by Professor Ross Kingwell, AEGIC Chief Economist
How government policies affect grain production is visually revealed.
Most people have used or relied upon “Google Earth” at some stage. Not only does it help people find their way, it also reveals how a landscape is used. One interesting application of “Google Earth” compares land use along countries’ mutual borders1.
Take two examples below: China’s border with Kazakhstan, and Turkey’s border with Syria. The underlying topography and inherent soil types on either side of the border in each of these two pictures are very similar, yet the agricultural production being generated is very different. The degree of greenness is the visual indicator of production differences.
The border differences mostly are the product of different government policies. Take the case of China. China is the largest nitrogen fertiliser producer in the world, and its use of nitrogen fertiliser has contributed substantially to China’s increased food production. Historically, Chinese government policy subsidised and encouraged use of nitrogen fertilisers. The average intensity of nitrogen fertiliser use in China is more than three times higher than the global average, but its nitrogen use efficiency, the ratio of nitrogen in harvested crops to the sum of nitrogen supplied by all main sources, lags behind the global average.
The prolonged commitment by the Chinese government to agricultural production and its underlying high rates of application of fertilisers is visually apparent when contrasted with land use in bordering Kazakhstan.
Turning to Turkey, more than 20% of Turkish farmers’ revenue comes via government support programs, with total support to farmers representing about 1.5% of the nation’s GDP or about USD $6.7 billion each year. Turkish farmers receive payments, based on their area of production, to fund their costs of diesel and fertiliser. Moreover, two thirds of the Turkish government’s general support to agriculture is support for irrigation infrastructure. Farmers receive 50% grant support for the installation of irrigation systems. Pressurised irrigation systems were installed on 1.12 million hectares by the end of 2021. In the second photo, the green circles of irrigated crops in the border region of Turkey are clearly visible.
Australia has no land borders with its neighbours, so the same visual comparison of the impact of government policies cannot be made. However, we know that by international comparison Australian agriculture receives little special support via government policy. Hence, the current ‘greening’ of Australian agriculture mostly is the product of individual farm businesses making use of advice and technology to best serve the interests of their farm business and community.
1 Wuepper, D., Le Clech, S., Zilberman, D. et al. Countries influence the trade-off between crop yields and nitrogen pollution. Nature Food 1, 713–719 (2020). https://doi.org/10.1038/s43016-020-00185-6
Banner image: Google Maps
Expert grains industry analysis and commentary from AEGIC’s Economics and Market Insight Team on a range of big-picture topics that affect Australia’s export grains sector.