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Guy Trafford finds that no matter how the world's population tracks in future, it will still be large and the demand for food will always be strong, including for the foods NZ exports

Guy Trafford finds that no matter how the world's population tracks in future, it will still be large and the demand for food will always be strong, including for the foods NZ exports

Perhaps one of the biggest ironies to come out of China for several decades is its population growth, or lack of it, which is now being mooted as a potential risk to its future growth.

In 2019 despite China’s overall population continuing to grow (going from 1.39 billion to 1.4 billion), the number of births was the lowest since the 1960s.

While many concerned with the state of the planet would welcome this, some see the birth rate falling below the rate of replacement threatening the ambitious growth targets set by the Chinese political leaders.

At one point in the 1990s the ‘fertility rate per family’ dropped as low as 1.2 children per family before bouncing back up to around 1.58 by 2017 but it is now rapidly trending back down with 1.49 in 2018 and 1.47 in 2019. This has/is occurring despite a move away from the 1 child family edict and the government now encouraging families to have two children.

The issue is that there is a rapidly ageing population in China and the concern is there will be a decline in the future work force. To achieve a stable population a replacement rate of 2.1 is the accepted figure with 2 to replace parents and 0.1 to meet ‘losses’ outside of the family.

Since 1970, the median age of China’s population has continued to increase from around 20 years to around 37 years in 2015. According to estimates from the United Nations, the increasing trend will slow down when the median age will get close to 50 years in the middle of the 21st century and will remain at around 50 years up to 2100.  As New Zealand is aware the slowing in population growth and the ageing population is a double edged sword with the increasing cost of aged welfare being the other cost on growth. The issue China is looking to have to face is the same that many developed nations are facing. Japan probably has been at the forefront of this with its population falling to the point where it is now at where it was in 1990 and in the meantime the average age of the population is growing.

There are some important differences between a country like Japan compared to China. A big one is that Japan is already a wealthy country and although ageing many Japanese have invested offshore to provide income despite what occurs within Japan (remember the Japanese housewife).

China on the other hand, despite the rapid progress it has made over the last decade or so is likely to get old before it gets wealthy, hence why the concern it has around its population.

A feature which could be considered that both countries have is an aversion both culturally and institutionally to allowing in immigrants to bolster the workforce.

New Zealand is somewhat different to many other developed countries with a relatively high growth rate. However, in our case the increase is due as much to immigration as natural births.

For New Zealand’s agriculture exports the ageing populations of our trading partners come with mixed blessings. On the negative is the potential risk of lowering ability to pay the prices we desire for the products we sell. But with the ageing population generally comes a de-population of the rural sector and people to work the land.

Technology no doubt will take up some of the slack however most countries (I include New Zealand here) are operating well below their potential production levels due to a lack of labour in the primary sectors. COVID-19 has certainly brought it home here but even before the pandemic it was the case. This may create more demand for many land-based products.

But if the past has taught us anything it is that the future is virtually impossible to predict.

It could be that factories which produce ‘synthetic foods’ are the solution for the masses or some other left field event occurs. Perhaps even the African continent, an incredibly underperforming part of the world with huge potential gets it act together and fills in the gaps.

One thing we can be almost certain of (future pandemics aside) is that we will be feeding a lot more people in the future than we are today. Whether we get to the 10 billion or so as predicted by the UN or not, New Zealand’s produce should be in demand for some time yet.

We just have to hope that those that want it can afford to pay for it and the world still has enough sanity left to allow trade to happen.

P2 Steer

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11 Comments

Given that overpopulation is the main cause of the world's present woes it may be that those nations with declining populations are on the right track. Saw on Australian TV last night that Aus universities have halved the cost of agricultural courses and doubled the cost of humanities courses. A far more supportive approach than here where our govt seems hell bent on putting farmers out of business.

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"While many concerned with the state of the planet would welcome this, some see the birth rate falling below the rate of replacement threatening the ambitious growth targets set by the Chinese political leaders." Falling birth rate threatening ambitious growth? Does anyone ever ask themselves the point of this "growth"? If the point is to lift living standards, although I'd question the validity of that notion, surely a shrinking population achieves exactly that? Less people sharing the pie, instead of growing the pie and trashing the planet in the process?

