Can Asia Urbanize Without Starving?
Image Credit: Wikicommons

Can Asia Urbanize Without Starving?


Is it a Malthusianism catastrophe, or the stuff of farmers’ dreams?

With forecasts of Asian food demand doubling by 2050, will the Asia-Pacific’s expanding middle class make agriculture the new oil?

Among those answering in the affirmative are commodities traders like Jim Rogers, who has warned of food riots and told investors to buy storable produce.

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“We’re going to have serious food shortages, not just in America but in the world. When I speak to universities and students, I tell them all they should be studying agriculture,” he told the financial website Money Morning.

"Soon, stockbrokers will be driving taxis, while the farmers are driving Lamborghinis," added Rogers, who currently invests primarily in commodities and currencies.

In 2008, a spike in food prices worldwide precipitated a crisis that led to food riots in countries ranging from Bangladesh to the Philippines, where the cost of staples such as wheat, rice and maize doubled or tripled. Continued high prices have left an estimated one billion people worldwide without access to sufficient food, and another billion suffering nutritional deficiencies.

There is reason to believe that these trends will only worsen in the decades ahead.

Some forecasts have the world’s population growing to 9.2 billion by 2050. These 9.2 billion people, moreover, are expected to consume the equivalent of 12 billion people’s worth of food, based on current consumption levels, and the large increase in food production that will be needed will have to take place amid the reduced availability of water resources.

Reflecting economic and population growth, energy major Shell recently predicted that global demand for food, energy and water would rise by as much as 50 percent by 2030, and as high as 80 percent by mid-century.

Economic growth in Asia has already increased demand for higher protein and more diverse diets, including more dairy, fish and meat. According to the UN’s Food and Agriculture Organization (FAO), Asia’s meat consumption grew annually by a factor of 14 between 1961 and 2009, and higher levels of urbanization are only expected to exacerbate this trend further.

By 2025, nearly 2.5 billion people in Asia – over half of the world’s urban population – are expected to be living in cities, with the number rising to 3.3 billion by 2050. The increase in resources this greater urbanization will require should not be understated. After all, consumption per person in urban areas is up to two times higher than it is in rural areas of China and India.

In its “Australia in the Asian Century” White Paper, the Australian government forecast that the real value of global food demand would rise by around 35 percent by 2025 over 2007 levels, with most of the increased demand coming from Asia.

It also predicted that food production in Asia would need to be 70 percent higher in 2050 than the current level due to growing demand for more protein-rich food. While the gap is expected to be made up by higher yields and increased cropping intensity, the rise is not expected to be easy.

“While the increase needed in agricultural yields is comparable to those achieved in the past, crop productivity growth is slowing and producers face much greater environmental constraints and challenges than before. And in many areas, climate change is multiplying these challenges. By 2030, rising sea levels could expose large parts of the Mekong Delta to extreme salinization and crop damage,” the report said.

“The combination of resource and environmental constraints, along with higher input costs, will constrain the supply response in most regions, so coming decades will be characterized by high food prices. Stronger links between agricultural and energy markets, as well as more frequent extreme weather shocks, will also add to food price volatility,” it added.

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