The speculator's bread: what is behind rising food prices?

Speculators increasingly invest into food markets for financial gain, with potentially devastating consequences for millions of poor people who cannot afford food at inflated prices....the market price of agricultural commodities is more important than those of nearly all other productsMost citizens in developed countries buy and consume their food without any consideration of how it is produced or how it gets from the field or slaughterhouse to the supermarket. They take for granted that they can afford it and do not care about its production and the economic, financial and other factors that eventually determine its price on the supermarket shelf. However, the market price of agricultural commodities is more important than those of nearly all other products. Increasing prices can cause hunger for millions of people and enormous political repercussions. In 2007–2008, a price explosion for grain and other commodities caused malnutrition among an estimated 115 million people and triggered hunger revolts in several nations. The prices subsequently dropped, only to soar again three years later (Fig 1), surpassing previous highs by the end of 2010. The revolt in Tunisia in January 2011 that eventually led to the government''s downfall was originally triggered by rising food prices.Open in a separate windowFigure 1FAO Food Price Index values from 1990 to 2010“The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices (representing 55 quotations), weighted with the average export shares of each of the groups for 2002–2004” (http://www.fao.org). FAO, Food and Agricultural Organization.Which factors or mechanisms determine the market price of food? If a drought or a flood were to destroy harvests in wheat-exporting countries such as Australia or Russia, it would certainly drive up the price of wheat. Yet, there is also ongoing debate about whether and how the 2007–2008 price spike might have been driven by financial speculation in commodity markets. This is not only a media debate, but also of scientific interest as it gets to the heart of economic theory; indeed, various research articles have tried to analyse and explain the causes of the 2007–2008 price spike.The revolt in Tunisia in January 2011 that eventually led to the government''s downfall was originally triggered by rising food pricesThe global market-prices for agricultural commodities are determined in different ways, depending on the commodity. Some products, such as rice, are mainly traded nationally, with only a small share being traded internationally; other commodities are traded in large quantities on international commodity exchanges, particularly in the USA. As the USA is one of the main producers and exporters of wheat, corn and soybean—and has a liberal market tradition—these exchanges are important for both the US and the global agricultural industry. In Europe, commodity exchanges for agricultural products play a lesser role, partly owing to the former Common Agricultural Policy of the European Union (EU), which tightly regulated the production of foodstuffs. However, this policy is now changing and exchanges are set to have a more important role in Europe too. The Paris commodity exchange is already a relevant marketplace for wheat, and the London commodity exchange has an important role in the global trade of coffee, cocoa and sugar.The price of any commodity should reflect the levels of supply and demand. Of course, fluctuations occur and are sometimes justified by fundamental factors, for example a bad harvest or increased demand. However, other external factors—such as a lack of information, asymmetries, externalities, conflicts of interest and agency problems—can also influence prices on commodity markets. In addition, outright speculation (for instance by hoarding), price bubbles and even market manipulation can repeatedly influence prices. The largest grain companies in the world, such as ADM, Cargill, Dreyfus and Bunge, have an interest in maximizing their profits and do so by buying and selling commodities at the most suitable time. Even farmers speculate on commodity markets, for example by withholding their harvest when they expect a price rise. To keep these factors and interests under control it is necessary and indeed legitimate to regulate and control markets, not just for food commodities.Commodities are not only traded physically on ‘spot'' or cash markets, but also subject to forward buying through ‘futures''. A future is a contract between a producer—that is, a farmer—and a buyer that specifies the amount, the price and the delivery date of a purchase. Similarly, buyers—such as millers—can use futures to buy a certain amount of grain at a guaranteed price ahead of time. Many farmers and end-users take advantage of futures to pre-sell or pre-purchase agricultural goods to insure themselves against market fluctuations. This ‘hedging'' reduces their risks and enables them to invest more safely.Intermediary traders ensure that the two sides meet. Traditionally, these traders are established firms that buy and sell futures from producers and to consumers, thereby providing the necessary liquidity. They shoulder the risks and gain their profits from the difference between the price stipulated in a future and the final market-price. These firms, naturally, have a profound knowledge and understanding of the commodity markets in which they are trading.In addition, such trading can take place both on exchanges (then called ‘futures trading'') and bilaterally ‘over-the-counter'' (OTC). Modern trading in commodity futures began in the USA during the mid-nineteenth century. Chicago, where the first modern wheat futures were traded, is still the largest and most important marketplace for agricultural commodities in the world, even though Asian countries have contested this in recent years.As futures no longer require the seller to possess the actual goods and because physical delivery is replaced by cash exchanges, their volume can be separated from the actual quantity of the commodity; their volume can also increase indefinitely as long as enough intermediaries want to deal with them. In the past, though, relatively few investors and intermediaries speculated on future markets. Moreover, regulatory agencies can and have imposed rules to limit the extent of speculation, for instance by regulating delivery dates, delivery locations, the timeframe for buying, certified stocks, storage fees, position limits, price limits and other factors.However, an increasing number of investors from outside the traditional markets—including banks, and pension and investment funds—have begun to speculate on agricultural futures exchanges. These large investors not only push the exploitation of price trends, but also—in contrast to the traditional intermediaries—are often not familiar with the cash market and the fundamentals. These outside speculators also often invest for reasons that have nothing to do with the cash market, for instance to protect themselves against price fluctuations on financial markets....an increasing number of investors from outside the traditional markets—including banks, and pension and investment funds—have begun to speculate on agricultural futures exchangesThis is the main reason that the US government imposed strict limits for financial speculation on commodity future exchanges. Only commercial participants with an interest in hedging were exempted. However, these rules and limits have been slowly eroded or removed. In 1991, one financial investor managed to get an official exemption from the limits in order to hedge his financial risk. In the following years, more traders were granted such exemptions or limit expansions. In 2000, the Commodity Futures Modernization Act exempted OTC trading from regulatory oversight and control. As a result of laxer oversight, other speculators joined the market, especially after the beginning of the financial crisis in 2006. These newcomers include banks such as Goldman Sachs, JP Morgan and Deutsche Bank; pension funds, such as the California State Teachers'' Retirement System; and hedge funds. A good deal of their trading is carried out through ‘swaps'', a type of OTC instrument.As these new and powerful