Slower global agricultural production growth expected : OECD-FAO

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Despite a slow down, farm production is expected to keep pace with global demand.

Global agricultural production is expected to grow 1.5 percent a year on average over the coming decade, compared with annual growth of 2.1 percent between 2003 and 2012. That according to a new report published by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization (FAO) on Thursday.

Limited expansion of agricultural land, rising production costs, growing resource constraints and increasing environmental pressures are the main factors behind the trend. But the report argues that farm commodity supply should keep pace with global demand.

The OECD-FAO Agricultural Outlook 2013-2022 expects prices to remain above historical averages over the medium term for both crop and livestock products due to a combination of slower production growth and stronger demand, including for biofuels.

The report says agriculture has been turned into an increasingly market-driven sector, as opposed to policy-driven as it was in the past, thus offering developing countries important investment opportunities and economic benefits, given their growing food demand, potential for production expansion and comparative advantages in many global markets.

However, the report says production shortfalls, price volatility and trade disruption remain a threat to global food security. The OECD/FAO Outlook warns: “As long as food stocks in major producing and consuming countries remain low, the risk of price volatility is amplified. A wide-spread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15-40 percent.”

Donn Bobb, United Nations.

Duration: 1’37″

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