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OECD, FAO Agricultural Outlook Highlights Continued High Food Costs

FAO11 July 2012: The Food and Agriculture Organization of the UN (FAO) and the Organisation for Economic Co-operation and Development (OECD) have released the Agricultural Outlook for 2012 to 2021, which highlights the expectation for continued high food costs due to stable production and increasing demand.

The Outlook indicates that contributing to this demand is the push for biofuel production, as well as changing diets and urban migration in developing countries. The report highlights concerns about agricultural lands and water security due to degradation, coupled with extreme weather events and changing climate patterns.

It stresses a number of interventions to promote sustainable development of the agriculture sector through improved regulatory environments, stronger agricultural innovation systems, a conducive business climate, and national investment schemes. The report devotes a chapter to biofuels and assesses the US biofuel policy. It predicts that ethanol and biofuel production will expand but at a slower pace than over recent years, but that production in many developing countries will remain below expected levels. It also suggests that trade of biofuel will expand significantly, driven by different policies of producing and consuming countries. The report notes that resource constraints and environmental pressures are exacerbated by climate change and volatility, which will pose major challenges to the agri-food sector. The report underscores that global agriculture is increasingly linked to energy markets. [Publication: Agricultural Outlook 2012-2021] [FAO Press Release]