global need for affordable food
• growing demands for feed, fibre, fuel and bio-based materials
• environmental protection
• sustainable increases in productivity
• combat challenges posed by climate change.
WORLDWIDE ANALYTIC REPORTS OF DEMAND AND SUPPLY FROM DAILY PRESS
research OR GLOBAL ORGANIZATIONS.
Africa's impressive growth
Jan 6th 2011, 14:10 by The Economist online
Africa is now one of the world’s fastest-growing regions
MUCH has been written about the rise of the BRICs and Asia’s impressive economic performance.
But an analysis by The Economist finds that over the ten years to 2010, six of the world’s ten
fastest-growing economies were in sub-Saharan Africa. On IMF forecasts Africa will grab seven of
the top ten places over the next five years (our ranking excludes countries with a population of less
than 10m as well as Iraq and Afghanistan, which could both rebound strongly in the years ahead).
Over the past decade the simple unweighted average of countries’ growth rates was virtually
identical in Africa and Asia. Over the next five years Africa is likely to take the lead. In other words,
the average African economy will outpace its Asian counterpart.
3. Global and regional food consumption patterns and trends
Promoting healthy diets and lifestyles to reduce the global burden of noncommunicable diseases
requires a multisectoral approach involving the various relevant sectors in societies. The agriculture
and food sector figures prominently in this enterprise and must be given due importance in any
consideration of the promotion of healthy diets for individuals and population groups. Food
strategies must not merely be directed at ensuring food security for all, but must also achieve the
consumption of adequate quantities of safe and good quality foods that together make up a healthy
diet. Any recommendation to that effect will have implications for all components in the food chain.
It is therefore useful at this juncture to examine trends in consumption patterns worldwide and
deliberate on the potential of the food and agriculture sector to meet the demands and challenges
posed by this report.
Economic development is normally accompanied by improvements in a country’s food supply and
the gradual elimination of dietary deficiencies, thus improving the overall nutritional status of the
country’s population. Furthermore, it also brings about qualitative changes in the production,
processing, distribution and marketing of food. Increasing urbanization will also have consequences
for the dietary patterns and lifestyles of individuals, not all of which are positive. Changes in diets,
patterns of work and leisure - often referred to as the “nutrition transition” - are already contributing
to the causal factors underlying noncommunicable diseases even in the poorest countries. Moreover,
the pace of these changes seems to be accelerating, especially in the low-income and middle-
The dietary changes that characterize the “nutrition transition” include both quantitative and
qualitative changes in the diet. The adverse dietary changes include shifts in the structure of the diet
towards a higher energy density diet with a greater role for fat and added sugars in foods, greater
saturated fat intake (mostly from animal sources), reduced intakes of complex carbohydrates and
dietary fibre, and reduced fruit and vegetable intakes (1). These dietary changes are compounded by
lifestyle changes that reflect reduced physical activity at work and during leisure time (2). At the
same time, however, poor countries continue to face food shortages and nutrient inadequacies.
Diets evolve over time, being influenced by many factors and complex interactions. Income, prices,
individual preferences and beliefs, cultural traditions, as well as geographical, environmental, social
and economic factors all interact in a complex manner to shape dietary consumption patterns. Data
on the national availability of the main food commodities provide a valuable insight into diets and
their evolution over time. FAO produces annual Food Balance Sheets which provide national data
on food availability (for almost all commodities and for nearly all countries). Food Balance Sheets
give a complete picture of supply (including production, imports, stock changes and exports) and
utilization (including final demand in the form of food use and industrial non-food use, intermediate
demand such as animal feed and seed use, and waste) by commodity. From these data, the average
per capita supply of macronutrients (i.e. energy, protein, fats) can be derived for all food
commodities. Although such average per capita supplies are derived from national data, they may
not correspond to actual per capita availability, which is determined by many other factors such as
inequality in access to food. Likewise, these data refer to “average food available for consumption”,
which, for a number of reasons (for example, waste at the household level), is not equal to average
food intake or average food consumption. In the remainder of this chapter, therefore, the terms
“food consumption” or “food intake” should be read as “food available for consumption”.
Actual food availability may vary by region, socioeconomic level and season. Certain difficulties
are encountered when estimating trade, production and stock changes on an annual scale. Hence
three-year averages are calculated in order to reduce errors. The FAO statistical database
(FAOSTAT), being based on national data, does not provide information on the distribution of food
within countries, or within communities and households.
3.2 Developments in the availability of dietary energy
Food consumption expressed in kilocalories (kcal) per capita per day is a key variable used for
measuring and evaluating the evolution of the global and regional food situation. A more
appropriate term for this variable would be “national average apparent food consumption” since the
data come from national Food Balance Sheets rather than from food consumption surveys. Analysis
of FAOSTAT data shows that dietary energy measured in kcals per capita per day has been steadily
increasing on a worldwide basis; availability of calories per capita from the mid-1960s to the late
1990s increased globally by approximately 450 kcal per capita per day and by over 600 kcal per
capita per day in developing countries (see Table 1). This change has not, however, been equal
across regions. The per capita supply of calories has remained almost stagnant in sub-Saharan
Africa and has recently fallen in the countries in economic transition. In contrast, the per capita
supply of energy has risen dramatically in East Asia (by almost 1000 kcal per capita per day, mainly
in China) and in the Near East/North Africa region (by over 700 kcal per capita per day).
Table 1. Global and regional per capita food consumption (kcal per capita per day)
Region 1964 - 1966 1974 - 1976 1984 - 1986 1997 - 1999 2015 2030
World 2358 2435 2655 2803 2940 3050
Developing countries 2054 2152 2450 2681 2850 2980
Near East and North Africa 2290 2591 2953 3006 3090 3170
Sub-Saharan Africaa 2058 2079 2057 2195 2360 2540
Latin America and the Caribbean 2393 2546 2689 2824 2980 3140
East Asia 1957 2105 2559 2921 3060 3190
South Asia 2017 1986 2205 2403 2700 2900
Industrialized countries 2947 3065 3206 3380 3440 3500
Transition countries 3222 3385 3379 2906 3060 3180
a Excludes South Africa.
Source: reproduced, with minor editorial amendments from reference 3 with the
permission of the publisher.
In short, it would appear that the world has made significant progress in raising food consumption
per person. The increase in the world average consumption would have been higher but for the
declines in the transition economies that occurred in the 1990s. It is generally agreed, however, that
those declines are likely to revert in the near future. The growth in food consumption has been
accompanied by significant structural changes and a shift in diet away from staples such as roots
and tubers towards more livestock products and vegetable oils (4). Table 1 shows that current
energy intakes range from 2681 kcal per capita per day in developing countries, to 2906 kcal per
capita per day in transition countries and 3380 kcal per capita per day in industrialized countries.
Data shown in Table 2 suggest that per capita energy supply has declined from both animal and
vegetable sources in the countries in economic transition, while it has increased in the developing
and industrialized countries.
Table 2. Vegetable and animal sources of energy in the diet (kcal per capita per day)
1967 - 1969 1977 - 1979 1987 - 1989 1997 - 1999
T V A T V A T V A T V A
Developing countries 2059 1898 161 2254 2070 184 2490 2248 242 2681 2344 337
Transition countries 3287 2507 780 3400 2507 893 3396 2455 941 2906 2235 671
Industrialized countries 3003 2132 871 3112 2206 906 3283 2333 950 3380 2437 943
T, total kcal; V, kcal of vegetable origin; A, kcal of animal origin (including fish
Source: FAOSTAT, 2003.
Similar trends are evident for protein availability; this has increased in both developing and
industrialized countries but decreased in the transition countries. Although the global supply of
protein has been increasing, the distribution of the increase in the protein supply is unequal. The per
capita supply of vegetable protein is slightly higher in developing countries, while the supply of
animal protein is three times higher in industrialized countries.
Globally, the share of dietary energy supplied by cereals appears to have remained relatively stable
over time, representing about 50% of dietary energy supply. Recently, however, subtle changes
appear to be taking place (see Fig. 1). A closer analysis of the dietary energy intake shows a
decrease in developing countries, where the share of energy derived from cereals has fallen from
60% to 54% in a period of only 10 years. Much of this downwards trend is attributable to cereals,
particularly wheat and rice, becoming less preferred foods in middle-income countries such as
Brazil and China, a pattern likely to continue over the next 30 years or so. Fig. 2 shows the
structural changes in the diet of developing countries over the past 30-40 years and FAO’s
projections to the year 2030 (3).
Figure 1. The share of dietary energy derived from cereals
Source: adapted from reference 4 with the permission of the
Figure 2. Calories from major commodities in developing countries
Source: reproduced from reference 3 with the permission of the
3.3 Availability and changes in consumption of dietary fat
The increase in the quantity and quality of the fats consumed in the diet is an important feature of
nutrition transition reflected in the national diets of countries. There are large variations across the
regions of the world in the amount of total fats (i.e. fats in foods, plus added fats and oils) available
for human consumption. The lowest quantities consumed are recorded in Africa, while the highest
consumption occurs in parts of North America and Europe. The important point is that there has
been a remarkable increase in the intake of dietary fats over the past three decades (see Table 3) and
that this increase has taken place practically everywhere except in Africa, where consumption levels
have stagnated. The per capita supply of fat from animal foods has increased, respectively, by 14
and 4 g per capita in developing and industrialized countries, while there has been a decrease of 9 g
per capita in transition countries.
