GAP Report Emphasizes Brazil-China Connection

Posted by on October 18th, 2013 | 0 Comments »

The Global Harvest Initiative is fortunate to host Michael Shyer as a policy intern from September through December 2013. Michael attends Cornell University, where he is enrolled in the China and Asia Pacific Studies program. He is a recipient of the U.S. Department of Education Foreign Language and Area Studies (FLAS) Fellowship, is learning Mandarin, and is pursuing his interests in Chinese studies, agriculture and ecology, and the intersection of the environment and foreign policy.

The 2013 Global Agricultural Productivity Report® (GAP Report®), released October 16 at the World Food Prize in Des Moines, reveals a growing agricultural interconnectedness among nations. Food and agriculture products from one country or region may travel thousands of miles to its final destination. This phenomenon is exemplified by the Brazil-China relationship. China is an example of a country that will likely face a growing food and agricultural deficit, and require greater imports. Brazil is an example of a country that will likely see domestic agricultural output far exceed domestic demand.

Although China has had remarkable success in developing its agriculture since the Opening and Reform period began in 1978, it will likely face a large deficit in agricultural production by 2030. This projected deficit in production is the result of a rapidly rising middle class. Two decades ago, the Chinese middle class numbered just 2.5 million people. That number has increased by more than 100 times today, surpassing 270 million people. The middle class in China is expected to grow even further, reaching 950 million by 2030, almost three times the current population of the United States. As these hundreds of millions of people attain larger incomes, they will increasingly demand more protein-rich, nutritious diets. Despite remarkable success in improving the productivity of its agriculture sector, by 2030, China will likely only be able to meet 72 percent of this demand domestically, and it will likely need to import ever greater amounts of food and agricultural products.

Fortunately for the people of China and other regions of impending agricultural deficits, the Latin American region is likely to produce growing surpluses in agriculture and food products. Brazil in particular, driven by efficiency gains and TFP (total factor productivity) growth, is expected to reach a level of agricultural output more than twice as large as its domestic demand. The GAP Report outlines how Brazil’s growth is largely the result of greater investments in agricultural research and technology, combined with successful economic reforms and infrastructural improvements. As production has increased, Brazil has steadily increased exports to China. For example, Brazil now exports more soybeans to china than it does to the rest of the world combined. GHI advocates for greater investments in raising the productivity of more countries in the Latin American and Caribbean region so that these countries can feed their own populations as well as take advantage of the growing global demand for food and agriculture and become sources of vital supply.

The 2013 GAP Index™ indicates that the global annual TFP growth will have to stay above 1.75% in order to meet the food and agricultural demand of 2050. As exemplified by the Brazil-China case, however, increasing global production is not the only issue. Countries must depend on other regions to help supply their own food demand. While this prospect may be daunting, especially to those in regions of agricultural deficit, it is a reflection of the growing interconnectedness of the modern world. This new reality should be addressed by liberalizing trade, and allowing for efficient transfer of food and agricultural products across the globe.

« Global Harvest Initiative Unveils 2013 Global Agricultural Productivity Report® (GAP Report®)
GHI Articles of Interest: 2013 GAP Report Edition »

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