Shifts and emerging trends in commodity production and trade flows Mathilde Douillet, FARM, Cirad (France) QUNO workshop «New Framework for Trade and Investment in Agriculture» 22 January 2014
Trends in commodity production and trade flows I. What have been the biggest changes? II. What has not changed? 2
I. What have been the biggest changes? Focus on : 1. Prices: spikes and volatility 2. Source of production increase 3. Shift of market power on international markets 4. Landscape of agricultural policies Other major changes s.a.demand (-biofuels, population growth and diets-), finance, investments, climate change, employment etc. discussed during the day. 3
1. Prices: spikes and volatility Source: FAO Causes are numerous and responsability is debated Often volatility on local markets is even higher than on intl Related to the financialization of agricultural markets 4
2. Source of production increase has switched Contribution to agricultural production growth (%) 3 2,5 2 Output growth increasingly led by technical and organisational progress (total factor productivity TFP) rather than increase in input use. 1,5 1 0,5 0 1960s 1970s 1980s 1990s 2000s PTF amount of land and water amount of other prod factor TFP does not presume the type of progress: Could have come from adoption of agro-ecological practices as well as GMOs seeds (needs to be studied more in depth). Source : Douillet et Girard 2013 from Fuglie Ket al. 2012 5
Source: Global Harvest 6
3. Market shares on international markets have changed Is world trade more concentrated or more dispersed in terms of firms? of countries? - Looking at transnational firms, market shares of the biggest ones have increased cf. expertise of participants - Looking at trade flows between countries, world trade is more dispersed (Daviron and Douillet 2013). 7
3. Market shares on international markets have changed Changeover from Europe to Asia for imports 50,00% Food Imports (% of world food import excluding intra EU trade) 45,00% Europa Asia 40,00% 35,00% 30,00% 25,00% 20,00% 15,00% 10,00% 5,00% -Change in the types of products imported: rise of oilseeds and vegetable oil - Linked to political choices 0,00% 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 CHINA INDIA Source: Daviron and Douillet 2013, based on COMTRADE data 8
3. Market shares on international markets have changed The decreasing share of the three major importing countries 80% Three major importing countries 70% 60% 50% 40% 30% 20% 10% 0% Corn Rice Wheat Oilseeds Vegetable oil 1990-1992 Japan, Iran, Russie, EU, EU, South Korea, Brazil, Chine, Japan, Chine, Russia Saudi Arabia Egypte Taiwan Pakistan 2010-2012 Japan, Nigeria, Egypte, China, India, Mexico, Indonesia, Brésil, EU, China, EU China Indonésie Japan EU 1990-1992 Sum of their market share Of which the leader 2010-2012 Sum of their market share Of which the leader Exception Source: Daviron and Douillet 2013 9
3. Market shares on international markets have changed 40,00% Non tropical food Exports (% of world exports excluding intra EU trade) Cairns Group 35,00% USA EU 30,00% 25,00% 20,00% 15,00% 10,00% AoA 5,00% Source: Daviron and Douillet 2013, based on COMTRADE data 0,00% 10 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
3. Market shares on international markets have changed Declining supremacy of the USA 90,00% US exports of grains (% of world exports) 80,00% 70,00% 60,00% 50,00% 40,00% Wheat Rice Corn Soybean 30,00% 20,00% 10,00% 0,00% 1960/1961 1965/1966 1970/1971 1975/1976 1980/1981 1985/1986 1990/1991 1995/1996 2000/2001 2005/2006 2010/2011 Source: Daviron and Douillet 2013, Based on data from USDA/PSD 11
