The document discusses global prospects for agriculture between 2011-2020. It finds that there will likely be higher average commodity prices, growing global food demand, an increasing market for biofuels, and expanding agricultural trade. However, rising production costs, environmental pressures, and greater output volatility may pose challenges. Slower global agricultural output growth is also expected. Governments are encouraged to boost innovation, improve sustainability, facilitate risk management, and develop enabling policies to support productivity growth in developing countries.
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Presentation of Wayne Jones, OECD, at Food, Fertilizers and Natural Resources Conference by Fertilizers Europe
1.
2. Food Security
The need to increase productivity
Wayne Jones
OECD Trade and Agriculture
Fertilizers Europe, Brussels, 19 October 2011
3. Good prospects for agriculture
global consensus on
medium term prospects for
agriculture and fisheries
• Higher average prices
• Growing food demand
• Increasing biofuel market
• Expanding trade
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4. Higher average commodity prices
% change in average real prices 2001-10 to 2011-2020
60
50
40
30
20
10
0
-10
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5. Growing demand
Share of global consumption gains
N.America
6%
L.America
10%
Oceania
1%
W.Europe
4%
E.Europe&C.Asia
5%
Asia&Pacific N.Africa&M.East
56% 7%
S.S.Africa
11%
0-15% over the decade 15-30% over the decade +30% over the decade
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6. Increasing production of biofuels
Share of global production used for biofuel feedstocks
2020 2008-2010
Percent
35%
30%
25%
20%
15%
10%
5%
0%
Sugar cane Vegetable oil Coarse Grains Sugar beet Wheat
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9. Energy prices mainly affect fertilizer costs
Production costs, 2010, Heartland (USD/acre)1
Item Corn Soybeans Wheat
Operating costs:
Seed 67.61 57.49 24.61
Fertilizer 105.82 (41%) 16.88 (14%) 83.89 (59%)
Chemicals 30.08 16.64 5.83
Custom operations 10.80 5.50 7.11
Fuel 26.79 (10%) 13.01 (11%) 10.28 (7%)
Other operating costs 14.24 12.90 11.47
Total operating costs 255.34 122.42 143.13
1 Data shown is for U.S. Heartland (corn belt)
9
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10. Good prospects but…
• Rising prod’n costs
• Environmental pressures
• Greater volatility
• Slower output growth
Risk management has, and
always will be, critical to
success in agriculture
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11. Volatility: food export restrictions
Sample of 105 countries 2007 to end-March 2011
Region Export restricting Export restricting
countries measures
Africa 9 15
Asia 15 49
LAC 5 15
Others 4 8
Total 33 87
Source: Ramesh Sharma, 2011 - based on WTO Annex 1 information
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12. The need to increase productivity growth
• Growing demand for food, feed and fuel
• Increasing competition for land
• Important water constraints
• Uncertain impacts of climate change
Improving agricultural productivity growth is not an
option to consider –– it is an essential requirement for
increasing global food supplies on a sustainable basis.
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13. Agriculture share of water use to decline
• 47% pop’n under severe water stress by 2050
• Irrigation costs rise with energy prices
• Water pricing to agriculture will increase
• 60% freshwater withdrawals used by agr (2010)
• 40% freshwater withdrawals used by agr (2050)
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14. Slower global output growth
Global agricultural production growth
3.0%
2.60%
2.0%
1.70%
1.0%
0.0%
2001-2010 2011-2020
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15. Wheat area and yield growth
Area harvested Annual % growth in yield
3,5
100.000
90.000 3
80.000
Annual growth rate
2,5
70.000
60.000 2
Kha
50.000 1,5
40.000
1
30.000
20.000 0,5
10.000
0
0 North Europe Asia and Africa
North America Europe Asia and Pacific Africa America Pacific
2000-2010 2010-2020
1995 2000 2005 2010 2015 2020
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16. Coarse grains area and yield growth
Area harvested Annual % growth in yield
3,5
120.000
3
100.000
Annual growth rate
2,5
80.000 2
Kha
1,5
60.000
1
40.000
0,5
20.000 0
North Europe Asia and Africa
0 America Pacific
North America Europe Asia and Pacific Africa
2000-2010 2010-2020
1995 2000 2005 2010 2015 2020
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17. Oilseeds area and yield growth
Area harvested Annual % growth in yield
90.000
2,5
80.000
70.000 2
Annual growth rate
60.000
1,5
50.000
Kha
40.000
1
30.000
20.000 0,5
10.000
0 0
North America Europe Asia and Pacific Africa North Europe Asia and Africa
America Pacific
2000-2010 2010-2020
1995 2000 2005 2010 2015 2020
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18. Global total factor productivity growing
• Slower pace in developing
countries and LDCs
• Faster pace for emerging
and transition economies
• R&D the main driver;
benefits exceed costs
• Public sector remains the
main actor
• Wide diversity in R&D
support
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19. Agriculture TFP growth
Average annual growth rate by period (%)
1970-79 1980-89 1990-99 2000-07
4
3,5
3
2,5
% growth rate
2
1,5
1
0,5
0
All developed countries All developing countries
-0,5
-1
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20. Agricultural TFP growth by region
Average annual growth rate by period (%)
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21. R&D expenditures by region in USD 2000
Public Agricultural R&D Spending Trends,
1976-81, 1981-91, 1991-2000
Source: Pardey et al. 2006
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 21
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22. The challenge for governments
Governments need to link
policies to priorities
• Invest in innovation
• Improve sustainability
• Facilitate producer risk
management
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23. Developing countries: enabling environment
Invest in education and extension
Reduce/remove distorting ag/trade policies
Develop better functioning markets
Adapt research and innovation to smallholders
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24. OECD Trade and Agriculture
www.agri-outlook.org
Follow us on Twitter: @OECDagriculture
Contact
tad.contact@oecd.org
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