Fewer Farms, Larger Farms

Right now, the world is in the midst of a food crisis. Some might contend that we never fully recovered from the food crisis of 2008, but what is certain is that food prices are rising. The reason for the spike is open for debate, but some combination of a growing demand due to population growth, an increase in the frequency of extreme weather events (floods in Pakistan, the Moscow heatwave, etc.), an expanding middle class with a growing taste for meat and dairy, global trade policy, commodity speculation, agribusiness lobbying, ethanol, and many other factors is likely. The success of the Green Revolution beginning in the 1960’s caused food prices to fall year after year for decades. With the world assuming that the food problem had been solved, the limited number of development dollars went to researching other global problems, namely solving public health issues like HIV/AIDS, tuberculosis, and malaria.

 
Global warming was another issue. Over the last two decades, economists and climatologists have been contemplating the effects of global warming on food production. The consensus was that, while climate change and the corresponding shift in weather patterns would have an adverse impact on agriculture in certain regions of the world, a rising temperature could actually open up new pockets of arable land. The one bright spot of climate change was that the increased amount of carbon in the atmosphere would actually improve crop yields. Unfortunately, that hypothesis proved to be overstated, at best, and quite possibly downright wrong. It turns out that a warmer world, despite what the computer models may say, is not good for food production.
 

The Economist recently had a special report on the feeding the world. The articles were thought-provoking and alarming, and should galvanize a stronger response from the developed world. As food prices increase, the people who are hit the hardest are those spending the highest percentage of their annual income on food. So, for a person of the developed world, a dramatic increase in the price of maize is less apparent on his grocery bill than it is for the rural farmer who is spending 60% of his income on maize. For this reason, the 2008 food price crisis led to riots in some countries and was hardly acknowledged in others. For the 100 million people driven into extreme poverty as a result of the spike in staple crop prices, the prospect of another food crisis in 2011 is likely terrifying, particularly if they understand the challenges in feeding nine billion people over the next half-century.
 

The Economist is quite expensive in Kenya, unless you buy an old copy from the street newsstand vendors. Yesterday I picked up the issue immediately following the one with the special report on food, and perused the letters in response. One response from Chris Haskins of the House of Lords stood out:
 

SIR – Regarding the future of food (Special report, February 26th), there are two additional factors to existing and new technology that will raise farm output significantly. Large tractors and combines have transformed agriculture in the developed world, enabling far more land to be cultivated and crops to be harvested at speed, which reduces the loss caused by weather. Sixty years ago my father needed six men to grow 100 acres (40 hectares) of crops. Today my son can farm 1,000 acres with one man.
 

Agriculture in the developing world could also be transformed by this existing technology, but there needs to be fewer and bigger farms to make use of large equipment and to raise the collateral to invest. That means far fewer rural workers, and controversial social consequences.
 

New technology, such as satellite mapping, will enable farmers to identify wide variations of soil quality across every field and to adjust their equipment to apply their seeds, fertilisers and chemicals precisely at varying rates, depending on the fertility across the field. This makes great economic and environmental sense.

 

This is a controversial position, but one with which I happen to agree. Large-scale commercial farming offers economies of scale that drive down the cost of production through mechanization, irrigation, and the consistent application of GAPs (good agricultural practices). In northern Ghana, it is difficult to offer mechanization services profitably to smallholder farmers because, frequently, the plots of land are not contiguous, meaning the tractor has to travel longer distances to serve the farmers, increasing fuel costs and adding to the per-acre cost. Not to mention, smallholder farmers often don’t have the resources to remove all the stumps and stones from their land, which, if run over by a tractor, will destroy it. The cost of importing replacement parts into the country is high, which is why, invariably, if you go to northern Ghana, you will see tractors gathering rust on the side of the road.

   

Zimbabwe was once called the “breadbasket of Africa” due to its massive agricultural output. Commercial farms operated by the predominantly white settlers were highly efficient, with yields that rivaled other parts of the world. After Robert Mugabe redistributed the land during his controversial land reform program, farm output fell. Now, Zimbabwe can hardly feed itself, sending many Zimbabweans into neighboring South Africa to find work. Say what you will about colonialism, but Zimbabwe’s agricultural prowess was once the envy of Sub-Saharan Africa (SSA).

   

The last point about Mr. Haskins letter I’d like to address is his call to reduce the number of farms. So much money is invested in helping farmers in SSA improve production and increase profits. FAAB – “farming as a business” – programs are designed to get subsistence farmers to think about their input costs and yields as components of a rudimentary profit-and-loss statement.

        

In Ghana, an exasperated colleague lamented the fact that, unlike in other places she’d worked in Africa, including Kenya, Mozambique, and South Africa, farmers in Ghana were lazy. Instead of transplanting rice by hand, or individually planting soya bean seeds in rows, Ghanaian farmers were content to broadcast the seed, throwing it haphazardly into the soil. The result is higher seed costs and lower yields. A Canadian friend and I were listening to this exasperated colleague, and after she left, I asked my Canadian colleague's opinion. He’s been living in Ghana for the better part of three years, working with the Ministry of Food and Agriculture and living in the rural communities with farmers. Maybe it isn’t that farmers in Ghana are lazy, he related, but rather that smallholder farmers anywhere - be it in Africa or the rest of the developing world - don’t actually want to be farmers! They are farmers because they have to be farmers, and farming is all they know. Maybe they would prefer to draw a salary from working on a large-scale commercial farm – a steady salary, unlike the lump sum payment they get for their crop at harvest time. 

   

I agree with Mr. Haskins: fewer farms and larger farms are the answer.

    

I once asked another colleague how make Ghanaian rice competitive against Thai, Vietnamese, and U.S. imports. “Give me 200,000 acres below the Volta Dam with full irrigation and three growing seasons, a warehouse in Tema (the port), and I’ll feed all of Accra.” The unfortunate reality of 200,000 farmers - each with an acre of land - will never come close to feeding all of Accra.