Prospects by Major Sector

Crop production

Cereals: an extra billion tonnes needed

Cereals are still by far the world's most important sources of food, both for direct human consumption and indirectly, as inputs to livestock production. What happens in the cereal sector is therefore crucial to world food supplies.

Since the mid-1960s the world has managed to raise cereal production by almost a billion tonnes. Over the next 30 years it must do so again. Is the task within its capabilities?

Growth of cereal demand slows down

The growth rate of world demand for cereals fell to 1 percent a year in the 1990s, down from 1.9 percent in the 1980s and 2.5 percent in the 1970s. World annual cereal use per person (including animal feeds) peaked in the mid-1980s at 334 kg and has since fallen to 317 kg (1997-99 average).

This rapid decline was thought by some to herald a new world food crisis. It was interpreted as a sign that the world was hitting the limits of its capacity for food production and would soon experience serious threats to food security.

In fact, average cereal consumption per person in developing countries has risen steadily throughout the past four decades. The slowdown in the growth of world consumption was due not to production constraints but to a series of factors that limited demand. Among these factors, some are ongoing and widespread:

• World population growth has been slowing.
• Many large countries, especially China, are reaching medium to high consumption levels, such that further rises will be much less rapid than in the past.
• Persistent poverty has prevented hundreds of millions of people from meeting their food needs.

Other factors, however, are largely transient. These include:

• A fall in demand in the transition economies. This was the strongest factor during the 1990s, when both consumption and imports in these countries fell from the very high levels they had reportedly reached earlier.
• The use of cereals for animal feeds in the EU declined until the early 1990s, as high domestic prices favoured cereal substitutes, which were largely imported. Growth in feed use resumed after EU policy reforms lowered domestic prices.
• Consumption grew more slowly in oil-exporting countries after the effect of the initial boom in oil prices on incomes and cereal imports had largely dissipated.
• Demand grew more slowly in the second half of the 1990s in the East Asian economies, which were hit by economic crisis.

The influence of these transient factors is already on the wane. Over the next 15 years they will gradually cease depressing the growth in cereal demand, which is projected to recover, rising to 1.4 per cent a year by 2015.

Looking further ahead, slower population growth and the levelling off of food consumption in many countries will continue to dampen demand, the growth of which is expected to slow to 1.2 percent a year over the period 2015 to 2030. Nevertheless, the production task facing world agriculture is massive. By 2030, an extra billion tonnes of cereals will be needed each year. Unforeseeable events such as oil price booms, dramatic growth spurts or crises could, of course, alter effective demand over short periods, but will not greatly change the big picture.

Developing countries will become more dependent on imports

In the developing countries the demand for cereals has grown faster than production. The net cereal imports of these countries rose from 39 million tonnes a year in the mid-1970s to 103 million tonnes in 1997-99, representing a move from 4 percent of their annual cereal use to 9 percent. This dependence on imports is likely to increase in the years ahead. By 2030 the developing countries could be importing 265 million tonnes of cereals, or 14 percent of their consumption, annually.

Though this increase may seem massive, it represents a lower rate of growth over the next three decades than since the mid-1970s. If real food prices do not rise, and industry and services grow as previously, then most countries will be able to afford to import cereals to meet their needs. However, the poorest countries with the worst food security also tend to be least able to pay for imports.

Exporters can fill the gap

Can the rest of the world produce the export surpluses needed to fill the gap? It is worth examining the experience of the past quarter century. Between the mid-1970s and 1997-99 the net annual imports of all cereal-importing countries almost doubled, from 89 million tonnes to 167 million tonnes.

Cereal exporters coped well with the spurt in demand, doubling their export levels. Traditional exporters such as Australia, North America, Argentina and Uruguay played their part. They have the potential to continue to do so. But about half the total increase in exports came from a new player, the EU. From being a net importer of 21 million tonnes of grain a year in the mid-1970s, the EU became a net exporter of 24 million tonnes a year in 1997-99. Initially, much of this turnaround depended on heavy price support and protectionist policies. Various EU policy reforms have since brought domestic prices broadly into line with international prices, but the EU is likely to remain a significant net exporter even if its trade is further liberalized.

