Agricultural commodity prices are expected to remain high in the future and to exhibit greater volatility. Both factors will lead to a situation where even more people – the urban poor in the developing countries in particular – will suffer from malnutrition. At the same time the developing and emerging countries will produce more food. These are the predictions of the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Cooperation and Development (OECD) as outlined in their Agricultural Outlook 2008–2017.

Although commodity prices are not expected to stay at their current peak, the economists nonetheless envisage average price hikes of 20 percent to 80 percent in nominal terms for the 2008–2017 period compared to the past ten years. Beef and pork prices are tipped to rise by 20 percent, sugar 30 percent, wheat, maize and skimmed milk powder 40–60 percent, butter and oilseeds more than 60 percent and vegetable oils more than 80 percent. Uncertain food  upplies (yield fluctuations as a result of climate change, depressed buffering capacity as a result of diminished stocks, price speculation) are at the same time likely to result in more volatile market prices.

The demand for food, driven by rapidly-expanding populations worldwide, changes in diet and the use of biofuels, will remain high (see also Rural 21, n° 3/08, p. 2). In response, agricultural production will increase around the world. In so doing, the epicentre of global agriculture will shift towards the developing countries. By 2017 these nations are predicted to dominate the production and consumption of most food staples, with the exception of coarse grains, cheese and skimmed milk powder. Increasing demand from these areas will be met largely by increased imports from emerging markets and other developing countries. However, many farmers in the developing countries have no market access and will derive very little benefi t from the increasing prices. The ones to suffer will be the poor, especially the urban poor in net foodimporting countries. More people are expected to suffer from malnutrition in the years to come. According to the report, more humanitarian aid will be needed to reduce the impact of higher prices on the very poor. For the longer term it emphasises the importance of improving the domestic supply capacity of those countries by increasing investment in education, training and extension services, research and development and physical infrastructure.

Only limited new areas of land are available to meet the rising demand for food. In response, the report focuses mainly on increasing agricultural productivity. It assumes some strengthening of the US dollar against most currencies, which should reinforce domestic incentives in these countries to increase production. These factors, however, will be partially offset by high oil prices and theresultant increases in production costs.

(sri)