http://www.hungry4change.eu

1. Agricultural Outlook
Prospects, Productivity and
Policies
Wayne Jones,OECD Trade and Agriculture
10 November 2011

2. Prospects for agriculture are good…
Global consensus on
medium term
prospects for
agriculture and
fisheries
• Higher average prices
• Increasing production
• Growing non-food use
• Expanding trade

3. Higher average commodity prices
% change in average real prices 2001-10 to 2011-2020
60
50
40
30
20
10
0
-10

4. Rising agricultural and fish production
N.America L.America W.Europe
E.Europe&C.Asia N.Africa&M.East S.S.Africa
160
150
140
130
120
110
100
90
80
70
60
2000 2005 2010 2015 2020

5. EU production projections
EU27 Production: % change 2011-2020 vs. 2001-10
Coarse grains
Rice Pigmeat
Fish Poultry
Whole Milk Powder Cheese
Butter Wheat
Beef Protein meals
Skimmed Milk… Veget. Oils
Sugar Oilseeds
-25 -20 -15 -10 -5 0 0 5 10 15 20 25 30 35

6. Rising non-food demand
Share of global production used for biofuel feedstocks
Percent
2020 2008-2010
35%
30%
25%
20%
15%
10%
5%
0%
Sugar cane Vegetable oil Coarse Grains Sugar beet Wheat

7. Expanding global trade
Share of export gains 2011-2020
N.America
13%
Oceania
4%
Asia&Pacific
38%
L.America
27%
S.S.Africa
-1%
W.Europe
N.Africa & E.Europe&C.
Asia 6%
M.East
0% 11%

8. EU production projections
EU 27 Net position 2011- 2020 vs. 2001-2010: exports minus
imports in thousand tonnes (absolute difference)
Whole Milk Powder Skimmed Milk Powder
Poultry Cheese
Butter Pigmeat
Beef Oilseeds
Rice Wheat
Fish 0 1000 2000 3000 4000 5000
Protein meals
Coarse grains
Sugar
Veget. Oils
-6000 -5000 -4000 -3000 -2000 -1000 0

9. Good global prospects but rising…
…production costs
…market/price volatility
…resource constraints
…and slowing productivity
growth

10. Rising production costs
• FACEPA and agri-
benchmark farm level
analysis
• Variable costs have gone up
– mainly energy and feed
• Impacts different by farm
type and prod’n structure
• Costs have risen less than
input prices (farmers adjust)
• Farm income rises with
farm size

11. Greater market/price volatility…
• Weather (climate change)
• Low stocks
• Energy prices
• Exchange rates
• Inelastic demand
• Ag and trade policy

12. Resource constraints: water shortages
• 47% population under
severe water stress by 2050
• Irrigation costs rise with
energy prices
• Water pricing to agriculture
will increase
• 60% freshwater withdrawals
by agriculture (2010)
• 40% freshwater withdrawals
used by agriculture (2050)

13. The need to increase productivity
growth
• Growing demand for food 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 fro increasing global
food supplies on a sustainable basis.

14. Slower agricultural TFP growth
Average annual growth rate by period (%)

15. Slower projected global output growth…
Global agricultural production growth
3.0%
2.60%
2.0%
1.70%
1.0%
0.0%
2001-2010 2011-2020

16. Productivity and Sustainability
• Need to reduce waste/carbon footprint (sustainable
consumption and production)
• Need to increase productivity in a more sustainable manner
• Productivity and sustainability can be complimentary
outcomes
•Precision farming (fertilizer/crop protection)
•More efficient water use (drip irrigation)
•Eco-system approaches (intensify production, conserve
organic matter)

17. Governments can help
Governments need to
link policies to priorities
• Invest in innovation
• Improve sustainability
• Facilitate producer
risk management

18. EU policy reforms
Since 1992 several reforms of
the Common Agricultural
Policy have aimed at reducing
distortions to production and
trade in agriculture
Post 2013:
• Reduce market distortions
• Strengthen AKS systems
• Target environmental
policies

19. OECD Trade and Agriculture
www.agri-outlook.org