Red, Green, and Blue

The US Agriculture Department says that fewer acres of corn and wheat will be planted in future, but this doesn’t necessarily mean a price hike. Acreage of corn being planted has dropped in part because there is less demand from the ethanol industry. Corn is used as livestock food as well as serving as a cereal and providing ethanol for a range of industry uses, including biofuels.

This will be the second year in a row that less corn is grown in the USA, but this decline is coming on the back of the largest crop production in fifty years, which occurred in 2007. Slightly less corn was grown in 2008, suggesting a mild downward trend has begun. Traditional corn-producing states, such as Iowa, appear to be intending to increase their acreage, while states that are not traditionally corn-producers appear to be reducing theirs.

Does it matter how much corn the USA produces?

Food security is one reason that it matters. Volatility is expected in some markets, less so in others. We’ve got used to roller-coaster oil prices, for example, although it doesn’t stop panic buying at the pumps when gas prices are projected to rise, but roller-coaster food prices are something that hasn’t been seen in most of the developed world for many decades. The combination of the current recession and the effect of changing weather patterns is going to change that.

Farmers are having to become gamblers – a fact that will surprise many people who have a rosy idea that farming is somehow a stable and unchanging lifestyle. One reason for the decrease in corn production in states that weren’t traditional corn areas is bad weather: the Northern Plains and eastern areas of the corn belt have had more late rain and more late temperature drops than usual. This means that farmers who were already finding their corn crops to be less of an investment return than they’d thought are likely to switch to growing soy-beans, which are planted some weeks later but harvested around the same time, meaning that farmers have more chance of avoiding the bad weather at planting time with soy than they do with corn. Wheat plantings are likely to drop too, but this probably won’t have any affect on food prices, because the world’s stockpile of wheat is substantial.

American corn sneezes, the rest of the world catches cold

These are minor fluctuations of food crops in major stable markets. In less stable economies or in countries where crop failure can lead to farmers losing their livelihoods or even the most marginalised in a community losing their health or their lives, changes in staple food prices, or in demand for staple foods, can be crucial.

This is why Bill & Melinda Gates Foundation and the National Science Foundation (NSF) have launched BREAD: Basic Research to Enable Agricultural Development, a programme to research, and hopefully to solve, major problems in global agriculture.  The fund total is around $48 million and will be spent over five years to fund research into drought, pests, diseases and storage amongst other issues.

What’s really interesting is the way the fund is being handled.  While the NSF will spend its half of the fund in the US and primarily on research, the Gates Foundation will spend its half on the work of international groups which will be working largely in Africa and Asia. It’s a good attempt to do many things at once: both conducting primary research and field testing it in suitable conditions, but also creating an infrastructure of well-funded research groups outside the developed world, so that different perspectives, as well as different techniques, can be examined. And that’s vital, because while we think of cereals and maybe potatoes, and that’s it, as far a staples are concerned, a lot of the world subsists on cassava or sorghum or mealies (rather than shucked corn) or many another food crop that gets no listing on the world’s commodity markets – but still needs support to prevent disease and predation.

Cash is king and so are cash crops

Part of the issue relates to diversity – it’s often more sensible, economically speaking, for subsistence farmers to grow tradable crops (called cash crops) rather than local varieties of similar species or staple foods that are ideally suited to the local soil and conditions but don’t have as much value in cash terms. But those tradable crops are often much less likely to thrive in subsistence conditions than robust local varieties and that means that small farmers in marginal conditions face a dilemma. Their choice is often to grow what they know will thrive but then have no cash crop to sell, or gamble on a cash crop that may not grow well for them. In countries where some aspects of schooling or healthcare are not free, this can mean deciding whether to raise cash crops and buy uniforms or books to educate children who might escape poverty if the crop actually grows and can be sold in the market, or grow local staples and keep the kids at home to farm, certain that there will be enough food, but not much else.

Finding ways to balance subsistence and cash crops for the world’s poorest farmers can lead to better land use, more robust farming systems, better educated farmers and a wider variety of crops in the market – there really isn’t any downside to diversity in food crops, if we can only find a way to make it work for everyone.

Cornfield courtesy of jpegjedi at Flickr under a creative commons licence

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