According to the latest annual OECD-FAO Agricultural Outlook, growth rates in world prices for meat, dairy and fish (together with biofuels) will outstrip those for cereals over the next decade. This is because global demand is shifting towards greater consumption of protein, fats and sugar as a result of rising incomes in newly emerging economies.
In the shorter term it is forecast that for the next 2 or 3 years, world prices for cereals and other crops will continue to fall “before stabilising at levels that remain above the pre-2008 period, but significantly below recent peaks”. This “below 2008 plateau” price level represents a fall in real prices, but with less price volatility expected. The growth in global demand for meat is expected to result in a shift in production in the cereals sector from wheat and rice towards coarse grains as well as other feeds such as oilseeds.
The report does not specifically identify the Caribbean and Pacific, but it does include forecasts for continental Africa. It expects Africa to increase net imports to meet growing demand.
For the coming year, the report highlights a favourable production outlook in South Africa for coarse grains and in Madagascar for rice, but drought-related problems for rice in Tanzania. For the decade as a whole, the expected price fall for cereals translate into a lower forecast for the growth of African rice production compared to the projection in the 2013 Outlook. Because African demand for rice is expected to outstrip its supply, the continent’s share of world rice imports is forecast to rise from 31 to 38% by 2023.
Africa’s production of meat is expected to increase – but by less than Asia, Latin America and North America. The growth in beef production in Africa will be particularly significant in least developed, pastoral states, and Africa will contribute to the growth in sheep meat output. But because of growing population, meat consumption is expected to outstrip production growth. In this context Africa is expected to account for “a significant share of additional meat imports”. Poultry meat is expected to overtake beef as the main meat consumed in Africa.
Africa’s production of some cereals and meat is expected to increase over the next decade – but consumption is forecast to grow faster. This, however, does not signal a major rise in per capita consumption but rather an overall expansion of consumption based largely on population growth. According to the OECD-FAO forecast, “per capita consumption growth in the region remains marginal.”
These trends will, however, result in increased import dependency. This can also be seen as a lost opportunity for African producers. In this context, this would appear to highlight the importance of reinforcing investment in agricultural production (through meeting Comprehensive Africa Agriculture Development Programme/CAADP targets for investment mobilisation and production expansion – 6% per annum by 2015) and strengthening policy formulation to ensure that local markets work more efficiently in terms of linking up rural production areas with urban consumption zones.
Without a shift of agricultural production onto a higher growth path, the opportunities for deficit states to satisfy consumption through intra-regional trade will remain limited.
Another lesson, therefore, is that international trade will remain vital to the efforts of many in Africa to feed themselves, at least until the fruits of CAADP-style investment in agricultural production start to feed into higher levels of output. Buoyant exports – some of them agricultural – will be required to fund increased food imports. If the forecasts turn out to be broadly accurate, the anticipated decline in real prices for cereals is good news for net cereals deficit countries, while the projected rise in meat prices should be of considerable benefit to livestock-based economies in Africa, if production, processing and marketing challenges can be successfully met.