speculators have entered the market, the total volume of new speculative investments in commodity indexes has increased more than tenfold in five years...As these new and powerful speculators have entered the market, the total volume of new speculative investments in commodity indexes has increased more than tenfold in five years: from an estimated $15 billion in 2003 to around $200 billion in 2008. ‘Index funds'', which aim to imitate the cash markets with futures, rose particularly high: between 2006 and 2008, index traders increased the demand for wheat futures from 33% to 100%. The number of daily outstanding contracts held by index traders on the Chicago Mercantile Exchange grew from approximately 30,000 in early 2004 to 220,000 in mid-2008 (US Senate PSI, 2009).The unexpected price hike in 2007–2008 has triggered a lively debate among economists about whether this increased speculation in futures has driven up cash prices. This discussion is both a theoretical debate about how futures markets work and an empirical debate about the reasons behind the price rise. The main questions are: Can speculation alone move the prices of futures and can there be excessive, that is, harmful, speculation in futures? Can futures prices influence the cash markets, and if so, how?Some claim that that the amount of trading in futures is irrelevant to the real price, because it is always a “zero-sum game” between traders (Irwin & Sanders, 2010). For every position that bets on a rising price (long position), there is a counterparty which bets on a falling price (short position). By this view, the amount of trading is detached from the price level. Indeed, it is not possible to demonstrate an unequivocal relationship between the amount of trading and the price.Yet, a large in-flow or out-flow of money can create a price shift. Statistical research has demonstrated the growing interdependence of commodity markets, both between the markets themselves and with financial markets. Tang & Xiong (2010) found that “concurrent with the rapidly growing index investment in commodities markets since the early 2000s, futures prices of different commodities in the US became increasingly correlated with each other. [...] In contrast, such commodity price co-movements were absent in China, which refutes growing commodity demands from emerging economies as the driver.”Silvennoinen & Thorp (2010) observe, “higher and more variable correlations between commodity futures and stock returns.” This trend—often called financialization—has also been observed by the United Nations Conference on Trade and Development (UNCTAD, 2009; Mayer, 2009). Similarly, an investigation by the US Senate took the view that the price of US futures had been influenced by excessive speculation (US Senate PSI, 2009).The second question, which is more relevant to consumers, remains: how can futures prices influence the cash price? Theoretically, the cash price should always converge with the futures price once the future is delivered. Some economists therefore assume that if futures are over-priced, the cash market will simply solve this problem by speculative arbitrage trading: buying something at a lower price and immediately reselling it for a higher price. Futures markets, in this view, are always driven by the cash markets, which themselves are determined by the fundamental mechanisms of supply and demand (Irwin & Sanders, 2010). However, it is logical to assume that futures markets have an influence on cash markets because, as all economists agree, they should predict the future price on the cash markets.Thus: how does speculation in futures influence prices on cash markets and how long does the effect last? Some scientists at the UN Food and Agricultural Organization were able to identify only short-term effects (Dreschler et al, 2010), but what does short-term mean? Different economists use different definitions: some define short-term as one day, others one week and some others one month. However, if the same effect leads to a one-month deviation, why should it not cause a deviation of many months? And what is the effect of a month-long deviation for people who need to buy food every day? As the famous economist John Maynard Keynes noted, in the long run we are all dead. Indeed, financial speculators cannot suspend the laws of supply and demand in the long-term, but they are able to cause short- to medium-term price increases, which, for the world at large, is bad enough.Traders are usually open about the effects of their trading. In April 2006, a hedge fund manager commented: “There is so much money going into commodity markets that it almost doesn''t matter how fundamentals behave” (WDM, 2010). At the same time, the investment bank Merill Lynch estimated that commodity prices had increased by 50% through speculation (Thornton, 2006). One of the most well-known speculators, George Soros, commented that, “Every speculation is also rooted in reality [however] speculators create the bubble that lies above everything. Their expectations, their gambling on futures help drive up prices, and their business distorts prices, which is especially true for commodities. It is like hoarding food in the midst of a famine, only to make profits on rising prices. That should not be possible” (WDM, 2010).Furthermore, if the futures price is higher than the cash price, traders on the cash market are inclined to store food in order to gain higher incomes. This is a common occurrence in hard commodity markets, such as oil or metal. However, hoarding of agricultural commodities driven by expectations of higher prices can also take place. Finally, divergent cash and futures prices, along with market volatility, cause other problems; higher costs are required for risk management and hedging, which harms the food business and ultimately affects food supply and prices (US Senate PSI, 2009).Many observers initially argued that the price spike of 2007–2008 was related to bad harvests, rising demand from importing countries—notably China—and the growing production of biofuels. A leading study by the World Bank was perhaps most influential at the time (World Bank, 2008). However, even when it became clear in early 2008 that harvests had recovered, the prices still rose. Moreover, prices on the cash and futures markets plummeted from mid-2008 onwards although demand from emerging countries remained high, even during the financial crisis. Some researchers are still not convinced that the 2007–2008 price spike was caused by speculation and continue to point to the increasing demand for biofuels, depreciation of the US dollar and the rising price of oil to explain this phenomenon (Headey & Fan, 2010).Nonetheless, criticism of financial speculations on commodity markets has been growing. In 2009, US hedge fund manager Michael W. Masters testified to the US Senate that passive investment, such as index funds, “provides no benefits to the markets while it exacts a heavy toll” (Masters, 2009). Accordingly, the US Senate and various scholars found signs of excessive and harmful speculation in US wheat markets (US Senate PSI, 2009; Lines, 2010; Gilbert, 2010). Headey & Fan (2010) reject the argument that rising demand from emerging countries could have caused the spike, writing that “low interest rates, and investment portfolio adjustments in favour of commodities” have an important role in price formation. The World Bank, in a recent working paper (Baffes & Haniotis, 2010), has also recognized the influence of financial speculators on prices: “We conjecture that index fund activity [...] played a key role during the 2008 price spike. Biofuels played some role too, but much less than initially thought. And we find no evidence that alleged stronger demand by emerging economies had any effect on world prices.” In a more recent paper by the UN Special Rapporteur on the Right to Food, Olivier de Schutter (2010) found that “a significant portion of the price increases and volatility of essential food commodities can only be explained by the emergence of a speculative bubble.”Another reason to assume that speculation is a harmful influence is that the oil-price peak of 2008 also seems to have been caused by speculation (Masters, 2009; Chevalier et al, 2010). This is not an independent