Production and consumption of farm products are
expanding faster in developing countries than in
developed economies. But a new joint report by the
OECD and
FAO says productivity
growth in the world's poorest nations is not keeping
pace with the food needs of their rising populations.
Because of this, the
poorest developing countries will be increasingly
dependent on world markets for their food security and
so more vulnerable to price fluctuations in world
markets, according to the report, OECD-FAO Agricultural
Outlook 2006-2015. To improve domestic production
capacity in these countries greater investment in
education, training and infrastructure development is
needed.
The report adds that
Brazil, India and China are of increasing importance in
shaping the future of world agricultural trade. In
developing countries as a whole rising incomes and
increasing urbanisation are causing changes to people’s
diets. This leads to greater demand for and imports of
meat and processed foods particularly, but also for the
animal feed needed for their production.
Shift in production
and exports
Growing market
opportunities in certain developing countries are
coupled with a shift in production and exports of farm
commodities away from OECD countries towards other
developing economies. This is expected to increase over
the next 10 years and as a result global competition
among exporters will get tougher, the report says.
The traditional main
wheat exporters -- Argentina, Australia, Canada, the
European Union and the United States -- are likely to
maintain their dominant positions, but output from
Ukraine and Kazakhstan is creating growing competition.
The United States is
expected to remain the largest wheat exporter over the
coming years, but its market share is likely to fall.
Similar trends
prevail in other commodity markets, with rapidly growing
exports from Latin American countries in particular.
The report estimates
that global average yields for wheat and coarse grains
like maize should rise by around one percent a year
between 2006 and 2015. Wheat output by 2015 is expected
to be 13 percent higher than in 2005. Coarse grain
production is estimated to rise by 18 percent over the
same period.
Production of
bioenergy expected to grow
In a context of
assumed strong energy prices, production of bioenergy
from coarse grains and other cereals, oilseeds and sugar
is expected to grow, creating additional demand for
these commodities.
In particular, much
of the growth in demand for coarse grains will be for
producing bio-diesel to be used as a substitute for
oil-based fossil fuels.
Growth is expected to
continue in international meat markets in the medium
term, but they remain vulnerable to animal disease
outbreaks in key supplying countries. Potential further
outbreaks of BSE (mad cow disease), foot-and-mouth
disease, and avian influenza will challenge markets and
affect trading patterns, requiring greater international
attention and cooperation.
Continued
productivity growth and increased competition in
international trade are expected to offset rising
demand, and world agricultural commodity prices,
adjusted for inflation, are mostly expected to continue
their long-term decline -- albeit slowly -- towards
2015.