The transition economies are another possible source of future exports. Indeed, they are already moving into surplus. Spare land is plentiful in parts of Eastern Europe and Russia, and the scope for increasing productivity by reducing losses and raising yields is high.

FAO's projections suggest that the transition countries could be net exporters of 10 million tonnes of cereals a year by 2015 and 25 million tonnes by 2030.

Prospects for key crops

Food staples

Wheat. The world's major cereal crop accounted for 31 percent of global cereal consumption in 1997-99. A growing share of wheat is used for animal feed in the industrial countries - 45 percent of total use in the EU. Wheat use per person in developing countries, overwhelmingly for food, has continued to rise, and most developing countries are increasingly dependent on imports. Among the net importers are some major wheat producers, such as Egypt, Islamic Republic of Iran, Mexico and Brazil. Over the coming years wheat consumption is expected to increase in all regions, including the transition countries as their consumption revives. In several rice-eating countries, increases in wheat consumption go hand in hand with constant or declining consumption of rice. The import dependence of developing countries (excluding exporters Argentina and Uruguay) should continue to grow, with net wheat imports expected to rise from 72 millions tonnes a year in 1997-99 to 160 million tonnes in 2030.

Rice. This crop is overwhelmingly used for direct human consumption, and made up 21 percent of the world's cereal consumption by weight in 1997-99. Average consumption per person in developing countries has been levelling off since the mid-1980s, reflecting economic development and income growth in major East Asian countries. It has, however, been growing in some regions, including South Asia, where it is still low. Consumption is expected to grow more slowly in the future than in the past. Indeed, average consumption per person in developing countries may well start to decline during the period 2015 to 2030. This will ease pressures on production, but given the slow yield growth of recent years, maintaining even modest increases in production will be a challenge to research and irrigation policy.

Coarse grains. These include maize, sorghum, barley, rye, oats and millet, and some regionally important grains such as tef (Ethiopia) or quinoa (Bolivia and Ecuador). About three-fifths of world consumption of coarse grains is used for animal feed, but where food insecurity is high these crops remain very important in direct human consumption: in sub-Saharan Africa, 80 percent of the grain harvest is used in this way. Consumption of coarse grains has been rising fast, driven mainly by growing use as animal feed in developing countries. In the future, consumption may well grow faster than that of rice or wheat, in line with the growth of the livestock sector. Developing countries will account for a rising share of world production, from less than half at present to just under three-fifths by 2030.

Oilcrops. This sector has been one of the world's most dynamic in recent decades, growing at almost double the speed of world agriculture as a whole. It covers a wide range of crops used not only for oil but also for direct consumption, animal feeds and a number of industrial uses. Oil-palm, soybean, sunflower and rapeseed account for almost three-quarters of world oilseed production, but olive oil, groundnut, sesame and coconut are also significant. The rapid expansion of production has meant that oilcrops have accounted for a huge share of the expansion of the world's agricultural land, with a net increase of 75 million ha between 1974-76 and 1997-99 - this at a time when the area under cereals shrank by 28 million ha.

With their high energy content, oilcrops have played a key role in improving food energy supplies in developing countries. Just over one out of every five kilocalories added to consumption in the developing countries in the past two decades originated in this group of products. This trend looks set to continue and indeed intensify: 45 out of every 100 additional kilocalories in the period to 2030 may come from oilseeds. The rapid growth in consumption over the past few decades was accompanied by the emergence of several developing countries - China, India, Mexico and Pakistan, among others - as major and growing net importers of vegetable oils. The result has been that the traditional surplus of the vegetable oils/oilseeds complex in the balance of payments of the developing countries has turned into a deficit in recent years. This has happened despite the spectacular growth of exports from a few developing countries that have come to dominate the world export scene, namely Malaysia and Indonesia for palm oil and Brazil and Argentina for soybean. In most other developing countries, the trend towards increased imports can be expected to continue.