explanatory variable for the price rise in agricultural commodities, but it highlights the impact of speculation.In addition to index funds, hedge funds have become increasingly important players in commodity markets. These funds, which can invest more freely than any other type of fund, often take highly speculative long and short positions to profit from rising or falling prices. Hedge funds can also move huge amounts of money. In July 2010, a single hedge fund bought almost all cocoa futures on the London commodity exchange, in an attempt to force cocoa buyers to buy from it at a monopolistic price. Afterwards, a group of cocoa processing companies called on the London International Financial Futures and Options Exchange to prevent such speculations and threatened to go to the New York commodity exchange, where tighter regulations are in force.Today, there is again a debate about whether speculation has a role in rising prices. On the one hand, harvest losses for wheat crops in July 2010 would justify a slight price rise. On the other hand, National Farmers Union representative Doug Sombke said at a US Commodity Futures Trading Commission hearing in the USA, “I think speculators have created a huge mess here for us. Farmers are feeling this today” (Reuters, 2010). Klaus Josef Lutz, CEO of BayWa, one of Europe''s biggest grain traders, commented that, “70 percent of the price rise can be blamed on speculators” (Handelsblatt, 2010). Finally, wheat is not nearly as scarce as the price rise would suggest: the global 2010 harvest is estimated to be the third largest of all time (FAO, 2010a).Higher food prices not only cause immediate problems; by reducing the available money for health care and education, they also produce negative long-term effectsTwo-thirds of developing countries are net importers of basic food commodities, even if the percentage of farmers in these countries is much higher than in industrialized countries. Furthermore, the relative household expenditure on food is much higher in developing countries: 60–80% compared with approximately 15% in the EU. This makes developing countries particularly vulnerable to price rises. They were hit hard in 2007–2008 and are again facing serious problems; the recent revolt in Tunisia being the most visible uprising sparked by food prices. Higher food prices not only cause immediate problems; by reducing the money available for health care and education, they also produce negative long-term effects.Some developing countries are commodity producers. As such, they profit, more or less, from price increases. However, their small-scale farmers are the weakest link in the production chain and profit the least from price rises. Apart from speculators, it is larger intermediaries, retailers or bigger farms that reap most of the profits (Höffler & Owour Ochieng, 2009).Growing ‘financialization'' makes it vital to reform commodity futures markets and set clear limits for speculation. Trading by financial speculators must take place on regulated and transparent commodity exchanges. The number and influence of speculators must be controlled through market and position limits. As Ann Berg, former commodity trader, stressed at a recent FAO special committee, “Over 150 years of futures trading history demonstrates that position limits are necessary in commodities of finite supply to curb excessive speculation and hoarding” (FAO, 2010b). Furthermore, some types of investment, such as index funds, could be strongly restricted. Generally, a legal demarcation between the commodities futures markets and the financial markets and a special agency to oversee it is required, such as the US Commodity Futures Trading Commission.The USA has learned its lesson from the past few years and is once again restricting financial speculation through reforms introduced in July 2010The USA has learned its lesson from the past few years and is once again restricting financial speculation through reforms introduced in July 2010. The US government aims to return OTC trading—mostly carried out as swaps—to multilateral trading and clearing platforms. Higher transparency requirements will apply and financial speculators will once again be limited by stricter position limits, without exemptions.As mentioned above, fewer agricultural commodities are traded on a large scale in the EU, but the London and Paris commodity exchanges still exert an influence. Moreover, stricter regulations in the USA could induce speculators to move their activities to European exchanges, even though there are strong position limits, at least at the Paris commodity exchange. Reforms of the financial markets in the EU are therefore necessary, and these are currently being debated. Michel Barnier, the European Commissioner for Internal Market and Services, has rightfully called speculation with food commodities a scandal. Whether his words will be followed with actions remains to be seen.In September 2010, the European Commission released draft regulations for OTC derivatives that include plans to create new trading platforms called ‘central counterparties''. The draft regulations require that OTC trades are limited and fulfil transparency requirements (EC, 2010). Along with these, two other directives will be revised: one on markets in financial instruments, such as futures, and one on market abuse. However, the EU has not yet acknowledged that commodities markets are not the same as financial markets. It is therefore not certain whether they will propose and pass appropriate regulation, which ought to include a special regulatory body, full transparency and position limits....farmers and buyers have a strong interest in managing their risks, and futures markets have proven to be an appropriate, if imperfect, mechanism...Given the problems that commodity futures markets have caused, it might be tempting to renounce them. Conversely, farmers and buyers have a strong interest in managing their risks, and futures markets have proven to be an appropriate, if imperfect, mechanism by which to do so. Other measures such as harvest assurances bring their own disadvantages. Moreover, local markets can also cause problems, as can political measures, especially when these include export bans.Nonetheless, it is prudent to explore alternatives. These could include regional or bilateral treaties between states, which have been successfully practised in several cases in Asia. The build-up of higher, more reliable reserves at the national, regional or global level is another option for dealing with volatility and uncertainty. Such reserves could also be virtual, as has been suggested by one leading agricultural researcher, Professor Joachim von Braun from Bonn University in Germany (von Braun, 2010).In the meantime, banks and hedge funds have also begun to invest in cash markets. In 2009, Goldman Sachs, Barclays and JP Morgan reportedly controlled physical commodities worth £16 billion—more than three times the amount they controlled in 2008. The head of one cocoa retail company commented on this development: “A lot of branch-alien money has poured into the market. The banks that are part of the game now are not giving us loans anymore or require much more collateral, as the markets have become more volatile. This is really grotesque” (Handelsblatt, 2010). This seems to be the next step in the ‘financialization'' of commodity markets, but the central question is whether banks should be able to buy our food or if they should get back to their initial purpose: serving the economy with credit.Food markets should serve the interests of people and not those of financial investorsFood markets should serve the interests of people and not those of financial investors. In this regard, politics has failed to protect food markets from excessive speculation. As former US President Bill Clinton said in a speech at the United Nations'' World Food Day on 16 October, 2008, “We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was President. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture” (Clinton, 2008).Given that hunger still exists in the world, even small price increases that are driven by financial investment are scandalous. We must not allow food to become a purely financial asset.? Open in a separate windowMarkus Henn

