A seemingly insignificant data point floated by the other day. The statistic was that, “Between 2020 and 2030 almost 76 million Indonesians will join the so-called consumer class, the folks that spend more than $11 per day.” Before you toss that aside, think about that for a moment. Indonesian is not the Corn Belt. It is a rugged Island north of Australia.
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Its inhabitants probably eat rice and boiled fish every day. Well, maybe not. By 2030, Indonesia will become the fourth biggest consumer market in the world behind giants, China, India and the United States. Their economy is exploding upward along with the population, and along with the amount of money in their pockets.
When people have discretionary money, they buy food, protein in particular. And with very little agriculture in Indonesia as we know it, the question becomes, “Who is going to feed all these people?”
Among the 30 biggest consumer markets, Asian countries are expected to exhibit the biggest absolute growth of the consumer class over the coming years. Those include Pakistan, which will add 60 million people by 2030, Bangladesh, which will add 52 million, Philippines, which will add 37 million, and Egypt, on track for another 30 million.
Left off that list were India, which will add 420 million by 2030, and China which is forecast to add 337 million people by then.
2030 is only nine years and a couple months away, and more than 1 billion more mouths to feed.
Why is that a concern? The 2021 Global Agricultural Productivity Report issued last week by Virginia Tech University reported that agricultural productivity needs to increase globally by 1.73 percent per year to keep up with the demand. That percentage us not much. U.S. farm production probably exceeded that for some crops this year, maybe.
The only problem is that global agricultural productivity is on the struggle bus. It is at 1.36 percent per year.
At the same time as the Virginia Tech report, USDA’s Economics Research Service reported Total Factor Productivity. In the latest period of measurement (2011-19), global output of total crop, animal, and aquaculture commodities grew by an average rate of 2.08 percent per year.
“Since the 1990s, growth in TFP rather than factor accumulation (growth in land, irrigation, and other inputs) accounted for most of the growth in world agriculture output.” Total Factor Productivity, as measured by the USDA’s Economics Research Service, is a combination of land expansion, yield growth, and policy changes that have allowed 1+1=more than 2.
There is irony in some of this. The United States is not at the top of the Total Factor Productivity list. Who is? China, Spain, Norway, Chile, and Brazil are at the top, along with Vietnam and Malawi.
Other than Brazil, which exports significant volumes of corn and soybeans, the other nations are not significant exporters of food. Certainly China is not.
So the question, again, is who is going to feed all of these people. Agricultural technology needs to ramp up quickly, because any delay in yield increases will mean a lot of hand to mouth consumption.
Stu Ellis is an observer of the Central Illinois agriculture scene. In addition to his weekly column, you can view his “From The Farm” and “Harvest Heritage” reports on WCIA 3 News.