GMO with a twist

GMO with a twist

This post is about GMO but not as you think, but GMO will also make a short guest appearance. Confused already? Let me explain.

I refer to a report published by Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”, hence the confusion), a Boston based asset management firm. Its chairman recently published a report on exploding commodity prices in which he paints a bleak outlook for the future of humanity. We all recently survived the Maya’s end of the world and I don’t want to prophesize another one but the news is not pretty. However, not including asteroids impacts and other natural ‘katastrofe’, humans have a lot of influence to determine their fate. It takes political will to steer long term interests but long term interests often succumbs to short term profits.

In the report the author argues that the number of people on the planet has outstripped the planet’s ability to support that number of people. Increases in the world’s population have always gone hand in hand with the availability of food. Periods of lost harvests in the past due to drought, pests, etc. have led to starvation and decreases of population sizes. Technological advances in agriculture increased yields and improved control of the production of food. More availability of food and more prosperity led to more mouths to be fed and increasing need for more food, a positive feedback mechanism. Especially increased demand for meat, to which half of the production of maize and soy is designated, puts a high strain on the planet. However, the planet has reached its limits. According to the analysis, 40 years ago the average yield increases per hectare/acre per year were 3.5% while the world’s population grew at 2%. However, yield growth rates nowadays have dropped to 1.5%, seriously affecting the planet’s capability to feed an ever increasing world population.

The yield increases were the result of the heavy use of fertilizers. Fertilizers are commodities and dependent on the price of oil. Fertilizers are also dependent on the availability of raw material such as nitrates, phosphorous and potassium. Nitrates can be synthesized but phosphorous and potassium cannot and are therefore finite natural resources. The world’s appetite for more food coupled with increased prices of oil and raw materials (which are becoming less available) drive up food prices. In Serbia that is compounded by inflation due to bad economic circumstances. Food prices are of course a complicated matter and also driven up by speculation, by drought due to climate change, by using crops for the production of bio-fuels, etc. Also, access to food is in some parts of the world a political weapon. Agricultural subsidies might lower food prices –in theory- but in other parts of the world lead to unfair competition.

Nevertheless, the world faces ‘a limit to agricultural growth’ due to increased oil prices, scarcity of raw materials for fertilizers and decreased fertility of agricultural land due to intensive agriculture. Some would see the increases of GMO (yes, Genetically Modified Organisms this time) as the answer but studies show that they do not necessarily increase yields and actually lead to increased uses of herbicides which are often derivatives of petroleum products….So what is the answer? Good Agricultural Practices –especially regarding soil fertility- coupled with changes in consumption patterns –especially meat (sorry pljeskavica lovers!)- could improve the fertility of agricultural land that allows the world to keep up with increasing amounts of mouths to feed. I wrote about the fertility of land in Vojvodina in a previous post. The countries that will profit and prosper will be those that look after the fertility of their agricultural lands and that use new and innovative ways to improve it. I will give some examples of that in one of my next posts.

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