Agriculture must be more sustainable and productive

The biggest challenge is feeding an ever-growing world population in a sustainable way. The impact of the climate crisis and the economic consequences of the war in Ukraine are also challenges. The war is the biggest short-term concern. Already existing problems such as trade disruptions due to the corona pandemic, poor weather conditions and rising production and transport costs have been exacerbated by the uncertainties surrounding agricultural exports from Ukraine and Russia. Both countries are important grain suppliers and Russia's role in the fertilizer market has also reinforced existing concerns about fertilizer prices and short-term availability.

The authors have calculated that equilibrium prices of grains could rise by 19% if grain exports from Ukraine come to a complete standstill. And by no less than 34% if on top of that, half of Russia's exports come to a standstill.

Famine lurking
If exports from Russia and Ukraine fall over the next two years and there is no response from the other countries, the number of chronically malnourished people could rise further. This is evident from a simulation carried out by the authors of the report. Without peace in Ukraine, food security will come under even greater pressure. Especially for the poorest people on earth," says Mathias Cormann, Secretary General of the OECD. "An immediate end to the war would be the best outcome for the people of Ukraine and Russia, as well as for the many households suffering from the sharply increased prices as a result of the war."

To guarantee food security, global trade will have to function properly, the report states. World trade is expected to grow in line with production in the coming years. Some countries will export more, but there will also be countries that are forced to import more because there is growing consumption. According to the report, this ever-growing interdependence between trading partners underlines the need for a transparent, predictable and rules-based multilateral trading system.

Agriculture more productive
Global agricultural production is expected to grow by 1,1% per year over the next ten years. This extra productivity mainly comes from low- and middle-income countries. According to the report, better access to raw materials and investments in technology, infrastructure and education are crucial to grow agriculture. However, there are concerns that a long-term increase in energy and raw material costs, such as fertilizer, will increase production costs and also impact productivity and growth in the coming years. The report also examines the contribution that agriculture makes to climate change. Greenhouse gas emissions will grow by 6% over the next decade. 90% of that growth comes from livestock. However, emissions are expected to grow less rapidly than production. This is partly due to greater effectiveness and a reduced share of ruminants.

Conflicting goals
The agricultural sector must achieve two contradictory goals in the coming years. On the one hand, there is the global goal of ending hunger by 2030. On the other hand, greenhouse gas emissions must meet the climate goals set out in Paris. To achieve that first goal, productivity must grow by 28% over the next ten years, without this being at the expense of the environment. And that is more than three times the productivity growth of the past decade. The required 24% productivity growth for arable farmers is almost double the growth achieved over the past decade (13%). The productivity of the livestock must increase by no less than 31% on average. Policy measures should encourage the use of sustainable new technologies, the authors say. 

The authors write that other improvements still need to be made. Consider policy measures to further limit greenhouse gas emissions from the sector, measures to combat food waste and measures to combat overconsumption, especially of meat.