Roots, tubers and plantains. World consumption of these crops as human food has been on the decline, but for 19 countries - all of them in Africa - they still provide more than a fifth, and sometimes as much as half, of all food energy. Cassava predominates in humid Central and West Africa and in the United Republic of Tanzania and Madagascar, while plantains are most important in Rwanda and cassava and sweet potato in West Africa and Burundi. Since most of these countries have low food consumption overall - less than 2 200 kcal per person per day - these crops play a crucial role in food security. In the period to 1997-99, Ghana and Nigeria made considerable advances in food security through the increased production of these crops, but in most of the other 17 countries per capita consumption stagnated or declined. The decline in world consumption of traditional roots and tubers has been accompanied by a gradual shift towards potato in some areas. A large part of this trend is explained by China, where millions of farmers and consumers have switched from sweet potato to potato.

Average demand for roots, tubers and plantains is projected to rise again in developing countries, with sweet potato and potato becoming particularly important as animal feeds. During the 1990s the use of imported cassava as feed in the EU skyrocketed because of high domestic prices for cereals, only to fall as reform of the Common Agricultural Policy reduced cereal prices. Cassava production for export as feed has been a major factor in expansion of the area cultivated in such countries as Thailand, a trend that is often associated with deforestation.

Traditional export crops

Beyond these basic food crops, the agriculture and often the whole economy of many developing countries depend to a high degree on the production of one or a few commodities destined principally for export. In this category are commodities such as banana, sugar, natural rubber and tropical beverages (tea, coffee and cocoa).

The distinction between export crops and those for the domestic market is not always neat, either across or even within the developing countries. For example, sugar is the export crop par excellence for Mauritius and Cuba but a major import for Egypt, Indonesia and several other countries. Vegetable oils and oilseeds (especially palm oil and soybean) are major and rapidly growing export crops for several countries (including Malaysia, Indonesia, Argentina and Brazil), but are heavily imported by countries such as India and China. Coffee and cocoa share the characteristic of being produced exclusively in the developing countries but consumed predominantly in the industrial ones. Natural rubber used to belong to this category, but more of it is now consumed in the developing countries (half of world consumption, up from a quarter in the mid-1970s) as they industrialize. Cotton is in the same class, but more so, with the developing countries having turned into large net importers following the growth of their textiles industries and exports.

The economies of countries dependent on exports of these commodities are subject to changing conditions in the world market. Slow growth in world demand, combined with increasing supplies from the main producing and exporting countries, which compete with one another, have led to declining and widely fluctuating prices in the markets for several commodities. This has been particularly marked for coffee in recent years: per capita consumption in the industrial countries, accounting for two-thirds of world consumption, has been nearly constant for two decades, at around 4.5 kg, while production has increased, with several new countries, such as Viet Nam, entering the market. The result is that the price of Robusta coffee has nosedived, falling to US$0.50 per kg by January 2002, one-fifth of what it was in the mid-1990s.

For sugar and a few other commodities experiencing faster growth in consumption, mainly in the developing countries, the earnings of developing country exporters have been curbed by policies restricting access to markets, including policies favouring substitute sweeteners such as corn syrup. Such policies are very common in the main industrial countries that are, or used until recently to be, large importers. The EU used policies of this kind to turn itself from a large net importer, which it was until the second half of the 1970s, into a large net exporter today.

Looking into the future, the scope for growth in world demand and in the exports of developing countries is greatest for those commodities whose consumption is growing fairly rapidly in the developing countries themselves, several of which are likely to become large importers. In this category belong sugar and vegetable oils and, to a lesser extent, natural rubber and tea. Banana and cocoa are also becoming substantial import items in several developing countries, a trend that should intensify in the coming decades. In these two commodities, but also in others such as citrus and fruits and vegetables in general, there is still scope for growth in consumption and imports in the industrial countries. In parallel, the transition economies will play a growing role as importers of tropical products, a process already under way. In contrast, the high concentration of coffee markets in the industrial countries, together with negligible growth in population and per capita consumption here, do not augur well for the expansion of production and exports in this commodity: a continuation of the current slow growth, of no more than 1.2 percent yearly, seems the most likely outcome.

