Emerging economies are set to remain the key drivers of global agricultural market growth over the next decade, according to the newly released OECD-FAO Agricultural Outlook 2024-2033. However, significant regional shifts are expected, with India, Southeast Asia, and Sub-Saharan Africa poised to take the lead as China’s influence wanes.
A Decade of Transformation
The latest report, a cornerstone in medium-term agricultural forecasting, marks the 20th edition of the OECD (Organisation for Economic Co-operation and Development) and FAO (Food and Agriculture Organization of the United Nations) collaboration. It highlights changing dynamics driven by demographic shifts and economic developments that are set to reshape global agricultural consumption and production patterns.
Declining Chinese Dominance
Over the past decade, China has been a major player in the global agricultural landscape, accounting for 28% of the growth in global consumption of agricultural and fisheries products. However, this dominance is expected to decline sharply to 11% in the next decade. Factors contributing to this reduction include China’s slowing population growth, moderated income increases, and stabilization in dietary habits.
Rising Stars: India, Southeast Asia, and Sub-Saharan Africa
Conversely, India and Southeast Asia are forecasted to account for 31% of the global consumption growth by 2033. These regions are experiencing rapid urbanization and rising affluence, driving higher demand for a variety of agricultural products. Sub-Saharan Africa, characterized by robust population growth, is projected to contribute 18% to global consumption increases, reflecting a surge in food demand.
Consumption and Food Security
Total agricultural and fisheries consumption is expected to grow at an annual rate of 1.1% over the next decade, with low- and middle-income countries driving nearly all of this additional demand. In middle-income countries, food calorie intake is projected to increase by 7%, driven by greater consumption of staples, livestock products, and fats. However, in low-income countries, the 4% growth in calorie intake will fall short of the Sustainable Development Goal of zero hunger by 2030.
Trade and Productivity
OECD Secretary-General Mathias Cormann emphasized the importance of well-functioning agricultural markets, reduction in food loss and waste, and the adoption of more productive and less polluting agricultural practices. “Over the coming decade, the volumes of agricultural commodities traded globally is expected to increase between net exporting regions and net importing regions, but with regional shifts reflecting increased global consumption in India and Southeast Asian countries,” he stated.
FAO Director-General QU Dongyu echoed these sentiments, underscoring the need to close productivity gaps in low- and middle-income countries to boost domestic production and enhance farmers’ incomes.
Environmental Implications and Technological Challenges
Productivity improvements on existing agricultural lands are anticipated to drive crop production growth, reducing the intensity of greenhouse gas emissions. Although livestock and fish production will also see productivity-driven growth, herd expansions will continue to play a role. Despite these advances, agricultural emissions are projected to increase by 5% over the next decade.
Significant productivity gaps will persist in less developed regions, posing challenges to farm incomes and food security, and increasing reliance on food imports. Technological disparities, limited input use, and adverse climatic conditions are key factors contributing to these productivity challenges.
International Market Dynamics
The peaks in international agricultural prices observed in 2022 are subsiding, and the report predicts a gradual decline in real international reference prices for major agricultural commodities over the next ten years. However, these trends might not necessarily translate to lower local retail food prices.
Halving Food Waste: A Potential Game-Changer
The Outlook also explores a scenario where food losses along supply chains and food waste at retail and consumer levels are halved by 2030. This could potentially reduce global agricultural greenhouse gas emissions by 4% and lower food prices, enhancing food security in low- and lower-middle-income countries by increasing food intake by 10% and 6%, respectively. This reduction could decrease the number of undernourished people by 153 million by 2030. Nonetheless, lower producer prices and decreased production could pose challenges for farmers’ livelihoods.
Commodity Projections
The report provides detailed projections for various commodities:
- Cereals: Human consumption will account for 41% of cereal use by 2033, with 36% used for animal feed and the remainder for biofuel and other industrial applications.
- Oilseeds: Yield growth will face challenges, especially in key producing regions like Indonesia, Malaysia, the European Union, and Canada.
- Meat: Poultry will continue to dominate meat sector growth due to its affordability and nutritional value, representing 43% of total meat protein consumption by 2033.
- Dairy: Global milk production is expected to grow at 1.6% annually, led by India and Pakistan.
- Fish: Aquaculture will account for 85% of the additional fish production, increasing its share in global fish production to 55% by 2033.
More information: OECD/FAO, OECD-FAO Agricultural Outlook 2024-2033 (EN), OECD Publishing (2024); DOI: 10.1787/4c5d2cfb-en. The Outlook’s information, data, and main conclusions are freely accessible at www.agri-outlook.org. Featured image credit: Nikolett Emmert | Unsplash
