Future scenarios in agriculture

1. Future scenarios in agriculture Nick Vink Institute for Futures Research Department of Agricultural Economics University of Stellenbosch nv@sun.ac.za

2. Outline • Foresight Project Report • BFAP Outlook • Supply considerations • Demand considerations • Africa

3. 1. The Foresight ProjectForesight. The Future of Food and Farming (2011). Final Project Report. The Government Office for Science, London

4. The five challenges • Balancing future demand and supply sustainably – to ensure that food supplies are affordable. • Ensuring that there is adequate stability in food supplies – and protecting the most vulnerable from the volatility that does occur. • Achieving global access to food and ending hunger. Producing enough food is not the same thing as ensuring food security for all. • Managing the contribution of the food system to the mitigation of climate change. • Maintaining biodiversity and ecosystem services while feeding the world.

5. Six drivers of change: Population increase • To 8bn by 2030 and >9bn by 2050 • Most in poorer countries: Africa’s population will double to two billion by 2050 • Factors affecting population size include • GDP growth • Educational attainment • Access to contraception • Gender equality • The extent of female education • Urbanisation

6. Six drivers of change: per capita demand for food • Some food items (such as grain-fed meat) require more resources to produce than others • Meat: increases in per capita consumption from 32 kg today to 52 kg by the middle of the century: implications for land, water and other inputs • Fish: demand is expected to increase substantially, and mostly met by aquaculture: consequences for the management of aquatic habitats and the supply of feed

7. Six drivers of change: governance of the food system • The globalisation of markets • The emergence and continued growth of new food superpowers: Brazil, China and India • The trend for consolidation in transnational companies in agribusiness, and food retail

8. Six drivers of change: governance of the food system • Production subsidies, trade restrictions and other market interventions of the rich countries • The extent to which governments act collectively to face challenges in shared resources, trade and volatility in agricultural markets. • The control of increasing areas of land for food production such as in Africa

9. Six drivers of change: climate change • The backdrop is rising temperatures and changing patterns of precipitation • These will affect crop growth and livestock performance and the functioning of ecosystem services • Extreme weather events will increase price volatility • Policies for climate change mitigation will also impact on the food system

10. Six drivers of change: competition for key resources • Land for food production: Additional land is available for food production, but in practice land will come under pressure for other uses • Land will be lost to erosion, urbanisation, recreation, desertification, salination and sea level rise • Global energy demand: Double to 2050, and the food system is vulnerable to higher energy costs • Global water demand: Agriculture currently consumes 70% of ‘blue water’ withdrawals, and demand could double by 2050.

11. Six drivers of change: food ethics • A major influence on politicians and policy makers and on patterns of consumption • Examples include • The acceptability of modern technology (GM) • Production methods such as organic and related management systems • The value placed on animal welfare • The relative importance of environmental sustainability and biodiversity protection • Issues of equity and fair trade

13. BFAP Baseline • World market: OECD-FAO Aglink Cosimo model and the FAPRI US and World Agricultural Outlook • Macroeconomic assumptions • South African supply and demand • Cooperation with industries • Farm level analyses • Building scenarios around the assumptions

14. Assumptions

15. Gross income in agriculture

16. Gross value of field cropsRecovery, then flattening out

17. Gross value of animal productionPoultry, dairy

18. Gross value of table grapes, apples and pearsExport markets

19. Farm requisites

20. Real Net Farm Income

21. Real farming debt

22. Most important trends • Historically high levels of yields for maize (>4.5 t/ha) and wheat • Shift out of (white) maize and towards soybeans and sunflower • Area planted to oilseeds will reach 1.2m ha in 2020, compared to 2.2m ha for maize • Rise and rise in consumption of poultry meat: 2.2m ton/year in 2020, compared to beef (<1m ton) • SA remains a net importer of all meat • Growth in dairy to 2.6m ton in 2020: cheese fastest growing

23. Consumer market

24. 3. Supply considerations

25. ANNUAL REAL FOOD PRICE INDICES (2002-2004=100)Source: FAO, 2011

26. Potential arable land and arable land in use in developing countries, 1997/1999 and 2030

27. Growth in land under irrigation, 1961-2007

28. Potential irrigated land and irrigated land in use in developing countries, 1997/1999 and 2030

29. Total and per capita agricultural production in Africa, 1964-2006

30. Land use in Africa: field crops

31. Land use in Africa: horticulture, pulses

32. Yield trends in Africa

33. Net agricultural exports from Africa, 1961-2007

34. 4. Demand considerations

35. South Africa: exports to world and Africa for 2008 and 2009

36. South African agricultural exports to Africa

37. South African imports from Africa

38. South Africa’s agricultural imports from Africa, 2008 & 2009

39. Wine exports to Africa • Total wine exports have declined the past 3 years • Packaged exports declined most • SA is therefore exporting more bulk wine (little value added) • BUT the market for packaged wine in Africa is growing fast

40. Exports of packaged wine