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NZ has had a rapid population growth with no significant increase in resources (or productivity) - result we have gone backwards compared to other developed countries which now matters since our talent is flowing overseas.
From Google ""Papua New Guinea (PNG) is a resource-rich country, yet almost 40 percent of the population lives in poverty."" PNG now has a population of 9m; it doubled in 32 years. If they had kept their population stable then their people would be living comfortably now.
If you are concerned by climate change then a deliberate, planned population decrease must be encouraged. We claim (maybe falsely) to set an example with climate change but are unwilling to even discuss a population policy.

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"Sign of our success" and "good problem to have" - Bill English

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NZ is in the same boat - even with immigration we are ageing fast and those immigrants will be sought after by others having the same issue (immigrants get old as well). I spoke to a demographer last week - he did his Phd on Northern Hawkes Bay - in @20 years time the working age population will be 40% smaller than it is now. This will affect nearly every rural area in NZ, as it already is, and the issue will be finding people to do work. I was in Hawaii a few years ago and they now have large areas of fertile land in fallow as there is no one to work the land - Ag competes against tourism and health care (someone has to look after us oldies). The islands now only produce 10% of there food requirements. This reality is ignored by politicians and primary producers of all strips but will be the big driver in the future. You need to be able to automate and mechanise production - if you can't its not a bright outlook.

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The World will be unrecognisable in 20 years. Half the jobs of today won't exist, if to believe the futurists. Will new ones replace them? Maybe, but I can't think what? We are told our food will be produced in a vat, or vertical farm. Energy to support human endeavours is likely to be scarce, with dwindling fossil reserves and the alternatives not a one to one replacement. Environmentally the landscape could look very different, especially if nothing is done about emissions. There will never be a shortage of people wanting to move countries, especially as the equatorial zone becomes uninhabitable.

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You are correct rural NZ is emptying and moving to our cities. What average or better school kid wants to stay in rural or small town NZ - all the excitement is in the cities. However your solution doesn't work - sociologists realised 100 years ago that immigrants prefer cities. For example you can bring in dairy workers from overseas and tie their work permit to a rural location but their children will leave asap and so will they once they get citizenship.
If you want to keep rural NZ populated (I do) then increase wages (note in the distant past a typical rural worker earned more than a city slum dweller) and make an effort to keep rural NZ worth living in: schools, pubs, sports and community. Should city dwellers like myself be taxed to keep rural NZ happy - I'd vote yes because your alternative is low wage immigration and selling NZ to foreigners. My first step would be to remove the accommodation allowance areas - my daughter was getting over $300pw with this benefit - if she and her kid had moved to a remote area it would have been $80pw. - NZ govt is almost bribing beneficiaries and low paid to stay in our cities.

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"Perhaps one of the biggest ironies to come out of China for several decades is its population growth, or lack of it, which is now being mooted as a potential risk to its future growth."
Aaarrrgggghhhh!!!!!!! It is GROWTH that is the risk, not a stabilizing or falling population. When, oh when, oh when, do economists and the like begin to even contemplate this and how we continue to prosper as we actually DE-grow???

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Generals fight the last war and so do economists. Once a growth of GDP depended on workers - it was true when NZ became a mutton and wool exporter and it worked when the USA built factories that supplied the world. It is no longer true. A healthy robust economy today doesn't need a mass of manual labourers. What does Auckland do with its flood of immigrants from overseas and from rural NZ? It has them preparing fast food and working in other low paid service jobs.

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The trouble is gross margins from food related businesses are miserable and sustainable net profits exist almost in legend. NZ is better off exporting access to its IP.

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From the comments above the future looks like an ageing rural population with limited production as the global masses eat lab reared foods. So other than trees as a carbon store, why aren't climate friendly land uses discussed more? Sugar cane produces biofuel, other crops do as well, but we hear very little about these. I'm guessing this is because the petro-chemical giants own the intellectual property rights? They are still making too much $$ out of oil, so have no need to switch as yet. So why aren't governments more engaged in this? It must offer benefits in technology development, help reduce climate pressures and provide a new employment sector. Large parts of New Zealand could grow and develop clean biofuels, so why no interest?

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