Remarks by Angel Gurría
Paris, France,10 July 2017
(As prepared for delivery)
Excellencies, Ladies and Gentlemen,
I am delighted to launch of this year’s OECD-FAO Agricultural Outlook – the 13th edition that we have produced jointly with the UN Food and Agriculture Organisation. I would like to express my appreciation to José Graziano da Silva and his team for their continued partnership.
This year’s Outlook comes at a time when the benefits of increased global integration and co-operation are being questioned. Yet international economic co-operation will be essential if we are to meet the fundamental challenges facing world food and agriculture: to ensure access to safe, healthy, and nutritious food for a growing world population; to use natural resources more sustainably; and to curb climate change.
This, in essence, is the message contained in the Declaration on Better Policies to Achieve a Productive, Sustainable and Resilient Global Food System that Agriculture Ministers and Vice Ministers from 48 OECD Member and partner countries, adopted last year at the OECD.
At the global level, slowing growth in food demand is putting downward pressure on food prices. Last year, we said that the recent period of high world food prices was effectively over. This year, we see that assessment further confirmed, with the prices of food crops now almost back to their levels before the 2007-08 food price crisis. Cereal stocks have been replenished by 230 million tonnes over the past decade, while abundant stocks of most other commodities are keeping prices well below the peaks experienced in the last decade.
The Outlook predicts that the real prices of most agricultural commodities will decline slightly over the next ten years. Fish prices are expected to fall by 1% per year in real terms over this period. And when it comes to biofuels, we expect ethanol prices to remain at current levels in real terms, with a modest decrease in the price of biodiesel.
As we have seen, unexpected events can easily take markets away from these central trends. In the past I have talked about the “hikes in the spikes”; now we have to beware of the “bumps in the slumps”!
When it comes to consumption, we expect that the global growth in demand observed over the last decade will slow down. Demand growth in China is slowing, as is growth in the production of biofuels in the face of moderate crude oil prices.
Agricultural markets are inherently volatile, but we need to ensure that policy uncertainties do not add to market risks. Trade needs to be allowed to balance surpluses and deficits in different regions of the world at different times of the year.
It is equally important that we look ahead. We need to monitor the economic trends and the policy choices that can shape markets over the medium and long term.
The OECD is proud to partner with the FAO as we help to respond to these global priorities. For example, we will continue to contribute to AMIS – or the Agricultural Market Information System – which was launched by the G20 in 2011 to help bring transparency and improved policy co-ordination to international food markets.
This year’s Outlook contains a special focus on the prospects for agriculture and fisheries in Southeast Asia. It is a region on the front line of the effects of climate change, and where the pressures on natural resources are rising. Food security has improved significantly, however. Undernourishment in the region has declined from around 31% of the population in the early 1990s to below 10% by the period 2014-16. Strong growth has raised farmers’ and fishers’ incomes.
The challenge now for the region is to maintain this growth, extend its reach to more rural families, and to improve its environmental footprint. Deeper regional integration will be one important dimension going forward, and the OECD’s Southeast Asia Regional Programme is helping to address this.
Excellencies, dear colleagues,
In 2015, we agreed on a common level of ambition through the SDGs and the Paris Agreement. Agriculture will be crucial in delivering on these commitments, ensuring food security for all, while safeguarding our planet for future generations.
In this important area and many others, the OECD remains committed to working with others in the pursuit of Better Policies for Better Lives. Thank you.
Press release: OECD and FAO see slower growth in demand keeping world food prices low
OECD work on Agriculture