THEY say Australia is the lucky country, and when you arrive here there is a sense that the ball bounces kindly down under. The country is blessed with almost unlimited resources, it is well run, the climate is lovely and more than anything else, as we move through the 21st century, Australia is situated in the right neighbourhood.

For centuries, when the world revolved around Europe and later the USA, Australia was accurately described as “very far away” because, relative to the action, it was at the other end of the world.

However, this morning, as I watch commuters heading to work, right here in York Street in central Sydney I get the feeling that Australia is getting lucky again. Because of its proximity to China and India, Australia looks to be in the right place at the right time.

That is not to say it won’t have its problems over the next few years because of its wildly overheated property market; it will, but the big trends in terms of what delivers a sustainable quality of life suggest that Australia will remain a lucky country.

Australia, having supplied Asia with the raw materials and commodities to fuel the great expansion in Chinese industrialisation in the past few years, is about to reap another harvest — a bountiful food harvest, again from Asia.

The single biggest challenge the world is facing concerns food, because the world’s population is not only growing, its diet is changing. The question is whether we will see the return of Malthus.

In the 19th century, Thomas Malthus declared that if the world’s population grew and grew, it would soon outstrip the ability of agriculture to feed it, leading to terrible famines and great turbulence.

Up to now, Malthus’s prediction that too many people would mean the world would eventually run out of food has not occurred (with a possible exception being the Great Irish Famine).

Could we yet face a Malthusian nightmare situation on a catastrophic scale as the rock of the insatiable demand of 7bn (soon to be 10bn) people smashes into the hard place of the planet’s limited resources to produce the food which keeps us all alive?

When you drill down, the food dilemma is in fact a much bigger one: it is an energy problem, and this one isn’t going away.

In general, humans have been ingenious animals; when faced with existential challenges humanity has come up with the technology to increase yields, increase farming productivity, increase supply and avoid catastrophe.

So successful has this been that the problem for many parts of the rich world is not too little food but too much food, not too many skinny people but too many fat people, and not a medical system working on the problems of malnutrition but one that is struggling with the challenges of obesity.

So there are two challenges. The first is: can we produce more to keep everyone in the world alive? And the second is: can we consume less so that those in the West who have food don’t eat too much of the wrong stuff?

If the world is going to produce more, which countries are going to do the producing and what type of food will they produce?

The rising population is moving from 7bn today to 10bn in 2050.They are consuming differently. The world could sustain more people if we consumed like Africans, but we don’t.

The Earth’s resources are enough to sustain only about 2bn people at a European standard of living because Europeans consume far more resources than the poorest 2bn people in the world.

However, Europeans use only about half the resources of Americans, on average.

Consider this. If all of the world’s 7bn people consumed as much as an average American, it would take the resources of more than five Earths to sustainably support all of them.

The big issue is that the diets of the Chinese and Indian populations are changing. As they get richer, they want meat and dairy, and this change in their diet is driving up food prices. The rise in the price of basic foods is punishing the poorest people in the world and is prompting unforeseen political developments, which seem unrelated but are tied together by the umbilical cord of the global food supply.

FOR example, while much is being made of the yearning for democracy behind the Arab Spring, few of us focus on the destabilising impact of a 50pc increase in the price of wheat over the past few years, which prompted food riots in Egypt which in turn fuelled political change. Food is politics and politics is food.

The problem will become more acute, not less. As a result of changing diets in China and India, the UN estimates that the global demand for meat will double over the next 20 years.

Producing a kilo of meat takes 10 kilos of fertiliser and 30 litres of oil, creates four tonnes of greenhouse gas and uses between 15,000 and 70,000 litres of water in a world where, by 2050, one third of the world’s population will face water shortages.

Up to now, there have been enormous changes in technology which have kept yields high, and this will obviously have to continue. But we can’t avoid the resource constraint implicit in China moving from cereals to dairy and meat.

Who will supply this food to them? This is where Australia comes in, and it is set to reap a rich harvest. Australia is the most likely beneficiary of the coming agriculture boom in Asia. It has capacity, it is close to Asia, and over the past 10 years has re-orientated itself away from its old link with Britain and has been forging new connections in Asia.

As I watch these Australians heading to work in downtown Sydney, it’s hard to avoid coming to the conclusion that the “lucky country” has got lucky one more time.

David McWilliams’ new book ‘The Good Room’ is out now.

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