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Climate Change and the Future of Food Production

October 12, 2015

2nd Annual Henry C. Gardiner Global Food Systems Lecture -Kansas State University
Greg Page, Executive Director

Good evening everyone. It’s an honor to be invited to speak to you about climate change and the future of food production.

Over the next few minutes, I will share some of my observations and then invite you to question, challenge and put forward your ideas on how best to tackle the great challenge for the next generation.

The challenge itself is clear: We have to figure out how to feed 9.5 billion people by 2050, a group that not only will be much larger, but also wealthier and more urban. We will have to do so with heightened attention to sustainability and respect for the planet’s natural limits. And to make matters even more complicated, we will have to learn to grow that extra food in the face of a range of possible impacts from climate change.

But if the challenge is clear, the solutions can be a bit murkier. More on that in a moment.

Just like Kansas State University, Cargill has deep roots in agriculture. Our company, which is celebrating our 150th anniversary this year, is just a couple of years younger than the university.

Over the course of those 150 years, the company has faced its share of daunting challenges, beginning with our first investment in a small grain elevator in Conover, Iowa, in 1865. With the railroads quickly expanding across the American prairies, Conover became an overnight boomtown with 200 buildings, fresh produce markets… and 32 saloons. Not too much later, however, the railroad abruptly dismantled its train station… and within a couple of years, Conover was a ghost town. Cargill moved on. Like everyone in this industry, we learned early that markets are always changing… and we must adapt.

Today, Cargill has 65 businesses operating in 68 countries.

First, we move food and crops from times and places of surplus to times and places of deficit. This core grain and oilseeds trading activity makes up about 25 percent of our business.

We also provide farmers at all scales of production with a variety of services and access to markets.

We produce a variety of foods too – cocoa and chocolate, malt, flour, cooking oils and poultry and beef.

We trade ocean freight, electricity, natural gas, petroleum and basic metals. The prices of these commodities have a dramatic impact on agriculture.

Kansas is home to several Cargill businesses.

Our North American meat businesses are headquartered in Wichita. We also have a beef plant in Dodge City, a feedlot in Leoti and salt operations in Hutchinson.

In addition, there are a number of Cargill AgHorizons locations across Kansas. Cargill AgHorizons operates grain elevators and farm service centers handling corn, wheat and soybeans. Products and services include grain origination and storage, grain marketing resources, agronomic advice, crop insurance and crop input products.

Together, we employ more than 4,100 Kansans at 39 locations across the state. We also are the beneficiaries of the excellent educational foundation that KSU provides… with more than 500 KSU graduates currently working at Cargill and contributing to our success.

Kansans know a lot about what it takes to feed a hungry world. Tonight, I want to talk to you about the potential impacts of a changing climate on the future of food production.

It is certainly a fitting time to be taking on this topic.

This week, World Food Prize activities in Des Moines will again draw the world’s attention to the challenges of feeding a world on its way to 9 billion more prosperous and more urban people in the next 25 years.

Then, at the end of next month, world leaders will convene in Paris to hammer out agreements to reduce global greenhouse gas emissions and put the world on a path to mitigate the most serious threats from climate change.

This is also a fitting place to be having this discussion.

As all you Wildcats likely know, Kansas State was the first land grant institution created in the United States.

Land grant universities have historically been important contributors to developing the science, technology – and the human talent and ingenuity – that has enabled the global food system to move the world further from famine than it has ever been.

All the world’s people owe a debt of gratitude to the advances in agriculture, agronomics, animal husbandry and food science that our land grant universities have helped produce. America’s agricultural sector should be very proud of the significant advances that have been made in productivity and sustainability.

For example, it now takes 33 percent less nitrogen to produce a bushel of corn than it did 20 years ago. No till farming has helped improve soil fertility while reducing soil erosion, energy use and carbon emissions. And farmers have improved feed conversion in hogs by a third in the last generation. Each of these successes dramatically lowered the greenhouse gas footprint of feeding the world.

In the face of the challenges still ahead for our global food system, it is reassuring to see the concentration of resources, energy and effort represented here in Manhattan in the form of the Biosecurity Research Institute, the Food Science Institute, the International Grain Science and Industry Complex, the USDA-ARS Center for Grain and Animal Health Research, the Kansas Department of Agriculture, the Urban Water Institute, and the soon-to-be-built National Bio and Agro-Defense Facility, among other facilities and programs.

Among the challenges ahead are those presented by a changing climate.

Climate change is not a popular subject in much of the heartland, nor with many of our farmer customers. But at Cargill we have come to believe that it is important to have serious conversations about what we can do now to accommodate a range of climate change scenarios – and for agriculture to take part in those conversations.

Why? Because all of the things that are challenging about farming under any circumstance become more difficult with the growing population and the presence of more quickly changing climate.

How much more difficult?

A group with which I’m affiliated also has studied risks associated with a changing climate. The studies from Risky Business bring unique perspective – focusing on economic risks under a range of scenarios vs. causes and policy prescriptions.

