Global Food Demand: A Flavour of the Future

by Shane Fitzgerald

Yesterday, the OECD and the FAO published an Agricultural Outlook for the next ten years, showing the best estimates of how food prices are likely to change between now and 2020.

The outlook highlights both the challenge of addressing global food insecurity and the major opportunities for agricultural producers and processors arising from the higher average prices projected over the coming decade.

Price volatility and insecurity of food supply have devastating consequences for the world’s poor. Both are complex problems dependent on a number of factors including weather and climate change, energy prices, resource pressures, trade restrictions and speculation. But both would be mitigated to some extent by more efficient and sustainable agriculture, which would also improve environmental and economic conditions in exporting countries.

Food consumption and prices are both set on an upward trajectory and, in line with other global trade trends, activity is shifting East. Drawing on longer term projections, the infograph above shows how global food demand is expected to grow by over 40% between now and 2050, mostly in emerging economies.

European producers are keen to establish trade relations in these rapidly expanding markets, but only the most innovative and competitive will succeed. Several European countries including Denmark, Finland and the UK have established strong connections with emerging economies. These countries already export between one and three percent of their total food and beverage exports to India and China.

But other EU states with large agricultural and food processing sectors, including Ireland, Portugal and Greece, are exporting a far smaller proportion of their food and beverages to these promising markets. Each of these countries is looking for ways to shift their economies on to a path of sustainable growth, and in each the potential of agrifood to assist in that shift is enormous.

Innovation and entrepreneurship, as well as the development of new high value added products, are key factors for success. A changing consumer landscape that places increasing importance on the health benefits and authenticity of food, and is marked by an awareness of ethical and sustainable dimensions, provides one backdrop against which such innovations can be considered. In this context, EU-level activities such the granting of Geographical Indications to certain products, and other Food Quality Certification Schemes, are particularly welcome.

There is a huge opportunity for European producers to move up the value chain in areas including branded processed dairy products, quality meats, and artisan products. Success requires a strategic approach, imagination and, perhaps most importantly, increased levels of public and private investment in R&D – the application of the knowledge economy to the agrifood sector. This in turn will make it easier to tap distant export markets, and ensure the continued success of the sector in the coming decades.

These are issues that need further exploration if Europe is to deliver the smart, sustainable and export-driven agrifood sector envisaged in reports such as Ireland’s Harvest 2020. An imminent reform of the EU’s Common Agricultural Policy may prove to be pivotal. The IIEA will be playing its own small role in promoting this exciting agenda through itsFlavour of the Future conference, which will explore these issues with some of the world’s leading experts.

Infographic

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References 

Trade flows Source: United Nations COMTRADE database, DESA/UNSD. http://comtrade.un.org/db/

Productivity Source: World Bank “agriculture value added per worker (constant 2000 US$).” Available at data.worldbank.org

GVA Source: Eurostat: “nama_nace” series available at ec.europa.eu/eurostat UK data from Office for National Statistics Blue Bookdatabase.

Food Demand Source: Estimates constructed using population and per capita food consumption projections from Food and Agricultural Organisation. 2006. World Agriculture: Towards 2030/2050. 

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