Environmental and Natural Resource Economics 3rd ed. Jonathan M Environmental and Natural Resource Economics 3rd ed. Jonathan M. Harris and Brian Roach Chapter 10 – Agriculture, Food, and the Environment Copyright © 2013 Jonathan M. Harris

Figure 10.1: World Food Production per Capita, 1961-2010 World food production per capita has increased steadily over the last five decades. Source: FAO , 2012, Per Capita Production Index Number (2004–2006 = 100). Note: Production quantities of each commodity are weighted by average international commodity prices and summed for each year.

Figure 10.2 (a): Total World Arable and Permanent Cropland, 1961-2009 Cropland expansion was an important contributor to increasing world food output in the period 1960-1990, but total cropland area has declined slightly since 1990, with additions to cropland being slightly exceeded by losses. Sources: FAO , 2012; population: World Bank, http://data.worldbank.org/indicator/SP.POP.TOT L/.

Figure 10.2 (b): Arable and Permanent Cropland per Capita, 1961-2009 As a result of increasing population and decreasing opportunities for cropland expansion, arable land per person has declined steadily, and continues to decline. This places the entire burden for feeding an expanding population on increasing yields. Sources: FAO , 2012; population: World Bank, http://data.worldbank.org/indicator/SP.POP.TOT L/.

Figure 10.3: World Grain Production, Total and per Capita, 1961-2010 The steadily increasing trend of world cereal production seems to tell a story of increasing abundance, but the per capita figures indicate that per capita cereal production peaked in the mid-1980s at around 375 kg/cap, and is now a bit lower, around 350 kg/cap. Sources: FAO , 2012; population: World Bank, http://data.worldbank.org.

Figure 10.4: Elastic and Inelastic Food Supply Food Price D3 D2 Demand (D1) Supply P3 P2 P1 Economists look to food prices as a key indicator of supply/demand balance. If supply is elastic a demand increase (D1-D2) will not result in increasing prices. If there are significant supply constraints, a similar demand increase (D2-D3) will lead to rising prices. The absence of rising prices over most of the period 1960-2000 led many economists to conclude that there was no problem with global food shortage. Q1 Q2 Q3 Quantity of Food

Figure 10.5 U.S. Producer Price Indices of Selected Cereal Crops, 1991-2009 Recently, the food price picture has altered. The long-term price trend of stable or declining prices (generally declining in real terms after correcting for inflation) reversed in 2006-8 with a sharp price spike, causing significant hardship to poorer global consumers. After falling back somewhat in 2009 and 2010, food prices again reached all-time highs in 2011 and 2012. Source: FAO , 2012.

Figure 10.6: Per Capita Cereals Production in South America and Sub-Saharan Africa, 1961-2009 (kg/capita) Cereal production per capita has increased only slowly in areas of the developing world such as South America, and has stagnated or declined slightly over five decades in sub-Saharan Africa. Source: FAO , 2012; U.S. Census, 2012, www.census.gov.

Figure 10.7: Per Capita Food Production Indices for China and Africa, 1961-2009 There is a dramatic contrast between the food production trend in China, where per capita production has steadily increased, and Africa, where it has barely changed since the 1960s. Source: FAO , 2012.

Figure 10.8: Land Quality, Crop Value, and Land Use Broccoli and Strawberries Crop Value with Increased Export Demand (E2) Broccoli and Strawberries Crop Value (E1) Crop Value Index Corn and Beans Crop Value (D1) An additional problem for the world’s poor is that with expansion of production for export, subsistence crops are forced onto poorer-quality land. (The graph above is a crop value index, not a demand curve, showing how the value of crop output is related to land quality). As export crops take more land, subsistence farmers are pushed to land of quality lower than point “B”, which also tends to increase environmental damage from slash-and-burn, cultivation on erosive hillsides, and degradation of poorer-quality soils. A B High Quality Land Low Quality

Figure 10.9: Global Meat Production Per Capita (kg/cap/year), 1961-2009 Global meat production has risen steadily as more people join the global middle class and are able to afford a more meat-based diet. Source: FAO , 2012.

Figure 10.1: Population and Cereal Consumption Projections for 2025 Region 1. Population in 2008 (millions) 2. Cereal production 2007-2009 average (mmt) 3. Cereal yields 2007-2009 average (kg/ha) 4. Projected population 2025 5. Projected cereal requirements in 2025 (mmt) 6. Projected yield requirements for self-sufficiency in 2025 (kg/ha) World 6,715 2,457 3,500 7,989 2,931 3,967 Developed countries 1,225 963 4,358 1,272 783 3,421 Developing countries 5,489 1,506 3,119 6,717 2,149 4,214 Developing countries (excluding China) 4,172 1,033 2,608 5,323 1,570 3,703 Africa 980 149 1,446 1,431 315 2,942 Latin America and Caribbean 576 178 3,513 682 222 4,262 Asia 4,051 1,178 3,583 4,715 1,626 5,052 Asia (excluding China) 2,734 705 2,915 3,321 1,032 4,376 China 1,317 473 5,439 1,394 570 6,629 United States and Canada 337 464 6,089 388 374 4,407 Europe (excluding Russia) 595 360 4,490 601 328 4,002 Russia 140 94 2,220 128 57 1,157 Oceania 34 32 1,604 41 16 1,258 Comparing columns 3 and 6 in this chart of population and yield projections shows that dramatic yield increases are needed in many areas of the world to keep up with population growth and a modest increase in per capita consumption. Africa would need to more than double yields by 2025 for grain self-sufficiency. China needs a substantial increase in yields, problematical since they have already reached yield levels comparable to the highest in the world, at high environmental cost. And Asia excluding China needs a 50% increase in yields. Not every area needs complete self-sufficiency (U.S./Canada projected yield requirements leave room for exports) , but increased import demand from China and elsewhere will intensify pressure on food prices. Sources: Population: www.census.gov/population/international/data/idb/informationGateway.php; production: http://faostat.fao.org. Projections assume an increase in 0.5% in per capita consumption in the developing world. Projections updated from Harris, 1996. Notes: kg/ha = kilograms per hectare; mmt = million metric tons.

Figure 10.10: Yield/Fertilizer Relationship for Major Regions: Averaged Data for Periods 1961-70, 1971-80, 1981-90, 1991-2001 Graphing yields against fertilizer use shows the long-term trend towards more intensive agriculture in all areas of the world. Note the contrast between Sub-Saharan Africa, where fertilizer use and yields have barely increased over four decades, and China, where fertilizer use has more than quadrupled and yields have more than doubled. Fertilizer use serves as a proxy for the Green Revolution package of increased fertilizer, irrigation, mechanization, and high-yield seeds, which has increased output while also bringing environmental problems of fertilizer runoff, water overdraft, and erosion. Source: FAO , 2012 (some fertilizer series have been discontinued).

Figure 10.11: U.S. Conventional Pesticide Usage, 1964-2001 U.S. pesticide use rose sharply through the mid 1980-s, then leveled off. World pesticide use is still rising, thoguh comprehensive figures for global use are not easily available. Source: U.S. EPA, 1995, 2001.

Figure 10.12: Increase in Pesticide-Resistant Species in the Twentieth Century Insects and Mites Number of Pesticide Resistant Species 600 400 Plant Diseases 200 Weeds Along with increased pesticide and herbicide use has come a surge in pesticide-resistant species. There are concerns that use of genetically modified plants could accelerate this trend, since plants genetically altered to be herbicide-resistant or to generate their own pesticides create continual environmental pressure for the development of resistant weeds and pests. 1900 1920 1940 1960 1980 2000 Year Source: Adapted from Gardner, 1996.