Four decades from now, the world’s population will peak at around 9 billion, requiring an additional 1 billion tonnes of annual cereal production on top of the current level of 2.3 billion tonnes, according to United Nations (U.N.) forecasts.
In a recent forum called "2050 – How to Feed the World," leading experts defined many of the challenges and issues facing agriculture to meet the demands of one-third more people on the planet by mid-century.
The discussion in Rome, Italy, Oct. 12-13, organized by the U.N. Food and Agriculture Organization (FAO), produced abundant debate and information about trends that long-term strategic planners among grain and oilseed traders and processors, as well as those who provide them with equipment and services, might want to digest.
"Big picture" assumptions framing the discourse included the following:
- Though the number of people on the planet will increase by one-third, food production needs to increase by 70% due to anticipated higher living standards and better diets.
- Net cereal imports into developing countries will increase threefold to 300 million tonnes by 2050 and account for 14% of their cereal consumption, up from 9.2% currently.
- At the same time, developing countries exports of vegetable oil and oilseeds will continue to increase.
- Annual meat consumption will grow by 200 million tonnes from today’s 270 million tonnes to 470 million tonnes.
- The planted area in developing countries will be expanded by 120 million hectares (ha) and reduced in developed countries by 50 million ha for an overall rise of 70 million ha. Sub-saharan Africa and Latin America will show all of the net increase.
GROWTH OPPORTUNITIES IN AFRICA
Much of the focus was on the disproportionate role that will be played by sub-Saharan Africa. It will account for the biggest share of global population growth, increasing from 770 million now to between 1.5 and 2 billion. It will also see the greatest expansion and transformation of its agriculture, as well as the greatest increases in cereals and oilseeds trade.
In his conference-opening speech, Jacques Diouf, the FAO’s director general, pointed out that despite the rise in total population, the number of rural dwellers will be 18% less than at present. Such is the pace of urbanization in the developing world, which will account for 100% of the world’s population growth.
"There will be double the demand of food, feed and fiber," Diouf said. Referring to the challenge of climate change, which is expected to impact lower latitude countries the most, he observed, "We will have to expand land under cultivation with irrigation but at the same time use less water." But Diouf also noted that "only seven percent of Africa’s arable land is irrigated and only four percent in sub-Saharan Africa. Africa uses only four percent of its water resources, compared to 20% in Asia."
The consensus of the forum was that by better applying existing technologies the challenge of feeding more people can be met. This means closing the gap between countries with advanced agriculture and those depending on subsistence farming. In sub-Saharan Africa, average cereals yields are only 1.2 tonnes per ha, well less than half of the global average of 3.1 tonnes. By 2050, the global average cereal yield per ha is expected to rise to 4.2 tonnes.
However, the rate of increase of global cereal yields has dropped from 3.5% in the 1960s to just 1.5% in 2000. If there is to be a reduction in the number of people currently suffering from chronic hunger and malnutrition, commonly put at 1 billion, Africa must undergo an agricultural transformation, most experts agreed.
The "Green Revolution" that resulted in a doubling of cereal yields from the 1960s to the early 1980s in Asia largely bypassed Africa. This time around, better use of fertilizer, increased irrigation, more plant breeding, increased research and development and better dissemination of technology via extension services will be critical to increasing productivity of African farming.
A key area of contention is the extent to which the smallholder farms typical throughout most countries of Africa can increase yields sufficiently to create the surpluses needed to feed growing urban populations and slow or decrease the continent’s rising dependence on food imports. Many argue that a shift from subsistence to commercial or even corporate farming in Africa will be critical to introducing the modern agricultural technology needed to increase productivity.
Noting that 70% of the world’s poor live from subsistence agriculture, Diouf stated, "There must be a special emphasis on smallholder farms. Judicious use of chemical fertilizers is necessary. GDP growth in agriculture is twice as effective in reducing poverty as compared to general GDP growth."
University of California-Berkeley professor Alain de Janvry pointed out in his keynote address that agriculture is generally underused in development. "Agriculture produces a surplus that can be invested in industry, but trade policy is often antagonistic to agriculture," he continued, citing the traditionally low international prices for cereals that are in part due to OECD subsidies.
