Topic 6

1
Topic 6 Commodities

• A Space
• B Minerals
• C Food
• D Water

2
Introduction

• Commodities
• Resources that can be consumed
• Accumulated (some perishable).
• Exchanged.
• Purchased.
• Fixed commodities
• Commodities that cannot be transferred (except
  title).
• Land, mining, logging and fishing rights.
• Value derived from utility and potential rate of
  extraction.
• Bulk commodities
• Commodities that can be transferred.
• Grains, metals, livestock, oil, cotton, coffee,
  sugar and cocoa.
• Value derived from utility, supply and demand
  (market price).
• Energy will be the object of Topic 7.

3
Space
A

• 1. Context
• 2. Seas
• 3. Forests
• 4. Human Occupation

4
Context
1

• Competition for space
• Various uses of nature are competing for space.
• Biologically productive areas on the planet are
  the most desirable locations.
• Mutually exclusive uses of nature
• Land used for wheat production cannot be used for
  roads, forests or grazing, and vice versa.
• The issue is that humans almost always win.
• Common transformations
• Natural to agricultural deforestation.
• Agricultural to urban conversion.

Humans
Space
Nature
5
Context
1

• Main categories
• The Earth has a surface area of 51 billion
  hectares.
• 197 million square miles.
• 36.3 billion are sea (71) and 14.7 billion are
  land (29).
• 8.3 billion hectares (16) of the land area are
  biologically productive
• The most valuable.
• 6.4 billion hectares (13) are marginally
  productive or unproductive
• Covered by ice.
• Unsuitable soil conditions or lack of water.

6
Historical Global Land Use Change (in billions)
1
7
Seas
2

• Overview
• Covers 36.3 billion hectares (141 million square
  miles)
• 6 hectares per person (0.023 square miles).
• 8 account for over 95 of the seas ecological
  production.
• Marine production is already harvested to the
  maximum.
• Provide approximately 18 kilogram of fish per
  capita per year.
• 7 of humanitys food supply.
• 90 of the large predatory fishes are gone (tuna,
  cod swordfish).
• Swordfish
• From average size of 300 pounds to 90 pounds.
• Measuring the ecological activity of the sea
• Surface determines its productivity.
• Capturing of solar energy and the gas exchanges
  with the atmosphere are proportional to the
  surface.
• Consumed fish that people fancy are high up in
  the food chain, the food gains from sea space
  remain limited.

8
Forests
3

• Overview
• Farmed or natural forests that can yield timber
  products.
• Environmental functions
• Erosion prevention.
• Climate stability.
• Maintenance of hydrological cycles.
• Sustaining ecological systems.
• 3.44 billion hectares covering our planet.
• 0.6 hectares per capita world-wide.
• The world has almost lost half of its original
  forest cover
• 62 million km2 (1900) to 33 million (1995).
• Most of if was destroyed over the last 30 years.
• Forests left occupy ecologically less productive
  land with exception of some few remaining
  inaccessible jungle areas.

9
Changes in the Worlds Forest Cover
3
Forest Cover by Region, Mid-1990s (in 1,000
square km)
Growing economies and consumption. Population
growth and demand for new land. Bad economic
policies that promote the overexploitation of
forests. Corruption and illegal trade. Poverty
and landlessness.
10
Forests
3

• Fossil Energy Land (Carbon sink)
• Land that should be reserved for CO2 absorption.
• Little area is set aside to absorb CO2.
• Neither the biochemical energy of the used fossil
  fuel is replaced nor its waste products absorbed.
• Can also be defined as a carbon sink.
• Humanity is living off nature's capital rather
  than its interests.
• Using fossil fuel based products or burning
  fossil fuels can release toxic pollutants.
• Potential of using the oceans to store CO2 at
  great depths.

