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Where to next? Predicting the future of agriculture

Someone is always trying to predict the future of agriculture. You might even be tempted to believe them... at your own peril

Human beings just can’t stand to feel that they’re being left in the dark. There’s something about the unknown that flat out bothers us. We go to enormous lengths to try to see what might be coming next, and we divert a big pile of our cash and an even bigger pile of our even scarcer time and attention to following market reports, listening to experts and going to meetings and conferences to try to sort out what is coming down the pipe.

In fact, agriculture is among the worst, ever since the biblical foretelling long, long ago of seven years of feast followed by seven years of famine.

It’s only natural in an industry that is so tossed about by weather — and by the volatile prices that result — that farmers keep their eyes on the horizon for any kind of insight.

Increasingly, it’s also good business. With the resources that are needed to keep farming today, let alone the big dollars needed in order to expand, who wouldn’t be looking for a glimmer of the world a few years down the road?

But, if we turn to corn as a convenient example, in the last decade alone we’ve been told that a bushel will always sell for $8, or always for $3, or for maybe something in between, just as we’ve been told that land prices have topped out, or that they have barely begun to rise.

We’ve also been assured that the world will run out of food, only to hear from the next expert that farmers are more than capable of growing a glut, no matter how many mouths need filling.

The problem is, each of those predictions has sounded utterly reasonable, absolutely scientific, and totally believeable.

The question is, is there a way for farmers to separate the true from the misguided?

What’s a farmer to do?

The answer might start with looking at just how old the debate actually is. It might seem like all today’s talk about global population growth and the rise of the middle class has come about because we’re living in a new, unprecedented point in history. But there’s very little that’s unprecedented about it.

Just barely out of the age of antiquity, Scottish cleric and political economist Thomas Malthus coined the Malthusian principle in his 1798 work An Essay on the Principle of Population. He theorized that every population will always expand until it exceeds its ability to feed itself.

Malthus has mostly been proven wrong so far. Better agricultural practices have continually boosted our yields to meet the need. But we still believe him, such as in the early 1970s, when the European thinktank the Club of Rome released its seminal work Limits to Growth. It tried to put a modern spin on it, but it was in essence a rehash of Malthus’s central idea that limited resources would act as a check on growth. It came at roughly the same time that pop culture was fixating on the same issue, in books like Paul Ehrlich’s Population Bomb.

In other words, there have always been predictions that we’re on the edge of global starvation. And to date, farmers have always saved the day.

So when agriculture in the 1970s experienced another of its period price spikes, with demand outstripping supply, many believed the future was here. In the rear-view mirror, however, the view is different, and predictable. Given a price signal and lots of encouragement from people like then U.S. agriculture secretary Earl “Fencerow-to-Fencerow” Butz, farmers made investments and kicked it up another few notches. As always, high prices solved high prices, and soon the world was awash in a grain glut.

More recently, history might not exactly be repeating, but it does seem to be rhyming. Economic growth in developing countries is building demand for better food products, and at the same time the ethanol market is sopping up a huge portion of the U.S. corn crop. This has prompted the usual shouts of “it’s different this time” that usually accompany the boom right before the bust.

But is it different? Maybe. Or maybe 300-bushel corn will kill this dream too.

The point is, we don’t know. So should we even bother listening to the next big prediction? Does anyone even have a sniff as to what the future holds?

The certainty principle

At the University of Manitoba, noted agriculture economist Brian Oleson, often gets skeptical when he hears anyone taking a long view with dead certainty.

“None of us really know,” Oleson said in a recent interview. “If either you or I, or anyone else for that matter, did, we’d take a big position in the market, make a lot of money and retire very rich to a beach somewhere sunny.”

In big part, the problem with long-term predictions is they’re inevitably being made by human beings, and most of us simply haven’t been around long enough to spot the natural rhythm of things, making us all too susceptible to believing what we want to hear — things like it’s a new era for farming, where the good times will last forever.

