1. Global food issue
One of the most important global issue
a. More people die each year from hunger and malnutrition than from AIDS, tuberculosis and malaria combined.
b. In 2009, food crisis persisted in 32 countries from the 36 affected in 2008
c. World Bank estimated that cereal production needs to increase by 50% and meat production by 85% between 2000 and 2030 to meet demand.
2. Increased demand for food
Increased demand for food: Rapidly growing world population and per capita food consumption
- 8.0biliion people by 2025
- 9.2billion people by 2050
※ World Population Growth (Source: UN)
3. Rapid rise in food price
Food prodution cost
According to a report published by the World Bank, global food price increased by83% between February of 2005 and February of 2008.
Food production Cost=Labor + Land + Materials + Fertilizer + other operating costs (agrochemicals, irrigation systems, transportation, etc.)
Food production Cost=Labor + Land + Materials + Energy
- Fertilizer, irrigation, storage, agrochemicals, and transportation belong to Energy costs
- Rising energy price brings the issue of escalating food prices : Figures from the Commodity Research Bureau and the FAO show a take off in energy prices, before food prices start to rise
* CRB Index: A global benchmark for measuring commodity price movement announced by Commodity Research Bureau(CRB), the world's leading commodities and futures research firm.
1) Fertilizer price
Energy cost means the price of fertilizer: The fertilizer made from ammonia which is produced from natural gas. The cost of natural gas makes up 90% of the cost of producing ammonia
a.Industrial production of ammonia and fertilizer’s role
- Ammonia was first manufactured using the Haber process on an industrial scale in 1913(BASF’s Oppau plant in Germany).
- Fertilizer generated from ammonia produced by the Harber process is estimated to be responsible for sustaining one-third of the Earth’s population: increased crop yield
b. The rise in energy price has contributed to an increase in fertilizer price.
- The production of ammonia consumes about 5% of global natural gas consumption, which is 2% of world energy production.
- 110million tonnes of nitrogenous fertilizer consumed per year.
- The cost of natural gas (energy cost) makes up about 90% of the cost of producing ammonia. The increase in price of natural gases over the past decade, along with increasing demand, have led to an increase in fertilizer price.
※ Changes in commodity prices in relation to oil prices (Source: FAO,2008; IMF,2008)
c. Increase of fertilizer consumption
- Total fertilizer use has raised five-fold since 1960: Nitrogenous fertilizers use has raised nine-fold.
- Without nitrogenous fertilizer, average maize yields declined 41%, rice 37%, barley 19%, and wheat 16%.
※ World fertilizer consumption(1961-2005) (Source: FAO, 2009)
d. Food production and economics of fertilizer use
- Optimum economic fertilizer application rate have remained similar, the return on fertilizer expenditures shows very positive.→ Increased fertilizer consumption
Ex)The fertilizer costs as a percentage of operating cost(%)of irrigated durum wheat, southern Alberta(A crop planning tool developed by Keith Mills, a Certified Crop Advisers was used for estimating potential returns per acre)
… 29% (2005)/ 33% (2006)/ 37 %( 2007)/ 48 %( 2008)
… Between 2006 and 2008, operating costs have increased according to the increased fertilizer cost
… Fertilizer costs increased 121%, but margins increased 202%
*The figures calculated by the crop planning tool developed by Keith Mills, a Certified Crop Advisers
2) Bio fuel production
- According to the International Grains Council, biofuel accounted for as much as 6.5% of the consumption of worldwide crop(2007~2008).
- As farmers devoted large parts of their cops to fuel production, land and resources available for food production were reduced correspondingly.
- As much as 30% of the U.S. corn crop was going into ethanol production for automotive fuel in 2009: The use of corn for biofuel resulted in less crops available for human consumption.
3) Operating cost
a. The rapid rise in operating cost(food storage and transportation etc.) comes from the increased fuel price
- The average distance food travels form source to plate is 1,500mile and with unstable gas prices, the cost of transportation adds up quickly
b. Irrigation system and agrochemicals : large amount of energy required sector
- UN predict that irrigation demands will increase by 50~100% by 2025
- More than 30 countries have been involved in ‘water wars’ and 145countries share lakes and river basins, the use of which is governed by more than 300 cooperative agreements between nations.
- Countries divert water to irrigate land by building large hydroelectric dams and mega-canal projects: Irrigation has drained the Aral Sea.
a. Increased demand for animal protein: More affluent people from China and India want more meats and dairy products.
- It is also prompting farmers around the world to expand their production of meat as well as the corn, soybeans and other crops used to feed livestock.→ More than 10 kg of grain is needed to produce 1 kg of beef.
b. Demand-driven food cycle
Millions of new consumers are becoming wealthy enough to switch, not just from rice to meat based diets, but also to diets that are rich in fruits and vegetables.
4. Solving the food crisis
Food production is an energy intensive business: Through solving energy supply problem with thorium-based nuclear power, we can solve food crisis.
a. The cost down in food production by supplying affordable fertilizer and agricultural energy
- The energy price decline reflects lower costs for the primary industry
- Food production is energy intensive: The price declines of energy will contribute to lower costs for food production, eventually leading to lower consumer food prices.
b. Increasing food production by replacing bio fuel with thorium-based nuclear power
- Expanding available land for food production and securing labor force.
c. Environmental protection by supplying clean energy: increasing food production
- Protection of available land for food production from natural disaster
Affordable energy + Clean energy = Thorium-based nuclear energy
|Causes||Increased demand for food|
|Rapid rise in food price by expensive energy cost|
Supplying food production with thorium-based nuclear power
→ Cost down in food production
→ Stable expansion of food production and supply