Macro Economic Factors
Global demand for food is rapidly increasing as the world population grows. Associated with this rising level of consumption is an improvement in diets and diversification of food types eaten.
According to the UN Food and Agriculture Organisation, the world’s farmers will need to double agricultural output by 2050 to meet projected food demands.
Biofuels compete with food production, and they compete for arable land. With the mandated targets for biofuel increasing to decrease reliance on fossil fuels, the land area dedicated to biofuels production is projected to increase dramatically.
Farmland is a finite resource which is fundamental to meeting the food and fibre requirements of a growing global population. Urbanisation, the impacts of climate change, salinisation, desertification and over use all contribute to decreasing either the total area of land available, or the quality of land remaining. Land is also redirected to environmental uses (such as to national parks and urban buffers) which further reduces the fundamental element for food production. Changes in water availability further compound the issue of certainty of supply from the farm sector.
With farmland productivity growth slowing, and the above factors impacting supply generally, there will be increasing pressure on farmland to supply the world’s food, fibre and fuel requirements. In the long term this must have upward pressure on commodity and farmland prices.
Source: US Census Bureau www.census.gov/ipc/www/img/worldpop.gif
FAO 2002 image at: www.fao.org/DOCREP/006/Y4683E/y4683e06.htm