With the price of various grains going up, there has been a general cry for more supply. Some people have taken to claiming that we are doomed, there are now too many people to support on the Earth. That’s nonsense of course, there is an enormous amount of potential for more food production. A lot of the developing world could supply much more food. Many of those countries’ economies are based around agriculture, but they are incredibly inefficient at it. Most of those farms are literally based on the “40 acres and a mule” concept. That needs to change, not only in order to feed everyone, but in order to get those economies on track.
Agribusiness is the answer. In 1900, 40% of the American work force worked in agriculture. Now, it is around 2% even though we produce much, much more food than before. With the use of automation and machinery, it takes far fewer people to raise food. Of course, as we lost all of those farm jobs, the standard of living and the economy dropped through the floor, right? Umm, no, it went up and up. If people are not required to toil in fields, they can do something else. If given a chance, people will think of something to do. We have seen a similar thing happening in the manufacturing sector. It takes far fewer people to make many more things. That’s good. A human doing what could be done with a machine is the definition of a wasted resource.
Africa could be feeding most of the world if efficient farming methods were used. Zimbabwe used to be a model of efficient farming, then Mugabe took land from the productive farmers and distributed it many more less efficient farmers. It was a political/racial decision, but the men that received the land did not know how to use it efficiently. Zimbabwe now has to import most of its food. They went from being the “breadbasket of Africa” to being one of the poorest nations in the world in 10 short years by going away from the agribusiness model. The distribution of land into smaller farms was a disaster for the economy as a whole and it made those farmers much worse off.
So why do so many organizations try to promote small farms? The world bank, numerous NGOs and charities make this a primary goal. Why not try to foster good property rights so that land owners can sell or rent their land to much more productive farmers? Everyone would be much better off. Freeing resources to be used for the most productive uses is one of the keys to a well performing economy.