In the 20th century, a dramatic transformation took place in the developed world as the economy shifted from agriculture to manufacturing. Since 1900, the number of U.S. farms has fallen by 63 percent, while the average farm size has increased by 67 percent. Moreover, those farms are increasingly specialized: In the early 20th century, a large number of small farms grew an average of five crops. Today, the U.S. agriculture industry is made up of a small number of large farms that each grow just one type of crop.

The most profound change, though, has been in the nation's workforce. According to the United States Department of Agriculture's Economic Research Service,1 the percentage of the U.S. workforce employed in agriculture fell from 41 percent in 1900 to just 1.9 percent in 2000. From 1930 to 2002, agricultural gross domestic product as a share of total GDP dropped from 7.7 percent to a mere 0.7 percent.

People in the developed world now eat more food and that food is healthier than ever before, with only a tiny fraction of our labor and capital devoted to agriculture. In fact, according to a new book called A World Without Agriculture,2 by Harvard Professor C. Peter Timmer, there are now more lawyers in the United States than there are farmers, and there are fewer farms than there are dry cleaners.

Investment in agriculture has fallen gradually over time, but since the 1980s, it has collapsed altogether in developed nations, largely due to the fact that food has been generally cheap - too cheap to make agriculture an attractive investment.

As the shares of GDP and employment represented by agriculture have declined, there has been a migration from rural to urban areas, leaving fewer people to work on farms. The rise of industrial and service sectors as sources of higher profits has marginalized farming in richer nations. In the process, there has been a demographic shift to lower birth rates, as well.

This transformation, which took the developed world 250 years to complete, now threatens to change the developing world in just a couple of generations. One reason is that global economic realities far beyond the control of local farmers or even individual nations are driving much of the change. For example, globalization has brought new supplies of cheap foods to poorer nations, competing with local farmers on the international market.

Water, which we discuss in our analysis of the trend, "THE GREAT 21ST CENTURY WATER OPPORTUNITY," is another problem facing local agricultural production. By mid-century, more than four billion people will suffer chronic water shortages.

As the population reaches nine billion in 2050, the overall demand for food will grow sharply. More significantly, the energy and raw materials required to feed each person will increase. In Asia, with its rising middle class, demand for meat will increase dramatically, in turn requiring more water, grain, and suitable grazing lands.

So ultimately, farmers in developing countries risk an increasingly marginal existence as they are unable to compete with global agribusiness. In countries like China, this had led to a massive migration of laborers from farms to factories. The result: In China alone, 150 million poor people have moved from rural areas to large cities in the past decade. This is a bigger migration from farms to cities than ever occurred in the developed world, and it is

happening at a much faster rate, leaving only the very young and the very old behind in farming communities. This has led to an unprecedented and staggering shortage.