Remarks by Mathias Cormann, Secretary-General, OECD
6 July 2023
Director General Qu,
Colleagues,
Welcome to the launch of this 19th edition of the OECD-FAO Agricultural Outlook 2023-2032.
Dongyu, congratulations on your recent re-election, we very much look forward to continuing our work together.
Well-functioning agricultural markets are essential for food security, development progress, and economic opportunities for the hundreds of millions of households around the world who earn their incomes from farming.
These markets have been under significant pressure in the past year, especially due to Russia’s war against Ukraine, which has disrupted agricultural supply chains.
The implementation and extension of the Black Sea Grain Initiative has improved the availability of grains and fertilisers since the onset of the war.
However, higher agricultural input prices continue to pose risks for global food security.
The Outlook shows that for every 10% increase in fertilizer prices, agricultural commodity prices could rise by 2%, with the burden falling hardest on those who can least afford it.
The good news is that fertilizer prices, while high, have eased from their 2022 peak.
But well-designed policies are needed to lay the foundation for long-term food security, affordability and sustainability.
First, boosting productivity in the agriculture sector.
The growth in global food consumption is projected to slow to 1.3% over the next decade.
However, even at this slower rate, global agricultural production is not expected to keep up.
Investments in technology, infrastructure and training for farmers and other food sector workers will need to grow more than currently expected to address the shortfall in output growth.
These investments could help improve crop and herd management, boost crop yields, and increase livestock productivity per animal through strategies like higher feed intensity.
Second, on the sustainable transformation of the agriculture sector to address our climate change mitigation and adaptation goals.
The Outlook shows that progress has been made in reducing the carbon intensity of agricultural production: agricultural output is projected to increase at 12.8%, greater than the projected 7.5% increase in greenhouse gas emissions for the sector.
Still, we need to further accelerate the decline in emissions intensity, particularly for livestock which account for 86% of the increase in agricultural emissions.
Sound policy frameworks are needed to incentivise the large-scale, and broad-based adoption of carbon neutral, and climate resilient, production processes and technologies.
Reducing food loss and waste is a major opportunity to increase food security, and decrease carbon emissions.
The Outlook’s improved statistics on food loss and waste will allow policymakers to track progress in tackling this challenge.
Third, on keeping agricultural markets open to trade and investment.
The Outlook shows that urbanisation in regions such as Southeast Asia is driving demand for affordable, convenient, packaged food, creating new export opportunities.
And trade will be a vital source of resilience when the adverse effects of climate change result in food supply disruptions.
As we emphasised launching last year’s edition of the Outlook, export bans must continue to be avoided in the wake of these disruptions, as they can aggravate price increases and undermine long-term supply.
In closing,
Agriculture is central to our economies, societies and structural reform priorities.
So the OECD’s greatly values its cooperation with the FAO:
- Our joint contributions to the G20’s Agricultural Market Information System, which enhances food market transparency and supports food security.
- Our development of the OECD-FAO Guidance for Responsible Agricultural Supply Chains, for which we are developing guidance on topics such as deforestation and forced labour in the cocoa sector.
- Our joint management of the Aglink-Cosimo model, which supports analysis of global agricultural markets and the impact of policies on those markets.
- And of course this Outlook, for which the Aglink-Cosimo model is an important input.
The data and the evidence-based analysis that we develop together helps policymakers assess the impact of their policies, identify new challenges on the horizon, and ultimately develop better agriculture and food policies for better lives.
Thank you.