At the Launch Event of the OECD-FAO Agricultural Outlook held on July 14, 2021 (Pick Up 341), several webinar attendees posted questions addressed to the main speakers, Mr. Holger Matthey, FAO Senior Economist and Dr. Hubertus Gay, OECD Senior Agricultural Policy Analyst at the OECD, as well as to the commentators, Mr. Gen FURUHASHI, PRIMAFF Senior Economist, and Dr. Jun FURUYA, Director of the Social Sciences Division of JIRCAS. Here are the questions and corresponding responses from the speakers and commentators.

● Assumptions

Q: What types of agricultural systems does the model of the report assume? Do they include those relying on chemical inputs such as pesticides?  

A: The report provides production projections based on national accounting figures. As such it includes all production systems in a country, without considering specifics. The projected productivity trends reflect the national average. (Mr. Matthey)

Q: Does your data allow a closer look at the carbon-nitrogen relationship?

A: I am not fully certain what exactly you mean, but we are not including physical fertilizer application rates and our emission accounting only considers the CO2 equivalent. (Mr. Matthey)

● Production

Q: What about farm size trends looking to 2030?

A: Farm size trends are not explicitly considered. Just like the production systems, the impact of the expected trends are supposed to be embodied in the productivity parameters of the model.

Q: My question is about the sources of growth in crop production. Did the growth in land-use and multi-cropped area projected here incorporate the effect of climate change (such as, poleward shift of crop suitable area and increase in the number of harvests per year due to warming)?

A: Although the outlook does not use data for such assessment, relevant information is obtained through discussions with experts and we hope to reflect the results where there is consensus. (Mr. Matthey)

● GHG emission

Q: 4% increase in carbon emission from agriculture is quite high, 80% of this is from livestock, then what about the contribution from paddy fields.

A: The share of paddy rice production in the total growth of emissions from agriculture during the coming decade is projected to be 1%, its contribution to the total emissions from agriculture falls slightly, but remains at about 10%. (Mr. Matthey)

Q: Do you think there will be any effect of recent trend of vegetarian foods may change the global balance of food and GHG emissions from the agriculture? 

A: The impact could not be confirmed from global statistics because the number of vegetarians is limited and the increase is slow. (Mr. Matthey)

Q: I believe that the shift to vegan/plant-based diet is essential in order to avoid catastrophes from the acceleration of climate change. In turn, your model results seem to indicate that both demand for and supply of meat would continue to grow for years to come. Can you have additional information and data to advocate for a shift to vegan diet as well as a shift to more organic, animal-friendly livestock industries?  

A: The Outlook provides an unbiased and neutral scenario of the medium-term prospects and challenges of global agricultural markets. The projections are not a forecast about the future, but rather a plausible scenario based on specific assumptions regarding the macroeconomic conditions, the agriculture and trade policy settings, weather conditions, longer term productivity trends, and international market developments and have the objective to serve as a reference for forward looking policy analysis and planning. (Mr. Matthey)

● Trade

Q: Near East and North Africa Region is standing out with its high dependency on food imports in terms of calorific values. Could you explain the drivers of the trend and possible solutions?   

A: The amount of food that can be produced in each region is limited due to the natural environment and weather conditions. It is important to consider food security within the international trade system. (Dr. Gay)

● Uncertainties

Q: In near future, with the development of new technologies and innovations such as AI, crop productivity can be significantly improved. To which extent does the economic model of the Outlook incorporate such ‘future’ technological breakthroughs?  

A: As such breakthroughs cannot properly be modelled in an economic model, we rely on expert judgement to adjust our outcome. Nevertheless, the approach is rather conservative and structural breaks during the projection period are not included.
(Dr. Gay)

Q: It is interesting to learn that the analysis assumes large portions of the increase in food production attributed to significant improvement in crop productivity. In reality, achieving big improvement in yields in developing countries especially in SSA countries would require a huge investment in R&D. As the authors who were in charge of the analyses, what recommendations are needed to ensure the international community to commit to big investments in R&D for productivity improvements in developing countries?  