11
Forests
3

• Frontier Forests
• Original forest cover remains with large tracts
  of relatively undisturbed forest
• Defined as the frontier forest.
• 40 of forest on Earth qualifies as frontier
  forest.
• Russia, Canada, and Brazil house almost 70 of
  the worlds remaining frontier forest.
• 39 of Earths remaining frontier forest is
  threatened by logging, agricultural clearing, and
  other human activity.
• 3 of the worlds frontier forest falls entirely
  within the temperate zone.
• Characterized by moderate climate, including much
  of the U.S and Europe.

12
Frontier Forests as Share of Total Remaining
Forests (in ), mid 1990s
3
13
Human Occupation
4

• Arable land (cropland)
• Land suitable for agriculture.
• Ecologically speaking the most productive land.
• Location / regional conditions imply different
  types of suitability
• Days without freezing.
• Average temperature.
• Precipitations.
• Type of soil.
• 1.4 billion hectares of arable land
• Land surface of 13.0 billion hectares.
• Only 10 of the land is thus arable.
• Additional 3.5 billion hectares of pasture land.
• 10 million hectares per year lost to degradation.
• Less than 0.25 hectares per capita world-wide.

14
Land Suitability for Cereal Cultivation
2
15
Human Occupation
4

• Pasture
• Grazing land for dairy and cattle farming.
• Most of the 3.35 billion hectares of pasture, or
  0.6 hectares per person, are significantly less
  productive than arable land.
• Potential for accumulating biomass is much lower.
• Expansion of pastures has been a main cause of
  shrinking forest areas.
• Built-up areas
• Host human settlements and roads.
• Extend approximately 0.03 hectares per capita
  world-wide.
• As most human settlements are located in the most
  fertile areas of the world, built-up land often
  leads to the irrevocable loss of prime arable
  land.

16
Trends in Global Agricultural Land Use, 1965-1997
(in millions of hectares)
4
17
Minerals
B

• 1. Types of Minerals
• 2. Mineral Reserves, Resources and Distribution

18
Types of Minerals
1

• Mineral resources
• Inorganic substances that are extracted from the
  earths crust.
• Their presence is the outcome of geological
  processes.
• The value is derived from the utility of the
  mineral
• Rare minerals used as a currency (gold, silver,
  diamonds, etc.).
• Construction materials.
• Metals that can be shaped to numerous uses.
• Energy (fossil fuels, uranium).
• Fertilizers.
• Concentrations of minerals in particular
  locations.

19
World Mineral Production, 1995 (in millions of
tons)
1

• Energy minerals
• Oil, gas, coal, fissionable minerals such as
  uranium.
• Ferrous minerals
• Iron ore and other elements mainly used as
  ferro-alloys, such as manganese, silicon, nickel,
  cobalt, and tungsten.
• Non-ferrous metals
• Gold, silver, copper, aluminum (from bauxite),
  lead, zinc, tin, and platinum.
• Non-metallic minerals
• Construction Limestone, gypsum, sand, gravel,
  and stone.
• Fertilizers Phosphorus, potassium, sulfur, and
  nitrates.
• Salt de-icing, chemicals (chlorine and sodium)
  and condiment.

20
Mineral Reserves, Resources and Distribution
2

• Mineral reserves
• Minerals recoverable from identified deposits
  under current technologies and economic
  conditions.
• Can change over time as technological advances
  make extraction more economically feasible.
• Mineral resources
• Reserves and other sources of the mineral that
  may eventually become available.
• Known deposits that are not currently profitably
  extractable.
• Undiscovered deposits that may be assumed to
  exist due to knowledge of a region's geological
  structures.
• Fixed quantity, unlike reserves.

