Agriculture worldwide - The problems of your colleagues
By Dr Christian Bickert
Of course, our focus is first on our own country. But what consequences do the Ukraine war or the consequences of the corona pandemic have for farmers on other continents? At the Field Days of the German Agricultural Society (DLG) there was an interesting discussion on this topic.
High prices for fertiliser, fodder and machinery, worries about the availability of fertiliser and pesticides, sales worries for pork and government intervention such as red zones or limits on the use of pesticides - these are currently the core problems facing farmers in Germany.
But what is the situation in other parts of the world, what moves farmers there? At the DLG Field Days in Mannheim, Germany, four farmers from Australia, Great Britain, Nigeria and the USA explained this at a panel discussion.
Patience Koku, Nigeria
Patience Koku can smile mildly about the problems in Germany. The committed entrepreneur from Nigeria first cultivated 500 ha of maize and soybeans in central Nigeria. The harvests were stolen and she herself was threatened. As a result, Mrs. Koku gave up the site and now grows 200 ha of maize on another site and 20 ha of bananas on a military site. Compared to our concerns, this seems to be a whole different calibre. For Patience Koku, security and political reliability are therefore quite crucial for the development of agricultural production in her country.
When asked about the general problems of agriculture, the first things that come to Ms Koku's mind are fertiliser and diesel prices. This is surprising, because Nigeria is a resource-rich country, a major oil exporter and also has a new urea factory. Yet there is a shortage of fertiliser and diesel, because there is not enough refinery and fertiliser capacity. "We are a fertile country," says Ms Koku, "and we could feed our 200 million inhabitants ourselves - but we lack organisation and money." And although the natural conditions are good and the prices for food are very high, the profitability of the farmers is shrinking. This is not least due to marketing, because the farmers sell their harvest directly at daily prices. Storage, advance contracts or producer groups are foreign words in Nigeria.
A core problem is the low yields, about 10 to 20 dt/ha for maize. Improving yields is not a problem because of the soil and climate, but it is still a big challenge for the farmers: "I need better seeds, better technology and innovations, and also better market access. But the supply chains are interrupted and there is no support from the state. Even the banks often don't give loans."
Paul Temple, Great Britain
Paul Temple runs a 300 ha farm in Yorkshire and raises beef cattle. As a mixed farm - he points out - he is less affected by the high fertiliser prices than others. For six years he has been working without a plough and with no-till, and therefore has relatively low machinery costs.
But for his colleagues the situation is less comfortable: he, too, reports the well-known problems such as massive price increases for diesel, fertiliser, fodder and machinery. In the UK, labour is also a key issue after Brexit. Not only directly in agriculture, but also in the service and supply industry. All these problems lead to low production, according to Mr Temple, who also confirms this for his farm: "I too have cut back my harvest expectations because of the high production costs and the associated savings".
Beverly Flatt, Tennessee/USA
The young entrepreneur has started a small farm together with her husband. It sounds like something out of a picture book: she keeps cattle, goats, chickens and offers school events. In the background is an investor who specialises in agricultural businesses.
Presumably, it is the mixed structure in combination with direct sales channels that make this farmer less susceptible to the problems that her colleagues from Great Britain, Nigeria or Australia name. Ms. Flatt sees the main problems in climate change and the increasingly unpredictable weather associated with it. Sustainable production, she says, has now become an important aspect for American consumers.
The Ukraine war affects them only very indirectly. Of course, fertiliser and diesel prices have also gone up in the US. But she fears much greater consequences in the long term due to the loss of large parts of Ukrainian agriculture. Asked about compensation, Ms Flatt replies: "As farmers, we cannot do anything about rising prices, supply bottlenecks and logistics problems. But we can prepare ourselves technically. For us, this means more precision farming and digitalisation". Getting more out of the same or even fewer means of production, that is her thoroughly optimistic message. But that also means: repairing machines instead of buying new ones, talking to the financier who stretches his payment terms.
Jake Ryan, Western Australia
You can almost guess that high fertiliser and energy prices are also the core problem for this young farmer from Australia. Phosphorus fertiliser in particular is very hard to come by. But access to new technology is also difficult, mainly because of transport. Because there are hardly any ships coming into Australian ports to bring machinery. "We export grain, rapeseed and iron ore as well as coal, all bulk goods. Such ships also come, but there is a lack of shipments of processed goods."
What is the importance of vegetarian or even vegan food?
It is at this point that one feels the differences between the different parts of the world most clearly. For Africa, this is not an issue, says Ms. Koku, citing a disarming reason: "We in Africa eat to survive. Unlike in Europe, we don't even have a choice about what we eat. The issue of nutrition is a luxury issue. If we don't get carbohydrates in the form of cereals, then we have to eat fruits and vegetables. If we can have milk, meat or eggs, we cover our protein needs with them." When asked if this applies to the whole of Africa, the Nigerian replies succinctly, "I think it applies to 70 % of the population south of the Sahara".
And how strong is the trend towards vegan food in Australia? It's on the rise, says Jake Ryan. "We're a rich country and we can afford both good meat and vegan food." This also means that there are always new opportunities and young people always have a chance to get their foot in the door.
Is the trend moving towards regional supply?
Not surprisingly, the view in the USA is quite different, rather European: Patience Flatt sees room for all eating habits and for all forms of agriculture. It is a question of market and location. The trend, especially after the Corona crisis and the current supply chain problems, is towards regional or even local supply. Customers want to buy not just a product, but a story to go with it. Consumers want to feel that the type of production fits their values. This is, of course, a question of income and thus far removed from the reality in Africa and probably also the slums of big East American cities. But it is a trend in US society that promises higher margins for farmers too.
Paul Temple sees it somewhat differently for the UK. Yes, there would be opportunities. But only if you don't get bogged down and if it suits the skills of the entrepreneur. In any case, he would not risk his core business. Besides, the rising prices at present would induce few consumers to spend additional money on environmental aspects of food.
Much of the discussion was to be expected. For example, that purchasing power is more of a problem in Africa than in Australia. Or that a vegetarian/vegan diet is not exactly the central problem in Africa, whereas safety is the top priority in countries like Nigeria.
And of course, four farmers from four countries with a combined population of 700 million is not exactly a real sample either. But the proverbial "look beyond one's own nose" allows for a better assessment of the situation in other countries - and puts the current focus on the situation in Ukraine into perspective.
A problem for all: purchasing power
"Inflation hurts," says US farmer Beverly Flatt. For many Americans, she says, the financial future is very uncertain, so it is the lower income groups in particular who are saving. For farmers, this means: Inflation and higher production costs weigh on profitability, while at the same time shrinking purchasing power ensures smaller demand. The result, at least in the medium term, is greater volatility in the markets, both in terms of prices and quantities.
It is not just prices, but also supply. "People in the UK are aware of rising food prices, but the current supply difficulties are not yet on their radar," says Paul Temple. Yet this has little impact on British farmers, as only a small proportion of grocery retail prices go towards raw material purchases. At the most, organic farms are already feeling the effects, because consumers are turning to cheaper conventional products and thus sales are shrinking. This sounds familiar to German ears. And Paul Temple also warns against blaming everything on the Ukraine war: "The basic market situation will not change when the war is over. Because the insufficient world production in relation to consumption is the core problem," says the farmer from Yorkshire.
In Nigeria, many people only buy what they absolutely need to live. Even the middle class has not been buying luxury goods for some time. And there is a lack of supra-regional sales. "Because of the high transport costs, fewer people from neighbouring countries or far-away provinces come to the markets. The regional oversupply then causes prices to collapse," says Patience Koku.