Cargill CEO says food shortage fears unfounded

Cargill Incorporated's top executive told a Naples audience Friday afternoon that fears about worldwide food shortages are unfounded, as long as governments and international organizations make wise decisions in coming years.

Chairman and CEO, Gregory R. Page, spoke to members of the Forum Club of Southwest Florida during a luncheon at the Naples Beach Resort's Everglades Dining Room Friday afternoon.

He said fears of coming famine are overblown.

"We can continue to feed ourselves and we can do it in a responsible and renewable way," he said. "We just have to make the right decisions."

Based in Minnesota, Cargill is a leading global agricultural producer and distributor and the nation's largest privately-owned company in terms of revenue. The company employs 139,000 workers in 65 countries and earned 119.5 billion in revenues during fiscal year 2011.

Page said modern technology and agricultural advances such as the use of genetically modified organisms have allowed growers to keep pace with the world's rising population.

Distributing food to nations with unstable political situations or lacking in economic resources has been the problem.

Noting that 85 percent of all calories consumed worldwide are grown in the nation where the food is produced, Page said increasing agricultural capabilities in Africa is a key to ensuring the world's food supply remains stable.

"We have doubled food production since 1975 using the same amount of land," Page said. "We need to double it again by 2050, and my guess is we'll need 20 percent more acreage. We cannot do that without including Africa."

African nations have been slow to adopt market-based agricultural systems and international efforts to help them develop their resources must adapt, Page said.

"The world has spent hundreds of billions of dollars in Africa and we have nothing to show for it in terms of small producers," he said. "We need their acres, but we need to do it thoughtfully."

Media hyperbole regarding food shortages leads to price and commodities market instability more than actual food supplies or market speculation, Page said.

Globally, the variation between annual food production and expected production stays within 2.5 percent annually.

"It's hording," said Page. "People read an article and they start to horde and it leads to enormous swings. People say it's speculators, but I say it's lots of people with two bags of rice on their basement shelf."

Page also said food resources such as grain and vegetable oil have been over-allocated to energy use.

Eight percent of grain and 14 percent of vegetable oil is now converted to biofuels such as ethanol.

That amount far exceeds the world's "caloric gap," or the amount of food produced and the amount needed, he said.

"Mathematically, we have an overwhelming capacity to extinguish that gap, but it hasn't happened," he said.

The Forum Club has hosted a monthly speaker series each winter season since 1985. This year's speakers included former CIA Director General Michael Hayden, Wall Street Journal writer Stephen Moore, and former FDIC Chairman William Isaac. Page was the last speaker on this year's schedule.

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