8,000 years

I've talked in the past about the need to improve agricultural productivity to keep the world fed.

This was brought home to me this week when I read an astonishing fact.  (Assuming, of course, that this is true  ... and I have no reason to doubt it.)

"The world will need as much food in the next 40 years as it has consumed in the past 8,000 years."

I have nothing to add.

Unintended Consequences

Governments (bless them!) often do things with good intentions.. but often fail to think through the unintended consequences of their actions.

Take energy subsidies as an example. Quite a few governments subsidise energy prices ... to help businesses be more competitive, perhaps.

However, business will only take a cold, hard look at energy usage when prices are high ... so keeping prices artificially low means more energy is used than should be - with consequences for both energy stocks and for the environment.

Good intention. Bad result.

More food, please

In advance of the recent G8 summit, Elanco (a company that develops and markets products to improve animal health and food animal production) president Jeff Simmons warned global leaders that food productivity is not keeping pace with food demand now and in the immediate future.

Food inflation combined with inadequate gains in productivity are clear indicators that our ability to feed a rapidly growing population is at serious risk without swift action.

Example 1
Eggs are one of the most basic, affordable protein sources that people around the world depend upon. But, in recent years, production has been declining by one egg per chicken per year.

Example 2
Global milk production has almost doubled in the past 50 years. Yet, fewer people have access to milk today because populations are growing faster than production gains,

Are we looking in the right place?

I read a report from Australia that hospital productivity has increased over the last 5 years- in terms of the numbers of in- and out-patients treated per unit of resource.

Great!

Except, of course, what really matters is the health of the nation ... and this can be declining steadily while hospital productivity goes up.

This is where policy-makers earn their keep ... by keeping their eye on the 'big picture'.

This is not to suggest that improved hospital productivity is not a good thing.  Just that it is part of the overall solution and should be treated as such.

Careful what you plan

The government in Thailand recently raised the minimum wage - considerably. This was obviously popular with the voting public ... but is it 'sensible'?

Those who invest capital in new and existing ventures to create new work and new jobs are now much more reluctant to do so ... their competitiveness in international markets has been (artificially) lessened.

This means fewer jobs will be created, fewer taxes will be paid and almost everybody loses in the longer-term.

Unfortunately governments (of all persuasions) too rarely think through the issues concerned with what at first seem like fairly simple policy decisions ... or if they do, they let 'political' judgement cloud economic sense.

Wage rises not brought about or supported by productivity gains are always inflationary and damaging.