Table 3. Trends in the dietary supply of fat
Supply of fat (g per capita per day)
Change between 1967 - 1969
and 1997 - 1999
World 53 57 67 73 20
North Africa 44 58 65 64 20
Sub-Saharan Africaa 41 43 41 45 4
North America 117 125 138 143 26
Latin America and the
54 65 73 79 25
China 24 27 48 79 55
East and South-East
28 32 44 52 24
South Asia 29 32 39 45 16
European Community 117 128 143 148 31
Eastern Europe 90 111 116 104 14
Near East 51 62 73 70 19
Oceania 102 102 113 113 11
a Excludes South Africa
Source: FAOSTAT, 2003.
The increase in dietary fat supply worldwide exceeds the increase in dietary protein supply. The
average global supply of fat has increased by 20 g per capita per day since 1967-1969. This increase
in availability has been most pronounced in the Americas, East Asia, and the European Community.
The proportion of energy contributed by dietary fats exceeds 30% in the industrialized regions, and
in nearly all other regions this share is increasing.
The fat-to-energy ratio (FER) is defined as the percentage of energy derived from fat in the total
supply of energy (in kcal). Country-specific analysis of FAO data for 1988-1990 (5) found a range
for the FER of 7-46%. A total of 19 countries fell below the minimum recommendation of 15%
dietary energy supply from fat, the majority of these being in sub-Saharan Africa and the remainder
in South Asia. In contrast, 24 countries were above the maximum recommendation of 35%, the
majority of these countries being in North America and Western Europe. It is useful to note that
limitations of the Food Balance Sheet data may contribute much of this variation in the FER
between countries. For instance, in countries such as Malaysia with abundant availability of
vegetable oils at low prices, Food Balance Sheet data may not reflect real consumption at the
individual household level.
Rising incomes in the developing world have also led to an increase in the availability and
consumption of energy-dense high-fat diets. Food balance data can be used to examine the shift in
the proportion of energy from fat over time and its relationship to increasing incomes (6).
In 1961-1963, a diet providing 20% of energy from fat was associated only with countries having at
least a per capita gross national product of US$ 1475. By 1990, however, even poor countries
having a gross national product of only US$ 750 per capita had access to a similar diet comprising
20% of energy from fat. (Both values of gross national product are given in 1993 US$.) This change
was mainly the result of an increase in the consumption of vegetable fats by poor countries, with
smaller increases occurred in middle-income and high-income countries. By 1990, vegetable fats
accounted for a greater proportion of dietary energy than animal fats for countries in the lowest per
capita income category. Changes in edible vegetable oil supply, in prices and in consumption
equally affected rich and poor countries, although the net impact was relatively much greater in
low-income countries. An equally large and important shift in the proportion of energy from added
sugars in the diets of low-income countries was also a feature of the nutrition transition (1).
Examinations of the purchasing habits of people, aimed at understanding the relationship between
level of education or income and the different amounts or types of commodities purchased at
different times were also revealing. Research conducted in China shows that there have been
profound shifts in purchasing practices in relation to income over the past decade. These analyses
show how extra income in China affects poor people and rich people in a differential manner,
enhancing the fat intake of the poor more than that of the rich (7).
A variable proportion of these fat calories are provided by saturated fatty acids. Only in the two of
the most affluent regions (i.e. in parts of North America and Europe) is the intake of saturated fat at
or above 10% of energy intake level. In other less affluent regions, the proportion of dietary energy
contributed by saturated fatty acids is lower, ranging from 5% to 8%, and generally not changing
much over time. National dietary surveys conducted in some countries confirm these data. The ratio
of dietary fat from animal sources to total fat is a key indicator, since foods from animal sources are
high in saturated fat. Data sets used to calculate country-specific FERs can also be used to calculate
proportions of animal fat in total fat. Such analysis indicated that the proportion of animal fat in
total fat was lower than 10% in some countries (Democratic Republic of Congo, Mozambique,
Nigeria, Sao Tome and Principe, and Sierra Leone), while it is above 75% in some other countries
(Denmark, Finland, Hungary, Mongolia, Poland and Uruguay). These findings are not strictly
divided along economic lines, as not all of the countries in the high range represent the most
affluent countries. Country-specific food availability and cultural dietary preferences and norms to
some extent determine these patterns.
The types of edible oils used in developing countries are also changing with the increasing use of
hardened margarines (rich in trans fatty acids) that do not need to be refrigerated. Palm oil is
becoming an increasingly important edible oil in the diets of much of South-East Asia and is likely
to be a major source in the coming years. Currently, palm oil consumption is low and the FER
ranges between 15% and 18%. At this low level of consumption, the saturated fatty acid content of
the diet comprises only 4% to 8%. Potential developments in the edible oil sector could affect all
stages of the oil production process from plant breeding to processing methods, including the
blending of oils aimed at producing edible oils that have a healthy fatty acid composition.
Olive oil is an important edible oil consumed largely in the Mediterranean region. Its production has
been driven by rising demand, which has increasingly shifted olive cultivation from traditional
farms to more intensive forms of cultivation. There is some concern that the intensive cultivation of
olives may have adverse environmental impacts, such as soil erosion and desertification (8).
However, agricultural production methods are being developed to ensure less harmful impacts on
3.4 Availability and changes in consumption of animal products
There has been an increasing pressure on the livestock sector to meet the growing demand for high-
value animal protein. The world’s livestock sector is growing at an unprecedented rate and the
driving force behind this enormous surge is a combination of population growth, rising incomes and
urbanization. Annual meat production is projected to increase from 218 million tonnes in 1997-1999
to 376 million tonnes by 2030.
There is a strong positive relationship between the level of income and the consumption of animal
protein, with the consumption of meat, milk and eggs increasing at the expense of staple foods.
Because of the recent steep decline in prices, developing countries are embarking on higher meat
consumption at much lower levels of gross domestic product than the industrialized countries did
some 20-30 years ago.
Urbanization is a major driving force influencing global demand for livestock products.
Urbanization stimulates improvements in infrastructure, including cold chains, which permit trade
in perishable goods. Compared with the less diversified diets of the rural communities, city dwellers
have a varied diet rich in animal proteins and fats, and characterized by higher consumption of
meat, poultry, milk and other dairy products. Table 4 shows trends in per capita consumption of
livestock products in different regions and country groups. There has been a remarkable increase in
the consumption of animal products in countries such as Brazil and China, although the levels are
still well below the levels of consumption in North American and most other industrialized
As diets become richer and more diverse, the high-value protein that the livestock sector offers
improves the nutrition of the vast majority of the world. Livestock products not only provide high-
value protein but are also important sources of a wide range of essential micronutrients, in particular
minerals such as iron and zinc, and vitamins such as vitamin A. For the large majority of people in
the world, particularly in developing countries, livestock products remain a desired food for
nutritional value and taste. Excessive consumption of animal products in some countries and social
classes can, however, lead to excessive intakes of fat.
Table 4. Per capita consumption of livestock products
Meat (kg per year) Milk (kg per year)
1964 - 1966 1997 - 1999 2030 1964 - 1966 1997 - 1999 2030
World 24.2 36.4 45.3 73.9 78.1 89.5
Developing countries 10.2 25.5 36.7 28.0 44.6 65.8
Near East and North Africa 11.9 21.2 35.0 68.6 72.3 89.9
Sub-Saharan Africaa 9.9 9.4 13.4 28.5 29.1 33.8
Latin America and the
31.7 53.8 76.6 80.1 110.2 139.8
East Asia 8.7 37.7 58.5 3.6 10.0 17.8
South Asia 3.9 5.3 11.7 37.0 67.5 106.9
Industrialized countries 61.5 88.2 100.1 185.5 212.2 221.0
Transition countries 42.5 46.2 60.7 156.6 159.1 178.7
a Excludes South Africa.
Source: Adapted from reference 4 with the permission of the publisher.
The growing demand for livestock products is likely to have an undesirable impact on the
environment. For example, there will be more large-scale, industrial production, often located close
to urban centres, which brings with it a range of environmental and public health risks. Attempts
have been made to estimate the environmental impact of industrial livestock production. For
instance, it has been estimated that the number of people fed in a year per hectare ranges from 22
for potatoes and 19 for rice to 1 and 2, respectively, for beef and lamb (9). The low energy
conversion ratio from feed to meat is another concern, since some of the cereal grain food produced
is diverted to livestock production. Likewise, land and water requirements for meat production are
likely to become a major concern, as the increasing demand for animal products results in more
intensive livestock production systems (10).
3.5 Availability and consumption of fish
Despite fluctuations in supply and demand caused by the changing state of fisheries resources, the
economic climate and environmental conditions, fisheries, including aquaculture, have traditionally
been, and remain an important source of food, employment and revenue in many countries and
communities (11). After the remarkable increase in both marine and inland capture of fish during
the 1950s and 1960s, world fisheries production has levelled off since the 1970s. This levelling off
of the total catch follows the general trend of most of the world’s fishing areas, which have
apparently reached their maximum potential for fisheries production, with the majority of stocks
being fully exploited. It is therefore very unlikely that substantial increases in total catch will be
obtained in the future. In contrast, aquaculture production has followed the opposite path. Starting
from an insignificant total production, inland and marine aquaculture production has been growing
at a remarkable rate, offsetting part of the reduction in the ocean catch of fish.
