Shahid Khalil


In 1961 the world was feeding 3.5 billion people by cultivating 1.37 billion hectares of land. A half century later, the world population had doubled to 7 billion, while land under cultivation increased by only 12 per cent to 1.53 billion hectares.

How, then, did agricultural production triple? This was done by increasing productivity. By getting more output from existing resources, global agriculture has grown, proving wrong past concerns that the world's population would exceed its food supply. In fact, at the global level, the long-run trend since at least 1900 has been one of increasing food abundance. In inflation-adjusted dollars, food prices fell by an average of 1 per cent per year over the course of the 20th century.

A recently released Food and Agriculture Organization report expresses concern about adequate availability of food for the developing economies. It points out that up till now the developed economies are producing more food than they consume. They might not spare the excess food they produce for food starved nations because they would be consuming it as bio fuel. The bulk of the agricultural productivity would have to come from developed world. Pakistan is also among the vulnerable countries as it does not produce enough edible oil to fulfill its domestic needs.

Things started changing on the food front at the start of this century. Around 2002, real food prices began to rise, and the shock was not merely a temporary one. We saw agricultural commodity prices spiking sharply in 2008, 2010, and again in 2012. Demand-side factors (including continued population growth, greater per capita consumption of meat, and diversion of crop commodities for bio fuel) and weather-induced production shocks (like the 2012 drought in North America) are certainly major forces behind the high and volatile prices of recent years. But the persistence of rising commodity prices has renewed concerns about whether agriculture is facing new constraints on growth. In fact, for major cereal grains like wheat and rice, average rates of yield growth have slowed from about 2 per cent per year in the 1970s and 1980s to about 1 per cent per year since 1990. Additionally, there is evidence that some developed countries have recently seen a slowing down of growth in agricultural total factor productivity (a broad measure of sector wide productivity), which has an effect on developing and developed countries alike.

A slowdown in agricultural productivity growth could signal rising food scarcity, higher commodity prices, and increased competition for the world's land, water, and energy resources. With such grave consequences, it is more urgent than ever to ensure agricultural productivity growth.

World agriculture has undergone some fundamental changes in the past few decades. One has been that many developing countries have greatly expanded their capacities in agricultural research and innovation. Combined with support from international agricultural research centers, this has led to the availability of improved technologies and practices for local farmers.
Complementing this have been institutional and policy reforms, improvements in farmer education and health, and investments in rural infrastructure, all of which help create an environment where new farm technologies and practices are adopted more rapidly. A second major development has been the changing location and composition of global agricultural production. With slower agricultural growth in developed countries and a significant increase in developing countries the balance was not greatly disturbed.

Greater productivity growth in developing countries' agriculture can certainly pull up the average for global productivity reduction in agricultural output from post-Soviet states; developing countries now account for a large and growing share of global agricultural production.

And, as rising incomes cause changes in the types of foods consumers demand, the share of staple food commodities in world agricultural production has declined. Two new studies found that the productivity growth rate has actually accelerated in recent decades, led by improved performance in developing countries. It follows, therefore, that future challenges to global food security, apart from long-term risks related to climate change, are more likely to be the result of uneven access to resources, technologies, and food than the world's ability to increase global agricultural production and food availability in the aggregate.

World agricultural production grew at an average annual rate of 2.4 per cent between 2001 and 2010, close to its historical average growth rate since the 1970s of 2.3 per cent per year. However, recent years demonstrate a period of accelerated growth that started around 1995, which, in turn, followed more than 20 years of gradually decreasing growth rates. The exceptionally slow growth observed in the 1990s reflected a sharp contraction in agricultural production in the former Soviet bloc, but the trend of declining agricultural growth in the decades prior to 1995 also includes a slowing of growth in some high-income countries, especially in Western Europe and Japan.

This slowing of growth in high-income and transition economies of the former Soviet bloc has led to a major geographic shift in where agricultural output was produced in those same countries, although they only comprised 33 per cent of the world's population at that time. Developing countries, on the other hand, with 76 per cent of the world population, produced just 44 per cent of total agricultural output. By 2010, the same high-income and transition economies produced 32 per cent of global agricultural output and held 21 per cent of world population. Developing countries accounted for 68 per cent of global agricultural output, with East, Southeast, and South Asia contributing 44 per cent (and comprising 52 per cent of world population),and Latin America, Africa, and West Asia contributing the remaining 24 per cent of global agricultural output (and comprising 27 per cent of world population).
Within developing regions, Northeast Asia (dominated by China) has sustained agricultural growth rates averaging more than 4 per cent per year since 1971. Southeast Asia, West Asia and North Africa, and Latin America and the Caribbean also achieved rapid growth in agricultural output, at around 3 per cent per year, while agricultural growth in Africa south of the Sahara averaged significantly lower (2.4 per cent per year).

In the 1980s, about half of the total growth in global agriculture came from East, Southeast, and South Asia, a contribution that reached 70 per cent in the 1990s and 60 per cent in the 2000s. High income and transition countries contributed about 30 per cent of the growth in global agricultural supply in the 1980s, but this fell to practically zero in the 1990s (with negative growth in the transition countries during this decade) before recovering to about a 10 per cent share of global agricultural growth in the 2000s. The importance of Latin America and the Caribbean has increased over time, and, in the 2000s, the region accounted for nearly 17 per cent of the growth in global agriculture.

In addition to the shifting location of agricultural production, changes have occurred in its composition. While the share of livestock products (meat, milk, eggs, hides, and wool) in total agricultural output has remained stable (around 37 per cent from 1970 to 2009), the share of cereal grains has fallen significantly (from 25 to 21 per cent of the total). Meanwhile, production of horticultural and oil crops has grown rapidly, with the share of total output from fruits and vegetables rising from 16 to 22 per cent and oil crops from 6 to 8 per cent over the same period. The changing composition of global agricultural output reflects changes in the types of foods consumers are demanding.

With rising per capita incomes, especially in developing countries, demand is shifting from staple food grains to more vegetables and fruits, vegetable oils, and animal products (and the protein-rich animal-feed meals provided by oilseeds as a co-product from crushing). Cereal grains, however, continue to supply 70-80 per cent of the total caloric supply available for food, animal feed, and bio fuel manufacturing.

The shifting location of world agricultural production to developing countries and the changing composition of agricultural output toward more horticultural and oil crops have significant implications for global trends in agricultural productivity.

Increasingly, raising average global yields in crops and livestock relies on raising yields in developing countries. And moving production from relatively low-valued cereal crops to higher-valued horticultural crops can imply a rise in economic efficiency; by reallocating resources to produce commodities with greater value, farmers may improve productivity and income.

http://www.weeklycuttingedge.com/front%20story01.htm