Global agricultural demand projected to grow 15% over next decade

A new report has predicted that global demand for agricultural products is projected to grow by 15% over the coming decade; however agricultural productivity growth is expected to increase slightly faster.

According to a report – conducted by the Organisation for Economic Co-operation and Development (OECD) and the UN’s Food and Agriculture Organisation (FAO) – this will cause inflation-adjusted prices of the major agricultural commodities to remain at or below their current levels.

This year’s edition of the OECD-FAO Agriculture Outlook, presented in Rome today, Tuesday, July 9, provides a consensus assessment of the 10-year prospects for agricultural and fish commodity markets at national, regional and global levels.

The outlook projects that yield improvements and higher production intensity, driven by technological innovation, will result in higher output even as global agricultural land use remains broadly constant.

Greenhouse gas emissions from agriculture are expected to grow by some 0.5% annually over the coming decade.

This figure is below the 0.7% rate of the past 10 years, and below the projected output growth rate – indicating declining carbon intensity.

Uncertainties

At the same time, the report outlines that new uncertainties are emerging on top of the usual risks facing agriculture.

The emerging uncertainties outlined in the report include:
  • Disruptions from trade tensions;
  • The spread of crop and animal diseases;
  • Growing resistance to antimicrobial substances;
  • Regulatory responses to new plant-breeding techniques;
  • Increasingly extreme climatic events;
  • Evolving dietary preferences in light of health and sustainability issues and policy responses to alarming worldwide trends in obesity;
  • Population growth, urbanisation and lifestyles.

Worldwide, the use of cereals for food is projected to grow by about 150 million tonnes over the outlook period – amounting to a 13% increase – with rice and wheat accounting for the bulk of the expansion.

The most significant factor behind the projected growth in food use of staple products is population growth, which is expected to rise fastest in Sub-Saharan Africa and South Asia.

Forecasted trends

The report finds that consumption levels of sugar and vegetable oil are projected to rise, reflecting the ongoing trend towards prepared and more processed foods, notably in many rapidly urbanising low and middle-income countries.

Concerns about health and well-being, meanwhile, are likely to nudge numerous higher-income countries towards lower consumption of red meat and a shift from vegetable oils to butter.

In addition, the demand for feed crops is projected to outpace animal production growth in countries where the livestock sector is evolving from traditional to commercialised production systems.

The use of agricultural commodities as feedstock to produce biofuels is expected to grow primarily in the developing countries.

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.