The total food fish supply and hence consumption has been growing at a rate of 3.6% per year since
1961, while the world’s population has been expanding at 1.8% per year. The proteins derived from
fish, crustaceans and molluscs account for between 13.8% and 16.5% of the animal protein intake
of the human population. The average apparent per capita consumption increased from about 9 kg
per year in the early 1960s to 16 kg in 1997. The per capita availability of fish and fishery products
has therefore nearly doubled in 40 years, outpacing population growth.
As well as income-related variations, the role of fish in nutrition shows marked continental, regional
and national differences. In industrialized countries, where diets generally contain a more
diversified range of animal proteins, a rise in per capita provision from 19.7 kg to 27.7 kg seems to
have occurred. This represents a growth rate close to 1% per year. In this group of countries, fish
contributed an increasing share of total protein intake until 1989 (accounting for between 6.5% and
8.5%), but since then its importance has gradually declined and, in 1997, its percentage contribution
was back to the level prevailing in the mid-1980s. In the early 1960s, per capita fish supply in low-
income food-deficit countries was, on average, only 30% of that of the richest countries. This gap
has been gradually reduced, such that in 1997, average fish consumption in these countries was
70% of that of the more affluent economies. Despite the relatively low consumption by weight in
low-income food-deficit countries, the contribution of fish to total animal protein intake is
considerable (nearly 20%). Over the past four decades, however, the share of fish proteins in animal
proteins has declined slightly, because of faster growth in the consumption of other animal products.
Currently, two-thirds of the total food fish supply is obtained from capture fisheries in marine and
inland waters, while the remaining one third is derived from aquaculture. The contribution of inland
and marine capture fisheries to per capita food supply has stabilized, around 10 kg per capita in the
period 1984-1998. Any recent increases in per capita availability have, therefore, been obtained
from aquaculture production, from both traditional rural aquaculture and intensive commercial
aquaculture of high-value species.
Fish contributes up to 180 kcal per capita per day, but reaches such high levels only in a few
countries where there is a lack of alternative protein foods grown locally or where there is a strong
preference for fish (examples are Iceland, Japan and some small island states). More typically, fish
provides about 20-30 kcal per capita per day. Fish proteins are essential in the diet of some densely
populated countries where the total protein intake level is low, and are very important in the diets of
many other countries. Worldwide, about a billion people rely on fish as their main source of animal
proteins. Dependence on fish is usually higher in coastal than in inland areas. About 20% of the
world’s population derives at least one-fifth of its animal protein intake from fish, and some small
island states depend almost exclusively on fish.
Recommending the increased consumption of fish is another area where the feasibility of dietary
recommendations needs to be balanced against concerns for sustainability of marine stocks and the
potential depletion of this important marine source of high quality nutritious food. Added to this is
the concern that a significant proportion of the world fish catch is transformed into fish meal and
used as animal feed in industrial livestock production and thus is not available for human
3.6 Availability and consumption of fruits and vegetables
Consumption of fruits and vegetables plays a vital role in providing a diversified and nutritious diet.
Alow consumption of fruits and vegetables in many regions of the developing world is, however, a
persistent phenomenon, confirmed by the findings of food consumption surveys. Nationally
representative surveys in India (12), for example, indicate a steady level of consumption of only
120-140 g per capita per day, with about another 100 g per capita coming from roots and tubers, and
some 40 g per capita from pulses. This may not be true for urban populations in India, who have
rising incomes and greater access to a diverse and varied diet. In contrast, in China, - a country that
is undergoing rapid economic growth and transition - the amount of fruits and vegetables consumed
has increased to 369 g per capita per day by 1992.
At present, only a small and negligible minority of the world’s population consumes the generally
recommended high average intake of fruits and vegetables. In 1998, only 6 of the 14 WHO regions
had an availability of fruits and vegetables equal to or greater than the earlier recommended intake
of 400 g per capita per day. The relatively favourable situation in 1998 appears to have evolved
from a markedly less favourable position in previous years, as evidenced by the great increase in
vegetable availability recorded between 1990 and 1998 for most of the regions. In contrast, the
availability of fruit generally decreased between 1990 and 1998 in most regions of the world.
The increase in urbanization globally is another challenge. Increasing urbanization will distance
more people from primary food production, and in turn have a negative impact on both the
availability of a varied and nutritious diet with enough fruits and vegetables, and the access of the
urban poor to such a diet. Nevertheless, it may facilitate the achievement of other goals, as those
who can afford it can have better access to a diverse and varied diet. Investment in periurban
horticulture may provide an opportunity to increase the availability and consumption of a healthy
Global trends in the production and supply of vegetables indicate that the current production and
consumption vary widely among regions, as indicated in Table 5. It should be noted that the
production of wild and indigenous vegetables is not taken into account in production statistics and
might therefore be underestimated in consumption statistics. In 2000, the global annual average per
capita vegetable supply was 102 kg, with the highest level in Asia (116 kg), and the lowest levels in
South America (48 kg) and Africa (52 kg). These figures also include the large amount of
horticultural produce that is consumed on the farm. Table 5 and Figure 3 illustrate the regional and
temporal variations in the per capita availability of vegetables per capita over the past few decades.
Table 5. Supply of vegetables per capita, by region, 1979 and 2000
(kg per capita per year)
Region 1979 2000
World 66.1 101.9
Developed countries 107.4 112.8
Developing countries 51.1 98.8
Africa 45.4 52.1
North and Central America 88.7 98.3
South America 43.2 47.8
Asia 56.6 116.2
Europe 110.9 112.5
Oceania 71.8 98.7
Source: reproduced from reference 13 with the permission of the publisher.
Figure 3. Trends in the supply of vegetables per capita, by region, 1970-2000
Source: reproduced from reference 13 the permission of the
3.7 Future trends in demand, foodavailability and consumption
In recent years the growth rates of world agricultural production and crop yields have slowed. This
has raised fears that the world may not be able to grow enough food and other commodities to
ensure that future populations are adequately fed. However, the slowdown has occurred not because
of shortages of land or water but rather because demand for agricultural products has also slowed.
This is mainly because world population growth rates have been declining since the late 1960s, and
fairly high levels of food consumption per person are now being reached in many countries, beyond
which further rises will be limited. It also true that a high share of the world’s population remains in
poverty and hence lacks the necessary income to translate its needs into effective demand. As a
result, the growth in world demand for agricultural products is expected to fall from an average
2.2% per year over the past 30 years to an average 1.5% per year for the next 30 years. In
developing countries the slowdown will be more dramatic, from 3.7% per year to 2% per year,
partly as a result of China having passed the phase of rapid growth in its demand for food. Global
food shortages are unlikely, but serious problems already exist at national and local levels, and may
worsen unless focused efforts are made.
The annual growth rate of world demand for cereals has declined from 2.5% per year in the 1970s
and 1.9% per year in the 1980s to only 1% per year in the 1990s. Annual cereal use per person
(including animal feeds) peaked in the mid-1980s at 334 kg and has since fallen to 317 kg. The
decline is not a cause for alarm, it is largely the natural result of slower population growth and shifts
in human diets and animal feeds. During the 1990s, however, the decline was accentuated by a
number of temporary factors, including serious economic recessions in the transition countries and
in some East and South-East Asian countries.
The growth rate in the demand for cereals is expected to rise again to 1.4% per year up until 2015,
slowing to 1.2% per year thereafter. In developing countries overall, cereal production is not
expected to keep pace with demand. The net cereal deficits of these countries, which amounted to
103 million tonnes or 9% of consumption in 1997-1999, could rise to 265 million tonnes by 2030,
when they will be 14% of consumption. This gap can be bridged by increased surpluses from
traditional grain exporters, and by new exports from the transition countries, which are expected to
shift from being net importers to being net exporters.
Oil crops have seen the fastest increase in area of any crop sector, expanding by 75 million hectares
between the mid-1970s and the end of the 1990s, while cereal area fell by 28 million hectares over
the same period. Future per capita consumption of oil crops is expected to rise more rapidly than
that of cereals. These crops will account for 45 out of every 100 extra kilocalories added to average
diets in developing countries between now and 2030.
There are three main sources of growth in crop production: expanding the land area, increasing the
frequency at which it is cropped (often through irrigation), and boosting yields. It has been
suggested that growth in crop production may be approaching the ceiling of what is possible in
respect of all three sources. A detailed examination of production potentials does not support this
view at the global level, although in some countries, and even in whole regions, serious problems
already exist and could deepen.
Diets in developing countries are changing as incomes rise. The share of staples, such as cereals,
roots and tubers, is declining, while that of meat, dairy products and oil crops is rising. Between
1964-1966 and 1997-1999, per capita meat consumption in developing countries rose by 150% and
that of milk and dairy products by 60%. By 2030, per capita consumption of livestock products
could rise by a further 44%. Poultry consumption is predicted to grow the fastest. Productivity
improvements are likely to be a major source of growth. Milk yields should improve, while
breeding and improved management should increase average carcass weights and off-take rates.
This will allow increased production with lower growth in animal numbers, and a corresponding
slowdown in the growth of environmental damage from grazing and animal wastes.
In developing countries, demand is predicted to grow faster than production, resulting in a growing
trade deficit. In meat products this deficit will rise steeply, from 1.2 million tonnes per year in 1997-
1999 to 5.9 million tonnes per year in 2030 (despite growing meat exports from Latin America),
while in the case of milk and dairy products, the rise will be less steep but still considerable, from
20 million tonnes per year in 1997-1999 to 39 million tonnes per year in 2030. An increasing share
of livestock production will probably come from industrial enterprises. In recent years, production
from this sector has grown twice as fast as that from more traditional mixed farming systems and
more than six times faster than that from grazing systems.
