Tag Archives: FAO

Phosphorus dynamics – mining vs. recycling

Global P consumption in Millions of Tonnes. Data from FAO.

Phosphorus is essential for sustaining humanity, because it is essential nutrient for producing food, and it is often a limiting nutrient for plant growth. Unlike nitrogen, it cannot be fixed from the air, and must be either recycled or mined.

Modern industrial agriculture relies on continual inputs of mined phosphor. How long phosphorus mining can last is quite uncertain. A new assessment of phosphor supplies suggests these are supplies are much bigger than previously thought.

A recent editorial in Nature Not Quite Assured (Oct 27, 2010)writes:

Reserves of the phosphate rock used to make such fertilizers are finite, and concerns have been raised that they are in danger of exhaustion. It has been argued, for example, that data from the US Geological Survey point to the available supplies peaking in as little as 25 years time (see Nature 461, 716–718; 2009). Because there is no substitute for phosphate in agriculture, this might present an urgent and substantial problem. But initial findings from the World Phosphate Rock Reserves and Resources study conducted this year by the IFDC, an international non-profit organization based in Muscle Shoals, Alabama, and formerly known as the International Fertilizer Development Center, suggest that phosphate rock deposits should last for between 300 and 400 years.

Accurate information about phosphate reserves is hard to come by, and the IFDC concedes that more work is needed to hone its estimates. The mining industry, governments and interested researchers should accept the organization’s invitation to collaborate in this process.

The phosphate issue runs beyond gaining assurances that total global supply will meet demand. There remain important concerns that phosphate and other fertilizers are being squandered in some parts of the world, whereas farmers in other regions cannot obtain them at a reasonable cost.

… current fertilizer-production methods fail to maximize the efficient conversion of phosphate rock into fertilizer. The supply of the rock is heavily concentrated in two nations, China and Morocco, on whose good faith the rest of the world relies for its phosphate supplies. That faith has been shaken by extreme price fluctuations in recent years.

Yet the heavy dependence of food production on fertilizers, inequalities of supply and the need for sustainable use of fertilizers — including recycling — are largely missing from discussions on approaches to sustainable development. They were only mentioned in passing, for example, at the United Nations’ world summit on food security in Rome last November.

Hydrologists, soil researchers and food scientists have begun to raise awareness of some of the issues surrounding phosphates. A discussion will be devoted to the topic at the Crop World 2010 meeting in London next week, in which researchers will be joined by industry and government representatives, including John Beddington, the UK government’s chief scientific adviser, who has worked hard to raise political awareness of food-security issues.

These efforts would be strengthened if an international body, such as the UN Food and Agriculture Organization, started to seriously champion the issue of sustainable fertilizer use. The organization already tracks fertilizer demand and supply, and has produced reports on phosphate fertilizer use. It doesn’t have a specific programme for sustainable fertilizers, but its departments of agriculture and natural resources do some work in this area, giving it a base on which to build. It now needs to push this issue out from the sidelines and into the policy-making process that will shape the future of agriculture and sustainable development.

My colleague Arno Rosemarin believes that the assessment is wrong.  He has co-authored another assessment of phosphor supplies, and comments on the nature editorial:

The statement in the IFDC report that we have 300-400 years prior to depletion og phosphorus is based on a zero increase in extraction from now on. The rate of annual increase is presently in fact 3-4%. Extraction will hopefully decrease as we become more efficient, start significant reuse programmes, etc. But this will take decades and no UN governance or monitoring plan is in sight. The food security summits in 2008 and 2009 never mention the word phosphorus. The new data on increased reserves from IFDC are based almost entirely on a recalculation for Morocco giving them 10 times more phosphorus and 85% of the global capacity. But the estimates are based on a hypothetical calculation and economic viability does not figure in the calculation. There are no data on reserves from industry in the calculation since this is kept confidential.

Ecosystem ecologist Jim Elser followed with:

While this seems like welcome news, as Dr Rosemarin notes, the new estimate is entirely based on a revision of estimates for Morocco and seems to be derived from a 20-year old geological report and not on any new geological survey data. It is also important to note that the 300-400 year IFDC estimate for P depletion is a different event than the timing of “peak phosphorus”, which refers to the date when global P production will occur (previous estimates placed this timing for 2030-2040). It is likely that, even if this new reserve number for Morocco is correct and the P ore there is indeed of high quality and accessible, a production peak for P is likely only pushed back by a few decades. In any case, the key issue for any such commodity is PRICE and what remains to be analyzed is the likely future dynamics of P fertilizer prices in the face of the need to double food production by 2050 while simultaneously satisfying the burgeoning bioenergy industry. “Not quite assured”, indeed.
Is this any way to run a biogeochemical cycle?

