Challenges galore for global agriculture next ten years

G. CHANDRASHEKHAR, THE HINDU BUSINESS LINE
Global food security has clearly been under strain in recent years with fluctuating output, weather aberrations, rising production costs and of course food inflation that dilutes the nutrition intake of the poor.

The emerging picture for the coming decade is one of firm demand driven by a combination of expanding population, rising purchasing power and changes in food habits, especially in developing countries on the one hand, and slowing growth in global agricultural output on the other. Add to this, newer threats such as land constraints, looming water shortage and adverse effects of climate change and you have a scenario that poses a daunting challenge. No wonder, the latest OECD-FAO agricultural outlook 2012-2021 argues that increased productivity and a more sustainable food system alone will improve global food security. According to the report, while international agricultural commodity markets appear to have entered calmer conditions after record highs last year, food commodity prices are anticipated to remain on a higher plateau over the next decade, underpinned by firm demand but a slowing global production growth.

In addition to population growth, several other factors such as higher per capita incomes, migration from rural to urban areas, changing diets in developing countries as well as requirements for biofuel feedstocks are adding to the demand pressure. At the same time, of concern is the slow supply response to higher prices emanating from traditional exporting developed countries.

INCREASING PRODUCTIVITY

Therefore, the report has emphasised that higher demand will be met increasingly by supplies that come to the market at higher cost. With farmland area expected to expand only slightly in the coming decade, additional production will need to come from increased productivity including by reducing productivity gaps in developing countries.

Anticipating that agricultural output growth will slow to an average of 1.7 per cent annually over the next ten years, down from a trend rate of over 2.0 per cent a year in recent decades, the report has cautioned that higher input costs, increasing resource constraints, growing environmental pressures and impacts of climate change will serve to dampen supply response.

SUSTAINABILITY CONCERNS

Then there are sustainability concerns. A quarter of all agricultural land is highly degraded. Critical water scarcity in agriculture is a fact for many countries. Several fish stocks are overexploited or at risk. There is growing consensus that extreme weather events are becoming more frequent and climatic patterns are changing in many parts of the world.

Beyond its call for complementary policies to address productivity and sustainability, the report recognises that the private sector will play the lead role in agriculture going forward. Governments should encourage better agronomic practices, create the right commercial, technical and regulatory environment and strengthen agricultural innovation systems (e.g. research, education, extension, infrastructure), with attention to the specific needs of smallholders. Creating the right enabling environment also means ensuring that the business climate is conducive to domestic and foreign investments, so governments should limit trade restrictions as well as those domestic support schemes that distort incentives for production and investment in agriculture. There is a need to develop national investment schemes and increased development assistance to agriculture for research and development, innovation adoption and infrastructure development, the report has said.

Developing countries should promote agricultural infrastructure investment in rural areas to improve storage, transportation and irrigation systems, as well as electrification, information and communication systems. Investment in human capital is equally important and depends on more public spending on healthcare, education and training.

These policies should also address the reduction of food loss and food waste, pegged by a recent FAO study at roughly one-third of food produced for human consumption, in order to limit the need to increase production and conserve resources. Much of the projected growth will come from developing countries, which will increasingly dominate in the production of most agricultural commodities, and also take on a more important role in commodity trade.

As the world’s third largest producer of agricultural crops, India needs to take serious note of the oncoming risks to not only to global agriculture, but also its own. Home to about 16 per cent of the world's population, the country has less than three per cent of the world’s land resources and four per cent of the water resources. With robust expansion of GDP in recent years, demand pressure on natural resources has risen rapidly. Land constraints and looming water shortage are a reality. Being a tropical country, we are at a greater risk of having to face the adverse effects of global warming.

So, in the coming years, the agricultural situation may worsen unless progressive, growth-oriented policies are adopted and sustainable practices are implemented. Stepping up public investment is key. Equally important is monitoring and evaluation of outcomes. India may not exactly be food insecure today, but risks moving in the direction. Nutrition security is another issue that is closely linked to food production as well as access and affordability of food.

Increased productivity, green-growth and more open markets will be essential if the food and nutrition requirements of the future generations are to be met, observed OECD secretary general. For consumers, especially for the millions of people living in extreme poverty, high food prices have caused considerable hardship.

“We need to redouble our efforts to bring down the number of hungry people; and must focus on increasing sustainable productivity growth, especially in developing countries, and especially for small producers”, said the FAO director general.