The Jolly Farmer
The farm crunch has been creeping up on the world for 20 years. Food output has risen at 1.3pc a year: the number of mouths at 1.35pc.
What has abruptly changed is the twin revolution of biofuel politics and Asia's switch to an animal-protein diet. Together, they have shattered the fragile equilibrium.
The world's grocery bill has jumped 21pc this year to $745bn (｣355bn), hence the food riots ripping through West Africa, Morocco, Yemen, Bengal, and Indonesia....
Malthus may yet be outwitted. Fuel cells and solar panels may come to the rescue. GM crops may gives us another Green Revolution. The price of oil may crash again, cooling the biofuel craze for another cycle.
Rich countries will not starve. But as Japan's Marubeni Institute warns, they may face a return to post-War food rationing long before the world population peaks in the middle of the century.
Investors who want to take advantage of agflation must tread with care, both for moral reasons and questions of timing. Grains have already had a torrid run for the past two years.
My colleague Tom Stevenson recommends Hugh Hendry's CF Eclectica Agriculture fund. Or there are the big agro-industrial giants such as Bunge, ADM, or Südzucker. Or just buy land.