Magazine article International Trade Forum

Growing Pains: The Influence of Climate Change on Agriculture: Implications for Exports of Agri-Food Products from Developing Countries

Magazine article International Trade Forum

Growing Pains: The Influence of Climate Change on Agriculture: Implications for Exports of Agri-Food Products from Developing Countries

Article excerpt

As a major source of greenhouse gas emissions, agriculture is both a contributor to climate change and a potential casualty. Resolving the tension between meeting food security needs whilst also reducing emissions presents a major development challenge, Trade plays a part in meeting this challenge.

Agriculture as a casualty of climate change

The world is currently on course for a 4[degrees]C average temperature rise by the end of the century. This will result in reduced agricultural yields, thereby having a major impact on the world's ability to feed itself, particularly given the growing population and higher calorie diets as incomes climb in developing countries.

The change in climate will have a negative impact on food production, increasing food prices, threatening rural jobs and livelihoods. It will increase the number of people at risk of hunger by 10% to 20% by 2050. Developing countries are also least able to adapt to changes because of their lack of resources, particularly among smallholder farmers and pastoralists. Africa and parts of South Asia and Central America are most at risk from climate change.

Increased temperatures, changes in rainfall, more drought and extreme weather events, melting glaciers and a rise in sea levels are all having a negative impact on developing country agriculture and disrupting the stability of food supplies. Agricultural yields will drop most in developing countries as they are located in the lower latitudes, where temperatures are climbing above optimal levels for agriculture. Malnutrition will also increase due to decreased water availability and quality.

Some analysts have argued that continued improvements in technology such as plant breeding and biotech will help maintain agricultural yields in the face of rising temperatures. This may well be a false panacea for two reasons:

1. The Green Revolution (and thus the scope for gains in yield) has slowed down. In the 1960s and 70s, grain yields grew by 2.7%. In the last quarter of the 20th century, this had fallen to 1,7%.

2. Even if there is no further slowdown in yield gains, there is a risk of imbalance between rising food demand and output. The world population is estimated to reach 9 billion by 2050. Incomes are also rising in developing countries, resulting in consumers shifting to higher calorie diets that require more energy to produce. Demand for ruminant meat (beef and lamb) is growing as incomes rapidly rise in developing countries. Eight kilograms of cereals are needed to produce one kilogram of beef, increasing competition for land and raising prices for staples.

To keep up with these changes, experts estimate that the world will need to produce 60%-100% more cereal and livestock. To compound the problem, land has been diverted away from food production to grow biofuels. Other factors are also constraining an increase in supply from agriculture:

* The supply of new land is scarce. Urbanization is also encroaching on existing farmland.

* Production is threatened by the damage to resources that have sustained it to date, for example, in the salinization of soils. Water scarcity is becoming acute in much of the developing world, limiting the expansion of irrigation.

* Public investment in African agriculture has been lacking (4% of GDP in 2004 compared to 10% in Asia) leading to a loss of extension services and infrastructure. Misinvestment is pervasive, for example the provision of input subsidies and transfers that are captured by richer farmers.

The role of trade in adaptation

Trade generates foreign exchange to pay for adaptation (e.g. infrastructure and public health services). More specifically, imports can smooth out local food shortages created by climate change and other factors. However, there is a cost for food-deficit countries if cereal imports increase. Importers' terms of trade could worsen if they find it necessary to increase their export earnings from other (likely labour-intensive) goods to pay for the extra imports of food. …

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