Technological Development
Mineral reserves
Economic Development
Mineral resources
Threshold
21
Mineral Reserves, Resources and Distribution
2
Unbalanced consumption and extraction are not
commonly located at the same place
22
Minerals Production and Intensity of Use,
1970-2000
2
23
Food
C

• 1. Food Models
• 2. Nutrition Transition
• 2. Food Production, Consumption and Trade
• 3. The Green Revolution
• 4. Agricultural Output and the Environment

24
Food Models
1

• The human diet
• Minimum caloric requirement
• 2,700 calories for men and 2,000 calories for
  women,
• Diet is organized along models.
• Result of the socio-economic environment of the
  population
• About 15 plants and 8 animal species supply 90
  of food.
• Commonality of some food components in different
  parts of the world.
• Related to an average daily calorie intake.
• Linked to agricultural practices, but also to
  agribusiness and food processing industries.
• Development level and the distribution of
  agricultural production
• Developed economies industrial techniques are
  increasingly present in the diet.
• Third World countries the diet remains often
  very simple and did not change for several
  hundred of years.

25
Global Food Insecurity
1
26
Annual Per Capita Consumption of Livestock
Products in Selected Countries, 1998 (in
kilograms)
1
27
Food Models
1

• Malnutrition
• Imbalance (deficit or excess) in intake of
  nutrients.
• Hunger
• Deficiency of calorie and protein.
• At least 1.2 billion people affected.
• Micronutrient deficiency
• Deficiency of vitamins and minerals.
• 2.0 billion affected.
• Overconsumption
• Excess of calories.
• Often accompanied by vitamins and minerals
  deficiencies.
• At least 1.2 billion people affected.
• 300 million people are obese.

28
Share of Underweight Children and Overweight
Adults, Selected Countries, Mid 1990s
1
29
Food Models
1

• Changes in the diet
• Nutritional shift
• From a diet dominated by grains and vegetables to
  a diet dominated by fats and sugars
• Natural human desire for fat and sugar (energy
  dense foods low satiation).
• Between 1980 and 2000 calorie intake in the US
  has risen nearly 10 for men and 7 for women.
• Increased corporate involvement in food supply
• Caffeine is added (75 of sodas) to provide
  addiction.
• Massive usage of flavoring.
• Homogenization of global diets
• Outcome of trade.
• Fast food industry.

30
Food Models
1

• Nutrition Transition
• Urban and sedentary
• People are more often away from home.
• 1970 75 of all food expenses spent to prepare
  meals at home.
• 2000 50 of all food expenses for restaurants.
• Element of time.
• More woman in the labor force
• Away from the traditional role of food
  preparation.
• Both members of a couple are often working.
• Less preparation time available
• 90 of the money spent on food is spent on
  processed foods.

31
Food expenditures by families and individuals as
a share of disposable personal income, 1929-2002
1
32
Food Models
1

• Obesity
• 55 of the adult Americans (over 20 years) are
  overweight
• 20 of men and 25 of women are obese (BMI 30
  weight in kilograms, divided by the square of
  height in meters).
• 15 aged 6-19 are overweight.
• 2.2 morbidly obese (BMI 40).
• More prevalent among the poor (fat and sugar).
• Generation XXL
• About 30 of American children are overweight
  (10 obese).
• NYC About 43 overweight and 24 obese.
• Supersizing.
• Lack of physical activities.
• High fat and sugar diet,
• Diet-related diseases
• 300,000 Americans die prematurely each year as a
  result of being overweight.
• Americans spend 40 billion per year on
  weight-loss products and services.
• Weight-loss products have been linked with
  growing obesity.
• People simply eat more fat-free products.

33
Food Models
1

• The Fast Food diet
• Higher sugar and fat content
• Value added and high profits food products.
• Fast food industry
• 110 billion a year industry.
• Largest group of minimum wage workers in the US
  (3.5 million).
• 25 of the adult population visit a fast food
  restaurant every single day.
• Most fast food is delivered to the restaurant
  already frozen, canned, dehydrated, or
  freeze-dried.
• A fast food kitchen is merely the final stage in
  a vast and highly complex system of mass
  production.
• Fast food, sweetened cereals and candy
• 50 of all food ads.
• Targeting the children and inculcate a
  nutritional consumption leaning on sugars and
  fats (schools).