World fisheries production has kept ahead of population growth over the past three decades. Total
fish production has almost doubled, from 65 million tonnes in 1970 to 125 million tonnes in 1999,
when the world average intake of fish, crustaceans and molluscs reached 16.3 kg per person. By
2030, annual fish consumption is likely to rise to some 150-160 million tonnes, or between 19-20
kg per person. This amount is significantly lower than the potential demand, as environmental
factors are expected to limit supply. During the 1990s the marine catch levelled out at 80-85 million
tonnes per year, and by the turn of the century, three-quarters of ocean fish stocks were overfished,
depleted or exploited up to their maximum sustainable yield. Further growth in the marine catch can
only be modest.
Aquaculture compensated for this marine slowdown, doubling its share of world fish production
during the 1990s. It is expected to continue to grow rapidly, at rates of 5-7% per year up to 2015. In
all sectors of fishing it will be essential to pursue forms of management conducive to sustainable
exploitation, especially for resources under common ownership or no ownership.
A number of conclusions can be drawn from the preceding discussion.
• Most of the information on food consumption has hitherto been obtained from national Food
Balance Sheet data. In order to better understand the relationship between food consumption
patterns, diets and the emergence of noncommunicable diseases, it is crucial to obtain more
reliable information on actual food consumption patterns and trends based on representative
• There is a need to monitor how the recommendations in this report influence the behaviour
of consumers, and what further action is needed to change their diets (and lifestyles) towards
more healthy patterns.
• The implications for agriculture, livestock, fisheries and horticulture will have to be assessed
and action taken to deal with potential future demands of an increasing and more affluent
population. To meet the specified levels of consumption, new strategies may need to be
developed. For example, a realistic approach to the implementation of the recommendation
concerning high average intake of fruit and vegetables, requires attention to be paid to
crucial matters such as where would the large quantities needed be produced, how can the
infrastructure be developed to permit trade in these perishable products, and would large-
scale production of horticultural products be sustainable?
• A number of more novel matters will need to be dealt with, such as:
• the positive and negative impacts on noncommunicable diseases of intensive
production systems, not only in terms of health (e.g. nitrite in vegetables, heavy
metals in irrigation water and manure, pesticide use), but also in terms of dietary
quality (e.g. leaner meats in intensive poultry production);
• the effects of longer food chains, in particular of longer storage and transport routes,
such as the higher risk of deterioration (even if most of this may be bacterial and
hence not a factor in chronic diseases), and the use and misuse of conserving agents
• the effects of changes in varietal composition and diversity of consumption patterns,
for example, the loss of traditional crop varieties and, perhaps even more
significantly, the declining use of foods from “wild” sources.
• Trade aspects need to be considered in the context of improving diet, nutrition and the
prevention of chronic diseases. Trade has an important role to play in improving food and
nutrition security. On the import side, lower trade barriers reduce domestic food prices,
increase the purchasing power of consumers and afford them a greater variety of food
products. Freer trade can thus help enhance the availability and affordability of food and
contribute to a better-balanced diet. On the export side, access to markets abroad creates new
income opportunities for domestic farmers and food processors. Farmers in developing
countries in particular stand to benefit from the removal of trade barriers for commodities
such as sugar, fruits and vegetables, as well as tropical beverages, all these being products
for which they have a comparative advantage.
• The impact that agricultural policies, particularly subsidies, have on the structure of
production, processing and marketing systems - and ultimately on the availability of foods
that support healthy food consumption patterns - should not be overlooked.
All these issues and challenges need to be addressed in a pragmatic and intersectoral manner. All
sectors in the food chain, from “farm to table”, will need to be involved if the food system is to
respond to the challenges posed by the need for changes in diets to cope with the burgeoning
epidemic of noncommunicable diseases.
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Reviews, 1997, 55:31-43.
2. Ferro-Luzzi A, Martino L. Obesity and physical activity. Ciba Foundation Symposium, 1996,
3. World agriculture: towards 2015/2030. Summary report. Rome, Food and Agriculture
Organization of the United Nations, 2002.
4. Bruinsma J, ed. World agriculture: towards 2015/2030. An FAO perspective. Rome, Food and
Agriculture Organization of the United Nations/London, Earthscan, 2003.
5. Fats and oils in human nutrition. Report of a Joint Expert Consultation. Rome, Food and
Agriculture Organization of the United Nations, 1994 (FAO Food and Nutrition Paper, No. 57).
6. Guo X et al. Structural change in the impact of income on food consumption in China 1989-
1993. Economic Development and Cultural Change, 2000, 48:737-760.
7. Popkin BM. Nutrition in transition: the changing global nutrition challenge. Asia Pacific Journal
of Clinical Nutrition, 2001, 10(Suppl. 1):S13-S18.
8. Beaufoy G. The environmental impact of olive oil production in the European Union: practical
options for improving the environmental impact. Brussels, Environment Directorate-General,
European Commission, 2000.
9. Spedding CRW. The effect of dietary changes on agriculture. In: Lewis B, Assmann G, eds. The
social and economic contexts of coronary prevention. London, Current Medical Literature, 1990.
10. Pimental D et al. Water resources: agriculture, the environment and society. Bioscience, 1997,
11. The state of the world fisheries and aquaculture 2002. Rome, Food and Agriculture
Organization of the United Nations, 2002.
12. India nutrition profile 1998. New Delhi, Department of Women and Child Development,
Ministry of Human Resource Development, Government of India, 1998.
13. Fresco LO, Baudoin WO. Food and nutrition security towards human security. In: Proceedings
of the International Conference on Vegetables, (ICV-2002), 11-14 November 2002, Bangalore,
India. Bangalore, Dr Prem Nath Agricultural Science Foundation (in press).
International Policy Network UK
Organic suppliers see increasing demand
Operations respond to consumers' specific choices
By STEVE BROWN
Organic farming ranges from the backyard gardener to the sprawling farm, orchard or livestock
operation. That same variety of scale is reflected in organic suppliers.
"No one dominates," said Michele Catalano, chairwoman of the Organic Advisory Board, which
was established in 1987 to advise the Washington State Department of Agriculture concerning the
implementation of the WSDA Organic Food Program.
Among seed suppliers, she said, "Some companies specialize in organics, like Territorial (in
Oregon) and Peaceful Valley (in California). Larger companies, like Osborne (in Washington) and
Johnny's (in Maine) will have some organic seed."
Catalano said organic growers can refer to two major resources for selecting supplies: WSDA's
Brand Names Materials List and the Organic Materials Review Institute list. These extensive lists
include such materials as seeds, fertilizers, minerals and pesticides.
"Growers large and small often pick and choose among the suppliers," she said. "In buying seed, for
instance, they choose based on traits they like."
With two co-owners and two employees, Yelm Earth Worms and Castings has extended its market
from its plant about 25 miles south of Tacoma into Oregon and California. Now, co-owner Hunt
McLean said, the company is shipping to Utah, Colorado and Wyoming, with buyers in Texas
Yelm Earth's product line revolves around its earthworms -- red wigglers, to be specific. Other
products available through its website include worm depots, harvesters, castings, soils, potting
mixes, amendments, compost tea and complete vermicomposting systems.
"We've got 30,000 square feet of enclosed production space," co-owner Kelan Moynagh said. "We
sell a lot of our product in bulk for the local buyers. We sold 500 yards last year. At 800 pounds a
yard, that makes 200 tons."
McLean said each of the 10 production bays holds two windrows. Each windrow -- which takes
about nine months to completely process -- yields two semi-truck loads.
"We feed the worms dairy waste that has had the salts washed and pressed out," he said.
Moynagh said Yelm Earth sells retail, wholesale and online. "We've seen an uptick in demand,
though locally it fell off this year because of the weather. A lot of gardens collapsed after that false
start, and gardeners didn't want to reseed."
Wilbur-Ellis, known for its variety of feed products and its international network of specialists in
crop protection, nutrition and seed technology, has also branched into organics.
"Organic products are not a significant part (of our business volume) overall," said John Leman,
marketing and sales manager for branded products. "But we have focused on organics, especially in
the tree fruit group. Several of our organics experts are up to speed on products and pesticides."
Leman said demand, which had been steadily growing, has slowed in the past two years.
At Black Lake Organic in Olympia, Wash., owner and manager Gary Kline produces and sells self-
formulated minerals and fertilizers to homeowners and small farmers. It's a local, one-man
operation, which last year sold 16 tons of products.
Thirty years ago the now-retired biologist started selling organic fertilizers out of his garage. Now
his shelves are stacked with packages of individual minerals as well as 10 blends specifically
designed for particular classes of plants.
His specialty, he said, is "getting minerals in the right proportion based on a soil test. ... Too many
organic growers and gardeners lack fully balanced soil fertility and fail to incorporate natural earth
minerals along with the organic matter, manures and unfortified compost that they typically supply
Kline said his small operation allows him to provide personalized expertise alongside his products.
