The 19th OECD-FAO Agricultural Outlook 2013-2022 was recently released, which is an annual report on projections for 15 agricultural products over a ten year period. It covers OECD countries as well as India, China, Brazil and Russia as well as Argentina, South Africa and other developing countries. The report specifically analyses the impact of economic developments and government policies on world commodity market trends.
In this latest report the main headlines are:
- Productivity growth is projected at 1.5% for the next decade, a reduction on the 2.1% productivity growth seen for the period 2003-2012.
- We can expect food prices to remain higher than historical averages given increasing demand and stagnating productivity. Price volatility and trade disruption are expected to continue to be a risk as food stocks, important as buffers against shocks to the food production system, remain low. As the report states, “a wide-spread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15-40%.”
- Agriculture has become more market driven as opposed to policy driven. This can offer developing countries greater investment opportunities, economic benefits, and potential for production expansion if markets are fair and equitable. Agriculture for Impact and the Overseas Development Institute recently launched a report, Leaping and Learning: Linking smallholders to markets in Africa, which investigates how markets can work for smallholder farmers in Africa. [Read more...]