Power in Agriculture: U.S. Remains Key, But Others Poised To Challenge

January 4, 2012 06:04 AM

The U.S. remains the major world power in agriculture, followed closely by the European Union (EU), according to a report prepared for the Oxford Farming Conference (OFC) on through Thursday in England. But the two key players face increasing competition on the global front.

The report's findings are based on an exam of where the economic, political and resource power lies in the world. According to the report, the most powerful countries/entities for agriculture are:

1. U.S.
2. EU 27
3. China
3. Russia
4. UK
5. Japan
6. Australasia
7. Brazil

The ranking was based on data from the WTO, USDA, the UN and others.

Here's a graphic showing the components of the rankings:


While the U.S. and EU remain atop the heap in terms of power in agriculture, the report warned, "European countries, including the UK, appear to be relatively poorly endowed in global terms with the critical natural resources used in agriculture, such as land, water, potassium, phosphate oil and natural gas."

Further, the OFC report also noted that the "situation, particularly the availability of water and energy, is likely to become worse because of the impact of climate change."

Emerging countries like Brazil, China and Russia are seen as being positioned well relative to water and energy resources moving forward, but may be limited by arable land supply. That has prompted these countries to undertake efforts to secure land in areas like Africa.

Regarding trade, the report revealed the top 20 exporting and importing countries account for 78% of global exports and 70% of global imports.

Further the report noted that trade patterns reflect factors including proximity and historic relationships, but new and evolving trade patterns are emerging. The report identified some keys as being multi and regional/bilateral trade agreements and others, and pointed out that "particularly noticeable is the rising importance of a number of the BRICS (Brazil, Russia, India, China and South Africa) countries."

And, trade has shifted in recent years. The following graphics look at the changes in world wheat trade taking place in essentially a decade.


WheatExports07 09

Besides assessing countries' trade positions, the report delves into what they label transnational corporations (TNCs) that account for a major portion of global ag commodity trade. Here are the statistics compiled in the report:

  • 4 companies account for 75%-90% of the global grain trade
  • 10 companies are responsible for more than 40% of the global retail market
  • 7 companies control virtually all fertilizer supply
  • 5 companies share 68% of the world's agrochemical market
  • 3 companies control almost 50% of the proprietary seeds market

"The emergence of these corporate players in the food sector has created a major orientation in the focus of power even further away from farmers," the report stated.

Despite this prominence, the report said countries can still undertake efforts that will temper the situation. "In some cases, civil society organizations and farmer groups have had a significant impact in countervailing or balancing corporate influences," the report noted. "Corporate power is not limitless and nation states can control agriculture. A major challenge for some countries is to balance corporate power with consumer and farmer power domestically whilst maintaining global power."

The report said further study is needed on population and world ag production and how to feed that growing population. It said a greater focus needs to be put on renewable resources relative to agriculture output when it comes to feeding a population that is forecast to rise to 9 billion by 2050.

Specifically in the UK, OFC Chairman Cedric Porter said, "With countries such as China and Brazil coming up the ranks, government will need to act with policy to retain this position. The government must recognize the need for policy to increase farm production and sustainability and to ensure the relationship between corporates and the UK's farmers is more balanced."

Further, Porter called on the UK to keep agriculture high on its priority list. "We need to make sure the UK does not become side-lined and we need to pressure government, corporations and representative bodies as hard as possible," Porter observed. "This is not the time for the UK to damage or relinquish its productive capacity. Quite the opposite, it needs to strengthen it."

Comments: Clearly the report echoes other studies relative to the situation with the need to boost productivity to feed a growing world population. But it offers an interesting assessment of the global agriculture situation by region or country, noting that even those nations poised to achieve major growth in ag output and productivity still have some major challenges in front of them in order to realize such growth.

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