34
Food Models
1

• Supersizing
• Larger containers and quantities
• Larger package size can increase consumption up
  to 55.
• 1950s The standard Coca-Cola container was 6.5
  ounces.
• 1990s The standard Coca-Cola container was 20
  ounces.
• Little cost for the supplier
• Brand name, packaging and marketing are dominant
  in pricing.
• Larger quantities directly means higher profits.
• Skew the perception of normal nutritional intake.

35
Food Production, Consumption and Trade
2

• Food production
• Has been able to keep up with population growth
• Expansion of arable land.
• Green Revolution.
• Environmental stress, soil degradation and
  destruction of ecosystems.
• Increased dependency on fertilizers and
  irrigation.
• Gradual shift to lower quality sources of
  protein
• From beef to pork and poultry.
• Intensification of aquaculture
• Try to replace exhausted fish supplies.
• More rational use of oceanic resources.

36
World Protein Production by Source, 1950-2000
2
37
Food Production, Consumption and Trade
2

• Deficit and distribution
• Overcome shortages
• Import what is lacking in the national
  production.
• An economy needs to generate sufficient surpluses
  from other sectors.
• Purchase enough food to overcome the national
  deficit
• Very few Third World countries can afford to do
  so.
• Africa
• Region facing the most intensive shortages.
• Chronic dependency of food aid.
• China
• Fast industrialization.
• Growing importer of food.
• India
• Intense irrigation projects.
• Has become self-sufficient, but may have reached
  a limit.

38
Food Production, Consumption and Trade
2

• International trade of agricultural goods
• About 9 of global exchanges in commodities.
• The nature, origin and destination of food trade
  is linked to a number of factors
• If the good is perishable.
• Consumption habits.
• The profit that can be derived from trading food
  products.
• Highly linked to export cultures that are
  produced strictly to generate income.
• Third World countries are massively involved in
  these types of cultures.

39
Exports of Cereals, 1960-2003 (in 1000s of tons)
2
40
Grain Imports for Selected Countries, 1990, With
Projected Need for Imported Grain in 2030
2
41
World Coffee Production and Trade, 2003
2
Share of Developing countries in global exports
of agricultural goods, 2000
42
The Green Revolution
3

• Context
• Strong population growth in the second half of
  the 20th century.
• New techniques were required to increase
  production.
• New land was becoming scarce.
• Labor was difficult to add to existing
  agricultural systems.
• Increasing the agricultural output
• Green Revolution in the 1960s.
• New varieties of wheat, corn and rice
• 1920 20 bushels per acre (wheat).
• 1997 120 bushels per acre (wheat).
• Enabling up to three harvests per year and
  increased outputs.

43
The Green Revolution
3

• Strategy
• Focused more on scientific achievements rather
  than on mechanization of agriculture.
• Focused on genetics and pedology (soil science).
• The development of new seed strains
• Increase agricultural production.
• Make crops more resistant to diseases.
• Development of hybrids.
• New strains do not occur naturally.
• The improvement of inputs into soils
• Fertilizers of various types.
• Enhance the productivity of previously marginal
  soils.
• Irrigation in dry areas (40 of our food comes
  from irrigation).
• Boost productivity in many world regions but not
  without costs.

44
Fertilizer Response Curve for Corn
3
45
The Green Revolution
3

• Net impact
• Increased agricultural output in many areas.
• Increased the cost of agriculture.
• Decreased agricultural employment in many areas
• Benefits accrued to the wealthier and middle
  class farmers who could afford its more costly
  inputs.
• Increased landlessness among the peasantry.
• Increased surplus population in rural areas.
• Increased rural to urban migration in many
  developing countries.
• Increased political instability in many places.

