OECD-FAO Agricultural Outlook 2015 to 2024 Focus on Latin … · 2019-06-20 · OECD-FAO Agricultural Outlook 2015 to 2024 ... • Production growth to come mostly from productivity

OECD-FAO Agricultural Outlook 2015 to 2024 Focus on Latin America

Stephan Hubertus Gay OECD Trade and Agriculture Directorate México, 29 October 2015

2 2 OECD-FAO Agricultural Outlook 2015-2024 | www.agri-outlook.org | #AgOutlook

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Long term real price trend

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1 200USD/t

Real Maize Price Long Term Trend


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Prices to remain higher than the years preceding the 2007-08 price spike

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Index (2012-14=100)

Cereals Dairy Meat Oilseeds


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This Outlook integrates uncertainty analysis

10th

90th

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USD/t Nominal maize price


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• Production increase based on yield growth and area

expansion

• The Americas main surplus region

• Special chapter on Brazil • Context: agriculture’s evolving role in the economy

• Main highlights of the Outlook for Brazil

• Three core challenges: 1. Sustaining agricultural productivity growth

2. Improving the environmental sustainability of

agriculture

3. Achieving further reductions in poverty and inequality

Focus on Latin America


6

Arable crop areas and yield changes in Latin America

Average annual percentage change 20024 relative to 2012-14

Notes: Axis refer to average annual percentage changes in yield and area harvested over the projection period (2015-24), while the size of the bubbles are indicative of the share in total arable crop area in the base period (2012-2014).


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Arable crop areas and yield changes in Asia and Pacific

Average annual percentage change 20024 relative to 2012-14

Notes: Axis refer to average annual percentage changes in yield and area harvested over the projection period (2015-24), while the size of the bubbles are indicative of the share in total arable crop area in the base period (2012-2014).


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World exports concentrated

AFRICA AMERICAS ASIA EUROPE OCEANIA

Concentration of exports, 2024

• Strong regional

differences persist

• US, EU and Brazil

remain among top

exporters

• In addition to sugar,

Brazil will become

leading exporter of beef

and poultry.

• Increased market risks,

associated with natural

disasters or the

adoption of disruptive

trade measures.


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World imports dispersed

Concentration of imports, 2024

• China stands out as

main importer of many

commodities.

• Trade pattern between

developing and

developed countries will

persist.

• Trade and domestic

policies are expected to

influence


10

Producer support (percentage of gross revenues)

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2000-02 2012-14 2000-02 2012-14 2000-02 2012-14 2000-02 2012-14 2000-02 2012-14 2000-02 2012-14 2000-02 2012-14

OECD Chile European Union Mexico United States Brazil China

%

Market Price Support Payments based on output and variable input use Other payments to farmers


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• Share of primary agriculture in GDP not especially high: 5.4%

in 2013

• Broader supply chain from inputs to processing & retail: 18%

• Agriculture and agro-food account for more than 1/3 of total

exports => major foreign currency earner

• The sector has played a “buffer” role during periods of weak

economic growth

• The sector supplies almost half the country’s energy

requirements

• It accounts for 13% of employment

• Poverty in Brazil is predominantly urban, but the incidence is

higher in rural areas where farming is a central activity

Agriculture plays an important role in the functioning of the Brazilian economy


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• Agricultural output has more than doubled since 1990

• The main driver has been rapid productivity growth, with some increase in agricultural area

• Technological change

• Capital replacing labour

• Change in the destination of exports: Asian market has become more important than the European one

• Slowing rate of deforestation – debate on agriculture’s direct and indirect contribution

• Agriculture a significant source of GHG emissions, but total emissions falling

• Rapid reductions in poverty and hunger, with improved access to food

Rapid development of the agricultural sector


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• Brazil to become foremost supplier in meeting additional global import demand

• But for many products a large share of production goes to the domestic market

• Production growth to come mostly from productivity improvements, with little increase in agricultural area

• Further reforms could enhance productivity – e.g. investment in infrastructure, reduced regulatory burden

• Forest Code, Low Carbon Agriculture will improve sustainability of farming practices

• Opportunities for family farmers in key products, e.g. coffee, tropical fruits

Highlights for Brazil


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Allocation of ten year production increases of major exportable commodities in Brazil

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Ethanol Cotton Oilseeds Sugar Pork Poultry Beef Coarsegrains

% Change

International Market Domestic Market


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Impacts of 25% higher (or lower) economic growth in China

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Oilseeds Sugar Vegetable oils Poultry Cotton

Mt

China Imports Brazil Exports to China Brazil Exports Brazil Production

ch

an

ges b

y 2

024


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Crop production in Brazil

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More sugarcane allocated to produce ethanol

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2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

billion litres Mt Ethanol Sugar Biofuel


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• Reducing the costs of doing business: • Lower regulatory burden, lower industrial tariffs,

simplified indirect taxes

• Improving the capacity for development: • Investment in infrastructure; strengthening human

capital

• Strengthening the innovation system

• Alignment of policy incentives

Challenge 1: Sustaining productivity growth


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• Brazil has abundant natural resources

• Environmental constraints vary across the country

• Production increases can be achieved sustainably

• Current policies emphasise these opportunities

• New Forest Code; Low Carbon Agriculture

• Agriculture a significant source of GHG emissions –

impact of a prospective climate change agreement still

unclear

Challenge 2: Improving the environmental sustainability of agriculture


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• Within agriculture, there are commercial opportunities for

poorer farmers in some sectors (e.g. coffee, tropical

fruits)

• Targeted investments can help farmers realise those

opportunities

• Parallel need for balanced rural development that

creates jobs both within and outside agriculture

Challenge 3: Achieving further reductions in poverty and inequality


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We invite you to visit our website

www.agri-outlook.org

For inquiries or further information, please contact:

Gregoire Tallard

[email protected]

Trade and Agriculture Directorate

(OECD)

Holger Matthey

[email protected]

Trade and Markets Division

(FAO)

Documents

OECD-FAO Agricultural Outlook 2015 to 2024 Focus on Latin … · 2019-06-20 · OECD-FAO Agricultural Outlook 2015 to 2024 ... • Production growth to come mostly from productivity