World Hunger: Approaches to Engineering Actions: Report of a Seminar (1975)

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Planning Implications for Increasing Food Supplies Charles S. Dennison The world society today is very different from what we have known in the past. Conservation of materials, and a totally new conception of waste and of consumption, as a linear increase must figure in all our thinking. We must also face the question of how we are going to divide up and use the resources of this finite planet. These are questions in which the engineer, along with his science and social science colleagues must be deeply involved. On the subject of increasing food production in developing countries, one crucial area we could focus on is fertilizers. The complexity of this subject—the need for management and feedback—will require skills that lie substantially but not exclusively in the engineering sector. FERTILIZER NEEDS OF DEVELOPING COUNTRIES Approximately 85% of world fertilizer production is concentrated in the developed world. Fertilizer consump- tion in the developing countries is expected to increase from 5.8 million metric tons of nitrogen nutrients (N) in l97l-72 to l5.5 million metric tons by l980-8l, and phos- phate nutrients (P) from 2.7 to 7.l million metric tons over the same period. In aggregate terms, N&P nutrient consumption is expected to grow from 8.5 to 22.6 million metric tons. 33

This rate of increase in fertilizer use is consistent with an average annual growth rate of 3.3%-3.5% in food and total agricultural production. Much of this increased fertilizer consumption can and should come from increased indigenous production in developing countries. This course, despite certain economic disadvantages, will con- tribute to overall economic development, employment, tech- nological and management advance and insure a stable and secure supply of a vital element in food production. World fertilizer production grew sharply during the first half of the l960s geared largely to expected demand increase in the developing world. Failure of this market to materialize caused sharp price drops in the second half of the l960s and a marked drop in new fertilizer invest- ment. This restriction of fertilizer supply had a marked effect on the price and availability of fertilizers now urgently needed by food-deficit developing countries. Pre- l973 urea cost averaged $90-$l00 per metric ton, C&F at Asian ports; by mid-l974 this cost had risen to $270 and, in the future could go up to $350. Higher prices and increased demand should encourage substantial investment in fertilizer production capacity. However, it is most unlikely that this will occur quickly enough to meet the needs of the poorer countries. Estimates of the investment required for fertilizer production in developing countries range from $6 to $l0 billion between now and l980-8l. Some of this may come from private enterprise, but not enough, because private investment flows to stable, assured markets chiefly in the developed world. It does not readily enter high-risk, low- margin operations in the developing countries that most need the fertilizer. AN ACTION STRATEGY: A FOUR-POINT PROPOSAL What can be done to alleviate this situation? I have a four-point action proposal to suggest, but first I would like to mention some of the assumptions basic to the pro- posal. l. Population control on a national and global scale is a vital and necessary consideration in any food produc- tion strategy. Unless mankind grapples with its growing numbers, all strategies, programs and projects will be reduced to futile palliatives. 2. The food problem is global, and its solution will require cooperation among industrial, socialist, and developing economies. Yet effective action requires a 34

competent, neutral, central authority—one that can mea- sure, manage and execute policy, exercise objective but positive leverage on individual countries, follow up pro- grams and evaluate their results. The engineering pro- fession has an important role to play in creating and operating such an authority. 3. The private fertilizer industry with its support- ing and outreaching auxiliaries has demonstrated excellent technical and managerial capability for producing and marketing its product. Therefore, it should be involved whenever possible, and all fertilizer supply programs should be coordinated with its normal market processes. However, private industry is responsible for earning a return on investment and for maintaining a competitive share of the market. These pressures serve the developed countries well but usually do not serve the poorer, less developed nations' farm populations well. Hence there is a need for a stable, continuing supply system for the poorer nations—one that will compensate for the drastic rises in energy and fertilizer costs. 4. Food production must be considered within the context of balanced, overall development. Fertilizer has been selected as the "critical path" item in the following proposal, but it is essential that other inputs in the "agro-industry" complex--seeds, chemicals, implements and pesticides—be brought together at the country and farm level. The four-point proposal that is suggested here is based on a new concept of the role and responsibility of the engineer in international development. It outlines very broadly the design of an international action program to deal with a critical element in the present world food situation. In this field, several studies, analyses and computer-model building exercises have been done, and others are in process under the direction of international or national agencies in developed and developing countries, universities, and private foundations. However, they are largely concerned with defining and measuring the food- population-growth "problematique." My proposal, on the other hand, suggests a systematic, urgent, engineering management action system to deal with the food production problem. This will require mobilizing investment and technology for fertilizer production, transport and distri- bution for on-farm use in developing countries. The approach constitutes a "critical path" effort to mobilize fertilizer supply and production where and when it is most needed. 35

