Deere executive highlights future farmer challenges

Dec 18, 2009
by DTN
Deere executive highlights future farmer challenges

When charting a course for long-term sustainability in agriculture, farmers face the challenges of doubling world food production while coming to grips with the environmental framework needed to address climate change, a key executive from Deere & Co. told attendees of DTN/The Progressive Farmer’s Ag Summit.

David Everitt, president of Deere’s Agriculture and Turf Division for North America, Asia, Australia, and Sub-Saharan and South Africa, and Global Tractor and Turf Products, gave a lesson in how agriculture must respond to the growing demands of food, sustainability and environment in his keynote speech at the Ag Summit in Chicago.

Along with feeding an increasing global population, farmers also have to help reduce the world’s dependence on fossil energy by providing renewable fuels. Then, agriculture must also take into account climate change, “both its effects on production agriculture around the globe and the effects of measures that worldwide governments will likely adopt to improve conditions,” Everitt said.

Acknowledging that the topic of climate change is controversial, Everitt said agricultural leaders at Deere feel “it is necessary to have a strong and engaged voice” on climate change as governmental policy is being crafted to protect the interest of its customers. Deere also is a member of the Environmental Protection Agency’s Climate Leaders program and the U.S. Climate Action Partnership.

“Now, I do understand some may not agree with that approach. We feel that it is vitally important to be engaged in this important discussion and to have a prominent seat at the table as policy is being defined,” Everitt said.

Deere has been working to reduce its own carbon footprint. Everitt said it is possible to have a good outcome while reducing emissions. And it’s a “bigger danger” to let some environmental and other non-governmental groups attempt to push policy without agriculture’s participation.

Recognizing both the science and political realities, Everitt said Deere support a comprehensive energy and environmental framework that addresses greenhousegas reductions.

“And, if there is to be any climate change legislation— and we believe that is almost a certainty—we believe and we think it best for our customers and our business to ensure the approach is as market-oriented and as agricultural-friendly as possible,” Everitt said.

Legislation has stalled in the U.S. Senate for the year, but climate change and its implications for agriculture are being debated at a United Nations summit in Copenhagen, Denmark. Much like realities facing the United Nations gathering, Everitt told the farmer-dominated crowd in Chicago that agriculture must find a way to address climate change over the next four decades and double productivity as the global population rises.

Deere backs “strong, effective action to reduce carbon emissions and address climate change if it is global in scope, technology-based and compatible with the imperative of benefitting our entire economy, while assuring we are able to meet the food needs of 2050,” Everitt said.

With that as a backdrop, Everitt, an industrial engineer who has worked for Deere 34 years, said, “global agriculture faces challenges unlike anything we’ve seen in the past.” First and foremost, farmers must prepare to feed a world whose population is predicted to climb from 6.5 billion to 9 billion by 2050. “And we must do that without an abundance of new resources, while respecting society’s desire to minimize our impact on our environment,” he said.

“To say we’ve got our work cut out for us is a bit of an understatement,” Everitt said. Yet he credited farmers for the pride they put in the land and their ability over generations to work the same ground that perhaps their grandfathers or even great-grandfathers once farmed. A critical element is making sure such a tradition can continue. “I believe that unless you’re taking action today to chart a sustainable course for your operations, you could leave your children not a legacy, but a liability,” Everitt said.

While Everitt said he is confident farmers can feed and fuel the world, the Deere leader said agriculture as an industry has a lot of work to do if it is going to produce twice as much with essentially the same amount of inputs—in just 40 years.

Everitt quoted economist and Nobel Prize winner Paul Krugman, saying Krugman “hits the nail on the head” when he says, “Productivity isn’t everything, but in the long run, it is almost everything.”

Krugman goes on to say that compared with the problem of slow productivity growth, all other long-term economic concerns like foreign competition, lagging technology and deteriorating infrastructure are minor issues. They matter only to the extent that they have an impact on our productivity growth, Everitt told the Ag Summit crowd.

Everitt noted that Krugman would be considered a “pretty liberal guy” to most people in agriculture. “But I believe feeding the world transcends politics,” Everitt said. “Feeding the world is essential to maintaining an orderly society and helping every person reach their full potential.”

Not only will there be 9 billion people to feed by 2050, but over the next several years, the global middle class will also increase by 2 billion people, Everitt noted. That translates into accelerated demand for improved diets with additional income spent on increased protein, he said. “These two factors— population growth and improved diets—are the fundamental reasons we have to double our output, and greatly accelerate productivity growth to do so, during the next 40 years.”

Ignoring this productivity challenge or not acting quickly enough has risks that should not be underestimated, Everitt said. Besides more potential human suffering from hunger and malnutrition, it means widespread turmoil and unrest that undermines the political stability of large parts of the world and impacts U.S. national security.

Everitt pointed to the global instability created last year when commodity prices spiked.

In partial response to the volatility in food prices globally, John Deere became one of the founding members of the Global Harvest Initiative this fall. Along with Archer Daniels Midland, DuPont and Monsanto, the initiative is working to create a greater dialogue on future food needs.

The Global Harvest Initiative states that innovation and the application of technology from agriculture is key to feeding the world of 2050. Farmers have been quick to embrace technology that improves productivity.

“Here in the U.S., we’re producing about 2.5 times what we did 60 years ago, with the same amount of resources,” Everitt said.

Between 1997 and 2007, U.S. corn production alone increased more than 40 percent. Today, because of productivity gains, we can produce a bushel of corn with nearly 30 percent less land than was required a decade ago. Meanwhile, nitrogen fertilizer application rates have remained relatively flat over the same period, Everitt said.

Innovations aren’t restricted to seeds. Equipment and related services also can be credited for boosting productivity, Everitt pointed out. At Deere, the smallest U.S.-made combine is more productive than the company’s largest machine was in 2000.

“We’re seeing one John Deere combine replacing as many as three less fuel-efficient machines in places like Russia,” he said.

Beyond overcoming the environmental challenges, Everitt said problems in global trade also have to be addressed to meet global food security. “To put it bluntly, we simply cannot successfully feed 2.5 billion more people by 2050 unless countries participate with open economies and expand trade,” he said.

With U.S. agricultural commodity exports hitting $115 billion in fiscal-year 2008, that means more than one-third of U.S. farmers’ sales—or the output from more than one of every three acres—goes to foreign markets.

“The new wave of protectionist actions spawned by the current global economic downturn threatens recent modest progress made in opening markets and facilitating commerce worldwide,” Everitt said. “Unfortunately, global trade talks remain stalled and the voices of anti-trade advocates are getting louder. This is a dangerous trend that could undo the beneficial gains made thus far.” — DTN