Posted: Thursday, September 30, 2010 12:00
Bangladesh Agriculture: In 21st Century
Posted by Perspective on 12/02/09 • Categorized as Cover Story
A. T. M. Syful Islam Bangladesh Agriculture University
Agriculture plays a key role in Bangladesh by
contributing 24 percent to its exports, 32 percent to its GDP and employing more than 60 percent of
its labor force. The dominance of agriculture will continue well into the 21st century as the nation
fights against poverty and strives to raise standard of living of its people through sustained
Bangladesh is the 7th largest country in the world in population where 164.707 million people are
virtually elbowing each other in a land that is 147,570 sq km in area with a population density of
more than 1100 people per sq km. Overpopulated! Well, there are only a few city-like states – like
Singapore – that would top this kind of population density. Excluding those states, Bangladesh
would make it to the top of the lists in population density. What makes the situation even more
horrifying for Bangladesh is that the country is poised to lose a good part of its territory for rise of
sea levels because of global warming, while its very population increases at an unsustainable rate.
Year Population (million)
Projected, 2025 190.000
Projected, 2050 231.000
Source: International Monetary Fund – 2009 World Economic Outlook
Food production and population growth in Bangladesh:
In Bangladesh, a country currently experiencing rapid population growth and serious food
shortages, an effort to increase crop yields through the introduction of HYV (high yield varieties) of
rice was initiated in 1966. As of 1979, 15% of the rice fields were planted with HYV rice, and the
remaining rice fields were planted with lower yield, traditional varieties. An investigation was
undertaken to determine if the increase in crop yields expected from the introduction of HYV rice
would sufficiently offset expected population increases and create a balance between food supply
and demand in the future. Time series analysis were used to project crop yields for the years 1980,
1990, and 2000 for each district of the country, if 15% of the land was planted in HYV rice and if
20% of the land was planted in HYV rice. Population projections were used to calculate per capita
food requirements for each district for the years 1980, 1990, and 2000. Projected crop yields and
per capita food requirements were then plotted on maps to determine the relationship between food
supply and demand in each district. Even under the most favorable projection, in which 20% of the
rice fields were planted in HYV rice, food deficient areas were more extensive than at the present
time. These findings suggested that even a massive agricultural effort cannot solve the food
problems of Bangladesh; however, if agricultural progress is combined with a rapid reduction in the
population growth rate, the country can solve its food problem and also develop a viable economy.
In overpopulated Bangladesh, people virtually elbow each other in a land spanning 147,570 square
kilometers with a population density of more than 1,100 people per square kilometer. While
landmass is being lost to rising sea levels due to rains and floods, blamed on global warming, the
population continues to increase at an unsustainable rate. In 1971, when Bangladesh attained
independence, its population was about 75 million. Since then it has doubled. The current growth
rate varies from 1.5 percent to 2 percent a year according to different assessments. Considering an
annual average growth rate of 1.75 percent a year, Bangladesh’s population will double in the next
40 years; at the lowest growth rate it will double in 47 years. This is like the current U.S. population
of 300 million living within the confines of the state of Wisconsin, which is close to the size of
Bangladesh. Despite such an ominous scenario, optimists point out that Bangladesh is improving in
education and healthcare and has achieved a respectable economic growth rate of about 5 percent
annually in recent decades. However, progress has had very little effect on overall poverty levels in
the country. In fact, studies have revealed that poverty levels have risen and not decreased.
In recent times, small shifts in weather patterns
have intensified flooding, causing more deaths and rendering millions homeless. When coastal areas
begin to submerge under water, people have no alternative but to migrate to higher land. This
process of migration to higher ground has already begun and will intensify as coastal areas are
increasingly flooded. The pressure is on Dhaka, the capital city, as more people cram into this
already overcrowded city each day. Living conditions in Dhaka are in a continuous state of
deterioration. People lack basic amenities like electricity and clean drinking water. Other cities fare
no better and encroachment on government land even in rural areas is a common sight. This is
likely to result in people migrating to neighboring India.
Climate change is likely to affect and impact the world’s food supply. Scientists predict that world
harvests will drop 20 to 40 percent by the end of this century as a result of global warming. So the
crucial issue is whether Bangladesh can meet its food requirements, given the anticipated massive
food shortage, its growing population and the loss of farmland when world food supplies decline.
Some experts have advocated the concept of “compact townships” to avoid the congestion of people
in major cities and limit the pressure on farmland. Others, however, believe that the country is
growing by about 20 square kilometers annually. Dismissing the idea of land growth, Atiq Rahman,
a member of the U.N. Intergovernmental Panel on Climate Change said, “The rate at which
sediment is deposited and new land is created is much slower than the rate at which climate change
and sea level rises are taking place.” Thousands of non-governmental organizations are currently
operating in Bangladesh and influencing the lives of many poor people. By taking a unified stand
and educating the public on family planning, NGOs can contribute more in advancing the cause of
humanity. Expatriate Bangladeshis are also morally obligated to come forward to help meet this
great challenge in their own innovative ways.
Population and food challenge of Bangladesh in the 21st century
Rice is the staple food of about 135 million people of Bangladesh. It provides nearly 48% of
rural employment, about two-third of total calorie supply and about one-half of the total
protein intakes of an average person in the country. Rice sector contributes one-half of the
agricultural GDP and one-sixth of the national income in Bangladesh.
Almost all of the 13 million farm families of the country grow rice. Rice is grown on about
10.5 million hectares which has remained almost stable over the past three decades.
About 75% of the total cropped area and over 80% of the total irrigated area is planted to
rice. Thus, rice plays a vital role in the livelihood of the people of Bangladesh. Total rice
production in Bangladesh was about 10.59 million tons in the year 1971 when the country’s
population was only about 70.88 millions. However, the country is now producing about 25.0
million tons to feed her 135 million people. This indicates that the growth of rice production
was much faster than the growth of population. This increased rice production has been
possible largely due to the adoption of modern rice varieties on around 66% of the rice land
which contributes to about 73% of the country’s total rice production.
However, there is no reason to be complacent. The population of Bangladesh is still growing
by two million every year and may increase by another 30 millions over the next 20 years.
Thus, Bangladesh will require about 27.26 million tons of rice for the year 2020. During this
time total rice area will also shrink to 10.28 million hectares. Rice yield therefore, needs to be
increased from the present 2.74 to 3.74 t/ha.
Calif. Governor Schwarzenegger Leads Asia
Trade Mission to Promote California, Boost
Fri, 10 Sep 2010 12:04:42 -0400 EDT | No Comments
by California Newswire
SACRAMENTO, Calif. /California Newswire/ — Governor Arnold Schwarzenegger yesterday
departed for a six-day trade mission to Asia in order to grow California’s economy and create jobs.
Leading multiple delegations of business leaders, the Governor will visit China, Japan and South
Korea; California’s fourth, third and fifth largest trading partners, respectively. In the course of the
mission, the Governor will engage in activities that will boost competition among countries to help
fund and build California’s high-speed rail system; increase access to Asian markets for California’s
products and services; improve relations with national and regional dignitaries; and connect
California and Asian businesses. As the number one exporting state in the U.S. in agriculture and
number two overall, trade plays a vital role in California’s economic success. Maintaining
relationships with our trading partners is integral to job creation, economic growth and increased
revenues in California.
“California is the world leader in many areas, from agriculture to
entertainment, and leads in nearly every industry of the future including high-tech, green-tech and
bio-tech. More than any other U.S. state, international trade drives California job growth and
economic prosperity,” said Governor Schwarzenegger. “With increasing world travel and
investment options for foreign tourists and businesspeople, California must take action to remain a
top destination for these important job-creating dollars. That is exactly why I am leading this trade
mission, to sell California’s world leading goods and encourage increased investment so more jobs,
economic growth and increased state revenues can benefit the Golden State.”
Trade is significant to California’s economy. In 2009, California exported $120 billion in goods
to over 220 foreign markets; $27 billion of which was to China, Japan and South Korea. It is
estimated by the U.S. Department of Commerce that one in seven jobs in the state are related
to trade and every million dollar increase in exports supports 11 jobs. California’s top exports
include: computer and electronic products; food and agriculture; and transportation
Tourism also has a positive economic impact on California’s economy, supporting over 880,000
jobs and generating $5.3 billion in tax revenues annually. In 2009, California received $15.6 billion
in international visitor spending, with close to $1.3 billion coming from the over one million
Chinese, Japanese and Korean tourists that visited California.
“At a time when California’s unemployment rate is more than 12 percent, our relationship with
China and its exploding economy has never been more important,” said Jim Wunderman, President
and CEO of the Bay Area Council, an organizer of the China portion of the trade mission. “The best
thing to get us out of this recession is to open up more demand for the products and services of the
people of California. We now live in a globalized world and big efforts like this show California
aims to win in the 21st Century economy. This mission, in effect, is bringing a big fortune cookie
that says ‘Buy Californian!’”
The Bay Area Council (Council), California Chamber of Commerce (Cal Chamber) and Los
Angeles Chamber of Commerce (L.A. Chamber) have all formed delegations of business,
agricultural and tourism leaders that will travel to different locations in Asia in conjunction with the
Governor’s trade mission. The Council, led by President and CEO Jim Wunderman has a delegation
of over 50 members, including: Lloyd Dean, CEO of Catholic Healthcare West & Chairman of Bay
Area Council; Patrick Lo, CEO of Netgear; and Marc Hedrick, CEO of Cytori Therapeutics. Due to
their working relationship with Shanghai, the Council delegation will be based in China; joining the
Governor on his stops in Hangzhou and Shanghai. Cal Chamber will lead a delegation of 20,
including leaders from Marvell Semiconductor, Roll International, E & J Gallo Winery and
Mammoth Mountain Resort. Some members from the Cal Chamber delegation will join the
Governor on all his stops; others will only join him in portions. The L.A. Chamber delegation will
be based in South Korea and will join the Governor on his stops there. The L.A. Chamber is
bringing leaders from businesses including Sea World Parks & Entertainment, New Logic Research,
the Ports of Long Beach and Los Angeles, Alvarado Manufacturing and 3Plus Logistics. For a full
list of delegates, click here.
