Better grain export infrastructure an urgent need

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Major agricultural exporters urgently need to upgrade their networks of road, rail and waterways to prepare to feed a world population forecast to grow by one-third by mid-century, the head of global agribusiness company Bunge Ltd said this week.

Alberto Weisser, chief executive of Bunge, listed improved infrastructure and the removal of trade barriers as two concrete steps to assure adequate food availability.

Experts say farm output must also double in order to feed a more populous and wealthier world. The global population is forecast to hit 9 billion people by 2050.

Current problems with low water levels on the Mississippi River that are hampering grain barges and imperiling U.S. exports are only a slice of the infrastructure problems around the globe, Weisser said.

"Infrastructure gets the attention it deserves only when it is dying," Weisser said at a speech at Johns Hopkins University's School of Advanced International Studies.

For example, growers in South America battle clogged roads annually to bring crops to port, and Weisser said Brazilian farmers lose the equivalent $1.40 a bushel on their soybean crops because of transportation bottlenecks.

"We need the ability to grow commodities where it makes the most sense to grow them and to move them where they need to go," Weisser said.

"The solution is probably going to be a public-private partnership," he said, noting some farmers in Mato Grosso, an agricultural powerhouse in center-west Brazil, are paying to pave local roads so they can move crops more rapidly.

Port facilities in Brazil and Argentina, which have become critical suppliers of grain and oilseeds in recent years, are "a nightmare," Weisser said. "It will make you cry."

The World Economic Forum has suggested the private-sector contributions to infrastructure will be essential given the immense needs worldwide and limited government funds.

The Organization for Economic Cooperation and Development has said that $300 billion in port and rail improvements are needed globally through 2030.

Food-exporting nations such as the United States, Australia, Brazil and Russia all face constraints on transportation. "These countries, indeed, are countries that need to act," said Weisser.

Asked if low water on the Mississippi River was diverting U.S. grain exports from New Orleans, Weisser said, "We are not seeing yet a change to different areas."

It would be more economical to shift cargo to rail from barge in order to bypass the river bottleneck than to change ports, he said.

Founded in 1818, Bunge is one of the world's largest food processors and exporters with 35,000 employees in 40 countries. Its products range from sugar and food ingredients to fertilizer.



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