Science & Society Series on Food and Science

This article is part of the EMBO reports Science & Society series on ''food and science'' to highlight the role of natural and social sciences in understanding our relationship with food. We hope that the series serves a delightful menu of interesting articles for our readers.     

Does natal habitat preference modulate cereal kernel preferences in the rice weevil?

The influence of larval diet source in Sitophilus oryzae (L.), a primary grain feeder, on the choice of a new cereal host by young adult was investigated through a multiple choice comparative bioassay. For this purpose, virgin male and female adults, which had been reared as immatures in different grain commodities, were monitored according to their food preference in cylindrical arenas containing whole kernels of maize, rice, barley and wheat. The adults showed a clear individual preference for maize kernels, regardless of the previous food experience, sex and also the interval on which the adults are exposed to food. Males were much more mobile than females and visited more vigorously different commodities before the final choice. Female response was found to be related with male response to specific food sources. Hence, our results indicate that there was no natal habitat preference induction, since maize was, in most cases, the final commodity choice.     

Variation in Yield Gap Induced by Nitrogen,Phosphorus and Potassium Fertilizer in North China Plain

A field experiment was conducted under a wheat-maize rotation system from 1990 to 2006 in North China Plain (NCP) to determine the effects of N, P and K on yield and yield gap. There were five treatments: NPK, PK, NK, NP and a control. Average wheat and maize yields were the highest in the NPK treatment, followed by those in the NP plots among all treatments. For wheat and maize yield, a significant increasing trend over time was found in the NPK-treated plots and a decreasing trend in the NK-treated plots. In the absence of N or P, wheat and maize yields were significantly lower than those in the NPK treatment. For both crops, the increasing rate of the yield gap was the highest in the P omission plots, i.e., 189.1 kg ha⁻¹ yr⁻¹ for wheat and 560.6 kg ha⁻¹ yr⁻¹ for maize. The cumulative omission of P fertilizer induced a deficit in the soil available N and extractable P concentrations for maize. The P fertilizer was more pivotal in long-term wheat and maize growth and soil fertility conservation in NCP, although the N fertilizer input was important for both crops growth. The crop response to K fertilizers was much lower than that to N or P fertilizers, but for maize, the cumulative omission of K fertilizer decreased the yield by 26% and increased the yield gap at a rate of 322.7 kg ha⁻¹ yr⁻¹. The soil indigenous K supply was not sufficiently high to meet maize K requirement over a long period. The proper application of K fertilizers is necessary for maize production in the region. Thus, the appropriate application of N and P fertilizers for the growth of both crops, while regularly combining K fertilizers for maize growth, is absolutely necessary for sustainable crop production in the NCP.     

Stress-tolerant P-solubilizing microorganisms

Drought, high/low temperature, and salinity are abiotic stress factors accepted as the main reason for crop yield losses in a world with growing population and food price increases. Additional problems create nutrient limitations and particularly low P soil status. The problem of phosphate fertilizers, P plant nutrition, and existing phosphate bearing resources can also be related to the scarcity of rock phosphate. The modern agricultural systems are highly dependent on the existing fertilizer industry based exclusively of this natural, finite, non-renewable resource. Biotechnology offers a number of sustainable solutions that can mitigate these problems by using plant beneficial, including P-solubilizing, microorganisms. This short review paper summarizes the current and future trends in isolation, development, and application of P-solubilizing microorganisms in stress environmental conditions bearing also in mind the imbalanced cycling and unsustainable management of P. Special attention is devoted to the efforts on development of biotechnological strategies for formulation of P-solubilizing microorganisms in order to increase their protection against adverse abiotic factors.     