The Governor will connect these California innovators and entrepreneurs with Asian businesspeople
and investors. From discussing jobs and economic growth with Alibaba Group Chairman and Chief
Executive Officer Jack Ma in Hangzhou, to visiting the 2010 World Expo in Shanghai and joining
the American Chamber of Commerce in Tokyo and Seoul to discuss business innovation and trade,
the Governor will play an important role in opening doors for California and Asian companies to
California agricultural exports to China, Japan and South Korea came in at $3.5 billion in
2009; with lots of room to grow. Opening additional access to these markets for California’s
agricultural products is a top priority for the Governor during this trade mission, where he
will promote California-grown products in several supermarket visits throughout Asia and
specifically in South Korea, where he is expected to make a speech on free trade.
High-speed rail will be a priority for the Governor in Asia. China, Japan and South Korea all
have advanced high-speed rail systems. The Governor will ride each of them and meet with
top officials from each country’s transportation ministry. California will begin construction
on its own high-speed rail system in 2012, and this fact-finding mission will play an important
role in providing information and generating international competition for bids to assist with
the expertise in building the railway.
The Governor will also meet with national and regional dignitaries, including: Tokyo’s
Governor Shintaro Ishihara, South Korea’s Gyeonggi Province Governor Kim Moon-soo and
South Korean President Lee Myung-bak. Bolstering the diplomatic relations between
California and its trading partners is vital to continued economic openness and cooperation.
farmers and ranchers nearly doubled the acreage of certified organic land, totaling to 2.3 million
acres. With increasing production and supply of organic produce and meats, organic food, once
considered a niche product, has become more available and affordable for consumers in mainstream
grocery stores. It is estimated that 46% of total organic food sales are now handled by the mass-
market channel, which includes supermarkets, grocery stores, mass merchandisers, and club stores
(OTA, 2006). A popular perception tends to suggest that most organic consumers are white,
wealthy, and have young children. However, the consumer base of organic food appears to have
become more diverse and cannot be easily pigeonholed as the market is growing with increased
availability and popularity. A study by the Hartman Group (2002) found that half of the respondents
who purchased organic food frequently have an annual income below $50,000, and that African
Americans, Asian Americans, and Hispanics purchase more organic products than Caucasians.
Our analysis used the Nielsen Homescan data from 2001 and 2004 (Box 1) to determine the
characteristics of organic consumers, what they buy, how much they spend, and the price premiums
they pay for organic produce. These two years give us a sample from before and after the
implementation of the National Organic Program's (NOP) labeling standard. We focus on fresh
produce because produce represents the largest sector, at about 39% of the organic market (OTA,
2006). One may speculate that the growing popularity of organic consumption could be attributed at
least partially to the implementation of NOP. However, it is not our intention to contribute to the
debate on the effect of NOP, mainly because Homescan data are not suitable for examining such an
issue. We simply present a cursory look at the data to examine whether any notable changes have
occurred after NOP by comparing household purchases of fresh produce in 2001 and 2004.
Who Buys Organic Produce?
Of all demographic characteristics, race seems to be the most correlated with organic expenditures.
In 2001, we found that Asian Americans, compared to other ethnic groups, spent the most food
dollars to purchase organic produce on a per capita basis. Though they bought comparable amounts
of fresh produce, Asian Americans, on average, spent more on organic produce than White, African,
or Hispanic Americans. By 2004, Asian Americans' expenditures on organics fell, while White,
African, and Hispanic Americans increased their spending on organic produce (Figure 1). Further,
African Americans have replaced Asian Americans to become the ethnic group that spent the most
on organic produce. The proportion of African Americans who purchased organic produce also
increased from 34% in 2001 to 37% in 2004, while the proportion of organic users among other
groups have remained relatively the same. These findings are in general agreement with the report
that Asian, Hispanic, and African Americans are the ethnic groups more likely to purchase organic
foods than Whites (Hartman Group, 2002). According to a more recent study by the Hartman Group
(2006), Asians and Hispanics are motivated primarily by family concerns in buying organic
Organic expenditures vary by region. We found that in 2004, households in the Western United
States purchased more organic produce than those residing in other regions, spending on average
about $4.90 per capita. This spending amount represents an increase of 19% over 2001, after
adjusting for inflation. Households residing in the northeastern and southern regions also registered
an increase in average per capita spending on organic produce. The Central United States showed
the lowest average per capita expenditure in 2004, which remained virtually unchanged from 2001.
In terms of proportion of households that purchased fresh organic produce, the western region also
showed the largest increase (almost 4%) of organic users from 2001 to 2004. The West and South
appear to be the two fastest growing markets for organic produce in the United States.
According to Homescan data, the average per capita spending on organic produce increased by 12%
in real terms between 2001 and 2004. As shown in Figure 2, this increase in spending is observed
for all households across various income groups. It is interesting to note that average per capita
spending on organic produce exhibited a U-shape relationship with income for households earning
less than $45,000 annually. Among households earning $45,000 and more, organic spending
appears to rise with income. These patterns between household income and organic spending are
observed for both 2001 and 2004. It is somewhat surprising to find that households with the lowest
income level of less than $25,000 spent the most—more than $4 per capita on organic produce in
2001 and 2004. Furthermore, households in the $35,000-$44,999 income bracket spent about as
much on organic produce per capita as those households earning over $100,000 annually ($3.94
versus $4.09 in 2004). For households with annual income at $25,000 or above, there appear little
variations on average per capita spending on organic produce in 2001 and 2004. Overall, there is
little consistent association between per capita expenditures on organic produce and household
income. Studies suggest that lower income families choose to buy organic when possible as a means
of preventative medicine, and thus are at least as likely to purchase organic as other income groups
(Hartman Group, 2003; OTA, 2004).
The lack of a clear positive association between organic expenditure and income level may have
prompted Laurie Demeritt, President of the Hartman Group, to observe that "income is about the
only thing that doesn't skew at all by user and nonuser. You get little skews in age, little skews in
geography, little skews in education, but there's nothing at all for income, so we don't even look at
that any more" (Fromartz, 2006). A recent survey conducted by the Food Marketing Institute (2004)
showed that only 11% of organic shoppers polled bought organics at a natural-food supermarket,
while 57% bought at mainstream grocery stores and discount stores. The fact that mainstream
grocery stores are replacing the specialty food stores as the major outlets for organic foods could
explain the seemingly fading relationship between organic expenditure and household income. It
appears that income may no longer be a good predicator to profile organic consumers as the
industry continues to grow and evolve into maturity.
What Do Organic Consumers Buy and How Much Organic
Premium Do They Pay?
According to Homescan, tomatoes, potatoes, carrots, onions, lettuce, apples, oranges, bananas,
grapes, and strawberries were the top five vegetables and fruits in terms of their shares of fresh
produce expenditures for home consumption. American households spent more on organic produce
between 2001 and 2004 for all produce except oranges and lettuce. Overall, average per capita
spending on these organic fruits and vegetables increased from $1.64 in 2001 to $1.91 in 2004, an
increase of 8.5% in real terms. Tomatoes appear to be the most favored organic vegetable among
American consumers with average per capita spending amounts 3-4 times those of other organic
produce in both 2001 and 2004. Per capita spending on organic apples and lettuce held distant
second and third places in 2001, while carrots and apples were ranked second and third,
respectively, in 2004. Strawberries and bananas registered the largest increases in organic
expenditures by 45% and 33%, respectively.
Since organic agricultural production is typically more cost intensive than conventional agriculture,
many organic farmers rely on the premiums that organic foods carry to cover their extra costs. High
premiums usually indicate high demand, signaling to producers which markets may be expanded.
As indicated previously (Box 1), we calculated unit values (spending over quantity purchased) to
derive price premiums for selected fresh produce because Homescan panelists do not report prices
of organic and conventional produce. Thus, the organic premiums derived from unit values are not
strictly the same as would be observed from the unit prices, if available. Except for oranges and
onions, average organic premiums for the most valuable produce increased from 2001 to 2004
(Figure 3). In 2001, average organic premiums varied from 1% ($0.01/lb.) above the conventional
produce for carrots to 78% ($0.32/lb.) for potatoes. In comparison, organic premiums varied from
9% ($0.08/lb.) for oranges to 78% ($0.36/lb.) for potatoes in 2004. According to our calculations,
organic potatoes carried a substantially higher price premium than other organic produce in both
2001 and 2004. This finding can be useful to organic producers who are looking for new crops to
improve their profit margins. The changes in organic premiums between 2001 and 2004 were
relatively moderate among the most valuable produce, except for lettuce and carrots.
