The future of food in South America
This post is also available in: Spanish
The future of food in South America is uncertain, because high-quality food will be grown anywhere in the world where there is the lowest cost of inputs.
The leadership of agriculture and food exports in South America is an achievement of generations and now yields its best harvest. This continent has a most conducive climate for producing high quality food, as well as exceptional soils, thanks to the volcanic ash of the Andes, accumulated over millennia. All these factors, coupled with hard work, the application of research from universities and the support of the governments of each country of the continent, have been important for success. However, this privileged position is now facing threats.
Agriculture in a controlled environment
The goal of a controlled environment for agriculture is to provide protection and maintain optimal growing conditions throughout crop development. Production is located in enclosed spaces such as greenhouses or buildings where plants can grow, often using hydroponic methods in order to provide adequate amounts of water and nutrients to the root zone. This type of agriculture optimizes the use of resources such as water, energy, space, capital and labour.
The expansion of this technology is limited by the cost of energy. The early stages of growth of fruit trees and vegetables are usually carried out in a controlled environment. These are the more expensive products, which are sold in supermarkets and are present on the shelves all year, such as lettuce and cranberries. The same applies to flowers of greater value, such as exclusive varieties of roses.
The aim of this type of agriculture is for fresh produce to reach consumers. There are leaders in this market, such as Plantagon and AeroFarms. They are promoted as environmentally friendly, because they reduce transportation costs and carbon emissions.
So far, the cost of energy for lamps has been the major constraint, because in traditional farms, plants receive free energy from the sun.
However, the gradual lowering of costs for solar panels and wind turbines, as well as energy storage, is narrowing the gap of production costs in comparison to traditional farms, and forging a new direction for the future of food.
Traditional farms are located far from the centres of consumption, so they are always subject to the costs of transportation, as well as energy for the conservation of products, in order to reach consumers with quality products.
The premise is that agriculture can be undertaken without having large tracts of land. Farms would not have to use a lot of land space – a farm could be located on the floors of a building – anywhere in the world – with LED lighting technology that delivers the optimum temperature and light for plant growth.
Climate & politics
A fervent lobbyist for alternative energy is Al Gore, shown in his lectures as being very optimistic about the matter. We should, however, not forget that he advocates for the interests of certain companies, not necessarily in the interests of everyone.
An article in The Guardian shows clearly that agriculture in a controlled environment is extremely energy demanding, and is not as optimistic about its application on a large scale.
Energy transport costs
These same technological advances, largely subsidized by consumers, will eventually have an effect on transportation. Solar energy accumulated to produce a farm controlled environment is not exclusive to this purpose. In the future it may also apply to ships, aircraft and other transport. Thus, one of the biggest criticisms of traditional agriculture by lobbyists seeking subsidies for companies for controlled environment agriculture disappears.
We also eat meat, and, as the largest consumer of meat in the world is the middle class, the demand for pasture and grain for inefficient methane producing animals will continue to grow. More efficiency and control over effluents and CO2 is gained if animals are kept inside. A second glance tells us that meat produced roaming free in a pasture is natural and healthier. Cows choose from among the meadow grasses ones that are best for their growth, and so their meat and/or milk is better quality and more naturally lean than that of an animal confined inside a building.
The Economist has an article video, “The creators of meat,” about two companies with different approaches to replacing meat. One is trying to grow IVM and the other is attempting to use plants to create a substitute for beef.
If we combine the two trends, it seems logical that someone will find a way to create a plant that can easily be converted into a substance that is very close to meat. It is a possibility, using cereals or legumes, to produce artificial meat. This brings us back to agriculture.
In trying to give a theoretical explanation for the problem of food availability, we can consider the ideas of Malthus.
Malthus was right, but only in a macro sense, that the population increases if you have more food. He was convinced that food production is linear and always linear. Conversely, increasing the population would be exponential. But we have to consider that the same food availability produces enough intelligence to improve food production techniques and the means of transport to put on the table for consumers fresh food of excellent quality, brought in from abroad. Birth control is among the other factors to be considered, population growth being linear, not exponential.
If this trend materializes with time, it would produce a major crisis in traditional agriculture in South America. Certainly, if you can produce at the same cost or less, anywhere in the world, the price of agricultural products would drop along with demand. If milk plants could eventually be produced, cattle would be limited to the beef sector. Going even further; if experimental investigations are realized and manage to produce meat in small spaces, this sector would also be affected.
However, energy is not the only variable. Water needs to be available to produce food. Whatever the techniques used, water is a scarce resource and is no manna from heaven which is renewed every day. Water is limited, and any part that is removed will produce an unfavourable change in the affected ecosystem.
There are large observable trends: the intensive use of technology in controlled environments and organic agriculture with the application of technology that is friendly to the environment, healthier and more natural.
Undoubtedly, companies like Berkshire Hathaway Energy have won the support of many politicians. This clearly demonstrates a predominant interest in high-tech agriculture with low production costs. These groups lobby for subsidies to make this form of agriculture competitive. They promote themselves as friendly to the environment, which is not always the case. PDF
In the opposite camp is organic farming, criticized for being inefficient. However, it requires labour and therefore provides employment, and, above all, is healthier.
Proponents of highly efficient agriculture in a controlled environment cannot deny that organic farming is friendlier to the environment, since the carbon footprint and waste is less than the chemicals used to construct buildings, power plants artificially, and the use of lamps and accumulators.
We must also focus on the final quality of food production, with the goal being the provider of the best food in the world. We have come a long way in this direction in recent years.
Existing diversity and quality in South America
In sum, we see sustained growth in the future of food in South America because the food quality and safety of organic food is far superior to any other. The trend in the production of green leafy vegetables and small fruits in controlled environments will be maintained. However, these crops do not present competition to large orchards, vineyards, cereals, meat and milk produced and exported from South America.
The natural climate and large expanses of exceptional soil cannot be placed indoors, not in this century, at least.
In conclusion, the threat is that some companies and their lobbyists are seeking public subsidies and trying to convince the consumer that they must pay for them to grow as large companies, possibly monopolistic, incidentally eliminating competition from traditional farmers.
The governments of South America are well aware of these threats. They strive to make alliances and treaties to keep the world supplied with food of excellent quality and at attractive prices.
English Editor: Audrey van Ryn
Researcher & Translator: Mª Verónica Brain
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.
About Gateway to South America
Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone communities of Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate services. Founded by Geoffrey McRae a New Zealander who maintains an active role in the business it has developed into International team that has a well deserved reputation for strong local knowledge, experience and professionalism..