Drivers leading to higher food prices: biofuels are not the main factor

Since 2007, the overall rise in food prices in the USA was twice that of the overall inflation rate, led by inflation for poultry and dairy products in particular. Prominent studies have indicated that the main drivers associated with the rise in food prices in the past 3 yr are the increased energy costs (and the trickle-down impact on farm input costs) and the devaluation of the US dollar. However, currently, the impact of crude oil as one of the primary drivers in food prices has waned significantly, as crude oil prices have fallen dramatically since late 2008. The data reviewed here debunk the popular myth that food producers, particularly farmers growing corn or soybean for biofuel feedstocks, are making huge profits with high commodity prices. Producers continue to face extraordinary risks in their farming operations, and profit margins have narrowed considerably because of the high input prices driven by high energy costs. One of the primary solutions to the food price inflation is to increase the supply of commodity crops in a responsible way that is both respectful and sustainable regarding economic, social, and environmental aspects. At the center of this solution is implementing and developing new technologies to increase crop yields and nutritional values without increasing the amount of fossil-based inputs used in agriculture. Conventional breeding, molecular breeding, genomics, and biotechnology are pivotal technologies for increasing crop yields to meet these supply needs, combined with the impacts of other new technologies and best management practices in agricultural production.     

Plant Growth-Promoting Effect of the Chitosanolytic Phosphate-Solubilizing Bacterium Burkholderia gladioli MEL01 After Fermentation with Chitosan and Fertilization with Rock Phosphate

Phosphate-solubilizing bacteria (PSB) are important plant growth-promoting rhizobacteria that can increase soil fertility through the solubilization of insoluble inorganic phosphate and organophosphorus. In this study, a PSB, Burkholderia gladioli MEL01, was isolated and identified from rice–wheat rotation rhizosphere soil. MEL01 had an excellent phosphate-solubilizing capacity (reaching 107.69 mg/L) toward insoluble inorganic phosphate rock phosphate. HPLC analysis revealed that the mechanism of phosphate solubilization of MEL01 was probably due to secreted oxalic acid and gluconic acid transformation of phosphate from insoluble to soluble. MEL01 also exhibited 4030 U/L specific chitosanase activity when cultured with chitosan fermentation medium. Interestingly, the chitosan hydrolysis product chitooligosaccharide could significantly enhance the MEL01 phosphate-solubilizing capacity. Pot experiments showed that MEL01 chitosan medium fermentation liquor (MCMFL) could promote improvement of soil available phosphorus and pakchoi growth when supplemented with phosphate rock phosphate as the phosphate fertilizer. In addition, pot experiments demonstrated that MCMFL could also promote the growth of wheat, which could decrease the amount of compound fertilizer used. Microbial diversity analysis showed that the genera Pseudomonas, Burkholderia, Mycoplana, and Cellvibrio were enriched, which might participate in synergetic phosphate solubilization. Therefore, after fermentation with chitosan and fertilization with rock phosphates, MEL01 has potential as a phosphate biofertilizer in ecological agricultural production.

     

Fertilizing nature: a tragedy of excess in the commons

Globally, we are applying excessive nitrogen (N) fertilizers to our agricultural crops, which ultimately causes nitrogen pollution to our ecosphere. The atmosphere is polluted by N₂O and NO_x gases that directly and indirectly increase atmospheric warming and climate change. Nitrogen is also leached from agricultural lands as the water-soluble form NO₃ ⁻, which increases nutrient overload in rivers, lakes, and oceans, causing “dead zones”, reducing property values and the diversity of aquatic life, and damaging our drinking water and aquatic-associated industries such as fishing and tourism. Why do some countries show reductions in fertilizer use while others show increasing use? What N fertilizer application reductions could occur, without compromising crop yields? And what are the economic and environmental benefits of using directed nutrient management strategies?In his 1968 seminal paper, “The Tragedy of the Commons,” the late Garrett Hardin argued that individuals, acting in rational pursuit of their own self-interest, will sacrifice the long-term viability of a shared resource for short-term gain. “Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.” In the case of pollution, he wrote, “Here it is not a question of taking something out of the commons, but of putting something in – sewage, or chemical wastes into water” [1]. Perhaps one of the best examples of this “over-contribution” is nitrogen (N) fertilizers, where individual rational behaviour (i.e., applying high fertilizer rates to maximize short-term economic yield) can cause long-range harm to the environment. The true cost of applying high rates of N fertilizers in order to maximize overall yield is already apparent in the form of global climate change. The incentive to over-apply N fertilizers is likely to continue, as both the Food and Agriculture Organization (FAO) and the United Nations (UN) have predicted high future demand for cereal production, especially within the developing nations, due to predicted increases in populations and dietary shifts.In developed countries, crop yields have nearly reached their biological maximum and increasing fertilizer use is unlikely to provide any significant additional gains. In contrast, in developing countries, there is still a large yield gap. Although we need to increase crop yields to feed the growing global population, we also need to do this in an environmentally sustainable way. We cannot increase our yields by increasing N fertilizer application (not even in areas of the world that still have an exploitable yield gap) at the expense of the ozone layer or marine life. Certainly, while regions with an N balance surplus can reduce N fertilizer application rates without yield losses (i.e., Denmark), other regions will need to increase their N use (i.e., sub-Saharan Africa), but still use best management practices. N balanced countries may also be able to reduce N fertilizer rates without yield loss by employing new technologies such as improved plant varieties, region-specific farming practices, time-release N fertilizer, drip irrigation, crop rotation, bioinoculants, and similar approaches.     

