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Irz, X., & Kuosmanen, N. (2013). Explaining growth in demand for dairy products in Finland: an econometric analysis. Food Economics, 9(sup5), 47–56.
Abstract: The dairy sector represents the cornerstone of Finnish agriculture but faces new challenges linked to the decoupling of farm subsidies and abolition of milk production quotas. Because of its increasing exposure to market forces, the sector must anticipate future changes in demand and deliver precisely what Finnish consumers want. This paper contributes to that goal by analyzing retroactively the drivers of demand for dairy products over the period 1975–2010 using National Accounts Data. After presenting the evolution of consumption for dairy products, we estimate a complete system of demand for food and dairy products and use it to decompose demand growth into a substitution effect, income effect, and trend effect. The analysis points to the severity of the challenges that the sector is facing. Stagnant consumption is at least partially the result of continuous but adverse taste changes, and as Finnish consumers grow more prosperous, they allocate an increasingly smaller share of their food budget to the dairy group. The low own-price elasticity of demand for dairy products also limits the benefits to the sector of growth in milk production. Hence, business-as-usual will result in the dwindling importance of the dairy sector in the Finnish food chain. Innovation and product differentiation, perhaps emphasizing the attributes of livestock production processes, are clearly required to counter this evolution.
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von Lampe, M., Willenbockel, D., Ahammad, H., Blanc, E., Cai, Y., Calvin, K., et al. (2014). Why do global long-term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison. Agric. Econ., 45(1), 3.
Abstract: Recent studies assessing plausible futures for agricultural markets and global food security have had contradictory outcomes. To advance our understanding of the sources of the differences, 10 global economic models that produce long-term scenarios were asked to compare a reference scenario with alternate socioeconomic, climate change, and bioenergy scenarios using a common set of key drivers. Several key conclusions emerge from this exercise: First, for a comparison of scenario results to be meaningful, a careful analysis of the interpretation of the relevant model variables is essential. For instance, the use of real world commodity prices differs widely across models, and comparing the prices without accounting for their different meanings can lead to misleading results. Second, results suggest that, once some key assumptions are harmonized, the variability in general trends across models declines but remains important. For example, given the common assumptions of the reference scenario, models show average annual rates of changes of real global producer prices for agricultural products on average ranging between -0.4% and +0.7% between the 2005 base year and 2050. This compares to an average decline of real agricultural prices of 4% p.a. between the 1960s and the 2000s. Several other common trends are shown, for example, relating to key global growth areas for agricultural production and consumption. Third, differences in basic model parameters such as income and price elasticities, sometimes hidden in the way market behavior is modeled, result in significant differences in the details. Fourth, the analysis shows that agro-economic modelers aiming to inform the agricultural and development policy debate require better data and analysis on both economic behavior and biophysical drivers. More interdisciplinary modeling efforts are required to cross-fertilize analyses at different scales.
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Sakschewski, B., von Bloh, W., Huber, V., Müller, C., & Bondeau, A. (2014). Feeding 10 billion people under climate change: How large is the production gap of current agricultural systems. Ecol. Model., 288, 103–111.
Abstract: The human population is projected to reach more than 10 billion in the year 2100. Together with changing consumption pattern, population growth will lead to increasing food demand. The question arises whether or not the Earth is capable of fulfilling this demand. In this study, we approach this question by estimating the carrying capacity of current agricultural systems (K-C), which does not measure the maximum number of people the Earth is likely to feed in the future, but rather allows for an indirect assessment of the increases in agricultural productivity required to meet demands. We project agricultural food production under progressing climate change using the state-of-the-art dynamic global vegetation model LPJmL, and input data of 3 climate models. For 1990 to 2100 the worldwide annual caloric yield of the most important 11 crop types is simulated. Model runs with and without elevated atmospheric CO2 concentrations are performed in order to investigate CO2 fertilization effects. Country-specific per-capita caloric demands fixed at current levels and changing demands based on future GDP projections are considered to assess the role of future dietary shifts. Our results indicate that current population projections may considerably exceed the maximum number of people that can be fed globally if climate change is not accompanied by significant changes in land use, agricultural efficiencies and/or consumption pathways. We estimate the gap between projected population size and K-C to reach 2 to 6.8 billion people by 2100. We also present possible caloric self-supply changes between 2000 and 2100 for all countries included in this study. The results show that predominantly developing countries in tropical and subtropical regions will experience vast decreases of self-supply. Therefore, this study is important for planning future large-scale agricultural management, as well as the critical assessment of population projections, which should take food-mediated climate change feedbacks into account
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Rosenzweig, C., Elliott, J., Deryng, D., Ruane, A. C., Müller, C., Arneth, A., et al. (2014). Assessing agricultural risks of climate change in the 21st century in a global gridded crop model intercomparison. Proc. Natl. Acad. Sci. U. S. A., 111(9), 3268–3273.
Abstract: Here we present the results from an intercomparison of multiple global gridded crop models (GGCMs) within the framework of the Agricultural Model Intercomparison and Improvement Project and the Inter-Sectoral Impacts Model Intercomparison Project. Results indicate strong negative effects of climate change, especially at higher levels of warming and at low latitudes; models that include explicit nitrogen stress project more severe impacts. Across seven GGCMs, five global climate models, and four representative concentration pathways, model agreement on direction of yield changes is found in many major agricultural regions at both low and high latitudes; however, reducing uncertainty in sign of response in mid-latitude regions remains a challenge. Uncertainties related to the representation of carbon dioxide, nitrogen, and high temperature effects demonstrated here show that further research is urgently needed to better understand effects of climate change on agricultural production and to devise targeted adaptation strategies.
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Valin, H., Sands, R. D., van der Mensbrugghe, D. and, Nelson, G. C., Ahammad, H., Blanc, E., et al. (2014). The future of food demand: Understanding differences in global economic models. Agric. Econ., 45(1), 51–67.
Abstract: 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.
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