Changes in the Structure of Global Food Demand (original) (raw)
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Structural shift in demand for food: Projections for 2020
Knowledge of demand structure and consumer behaviour is essential for a wide range of development policy questions like improvement in nutritional status, food subsidy, sectoral and macroeconomic policy analysis, etc. An analysis of food consumption patterns and how they are likely to shift with changes in income and relative price is required to assess the food security-related policy issues in the agricultural sector. With high growth rates in the agricultural sector, the average per capita income in the country shows an increase, accompanied by a fall in the per capita consumption of staple food. In this background the present study diagnoses the food basket of households in rural and urban areas under different expenditure groups in the last two decades and tries to investigate the driving force for these changes by computing the demand elasticities that explain the level of demand for the commodities by an individual consumer given the structure of relative prices faced, real income and a set of individual characteristics such as age, type of household (expenditure groups) and geographical environment (rural or urban). The study projects the prospects of the food demand scenario in the country in 2020. And, finally, aims at finding answers to some of the most debatable issues relating to the country's food security, decline in cereal consumption and implications on poverty. The study uses data from the consumer expenditure survey of the National Sample Survey (NSS) rounds number 38, 43, 50 and 55
Projecting World Food Demand: A Comparison of Alternative Demand Systems
Projections of world food demands hinge critically on the underlying functional form used to predict future demands. Simple functional forms can lead to unrealistic projections by failing to capture changes in income elasticities of demand as consumer becomes wealthier. This paper compares several demand systems in the projection of disaggregated food demand across a wide range of countries with different income levels using a global general equilibrium model. We find that the recently introduced AIDADS system represents a substantial improvement over existing demand systems currently in use in CGE modeling. In particular, our projection results show that for relatively poor regions experiencing rapid income growth, the widely used LES and CDE demand systems tend to over-predict growth in consumer demand, and hence import and output requirements for food products and under-predict that for non-food products, compared to the AIDADS system. On the other hand, for high-income regions with modest income growth, the choice of functional form is less critical.
The future of food demand: understanding differences in global economic models
Agricultural Economics, 2014
Understanding the capacity of agricultural systems to feed the world population under climate change requires projecting future food demand. This article reviews demand modeling approaches from 10 global economic models participating in the Agricultural Model Intercomparison and Improvement Project (AgMIP). We compare food demand projections in 2050 for various regions and agricultural products under harmonized scenarios of socioeconomic development, climate change, and bioenergy expansion. In the reference scenario (SSP2), food demand increases by 59-98% between 2005 and 2050, slightly higher than the most recent FAO projection of 54% from 2005/2007. The range of results is large, in particular for animal calories (between 61% and 144%), caused by differences in demand systems specifications, and in income and price elasticities. The results are more sensitive to socioeconomic assumptions than to climate change or bioenergy scenarios. When considering a world with higher population and lower economic growth (SSP3), consumption per capita drops on average by 9% for crops and 18% for livestock. The maximum effect of climate change on calorie availability is −6% at the global level, and the effect of biofuel production on calorie availability is even smaller.
Projecting world food demand using alternative demand systems
Economic Modelling, 2004
Computable General Equilibrium (CGE) models are increasingly being used to project world food markets in order to support forward-looking policy analysis. Such projections hinge critically on the underlying functional form for representing consumer demand. Simple functional forms can lead to unrealistic projections by failing to capture changes in income elasticities of demand. We adopt as our benchmark the recently introduced AIDADS demand system and compare it with several alternative demand systems currently in widespread use in CGE models. This comparison is conducted in the context of projections for disaggregated global food demand using a global CGE model. We find that AIDADS represents a substantial improvement, particularly for the rapidly growing developing countries. For these economies, the most widely used demand systems tend to over-predict future food demands, and hence overestimate future production and import requirements for agricultural products.
Economic Development and Food Demand Changes: Production and Management Implications
Per capita food consumption and production changes during economic development are analyzed using a resource-based cereal equivalent measure. Diet up-grades to livestock products during economic development contribute to an increase in per capita food resource use by a factor of five or more. Food consumption changes are generally consistent across countries and are only marginally affected by a country’s food production resource base (land). Food consumption increases tend to exceed food production increases in early stages of development, leading to food import needs. In later stages of development, per capita food consumption stabilizes. Continued increases in production allow the closing of the consumption-production gap for some countries at high income levels. Consumption of pork and poultry meat show the largest percentage increase during economic development; however, beef and dairy products are less efficient in resource use and therefore command a majority of the productiv...
Demand side drivers of global food security
Global Food Security, 2013
Drawing upon a series of cross-country demand analyses conducted using International Comparison Program (ICP) data from 1980, 1996 and 2005, this paper highlights how consumer preferences for food evolve over time. Income and price elasticities were estimated for an increasing number of countries, reaching 144 in the 2005 ICP analysis. Consumers in lower income countries spend a higher share of income on food, are most responsive to income and price changes, and are increasingly diversifying their diets toward more protein and fat containing foods such as meats and fish. Consumers, in general, also make larger adjustments to non-food expenditures when food prices change than they do to food expenditures when the price of non-food items change.