Diversifying crops for food and nutrition security – a case of teff

There are more than 50000 known edible plants in the world, yet two‐thirds of global plant‐derived food is provided by only three major cereals – maize (Zea mays), wheat (Triticum aestivum) and rice (Oryza sativa). The dominance of this triad, now considered truly global food commodities, has led to a decline in the number of crop species contributing to global food supplies. Our dependence on only a few crop species limits our capability to deal with challenges posed by the adverse effects of climate change and the consequences of dietary imbalance. Emerging evidence suggests that climate change will cause shifts in crop production and yield loss due to more unpredictable and hostile weather patterns. One solution to this problem is through the wider use of underutilised (also called orphan or minor) crops to diversify agricultural systems and food sources. In addition to being highly nutritious, underutilised crops are resilient in natural and agricultural conditions, making them a suitable surrogate to the major crops. One such crop is teff [Eragrostis tef (Zucc.) Trotter], a warm‐season annual cereal with the tiniest grain in the world. Native to Ethiopia and often the sustenance for local small farmers, teff thrives in both moisture‐stressed and waterlogged soil conditions, making it a dependable staple within and beyond its current centre of origin. Today, teff is deemed a healthy wheat alternative in the West and is sought‐after by health aficionados and those with coeliac disease or gluten sensitivity. The blooming market for healthy food is breathing new life into this underutilised crop, which has received relatively limited attention from mainstream research perhaps due to its ‘orphan crop’ status. This review presents the past, present and future of an ancient grain with a potential beyond its size.     

Green manure technology: Potential,usage, and limitations. A case study for lowland rice

The growing concern about the sustainability of tropical agricultural systems stands in striking contrast to a world-wide decline in the use of soil-improving legumes. It is timely to assess the future role that soil-improving legumes may play in agricultural systems. This paper reviews recent progress, potential, and limitations of green manure technology, using lowland rice cropping systems as the example.Only a few legume species are currently used as green manures in lowland rice. Sesbania cannabina is the most widely used pre-rice green manure for rice in the humid tropics of Africa and Asia. Astragalus sinicus is the prototype post-rice green manure species for the cool tropics. Stem-nodulating S. rostrata has been most prominent in recent research. Many green manure legumes show a high N accumulation (80–100 kg N ha^-1 in 45–60 days of growth) of which the major portion (about 80%) is derived from biological N₂ fixation. The average amounts of N accumulated by green manures can entirely substitute for mineral fertilizer N at current average application rates. With similar N use efficiencies, green manure N is less prone to loss mechanisms than mineral N fertilizers and may therefore contribute to long-term residual effects on soil productivity.Despite a high N₂-fixing potential and positive effects on soil physical and chemical parameters, the use of green manure legumes for lowland rice production has declined dramatically world-wide over the last 30 years. Land scarcity due to increasing demographic pressure and a relatively low price of urea N are probably the main determining factors for the long-term reduction in pre-rice green manure use. Post-rice green manures were largely substituted for by high-yielding early-maturing grain legumes. Unreliability of green manure performance, non-availability of seeds, and labor intensive operations are the major agronomic constraints. The recognition and extrapolation of niches where green manures have a comparative advantage may improve an often unfavorable economic comparison of green manure with cash crop or fertilizer N. Socio-economic factors like the cost of land, labor, and mineral N fertilizer are seen to determine the cost-effectiveness and thereby farmers' adoption of sustainable pre-rice green manure technology. Hydrology and soil texture determine the agronomic competitiveness of a green manure with N fertilizers and with alternative cash crops. In general, the niches for pre-rice green manure are characterized by a relatively short time span available for green manure growth and a soil moisture regime that is unfavorable for cash crops (flood-prone rainfed lowlands with coarse-textured soils).Given the numerous agronomic and socio-economic constraints, green manure use is not seen to become a relevant feature of favourable rice-growing environments in the foreseeable future. However, in environments where soil properties and hydrology are marginal for food crop production, but which farmers may be compelled to cultivate in order to meet their subsistence food requirements, green manures may have a realistic and applicable potential.     

Minicolumn chromatography for the detection of sterigmatocystin in agricultural commodities

A simple method for detecting sterigmatocystin in agricultural commodities by minicolumn chromatography was developed. Clean-up as well as semi-quantitative estimation could be done on the same column. The method is suitable for the analysis of samples of rice, wheat, maize and sorghum contaminated with sterigmatocystin and could be used as an effective preliminary screening technique in public health laboratories.     

Unravelling the anthropogenic pathways of phosphorus in the food production and consumption system of Bangladesh through the lens of substance flow analysis

Phosphorus (P) is central to food production. Current understanding about the global phosphorus system is dominated by studies in wealthier nations where soil fertility, fertilizer supply chains, and agronomic tracking have long been established. In contrast, developing nations are experiencing major agricultural transitions and the associated phosphorus flows remain a significant knowledge gap. We compiled and analyzed several years of recent agricultural datasets for Bangladesh, currently the eighth most populous nation, using substance flow analysis for phosphorus. From 2000 to 2016, rice production increased by >50% and remained the dominant crop with remarkably higher phosphorus flow (49.96 kt in 2016) than all other crops. Phosphorus content of livestock products in 2016 exceeded 6.00 kt, more than double in the year 2000, driven primarily by phosphorus in milk and secondarily in meat/eggs. These agricultural changes coincided with a doubling of national phosphorus fertilizer consumption since 2000, a fourfold increase since the global food crisis (2009), and a pronounced rise in the phosphorus import dependency ratio, which was the highest among all countries compared. In turn, during 2010s fertilizer phosphorus use exceeded phosphorus as food + feed production leading to soil phosphorus accumulation, and loss as burned manure became one of the largest phosphorus flows in the entire system, equivalent to half of fertilizer use. This dramatic reconfiguration of the Bangladesh phosphorus system illustrates an important case of agricultural expansion and intensification that is still playing out, with similar situations occurring in developing nations where population growth rates are high, and access to commercial fertilizers has risen.     

