MUCH has been said about how BHP Billiton's bid for Potash Corporation and Canadian fertiliser company Agrium's play for AWB fit in with the growing issue of food security and food shortages.
These are just new chapters in developments that resulted in China's Bright Food Group trying to acquire Australia's CSR sugar this year and Sinochem's move to buy Australian agrichemicals operator Nufarm. Then there's Qatar-based Hassad Food, backed by the Qatar Investment Authority, buying up rural land in Australia to feed Qatar and other Middle East countries worried about food security. Hassad has bought more than $40 million worth of sheep stations in northern New South Wales and South Australia in the past six months.
The corporate activity is a storm warning of how food shortages and famine will reshape the world and corporate strategies.
The Economist notes that by 2050 world grain output will have to rise by half and meat production will need to double to meet demand at a time when growth in grain yields is flattening out, there is little extra farmland and renewable water is running short.
Similarly, rising food prices are a poke in the eye that the world needs to remind us of how fragile the food production chain has become. The drought and bushfires in Russia, combined with limits on grain exports, have resulted in a 70 per cent price spike in wheat futures, which has caused prices for soy and barley to go up by 10 per cent.
Global warming is getting the press, but some are now warning that the threat to the human race is a looming food shortage. This seems unimaginable in a world where there has been almost half a century of abundance.
But in his chilling book The Coming Famine, journalist and science writer Julian Cribb warns we are headed towards global food shortages in the next 40 years because of scarcities of water, good land, energy, nutrients, technology, fish and, significantly, stable climates. You can add to that population growth, consumer demand and protectionist trade policies.
"The coming famine is also complex, because it is driven not by one or two, or even half a dozen factors but rather by the confluence of many large and profoundly intractable causes that tend to amplify one another,'' Cribb writes. "This means that it cannot be easily remedied by 'silver bullets' in the form of technology, subsidies, or single-country policy changes, because of the synergetic character of the things that power it.''
The world is running out of farmland. Advanced farming depends entirely on fossil fuels likely to become scarce, supplies of nutrients for farming have peaked and fresh water resources are finite. With global warming, up to half the planet faces regular drought by the end of the century. Storms and the kinds of floods that have devastated Pakistan are tipped to become more frequent and intense.
Cribb has several solutions; none will come easy. It could start with more free trade and diverting just a tenth of the $US1.5 trillion ($A1.7 trillion) global armaments spending to sustaining global food supplies.
It will be costly, but not as costly as failing to create food and water security. The choice is clear. In the 21st century, we either eat - or we fight.
But as Cribb points out, human beings are remarkable. In the 20th century, they developed weapons that could destroy the world but developed systems and agreements not to do it. They damaged the climate but there are strategies, which may or may not be successful, to tackle global warming. The looming food crisis calls for us to better manage water, land, nutrients and other inputs. Green cities that grow food will need to be established and the real costs of food to the environment and society might be passed on consumers.
If Cribb's warnings are correct, the prospect of famine, the third horseman of the Apocalypse, will be the biggest trial of our common humanity. BHP and AWB are footnotes to a much bigger story of how it will reshape business and society.
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