What is the Future of Agriculture?

<p><strong>The Future of Agriculture</strong></p><p>01/ When you talk about the future, you need a) Narrative that humans can easily identify with and b) Numbers to make sure that you don&rsquo;t get swayed too much by the narrative.</p><p>I will first present the narrative version and then corroborate them with numbers.</p><p>02/ When I wrote the&nbsp;central hypothesis underpinning this newsletter (which is a far more detailed version of the summary that I am presenting below), I wrote that the future of agriculture is a contest between two polarizing, but seductive visions,&nbsp;quietly&nbsp;playing out,&nbsp;competing with each other.</p><p><strong>Vision #1: Small land-holding farmers don't matter in the long run, as their farms will be eventually consolidated by the market economics of digital agribusiness.</strong></p><p><strong>Vision #2: Small land-holding farmers matter in the long run, as the world's (and therefore our) ability to face environmental crises and climate change depends on their sovereignty to pursue their economic well-being and adapt to the changing times.</strong></p><p>Using the definition of&nbsp;James<strong><u> </u></strong>Carse&rsquo;s<strong><u>&nbsp;</u></strong>Finite and Infinite Games,</p><p><strong><em>A finite game is defined by known players, fixed rules, and the objective of the game is already agreed upon: You play the game to win.</em></strong></p><p><strong><em>An infinite game is defined by known and unknown players; Rules are changeable, and the objective is to keep the game in play. To perpetuate the game.</em></strong></p><p>I had characterized these two visions as Finite and Infinite Games.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="" /></p><p>At the heart of it, both visions are offspring&rsquo;s of a particular type of mindset. Vision #1 sprints from the &ldquo;Mechanism mindset&rdquo;, while Vision #2 springs from the &ldquo;Organism&rdquo; mindset.</p><p>Those who pursue Vision #1 want to reimagine Farm as a Factory (Alternative Protein, Lab Meat, Indoor &amp; Vertical Farming, Hydroponics, Aeroponics).</p><p>Those who pursue Vision #2 want to reimagine Farm as Nature (Regenerative Agriculture, Steinerian Biodynamic Agriculture, Zero Budget Natural Farming).</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="" /></p><p>Vision #1 is profitable, but not yet sustainable. Vision #2 is sustainable but not yet profitable.</p><p>03/ And if you want a quadrantologist&rsquo;s view of the future, what you will see might look like this:</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="" /></p><p><em>If you want to understand the cultural wars happening in agriculture, a reasonably objective field guide would look something like this. The axes are here are built on cultivated perceptions, based on the demands of agribusiness, and therefore, I have included them with double quotes. If you ask me, saying farmers are &ldquo;progressive&rdquo; is as much a ridiculous statement as saying farmers are &ldquo;backward</em></p><p>04/ Essentially, this is my narrative view of the future. If I were a filmmaker and not a newsletter writer, I would have finished writing an epic battle between these two visions.</p><p>05/ How does the number-view of the future look like? Of the various future-scenario models that I looked around,&nbsp;Bruno Dorin&rsquo;s assessment seemed the most grounded.</p><p>Essentially, when you are talking of the future, you must talk about labor productivity at a macro level. How do you increase the labor productivity of farming? You have two ways</p><ol><li>Intensification: (with irrigation, fertilizers, HYV, pesticides, etc) to get higher yields per hectare (land productivity)&nbsp;</li><li>Motorization (with tractors, combine harvesters, drones) to crop more land per farmer</li></ol><p>If you map their orthogonal relationship, you get a graph that looks like this.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="" /></p><p><em>Image Source: Bruno Dorin</em><strong><em><u>: A World Without Agriculture: Lewis Path Revisited</u></em></strong></p><p>Now if you are interested in extrapolating the present to the future, you need to answer two questions.</p><p>1) How far past increases in agricultural per-capita production were driven by &ldquo;intensification&rdquo;?</p><p>2) How far past increases in agricultural per-capita production were driven by &ldquo;motorization&rdquo;?</p><p>Bruno Dorin puts together the millions of national plant food productions data behind this TALA equation (<strong>Q/A * y A/La = Q/La)&nbsp;</strong>to see how this equation has evolved over the past decades in different parts of the world.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="" /></p><p>This figure shows the 1961-2013 evolution of the average yield in plant food calories (kcal) on the vertical axis (a proxy for intensification), the evolution of the net cropped area per farmer on the horizontal axis (which is a proxy for the size of farms or the level of motor-mechanization) and, last, the evolution of the concomitant progress of agricultural labor productivity on the isocurves.&nbsp;</p><p>When you meditate on this graph, several truths about agricultural country growth become plainly obvious.</p><p>Why is agriculture a zero-sum game in OECD countries? If you see the data, you realize that OECD countries were able to raise their productivity by acquiring more land and thereby improving the level of mechanization.</p><p>As Bruno writes further in his<strong><u>&nbsp;</u></strong>presentation,</p><p>&ldquo;Over half a century, you can see that the labour productivity of OECD farmers has risen from 66,000 to 658,000 kcal/day on average, a tenfold increase, while in Asia it has only increased from 7,900 to 25,000, barely three times.&rdquo;</p><p>And when you extrapolate this to 2050, the available land per farmer may grow up to 200 ha on average in North America in 2050, while the same figure would be less than 0.8 ha in both Asia and Sub-Saharan Africa.&nbsp;</p><p>In other words, as Bruno writes,</p><p>&ldquo; while the gap in land productivity between Asia and the rich countries has more than closed, this is not true of the gap in labour productivity, which has continued to widen tremendously.&rdquo;</p><p>Can you imagine the shuddering implications behind this?</p><p>As predicted,&nbsp;data from India is now emerging that an increasing number of people are joining agriculture for employment, a shift from non-farm sectors like manufacturing and other informal jobs.</p><p>&ldquo;The CMIE analysis says that the share of the agriculture sector in total employment has increased to 45.6 percent in 2019-20, from 42.5 per cent in 2018-19.&rdquo;</p><p>What this means is that while OECD countries move towards optimizing supply, moving towards a smaller number of farmers, and more productivity, Asian countries especially will move towards more farmers and lower farmer incomes, with more disparity in farmer Vs Non-farmer incomes. This will further intensify the agrarian crisis and exacerbate this scenario further.</p><p>Where does China fit in this picture? How to make sense of China&rsquo;s disproportionate influence in agrochemicals and thus agriculture? What are the larger implications and what are the alternatives? We will explore further</p><p>&nbsp;</p>
KR Expert - Venky Ramachandran

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