1. Future Food Demand and Smallholder Farms Commercial smallholder farmers play a vital role in the overall food supply chain in developing countries. Their role will be even more critical as these countries prepare for the significant growth in food demand expected from continued population growth, urbanization and economic development. Commercial smallholder farmers must more fully adopt intensive farming practices, including agricultural best practices and the judicious use of fertilizers, to help achieve the yield increases required by 2050. In addition, these farmers will need targeted policy interventions by governments to overcome the economic and infrastructure challenges they face to access needed supplies, land, water and energy, improve crop yields and participate more fully in post-harvest markets.
Figure 1
Global Population Billions Developed
Emerging Urban
Emerging Rural
9.2 6.9
2.6
3.1 5.3
2.6 1.2
1.3
2010
2050
Figure 2
Developing Regions Urban:Rural Population Ratio Total rural population
Tomorrow’s Population and Food Demand
Excluding subsistence rural population
While the global population is projected to grow by 33 percent by 2050 (United Nations [UN], 2009), food demand will increase by 70 percent over the same period as the emerging regions urbanize, develop economically and their populations consume a richer diet (Foresight, 2011). The absolute increase in food required to meet this demand over the next 40 years is expected to be at least as large as the increase since the Green Revolution was launched in the 1960s – as available arable land and water become scarcer. The UN estimates a major shift in the world’s population mix over the next 40 years. It is estimated that the total global population will grow from 6.9 billion in 2010 to at least 9.2 billion by 2050 (Figure 1). Within this growth: •
The population of developed regions will be largely unchanged at around 1.3 billion.
•
Urban populations in developing regions are projected to dominate the growth – more than doubling from the current 2.6 billion to an estimated 5.3 billion by 2050. This growth will be a result of intrinsic urban growth and a steady migration from rural areas (currently estimated at 20-25 million per year globally and projected to average 40-45 million annually through 2050). The percentage of total population in urbanized areas in developing regions will climb to nearly 70 percent, compared with less than 50 percent now.
•
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Rural populations in developing regions (currently 3.1 billion) are expected to peak in 2020 at 3.5 billion and then decline gradually as the urban migration
Developed Regions > 9:1
0.3
0.6
1960
0.8
2.0
2.4
1.2
2010
2050 IFDC est.
accelerates. However, these rural populations will still be sizable in 2050 (estimated at 2.6 billion). By 2050 farmers will be supporting the food needs of an urban population that is larger than the rural population for the first time (a ratio of more than 2:1 by 2050) (Figure 2).
IFDC coupled estimated population growth information from the UN with the Food and Agriculture Organization of the United Nations’ (FAO) estimates of regional per capita food consumption (kcal/day/capita) to gain insights into the nature and magnitude of the food demand challenge over the next 40 years in developing countries: •
Urbanization and robust economic development will undoubtedly lead to a demand for a richer and more diverse diet in developing countries, which IFDC estimates could lead to the need for an additional 20 percent in required food supply. As a result, food demand in developing regions could grow by as much as 90 percent by 2050 compared with a modest increase in developed regions (+/- 6 percent).
•
•
•
Urban demand for food in emerging markets is expected to more than double and will be responsible for almost the entire growth in global food demand (Figure 3). As a result, urban food demand is projected to exceed 60 percent of total global demand by 2050 (compared with nearly 40 percent today and only about 15 percent in 1960) (Figure 4). In contrast to the growth in urban food demand in developing countries, food demand by rural populations is likely to grow only modestly above current levels as the projected rural population decline begins to materialize after 2020.
Figure 3
Global Food Demand % Increase 2050 vs 2010
Total Emerging Rural
70%
9%
+88%
Emerging Urban
By 2050, developing regions will represent nearly 90 percent of global food demand, up from nearly 80 percent currently (Figure 4).
Developed
163% 6% IFDC est.
This profile of future population shifts and food demand poses important policy decisions for leaders in developing countries: •
•
Figure 4
Global Food Demand % by Region
How to allocate increasingly scarce land, water and energy resources between ongoing urbanization and economic development and a secure food supply chain and infrastructure.
Developed
How to ensure that a declining population of farmers will be able to meet the projected increase in food demand in an era of growing scarcity of land, water and energy resources.
79%
87%
40%
62%
21%
13%
2010
2050 IFDC est.
FigureFigure 5 6
•
Sub-Saharan Africa, with a history of nomadic herding and abundant available land per capita, pursued extensive farming (land-use expansion).
•
South Asia, already land-pressured in the 1960s, embraced the intensive farming techniques advocated by the Green Revolution, and dramatically increased yields using improved seed varieties and nutrients from newly available chemical fertilizers.
240
The difference in approaches is clearly evident in Africa’s noticeably lower crop yields per hectare and virtually non-existent fertilizer use compared with other developing regions of the world (Figures 6 and 7).
120
Cereal Production - 1961, 2009 (1961 = 100) Sub-Saharan Africa
Extensification vs. Intensification
2009 = 359
South Asia 2009 = 310 1961 = 100
AREA
But extensive farming can no longer be the primary method for Sub-Saharan Africa to meet its growing food needs. By 2025, the region is projected to no longer be 'land-advantaged' compared with other regions. And its practice of extensive farming with low rates of fertilizer usage has led to 'soil nutrient mining,' resulting in large tracts of nutrient-depleted land (a problem increasingly acknowledged by African leaders).
