Agricultural output growth to keep food prices low over the coming decade.
OECD and FAO highlight role of diets, urbanization, emissions and trade in outlook for next decade
08/07/2019 – Global demand for agricultural products is
projected to grow by 15 percent over the coming decade, while agricultural
productivity growth is expected to increase slightly faster, causing
inflation-adjusted prices of the major agricultural commodities to remain at or
below their current levels, according to an annual report by the Organization
for Economic Co-operation and Development and the UN’s Food and Agriculture
Organization.
This year’s edition of the OECD-FAO Agriculture Outlook,
presented in Rome, provides a consensus assessment of the 10-year prospects for
agricultural and fish commodity markets at national, regional and global
levels.
“Global agriculture has evolved into a highly diverse sector, with operations
ranging from small subsistence farms to large multinational holdings,” FAO
Director-General José Graziano da Silva and OECD Secretary-General Angel
Gurría write in the Foreword of the report. Along with providing food, they
added, today’s farmers “are important custodians of the natural environment and
have become producers of renewable energy.”
The Outlook projects that yield improvements and higher production intensity,
driven by technological innovation, will result in higher output even as global
agricultural land use remains broadly constant. Direct greenhouse gas emissions
from agriculture, meanwhile, are expected to grow by some 0.5 percent annually over
the coming decade, below the 0.7 percent rate of the past 10 years, and below
the projected output growth rate – indicating declining carbon intensity.
At the same time, new uncertainties are emerging on top of the usual risks
facing agriculture. These include disruptions from trade tensions, the spread
of crop and animal diseases, and growing resistance to antimicrobial
substances, regulatory responses to new plant-breeding techniques, and
increasingly extreme climatic events. Uncertainties also include evolving
dietary preferences in light of health and sustainability issues and policy
responses to alarming worldwide trends in obesity.
Population growth, urbanization and lifestyles
Worldwide, the use of cereals for food is projected to grow by about 150 million tonnes over the outlook period – amounting to a 13 percent increase – with rice and wheat accounting for the bulk of the expansion. The most significant factor behind the projected growth in food use of staple products is population growth, which is expected to rise fastest in Sub-Saharan Africa and South Asia.
“Regrettably, the most needy regions are expected to see slow income growth and
hence only small improvements in their nutritional status,” warned FAO
Assistant Director-General for Economic and Social Development Máximo Torero.
“The findings point to an overall decline in undernourishment; however, at
current rates of improvement, we would remain far off track from reaching the
Zero Hunger target by 2030.”
“The Outlook makes abundantly clear that trade is critical for global food
security,” said OECD Director for Trade and Agriculture Ken Ash. “Regions that
are experiencing rapid population growth are not necessarily those where food
production can be increased sustainably, so it is essential that all
governments support open, transparent and predictable agro-food markets.”
The report finds that consumption levels of sugar and vegetable oil are
projected to rise, reflecting the ongoing trend towards prepared and more
processed foods, notably in many rapidly-urbanizing low and middle-income
countries. Concerns about health and wellbeing, meanwhile, are likely to nudge
numerous higher-income countries towards lower consumption of red meat and a
shift from vegetable oils to butter. In
addition, the demand for feed crops is projected to outpace animal production
growth in countries where the livestock sector is evolving from traditional to
commercialized production systems, while the use of agricultural commodities as
feedstock to produce biofuels is expected to grow primarily in the developing
countries.
Trade in agricultural and fisheries commodities should expand over the coming
decade at around 1.3 percent annually, slower than over the past decade (3.3
percent average), as growth in global import demand is expected to slow. On the
export side, both Latin America and Europe are projected to increase their
sales to foreign markets.
Special focus on Latin America
This
year’s publication features a special chapter on Latin American and the
Caribbean, a region that accounts for 14 percent of global production and 23
percent of the world’s exports of agricultural and fisheries products – a share
expected to rise to 25 percent by 2028.
Despite the impressive growth, the region is facing persistent challenges in
terms of food security, as many households are unable to afford the food they
need. The region also faces growing natural resource challenges. Ensuring a
more sustainable and inclusive pathway for future agricultural growth will
depend on developments in the areas of nutrition, social and environmental
protection and support for livelihoods.
