While international
agricultural commodity markets appear to have entered calmer conditions after
record highs last year, food commodity prices are anticipated to remain on a
higher plateau over the next decade, underpinned by firm demand but a slowing growth
in global production, according to the latest OECD-FAO Agricultural Outlook.
The report suggests that in addition to population growth higher per capita incomes, urban migration and changing diets in developing countries, as well as rising requirements for biofuel feedstocks, are underpinning demand pressures. At the same time, agricultural output by traditional exporting developed countries has been slow to respond to higher prices in the last decade.
Higher demand will be met increasingly by supplies that come to market at higher cost. With farmland area expected to expand only slightly in the coming decade, additional production will need to come from increased productivity, including by reducing productivity gaps in developing countries, the report said.
The Outlook anticipates that agricultural output growth will slow to an average of 1.7 percent annually over the next 10 years, down from a trend rate of over 2 percent per year in recent decades. Higher input costs, increasing resource constraints, growing environmental pressures and the impacts of climate change will all serve to dampen supply response.
Much of the projected growth will come from developing countries, which will increasingly dominate in the production of most agricultural commodities, and also take on a more important role in commodity trade.
"Increased productivity, green-growth and more open markets will be essential if the food and nutrition requirements of future generations are to be met," said OECD Secretary-General Angel Gurría. "Governments should renounce trade-distorting practices and create an enabling environment for a thriving and sustainable agriculture underpinned by improved productivity. We have highlighted many of these issues in our work on food security for the G20 and this Outlook provides further important analysis and recommendations to governments."
The report suggests that in addition to population growth higher per capita incomes, urban migration and changing diets in developing countries, as well as rising requirements for biofuel feedstocks, are underpinning demand pressures. At the same time, agricultural output by traditional exporting developed countries has been slow to respond to higher prices in the last decade.
Higher demand will be met increasingly by supplies that come to market at higher cost. With farmland area expected to expand only slightly in the coming decade, additional production will need to come from increased productivity, including by reducing productivity gaps in developing countries, the report said.
The Outlook anticipates that agricultural output growth will slow to an average of 1.7 percent annually over the next 10 years, down from a trend rate of over 2 percent per year in recent decades. Higher input costs, increasing resource constraints, growing environmental pressures and the impacts of climate change will all serve to dampen supply response.
Much of the projected growth will come from developing countries, which will increasingly dominate in the production of most agricultural commodities, and also take on a more important role in commodity trade.
"Increased productivity, green-growth and more open markets will be essential if the food and nutrition requirements of future generations are to be met," said OECD Secretary-General Angel Gurría. "Governments should renounce trade-distorting practices and create an enabling environment for a thriving and sustainable agriculture underpinned by improved productivity. We have highlighted many of these issues in our work on food security for the G20 and this Outlook provides further important analysis and recommendations to governments."
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