46
Global Production of Major Grains, 1961-2004 (in
M tons)
3
47
Global Cereal Yields, 1961-2004 (kg per hectare)
3
48
Change in Cereal Yields, 1965-2002
3
Cereal Output per Hectare, 2000 (kg)
49
Production and Yield of Wheat in China and India,
1961-2004
3
50
Mechanization and Performance of Agriculture,
1995-1998, Selected Countries
3
51
The Green Revolution
3

• The Green Revolution and economic dependency
• Requires irrigation systems, fertilisers and
  pesticides.
• Agriculture is now more capital intensive
• Fertilisers and pesticides are often produced by
  multinational corporations.
• Seeds are also produced.
• Financing agriculture
• Increasing linkages with financial institutions.
• Borrowed money to purchase inputs, fell into
  debt, and lost their land to creditors when they
  were unable to pay.
• Put the peasant in a debt cycle.
• In many areas the Green Revolution increased
  landlessness among the peasantry.

52
The Green Revolution
3

• Future of agriculture?
• Improving the performance of plants and animals
• Genetical engineering transgenic crops.
• Controlled ripening (enzyme).
• Herbicide and fungal resistance.
• Animal diet (increased absorption).
• Improved nutrition (more amino acids, vitamins
  and easier digestion).
• Modifying life to suit medical, industrial and
  energy purposes
• Disease fighters (bananas and potatoes delivering
  vaccine).
• Manufacturing (colored cotton plastic making
  corn rubber making sunflower).
• Hydrogen producing algae.

53
Agricultural Output and the Environment
4

• Maintaining agricultural output
• Context of increased food demand.
• Provide food for the expected population surge of
  1.5 billion people between 2000 and 2020.
• Expansion of land under cultivation.
• Intensified cultivation higher productivity per
  unit of surface.
• Efforts aimed at intensified cultivation are now
  much more critical than only 20 years ago.

54
Agricultural Output and the Environment
4

• Expansion potential
• Reserves still exist in the developing countries
  for expanding agricultural land.
• Very unevenly distributed.
• Found mainly in Latin America and Sub-Saharan
  Africa.
• Asian countries, especially the most densely
  populated, have only slight expansion
  possibilities.
• Demographic pressure pushes towards that strategy.

55
Grain Harvested Area per Person, 1995-2020 (in
square meters)
4
56
Grain Equivalent to Produce Meat (in kg)
4
57
Meat Production, United States and China
1961-2003 (in tons)
4
58
Agricultural Output and the Environment
4

• Consequences
• Rapidly deterioration of environmental quality.
• Extended soil degradation
• Nutrient depletion.
• Erosion.
• Salination.
• Dwindling availability of water resources
• Agriculture accounts for 70 of all fresh water
  withdrawals.
• Exhaustion of aquifers.
• Water pollution by fertilizers and pesticides.
• Loss of animal and plant species (biodiversity)
• 20 to 30 of the worlds forest converted to
  agriculture.
• 50 of all species are in danger of extinction.
• Threatening national parks and protected areas.

59
Water
D

• 1. Sources of Water
• 2. Water Development Projects
• 3. Water Use

60
Sources of Water
1

• Rivers, lakes, and streams
• Traditional sources of water.
• 50 of all major rivers are polluted and
  overused.
• 700 million Chinese are drinking contaminated
  water.
• Aquifers
• Important water sources, especially in many dry
  areas.
• Wells of various kinds tap into the water table
  to draw upon underground sources of water.
• 51 of all the drinking water in the US.
• Many aquifers are re-charged
• Receive water through percolation of rainwater
  through the overlying soil and rock structure.

61
Sources of Water
1

• Fossil aquifers
• They lie under arid regions today.
• Formed in earlier geologic periods when the
  region may have received greater precipitation.
• Not being re-charged a non-renewable resource.
• The aquifer underlying parts of Saudi Arabia
  falls into this category.
• De-salinization of sea water
• Remains an expensive alternative.
• Not produced satisfactory results in many areas,
  at least as far as human consumption is
  concerned.
• Technologies for de-salinization are receiving
  greater priority.
• Moving from steam-process to filtration
  (osmosis).
• Pushed the price for desalted seawater down to 2
  for a thousand gallons, compared with 6 around
  1990.