Spatial and Temporal Variations of Crop Fertilization and Soil Fertility in the Loess Plateau in China from the 1970s to the 2000s

Increased fertilizer input in agricultural systems during the last few decades has resulted in large yield increases, but also in environmental problems. We used data from published papers and a soil testing and fertilization project in Shaanxi province during the years 2005 to 2009 to analyze chemical fertilizer inputs and yields of wheat (Triticum aestivum L.) and maize (Zea mays L.) on the farmers'' level, and soil fertility change from the 1970s to the 2000s in the Loess Plateau in China. The results showed that in different regions of the province, chemical fertilizer NPK inputs and yields of wheat and maize increased. With regard to soil nutrient balance, N and P gradually changed from deficit to surplus levels, while K deficiency became more severe. In addition, soil organic matter, total nitrogen, alkali-hydrolysis nitrogen, available phosphorus and available potassium increased during the same period. The PFP of N, NP and NPK on wheat and maize all decreased from the 1970s to the 2000s as a whole. With the increase in N fertilizer inputs, both soil total nitrogen and alkali-hydrolysis nitrogen increased; P fertilizer increased soil available phosphorus and K fertilizer increased soil available potassium. At the same time, soil organic matter, total nitrogen, alkali-hydrolysis nitrogen, available phosphorus and available potassium all had positive impacts on crop yields. In order to promote food safety and environmental protection, fertilizer requirements should be assessed at the farmers'' level. In many cases, farmers should be encouraged to reduce nitrogen and phosphate fertilizer inputs significantly, but increase potassium fertilizer and organic manure on cereal crops as a whole.     

不同包膜控释尿素对农田土壤氨挥发的影响

为了探索包膜控释尿素土壤氨挥发损失规律特征和提高肥料氮素利用率,采用小麦玉米轮作田间试验,通过与普通尿素进行对比,运用土壤氨挥发原位测定方法——通气法系统研究了硫包膜和树脂包膜控释尿素的施用对小麦玉米轮作农田土壤氨挥发的影响.研究结果表明:在两种施氮量水平下(210 kg/hm2和300 kg/hm2),与普通尿素相比,硫包膜和树脂包膜控释尿素在小麦基肥期、小麦追肥期和玉米施肥期的施用均减少了土壤氨挥发的累积损失量,分别达35.1％-54.3％、59.6％-75.2％、65.6％-98.1％;有效降低了土壤氨挥发通量峰值且延迟其出现时间3-8 d,并能延缓土壤氨挥发主要阶段的时间分别为4-12 d、5-12 d.在小麦玉米轮作周年中,控释尿素土壤氨挥发累积损失量为28.39-43.35 kg/hm2,土壤氨挥发损失率为4.48％-5.63％,控释尿素时段土壤氨挥发通量比普通尿素降低了51.0％-70.8％;且树脂包膜控释尿素的施用降低小麦玉米轮作农田土壤氨挥发的效果优于硫包膜控释尿素.     

Fungi that produce mycotoxins: Conditions and occurrence

The occurrence of mycotoxins, in agricultural commodities is a worldwide problem with almost all commodities being potentially susceptible to contamination under the proper conditions. The genera of fungi most implicated are Aspergillus, Penicillium and Fusarium, although the potential for toxin production varies considerably within any given species.Conditions that affect toxin production include fungal strain variation, genetic susceptibility of the host plant or commodity, moisture content, commodity composition, temperature, aeration, microbial population and stress factors. There is undoubtedly interaction between these factors so that laboratory studies involving limited variables can only, at best, approximate field conditions.Natural contamination with mycotoxins has been reported for most of the major agricultural commodities in the world including corn, wheat, rice, millet, barley, oats, sorghum, peanuts, beans, copra, some fruits and nuts and various forages; strangely, soybeans do not appear to be involved to any major extent. The major mycotoxins on commodities reported to date include aflatoxin, the trichothecenes, ochratoxin, citrinin, zearalenone, sporidesmins and some tremorgens. However, laboratory studies have shown that the fungi are capable of producing hundreds of toxic chemicals, most of which are not included in routine analyses. In addition, since toxin effects are often insidious and may go undetected, the true dimensions of the mycotoxin problem are unknown.     

The uptake of phosphorus by wheat and clover from four inorganic soil phosphate fractions after the addition of contrasting types of phosphatic fertilizer

Summary Basic slag, calcinated rock phosphate, monocalcium phosphate and rock phosphate were applied to acid, clay-loam soil at rates of 0, 50 and 100 ppm P. Yield response was assessed using subterranean clover and residual values using clover or wheat. Basic slag and monocalcium phosphate were equally efficient in producing increased yield in the first period and basic slag slightly better during the residual phase. Calcined rock phosphate was slightly inferior to rock phosphate at first, but was equal during the second stage: both were markedly inferior to the other two fertilizers when clover was the crop.The soil phosphorus was fractionated by a modified Chang and Jackson procedure. There were shown to be significant differences in the forms of phosphate used by the different species and by the same species at different times. It was concluded that the better residual value of basic slag can, in part, be ascribed to the greater solubility of the residual fertilizer in the soil over the reaction products of fertilizer and soil.     

