Just occasionally you see an image that completely blows your mind. This graph appeared in the Platinum Trusts Quarterly report for March 2015. The source is reliable and the overlaid comment by the Platinum management team is well worth noting.
Slightly over 30 years ago India's wheat production was around 45 million tonnes while that of the US was around 65 million. Now India is producing around 95 million tonnes while the USA production is around 60 million.
I am a child of the 1960s. When I was doing my first degree at Cambridge in the mid 1960s, the acronym on everyone lips was ZPG or Zero Population Growth. Dr. Paul Ehrlich, a Stanford professor, had written The Population Bomb, which opened with the following passage "The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate..." Ehrlich argued that as the existing population was not being fed adequately and as it was growing rapidly it was unreasonable to expect sufficient improvements in food production to feed everyone. If anyone had stood up at that time and said by 2013 India would be producing 60% more wheat than the USA, he or she would have been vilified, much as the climate change alarmists denigrate today's climate change sceptics.
The irony of course is that in 2015 the major problem now facing many OECD governments is declining birth rates.
It is very common when trying to predict the future to extrapolate a trend. Unfortunately when I look back at my own life I have seen a number of predictions based on prevailing trends fail spectacularly.
When I did my MBA at London in the early 1970s, we were all required to read The Emerging Japanese Superstate, written by the leading futurologist of the time Herman Kahn. The book predicted the dominance of Japan and the relative demise of the USA. It could not have been more wrong. By contrast during the whole two years at London Business School I don't think the word entrepreneur was mentioned once. I certainly never heard the phrase "venture capital".
In 1980, I switched my career from IT to merchant banking. I remember in early 1981 going to a presentation by Rob Ferguson and Olav Rahn, who had just spent three weeks in New York and had come back with the drum. Effectively their message was that in you think the 1970s was bad for equities, the 1980s would be an unmitigated disaster. Reagan was going to be a worse president than Carter and for equity investors it was all over. That night the Dow jumped 20 points triggering the greatest bull market ever seen in the history of man.
In May 1984, I was charged with the raising of the $10 million for BT Innovation, one of the seven original MICs that effectively kick started the Australian Venture Capital industry. We raised our money on June 30 – 2,000 cheques of $5,000 each arrived on our doorstep that day and on July 1, 1984 we opened for business. The business plans started flooding in and as the only VC in Australia who had ever written a program or sold a computer I was the IT industry specialist. As my knowledge was then some five years out of date I decided I would update it by attending an IDC conference about future industry trends. I will never forget it. The message was that if you think IBM was strong in the 1960s and 1970s wait till the 1980s and 1990s. Their dominance in the mainframes would now extend to the minis and the PCs where because of IBM's economies of scale no-one would be able to compete. Again the prediction could not have been more wrong. IBM declined dramatically and was replaced by Intel and Microsoft.
Why have India's wheat yields increased so dramatically. There are a variety of reasons:
- Increased production inputs, primarily nitrogen fertilizer and irrigation water
- Adoption high-yielding, disease-resistant semi-dwarf wheat strains
- The spread of water-conserving cultural practices.
However there is one reason I have only seen mentioned recently. Rising levels of carbon dioxide causing increasing plant growth. Rising CO2 levels have caused a remarkable 11 percent increase in foliage in arid regions in just 30 years roughly corresponding to the increase in atmospheric levels. I first came across a mention of this phenomenon is Climate Change: The Facts 2014 which is an anthology of sceptical articles produced by the Institute of Public Affairs. The book was funded by crowd sourcing and I declare I was one of the funders. You can read about increased greening due to rising CO2 levels here. Of course the sceptics have long argued that carbon dioxide is a plant food, it is just mind-blowing to see a graph that so eloquently supports the argument. The next time you get in your car, don't feel guilty about increasing the level of CO2 in the atmosphere, instead feel good inside about helping the Indian farmers grow more wheat.
By the way it is often asked why don't experts sit down and debate climate change science so the ordinary man in the street can form an opinion. If you want to see the level of argument of climate change alarmists are currently presenting look at this video.
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