Abstract
Recent globalization has been characterized by a decline in the costs of cross-border trade in farm and other products. It has been driven primarily by the information and communication technology revolution and—in the case of farm products—by reductions in governmental distortions to agricultural production, consumption and trade. Both have boosted economic growth and reduced poverty globally, especially in Asia. The first but maybe not the second of these drivers will continue in coming decades. World food prices will depend also on whether (and if so by how much) farm productivity growth continues to outpace demand growth and to what extent diets in emerging economies move towards livestock and horticultural products at the expense of staples. Demand in turn will be driven not only by population and income growth, but also by crude oil prices if they remain at current historically high levels, since that will affect biofuel demand. Climate change mitigation policies and adaptation, water market developments and market access standards particularly for transgenic foods will add to future production, price and trade uncertainties.
Highlights
One of the most striking features of economic development is the relative decline in the agricultural sector in growing economies
That has been characterized by a rapid decline in the costs of cross-border trade in farm and other products, driven by declines in the costs of transporting bulky and perishable products long distances, the information and communication technology (ICT)
research and development (R&D) on the latter will reduce the upward pressure that demands for those non-food crops would otherwise put on food prices, but the antiGM food stance will continue to reduce the potential for biotechnology to lower food prices in countries where GM food is discouraged or banned—with major implications for bilateral trade flows since it effectively divides the world food supplies into two separate markets (Anderson & Jackson 2006)
Summary
One of the most striking features of economic development is the relative decline in the agricultural sector in growing economies. Whether that leads to a decline or a rise in the overall food self-sufficiency in and net exports of total agricultural products depends on productivity growth in farming relative to non-agricultural production (Anderson 1987), and in trends in government assistance to farmers relative to producers of other tradables. Price-distorting policies have gradually changed from disfavouring to favouring agriculture relative to other tradable sectors as per capita incomes grow (Anderson 2009); globally, productivity. Revolution and major reductions in governmental distortions to agricultural trade Together, these developments have boosted economic growth and reduced extreme poverty globally, and in the process altered global agricultural production, consumption and trade patterns. This paper first examines the key drivers of the above developments over the past four or five decades and draws on that analysis and recent events to suggest likely drivers of—and uncertainties associated with—global food and other agricultural trade trends over the four decades
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