Emerging Rural
25%
39%
Extensive Farming Over the 50 years since the Green Revolution of the 1960s, Sub-Saharan Africa and South Asia achieved similar increases (2+ times) in total food output needed for their people but they relied on different farming approaches (Figure 5):
Emerging Urban
PRODUCTION (area x yield)
YIELD
150
260
5
294
Figure 6
Figure 7
Fertilizer Use by Region - 2009/10 (kg/ha) Developed Markets
Transitional Markets
World
Sub-Saharan Africa 208
Developing Markets
Source: Derived from FAO Data
155 117
110
World
82
91
2.51
South Asia
2.77 3.57
Latin America
66
76
105
136
Near East and North Africa
1.50
3.92
40
46
46 28
6
Africa
1.22
Cereal Yields per Hectare by Regions, 2010/11 (mt/ha) South Asia
Asia East Asia
SubSaharan Africa
South Africa Oceania West Asia North America North Africa Latin America World Central Europe
Eurasia Central America
Source: Derived from FAO Data
“To feed our people, we must feed the soil. The main reason for Africa’s food shortages is soil nutrient depletion. Africa loses about US $4 billion worth of plant nutrients from its soils each year due to continuous cultivation without nutrient replenishment.” – former Nigerian President Olusegun Obasanjo (2006)
More broadly, extensive farming faces two pressure points: •
The increasing scarcity of arable land and the competing demands of economic development versus food production on that land.
•
Studies indicate that the environmental impact of land conversion is responsible for 10-12 percent of all global greenhouse gas (GHG) emissions each year. Using these emission rates, IFDC estimates that agricultural land expansion in the current ratio of extensive and intensive farming to support the needed increases in food supply could double the current level of GHG emissions from land conversion. At recently declared GHG 'tax rates' ($25/mt CO2 equivalent), extensive farming would face a global tax bill of $150 billion annually.
Land conversion for new crop production is becoming increasingly problematic – there simply is little arable land
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remaining. Farmers in developing regions (particularly Africa) must embrace efficient intensive farming practices and fertilizers to help them achieve the yield improvements needed to double farm output.
Smallholder Farms – Their Role and Challenges Over 500 million smallholder farms – each with an average size of only 0.5 hectares – are at the heart of IFDC’s mission of "creating and sustaining food security in developing regions." IFDC estimates that these smallholder farms are home to nearly three billion people and comprise two broad segments, which have distinctly different implications for food security: Subsistence Smallholder Farmers About 35 percent of this population (approximately one billion people on some 200 million farms, located primarily in Sub-Saharan Africa and Asia) ekes out a subsistence existence – often from less than 0.2 hectares
of nutrient-deficient soil. With aid support, many engage in commercial farming, but this often remains marginal; most struggle to make even $2 a day with no reserves for unforeseen events.
Figure 8
Food Supply in Developing Regions % by Farm Type Large farms
Sadly, these farmers will play no meaningful role in their country’s national food supply chain unless they can move into sustainable commercial farming. Until that occurs, 'subsistence' smallholder farmers will continue to require development support to pull them out of their marginal existence. Encouragingly, with this support some 700 million people were able to become commercial farmers over the past 50 years; IFDC estimates this trend will continue and could lead to reducing by half (or more) the subsistence farming population by 2050.
Commercial SHFs
100%
Marginal SHFs
3%
12%
80% 60%
41%
35% 2.6
47%
5.362%
40% 20%
1.3
0% 2010
Commercial Smallholder Farmers
2050
Figure 9
The remaining smallholder farms, with nearly two billion people on 300+ million farms, comprise the segment that does participate in the food supply chain in developing countries. In IFDC’s experience, about 25-30 percent of the crop production from these farms is available for postharvest markets and is the source of income for these commercial smallholder farmers. They currently account for some 40 percent of the domestic food supply in developing regions (including their own needs) (Figure 8).
Yield in Developing Regions 2010 Large Farms = 100 Large farms
Overall
Commercial SHFs
53 2010
66
100
+1.47% per year
84
As rural populations decline, IFDC estimates that the number of commercial smallholder farms will also decline to around 225 million by 2050. Under a 'reasonable' scenario in which the amount of farmed land increases only modestly from current acreage and commercial smallholder farms increase the proportion of their crop production available for markets to 50 percent, these farms would continue to remain a substantial factor in domestic food supply (35 percent). To do so successfully, commercial smallholder farm yields must increase by some 60 percent by 2050 (+2.2 percent per year), and overall yield needs to increase by 80 percent (+1.5 percent per year) (Figure 9). In light of the expected pressures on land and water availability, fertilizers will have to play an increasing role in the achievement of higher yields, particularly in commercial smallholder farming. However, these farmers continue to face many challenges that not only hamper their ability to increase crop yields and deliver their output to markets, but often hinder their ability to remain viable: •
Proper market access remains problematic for most of these farmers as a result of either poor infrastructure (transportation, storage) that can lead to substantial spoilage or patchy contacts with buyers who otherwise would ensure a steady market. Together, these constraints rob many commercial smallholder farmers of the full economic potential of their crop output.
•
This economic challenge is further exacerbated by a lack of credit that could help these farmers in difficult periods (crop failure or crop spoilage) or, just as importantly, allow these farmers to take advantage of
IFDC est.
119 2050
171 IFDC est.
additional production opportunities that they cannot exploit because of a lack of financial resources.
•
In addition, policies established for national economic development (e.g. regarding land use and crop priorities) can often have inadvertent consequences that constrain smallholder farmers from reaching their economic potential and contributing fully to their country’s food supply chain.
Without a deliberate program combining effective intensive farming practices with supportive government policy interventions, smallholder farms (SHFs) will be constrained from playing a vital role in future food supply chains that must generate a doubled food supply in developing regions.
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