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How will the global food, agriculture and fisheries system evolve in coming decades? A lot will depend on government policies.
The OECD-FAO Agricultural Outlook projects that demand for food, agriculture and fisheries products will continue to grow over the next decade. However, growth will be at a slower pace than in the recent past, when exceptionally strong growth in China and the largely policy-induced expansion of biofuels spurred demand. The main exception to this slowdown in demand growth is fresh dairy, as income and population growth in India are expected to lead to a strong increase in consumption. Despite slower growth, the additional demand for most commodities will still be considerable, with most of the extra demand coming from China, India, and Sub-Saharan Africa.
Because of differences in geography, climate and population density, some parts of the world are better suited to produce food, agriculture, and fisheries products than others. Over the past few decades, international trade between these regions has intensified. Countries in North and South America in particular have emerged as major agricultural exporters. At the same time, agricultural imports have increased in Sub-Saharan Africa, in the Middle East and North Africa, and in South and East Asia (most notably in China). These trends are expected to continue over the coming years, underscoring the growing importance of international trade for global food security.
Across the globe, countries are in various stages of evolution from (primarily) physical economies, to service economies, to digital economies – and potentially to the “single economy”, where data are pervasive across all economic activities and society. Much international attention today is focused on how best to harness the enormous opportunities associated with digitilisation, while avoiding potential threats to specific jobs and to countries, regions, sectors, and individuals who may be unable to invest in, and benefit from, digitilisation.
The food, agriculture and fisheries sector will need to situate itself within this wider framework, to ensure coherence across policy fields domestically and to avoid policy fragmentation internationally. This will require a greater level of international co-operation than is evident today. In many countries, it will also require much greater investments, and public-private collaboration, in digital infrastructure and related education and training than is available today.
Of course, traditional research and development remains a priority and more could usefully be done by both the private and public sectors. Plant and animal breeding to enhance productivity and resilience to climatic events, development of less environmentally harmful plant protection chemicals, and improved fertilizers are amongst the priority areas for a more sustainable agriculture.
Global production of food, agriculture and fisheries is on track to meet rising global demand. The capacity of the sector to respond to even unexpected increases in demand remains strong, in both developed and developing regions of the world. The most recent spike in many commodity prices, in 2007-08, for example, sparked an immediate supply response that satisfied markets and replenished stocks quickly.
Countries can do more to shift some of the resources they dedicate to the sector to support research and development (to advance new technologies) and technology transfer and extension services (to increase adoption and appropriate of available technologies and best practises). The economic case for doing is clear, as the well documented returns to R&D are huge.
Countries can also do much more to open markets, allowing goods to flow more easily and predictably from where they are best produced on a sustainable basis to where they are consumed. While border restrictions matter, behind-the-border non-tariff measures (NTMs) are particularly important in the food, agriculture and fisheries sector. While NTMs often facilitate trade, poorly designed measures can sometimes impose unnecessary costs on traders, disadvantaging smaller producers in particular.
A key challenge is whether continued growth in production can be achieved sustainably. Agriculture has a considerable environmental footprint, as the largest user of the world’s land and water resources and an important source of greenhouse gas emissions. Fish stocks are under increasing pressure from overfishing, while aquaculture raises concerns about the degradation of ecosystems. Under current policy settings, the food, agriculture and fisheries sector can be expected to continue to under-perform with respect to sustainability, climate, and resilience goals expressed by governments.
Governments have an opportunity to begin to roll back ineffective policies that are, in many cases, simply legacies of the past. In this way, scarce financial resources will be released that can be devoted to coherent policy packages that can contribute to a productive, sustainable, and resilient sector. The recipe will differ across countries, but the basic ingredients are largely the same.
The implications of such a policy shift are significant. While consumers and society overall can be expected to benefit substantially, the burden of adjustment will fall more narrowly on relatively resource-poor farm households unable to adjust on their own. In some cases adjustment within in the sector will be possible, with time and transitionary support from governments; in other cases adjustment will require moving out of the sector to more remunerative employment opportunities. Well targeted temporary income support and active labor market measures will be required to support the needed adjustment, ensuring that no one is left behind.
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