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Markets and Outlook: Global Agriculture
Agricultural Production and Consumption: Global Trends ― Implications for Development Cooperation GIZ, Bonn, 10 December 2015
Jonathan BrooksHead, Agri-Food Trade and Markets DivisionTrade and Agriculture Directorate, OECD
22OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 2
• Calmer food markets, with strong harvests and abundant stocks for cereals and oilseeds
• Prices for meat and dairy products have come down from record highs
• Low oil prices• Biofuel production generally not profitable
• Weak economic growth globally
Context
33OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 3
• Real food prices expected to decline slightly, but remain above levels before 2007-08 food price crisis.
• Changing relative prices:› Consumption of staples reaching saturation in many countries› Meat and dairy prices increase relative to crops – higher incomes and protein
demand› Coarse grain and oilseed prices increase relative to food staples – feed
demand• Calmer markets but a risk of resurgent volatility• Spread of imports across a large number of countries;
concentration of exports among a few key suppliers
Highlights of the OECD-FAO Outlook
44OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 4
Real prices to remain higher than in the years preceding the 2007-08 price spike
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
40
50
60
70
80
90
100
110
120
130
CerealsDairyMeatOilseeds
Index (2012-14=100)
55OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 5
Projected prices continue a trend of long-term decline
0
200
400
600
800
1 000
1 200
Real Maize Price Long Term TrendUSD/t
66OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 6
For most products price volatility has come down
Beef Rice Maize Wheat Soybeans … Food0
0.1
0.2
0.3
0.4
0.5 1970-79 1980-89 1990-99 2000-09 2010-14
Source: IMF, World Bank
Monthly CV
77OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 7
But there is a substantial risk of a further price shock
0
50
100
150
200
250
300
350
400
10th
90th
Nominal maize priceUSD/t
Probability of price outside the 10-90th percentile = 1 – 0.8**10 or approximately 90%
88OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 8
Producer food prices are inherently volatile
20042005200620072008200920102011201220132014
-20-10
010203040 European
UnionJapanBrazil
% change
99OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 9
…consumer prices much less so
20042005200620072008200920102011201220132014
-20-10
010203040 European
UnionJapan
% change
1010OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 10
Per capita food consumption growing modestly
Annual compound per capita growth rate between 2015-2024 (%)
1111OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 11
Centres of per capita production growth differ
Annual compound per capita growth rate between 2015-2024 (%)
1212OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 12
Increasing meat demand
Annual compound per capita growth rate between 2015-2024 (%)
1313OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 13
On current trends, undernourishment will decrease, but not in SSA, and SDG2 will not be met
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
0
200
400
600
800
1000
1200
Other Latin America and Caribbean India China Asia and Pacific (excluding China and India)
Sub-saharan Africa North AfricaMillion
1414OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 14
Trend growth will induce over 200 million workers to transition from agriculture
2005 2015 20240
500
1000
1500
2000
2500
3000
3500
4000
201 million
Non-Agricultural Employment Transition from Agriculture to Non-Agriculture Agricultural EmploymentMillion
1515OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 15
• Global food and energy prices
• Scramble for land in Africa
• Land degradation
• Youth bulge and employment challenges
• Income growth and distribution
• Greater climate variability
• Information communication technology
Forthcoming African outlook will focus on mega-trends
1616OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 16
Levels of support to producers (PSE) in OECD and emerging economies are converging
Source: OECD (2015), "Producer and Consumer Support Estimates", OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.
Percentage of gross farm receipts
1717OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 17
Emerging economies also tend to use trade distorting instruments
Source: OECD19
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
14-100000
0100000200000300000400000500000600000700000800000
Emerging 8
OECD
OECD least distor-tionary
Emerging 8 least distortionary
PSE Nominal USD, millions
1818OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 18
• Need transparent and open agricultural markets• Measures to improve productivity sustainably benefit consumers and
(innovating) farmers• Other actions can increase food availability – reduced post-harvest losses,
reduced waste, less over-consumption…but will not by themselves ensure food security
• Phasing out 1st generation biofuel support would eliminate a factor that can turn a shock into a crisis
• Need to price scarce resources for sustainable use• Risk management tools needed to manage price volatility, not border
measures
OECD’s main policy conclusions:
1919OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 19
The future’s so bright, we gotta wear shades!
2020OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook 20
We invite you to visit our websitewww.agri-outlook.org
Jonathan Brooks, Head of Division
Hubertus Gay, Outlook Coordinator at OECD
[email protected] and Agriculture Directorate(OECD)