| David C. Everitt ||Charting a Sustainable Future for Production Agriculture |
Keynote Address by Dave Everitt
DTN/Progressive Farmer Ag Summit
December 9, 2009
Good evening and thank you Urban for the opportunity to address this group of top producers on a subject that is foremost in all of our minds. In thinking about my comments for this evening, I was reminded of a clever t-shirt that won an annual contest at the FFA national convention in Louisville a few years back.
Its message was simple — a bit flippant perhaps — but at the same time, pretty darned profound:
"Naked & Hungry: What Would You Be Without Agriculture?"
That about says it all, don't you think?
Today, I would suggest that global agriculture faces challenges unlike anything we've seen in the past. First and foremost, we must prepare to feed a world whose population is predicted to climb from 6 ½ billion to 9 billion by 2050 — just 40 years from now! And we must do that without an abundance of new resources, especially land and water, while respecting society's desire to minimize agriculture's impact on our environment.
Now 40 years may seem like a long time — but 40 years ago, in 1969, I was a high school junior in Concordia , Kansas . I thought the coolest thing in the world would be to own a 1969 Camaro SS. Frankly, that seems like only yesterday....and the next 40 years will go by just as fast.
The world we live in is undergoing a fundamental shift in its demand for food. To feed those additional 2 ½ billion people by 2050, we must double the food supply. Think about it: double what we produce today! If forty years seems too far away, consider this: In just 20 years, 2030, we must produce 50% more food! And at the same time, we have to help reduce the world's dependence on fossil energy by providing renewable fuels!
Then, we must also take into account climate change — both its effects on production agriculture around the globe, and the effects of measures that worldwide governments will likely adopt to improve conditions.
Twenty years ago, in November 1989, the Berlin Wall fell. That same year, we produced approximately 1.5 billion tons of grain. Today, just 20 years later, we produce over 2 billion tons of grain. By 2030, just 20 years from now, we'll need to produce 3 billion tons or more on approximately the same amount of land, with increasingly scarce water and labor, all while respecting society's desire to clean up the air, preserve the land, and maintain viewscapes.
To say we've got our work cut out for us is a bit of an understatement — kind of like saying the Chicago Bears better keep winning football games if they expect to keep their post-season hopes alive.
Seriously though, one of the greatest things I've noticed about ag producers is the tremendous pride many take in working the land, maybe, working the same land as their fathers, grandfathers and even great grandfathers did so many years ago. Just a show of hands — how many of you live on a century farm? Congratulations! And how many of you are planning to keep the tradition going by passing on your farm to a son or daughter?
I believe that unless you're taking action today to chart a sustainable course for your operations, you could leave your children not a legacy, but a liability. And I firmly believe the path to sustainable agriculture and feeding a hungry world is through improved productivity.
While I'm confident of agriculture's ability to feed and fuel the world, the fact remains: We have a lot of work to do if we are to produce twice as much with essentially the same amount of inputs, in just 40 years.
Economist and Nobel Prize winner Paul Krugman hits the nail on the head when he says, "Productivity isn't everything, but in the long run it is almost everything." He goes on to say that compared with the problem of slow productivity growth, all other long-term economic concerns like foreign competition, lagging technology and deteriorating infrastructure are minor issues — they matter only to the extent that they have an impact on our productivity growth.
Now I understand that Mr. Krugman is considered a pretty liberal guy to most in the ag industry. But feeding the world transcends politics. Feeding the world is essential to maintaining an orderly society and helping every person reach his or her full potential.
With that idea in mind, I'd like to share some thoughts with you this evening on how we can meet this productivity challenge through, first: innovation and technology advances that are environmentally-friendly; second: through favorable trade policies, and finally: through investment in rural communities, especially here in America.
Before I go any further, let me describe why we must change the "business as usual" mindset. The premise is that we have a potential food production shortfall that will almost certainly occur if we don't significantly accelerate our historic productivity growth rates.
What factors are driving this premise?
First, a decreasing global fertility rate — defined as the number of children an average woman is likely to have during her childbearing years — that will cause the world's population to stabilize in 2050 after reaching approximately 9 billion. This is not a theoretical projection: The girls who will give birth to this future larger generation have already been born.
While population growth will most definitely fuel the demand for more food in the future, rising incomes will accelerate that demand. As an example, in the next two years, some 2 billion people, or nearly a third of the world's population are expected to join the middle class, with most of the projected growth occurring in urban areas of developing countries. Rising incomes mean improved diets, with much of that additional income spent on increased protein intake. These two factors — population growth and improved diets — are the fundamental reasons we have to double our output (and greatly accelerate productivity growth to do so) during the next 40 years.
Our challenge is to do everything we can to minimize or close this pending productivity gap. That is, we must address the difference between our current growth rate of food production and the more rapid rate needed to meet future requirements.
