The Global Stretch for Yield

The deepening economic crisis in Venezuela has left many residents scrambling to secure basic necessities. When they can, tens of thousands stream into Colombia to buy food and other supplies. Looting is an everyday occurrence. And last month, a study found that half of sixth graders attending public schools had gone to bed hungry in the past week. The situation in Venezuela is an unwelcome reminder of what happens when food becomes scarce. 

The Latin American country’s crisis is the result of a political failure, but poor management is not the only cause of shortfalls. Demand shocks, like supply disruptions, can have a similarly devastating effect. And because of rising demand over the coming decades, we’ll need to produce a lot more food or expect to see shortages on a global scale.

The National Intelligence Council expects worldwide demand for food to grow at least 35% between 2012 and 2030. This is driven by population growth, but also by rising incomes. That’s because as people get wealthier, their diets shift towards more protein, fruits, vegetables, sugars, oils, and fats. Per capita consumption of fish, for example, is expected to rise 11.7% over the next decade in developing countries (excluding Sub-Saharan Africa). Dairy consumption? A whopping 21.6%. And don't forget that animals themselves must eat, so the impact on grains will be even larger.

To many, such a demand boom conjures images of Malthusian shortages and widespread famine. While some may foresee a Venezuela-like future, the global risk of such shortages in the short run is greatly diminished by a host of developments that promise to increase food yields.

As people get wealthier, their diets shift towards more protein, fruits, vegetables, sugars, oils, and fats.

As a recent report by the UN’s Food and Agriculture Organization and the OECD argues, we could meet future food demand primarily by extending prevailing productivity levels to low-yield regions like Sub-Saharan Africa, and, to a much lesser extent, increasing the area we farm on. The report predicts no supply shortfalls in the next ten years, with 80% of increased crop output coming from yield increases, especially in low-productivity regions. 

In addition to increasing global crop yields, shifting the type of animal protein consumed can help offset rising demand. Given that fish are far more efficient at converting feed into protein than cattle, a shift from beef to fish would significantly reduce pressure on supply. A booming aquaculture industry has already enabled record global per capita fish consumption. We shouldn’t be surprised to more frequently see fish farms popping up in unexpected places, from the foundation of what was supposed to be the world’s tallest building in China, to the guts of cargo ships.

But it’s not just changing the kind of protein we farm that will help. Scientists are working hard at engineering the fish themselves to be more productive. Last November, the FDA approved a genetically modified salmon that grows twice as fast to market weight as its organic half-sibling (although the organization has since delayed the import of the fish). According to Aquabounty, the developer of the modified salmon, their fish requires 25% less food. Researchers and chefs are also exploring alternative protein sources to meet demand, from algae and peas to crickets and lab-grown meat.

Despite the optimism of scientists and economists alike, there is one gigantic factor that could make meeting global food demand more difficult: climate change. Shifts in temperatures and an onslaught of droughts threaten to lower yields, and regulations associated with climate change mitigation could raise costs. Here’s a map showing potential changes in yields for corn, potato, rice, and wheat by 2050 across the globe. In response to the threat of diminished yields, scientists are trying to genetically engineer crops that could resist these environmental pressures, but it is unclear whether progress will be fast enough. And if political backlash to Frankenfoods enters this mix, the pace may slow further.

The stakes are high. One model projected that food shortfalls caused by climate change could result in over half a million deaths by 2050. And let’s not forget that food price spikes drive social unrest, which could compound the chaos and add to the death toll caused by hunger. Countries in the Middle East and Africa are particularly vulnerable. And indeed, researchers believe that climate change exacerbated a drought that helped bring on the conflict in Syria, which has been called “the worst humanitarian crisis since World War II,” claiming hundreds of thousands of lives and displacing millions more. 

The connection between climate, food, and politics is likely to capture more and more headlines in the coming decades. Let’s hope human ingenuity helps us continue to grow yield, and that climate change mitigation efforts prove effective. The combination of those two developments may just be enough for us to avoid the many tragedies that accompany food shortages.

Whatever happens, we can all benefit from taking a step back and noticing the interdependence of what on the surface might seem like disparate forces. 

Vikram Mansharamani is the President of Kelan Advisors, LLC and the author of Boombustology: Spotting Financial Bubbles Before They Burst (Wiley, 2011). To learn more about him or to subscribe to his free mailing list, visit his website. He can also be followed on Twitter @mansharamani or by liking his Facebook page.