In conclusion, the agriculture, overall economy and food security of several developing countries will continue to depend on several crops for which the world market conditions are not only volatile but also, on balance, on a declining trend as regards real prices. These characteristics of the market could be highly detrimental to the development prospects of these countries. Countries that have failed in the past to diversify their economies and reduce their dependence on these traditional export crops have had a growth record well below average. Their challenge is to change this scenario in the future. The experiences of countries such as Malaysia suggest that this can be done.

The environmental issues must be addressed

A frequently voiced concern is that the additional production required to meet world demand will be unsustainable, involving deepening levels of environmental damage that will undermine the natural resource base.

In the developed countries this concern relates mainly to the increased use of fertilizers and other chemical inputs. Past increases have led to serious problems of water and air pollution, and so will future ones unless counter-measures are taken.

Although the overuse of pesticides and other chemical inputs is a problem in some high-potential areas, increasing production in the developing world for the most part entails environmental risks of a different kind:

• In extensive farming and ranching systems, the major risks are soil erosion, soil mining and deforestation, leading to declining yields and desertification.
• In intensive irrigated farming systems, the major risks are salinization, waterlogging and water scarcities.

Some methods for increasing and sustaining crop production while minimizing environmental damage are already known and practised in some areas. Such methods need to be researched and extended for all environments, with appropriate policies that will encourage their rapid spread also being devised and implemented.

Land, water and crop yields

Although future demand for food and cash crops will grow more slowly than in the past, meeting this demand will still require the continued expansion of farmland, together with improvements in yield based on new plant varieties and farming technologies.

Questions have been raised about all of these factors. Is there enough suitable land and water to expand the rainfed and irrigated area as much as will be needed, or is the world running short of these vital inputs? Is there scope for the higher yields that will be required, or are yields approaching limits that cannot be breached? Can biotechnology deliver a new generation of higher-yielding crops better suited to difficult environments? And are there approaches to farming that can increase and sustain production while improving conservation? The following sections will examine these questions.

The sources of production growth

Increases in crop production derive from three main sources: expansion of arable land, increases in cropping intensity (the frequency with which crops are harvested from a given area) and improvements in yield.

Since the early 1960s, yield improvements have been by far the largest source of increase in world crop production, accounting for almost four-fifths or 78 percent of the increase between 1961 and 1999. A further 7 percent of the increase came from increased cropping intensity, while a mere 15 percent came from expansion of the arable area.

Yield improvement was by far the largest factor not just in the developed world but also in the developing countries, where it accounted for 70 percent of increased production. Expansion of the area cultivated accounted for just under a quarter of production growth in these countries. However, in areas with more abundant land, area expansion was a larger contributing factor. This was especially the case in sub-Saharan Africa, where it accounted for 35 percent, and in Latin America, where the figure reached 46 percent.

The projections suggest that these broad trends for the developing countries will continue, at least until 2030: land expansion is expected to account for 20 percent of production growth, yield improvements for about 70 percent and increased cropping intensity for the remainder. In sub-Saharan Africa and Latin America, land expansion will still be important, but it is likely to be increasingly outweighed by yield increases.

The FAO study indicates that, for the world as a whole, there is enough unused productive potential, in terms of land, water and yield improvements, to meet the expected growth in effective demand. However, this is a global conclusion and there are several strong qualifications to bear in mind:

• Effective demand expresses people's purchasing power rather than the real need for food: wealthy consumers may indulge to excess, while the very poor may not be able to afford even basic foods.
• Data suggesting that food is getting cheaper may be flawed, because they do not reflect the environmental costs of expanding and intensifying agriculture; moreover, the failure to internalize resource costs may curb investment in agricultural research, holding back the potential for future growth in yields.
• Land or water scarcities and other problems will most certainly continue to arise at country and local levels, with serious consequences for poverty and food security.