62
Sources of Water (in cubic miles)
1
63
Water Development Projects
2

• Context
• Increasing the amount of usable water for the
  various purposes that follow.
• These projects are not without their limits or
  with their attendant problems.
• Dam construction
• Assisted tremendously in achieving the increases
  registered in irrigation worldwide.
• Reaching the point where further increases will
  be difficult to realize.
• Relatively few remaining rivers and streams.
• More than 45,000 dams have been constructed
  worldwide.
• The rate of construction has declined recently.

64
Commissioning of Large Dams
2
65
Water Development Projects
2

• Problems with dams
• They are exceptionally expensive to build
• Large dams cost billions of dollars.
• Displace many people in areas to be flooded by
  the reservoir that is created behind the dam.
• The reservoir takes some land out of production.
• Dredging
• The outcome of siltation.
• The volume of sediments deposited from upstream
  by the river that is dammed can outstrip the
  capacity to dredge.
• The reservoir may eventually fill in and the dam
  will become useless.
• The rate of sedimentation increases with
  population growth and the expansion of
  agriculture in the upstream locations.
• The flood control achieved by the dam is helpful
  in some ways.

66
Largest Dam Reservoirs
2
67
Water Development Projects
2

• River diversion
• Re-channeling water in some areas to render it
  more readily available for use, especially in
  agriculture.
• Reduces water flow to downstream locations.
• Sometimes, international boundaries are crossed
  by rivers.
• Removal of water for purposes upstream means that
  less water is available in the country (or
  countries) that lies downstream.
• Rivers no longer reaching the sea
• The Nile in Egypt.
• The Ganges in South Asia.
• The Yellow River in China.
• The Colorado River in North America.

68
Water Development Projects
2

• The Nile
• The construction of the Aswan High Dam in
  southern Egypt.
• Interrupted the seasonal pattern of flooding
  along the Nile Valley.
• These floods throughout history have served to
  replenish the soils of the valley.
• The soils are now not receiving the necessary
  nutrients and may be depleted.
• Usage of fertilizers instead.
• Irrigation water from the dam also enabled Egypt
  to double agricultural production.
• Created increased soil salinity in the process.

Aswan High Dam
69
Water Use
3

• Water use
• Tripled since 1950
• Water use is increasing at a pace faster than
  population.
• Linked with rising living standards.
• Roles
• Water has two primary contradictory roles
• Key life support for all species and natural
  communities.
• A commodity to be sold and used for agricultural,
  industrial, and urban purposes.
• The overuse of water and the pollution, if
  allowed to proceed unchecked, render the first
  role unsustainable.

70
Global Water Withdrawal by Sector, 1900-2000 (in
cubic km)
3
71
Water Use
3

• Agriculture
• Fast growth of water requirements.
• Population growth.
• Expansion of the land under cultivation.
• Irrigation necessary to render arable otherwise
  marginal land.
• Industrial
• Used by heavy industry, notably mining.
• Industrialization is leading to rapid increases
  in water use.
• Municipal
• Direct human consumption of water for drinking
  and cooking purposes, sewage treatment, space
  heating, and other uses.
• Highly concentrated geographically due to
  urbanization.
• A human being needs 3-5 liters of water per day.

72
Percentage of Land Irrigated
3
Irrigated Area, Top 10 Countries, 1995 (in
millions of hectares)
73
Water Required to Produce 1 kg of Food (in liters)
3
74
Water Use
3

• Water losses
• Loss of water before it can be used.
• Result of human activity and/or alteration of the
  environment.
• Such losses amount to just 5 of water use.
• Evaporation of still water from reservoirs.
• Inefficient irrigation practices.
• Infrastructure decay
• Urban plumbing and sewer systems.
• Problematic in many developing countries that
  cannot afford better upkeep.
• Water pollution
• 20 of rivers in China are severely polluted.
• 80 cannot sustain commercial fishing.

75
The Bottom Line with Commodities

• Human activities are dependant on commodities
• Several commodities cannot be substituted.
• Many are not renewable.
• Price and availability
• Supply and demand.
• Level of utility.
• The demand is expected to rise substantially.
• The supply of many commodities will not.