8 July 2019: Publications by the Organisation for Economic Co-operation and Development (OECD) find that global demand for agricultural products will grow by 15% over the next 10 years, while agricultural productivity growth will increase slightly faster, causing the prices of major agricultural commodities to remain at or below their current levels. They also highlight how efforts to reform government agriculture subsidies have largely stalled.

The ‘OECD-FAO Agricultural Outlook 2019-2028’ is a collaborative effort of the OECD and the Food and Agriculture Organization of the UN (FAO), prepared with inputs from the experts of their member governments and from specialist commodity organizations. The report provides an assessment of the 10-year prospects for agricultural and fish commodity markets at national, regional, and global levels, with the 2019 edition containing a special focus on Latin America and the Caribbean.

According to the report, meat demand is expected to be relatively strong in the Americas, while low incomes will continue to limit meat consumption in Sub-Saharan Africa. Fresh dairy products will meet much of the additional demand for protein in South Asia (especially in India and Pakistan). Globally, per capita consumption of sugar and vegetable oils is expected to rise, driven by urbanization and the shift to more processed and convenience foods.

By the text, strong demand for animal products provides incentives to expand production in the livestock sector through larger herds. Paired with improvements in offtake rates, demand for animal feed will be stimulated, with feed crops such as maize and soybeans expected to increase their shares in the global crop mix. Because of the limitations in capture fisheries, nearly all projected growth in fish and seafood supply will be from aquaculture, pushing its share in total production to about 55% by 2028.

The publication notes that agricultural production is expected to grow by 15% over the next 10 years, while global agricultural land use is expected to be broadly flat. The projected expansion in crop output, the text explains, can be attributed primarily to yield improvements and higher production intensity, driven by technological innovation.

Direct global greenhouse gas emissions of agriculture, mostly from livestock, as well as rice and synthetic fertilizers, are expected to grow by 0.5% per annum over the coming decade, compared with 0.7% per annum over the past 10 years. This is lower than the growth rate of agricultural production, the report explains, which indicates a declining carbon intensity as productivity increases.

The report notes that, following several years of relatively calm market conditions, world agricultural markets face mounting risks, including policy uncertainty from trade tensions. Much of the additional food demand over the coming decade will originate in regions with high population growth, in particular Sub-Saharan Africa, South Asia, and the Middle East and North Africa. Given that the regions experiencing rapid population growth are not those where food production can be increased sustainably, the publication highlights that open, transparent, and predictable trade will be important for global food security.

A second publication, the 2019 OECD ‘Agricultural Policy Monitoring and Evaluation’ report provides up-to-date estimates of government support to agriculture for all OECD and European Union countries, as well as the key emerging economies of Brazil, China, Colombia, Costa Rica, Kazakhstan, the Philippines, the Russian Federation, South Africa, Ukraine, Viet Nam, and for the first time, both India and Argentina. The publication includes comprehensive country chapters and a Statistical Annex containing detailed background tables with indicators of agricultural support.

The publication finds that little progress has been made over the past 10 years in reforming agricultural support policies in 53 study countries. By the text, many agricultural policies continue to distort farm production and trade decisions and do not effectively target stated government objectives. The publication reveals that 54% of public support is provided through policies that artificially maintain domestic farm prices above international levels, which harms consumers, especially poor consumers, and increases the income gap between small and large farms, while reducing the competitiveness of the food industry.

The report also shows that relatively little of the current policy mix in most countries targets agricultural productivity growth and the sustainable use of land, water, and biodiversity resources.

Speaking on the report launch, Ken Ash, OECD Director for Trade and Agriculture, recommends countries to remove the link between support and farm production decisions, and invest instead in needed public services to build an enabling environment in which farmers have the freedom to make business decisions in response to evolving market opportunities at home and abroad. He suggests farm policy be better targeted towards improved access to technologies that drive both productivity growth and sustainable resource use. [OECD Press Release on OECD Agricultural Policy Monitoring and Evaluation Report] [Publication: OECD Agricultural Policy Monitoring and Evaluation] [OECD Press Release on Agricultural Outlook 2019-2028] [Publication: Agricultural Outlook 2019-2028] [Executive Summary Agricultural Outlook 2019-2028]