Ignoring this looming productivity challenge or not acting quickly enough has perilous risks that should not be underestimated. At its most basic, it means additional human suffering through hunger and malnutrition. Beyond that, it means widespread social turmoil and unrest that undermine the political stability of large parts of the world — not to mention eroding our own national security.
Just think back a year or so ago when commodity prices spiked, causing significant increases in food prices in many countries of the world. The ensuing political unrest in Egypt , for example, sent shivers down the spines of many developed countries, including the U.S. It was frightening to imagine how a toppled Egyptian government could shut down major shipping lanes, cause a spike in oil prices and bring massive political instability across one of the most volatile regions of the world.
This event and several others like it illustrate a few basic givens we must never forget. People must eat. People need to be able to afford food and fuel. And the world depends on agriculture to be the foundation of global security.
So back to the question at hand: How does our industry produce more with basically the same global resources that are available to us today?
Well, no one person or business can do it alone. For example, John Deere is proud to be a founding member of the Global Harvest Initiative, an organization dedicated to spurring agricultural development and encouraging agricultural innovation by those who need it most.
The Global Harvest Initiative supports a multifaceted approach to expanding agricultural production, realizing there is no single solution to closing the productivity gap. Together with Archer Daniels Midland Company, DuPont, and Monsanto, we've created a unified voice to promote dialogue that we believe will encourage positive change through expanded investment from both public and private entities.
It is our hope that the Global Harvest Initiative can promote national and international policies that support agricultural research, continued liberalization of food and agricultural trade, and more effective policies and actions in developing countries where diets are least adequate.
Increased Productivity through Technology/Innovation
As members of the Global Harvest Initiative, we agree that above all, innovation and the application of technology, from ag production all across the value chain through distribution, is key to feeding the world of 2050. This will affect all production practices, including conventional and organic agriculture. It will also affect producers of all sizes, from subsistence farmers to large modern producers like yourselves, in both developed and developing countries.
You're probably thinking a representative of an agribusiness company like me would naturally mention innovation. But I can assure you that we're practicing what we preach in this regard. Innovation is one of Deere's core values and even in these days of economic recession, we've remained committed to bringing more and more advances to our customers.
Last year, Deere spent more than $2 ½ million a day on research and development. That's each day, including weekends and holidays! And we're not alone in that commitment. Collectively, the four founding members of the Global Harvest Initiative invest more than $9 million daily in research and development.
That's great news, because if there's one thing farmers need more than warm sun and steady rain, it's innovation!
I'm actually very optimistic we can rise to the challenge and that we can double production through investment in innovation in the years ahead, because we're already well on our way.
Overall, ag productivity has been increasing for years, with the equivalent of 45 million "virtual" acres of crop production created since 1981. Here in the U.S., we're producing 2 ½ times more than we did 60 years ago, with the same amount of resources.
Let me give you a more specific example: Between 1997 and 2007, U.S. corn production increased more than 40 percent. Today, because of productivity gains, we can produce a bushel of corn with nearly 30% less land than was required just 10 years ago!
Meanwhile, nitrogen fertilizer application rates have remained relatively flat over the same period. Advances like this have occurred thanks to dramatic investments in the areas of plant breeding and biotechnology by companies like Monsanto and DuPont, fellow Global Harvest Initiative members.
In addition to advanced seed technology, innovations in ag equipment and related services also can be credited for boosting productivity, while increasing farmers' efficiency and lowering their costs. At Deere, we are charting a sustainable course through improved products and services that contribute to expanded agricultural output everywhere in the world in an environmentally sustainable way.
For example, today, our smallest U.S.-made combine is more productive than our largest machine was in 2000. We're seeing a single John Deere combine replacing as many as three outdated, less fuel-efficient machines in growing ag economies like Russia.
Then there's reduced tillage equipment — both low-till and no-till — that cuts costs, improves water management and increases yields. Back in 1985, many farmers used three tillage passes per year to raise corn. On average, farmers like you have eliminated one tillage pass on every acre of corn grown, using today's technology. In fact, many field crops today are often planted with only one or no tillage pass, saving at least 1.5 gallons of diesel fuel per acre and lowering your costs.
I don't have to tell you that reduced tillage is a good thing. It means reduced soil erosion, improved soil health, conservation of water, and less carbon emissions. A recent U.K. study found that in the past 4 years, conservation tillage practices in our industry have reduced carbon emissions by 22 billion pounds — or the equivalent of taking 6 million cars off the road.
We also continue to make major improvements in engines and power trains. Deere's 8430 row-crop tractor, with Tier III technology, emits 50% less particulate matter and 30% less nitrogen oxide (or NOX) than its predecessor, introduced back in 2002. At the same time, this tractor set an all-time record as the most fuel efficient row crop tractor ever tested at the Nebraska Tractor Test Lab. The new 8R series, introduced for model year 2009, continues to utilize this advanced and field-proven technology.