Over the next decades mankind will demand more food from fewer land and water resources. This study quantifies the food production impacts of four alternative development scenarios from the Millennium Ecosystem Assessment and the Special Report on Emission Scenarios. Partially and jointly considered are land and water supply impacts from population growth, and technical change, as well as forest and agricultural commodity demand shifts from population growth and economic development. The income impacts on food demand are computed with dynamic elasticities. Simulations with a global, partial equilibrium model of the agricultural and forest sectors show that per capita food levels increase in all examined development scenarios with minor impacts on food prices. Global agricultural land increases by up to 14% between 2010 and 2030. Deforestation restrictions strongly impact the price of land and water resources but have little consequences for the global level of food production and food prices. While projected income changes have the highest partial impact on per capita food consumption levels, population growth leads to the highest increase in total food production. The impact of technical change is amplified or mitigated by adaptations of land management intensities.
A Consistent Food Demand Framework for International Food Security Assessment
2014
A parsimonious demand modeling approach has been developed for the annual USDA-ERS International Food Security Assessment to be fully implemented in 2016. The approach incorporates price effects, variation in food quality across income deciles, and consistent aggregation over income deciles and food qualities. The approach is based on a simple PIGLOG demand approach for four food categories: corn, other grains, roots and tubers, and "all other" foods. The framework exhibits desirable characteristics obtained via calibration: food "quality" within a food group increases with income (e.g., from simple wheat flour purchased by poor households to commercial baked goods purchased by higher income groups); price and income responses become less sensitive with increasing income; and increasing income inequality decreases average per capita food consumption. The proposed modeling approach is illustrated for Tanzania. The new calibrated model will be able to identify the unique impacts of income, prices, and exchange rates on food consumption, i.e. potential sources of food insecurity.
Income, consumer preferences, and the future of livestock-derived food demand
Global Environmental Change, 2021
In recent decades there has been a sustained and substantial shift in human diets across the globe towards including more livestock-derived foods. Continuing debates scrutinize how these dietary shifts affect human health, the natural environment, and livelihoods. However, amidst these debates there remain unanswered questions about how demand for livestock-derived foods may evolve over the upcoming decades for a range of scenarios for key drivers of change including human population, income, and consumer preferences. Future trends in human population and income in our scenarios were sourced from three of the shared socioeconomic pathways. We used scenario-based modeling to show that average protein demand for red meat (beef, sheep, goats, and pork), poultry, dairy milk, and eggs across the globe would increase by 14% per person and 38% in total between the year 2020 and the year 2050 if trends in income and population continue along a mid-range trajectory. The fastest per person rates of increase were 49% in South Asia and 55% in sub-Saharan Africa. We show that per person demand for red meat in high-income countries would decline by 2.8% if income elasticities of demand (a partial proxy for consumer preferences, based on the responsiveness of demand to income changes) in high-income countries decline by 100% by 2050 under a mid-range trajectory for per person income growth, compared to their current trajectory. Prices are an important driver of demand, and our results demonstrate that the result of a decline in red meat demand in high-income countries is strongly related to rising red meat prices, as projected by our scenario-based modeling. If the decline in the income elasticity of demand occurred in all countries rather than only in high-income countries, then per person red meat demand in high-income countries would actually increase in 2050 by 8.9% because the income elasticity-driven decline in global demand reduces prices, and the effect of lower prices outweighs the effect of a decline in the income elasticity of demand. Our results demonstrate the importance of interactions between income, prices, and the income elasticity of demand in projecting future demand for livestock-derived foods. We complement the existing literature on food systems and global change by providing quantitative evidence about the possible space for the future demand of livestock-derived foods, which has important implications for human health and the natural environment.
A physically-based model of long-term food demand
Global Environmental Change
Reducing hunger while staying within planetary boundaries of pollution, land use and fresh water use is one of the most urgent sustainable development goals. It is imperative to understand future food demand, the agricultural system, and the interactions with other natural and human systems. Studying such interactions in the long-term future is often done with Integrated Assessment Modelling. In this paper we develop a new food demand model to make projections several decades ahead, having 46 detailed food categories and population segmented by income and urban vs rural. The core of our model is a set of relationships between income and dietary patterns, with differences between regions and income inequalities within a region. Hereby we take a different, more long-term-oriented approach than elasticity-based macroeconomic models (Computable General Equilibrium (CGE) and Partial Equilibrium (PE) models). The physical and detailed nature of our model allows for fine-grained scenario exploration. We first apply the model to the newly developed Shared Socioeconomic Pathways (SSP) scenarios, and then to additional sustainable development scenarios of food waste reduction and dietary change. We conclude that total demand for crops and grass could increase roughly 35-165% between 2010 and 2100, that this future demand growth can be tempered more effectively by replacing animal products than by reducing food waste, and that income-based consumption inequality persists and is a contributing factor to our estimate that 270 million people could still be undernourished in 2050.