Land resources

Is there enough potential cropland for future needs?

It is often suggested that the world may be heading towards shortages of suitable agricultural land. FAO studies suggest that this will not be the case at the global level, although in some regions and areas there are already serious shortages, and these may worsen.

Less new agricultural land will be opened up than in the past. Over the period 1961-63 to 1997-99 the expansion of arable land in developing countries totalled 172 million ha, an increase of 25 percent. In the next 30 years an increase of only 120 million ha, or 13 percent, will be required. Adding an extra 3.75 million ha a year may seem a daunting task - but it is less than the rate of 4.8 million ha a year that was actually achieved over the period 1961-63 to 1997-99. A slowdown in expansion is expected in all regions, but this is mainly a reflection of the slower growth in demand for crops.

There is still potential agricultural land that is as yet unused. At present some 1.5 billion ha of land is used for arable and permanent crops, around 11 percent of the world's surface area. A new assessment by FAO and the International Institute for Applied Systems Analysis (IIASA) of soils, terrains and climates compared with the needs of and for major crops suggests that a further 2.8 billion ha are to some degree suitable for rainfed production. This is almost twice as much as is currently farmed.

Of course, much of this potential land is in practice unavailable, or locked up in other valuable uses. Some 45 percent is covered in forests, 12 percent is in protected areas and 3 percent is taken up by human settlements and infrastructure. In addition, much of the land reserve may have characteristics that make agriculture difficult, such as low soil fertility, high soil toxicity, high incidence of human and animal diseases, poor infrastructure, and hilly or otherwise difficult terrain.

The pool of unused suitable cropland is very unevenly distributed. By the end of the twentieth century, sub-Saharan Africa and Latin America were still farming only around a fifth of their potentially suitable cropland. More than half the remaining global land balance was in just seven countries in these two regions: Angola, Argentina, Bolivia, Brazil, Colombia, Democratic Republic of Congo and the Sudan. At the other extreme, in the Near East and North Africa 87 percent of suitable land was already being farmed, while in South Asia the figure was no less than 94 percent. In a few countries of the Near East and North Africa, the land balance is negative - that is, more land is being cropped than is suitable for rainfed cropping. This is possible where, for example, land that is too sloping or too dry for rainfed crops has been brought into production by terracing or irrigation.

More than 80 percent of the projected expansion in arable area is expected to take place in sub-Saharan Africa and Latin America. Although there is still surplus land in these regions, the expansion may involve cutting back on long rotation and fallow periods. If fertilizer use does not rise to compensate, this may result in soil mining and stagnant or declining yields.

In contrast, in South Asia and the Near East and North Africa, where almost all suitable land is already in use, there will be next to no expansion in area. By 2030 the Near East and North Africa will be using 94 percent of its suitable cropland, with a remaining surplus of only 6 million ha. In South Asia the situation will be even tighter, with 98 percent already in cultivation. In South and East Asia, more than 80 percent of the increase in production will have to come from yield increases, since only 5 or 6 percent can come from expansion of the arable area.

Cropping intensities will rise in all developing regions, on average from 93 percent to 99 percent. This will occur through the shortening of fallow periods and increased multiple cropping, made possible partly by growth in the irrigated area.

Is land becoming scarcer?

There is widespread concern that the world may be running out of agricultural land. The trend towards scarcity associated with population growth is aggravated by the conversion of farmland to urban uses, by land degradation and by other factors.

Certainly, much farmland is being taken over for non-agricultural uses. Assuming a requirement for housing and other infrastructure of 40 ha per 1000 people, then world population growth between 1995 and 2030 implies the need for an additional 100 million ha of such non-agricultural land. Since most urban centres are sited on fertile agricultural land in coastal plains or river valleys, when they expand they take up more of this prime land. In China alone, more than 2 million ha were taken out of agriculture in the ten years to1995.

