The Impact of Agriculture and Natural Resources on The World's Economy

Through the history of civilization the ability to attain develop and use our planet’s agricultural resources has been vital for the human evolution. Civilizations prospered and vanished; wars were started, won and lost because of natural resources. Today the fundamental needs of our nations, societies and individuals have not changed.

The advancement of globalization and industrialization has created unprecedented economic growth and increase in the standard of living of nations struggling some fifty years ago. Double digits growth in the BRIC countries (Brazil, Russia, India, China), sparked by liberalization of their economies, has led to substantial generation of wealth. This, along with the dramatic increase in population, caused increased demand for virtually every essential commodity.

Despite the fact that the world has entered a deep recession, thus slowing the demand for most agricultural resources, the population of our planet is still increasing. Moreover, the lower commodities prices are just temporary phenomena. In a recession economic environment the profitably of investment in natural resource development is low. Thus, improvements, expansion and exploitation of natural resources are halted.

This fact creates a serious danger as the supply side rushes down to catch up with the lower demand. If we assume that the world’s economy will eventually get back to a stage of growth, then we should assume that the supply side will emerge out severely damaged. To open a new mine, get an oil field to exploitation stage, or develop a large agriculture region takes years and billions of dollars.

Even if the economy never got back to its peak our planet will still have to feed and provide energy for its 6.80 billion inhabitants. Unless there is a major natural disaster, or other catastrophic event we are to see this number continuing growing, thus challenging our ability to provide enough energy, food and fresh water for the world’s population.

Another factor affecting the future of the agricultural resource management is the global change in climate. Changing weather patterns will benefit countries such as Canada, but will present enormous challenge for other geographical regions. The scarce of fresh water is already evident in many parts of the world, while other regions suffer from increased precipitation, challenging the crops harvest and requiring even more sophisticated input resource allocation.

The importance of managing our scarce agricultural resources has become and will be the single most important problem for governments and businesses around the world in this century. Thus, every business professional with vision and leadership abilities should recognize the importance of the agricultural resource management. This is where the enormous challenges and opportunities of the 21st century will arise.