ROME, ITALY — While global demand for agricultural products is expected to grow 15% in the next decade, productivity growth is expected to increase slightly faster, according to an annual report by the Organization for Economic Cooperative and Development and the Food and Agriculture Organization (FAO).
As a result, inflation-adjusted prices of the major agricultural commodities will remain at or below current levels, the OECD-FAO Agriculture Outlook report said. The report provides an 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 wrote 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.”
Technology will drive yield improvements and higher output while agricultural land use will remain constant. Growth of greenhouse gas emissions from agriculture is expected to decrease to 0.5% annually compared to the rate of 0.7% for the past decade.
However, agriculture is facing new uncertainties, including disruptions from trade tensions, the spread of crop and animal diseases, 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.
Worldwide, the use of cereals for food is projected to grow by about 150 million tonnes over the outlook period — amounting to a 13% 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,” said Máximo Torero, FAO assistant director-general for economic and social development. “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.”
Ken Ash, OECD director for trade and agriculture, added, “The Outlook makes abundantly clear that trade is critical for global food security. 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 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% annually, slower than over the past decade (3.3% 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.