Twenty two countries in protracted crisis

FAO reports that:

Twenty-two countries are … are in what is termed a protracted crisis, FAO said in its “State of Food Insecurity in the World 2010” hunger report, jointly published today with the World Food Programme (WFP).

Chronic hunger and food insecurity are the most common characteristics of a protracted crisis. On average, the proportion of people who are undernourished in countries facing these complex problems is almost three times as high as in other developing countries.

More than 166 million undernourished people live in countries in protracted crises, roughly 20 percent of the world’s undernourished people, or more than a third of the total if large countries like China and India are excluded from the calculation.

… Faced with so many obstacles, it is little wonder that protracted crises can become a self-perpetuating vicious cycle,” said the preface to the SOFI report, signed jointly by FAO Director General Jacques Diouf and World Food Programme Executive Director Josette Sheeran.

…For the first time, FAO and WFP offer a clear definition of a protracted crisis that will help improve aid interventions. Countries considered as being in a protracted crisis are those reporting a food crisis for eight years or more, receive more than 10 percent of foreign assistance as humanitarian relief, and be on the list of Low-Income Food-Deficit Countries.

Food security and financial markets

FAO says that Food price volatility a major threat to food security:

Concluding a day-long special meeting in Rome the experts recognized that unexpected price hikes “are a major threat to food security” and recommended further work to address their root causes.

The recommendations, put forward by the Inter-Governmental Groups (IGGs) on Grains and on Rice, came as FAO issued a report showing that international wheat prices have soared 60-80 percent since July while maize spiked about 40 percent.

The meeting said that “Global cereal supply and demand still appears sufficiently in balance”, adding, “unexpected crop failure in some major exporting countries followed by national policy responses and speculative behaviour rather than global market fundamentals have been the main factors behind the recent escalation of world prices and the prevailing high price volatility.”

Among the root causes of volatility, the meeting identified “Growing linkage with outside markets, in particular the impact of ‘financialization’ on futures markets”. Other causes were listed as insufficient information on crop supply and demand, poor market transparency, unexpected changes triggered by national food security situations, panic buying and hoarding.

The Groups therefore recommended exploring “alternative approaches to mitigating food price volatility” and “new mechanisms to enhance transparency and manage the risks associated with new sources of market volatility”.

In a recent IFPRI discussion paper, Recent Food Prices Movements: A Time Series Analysis, Bryce Cooke and Miguel Robles analyze the food price spike of 2008.  They asses multiple proposed explanations (from biofuels, oil prices, weather, trade barriers, and speculative markets) using econometric time series analysis.  They conclude that financial activity in futures markets and proxies for speculation can best explain crisis.  They write:

Results of our rolling windows Granger causality tests show the following:

(1) In the case of rice prices we find weak evidence that for few 30-month intervals between 2004 and 2007, the U.S. dollar depreciation rate has marginally Granger-caused the growth rate of rice price; and also the growth rate of real world money holdings seems to be more important in explaining the growth rate of rice prices after 2004, but this evidence is not really statistically significant.

(2) When we analyze the price of soybeans we find that, starting in mid-2005 (which implies a 30-month period ending December 2007), the growth rate in the world exports of soybeans shows evidence of Granger causing the growth rate of soybean prices.

(3) In the case of corn we find that starting in the second half of 2004 the growth rate of oil prices shows evidence of Granger causing the growth rate of corn prices, but with a negative relationship.

(4) When analyzing our speculation proxies we observe that the ratio of monthly volume to open interest in futures contracts indicates that for the case of wheat and rice, starting in 2005, it has influence in forecasting price movements.

Also we find that for the case of rice, the ratio of noncommercial long positions to total long (reportable) positions has an effect on prices, starting in 2004. When we analyze the same ratio for short positions we find additional evidence for speculation affecting the growth rate of corn and soybean prices. In the case of corn there are signs of causality between March 2004 and September 2006, and during the 30-month span from May 2005 to November 2007. In the case of soybeans we find weak evidence, in particular for the 30-month period ending February 2008.

Interestingly as the rolling samples include 2008 and 2009 data, picking the decrease of grain prices since mid 2008 and the adverse effects of the global financial crisis, the evidence of speculation activity affecting spot prices vanishes in all cases. This supports the view that during the food crisis agricultural grain markets were operating under a different regime in which speculation activity played a role in spot prices formation. The overall evidence points to the following interpretation: before and after the food crisis speculation activity had no effect on spot prices formation while during the crisis it did. This is not to say that before and after the crisis speculation was not present, it was (probably to a less extent) but didn’t granger cause spot prices.

