Agriculture's Race to Keep Up with Population

In the struggle to feed the world's 7 billion people, food has become more abundant even as numbers have grown and agricultural land has grown scarcer, testimony to advances in microbiology, information and other sciences that has kept agricultural productivity growing.

In 1961, according to a new report by the International Food Policy Research Institute, the world was feeding 3.5 billion people on 1.37 billion hectares of land. The world's population has doubled in the past half century while land under cultivation increased by only 12 percent, to 1.53 billion hectares, but agriculture has kept up.

How long that record will continue, or whether the British scholar and philosopher Thomas Malthus's grim prediction will come true that population will ultimately outstrip the world's ability to feed people remains to be seen.

"Looking several decades ahead, the effects of a changing climate greatly increase uncertainties for agriculture and give further impetus to maintain and strengthen global capacities in agricultural science and technology," the report says. Developing countries have played a major role in the success.

Long-term productivity growth in developing-country agriculture over the past half-century has been rested on three pillars: agricultural research and innovation, support from public research centers providing genetic materials, and creation of an environment in which new technologies can flourish, including rural institutions that provide financial and educational services, rural infrastructure that improves access to markets, and economic and trade policies that allow markets to signal resource allocation.

Brazil and China, both of which invested heavily in agricultural research and reformed their policies and institutions, tapping heavily into international sources of technology, have been signal success stories. They have raised productivity, cut food prices and stimulated not just growth in agriculture but their economies as a whole. Others, like much of sub-Saharan Africa, have continued to lag, although even they have begun to pick up in recent years, according to the report.

At the global level, the long-run trend since at least 1900 has been one of increasing food abundance, the report notes. In inflation-adjusted dollars, food prices have averaged a decrease of 1 percent per year over the course of the 20th century - or did, until about 2002, when real food prices began to rise.

Commodity prices spiked up sharply four times over the first decade of the current century as continued population growth, rising per capita meat consumption, diversion of crops into biofuels and weather shocks drove prices up.

"The persistence of rising commodity prices has renewed concerns about whether agriculture is facing new constraints on growth," the report continues. "In fact, for major cereal grains like wheat and rice, average rates of yield growth have slowed from about 2 percent per year in the 1970s and 1980s to about 1 percent per year since 1990." Additionally, there is evidence that agricultural total factor productivity growth in some developed countries has slowed, which has an effect on developing and developed countries alike in that slowing agricultural productivity growth could signal rising food scarcity, higher commodity prices, and increased competition for the world's land, water, and energy resources.

The composition and location of the world's agricultural production has begun to change, with many developing countries greatly expanding agricultural research and innovation, which has led to the availability of improved technologies and practices for local farmers. Growth has been slower in the developed countries over 20 years until about 1995.

Agricultural production contracted sharply in the former Soviet bloc, but the trend of declining agricultural growth in the decades prior to 1995 also includes a slowing of growth in some high-income countries, especially in Western Europe and Japan. The former Soviet bloc nations have begun to recover, some of them turning into formidable powerhouses in the production of grains.

"This slowing of growth in high-income and transition economies of the former Soviet bloc has led to a major geographic shift in where agricultural production takes place globally," the report notes. "In 1965, 56 percent of total agricultural output was produced in those same countries, although they only comprised 33 percent of the world's population at that time. Developing countries, on the other hand, with 76 percent of the world population, produced just 44 percent of total agricultural output.

By 2010, the same high-income and transition economies produced 32 percent of global agricultural output and held 21 percent of world population. Developing countries accounted for 68 percent of global agricultural output, with East, Southeast, and South Asia contributing 44 percent (and comprising 52 percent of world population), and Latin America, Africa, and West Asia contributing the remaining 24 percent of global agricultural output (and comprising 27 percent of world population).

Northeast Asia, dominated by China, seen agricultural growth rates averaging nearly twice the world average despite limited and falling agricultural land as urbanization has eaten steadily into productive farm areas.

Southeast Asia, West Asia and North Africa, and Latin America and the Caribbean also achieved rapid growth in agricultural output, at around 3 percent per year, while agricultural growth in Africa south of the Sahara was significantly lower. The importance of Latin America and the Caribbean has increased over time, and, in the 2000s, the region accounted for nearly 17 percent of the growth in global agriculture.

While the share of livestock products - meat, milk, eggs, hides, and wool - in total agricultural output has remained stable, the share of cereal grains has fallen significantly. Production of horticultural and oil crops has grown rapidly, with the share of total output from fruits and vegetables rising from 16 to 22 percent and oil crops from 6 to 8 percent over the same period.

The changing composition of global agricultural output reflects changes in the types of foods consumers are demanding. With rising per capita incomes, especially in developing countries, demand is shifting from staple food grains to more vegetables and fruits, vegetable oils, and animal products (and the protein-rich animal-feed meals provided by oilseeds as a co-product from crushing).

Cereal grains, however, continue to supply 70–80 percent of the total caloric supply available for food, animal feed, and biofuel manufacturing.

The shifting location of world agricultural production to developing countries and the changing composition of agricultural output toward more horticultural and oil crops have significant implications for global trends in agricultural productivity. Increasingly, raising average global yields in crops and livestock relies on raising yields in developing countries. And moving production from relatively low-valued cereal crops to higher-valued horticultural crops can imply a rise in economic efficiency; by reallocating resources to produce commodities with greater value, farmers may improve productivity and income.

Trends in annual growth-rate estimates for land, labor, and total factor productivity are hardly uniform, although three general patterns are evident:

1. In high-income countries, the total amount of resources used in agriculture has been falling since about 1980. Productivity growth offset the declining resource base to keep output from falling although it has slowed in some countries such as Australia and the United Kingdom. Labor productivity has been rising much faster than land productivity as the agricultural labor force in these countries declined and average farm size increased

2. In developing regions, TFP growth saw substantial acceleration in 2001–2009 compared with 1971–2009. China and Brazil have sustained high TFP growth during the past two decades, and Southeast Asia, West Asia and North Africa, and Latin America and the Caribbean also demonstrated accelerated TFP growth in the 2000s. Africa south of the Sahara is the major exception, with long-run TFP growth staying below 1 percent per year.

3. In transition countries, the dissolution of the Soviet Union in 1991 imparted a major shock to agriculture. As they began the transition from centrally planned to market-oriented economies, agricultural resources sharply contracted and output fell. Since about 2001, however, output has begun to expand again, and it appears to be led by improvements in productivity. Productivity growth, which was practically nonexistent during the Soviet era, has taken off since 2001.