In terms of dollar amount, average organic premiums that consumers paid in 2004 for apples,
grapes, strawberries, tomatoes, and potatoes were fairly uniform at about $0.35/lb. above their
conventional counterparts. There are substantial variations among individual fresh produce, most
notably in carrots and lettuce, which registered the largest increases in price premiums between
2001 and 2004. Tomatoes and apples also showed an increase in average price premiums by 52%
and 75%, respectively. Overall, the average price premium for the selected produce increased from
$0.19/lb. in 2001 to $0.29/lb. in 2004, which represents a 42% increase in real terms.
Price plays an important role in consumers' purchase decisions. A survey by Walnut Acres (2002)
reported that 68% of consumers cited high prices as the main reason they did not buy organic foods.
However, to many organic consumers, price could be of secondary consideration. They are willing
to pay a price premium because they value and demand certain attributes from organic products. To
them, the organic attributes are well worth the price difference. The fact that we find the organic
premiums for most selected fresh produce increased from 2001 to 2004 suggests that the demand
for organic produce remains strong, and consumers are willing to pay additional dollars for the
Based on limited data on organic prices over the period 2000—04 at the farmgate and wholesale
levels, Oberholtzer, Dimitri, and Greene (2005) show that prices for organic varieties are
comparatively more volatile than their conventional counterparts and organic price premiums were
higher at the wholesale level than at the farmgate level. Of the three produce (broccoli, carrots, and
mesclun mix) studied, they found that average annual organic price premiums at wholesale, as a
percent of conventional prices, increased for carrots (143% to 148%) and for broccoli (141% to
153%) between 2001 and 2004, while the price premiums decreased for mesclun mix from 9% to
7%. It should be noted that the organic premiums calculated from the Homescan data are not
directly comparable with those reported in Oberholtzer, Dimitri, and Greene (2005). However, one
would expect relatively lower organic price premiums at the retail level than at the wholesale or
farmgate level as organic foods are becoming more competitive and increasingly marketed through
mainstream supermarkets and discount club stores.
A Profile of Consumer by User Group
In our analysis, we categorized each household into user or nonuser group according to whether or
not the household purchased organic produce. Then user households are classified into one of three
user groups based on sample distribution of per capita spending on organic produce. In 2004, the
first quartile of organic users with per capita spending greater than $0 but less than $0.75 is defined
as light users, the second and third quartiles are defined as medium users (between $0.76 and
$3.65), and the fourth quartile is the heavy users (> $3.65). The nonusers account for 62.5% of the
2004 sample, while light, medium, and heavy users account for 9.6%, 18.6%, and 9.4%,
respectively. In comparison, the proportion of user groups in 2001 are 62.9% (nonusers), 9.5%
(light users), 18.4% (medium users), and 9.2% (heavy users). Overall, the result shows that
proportionally more consumers have become organic users in 2004 than in 2001, with a slightly
higher increase in both medium and heavy user groups. Per capita spending on organic produce by
medium users increased from $1.45 in 2001 to $1.81 in 2004; an increase of 16% in real terms. For
the light and heavy users, the growth in real per capita organic spending increased by 10% from
2001 to 2004.
With respect to market shares of selected organic produce across user groups, Figure 4 shows that
light users spent the largest proportion of their organic expenditures on carrots, bananas, and
tomatoes. The medium users purchased more tomatoes and carrots relative to other kinds of fresh
produce, while heavy users seemed to expend a larger proportion of their organic budgets on
tomatoes, apples, and grapes. Overall, organic tomatoes appear to be the favorite fresh produce
among the organic users, accounting for more than 15% of light and medium users' organic produce
expenditure and more than 10% for heavy users. It is interesting to note that organic vegetables
appear to be the preferred organic produce of light users, while the heavy users seem to have an
affinity for organic fruits, especially apples and grapes. Heavy users buy proportionately more of
each fruit than either the light or medium users, except for bananas. On the other hand, they tend to
buy less of each vegetable than either the light or medium users, except for potatoes.
Comparing demographic information across user groups in 2004 gives us further insights in terms
of how organic expenditures are related to these characteristics. As shown in Table 1, heavy and
medium users have the largest proportions of those who have at least a bachelor's degree, while a
larger portion of nonusers and light users have either a high school diploma or some college.
Interestingly, households whose heads have less than a high school education account for 1.9% of
heavy users, the highest among all user groups. With respect to age, heavy users seem to comprise
the largest proportion of the youngest households (household head age < 30 years), while the light
users' group has the largest proportion of household head age between 30 and 49 years old. Medium
and heavy users also have the largest proportion of older households relative to nonusers and light
users, with the age of household head 50 years and older. Most heavy users are found in the
Southern and Western United States, and the fewest are found in the central region. Medium users
have the largest proportion of Whites relative to other user groups, while a relatively large
proportion of Hispanic consumers belong to the light users' group. In comparison, heavy users are
proportionally few among Whites, with the reverse being true for African, Asian, and other
We used the Nielsen Homescan data from 2001 and 2004 to analyze consumer purchase patterns of
fresh organic produce. Our analysis shows that Asian and African Americans tend to purchase
organic over conventional produce more than Whites and Hispanics. Households residing in the
western region spent more on organic produce on a per capita basis than those residing in other
regions. Contrary to popular opinion, we do not find any consistent positive association between
household income and expenditures on organic produce. Although certified organic acreage has
increased rapidly in boosting the production of organic foods, our analysis suggests that demand
appears to be growing faster than the supply so that organic price premiums for most selected fresh
produce remained relatively high in 2004, varying from 9% for oranges to 78% for potatoes.
Among all fresh produce studied, organic potatoes appear to command the highest percentage of
price premiums in both 2001 and 2004.
We classified all households into four groups: nonusers, light users, medium users, and heavy users,
according to their per capita expenditures on organic fresh produce. The proportion of consumers
buying organic produce increased between 2001 and 2004, suggesting an increasing organic
penetration. In terms of demographic characteristics, medium and heavy users are represented
proportionately more by older households with the age of household head 50 years and older. Heavy
users also comprise the largest proportion of the youngest households (household head age < 30
years), while light users have the largest proportion of household head age between 30 and 49 years
old. In addition, we find that light users expend a relatively larger share of their organic
expenditures on bananas and carrots than both the medium and heavy users. Organic vegetables
appear to be the preferred organic produce of light users, while the heavy users seem to prefer
organic fruits, especially apples and grapes. For all organic users, organic tomatoes are clearly the
preferred choice over other vegetables.
The views expressed in this study are those of the authors, and do not necessarily reflect those of
the United States Department of Agriculture.
For More Information
Dimitri, C., & Greene, C. (2002). Recent growth patterns in U.S. organic foods market.
Agricultural Information Bulletin No. 777, U.S. Department of Agriculture, Economic Research
Food Marketing Institute. (2004). U.S. organic food sales continue to grow. Food Institute Report,
Arlington, VA, May 10.
Fromartz, S. (2006). Organic, Inc.: Natural foods and how they grew. New York: Harcourt Trade
Hartman Group. (2002). Hartman organic research review: A compilation of national organic
research conducted by the Hartman Group. Bellevue, WA.
Hartman Group. (2003). Organic consumer evolution 2003. Bellevue, WA.
Hartman Group. (2006). Organic2006: Consumer attitudes & behavior five years later & into the
future. Bellevue, WA.
Nutrition Business Journal (NBJ). (2004). The NBJ/SPINS organic foods report 2004. Cleveland,
OH: Penton Media, Inc.
Oberholtzer, L., Dimitri, C., & Greene, C. (2005). Price premiums hold on as U.S. organic produce
market expands. VGS-308-01. Washington, DC: U.S. Department of Agriculture, Economic
The Organic Trade Association (OTA). (May 2004). The Organic Trade Association's 2004
manufacturer survey. Greenfield, MA.
The Organic Trade Association (OTA). (2006). The OTA 2006 manufacturer survey overview.
Available online: http://www.ota.com/organic/mt.html.
Walnut Acres. (2002). Many Americans make eating organic food a top choice to protect health.
Boulder, CO, April 9.
Box 1. The Sample Data and Description.
The Nielsen Homescan panel data include purchases of both random-weight and Uniform Product
Code (UPC) food items. According to Nielsen, the panel consists of representative U.S. households
that provide food purchase data for at-home consumption. For 2001 and 2004, more than 8,164 and
8,430 households, respectively, participated in the Homescan panel. In general, panelists report their
purchases weekly by scanning either the UPC or a designated code for random-weight
(unpackaged) products of all their purchases from grocery stores or other retail outlets. For
packaged or UPC-coded food products, organic produce can be identified by the presence of the
USDA organic seal or with organic-claim codes created by Nielsen. For random-weight items, the
descriptions of designated codes can be used to identify organic produce. Homescan panelists do
not report prices they pay for each food; they report total quantity and spending for each food. In
addition, the Homescan data include product characteristics and promotion information, as well as
detailed socio-demographic information of each household. For our analysis, household spending
on selected fresh produce was calculated as average expenditures on per purchase record basis.
Prices for organic and conventional produce were derived as unit values based on the household's
reported expenditures and quantities. Average household expenditures on fresh produce were
expressed in terms of per capita to control for household size effect. Furthermore, all expenditures
and prices were expressed on nominal current dollars for 2001 and 2004, respectively. The
Consumer Price Index for food and beverages increased by 7.49% from 2001 to 2004, and this
inflation rate is used to calculate changes in real terms.
Average per capita spending on fresh organic produce for home consumption by
Average per capita spending on organic produce for home consumption by income
Average price premiums as % of conventional price for the top 10 most valuable organic
Market shares of selected organic produce by user group,
Selected Household Characteristics by User Group, 2004.
