'Third World demand to fuel global farm trade'

BRUSSELS: World agricultural production will expand slowly but steadily over the next decade, fuelled by rising Third World consumption and imports while developed countries focus more on quality, a major study said on Tuesday.

The study, co-written by the Organisation for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organisation (FAO), said farm production was shifting away from developed nations, especially for bulk items. Overall, world agricultural production would increase steadily through to 2015 but at a slower rate than during the previous 10 years, it said.

Most developing countries were seeing increasing demand for meat-based products as well as fruit, vegetables and processed foods, based on higher incomes and populations moving towards urban areas — all leading to higher import demand.
Consumption of farm products would grow faster in developing than developed countries over the ‘06-15 period and lead to higher food imports in non-OECD countries, it said.

Local production would probably be overtaken by demand in these countries, it said. Still, their output would indeed rise, due to improvements in local techniques and lower costs thanks to more efficient transport and distribution systems.
“With their increasing affluence and faster population growth... the countries in the non-OECD region are expected to continue to experience a more rapid increase in consumption of agricultural products than countries in the OECD area,” the report said.

“The outlook (study) foresees an intensification of competition for these growing markets between traditional OECD exporting countries and those exporters in the developing world,” it added.

In contrast, developed countries’ decades of concerns about food availability had been replaced by other worries about food attributes and quality, the report said. “... the developing countries are now increasingly determining the contours of the world agricultural landscape and have effectively eclipsed the role of the developed countries in this respect,” it said further.

“Developing countries, and particularly Brazil, India and China, are becoming the new epicentre of forces shaping world agricultural production and trade, a tendency which is expected to accelerate over the outlook period,” it added. Rises in agricultural exports were a key factor driving economic growth in both Argentina and Brazil, which was expected to exceed that of most OECD countries, the study said.