For decades, global agriculture was characterised by policy-induced production surpluses in industrialised countries and stagnating growth in developing countries. Policy reforms and economic growth across the globe have been changing demand and supply fundamentals sufficiently to turn agriculture into a more market-driven sector which provides investment opportunities, particularly in developing countries. Agricultural trade is projected to increase with developing countries capturing most of the export growth. Expansion of agricultural production is likely to slow at least in the medium term with slower area and productivity growth. Supply should keep pace with demand at prices that are expected to remain relatively high. In this context, measures to reduce food loss and waste will be important in meeting rising demand and for increasing productivity.
With one-fifth of the world’s population, high income growth and a rapidly expanding agri-food sector, China is a special focus of this Outlook. Developments in Chinese agriculture may have a major influence on world markets. With increasing production constraints and strong demand growth, additional agricultural imports may be anticipated.
Still, China should remain self-sufficient in the main food crops despite its relatively limited per capita agricultural resource endowments. Food security has improved as high income and agricultural growth has reduced the number of undernourished people from 21% in 1990 to 12% today but more still needs to be done as the economy expands.