4. Landscape of agricultural policies has changed Emerging economies have increased their support to agriculture PSE as a % share of agricultural receipt PSE (millions US $) 1986-89 1990-94 1995-99 2000-04 2005-09 2010-12 2010-12 High Income Countries 31% 28% 27% 26% 20% 14% 155 028 Australia 9% 9% 5% 4% 4% 3% 1 371 Canada 33% 28% 16% 20% 17% 15% 7 467 Swizterland 75% 72% 70% 70% 60% 55% 5 730 EU 37% 36% 35% 33% 25% 19% 105 305 Japan 62% 57% 59% 57% 50% 54% 61 Norway 69% 71% 68% 69% 61% 61% 3 952 USA 22% 17% 17% 19% 11% 8% 29 913 Emerging economies 3% 9% 10% 14% 210 764 Brazil -9% 5% 5% 5% 8 728 Chile 10% 9% 7% 4% 3% 342 China -6% 1% 6% 9% 15% 135 367 Indonesia 4% -8% 9% 5% 19% 23 570 Korea 72% 73% 65% 60% 55% 49% 19 Mexico 6% 25% 11% 20% 13% 13% 6 809 Russia 79% 53% 14% 12% 18% 16% 14 979 Turkey 21% 29% 29% 28% 29% 24% 18 606 Source : Debar and Douillet 2014 from OECD Note : EU includes members in of the European Union as they integrated it 12
4. Landscape of agricultural policies has changed Wide regional disparities Total National Rate of Asssitance to agriculture (WB) 100% 100% Share of distortive support (% of PSE) (OECD) 50% 0% -50% -100% Pays à haut revenu Reste de l'asie (hors Japon) Amérique latine et caraïbes Afrique sub-saharienne Many poor countries used to TAX agriculture 50% 0% Emerging economies increasignly use support linked to production. Pays à haut revenu Economies émergeantes -150% Source : Debar and Douillet 2014, from World Bank distorsion database and OECD PPSE data 13
II. What has not changed? 1. «Internationalization» has kept limited 2. Most farmers are still smallholder 3. Family farms produce most of our food 4. Differences in labour productivity are still wide 14
1. «Internationalization» has kept limited Growth rate of international food trade and world food production in volume (excluding intra-eu trade), 1990-2011 1990-1994 1995-1999 2000-2004 2005-2009 2010-2011 International Food trade 3.8% 5.0% 3.7% 2.9% 2.5% World Food Production 2.0% 2.4% 2.4% 2.8% 2.8% Source: Daviron and Douillet 2013 15
1. «Internationalization» has kept limited 50,00% 45,00% 40,00% World Exports-to-Production Ratio Vegetable Oils Oil Seeds Cereals 35,00% 30,00% 25,00% 20,00% 15,00% 10,00% 5,00% 0,00% 1990/1991 1995/1996 2000/2001 2005/2006 2010/2011 1990 1995 2000 2005 2010 Source: Daviron and Douillet 2013 16
2. Most farmers are still smallholder Source: Cirad 2013 from FAOstat 17
rice plantains (bananas) roots and tubers coffee cocoa palm oil 3. Family farms produce most of our food Family farmers still grow most of what is consumed and traded. Family farms (in green) contribution to world production: significant examples cotton rubber => they compete globally through trade Source : Cirad 2013 from FAO data and Cirda s experts say 18
4. Differences in labour productivity are still wide Répartition des 1,3 milliards d'actifs agricole et écarts de productivité (en t équivalent céréale) 1000 t/actif/an 1 t/actif/an 50 t/actif/an Traction motorisée et révolution verte Traction animale et révolution verte Manuel et révolution verte Manuel 10 t/actif/an Source : Cirad 2013 from FAO data, inspired by Mazoyer 2001 19
References Cirad, 2013. «Les agricultures familiales du monde. Définitions, contributions et politiques publiques.» AFD-CIRAD. http://agriculture.gouv.fr/img/pdf/20130711_rapport_final_maaf_mae_afd_af_ciradbis_31_ Mai_complet_cle0197b5.pdf Daviron B. and M. Douillet 2013 «Major players of the international food trade and the world food security FOODSECURE working paper http://www3.lei.wur.nl/foodsecurepublications/foodsecure-wp-12_final2014.pdf Debar J.-C. and M. Douillet 2014 «Le nouveau paysage mondial du soutien à l agriculture» FARM working paper forthcoming (provisional version available upon request) Douillet M. and P. Girard, 2013. «Productivité agricole : des motifs d inquiétude? (I) Les concepts». English version coming very very soon http://www.fondation-farm.org/spip.php?article873 Fuglie K., Wang S. and V. E. Ball, 2012. Productivity Growth in Agriculture: An International Perspective. USDA. 20