Global worries over how to feed the earth’s burgeoning billions have abated, with years of strong supplies expected to continue and reducing the international prices of most agricultural commodities, according to a new combined report by the Organization for Economic Cooperation and Development and the UN’s Food and Agriculture Office.
For nearly all commodities covered in the annual Agricultural Outlook, which covers the current year to 2018, “real prices are projected to remain at or below current levels over the coming decade, as productivity improvements continue to outpace demand growth” to feed an increasingly fat population.
A growing global population will continue to use increasing amounts of agricultural products as food, feed and for industrial purposes, with much of the demand arising from regions with high population growth including Sub-Saharan Africa, India, and the Middle East and North Africa. Although there is growing optimism that the headlong population growth of the past several decades is falling to urbanization and growing incomes, these areas are still vulnerable.
Rising incomes and ongoing urbanization do mean that increasingly prosperous populations are eating more meat. Thus the livestock sector will continue to expand and intensify, requiring more pastureland, more water and more animal feed. Paired with improvements in offtake rates, demand for animal feed will be stimulated, with feed crops such as maize and soybeans expected to increase their shares in the global crop mix. Hence, the growth in feed use of cereals is expected to exceed the expansion of food use over the coming decade.
Meat demand is expected to be relatively strong in the Americas, while low incomes continue to constrain meat consumption in Sub-Saharan Africa in particular. Per-capita consumption of sugar and vegetable oils is expected to rise, driven by urbanization and the shift to more processed and convenience foods.
“A combination of excessive calorie consumption, unbalanced diets and declining activity levels imply a growing burden of overweight and obesity in various countries across the world,” the study shows. “In many low and middle-income countries, these problems coexist with undernourishment and micronutrient deficiencies, implying a “triple burden” of malnutrition. Robust demand for animal products provides incentives to expand production in the livestock sector through larger herds.
Biofuel production, which has formed a major source of crop demand growth over the past two decades, will expand more slowly over the coming decade, with additional demand coming mainly from Indonesia, using vegetable oil for biodiesel, and China and Brazil, using cassava and sugarcane for ethanol.
Agricultural production is expected to grow by 15 percent over the coming decade, while global agricultural land use is expected to be broadly flat. The projected expansion in crop output can be attributed primarily to yield improvements and higher production intensity, driven by technological innovation.
The foreseen growth in livestock production will be based on an expansion of herds, greater feed use and a more efficient use of feed. As the oceans empty of fish, nearly all projected growth in fish and seafood supply will be from aquaculture, pushing its share of total production to about 55 percent by 2028.
Agriculture is projected to increase its carbon footprint, but at a declining rate, the report states, remaining a significant contributor to global greenhouse gas emissions with direct emissions mostly from livestock in the form of methane. Rice and synthetic fertilizers are expected to grow by 0.5 percent per annum over the coming decade, compared with 0.7 percent annual growth over the past decade. This is lower than the growth in agricultural production, indicating a declining carbon intensity as productivity increases.
International trade will remain essential for food security in a growing number food-importing countries and continues to be important to incomes and livelihoods in exporting regions such as Latin America and the Caribbean, which is expected to further increase its share of global agricultural exports. The Black Sea region will consolidate its position as a leading exporter of wheat and coarse grains, with most exports going to the Middle East and North Africa.
World agricultural markets face a range of new uncertainties that add to the traditionally high risks facing agriculture, the report continues. On the supply side, these include the spread of diseases such as African Swine Fever, growing resistance to antimicrobial substances, regulatory responses to new plant breeding techniques and responses to increasingly likely extreme climatic events.
On the demand side, they include evolving diets, reflecting perceptions with respect to health and sustainability issues, and policy responses to alarming trends in obesity. A further factor is the heightened uncertainty with respect to future trading agreements between several important players on world agricultural markets. An escalation of ongoing trade tensions has the potential to reduce and redirect trade, with repercussions for international and domestic markets.
This year’s special chapter focuses on Latin America and the Caribbean, “a region abundant in land and water that accounts for 14 percent of global production and 23 percent of the world’s exports of agricultural and fisheries commodities. Production growth of 22 percent for crops and 16 percent for livestock products is projected to be, respectively, seven and two percentage points faster than the global average.”
By 2028, the region will account for more than 25 percent of global exports in agricultural and fisheries products, underscoring the importance of trade openness at the global level. Raising agricultural productivity sustainably will require strategic investments in agriculture’s enabling environment. However, due to the diverse state of rural infrastructure and R&D initiatives across the region, there are differing requirements for public spending on strategic investments in agriculture’s enabling environment that could raise agricultural productivity sustainably.
Several governments in the region also face the need to invest in improving the environmental performance of the sector. Strong growth opportunities in high value fruit and vegetable crops provide opportunities for smallholders, but policies will need to be differentiated according to resource endowments and market potential.
Agriculture is becoming increasingly “feminized,” the report states, creating a need for targeted interventions to improve women’s access to education, credit and extension services.
Despite the fact that the region will increasingly become the world’s breadbasked, “Food security continues to be a concern, with many households unable to afford the food they need. As extreme poverty has risen since 2015, ensuring income growth among the poorest communities is paramount – a challenge where agricultural development has an important role to play.”
Paradoxically, there is a simultaneous rise in the number of people who are overweight and obese, requiring initiatives to counter these trends, from the provision of public information to regulations on industry and fiscal measures. “Evaluating these policies is essential, so that successful initiatives can be scaled up and extended to other countries.”