Published on 12/07/06

Global trends shifting farm markets, expert says

By Stephanie Schupska
University of Georgia

When Carole Brookins gives her spin on global trends, she reaches into the future to work in the present. As former U.S. executive director to the World Bank and a historian, she doesn’t look at numbers but at what they represent.

“Agriculture’s markets are shifting, and not only due to farm policy and trade negotiations,” Brookins said in Athens, Ga., in the annual J.W. Fanning Lecture at the University of Georgia College of Agricultural and Environmental Sciences.

“Ethanol and biofuels are having a profound impact on rural America,” she said. “Climate change can mean big benefits to agriculture and rural economies.”

Climate change and emissions trading can lead to new sources of farm income from carbon credits, she said.

Consumer tastes and food products are changing, and not just because of the “food police.” Brookins said modern wars are against calories, food allergies, fats, aging, diseases and bioterrorism.

Technology, too, is “making agriculture sexy,” she said. Couple that with the demand for organic, which grew 15 percent last year, five times the rate of conventional foods, and you’ve got a picture of American trends.

But while Americans now look at whether they saved a cow or tree by the kind of cereal they ate for breakfast, she said, “we’re the few who can be this selective.”

To think globally, Brookins said, all it takes is a look at future numbers.

With the United States, Europe and Australia containing fewer than 10 percent of the world’s consumers, she said, industry, agriculture and business need to shift their focus abroad.

“In 1950, developed countries had 30 percent of the world’s population,” she said. “By 2050, we’ll have only 10 percent.” By 2025, she said, 1.6 billion people will have been added to the world, 96 percent in developing countries.

Asia’s share of the global gross domestic product will reach 50 percent of the total GDP by 2050, she said. Latin America’s share will rise by 3 to 4 percent. Europe’s will decline substantially, and the U.S.’s will remain constant.

A key to working within these trends is to have smart engagement in emerging markets.

“Development assistance is the key to improving ports, customs and trade infrastructure,” she said. “Trade platforms, not paper agreements, move products into real trade.”

This has to be taken in the context of each country. Governments that work, she said, have good rule of law, regulatory enforcement and transparency and dispute resolution. With poor governance, 25 percent of a product’s cost is from poor shipping and infrastructure.

The average time it takes to clear customs for sea cargo is a bit more than two days in developed countries, according to the International Exhibition Logistics Associates. In East Asia and the Pacific, it’s about five days. And in Africa and South Asia, it’s about 10.

In India, it takes more than 80 days to wade through paperwork to start a new business, compared to just a few in the U.S. In Sierra Leone, a person must have more than 1,200 percent of his income saved to start a new business. In the U.S., you need about zero.

All of these factors affect how countries develop, how growers and producers get their products to market and how businesses meet the demands of fast-growing populations. This is critical, since cities like Bombay and Delhi, India, will each have more than 20 million people by 2015.

Europe’s largest city then will be Paris, with just 10 million. The U.S. will have two megacities: New York (19.7 million) and Los Angeles (13.1 million).

“We need to be focusing on global trends,” Brookins said. “People plus urbanization equals purchasing power. Megacities are proliferating. By 2015, 360 million people will be occupying 22 cities in the world.”

(Stephanie Schupska is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.)

Stephanie Schupska is the communications coordinator with the University of Georgia Honors College.

CAES Media Newswire