Wednesday, April 24, 2024

Tough task ahead for global ag

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The OECD’s head of trade and agriculture sets out the triple challenges facing food producers worldwide.
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New Zealand farmers are not alone in facing the challenge of striving for value while mitigating their environmental footprint. Senior reporter Richard Rennie is in Australia to find out how our neighbours are approaching the issues of gene technology, carbon farming and sustainability.

Global agricultural producers will struggle to meet the triple challenges of improved sustainability, greater productivity and maintaining profitable farm operations over the coming years, despite signs of improvement in reducing greenhouse gas intensity globally.

So says Dr Marion Jansen, director of trade and agriculture for the OECD, who presented her outlook on global agricultural challenges to delegates in Canberra at the ABARES Outlook conference. 

Her data indicating that globally agriculture’s carbon intensity is projected to decline was encouraging, but was countered by the need for large productivity increases to offset the rise in hunger that is now plaguing the planet. 

After a period of relative stability when global hunger affected about 7.5% of the world’s population, it has risen since covid to nearer 10%, with estimates that up to 780 million people now facing extreme hunger.

This includes extreme differences in global dietary protein sources, with meat forming the main protein source in higher income countries, while developing countries continue to source from staples, namely cereals, tubers and sorghum crops.

But future protein sources are likely to see a continued move to meat, driven by mid-lower income countries’ gains in livestock productivity.

Much of the anticipated growth in future agricultural production is likely to come from Africa, with crop production expected to be driven by productivity improvements, rather than expanding land use. Meantime India continues to push on with gains in dairy and meat productivity.

“And this is good news for global greenhouse gas emissions. We even see some regions in Africa where land use will decline,” Jansen said.

“But while we expect the intensity of greenhouse gas emissions to go down, it will not be by enough for the entire production of greenhouse gases to go down. 

“Ruminants remain a key source of GHGs and are likely to continue to only increase.”
To meet demands for more food and reduce net GHG emissions requires a tripling of the productivity gains made in the past 10 years, something Jansen said is almost impossible to achieve. 

For livestock productivity this would represent an increase of 31% and for crop yields an increase of 24%.

Uncertainty and global shocks such as the war in Ukraine have only made the task tougher for farmers, with hikes of up to 40% on input costs including nitrogenous fertiliser. 

“And those cost rises have come higher than the rise in commodity values.”

A 1% rise in fertiliser costs feeds through to a .14% increase in beef prices and a .16% increase in dairy, for example.

Global trade and a rules-based trading system need to be preserved to play a vital role in at least maintaining nutrient flows to the world’s population, she said. 

About 20% of the world’s calories are supplied through trading outside of domestic borders, but that is less than 10% in the United States, and 70% in Africa.

Meantime there is a need to double down on addressing the triple challenges and ensuring a reliable rules-based international trading system remains in place.

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