Oil price rises and the growth in world grain consumption are likely to herald a new era in which the farmer, his skills, and his land, are in demand.

CLA Wales says world food security is becoming a serious talking point in intellectual and political circles, particularly in the United States.

This and the market driven, as well as the politically expedient, imperative to find alternatives to oil, has the potential to affect every farmer in Wales and overshadow the importance of the CAP as a significant proportion of agricultural output is driven by more profitable non-food global markets. The demand for food will still have to be met from somewhere.

Speaking at the Royal Welsh Winter Fair, CLA Wales Director Julian Salmon said farmers and landowners should consider carefully before committing their land to any long term projects which would preclude food production. Commentators suggest that the rapidly increasing price of grain and the forecasts of future supply shortfalls could have dynamic implications for global agriculture and knock-on effects on all commodities, returning some power to the farmer in the market place.

"This all may seem fanciful but the trends are already a reality", he added. "Farmers may wonder about its relevance regarding the price of store stock in Builth market, as that may be as much to do with the availability of winter keep or numbers of stock on the day! The important lesson is that we should not lose sight of the bigger picture and major influences at work beyond the horizon.

"The availability of water is another global production issue, for which Wales is well placed, and whilst the greater market opportunities may be for arable production, the knock–on effects on other productive land is inevitable if food demands are to be met. Couple this to the increasing recognition of food miles and provenance and that ‘food value needs to be re-aligned’ as concluded by the recent EBLEX report, and the future begins to sound, if not look, more promising-what a change that is!"

Mr Salmon cited a recent report by the President of the Washington based Earth Policy Institute which predicts food riots in lower income countries as motorists and the hungry clash over food supplies. Lester R Brown points to this year's grain harvest shortfall of nearly 4% as one of the largest on record.

The harvest of 1,967 million tons is falling short of estimated consumption of 2,040 million tons by 73 million tons. And he says that the annual growth in grain used to produce fuel ethanol for cars in the United States averaged nearly seven million tons per year, reaching 14 million tons in 2006.

"Lester Brown claims that investment in crop-based fuel production, once dependent on government subsidies, is now driven by the price of oil", added Mr Salmon. "He says that with the current price of ethanol double its cost of production, the conversion of agricultural commodities into fuel for cars has become hugely profitable.

"And he says construction has begun on 54 new ethanol distilleries in the United States, with virtually all of them producing by the end of next year. They will consume 39 million tons of grain a year.

"His predictions are that an extra 136 million tons of grain will be needed next year if a further decline in world stocks is to be prevented. And he warns that every item in the refrigerator is affected by the price of corn. Milk, eggs, cheese, chicken, ham, beef, ice cream and yoghourt are all produced with corn".

Mr Salmon also stressed the mood of the annual conference of the National Non-Food Crop Centre meeting in York which recently heard that the prospects for farmers were looking good as markets for renewable products manufactured from UK-grown crops were becoming established. The emerging theme was that the prospects for farming were good, but farmers had to look very closely at how they could adapt their businesses.

He noted that there has been a substantial rise in demand for biofuels, which are already lifting UK grain and oilseed prices. And plant-based pharmaceuticals, renewable construction materials such as an insulation board recently developed using sheep's wool, and bio-based lubricants would become increasingly important.

A huge biotethanol plant is to be established on Teeside and a new Defra report says the biorenewables industry in the UK is expanding, and that markets are developing for a range of products and materials.

* The Earth Policy Institute can be found at www.earth-policy.org

The Earth Policy Institute is a Partner in the Green Power Partnership, an EPA voluntary program working to reduce the emissions associated with conventional electricity generation by encouraging organizations to switch a specific percentage of their electricity to green power. Additional information is available at www.epa.gov/greenpower

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