Commodity Corner
Views on commodities and energy
But will shareholders back hunger fight?
The world needs to spend $83 billion a year to ensure it can produce enough food amid a changing climate for its growing population by 2050, the UN’s Food and Agriculture Organization estimates.
Rich countries have pledged more than $22 billion over three years to help small, impoverished farmers grow and sell more by investing in seeds, fertilizer, roads and marketing infrastructure.
Philanthropists have thrown their weight behind the goal. Bill Gates challenged research companies last week to make new technologies available to small farmers without charging them royalties. (Click on the link at the bottom to see his full speech to the World Food Prize forum.)
Corporations have said they see themselves as part of the fight too, particularly when it comes to research. But Robert Thompson, a former World Bank official, says he’s pessimistic the private sector will be able to contribute enough. “Their shareholders won’t stand for them solving all the problems of the developing countries, and giving it away,” he told Reuters.
“It’s going to take subsidies or at least a public sector contribution to engage their research horsepower,” said Thompson, now an agriculture professor with the University of Illinois, who has pushed for more spending on agricultural development for 40 years.
Agribusiness should be motivated to get involved in developing countries because they represent a future growth market for their products, Thompson said. “They should be willing to accept lower return on their own investments as an investment in the longer term, but we have to keep the short time horizon of the U.S. investment community in mind,” he said.
“Shareholders are brutal on companies that don’t meet their short-term profit expectations. In that sense, perhaps some of the European companies like Syngenta, BASF or Bayer … may have a little more license, if you will, to take a longer-term perspective than some of the U.S. publicly traded companies.”
Below: Bill Gates addresses World Food Prize forum in Des Moines, Iowa.
from Jasmin Melvin:
Modern marvels boost food output, or would if countries used them
It may have been preaching to the converted but the world's largest agrochemicals company came to the 2009 Outlook Forum to hold forth on the benefits of technology for farmers, and not just on genetially modified technologies.
Michael Mack, CEO of Zurich-based Syngenta International AG told attendees that advanced technologies and a little education will be necessary to feed the world, but maintained such innovations aren't years or even decades away -- they're already here.
More than 850 million people face starvation each day under current conditions, according to the United Nations' Food and Agriculture Organization, yet many nations do not fully utilize existing technologies to maximize their harvests.
"We can realize significant yield potential in the next 10 years by simply deploying existing technology across land that is currently under cultivation," Mack said.
Mack noted that places such as Russia and Ukraine, once considered the breadbasket of Europe, farm only 10 percent of their land efficiently, while Asia could boost its productivity by 20 percent within seven to 10 years by adopting modern farming methods.
Simply put, technology would allow us to do more with less, a phenomenon that will become even more significant as the world's population grows by an expected 2 billion people by 2030.
"This means that there are not only more mouths to feed but they will all be demanding a bigger and better diet," Mack said, which will require a doubling of feed and food production.
Technologies as simple as fertilizers and pesticides boost crop yields but costs and lack of education on their use often result in them being left out of farming in developing countries.
The International Plant Nutrition Institute, a not-for-profit agronomic education and research group, says on its Web site that 
"somewhere between 30 to 50 percent of crop yield in the U.S. is attributable to nutrient inputs."
And Mack noted, "It's a fact without current crop protection products there would be 40 percent less food available in the world."
Syngenta has seen sales of its crop protection products increase in recent years.
Selective herbicides, which target specific weeds and are Syngenta's most profitabe crop protection product, saw sales increase by 8 percent to $2 billion for the company in 2007.
Mack also spoke about more controversial technologies, like genetically modified seeds, which are strongly opposed by some environmental groups. He praised American policy and regulations on GMO crops and expressed hope that other countries would follow.
"If we embrace science, we can have a future of bounty," Mack said.
For more Reuters coverage of the U.S. Agriculture Department's 2009 Outlook Forum, click here.
