AGRICULTURE WEATHERING RECESSION STORM

GABORONE- As the world leaders continue to find means to mitigate the effects of the global recession, a recent report by the Organisation for Economic Co-operation and Development (OECD) and the United Nations' Food and Agriculture Organisation (FAO) shows that the agricultural sector is more resilient to this crisis when compared to other industries, writes Simba Nembaware

The report however notes that if the recession continues then the sector could also be at risk. But in the mean time agribusiness leaders like Thabo Thamane of Botswana's Citizens Entrepreneurial Development Agency (CEDA) urges youths to invest in agriculture. He says this is the only viable industry buoyed by food being a daily
necessity.


The OECD-FAO Agricultural Outlook 200912018 notes that if the global economic recovery begins within two to three years then the fall in agricultural prices and in the production and consumption of farm goods would be moderate. The report adds that pressure would be eased on crisis hit consumers who have less money to spend as the the downturn lowers food prices.

Food prices have come down from the record peak of early 2008 but they remain high in many poor countries. Over the coming decade prices for all farm commodities except beef and pigmeat - even when adjusted for inflation - are unlikely to fall back to their average levels before the 2007-08 peaks.

Average crop prices are projected to be 10 - 20 percent higher in real terms (adjusted for inflation) for the next 10 years compared with the average for the period 1997-2006. Prices for vegetable oils are expected to be more than 30 percent higher. An expected economic recovery, renewed food demand growth from developing countries and the emerging biofuel markets are the key drivers underpinning agricultural commodity prices and markets over the medium term.

The report warns that episodes of extreme price volatility similar to the hike in 2008 cannot be ruled out in coming years, particularly as commodity prices have become increasingly linked to oil and energy costs and environmental experts warn of more erratic weather conditions.

Although agricultural production, consumption and trade are expected to increase in developing countries, food insecurity and hunger is a growing problem for the world’s poor. The report argues that the longer term problem is access to food rather than food availability, with poverty reduction and economic growth a big part of the solution.Agriculture growth is key for sustainable development and poverty reduction since 75 per cent of the poor in developing countries live in rural areas.

The report says in addition to more effective international aid, governments can best support domestic agricultural development through targeted policies such as infrastructure investment, establishing effective research and development systems and providing incentives for sustainable use of soil and water. It also emphasises the need for greater opening of agricultural markets and broadening economic
development beyond farming in poor rural regions.

The report comes at a time when FAO and the Division of Nuclear Techniques in Food and Agriculture International Atomic Energy Agency were leading a conference in Vienna Austria on the Sustainable Improvement of Animal Production and Health while Capetown, South Africa hosted the first ever EMRC Agribusiness forum in Africa titled: Boosting Agricultural Productivity for Economic Growth in Africa