Overall, we conclude from our time series analysis that when taking the four commodities analyzed here there is evidence that financial activity in futures markets and/or speculation in these markets can help explain the behavior of these prices in recent years. Other explanations are only partially supported for the particular case of one agricultural commodity or not supported at all. We do not claim, however, that these other explanations should be disregarded; all that we can say is that in using the variables considered in this study and the particular time series models herein, we do not find such evidence.

Frederick Kaufman wrote a Harper’s magazine in July 2010 The food bubble:
How Wall Street starved millions and got away with it
that reports on finance and the food crisis. The Harper’s version is behind a paywall, but Kaufman was interviewed on Democracy Now.

More academic takes on the food crisis and the possible future of food price volatility are in:

C. Gilbert and C. Morgan’s article Food price volatility in Proc Royal Soc (DOI: 10.1098/rstb.2010.0139 ). They conclude:

We have highlighted the extensive evidence demonstrating interconnection of financial and food commodity markets as the result of speculative activity. Nevertheless, this contention remains controversial and, until the mechanisms are better understood, the policy debate will remain confused.


C. Gilbert’s How to Understand High Food Prices in Journal of Agricultural Economics (DOI: 10.1111/j.1477-9552.2010.00248.x) whose abstract states:

Agricultural price booms are better explained by common factors than by market-specific factors such as supply shocks. A capital asset pricing model-type model shows why one should expect this and Granger causality analysis establishes the role of demand growth, monetary expansion and exchange rate movements in explaining price movements over the period since 1971. The demand for grains and oilseeds as biofuel feedstocks has been cited as the main cause of the price rise, but there is little direct evidence for this contention. Instead, index-based investment in agricultural futures markets is seen as the major channel through which macroeconomic and monetary factors generated the 2007–2008 food price rises.

Short links: agricultural statistics

1) FAO is granting free and open access to its central data repository, FAOSTAT, the world’s largest and most comprehensive statistical database on food, agriculture, and hunger.

2) FAO statistics on production of crops, fruits, livestock, oil crops, and others can be analyzed in Gapminder.

3) How many plants feed the world on Agricultural Biodiversity weblog.  They write:

Instead, they worked with national level Food Balance Sheets from FAO, and looked at the question in four ways to determine just how many species make up 90% of the total intake of food weight, calories, protein and fat in each country.

The result is “85 species commodities and 28 general commodities contribute 90% of national per capita supplies of food plants.” After a bit of tinkering, they come up with this final statement: “the total number of species commodities is 82. These consist of 103 species. Fifty-six of the species commodities, consisting of 75 species, account for 5% or more of the national supply of a nutritional category in at least one country.”

4) International Development Statistics is an online database of the volume, origin and types of aid and resource flows to over 150 developing countries. The data are collected from official statistical reports submitted to the OECD by members of its Development Assistance Committee and include figures on official development assistance, other official flows and private funding.

How important are pollination ecosystem services?

Nature News reports on a paper by Aizen, Garibaldi, Cunningham & Klein in Current Biology (doi:10.1016/j.cub.2008.08.066) in an article Agriculture unaffected by pollinator declines

Bees and many other insects may be in decline almost everywhere — but agriculture that depends on pollinators has been surprisingly unaffected at the global scale.

That’s the conclusion of a study by Alexandra Klein at the University of California, Berkeley, and her colleagues. Using a data set of global crop production — maintained by the Food and Agriculture Organisation of the United Nations (FAO) — which spanned 1961 to 2006, they compared the yields of crops that require pollinators with those that don’t.

They found that crop yields for both crop types have gone up consistently, seeing average annual growth rates of about 1.5%. There was also no difference when the researchers split the data into crops from developing countries and crops from developed countries.

And when the researchers compared crops that are cultivated almost exclusively in tropical regions, they found no difference between the success of insect-pollinated crops — such as oil palm, cocoa and the Brazil nut — and those crops that need only the breeze to spread their pollen.

An interesting finding, but I expect that data collected at the national level is not able to detect current declines in pollination services.  In the news article Klein states that the data doesn’t show the extent to which farmers may have adapted to a decline, and that the world is becoming increasingly reliant on pollinator dependent crops.  They have grown from 8 % of developed world agricultural production in 1961 to about 15% in 2006.

This study also points out the gap between local level ecological understanding and regional to global assessment needs.