Anyone who wants a birds eye view of global agriculture and its likely development should read, or at least dip into, the Organisation for Economic Co-operation and Development (OECD) 600-page review of the sector. Just published this week, it is bang up-to-date in analysing how the food and agri sector responded to the COVID-19 pandemic.

Well, it is the short answer, with the entire sector classified as essential activity.

But apart from COVID-19, this enormous volume looks at two very different types of government involvement in agriculture

While there were some hiccups, broadly, people were fed and the supply chains functioned surprisingly smoothly. It was much better to be a farmer or supermarket owner than an airline pilot or hotelier.

But apart from COVID-19, this enormous volume looks at two very different types of government involvement in agriculture. The first approach is broadly analytical and is an invaluable reference for anyone involved in the sector.

The second is the policy recommendations where the OECD repeats its long-term aim for a level playing field. The report clearly identifies what should be the aims of an agricultural policy:

  • The provision of a secure and nutritious food supply.
  • The provision of an income for farmers and producers.
  • Environmental sustainability (to use the current buzz word).
  • The first is the easiest to measure. Either enough food is being produced, or there is a persistent scarcity. The figures are astonishing. Global agricultural production has increased fourfold since 1960, far outpacing the growth in population with the amount of food per person increasing by 56%. This trend is forecast to continue, due to the continued growth in crop and livestock production efficiency gains.

    I hadn’t realised that irrigation for agriculture accounts for 70% of all fresh water usage

    Not surprisingly with these long-term gains in productivity, there has been a continuous decline in farm prices, especially in grains and meat dependent on grains. So, maize in 2020 was only one-third of its real price in 1960. The same applies to pork, but beef has held its real price better. The analysis on the developments in farm incomes is, at least in this report, non-existent, but there is a major focus on the environmental effects of farming.

    I hadn’t realised that irrigation for agriculture accounts for 70% of all fresh water usage, while in the production of greenhouse gases, the EU accounts for less than half of those generated by either South America or Africa. If there are two key messages to be taken from such a comprehensive report, they are:

  • Recent growth in agricultural output has come from enhanced efficiency compared to the 1960s and 1970s, when extra land was being brought into production.
  • New plant breeding technology such as gene editing and genetic modification has transformed global agriculture, as well as dramatically reducing the use of many plant protection products including insecticides. Europe is being visibly left behind.
  • It’s unsurprising that those with very competitive natural conditions, such as New Zealand for milk and lamb and South America for beef and crops, get very little government support and may, in the case of Argentina, suffer taxes on exports.

    But it’s a pity that the issue of appropriate levels of national food self-sufficiency is not addressed. The implied recommendation of a reliance on imports, does not seem sensible in such an unstable world.