Tag Archives: australia
Crop Crisis: Why Global Grain Demand Will Outstrip Supply
To meet global demand, grain production needs to double by 2050. It’s not going to make it. International Maize and Wheat Improvement Center Since the time of Malthus, humanity has worried whether there would be enough food to feed the growing population. Such fears were always overcome and doomsayers all proven wrong: there was always more land to grow our crops when existing croplands failed to deliver, and new ways to get more yield from old crops. Today our planet appears very finite, and the only places to expand agriculture are in our remnant natural grasslands and tropical forests. And the demand for more agricultural crops is relentless, due to not only our rising population, but more importantly, our rising prosperity. The expected 4 billion new members of the middle class who will join the rest of us by 2050 will likely demand more dairy and meat. These require an enormous amount of grains to produce. Add to these the demands biofuel places on agriculture, and we need to boost global agricultural production by 60% to 110% by 2050. To put this challenge in a time perspective, that kind of increase took our ancestors 10,000 years to achieve. So how are we doing? My research team recently published an analysis in PLOS ONE of the local to global scale performance of maize, rice, wheat and soybeans. These are the top four global crops, collectively responsible for nearly two-thirds of all agricultural calorie production. We found that current rates of productivity improvements are nowhere near the rates of productivity gains (2.4% per year) required for growing demand. Instead of the required doubling of crop production by 2050, at this rate the yield increase will be only 38% to 67%, with the problem more acute for rice and wheat. Australia, is the ninth largest global producer of wheat and a major exporter. Its wheat yields have declined at 0.7% per year. In fact, we observed negative yield trends in around 80% of Australia’s wheat cropland areas. Productivity was rising in only a few of the important wheat cropland areas: the South Eastern statistical division in New South Wales; Darling Downs in Queensland; Goulburn, Western district and Central Highlands in Victoria; south eastern region in Western Australia; and outer Adelaide, Murray Lands, and Eyre in South Australia. Even in these regions the rates of wheat productivity improvements were below the 2.4% rate required to double wheat production, except for south eastern region of New South Wales, where we estimated the rate to be 3.4% per year. Does this mean Australians won’t be able to feed themselves, much less feed others, with wheat? It seems very unlikely at only 0.7% per yearly declines. This decline however may worsen as Australian agriculture matures. Australian wheat yields are limited by lack of nutrients and of water, with the latter being a bigger factor as we reported in a paper published in Nature last year. In some areas of Australia wheat productivity was already at the maximum possible value. Looking beyond Australia, we found many countries where the gains in crop productivity are less than those required to keep pace with their population growth. In several countries – such as Guatemala and Kenya – productivity of maize, a significant source of daily dietary energy, is declining and population is growing. In Indonesia – the third largest rice-producing nation on Earth where rice provides about 49% of daily dietary energy – productivity gain is too low to keep pace with population growth. In India, China, Philippines and Nepal, productivity improvement rates in rice are just about enough to maintain per capita production at current levels. Although supply will not meet demand by 2050, all is not lost. We can close the demand–supply gap in one of many ways. We can invest more to boost crop productivity in the faltering regions that we identified. We can bring more of our remaining natural lands under production (but wheat alone would require 95 million additional hectares, more than the total area of New South Wales). We can reduce food waste, which already accounts for nearly half of global crop production (unfortunately, waste sometimes is difficult and expensive to reduce, as in developing nations where it occurs between farm and table due to lack of storage and transportation). Perhaps most controversially, we can change to more plant-based diets. Nobody really knows what members of the new middle class will choose to eat. History shows time and again that as people join the middle class, they look for more dairy and meat. But if they go against previous trends and decide to keep consumption of animal products low – if those of us already in the middle class reduce our meat consumption – we may all have enough to eat after all. 20 June 2013 Continue reading
Ernst & Young: Energy Bill Slow Progress Hinders UK’s Investment Potential
30 May 2013 The UK is missing out on a unique opportunity to become the market of choice for investment in renewables in Europe as political infighting delays the Energy Bill becoming a reality, according to the tenth anniversary edition of the Renewable Energy Country Attractiveness Indices (RECAI), released by Ernst & Young this week. At a time when investment in most other European markets is wavering, further delays in delivering a stable framework in the UK are weakening the country’s promising prospects and holding back investment . “We are at a stage where the UK is presented with a unique opportunity to become a safe harbour for renewable energy investment in Europe,” said Ben Warren, Environmental Finance Leader at Ernst & Young . “The foundations are there, reflected by the UK’s consistent performance in our index and its current 5th place ranking, as well as its huge offshore wind potential. “However, competing visions and strategies within the Government about the country’s future energy mix, pose serious questions amongst investors about whether we can compete for capital on a global level,” added Warren. “Although we are starting to see nods towards a more stable investment environment through initiatives like the Green Investment Bank (GIB) attracting significant foreign investment, more needs to be done to help the UK realise its full potential,” he said. The latest RECAI index includes a revised methodology to reflect the shift in investment and deployment drivers and the maturing of the sector since the report’s creation ten years ago, according to Ernst & Young. Key changes include an increased focus on the role renewable energy plays in each country’s energy mix, energy supply and demand, the cost competitiveness of renewable energy, the importance of decarbonisation and an increased emphasis on the economic and political stability of each particular market. The index sees the US regain the top spot, as high barriers to entry for external investors realign China into second place. However, growth prospects for the sector in China remain strong with continued GDP growth, increasing energy demand, and the ongoing strategic