A: Considerable improvements of yields in developing countries can be achieved by knowledge transfer and training and we see improvements throughout SSA. The most important element is to provide an enabling environment that farmers are reached. Only based on this further investments in technology is useful and might be based on the demands by farmers. (Dr. Gay)

Q: Investments in productivity growth include research & development. Any way to assess to what extent breeding research drives yield growth, versus agronomy-based improvements?

A: It is difficult to disentangle as both contribute and often it is necessary to have both in parallel, e.g. new breeding technologies require adjusted agronomic practices, or adjusted agronomic processes only work with new varieties. (Dr. Gay)

Q: How sever do you perceive the trends and impacts of global warming, degradation of arable land, water and air pollution? These issues need more global attentions! 

A: These are all significant issues that are considered in the consumption, production, trade and price projections of the OECD-FAO Agricultural Outlook. The specific impact of each of these factors on the markets for agricultural commodities to 2030 cannot be quantified however. (Mr. Matthey)

● Others

Q: The Outlook report refers to challenges to solve multi-dimensional nutrition problems, i.e., eradicating famines on one hand, and dealing with health issues such as obesity on the other. What actions do you think are needed to solve these challenges?

A: In most cases, the food availability is the least problem but access and choice by consumers needs to be improved. Regarding the choice by consumers, education and information plays a vital rule. For access, it is more complicated but mostly it is a problem of income and prices either directly or indirectly that only a limited choice is available. (Dr. Gay)

Q: OECD-FAO Outlook Report is published every year. Could you tell us which feature distinguishes this year’s Outlook report most from the version published last year?  

A: The included boxes focus on new and emerging elements (The determinants of fruits and vegetables consumption; Public expenditure and growth potential for agricultural productivity in Africa; Trade and the Sustainable Development Goals (SDGs); Beyond the conventional Outlook: assessing agri-food systems transformation)). In addition, in the first chapter the aim was to work more on drivers and implications rather than on reporting on the Outlook numbers. This is a continuing process and evolves over the recent years. (Dr. Gay)

● Questions for commentators

Q: The presentations today reminded me of the debates over food and environmental crises, prompted by Lester Brown’s ‘Who will feed China’ published in the late 1990s. OECD and FAO provide plausible scenarios based on the wealth of data. Can we conclude that the outlooks having been projected by the data/model of Lester Brown did not come true or turned out having largely diverged from the actual food demand-supply outcomes? Can you share your opinions on the topic (if the food crises can occur during the 21st century – projections and evidence)?

A: As you pointed out, it is assumed that China itself will feed China as much as possible. However, I believe that Dr. Lester Brown's "Who Will Feed China?" played a certain role in sounding the alarm not only to the world but also to China itself. In addition to the fact that the book's estimates of China's future demand for livestock feed were rather generous, it did not take into account the fact that the price effect would encourage exporting countries such as the US to increase production, and that it did not adequately consider the uses of soybean meal for animal feed. In order to avoid the future predicted in the book (which is one of the future images), China itself took measures, and in addition, adjustments were made in the grain market according to prices, which may have helped to avoid the somewhat excessive future image of the book. In addition, as China's economy has continued to grow at a high rate since the 1990s, the increase in the volume of grain imports was one of the risks that were assumed to be excessive in the future. Therefore, under the current global uncertainty, future food prospects based on quantitative models will continue to be important in order to assume and consider these risks.

Q: Could you explain in detail the potential impacts of the COVID-19 on cold-chain industries?

A: If the spread of COVID-19 reduces the income of consumers, the demand for refrigerated foods such as meat products, will decrease because income elasticities of these foods are relatively high. In such cases, there will be overcapacity of refrigerators in warehouses and cargos. The excess capacity will lead to higher maintenance cost of the cold-chain, which in turn will increase the price of refrigerated foods. In addition, such capacity optimization is difficult due to frequent lockdowns and the issuance of state of emergency. Even with the COVID-19 spreading, cold chain companies will have to continue to employ workers in processing plants and truck drivers to maintain food supplies. These companies must also spend money on hygiene training for their workers. (Dr. Furuya)

Contributor: KUSANO Eiichi (Social Sciences Division)