World agriculture towards 2030/2050: the 2012 revision - Fao

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Considering the projections that imply more than 3-fold increase in world economic
activity in just 45 years, one cannot but pose the issue of limits imposed by natural resource
constraints and the environment. The fact that those that make these projections consider them
as possible outcomes, even in a scenario sense, suggests either of two things: (a) that such
constraints will not prove binding in the 45-year projection period, or (b) more likely, they
make the implicit assumption that, in time-honoured fashion, a more prosperous world will be
finding ways around such constraints, as and when they arise – a Julian Simon concept of
economic progress (Simon, 1996).
We cannot possibly examine these aspects here, but certainly we shall have to address
the issue whether agricultural resources, together with prospective developments in
technology and investments in the sector, are sufficient to meet the demands placed upon
them by a growing population and the growth of incomes and changes in diets towards more
livestock products. The saving grace in the case of food is that consumption per capita is a
largely bounded variable: incomes may continue growing but, beyond certain levels (when
per capita food consumption approaches saturation) such income growth becomes largely
irrelevant as it will not be generating additional pressures, at least not significant ones, on
agricultural resources for increasing food production. Considering also that population growth
will be slowing down, we can be more sanguine about absence of constraints to development
arising from global agricultural resource scarcities for producing food than from other
resources, e.g. energy and the environment. However, growth of total GDP becomes very
relevant for pressures exerted on agricultural resources if, as is likely, it increases competition
among agriculture and alternative (non-food production) uses of land and water, e.g. diversion
to biofuels production, or to urban, industrial and infrastructure development.
GDP projections used in this study
Our projections of food demand are derived, as a first step, as functions of projected per
capita GDPs, using different Engel functions for the different commodities and countries. The
projected per capita GDPs are exogenous variables to our agricultural projections exercise and
come from other sources that specialize in economy-wide analyses and modelling. The
demand projections are subsequently modified, sometimes substantially, in the context of
successive rounds of revisions for nutritional consistency and compatibility with “feasible”
projected levels of production and trade for each commodity.
We have traditionally depended on external sources for the GDP projections, usually
from the World Bank. For the present study, the staff of the Development Prospects Group of
the World Bank kindly made available one set of GDP projections related to their above
mentioned work, though much more conservative than the one used in their paper for the
2009 Expert Group (van der Mensbrugghe et al., 2011). They are shown in Table 2.4: world
GDP grows at 2.1 percent p.a., from 2005/07-2050; that of the developing countries (our
definition used in this study) at 3.6 percent p.a. The differential growth rates will contribute
towards convergence between per capita incomes in the developed and the developing
countries. At present the average of the developed countries is nearly 12 times as high as that
of the developing countries when GDP is measured in dollars at market exchange rates of
2005/07. The ratio may be nearly halved by 2050, i.e. decline to 6.3. The initial gap between
developed and developing countries is much smaller if GDP is measured in dollars at PPP
exchange rates. This we can measure for the historical data: the ratio of incomes in 2005/07 is
5.9 rather than 11.9 (Table 2.4). However, as noted PPPs change as incomes of the low
income countries grow faster than those of the high income countries and the distance
between the two narrows: it follows that the ratio of incomes may be less than halved by 2050
if incomes are measured at the PPPs that would prevail in 2050.
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