To gain a little insight into the longer trends, Country Guide was fortunate enough to talk to someone who’s been around the block a time or two, with the tales to tell to prove it. Charles “Red” Williams is a professor emeritus with the University of Saskatchewan and a well-known public speaker and newspaper columnist on agriculture topics. These days he’s looking hard at 90, but even a few seconds of conversation confirms his formidable mind remains in fighting trim. Contacted by a smart-aleck young writer looking for insight into the future, he chuckled a few seconds and delivered a crisp assessment.

“Well, I think Country Guide is brave to even take this on, and you’ll do fine if you just accept one thing — the second you write it down, you’re going to begin being wrong,” Williams said.

He explained that his generation didn’t do a great job of predicting the future, the next didn’t either, and the current one likely won’t beat anyone else’s record.

“Going way back, we had no idea what would be coming over the next 40, 50 or 60 years,” Williams said. “We just had a glimpse or two, really.”

To give some sense of just how fast things can change, Williams spoke of his own experience around the time of the Second World War. Prior to joining up, he finished one last harvest, as a member of an old-school threshing crew, running a team of four horses. Just a couple years later he had a front-row seat to the D-Day invasion of Normandy, even to this day one of the most impressive displays of mechanized warfare ever launched.

“There were 4,000 ships, many with 16-inch guns that pounded targets 25 miles inland,” Williams said. “You watched wave after wave of planes — thousands of them — coming overhead. The British even assembled, floated over and anchored a movable harbour just off the coast.”

Returning home, he was still in uniform when he got a message from his uncle, who farmed on the fertile Regina Plains, calling for help with the harvest. Still in uniform, he requested leave to help finish. When he arrived he saw the first sign of the change that was about to come.

“He had a small combine, and together he and I finished the harvest,” Williams said. “That was one of the greatest legacies of the Second World War — we  created the heavy manufacturing capacity to build things like larger tractors and other farm equipment.”

Likewise the first agriculture chemicals were things like DDT, developed to protect troops from malaria, and fertilizer became much more readily available as high explosive plants were repurposed to nitrogen fertilizer production.

“God help us, but a war really speeds things up,” Williams said. “But at least after the war we were able to turn these things to peaceful purposes — we really did turn the swords into ploughshares.”

His central point remains strongly held — a young person leaving college today to go back to the home farm can’t possibly predict the unpredictable, or envision just how things will play out any more than the young man who marched to war in the early 1940s. Human history is littered with so-called black swan events that are utterly random, even to the most informed and involved participants.

“That’s the nature of black swan events — they’re totally unpredictable, that’s what makes them black swans,” says Oleson of the U of M.

Practical insight

All this adds up to a real hesitation on the part of reputable academics to try to peer too far into the future, preferring to leave that to the self-styled futurists.

John Cranfield, an agriculture economist with the University of Guelph, puts it this way. He says there’s a really good track record of accuracy in the very short term, measured in a few months or a year, and he convincingly points to futures markets as the best example of this.

“As futures get closer and closer to maturity, they become a very good barometer that farmers can use to take action,” Cranfield said. “Farmers can use them to determine things like their crop mix, and to make other economic decisions. But further out than that, things start getting really shaky.”

Cranfield says medium-term predictions can have some value, over a time frame of five to 10 years, but even they should be taken with a grain of salt, because unpredictable things can happen.

“It’s like a public opinion survey you might see,” Cranfield said. “Those are usually said to be accurate, on average, plus or minus a few per cent, 19 times out of 20.”

Brian Oleson agrees that such predictions require caution, but also says the agriculture economics field has accrued a bit of a track record of success predicting these medium-term trends.

“I think we’ve more-or-less been good,” Oleson said. “In the early 1970s we said there would be a period of prosperity, and there was, for about 10 years, until the early 1980s. By about 1982, we were saying we were headed into a tougher period, which we did. Beginning in about 2004 and 2005, we started talking about heading into a better period we thought would last about 10 years or so.”

But what about those big-picture, headline-grabbing statements about new paradigms and the like? Here nobody Country Guide spoke to was willing to plant a flag in the ground and try to defend their track record.

“When you get out a long ways — 25 years or even more — I wouldn’t say I have a lot of confidence in those sorts of predictions,” Cranfield said. “It really is a stab in the dark most times.”

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