Economic analysis of supply and demand for food up to 2030 ...

FAO Fisheries and Aquaculture Circular No. 1089

FIPM//C1089 (En)

ISSN 2070-6065

ECONOMIC ANALYSIS OF SUPPLY AND DEMAND FOR FOOD UP TO 2030 ? SPECIAL FOCUS ON FISH AND FISHERY PRODUCTS

FAO Fisheries and Aquaculture Circular No. 1089

FIPM/C1089 (En)

ECONOMIC ANALYSIS OF SUPPLY AND DEMAND FOR FOOD UP TO 2030 ? SPECIAL FOCUS ON FISH AND FISHERY PRODUCTS

by Mr Audun Lem Branch Chief Products, Trade and Marketing Branch Fisheries and Aquaculture Policy and Economics Division Food and Agriculture Organization Rome, Italy Mr Trond Bjorndal Aalesund University College Aalesund, Norway SNF Centre for Applied Research at NHH Bergen, Norway Ms Alena Lappo Consultant Products, Trade and Marketing Branch Fisheries and Aquaculture Policy and Economics Division Rome, Italy

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2014

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? FAO, 2014

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PREPARATION OF THIS DOCUMENT

This report contributes to FAO's ongoing activities and forecasts of food demand and supply. There is much concern about future food supply and demand on the basis of expected population growth as well as due to the large number of people still suffering from undernourishment. At the same time there are limits to the potential for expanded production from fisheries, aquaculture and agriculture. What is often overlooked in many studies is the economic impact of changes in supply and demand for example due to changes in food prices, household income and consumer preferences. This analysis takes an economic approach in analysing supply of and demand for food up to 2030, with a particular emphasis on fisheries and aquaculture.

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Lem, A., Bjorndal, T. & Lappo, A. 2014. Economic analysis of supply and demand for food up to 2030 ? Special focus on fish and fishery products. FAO Fisheries and Aquaculture Circular No. 1089. Rome, FAO. 106 pp.

ABSTRACT

With the world's population expected to reach 8.2 billion people by 2030, and with 842 million people estimated as having been undernourished in the period 2011?13, food supply will present a growing challenge in the next two decades. With increases in income along with demographic changes related to family size, population ageing and urbanization, and consumer trends such as concerns for healthy eating and sustainable production, there will be great shifts in demand and major changes in the composition of demand. This will in turn have an impact on food supply, which will need to both increase and become more efficient if it is to grow within the constraints presented by the availability of natural resources and existing technology.

This publication presents projections of future food supply up to 2030, building on existing analyses but also providing more economic perspectives on the future evolution of food production. It thus looks at the main drivers of future demand and supply, with a particular focus on fisheries and aquaculture production. The analysis is supplemented with a number of new scenarios on fish production in the period until 2022.

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CONTENTS

Preparation of this document

iii

Acknowledgements

vii

Abbreviations and acronyms

viii

Executive summary

ix

1. INTRODUCTION

1

2. POPULATION

2

2.1 Future population growth

2

2.2 Summary and discussion

6

3. DEVELOPMENT IN GROSS DOMESTIC PRODUCT

9

3.1 Future GDP growth

9

3.2 GDP per capita

12

3.3 Impact on food demand

14

4. UNDERNOURISHMENT AND HUNGER

17

4.1 Hunger

17

4.2 Geography of hunger and its development over time

18

4.3 The fight against hunger

20

4.4 Role of agricultural growth in reduction of hunger and malnutrition

21

4.5 Summary and discussions

22

5. IMPACT OF CHANGES IN PRICE AND INCOME ON FOOD DEMAND

24

5.1 Empirical demand studies for food products

25

5.2 Summary and discussion

29

6. CONSUMER TRENDS AND PREFERENCES IN THE DEMAND FOR FOOD

31

6.1 Background

31

6.2 Safety and health benefits

32

6.3 Corporate social responsibility

34

6.4 Production systems and innovation

35

6.5 Sustainability

38

6.6 Country and region of origin

40

6.7 Summary and discussions

41

Food safety and health benefits

42

Corporate social responsibility

43

Production systems and innovations

43

Sustainability

43

Country and region of origin

43

Discussion

43

7. SUMMARY ? DEMAND SIDE

45

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8. FISHERIES AND AQUACULTURE PRODUCTION

48

8.1 World production of fish from 1950 to the present

48

8.2 Capture fisheries

49

8.3 Usage

51

8.4 Aquaculture

54

8.5 Global fish exports and imports

57

8.6 The potential for increased production

59

Climate change

59

Capture fisheries

59

Aquaculture

60

9. AGRICULTURE

61

9.1 Historical production

61

9.2 Production projections

64

9.3 Trade

65

9.4 Constraints

69

9.5 Productivity

71

9.6 Summary

72

10. SUPPLY CHAINS

74

10.1 Typical supply chains for domestic and international markets

74

10.2 The value chain approach

75

10.3 Relationships among agents along supply/value chains

76

10.4 Scope for efficiency improvements in supply chains

77

10.5 Summary

79

11. SUMMARY ? SUPPLY SIDE

80

12. FUTURE MARKETS

84

12.1 Production

85

12.2 Prices

89

12.3 Fishmeal and fish oil

92

Fishmeal

92

Fish oil

96

Analysis

98

13. REFERENCES

100

14. APPENDIX

105

14.1 Demand elasticities for scenario 5

105

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