importance of the sector to the local economy providing solid foundations for the future. South America continues to grow in prominence, thanks in part to its growing energy demand. Chile’s project pipeline includes 300-400MW concentrated solar power plants, while Peru has entered the index for the first time due to good natural resources and a strong investment climate. However, new policy measures and tender cancellations in Brazil are likely to temper the rapid growth seen in the region over the last 18 months, said the authors. High levels of project activity and investment interest in Japan and Australia give the Asia Pacific region a stronger presence at the top of the index, said the company. Thailand also joins the index in this issue, boasting strong solar resource and a healthy project pipeline, as well as stable fiscal and regulatory support measures. In Europe, Romania became the latest to slash its subsidies, reinforcing the relatively sombre mood in Eastern Europe as policy makers try to find the balance between growth and sustainability, the report found. A number of the Middle East and North Africa countries, including Egypt, Tunisia and the UAE, have fallen out of the top 40 due to a slow recovery from the Arab Spring and an absence of clear policy frameworks delaying capacity deployment, according to Ernst & Young. Deal activity in the sector has been characterised by both incumbents and new entrants driving industry consolidation. There is also a strong appetite from Far East construction groups and original equipment manufacturers (OEMs) seeking development pipelines of solar and wind assets to provide a distribution channel for their products. Factors driving the levels of investment in renewables include divestment needs, market restructuring and the entry of new investors into the sector. Utilities and financial buyers are finding greater value in buying operational plants than investing in plant construction. “The mismatch between project sponsors’ capital expenditure plans and the corporate capacity to finance this investment will continue to drive more asset disposals,” said Warren. “Both financial investors and OEMs under pressure from overcapacity are likely to remain the most active buyers of operational assets and development assets respectively.” “Further consolidation can be expected in the supply chain. Depressed pricing, reduced fiscal support for renewables and continued overcapacity are all going to contribute to additional casualties in the year ahead,” Warren concluded. “However, with the shift in power democratising the energy sector and increasing the power of the consumer, the future role of renewables in the energy mix is bright.” Continue reading
[Invest Korea] New Tax Rules Beneficial for Foreign Investors
Friday, June 14th, 2013 KOREA IT TIMES (INFO@KOREAITTIMES.COM) This month we present Part II of our two-part series on Korea’s amended Presidential Decree under the Law for Coordination of International Tax Affairs and other relevant tax laws. Below we look at important tax regulation changes providing foreign investors with advantageous effects. Background In order to provide better conditions for investing in Korea, the Korean government amended some provisions of the Enforcement Decree of Corporate Income Tax Act and the Enforcement Decree of Special Tax Treatment Control Law early this year. Related tax incentives encompass those relating to not only foreign direct investment but also investments through domestic funds or foreign funds, considering that the portion of foreign investment through an investment fund or a private equity fund is ever growing. 1. An Exception to the General Tax Treatment Toward a Limited Partner’s Income of a Domestic Private Equity Fund Prior to the amendment, if foreign investors invested in Korean shares through a Korean private equity fund (PEF), all income allocated to limited partners (including the foreign pension fund) by the Korean PEF was classified as dividends; therefore, regardless of the character of the underlying income, all distributed income by the Korean PEF was subject to withholding at 22 percent for dividends (or a reduced rate under an applicable tax treaty). Because foreign private equity investors, including foreign pension funds, usually realized investment profits in the form of capital gains, rather than dividends, such taxation had the effect of depriving investors investing through a Korean PEF of the opportunity to claim a capital gains tax exemption under an applicable treaty. Effective 2013, however, the amended tax law allows look-through treatment to determine the character of income of a Korean PEF allocated to certain foreign pension funds, thereby affording them the opportunity to claim tax treaty exemptions. As a result of the amended rule, such income allocated to eligible foreign pension funds will be classified as interest, dividends or capital gains from alienation of shares depending on the character of the underlying income recognized by the PEF. 2. Special Tax Treatment for Foreign Investment Entities Under the past tax regulation, certain domestic joint investment entities such as domestic private equity funds can elect to be treated as a partnership, which is a quasi pass-through entity subject to no entitylevel tax. On the other hand, the permanent establishment of foreign corporations is not entitled to this partnership election and was subject to corporate income tax of maximum 24.2 percent at the entity level. To eliminate this tax inequity and attract foreign investments, the lawmakers expanded the special partnership taxation election regime to include foreign eligible entities carrying on a business in Korea through a permanent establishment. According to the new rule, there is no partnership-level tax if the eligible foreign entity with a Korean permanent establishment elects to be treated as the partnership. Instead, limited partners, as passive investors in such foreign entity, are subject to Korean withholding tax with respect to their share of Korean income as dividend at the rate of 22 percent. However, a reduced treaty rate ranging from 5 percent to 16.5 percent should be available depending on the residency of the limited partner. After a one-year grace period, the proposed change will be applicable to taxable years commencing on or after January 1, 2014. 3. Amendments to Foreign Direct Investment Incentive Regime The foreign investment zone regime’s prescription of eligible businesses was expanded to include information technology services from February 15. Until the end of last year, the following businesses were eligible for the incentives: (i) manufacturing with a minimum investment amount of USD 30 million; (ii) tourism with USD 20 million; (iii) logistics services with USD 10 million; and (iv) research and development with USD 2 million. However, the amended rules include computer programming, system integration and management services, data processing/ hosting services and other related information services with a minimum investment amount of USD 30 million. Source : Invest Korea Continue reading
