In the history of Saskatchewan the grain producers have always had to deal with the short end of the stick. Now fuel prices have risen to the point that synthetic fuels are economically viable and society suddenly realises if we use agricultural products for fuel, food prices will rise dramatically. To that anyone who has talked to a farmer in the last fifty years will smile and say "exactly." The marketplace has been organised to make the producer the one who has to deal with all the variables and when the weather cooperates and the prices are close to the break even point then we know we must be dead or in Disney Land.
On Sunday a farmer who told me he is looking at the best crop in five years and with the high value of grains right now he thinks a profit is a realistic thing to expect this year but he also pointed out that the fertilizer he used last year cost $40 a unit cost him $80 this year. The rising cost of production will make profittability marginal once again.
In the past two years the realisation that with oil prices over $100 a barrel biofuels like that which can simply produced from Canola and ethanol from corn and wheat will extend gasoline volumes the marketplace has shifted to this reality. Corn is going into gasoline as ethanol around the world and the price of cereal grains have shot upward. Surprise, surprise!
Oil seed crops all can be used to make fuel and even with small amounts going this direction their price continues to climb.
Meanwhile agricultural and commodity experts are pointing out that the world does not produce enough food and grains to be used for fule to satisfy both markets. The primary problem is that the expanding demand for fuel is limitless and the petroleum in the ground is definitely limited. If we continue with the present trend of converting food production to fuel production the less developed parts of the world are definitely facing starvation.
Now we are not talking about the price of Cheez Wiz being over $8.00 a jar we are talking about not enough food to feed the marginal portions of the world for they too are seeing the shift of agricultural production to fuel markets and one meal a day will soon be one meal a week and then less.
What is to be done? Surprisingly, this is not a difficult problem. The price of fuels has to dramatically increase to naturally control consumption. While that is happening the governments of the world have to recognise that something has to be done about greenhouse gases, not in fifty years but yesterday and farming, world wide, needs to be given a much hirer priority immeidately.
There is a myth about agriculture that defies economics and logic and that is that big is more efficient. The reality is completely the opposite, the smaller the property and more intense the form of agriculture the more productive the land. Our American and Canadian farms have grown to the point that in order to deal with the profit factor farms must be between 3,000 and 15,000 planted acres. Of course with that factor comes continuous planting with the dread dependence on fertilizers and chemicals to control weeds and ultimately the whole business will be doomed because of these farming practices.
Just in case you have forgotten in the very early 60s we experienced an agricultural boom in Saskatchewan because the Conservative government of the day arranged for giant loans to the Soviet Union so they could buy Canadian wheat. You see the results of large corporate farms and bad farming practices had depreted the Soviet Union's agricultural production to the point they could no longer feed themselves. Their agricultural policies has seen in the 30s the forced collectivisation of farmland. Small farms were dispensed with and huge corporate, collective farms with continuous cropping, fertilizers and chemicals made the land unproductive and began starving the country. We are now repeating the Soviet programme and the results will be the same.
Family farms and intensive agriculture is more productive and better for the land and society then any other form we have come across yet governments have failed to recognise this and you are seeing and about to pay for the results.