Stable isotope analysis of aquatic invertebrate communities in irrigated rice fields cultivated under different management regimes

In this study we have used stable isotope analysis to identify major food resources driving food webs in commercial rice agroecosystems and to examine the effects of agricultural management practices on the trophic structure of these food webs. Potential carbon sources and aquatic macroinvertebrate consumers were collected from large-scale rice farms in south-eastern Australia cultivated under three different crop management regimes conventional-aerial (agrochemicals applied, aerially sown), conventional-sod (agrochemicals applied, directly sown) and organic-sod (agrochemical-free, directly sown). Evidence from stable isotope analysis demonstrated the importance of food sources, such as biofilm and detritus, as the principal energy sources driving aquatic food webs in rice agroecosystems. Despite the greater diversity of potential food sources collected from the organic-sod regime across all sampling occasions, the range of food resources directly assimilated by macroinvertebrate consumers did not differ substantially across management regimes. Trophic complexity of aquatic food webs, as evidenced by the number of trophic levels identified using δ¹⁵N data, differed across management regimes at the early season sampling. Sites with low or no agrochemical applications contained more than two trophic levels, but at the site with the highest pesticide application no primary or secondary consumers were found. Our data demonstrates that the choice of agricultural management regime has a season-long influence on aquatic food webs in rice crops, and highlights the importance of conserving non-rice food resources that drive these trophic networks.     

Salinity imposed stress on principal cereal crops and employing seed priming as a sustainable management approach

Cereal crops specifically maize, wheat, and rice have a prominent role in feeding the world's population. In the context of a growing population and a potential increase in food demand in coming years, yield output of cereals is certainly necessary. Concurrently, the production of these crops is challenged with several abiotic and biotic stresses. Salinity, a leading abiotic stress in global agriculture, significantly reduce growth, yield and overall production of cereals and if not managed through successive efforts, global food security will be uncertain in the future. Thus, employment of sustainable approaches in achieving the targets of food demands of increasing population needs focused attention. Integration of agronomic and biotechnological methods can manage salinity induced drastic effects on crops which would lead to increased crop productivity. In this review, we focus on employing seed priming techniques as possible salt stress management approaches in three major cereal crops (maize, rice, and wheat).     

The Growing Price Gap between More and Less Healthy Foods: Analysis of a Novel Longitudinal UK Dataset

Objectives

The UK government has noted the public health importance of food prices and the affordability of a healthy diet. Yet, methods for tracking change over time have not been established. We aimed to investigate the prices of more and less healthy foods over time using existing government data on national food prices and nutrition content.

Methods

We linked economic data for 94 foods and beverages in the UK Consumer Price Index to food and nutrient data from the UK Department of Health''s National Diet and Nutrition Survey, producing a novel dataset across the period 2002–2012. Each item was assigned to a food group and also categorised as either “more healthy” or “less healthy” using a nutrient profiling model developed by the Food Standards Agency. We tested statistical significance using a t-test and repeated measures ANOVA.

Results

The mean (standard deviation) 2012 price/1000 kcal was £2.50 (0.29) for less healthy items and £7.49 (1.27) for more healthy items. The ANOVA results confirmed that all prices had risen over the period 2002–2012, but more healthy items rose faster than less healthy ones in absolute terms:£0.17 compared to £0.07/1000 kcal per year on average for more and less healthy items, respectively (p<0.001).

Conclusions

Since 2002, more healthy foods and beverages have been consistently more expensive than less healthy ones, with a growing gap between them. This trend is likely to make healthier diets less affordable over time, which may have implications for individual food security and population health, and it may exacerbate social inequalities in health. The novel data linkage employed here could be used as the basis for routine food price monitoring to inform public health policy.     

Molecular Improvement of Tropical Maize for Drought Stress Tolerance in Sub-Saharan Africa

The C4 grass Zea mays (maize or corn) is the third most important food crop globally after wheat and rice in terms of production and the second most widespread genetically modified (GM) crop, after soybean. Its demand is predicted to increase by 45% by the year 2020. In sub-Saharan Africa, tropical maize has traditionally been the main staple of the diet, 95% of the maize grown is consumed directly as human food and as an important source of income for the resource—poor rural population. However, its growth, development and production are greatly affected by environmental stresses such as drought and salinization. In this respect, food security in tropical sub-Saharan Africa is increasingly dependent on continuous improvement of tropical maize through conventional breeding involving improved germplasm, greater input of fertilizers, irrigation, and production of two or more crops per year on the same piece of land. Integration of advances in biotechnology, genomic research, and molecular marker applications with conventional plant breeding practices opens tremendous avenues for genetic modifications and fundamental research in tropical maize. The ability to transfer genes into this agronomically important crop might enable improvement of the species with respect to enhanced characteristics, such as enriched nutritional quality, high yield, resistance to herbicides, diseases, viruses, and insects, and tolerance to drought, salt, and flooding. These improvements in tropical maize will ultimately enhance global food production and human health. Molecular approaches to modulate drought stress tolerance are discussed for sub-Saharan Africa, but widely applicable to other tropical genotypes in Central and Latin America. This review highlights abiotic constraints that affect growth, development and production of tropical maize and subsequently focuses on the mechanisms that regulate drought stress tolerance in maize. Biotechnological approaches to manage abiotic stress tolerance in maize will be discussed. The current status of tropical maize transformation using Agrobacterium as a vehicle for DNA transfer is emphasized. This review also addresses the present status of genetically modified organisms (GMOs) regulation in sub-Saharan Africa.     

Analyzing the Long Term Cohesive Effect of Sector Specific Driving Forces

Financial markets are partially composed of sectors dominated by external driving forces, such as commodity prices, infrastructure and other indices. We characterize the statistical properties of such sectors and present a novel model for the coupling of the stock prices and their dominating driving forces, inspired by mean reverting stochastic processes. Using the model we were able to explain the market sectors’ long term behavior and estimate the coupling strength between stocks in financial markets and the sector specific driving forces. Notably, the analysis was successfully applied to the shipping market, in which the Baltic dry index (BDI), an assessment of the price of transporting the major raw materials by sea, influences the shipping financial market. We also present the analysis of other sectors—the gold mining market and the food production market, for which the model was also successfully applied. The model can serve as a general tool for characterizing the coupling between external forces and affected financial variables and therefore for estimating the risk in sectors and their vulnerability to external stress.