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Global Food Security and
its importance for the
UK/Scotland
Kate Bailey
Cardiff Business School
Global Factors
World population growth (and increasing
per capita calorie intake)
Climate change and extreme weather,
carbon price
GDP growth in Asia and China, nutrition
transition
Energy costs
Rising agricultural input costs
Freight costs
Level of biofuel subsidies and production
Futures trading, speculation
WTO, environment/open trade tensions,
unilateral food tariffs,
Level of food stocks
Supply response – change in plantings
Government policy in general,
including sustainability policy
Environmental policy: Loss/protection
of biodiversity, reduced nitrogen,
carbon pricing
Agricultural policy: EU/UK, end of setaside, CAP reform
New agricultural production technology
(e.g. GM)
Macroeconomic conditions, capital
availability, R&D expenditure, lag in
innovation application
Water availability
Competition for land use, land use
issues
Animal and plant disease
7 fundamentals
Population growth
Nutrition Transition
Energy
Land
Water
Labour
Climate change
Chatham House Project
Global Food Scenarios
System structure unchanged
1 Just a Blip
Food
prices
trend
down
2 Food Inflation
(5 years)
(10 years)
High food prices trigger a strong supply
response by farmers. The weather is
favourable. Global anxieties recede and the oil
price falls. The reduced oil price undercuts the
incentive for bio-fuel production, which drops,
reducing the competition with food supply and
freeing up production capacity. Food moves
into overproduction and prices fall to below the
long run trendline as financial speculators
change tack.
Demand for food grows with population and
slightly outpaces supply, as Asian meat
consumption grows and weather losses mount.
High energy prices support the push for bio-fuels
and raise fertiliser prices. The push for increased
supply encourages investment in new production
technology. Productivity improves but input costs
and food prices remain high. High food prices fuel
inflation and contribute to economic recession
woes.
3 Into a New Era
4 Food in Crisis
(10 years)
Oil supply tightens as peak oil arrives. Climate
change is stark and weather-related crop losses
mount. International carbon pricing is agreed
and environmental regulations get tougher,
restricting energy use and synthetic inputs.
Under these conditions, fundamental long term
supply constraints become apparent. The
problems of the existing agricultural paradigm
are accepted and production gradually shifts to
an eco-technological approach.
Steady transformation
(5 years)
New diseases spread and water shortages bite.
Geopolitical disruptions drive energy prices to
record levels. Significant input cost pressure
drives food prices higher. Grain stocks are run
down in an effort to avoid high prices. Extreme
weather events reduce harvests well below
expectations. Stocks are exhausted, and prices
skyrocket. Nations control prices and ban
exports. Civil disturbances and wars spread.
Serious famines occur in many poor regions.
Crisis mode discontinuity
System structure changed
Food
prices
stay high
Food
prices
skyrocket
Range of impacts
Global influences are combining to create a new generational
experience
• EU/UK are not immune
A food crisis cannot be ruled out
• Both shocks or systemic risks could trigger a crisis event
Higher baseline of costs – end of the era of cheap food
• Tightening in global demand and supply will drive higher prices
• Higher energy and input costs
• Food, energy, transport cost burden higher in Scotland
• Inclusion of external costs (carbon, water etc)
Higher prices have potential to create health and equity issues
• Particular concern for Scotland
Range of impacts
• Increased global competition could pressure some aspects of supply
• Higher prices/crisis likely to trigger further protectionist behaviours
• Food’s increasing prominence as a strategic asset may see increased bypassing of world trade system
• UK/Scotland has key global dependencies include the supply of fruit,
phosphates, soya
Sustainability issues are creating an ecological dimension to food
security
• Availability and usage of basic resources – land, water, skills – creating new
uncertainties
• Longer term ability of the system to function could come under question
Food will increasingly need to be considered as a strategic issue
The New Dynamic
Environmental and social
impacts of agriculture and
food production can no longer
be ignored
New definitions of risk as
global shocks and the
availability of basic resources
create more uncertainty
Businesses will need to
operate around a higher price
norm, reflecting true social
and ecological costs
Consumers expectations of
cheap, unlimited food will be
challenged
Resilience
Managing
Consumer
expectations
Four key
system elements
Competitiveness
Sustainability