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OECD-FAO report: Agricultural output growth to keep food prices low over the coming decade

Global demand for agricultural products is projected to grow by 15 per cent over the coming decade, while agricultural productivity growth is expected to increase slightly faster, according to an annual report by the Organisation for Economic Co-operation and Development (OECD) and the UN’s Food and Agriculture Organization (FAO)

oecd faoThe outlook project yield improvements and higher production intensity, driven by technological innovation. (Image source: Pexels/Pixabay)

“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.

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 0.5 per cent annually over the coming decade, below the 0.7 per cent rate of the past 10 years.

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, 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, urbanisation and lifestyles

Worldwide, the use of cereals for food is projected to grow by about 150mn tonnes over the outlook period – amounting to a 13 per cent 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.

“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.”

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-urbanising low and middle-income countries.

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 commercialised 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 per cent annually, slower than over the past decade (3.3 per cent 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.

This year’s publication features a special chapter on Latin American and the Caribbean, a region that accounts for 14 per cent of global production and 23 per cent of the world’s exports of agricultural and fisheries products – a share expected to rise to 25 per cent by 2028.


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