As the world’s markets and exchange traded funds (ETFs) recover from the beating they took in the market meltdown, attention is turning toward what could well be the next crisis: agriculture.

The primary reason that agriculture is gaining attention is the basic imbalance in supply and demand: populations continue to expand and food production continues to decline.  The Economist states that there are other causes for the imbalance, as well:

  • Changing appetites. As economies gain strength, there’s a tendency to adopt a more Western diet.
  • Rising incomes in emerging markets. Richer citizens can afford to eat more food.
  • The competition of land between the development of biofuels and food crops and the decline in yield growth in cereals. (Other reasons agriculture attracts assets).

Food prices have risen 9.8% in the first 10 months of the year and “breakfast commodities” are trading at a 30-year high. (Other commodities to look at).

The importance of agriculture is not lost on governments. Agriculture and food security have become the backbone of talks between global leaders as the World Bank increased its spending on agriculture by 50% to $6 billion in 2009. For the first time, the Islamic Development Bank is creating an agriculture department. (Some things to consider when playing agriculture ETFs).  Lastly, countries like the Philippines and India are throwing government money to farmers to aid them in improving crop production and bumping up efficiency. (More on India).

For more stories on agriculture, visit our agriculture category.