives with the long-term needs of sustainable farming communities: link assistance
- 11. For more information... Copies of ‘Farming Smarter, Not Harder’ are http://cpd.org.au/2012/11/farming-smarter-no
Editor's Notes
- The Sustainable Economy program asks “How can we develop a thriving economy in the face of resource constraints and environmental pressures?”This report looks at the future of Australian agriculture in the contextof rising food demand; land degradation;climate change; and rising fuel and fertilizer pricesAgriculture has been front page news lately, with food the hot new commodity.This report asks what policies can support farmers to deal with the practical challenges of seizing this opportunity.
- Seeing a major shift from declining to rising food pricesProductivity gains of 1960’s ‘Green Revolution’ running out – globally crop yield growth has halved. 1960’s crop yields rising 3 to 6 per cent a year, now 1 – 2 per cent a year Demand continues to grow By 2050, demand projected to be 60 per cent higher than in 2009 – assuming continued GDP growth and increasing meat consumption per capita Majority of extra demand from rising incomes and populations in Asia, particularly China (43 % of total)Also seeing more volatile prices A number of factors driving increased volatility – biofuels, lower stocks, speculation Extreme weather a driver of each of three international price spikes in the past five years e.g. 2010, drought reduced Ukraine/Russia grain harvest by 1/3, floods in Aus & USFood insecurity rising – over 1 billion people now go to bed hungry every night
- No such thing as a free lunch.Rising prices + likely higher fuel and fertilizer costs = continued pressure on farmersConstraints to expanding production highest in some of the poorest areasLow income countries less than half cultivated land/capita of high income countriesMost arable land in a few Latin American and sub-Saharan African countries, lack of access and infrastructure makes production uneconomic Water abundant globally, but scarce in Near East, North Africa & China By 2050, over 40 per cent of global population could live in river basins under stress
- Declining soil condition has been an unrecognised problem 1996, soil degradation affected 15 per cent of world’s land Looking at map can see widespread degradation where demand growing – China, India AND where populations poor & exposed to climate change.Anyone with knowledge of farming would know that soil degradation reduces efficiency of water and fertilizer use. Practices that improve soil condition can increase yield, improve water & fertilizer efficiency, reduce dependence on fuel BUT takes investment.
- Agriculture important industryAustralia well placed to seize opportunity of rising demandStrong skills baseProximity to growth markets in Asia High quality produceBut face same challenges as rest of worldAnd expect more frequent and severe droughts due to climate change
- To communicate importance of soil condition, useful to estimate potential gains.Using wheat as an example.....note overlap of types of soil degradationOf course this takes investment, but value of recovering lost production likely to rise over time. AND rising costs for farm inputs would improve returns on investment.
- Many farmers are already raising input-efficiency and productivity, by improving soil conditionCropping & grazing, but also horticulture, which we sometimes forget aboutSoil in good condition can allow farmers to take advantage of more favourable seasons in a variable climate. This can ensure more reliable production levels and financial returns over time.None of these practices particularly radical, but do require patient capital
- If weather getting more variable, need even more flexibility in production Lots of promising practices already being used, need R&D to match to specific locatione.g. PA allowing choice of which paddocks to fertilizer, when, with efficient amounte.g. Mosaic farming providing opportunistic grazing between treesBeyond this need innovation in more resilient crops and farming systemse.g. Canola is an earlier innovation that improved wheat yieldsTedera showing promise to provide feed for sheep during droughtsThe report says the tedera implementation has the potential to 'increase farm profits by up to 26% and be grown on ~28% of a low rainfall mixed enterprise farm'And on a high rainfall mixed enterprise farm 'tedera may boost profit by up to 58% and be grown on ~75% of the farm.'
- Just as there are economic advantages from investing in soil health, maintaining broader health of farming landscapes is important for long-term viability of agricultureNative grasses and trees can protect against erosion