June 16, 2010

Brazil is set to outpace the EU27 four-fold in agriculture growth during the next 10 years, according to the annual joint report from the OECD and the UN Food and Agriculture Organisation (FAO), published on Tuesday (Jun 15).

The OECD-FAO Agricultural Outlook 2010-19 says that based on commodities, Brazil is the fastest growing agricultural sector by far, growing by over 40% to 2019, when compared to the 2007-09 base period.

Russia and Ukraine are projected to grow 26% and 29%, provided plans and support measure by the respective governments proceed as indicated and bear fruit, marking a significant recovery in production levels.

China and India may also grow significantly by 26% and 21%, respectively. While Australia is projected to grow some 17%, this growth reflects an assumed return to more normal yields. Production growth in the US and Canada is projected in the 10-15% range over the same period.

In contrast, over the same period, net agricultural output in the EU-27 will have grown less than 4%. The report says these diverse trends reflect important developments in these countries which may be generating or inhibiting growth.

The report says per capita output has fallen in North Africa and the Middle East, largely due to limited water availability and policies in some countries such as Saudi Arabia to reduce highly subsidised wheat production. Production in the Sub-Sahara region of Africa is expected to be stagnant in per capita terms, as production barely keeps pace with population growth still averaging around 2.2% per year.

In Western Europe, production is also stagnant. Growth in consumption on a per capita basis in this region will need to be met by imports. Latin America is the fastest growing production region, but in per capita terms Eastern Europe, is the fastest growing, because projections assume that in this region's population numbers will actually decline by over 3% over the Outlook period.

The report sees global agriculture output growing more slowly over the next decade than in the past 10 years but nevertheless remains on track with previous estimates to meet the 70% increase in world food production required to meet the market demand of estimated population levels in 2050.