OECD-FAO Agricultural Outlook 2025-2034 | 21 Jul 2025

Source: DTE 

Why in News? 

The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) Agricultural Outlook 2025-2034 report, offers a 10-year outlook on global agricultural and fish markets to guide evidence-based policymaking. 

What are the Global Market Trends According to OECD-FAO Agricultural Outlook 2025-2034? 

• Cereal Production and Biofuel Demand: Global cereal production is expected to grow at 1.1% annually, driven largely by yield increases (0.9% per year). However, the expansion of harvested area will slow to 0.14% annually through 2034. 
  • By 2034, 40% of cereal production will be consumed directly by humans, while 33% will be used for animal feed and 27% will be diverted to biofuels and industrial uses. 
    • By 2034, India and Southeast Asia will drive 39% of global cereal consumption growth, while China’s share will fall to 13% from 32%, reflecting changing consumption trends. 
  • Biofuel demand is projected to grow at 0.9% annually, primarily due to increases in countries like Brazil, India, and Indonesia. 
• Agricultural and Fish Commodity Growth: Global agricultural and fish production is projected to grow by 14% through 2034, primarily driven by productivity gains in middle-income nations. 
  • However, this growth will also lead to a 6% increase in agricultural greenhouse gas emissions. 
• Rise in Animal Product Consumption: Global per capita calorie intake from livestock and fish products is expected to increase by 6% over the next decade, driven by growth in lower-middle-income countries, where intake is anticipated to rise by 24% nearly four times the global average. 
  • This increase will raise daily intake in lower-middle-income countries to 364 kcal, but low-income countries will remain far behind, with an intake of just 143 kcal, well below the 300 kcal/day target for a healthy diet. 

How does the Rising Demand for Biofuels Impact Global Food Security? 

• Land Use: Growing biofuel crops can reduce land available for food production. To meet the E20 target, India would need 7.1 million hectares (around 3% of its total cropped area), raising serious concerns about land use and food security. 
• Pressure on Water and Resources: Biofuel crops require significant water (ethanol production uses 8-12 liters of water per liter of ethanol) and fertilizers, straining resources needed for food farming. 
• Food Inflation: Biofuels raise food prices by increasing demand for feedstock crops. India’s ethanol shift to maize and rice may divert food supplies, with rice prices rising 14.5% in 2023, hitting poor households hardest. 
  • Poorer nations face greater risks of food insecurity due to reduced access and affordability. 
• Environmental Trade-offs: Expansion of biofuel crops can lead to deforestation and biodiversity loss, indirectly affecting food systems. 

How Can Sustainable Biofuel and Food Security Policies Be Ensured? 

• Feedstock Diversification: Promoting 3G ethanol (from microalgae using wastewater/sewage/seawater) offers a sustainable alternative to 1G (sugarcane, wheat, rice) and 2G (crop residues) biofuels, avoiding food and water stress. 
  • India can also invest in developing genetically modified (GM) crops specifically tailored for biofuel production to boost yields and reduce pressure on food crops. 
• Zoning and Land Use Planning: Implement a biofuel zoning policy that prevents diversion of fertile agricultural land. 
  • Use marginal and wastelands for biofuel crops under strict ecological safeguards to avoid deforestation or biodiversity loss. 
• Crop Diversification Incentives: Strengthen Minimum Support Prices (MSP) and procurement for diverse food grains to counter biofuel-driven monocultures. 
  • Align ethanol procurement policies with food surplus seasons to avoid market distortion. 
• Improving Productivity and Sustainability: Increased agricultural productivity is critical to reduce undernourishment and curb GHG emissions.  
  • The report suggests that global undernourishment could be eradicated and emissions reduced by 7% with 15% productivity improvements and investments in emissions-reduction technologies (e.g., precision farming, livestock feed enhancements, and low-cost practices like crop rotations).