What does the Risky Business assessment say?

Specific to agriculture, the Risky Business report outlined the shifting agricultural patterns in crop yields that we should expect – with likely gains for northern farmers offset by losses in the South. The report also showed that without agricultural adaptation, U.S. production of corn, soybeans, wheat and cotton could decline by 14 percent by midcentury and by as much as 42 percent by late century; again, without adaptation and investments in resilience.

It is important to note that the temperatures predicted for the Midwest are not higher than those faced by corn farmers in Thailand or Brazil today. We can adapt.

In fact, the resilience and adaptive capacity of farmers is real and already in play.

In the face of a climate that is likely to be become warmer, wetter in some places, drier in others and more prone to extremes everywhere… how do we preserve and enhance the resilience and adaptive capacity of the global food system?

I propose four things the next generation must do better than my generation has:

1) Embrace the signaling power of price

The foundation of sustainable agriculture is a price adequate to reward farmers for their efforts. This is as true for commercial smallholder farmers in developing parts of the world as it is for large scale producers here in Kansas and elsewhere.

Prices are potent fertilizer, signaling and motivating farmers to produce more when the market calls for it. We mask these signals with subsidies, tariffs and other market-distorting mechanisms at our peril.

But we can’t afford to look at commodity prices in a vacuum. Because consumers must have enough purchasing power to create demand, growth in the wider economy is critically important for agriculture to thrive in both the developed and the developing world.

2) Honor comparative advantage; enable open trade

The world’s farmers will produce the most food in the most economically and environmentally sound ways when they cultivate the crops best suited for their particular growing conditions and trade the resulting surpluses with others.

Food self-sufficiency, a tempting idea, is not the path to food security. But we default to it too readily. Export bans exacerbated the food crisis in 2007-2008 and Russia’s ban on wheat exports did again in 2011. (More current examples: India; Indonesia?)

By contrast, in soybeans, China has set a better example… China has helped the world in aggregate produce more food through its decision to honor comparative advantage and import soybeans. When it focuses on those areas where it has an advantage – using its scarce land to produce corn, wheat, and rice -- all of which yield relatively better in China, then imports soybeans and vegetable oils, which yield relatively more poorly in China – the world in total raises more food.

Honoring comparative advantage and embracing open trade are particularly important given the demographic trends ahead – more population growth in regions that are natural food importers means more food will need to cross borders.

Honoring comparative advantage and embracing open trade are also buffers against regional crop failures resulting from extreme weather events – events that may become more common in a changing climate.

3) Pursue sustainable intensification

The world’s farmers have doubled the amount of grains, rice and oilseeds that they have produced since 1975 – without putting much new land under cultivation.

We will continue to need to deliver yield increases primarily from productivity improvements. The alternative is to further encroach on the world’s native forests and wetlands.

This is entirely possible … but not if we turn our backs on proven technologies that enable farmers to produce more with less water, less fertilizer, fewer herbicides and pesticides and less tillage.

4) Tackle climate change head on

Devilishly difficult challenge … a problem “politics is almost designed not to solve” (Jonathan Chait) given costs that lie mostly in the distant future and solutions that require coordination across scores of countries with wildly disparate economies, agendas and political structure.

Bill gates has pointed out on more than one occasion that 90 percent of what wealthy nations are spending today on carbon free energy goes into subsidizing things that won't SOLVE the challenge and only 10 percent on basic research into technologies that might truly work. We must rethink this mix.

Visiting Cargill, Risky Business co-founder Tom Steyer called climate change “the transcendent issue for our generation.” The profound question it begs is how… and how much to spend against an uncertain outcome. That is the essence of risk management.

But he, like me, is optimistic that we will rise to the occasion, particularly in the U.S. where ingenuity and entrepreneurial impulses and an ability to scale solutions can all be assets in addressing the challenge.

In that spirit, here are some things that I believe will make our global food system more resilient and adaptable to the potential impacts of a changing climate

  • First, continue to invest in yield increasing attainable yields through improvements in genetics, and in agronomic practices that protect improved genetic potential … and in propagating those technologies and practices through extension services and education.
  • Second, continue to reduce agriculture’s environmental impacts … by using water and land more efficiently and judiciously, protecting soil and water quality, and by adopting practices that enable us to continue sustainable intensification. In doing so, we build on a proud tradition.
  • Third, discourage our political leaders worldwide from pursuing food self-sufficiency, imposing export barriers and taking other actions that inhibit food from moving freely across international borders.
  • Fourth, favor flexibility in implementing renewable fuel policies so that food crops are not diverted by rigid dictates to non-food uses in periods of poor harvests and preserving this tool to support price adequacy in times of surplus.
  • Fifth … be open to cooperation, collaboration. Assume good intent, even on the part of people with whom you disagree. That’s the way to enter into the conversations we need to have to make smart decisions about our future.