Food Security in an Age of Falling Commodity and Food Prices
Figure 7 : Compound Annual Growth Rates in World Yields per Hectare
Source : Reproduced from Interagency Report to the Mexican G20 Presidency ( 2012 )
agriculture . This part of global demand for agricultural commodities is expected to remain with us largely irrespective of what happens to commodity prices . At the Paris meeting on climate change in the second week of December 2015 , many governments have declared that they are determined , for good or not so good reasons , to continue to promote the use of agricultural commodities for the production of biofuels .
Finally , there is another specific agricultural factor behind higher prices on agricultural and food commodity markets , equally worrying as the expansion of biofuel and unfortunately occurring at the same time . It is the fact that yield growth for major cereals and grains has declined in the last two decades or so ( see Figure 7 ). The world has had a green revolution in the past , but it is lacking one in our days . We certainly want to have one again — but unfortunately it is not occurring for the time being , and there are also no strong signs that it is immediately around the corner . If we combine the decline in yield growth worldwide with additional demand from the biofuel sector and a high growth rate of demand for food from emerging economies — China being one of them — then of course we should not be surprised to find that we have reached a higher price plateau for agricultural commodities .
The interim conclusion is that while prices of agricultural and food commodities are declining at the moment , we should not exaggerate the importance of that decline . There is no doubt that prices are actually declining since a number of months , but they are doing so from the extremely high level they had attained in the years following 2007 . There are good reasons to believe that they will not fall below the level of what we have had
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