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by Susie Taylor

An in-depth look at the issues facing agriculture within the next few decades revealed six "colossal changes" that will impact the industry. But, they’re nothing agriculture can’t adapt to, according to an OFBF staffer.

Although those issues portend challenges for agriculture, they also spell out some significant opportunities, said Constance Jackson, Ohio Farm Bureau Federation vice president of agricultural ecology.

Jackson and OFBF Vice President Bob Peterson participated in a multi-day discussion surrounding those "colossal" issues this fall when the Sparks Companies, an agricultural/public policy research firm, released discussion papers focusing on those six areas: agricultural regulations, competition, nutrition and obesity, a world-wide monoculture, trade and global water outlook.

"All of us in agriculture, especially at this time of year when we’re producing crops, tend to overlook the big issues like world trade, energy policy and developing countries," Peterson said. "All of these issues have a huge affect on our ability to remain profitable."

"Even though we see several big changes coming down the road, we also see many ways to adjust and take advantage of those opportunities," Jackson said.

With World Trade Organization (WTO) negotiations fresh on participants’ minds, the trade discussion took on more significance, Jackson said. According to the Sparks report: "While agricultural trade is far from the largest export sector, it is by far the most difficult." And even though the Cancun WTO talks foundered, world trade is still one of the biggest opportunities for U.S. agriculture, Jackson said, especially for value-added products.

As per capita incomes increase, consumers buy more packaged and processed foods, thus increasing the markets for value-added products, Jackson said. But increasing those per capita incomes in developing countries is where the challenges lie, she said.

Collapse of the Cancun talks can be attributed to "a very important shift in balance of negotiating power between rich and poor countries," according to Sparks’ report. The "Group of 21," led by Brazil, is a coalition of developing countries that walked out of talks in Cancun, halting the negotiations. But Sparks reports the group’s actions may end up harming developing countries more than helping them.

"The group prevented action on Singapore issues: investment, competition policy, transparency in government procurement and trade facilitation. Such agreement likely would have benefited developing countries more than developed nations."

The collapse of WTO talks will intensify bilateral Free Trade Agreements (FTAs). "And although we would prefer multi-lateral debates for agriculture, FTAs can be a benefit to the United States," Jackson said.

"It can still be beneficial to negotiate specific agreements with one country at a time, and we’ve been able to do that with Chile," Jackson said.

Even though water is considered by many as a "free" resource, its availability will play an important role in countries’ ability to produce, Jackson said.

"Water availability will certainly be a serious constraint to achieving the food requirements projected for 2025," the Sparks report said. "Groundwater overdrafting, salinization of soils, and re-allocation of water from agriculture to cities and aquatic ecosystems will combine to limit irrigated crop production in many important food-producing regions," according to the report. "At the same time, more and more countries will see their populations exceed the level that can be fully sustained by available water supplies."

The report continues: "In a world of deepening water scarcity, non-irrigated land will thus become increasingly important to global food security."

Even in a state like Ohio, where water quantity is historically not an issue, improved irrigation efficiency, better use of rain and ground water supplies and incentives to save water will all play a role in the future of agriculture, Jackson said.

Increased regulations on agriculture are a fact of life, Jackson said. "That means getting involved proactively rather than reactively is even more important to agriculture than it’s ever been before," she said.

According to the report: "The regulatory pressures facing the agriculture sector are real and increasing … As the farm population continues to decline regulatory control becomes much more subject to the whims of popular opinion and emotion rather than the true benefits and costs to society."

USDA’s food pyramid is under constant scrutiny, and the definition of what constitutes a healthy diet is under debate, Jackson said. "We, as an industry, have to be aware of niche markets that open up to us because of specific dietary needs," she said. "We’re going to be asked to produce those foods and the people who provide that service will be the ones to prosper."

Consumers can walk into any market in the world and find cans of Coca-Cola and Pepsi. Special telephone pricing plans offer the same charges for a call from Columbus to New York City, Vancouver or Madrid.

The recent electric blackout on the East Coast demonstrates how integrated technologies are efficient and yet, when something goes wrong, impacts a lot of people, Jackson said.

"A monoculture also means we have more markets opened to us than ever before," Jackson said.

Mergers and acquisitions within the industry have "increased concentration, especially in retailing where the share of sales by the top four firms has grown from below 17 percent in 1996 to more than 27 percent in 2000," according to the Sparks report.

"These trends have brought with them a new kind of competition, with potentially powerful implications. Buyer-seller relationships are changing through the food supply chain as stages become increasingly interdependent," the report continued.

"When it’s all said and done, agriculture will face some daunting difficulties in the future, but I think the industry is up to meeting the challenge," Jackson said.

Information gathered when the discussion papers were released will be used to share insights and develop discussion points with members through many avenues. "We’ll certainly be able to use this information to help our organization and agriculture in Ohio and the United States move ahead as we work to face these challenges," she said.

This Sparks meeting was a follow-up to a seminar held this past spring when participants identified the six areas of change. Sparks researchers studied those areas and the issues impacting them and produced the six strategic forum discussion papers released during the fall meeting.