Foreword
This year’s OECD-FAO Agricultural Outlook comes at a critical juncture. The COVID-19 pandemic has placed unprecedented stress on the agricultural sector, requiring swift action to ensure the sector can remain resilient, efficient and sustainable, now and over the longer term. The 2021 UN Food Systems Summit in New York will be an excellent opportunity for the international community to chart a future vision for the agri-food systems, including to meet the Sustainable Development Goals (SDGs). With less than ten years until the 2030 target for achieving the SDGs, policy-makers need to reflect on the factors and forces driving performance in the agri-food systems. It is against this background that the 2021 OECD-FAO Agricultural Outlook identifies and analyses the drivers of performance in the agri-food markets over 2021-2030.
The annual OECD-FAO Agricultural Outlook provides decision makers with reliable information on future trends for agriculture and food and the factors driving global demand, supply, trade and prices. It provides a comprehensive medium-term baseline scenario for the expected evolution of agricultural commodity, fish and biofuel markets at national, regional and global levels. This baseline scenario represents the considered views of global experts from national governments and international commodity organisations around the world.
The Outlook suggests that some progress towards the SDGs will be made, assuming a fast recovery from the global COVID-19 pandemic and stable weather conditions and policy environments, although the past year of disruptions from COVID-19 has moved us further away from achieving the SDG targets. Without additional efforts, the Zero Hunger goal will be missed and greenhouse gas (GHG) emissions from agriculture will increase further.
Over the coming decade, diets in low-income countries are projected to remain largely based on staples, and ensuring food security for a growing population will remain a key challenge. Consumers in middle and high-income countries will consume higher shares of fats and animal products in their diets, underscoring the need for additional efforts to promote a transition towards healthier diets, as recommended by the WHO and FAO and as encouraged through FAO’s Hand in Hand initiative. At this year’s UN Food Systems Summit, we must all work together to transform the way the world produces, consumes and thinks about food. An agri-food systems transformation is urgently needed.
Productivity improvements are expected to account for most of the projected growth in agricultural production needed to feed a growing global population sustainably. However, these improvements will not happen without continuing investments in infrastructure and R&D, and an important acceleration on innovations in digitalisation, technology, better data, and on human capital
These investments are also critical for limiting the environmental impact of agriculture, enabling sustainable yield increases, and allowing production to be driven by productivity growth rather than expansion of agricultural land. While the carbon intensity of agricultural production is expected to decline further over the next ten years, more is needed for the sector to effectively contribute to the global reduction in GHG emissions targeted in the Paris Agreement. This again underscores the need for investments in, and the global implementation of, innovative solutions to improve the environmental sustainability of the agricultural sector.
Making these investments will be challenging, as projected productivity gains and slowing demand growth are expected to keep the baseline real prices of basic agricultural commodities flat over the medium-term to 2030. These medium-term price projections are subject to uncertainty, and they do not remove the reality of short-term price spikes and volatility ‒ as evidenced by the current surge in global food commodity prices. The Agricultural Market Information System (AMIS) and FAO’s Food Outlook both provide timely insights into current market developments and also form the basis of the medium-term outlook.
Lastly, trade will continue to be critical for food security, nutrition, farm incomes and tackling rural poverty. COVID-19 has underscored the importance of a fair, equitable, open, transparent and rules-based international trading system for the food security and well-being of populations in both exporting and importing countries. The COVID-related disruptions to transport and logistics highlighted the importance of intra-regional trade in agri-food products, particularly in Africa. And COVID-19 has again demonstrated that trade restrictions are counterproductive, undermining confidence in global markets and ultimately threatening global food security.
While policy makers are understandably focused on overcoming the immediate COVID-19-related challenges, decisions made now will shape the future of the agriculture sector. There is thus a unique opportunity at this juncture to “build back better”, and to set the sector on a path of sustainability, efficiency and resilience. The OECD-FAO Agricultural Outlook provides insights and evidence to support countries as they shape the sector to be ready to navigate risks and seize new opportunities over the next ten years and, thus, contribute to achieving the SDGs.