The conference discussion papers offered much data to demonstrate the unexploited agricultural potential of Africa. The FAO estimates there are 700 million ha of unexploited arable land in Africa. Less than one quarter of the land suitable for rain-fed agriculture is now used. The guinea savanna zone is 600 million ha in size, similar in many ways to the Brazilian cerrado, but only 10% farmed. Africa applies an average of only 13 kilograms (kg) of fertilizer per ha, compared to a global average of 73 kg, and 190 kg in East Asia.
Javier Blas, the Financial Times’ commodities correspondent, asked rhetorically, "Will the developing world remain in misery and sorrow?" and then commented, "There were mid-50s doomsday projections for rice, but production more than doubled from 260 million tonnes to 600 million tonnes."
With that said, it is clear that the area under rice cultivation in Asia will decline due to dietary changes taking place in many countries. Population growth in East and Southeast Asia will be only 11% by 2050, and per capita rice consumption is falling in many countries. In Thailand, it has dropped from 130 kg to less than 100 kg in less than 10 years, according to Kwanchai A. Gomez, director of The Asia Rice Foundation.
Africa, on the other hand, is likely to see a big increase in land under rice cultivation in order to replace or slow burgeoning rice imports in many countries. Much of the foreign investment now taking place in agriculture on the continent is for the creation of large rice plantations throughout the sub-Saharan area where there are ample water resources from Kenya to Mozambique in the east and from Angola to Mali in the west.
THE BIOFUELS DILEMMA
The role of biofuels inevitably figured into the discussion. They can be a double-edged sword for Africa. On one hand, increased demand for feedstocks can contribute to spikes in food commodity prices, as seen in 2007 and 2008. On the other hand, with so much arable land, Africa is well positioned to supply maize, sugar and palm oil to world markets compensating for the diversion of these commodities to biofuels by traditional supplier countries like the U.S., Brazil and Malaysia. In fact, much of the wave of foreign investment in corporate farms in Africa is already targeting maize, sugar cane and palm oil along with rice.
As one paper from the conference showed, the impact of biofuels on global agriculture is already significant: 7% of coarse grains are dedicated to biofuels, as is 9% of all vegetable oil use. But this only equates to 0.2% of global energy use and 1.5% of road transport fuels.
One outcome, as pointed out by panelist Kitty Smith, administrator of the USDA’s Economic Research Service, will be that a "high degree of price volatility can be expected in the future, due to weather and relationship between agricultural and energy prices." Thus, policy measures that can provide farmers with some stability and reduce risks were also a key area of discussion.
The forecast of a tripling in cereal imports by developing countries to 300 million tonnes from today’s level of 100 million tonnes should be of huge interest to international grain traders and processors. Despite their guarded optimism about the ability of the world to feed itself, the experts clearly do not believe that local or regional agriculture can do the job alone.
WHEAT PRODUCTION LIKELY TO SOAR
What cereals will make up this threefold increase and where will they originate? The conference papers did not provide any detailed predictions. However, given urbanization trends in Africa, wheat is likely to be one big winner based on changes in diet already seen around the continent. The one wheat growing zone with the greatest potential to expand production, and where global warming could even be a positive, is the Black Sea Region — Russia, Ukraine and Kazakhstan.
In richer developing countries where demand for meat will continue to escalate, maize should score big gains in trade, despite the potential to improve local output through higher yields and more intensive cropping. Some of that maize could come from invigorated smallholders and new corporate farms in Africa and be destined for the Middle East and Asia.
While experts ponder the development policies that countries should adopt, new money for African agriculture has started to pour in from opportunistic sovereign wealth funds and trading companies around the world with an appetite for backward integration and risk. The surge in investment is still at an early stage, but already the signs are positive. In recent years, according to FAO data, Africa has been recording 3.5% rate growth in farm production compared to 2% population growth, putting an end to decades of stagnation.
The playing field in Africa is large and full of obstacles for agricultural development. But it seems clear that there is plenty of room for those now standing on the sidelines to enter the game, bringing with them much needed capital and know how.
David McKee is a grain industry consultant providing market research and other services to companies seeking to initiate business in new markets. He can be reached by e-mail at