World food commodity supply at tipping point

The global food system has been brought to a tipping point, and the battle for agri-commodities will only intensify, says Netherlands bank Rabobank.


Increasing scarcity and price volatility in food commodities over the next 10 years means that worldwide food production will be unable to keep up with 50% population growth to 9bn by 2050.


“This in itself is not a new phenomenon, but what is happening this time is genuinely different,” says the bank in its report, The Impact of Agricultural Price Volatility on Sourcing Strategies.


A profound transition was needed to enable a fairer division of the proceeds in the supply chain by making guaranteed, sustainable production and purchase agreements with farmers.


“The next decade will be dominated by the battle for raw materials, with a small group of upstream and downstream oligopolies controlling the existing pool of agri-commodities.”


The consequences of this would be:


– Global food companies strengthening their influence in the supply chain


– Smaller and medium sized processors and traders coming under most pressure


– Global and regional trading houses strengthening their positions in the supply chain

This made it urgent that traders, institutions and governments join forces with farmers to double food production sustainably.


The political sensitivity of food supply also meant that governments would increasingly become involved in organising the supply of commodities, said the bank.


Removing trade barriers would be one of the quickest and most effective measures, along with more investment in agrifood research and development – current levels of research and development spending were the same as in 1970, while world population had doubled in the same period.


Changes to diets, environmental improvements to cities and to food distribution systems were also needed.


How can UK growers gain more control – what do you suggest?


Have your say on our forum on this topic.





Read our article about the fears for the supply chain if Tesco’s latest price cuts will start supermarket price war.

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