Will Income or Population be the Main Driver of Food Demand Growth to 2050

Abstract

There is considerable uncertainty about how much food will be produced and how much land and other resources will be required in 2050 (Hertel, Baldos and van der Mensbrugghe, 2016). Part of the challenge is that we still do not understand the relative importance of different drivers of demand. Of particular note is the relative role of population and income that drives future sustainability stresses. Over the past 50 years, population has been the main driver of food demand, as global population has risen rapidly from 3.6 billion in 1968 to 7.6 billion in early 2018. Furthermore, the FAO predicts that the world population is expected to grow over 2 billion in the next thirty-some years, while at the same time per capita incomes on a global scale are projected to be raised several-fold. Projections to the future food consumption however are mixed. Baldos and Hertel (2014) argue that income will overtake population as the key driver of food demand as population growth shifts to the poorer countries where per capita consumption is lower and less resource-intensive. Meanwhile strong income growth in the developing countries will lead to dietary upgrading and strong income-driven growth in demand. On the other hand, Gouel and Guimbard (2017) come to the opposite conclusion, arguing that population will persist as the main driver of global food demand to 2050. However, their analysis abstracts from the supply side of the puzzle, assuming perfectly elastic supplies of food and fixed prices. For this reason, the two studies are not comparable. A key factor in this debate is understanding how the income elasticities of demand for food will evolve as incomes rise. This paper seeks to shed further light on this debate by incorporating a new demand system (MAIDADS) into the SIMPLE model of global food supply and demand, using this revised framework to determine the relative importance of income and population growth in driving global food output to 2050.