The four points of my proposal for COPEP and other appropriate organizations are: l. COPEP should begin to make an immediate appraisal of the role that engineering and engineering-based manage- ment can play in devising and executing strategies and action programs in the world food-population situation at the international macro-level, and at the complementary national or micro-level. Such an appraisal should use, but not rely entirely on systematic approaches and tech- niques . 2. Select a concrete and urgent element for action in food production, and formulate and recommend, for example, a trial effort to provide adequate supplies of chemical fertilizers, in sufficient time and over time, at costs developing nations can afford. Such a fertilizer supply effort should be international, be tied to a program of emergency and reserve food supplies, and be aimed at the poorest 40% in the developing world. 3. Collaborate in this fertilizer supply study pro- gram with other disciplines—agricultural scientists, development economists, financial and transportation specialists—to develop a systematic management approach that could be applied to other equally important aspects of the food and population situations such as population control, food stocking and distribution, water use and conservation, energy, chemicals, and other inputs, waste control, environmental protection and improvement, etc. 4. Explore with other professional organizations such as ICSU, FAO, IBRD, IIASA,* and the fertilizer indus- try, the specific arrangements for implementing a food- population strategy. COPEP action should be given impetus by the impact of the energy crisis, the sharp inflation of fertilizer prices, disruption of world fertilizer supplies, and resulting hardship for the poorest countries and farmers. Elaborating further on point 2, my suggestion is that we start with national food-fertilizer needs and work back to the requirements for raw material inputs, technology, transportation and investment. Such food and fertilizer needs will have to be calculated for now to the end of the decade, and to l985-86, with concentration on the most needy countries (estimated to number 26-30 with a probable *ICSU (International Council of Scientific Unions) FAO (Food and Agricultural Organization of the United Nations) IBRD (World Bank) IIASA (International Institute for Applied Systems Analysis) 36

population of 350-400 million by l985). These countries are to be listed in priority according to: (l) need; (2) government receptivity and will to act; (3) agricul- tural, logistical, and environmental absorptive capacity; (4) water availability; and, (5) population control policy. An international managing and financing authority should be created with the support of international organ- izations in the food and economic development field. Such an authority would respond to the systems-defined priority needs at the country level with a four-phase synchronized program: l. Provide emergency food supplies and build better food stocks as already proposed by FAO. 2. In close coordination with this world food reserve system, create a complementary pool and supply system for fertilizer and other food production inputs. The fertili- zers and inputs would be purchased on the open market in large quantities and at competitive world market prices thus providing a quick and substantial demand to encourage increased fertilizer production in developed and certain developing countries. The pool fertilizer would be sup- plied to priority-need countries at concessional prices to offset the inflationary impact of sharply increased petroleum costs. Countries receiving such supplies would meet the criteria listed above, thus providing a measure of international leverage to ensure improved agricultural policy and practice in recipient countries. The supply of pool fertilizers and other inputs would work as a "seeding program" intended to create and test a fertilizer logis- tics system, including shipping, harbor unloading, storage, railroad, road and barge movement to farm areas, provision of credit to cultivators, extension services for cultiva- tion and post-harvesting processing, storage and distribu- tion to market. 3. Concurrently with the operation of the emergency food-cum-fertilizer and requisites supply system outlined above the international authority would devise a program with governments for indigenous fertilizer production in certain suitable priority countries that would be hospit- able to such operation. This would entail expansion, modernization, and full capacity use of existing fertilizer facilities as well as construction of new facilities appropriate for the market. The following would be assessed in planning production facilities—indigenous resource availability, energy and fossil fuels or substitutes, phosphate, potash, and sulfur as raw materials, transport and logistical facilities, environmental carrying capacity and constraints, and water availability. 37

4. Finally the authority would create an inter- national support base for the planned indigenous plant network. This would consist of locating, mobilizing and channelling the raw material supplies—petroleum or gas (with particular emphasis on using flared gas in the Middle East and elsewhere), as well as the phosphate, potash, sulfur required—at the most favorable terms possible. Much of this supply operation could be handled by the world market but the authority would have to inter- vene to supplement the market, to adjust prices to ensure continuity of supply and to compete effectively with the usually favored industrial country users. The authority would expedite and collaborate in the provision of the required technology and management draw- ing upon private industry, consulting engineers, govern- ment and international agencies. It would also assist in providing ocean transport, including specially designed carriers for ammonia, phosphoric acid, etc. The financing of a fertilizer supply program would have to be considered as an integral part of the financing of a food supply and buffer stock program. The purchase of fertilizers at competitive world market prices would come from funds that might be added to those provided for food supplies. Financing of the long-term indigenous fertilizer facilities would have to come from a vast new reservoir of development funds, including OPEC. Core funding of about a billion dollars could start the indi- genous fertilizer production program with additional fund- ing being supplied as viable projects begin to develop both at the country and materials supply level. 38