Category Nonusers Light Users Medium Users Heavy Users Total
Educational Level (%)
Less than high school
1.86 0.86 1.66 1.90 1.73
High school diploma 19.60 15.80 15.02 11.53 17.63
Some college 31.49 31.60 30.73 26.36 30.88
College degree 32.05 35.56 33.61 32.83 32.75
Post-college degree 15.00 16.17 18.98 27.38 17.01
Age of Household Head (%)
< 30 years 1.44 0.86 1.21 2.15 1.41
30—39 years 12.46 13.59 9.33 11.91 11.93
40—49 years 24.06 29.01 20.38 19.90 23.46
50—64 years 38.72 35.19 39.17 39.04 38.49
65 years and older 23.32 21.36 29.90 27.00 24.70
Northeast 20.41 22.59 25.24 23.45 21.80
Central 18.76 16.79 14.25 10.65 16.98
South> 41.36 37.41 34.89 31.43 38.85
West 19.46 23.21 25.62 34.47 22.37
White 74.08 71.48 76.61 67.93 73.72
African 13.44 12.84 11.69 15.59 13.26
Hispanic 8.17 10.49 6.84 8.37 8.06
Asian 2.72 3.46 2.81 4.06 2.93
Other 1.60 1.72 2.04 4.06 1.92
Number of households 5,266 810 1,565 789 8,430
Note: User groups are classified based on sample distribution of average per capita spending on
organic produce per purchase record. The first quartile is defined as light users with per capita
spending greater than $0 but less than $0.75, the second and third quartile are defined as medium
users (between $0.75 and $3.65), and the fourth quartile is the heavy users (> $3.65).
John Stevens-Garmon (email@example.com) is Graduate Research Assistant, and Chung L. Huang
(firstname.lastname@example.org) is Professor, Department of Agricultural and Applied Economics,
University of Georgia, Athens, GA. Biing-Hwan Lin (BLIN@ers.usda.gov) is Senior Economist,
Economic Research Service of the USDA, Washington, DC. This research was supported by
USDA-ERS Cooperative Agreement No. 43-3AEM-5-80043.
The price of everything is determined by the
supply and demand for that everything. In the
Agri-Food markets demand is increasing more
rapidly than supply, causing prices to rise.
Given Asian-Pacific economic growth, that will
likely continue to be the situation.
Chinese consumers, now with higher incomes, wanting to buy more food of some type simply go to
nearest grocery store. Those purchases increase the demand for whatever they buy. The producer of
that food item cannot increase supply rapidly. Going from sow to pork chop cannot be done any
faster than nature allows. Price is the variable that responds when demand changes and supply is
Food prices are indeed rising and China's demand is part of that development according to "A
commodities boom makes itself felt in the supermarket" by J. Wiggins in The Financial Times.
"The 6.7 per cent annual growth in food prices tracked in the US at the beginning of this
year, if it continues would be the biggest annual increase since 1980. The UK is
witnessing comparable increases, as is China, where food is up annual 6.2 per cent in
the first quarter of this year. In all these countries, food prices are rising more quickly
than overall prices. . . China's total agricultural imports have grown more quickly
than anticipated, more than doubling between 2001 and 2004 to $33 billion. (24
May 2007,13)"[Emphasis added]
Indeed, food prices around the world are
rising faster than most other prices, as
indicated by the previous quotation.
Demand for agri-food products is
pushing prices up. Most economists
ignore this situation because they are
mired in the economic environment of
more than a decade ago.
Around two billion consumers, in China
and India, are entering an era of economic prosperity. Not since Europe was rebuilt after World War
II has the world experienced such an economic upheaval of such a positive nature. For that reason
food prices are rising, and will continue to rise as long as this income miracle is in process.
CHANGING CONSUMPTION OF AGRIFOOD PRODUCTS: The U.S. government is not
alone in its interest in the production of alcohol. That government wants to put it in cars while
others want to put it inside themselves. What brought this subject to our attention was "LVMH
soaks up Wenjun" in the Financial Times.
"Not content with exporting Don Perignon champagne, Hennessy cognac and Glenmorangie
whiskey to China's elite, France's LVMH has taken a majority stake in Wenjun, a Chinese distillery.
Its decision to buy 55 per cent of the business for an undisclosed sum highlights the desire of
international drink groups to win a foothold in the fast-growing market for Chinese clear grain
spirites, known as baijiu or "white alcohol". . . . Company officials declined to comment yesterday
but local media have said Wenjun produces 30,000 tonnes of alcohol a year for sale under more
than 100 of its own brands as well as a further 2,800 tonnes of raw alcohol sold to other drink
companies.(17 May 2007,p.25)"
The graph at the upper right is of consumption of alcohol for the world, China, and India.
Measurement is in liters per adult, and the data comes from the World Health Organization. One
would have to assume that the WHO is not in favor of alcohol consumption as they tend to oppose
most of the enjoyable parts of life. The line of red squares is the estimated global per adult
consumption of alcohol. That line is fairly flat from about 1995 on, at a little more than 4 liters per
adult per year.
The solid blue circles are for Chinese consumption of alcohol. Clearly, Chinese consumers like to
partake of alcohol. The nation consumes almost 25% more per adult than the world average. LVHM
apparently sees this rate of consumption as attractive. As incomes rise in China, consumers will
move up the alcohol pyramid to the pricier blends and away from baijiu. LVMH will, as we talked
about last month, be able to increase market share in a likely growing alcohol market.
The solid green line is for India, and suggests that alcohol consumption is not material in India.
Cultural and income factors are the dominant forces in causing Indian alcohol consumption be at
such a low level. Will Indian alcohol consumption rise as incomes increase in that country?
Lifestyles tend to change with the level of income. Wealthy Arabs, for example, do not fully
subscribe to the abstinence advocated by their religious rules. One of those situations that will have
Have never had the opportunity to consume baijiu, or Chinese white alcohol, but can imagine that it
is an acquired taste. Consumers have begun to move up the quality scale for the same article says,
"Though much of the baijiu sold in China is still cut-price firewater, the industry's profits have
soared in recent years as newly affluent urban drinkers focus on more premium brands." We note
too that tequila was not first thought of as a chic drink.
LVMH, the acquiring company in the article, is Lymh Moet Hennessy Lou Vuit, a French company.
U.S. symbol is LVMU.Y We are going to have to add that name to our "to do research" list for
future consideration. We may someday find baijiu in "Ming like" bottles for $40 at local stores.
The Agri-Food Value View Philosophy: The consumption of food and agricultural products is a
function of the size of the population and the per capita disposal income. These two factors
determine Global Agri-Food Revenues. Economic expansion in the Asia-Pacific region combined
with the demands for renewable energy sources will greatly increase the growth of Global Agri-
Food Revenues. Investors that position themselves in front of this growth dynamic are likely to
benefit from it. The Agri-Food Trinity, prices of food and agricultural products, the economics of
companies involved, and the value of agricultural land, should enhance investor wealth.
Schmidt Base Food Index Components
Pricing in U.S. dollars at historic U.S. locations. Cash, spot, prices where possible.
Data Sources: wsjmarkets.com; cbot.com; Base for all calculations is 2 Feb 2007
Component Price Current Price High Price Trend Trend Rank
Jun / May
Butter $1.55 $1.55 + 1 / 1
Hogs $0.709 $0.721 + 2 / 9
Barley $4.50 $4.50 + 3 / 8
Rice, rough $10.90 $11.30 + 4 / 6
Wheat $5.77 $5.84 + 5 / 7
Soybeans $7.75 $7.75 + 6 / 10
Broilers $0.802 $0.802 + 7 / 5
Steers, feeder $1.23 $1.26 + 8 / 2
Beef carcass index 143.38 156.14 + 9 / 3
Oats $2.95 $3.09 + 10 / 4
Corn $3.77 $4.08 - 11 / 13
Sugar, world $0.111 $0.124 - 12 / 12
Eggs $0.765 $0.895 - 13 / 11
BASE FOOD INDEX & COMPONENT TRENDS:
Our chart on the first page continues to show an interesting
story. Admittedly the time period is short, but that time
period includes extremely strong performance by the U.S.
equity markets. That said, the Base Food Index has
performed better than U.S. stocks.
When risk is considered, the impressive nature of these
results becomes more apparent. The graph to the right is of
the ratio of mean return to the standard deviation of return.
The Base Food Index gives far superior return per unit of
risk than U.S. equities. The covariance of the Base Food
Index with U.S. equities is zero, meaning their returns are
unrelated. Benefits from diversification into agri-foods are,
What all this means is that the base source of returns for agri-foods investment is extremely
attractive to an investor. Direct investment in the sources of these returns, basic food components, is
not easily done. The trick will be to find investments that derive value from these characteristics but
do not have other factors interfering with the manifestation of those returns.
As can be observed in the table on the previous page, corn price while improving somewhat in the
ranking continues to have a negative trend. Expectations that corn will be in ample supply this fall
continues to dominate. Corn is one of three prices with a negative trend, while all others are in
positive trends. Soybean prices continue to improve on belief that too much acreage has been
shifted to corn. Likely ample corn supplies are causing expectations of greater supply of beef which
in turn is causing beef prices to weaken. Perhaps we will have cheaper steaks later in the year. Hog
prices are probably reflecting the summer demand relative to a supply that had not expanded earlier
due to high corn prices.