Despite these losses, there is little evidence to suggest that global land scarcities lie ahead. Between the early 1960s and the late 1990s, world cropland grew by only 11 percent, while world population almost doubled. As a result, cropland per person fell by 40 percent, from 0.43 ha to only 0.26 ha. Yet, over this same period, nutrition levels improved considerably and the real price of food declined.

The explanation for this paradox is that productivity growth reduced the amount of land needed to produce a given amount of food by around 56 percent over this same period. This reduction, made possible by increases in yields and cropping intensities, more than matched the decline in area per person, allowing food production to increase.

Land scarcity and the problems associated with it do of course exist at country and local levels, with serious consequences for poverty and food security. In many places these are likely to worsen unless remedial action is taken.

How serious is land degradation?

Land degradation is the process by which the soil's current or future capacity to produce is lowered by chemical, physical or biological changes. Some analysts claim that accelerating land degradation will offset productivity improvements, while others believe the seriousness of this problem has been greatly overstated.

The truth is that the area of degraded land is not known with much precision. Its assessment is often based on expert judgement rather than objective measurement. For India alone, estimates by different public authorities vary from 53 million ha right up to 239 million ha.

The most comprehensive survey to date, the Global Assessment of Land Degradation (GLASOD), is now over ten years old. GLASOD estimated that a total of 1964 million ha were degraded, 910 million ha to at least a moderate degree (with significantly reduced productivity) and 305 million ha strongly or extremely so (no longer suitable for agriculture). Water erosion was the most common problem, affecting almost 1 100 million ha, followed by wind erosion, which affected almost 600 million ha.

The impact of degradation on productivity is also hard to assess. Its seriousness varies widely from site to site over even small distances, and at the same site according to local weather, vegetation and farming techniques. Degradation is a slow process that can be masked by applying additional fertilizer or by changing the crops grown. GLASOD reported in 1991 that almost all farmland in China was degraded, yet between the early 1960s and mid-1990s China tripled her rice production and increased her wheat production sevenfold. Some studies suggest annual average losses in cropland productivity may be quite small, averaging only 0.2 to 0.4 percent a year.

Degradation also has off-site costs, such as the siltation of streambeds and dams, flood damage, loss of fisheries and the eutrophication of lakes and coastal waters. These costs are often greater than on-site costs. However, the off-site effects of degradation are not all negative: losses in one place may result in gains elsewhere, as when soil eroded from uplands boosts productivity in the alluvial plains where it is deposited.

Because it is difficult to quantify, the future progress of land degradation was not taken into account in the projections made for this study. However, some projected or foreseeable trends, driven primarily by economic forces, will tend to reduce its extent and impact:

• About a third of the harvested area in developing countries in 2030 is expected to be irrigated land, which is generally flat, protected by bunds and little affected by erosion. A quarter of the rainfed land by that time will have slopes of less than 5 degrees, also generally not prone to heavy erosion.
• The shift in livestock production to more intensive systems will take some pressure off dryland pastures. However, in the developing countries this will be partly offset by the encroachment of cropland, which will reduce the area remaining for extensive grazing.
• As people leave rural areas for urban centres, and farming for non-farming occupations, steep slopes and other marginal land will tend to be abandoned and will revert to scrub and forest. This process has already occurred rapidly in some European countries. In Italy, some 1.5 million ha were abandoned in the 1960s, 70 percent of which was sloping land. In some provinces, agricultural land decreased by 20 percent.

Other trends tending to reduce land degradation are likely, but their extent and intensity will depend heavily on the spread of improved agricultural and conservation practices, without which land degradation may worsen in many areas. The main practices and their potential impact are:

• No-till/conservation agriculture (NT/CA), which can maintain year-round soil cover and increase organic matter in soils, thereby reducing water and wind erosion.
• Increased fertilizer consumption and more efficient fertilizer use, which will reduce erosion by increasing root growth and ground cover.
• The use of irrigation, water harvesting, drought-tolerant crops and grazing-tolerant grasses, which will improve crop and vegetation cover and reduce erosion in drylands.
• The cultivation of legumes, which can add nitrogen to soils and improve their stability and texture in mixed crop-livestock farming systems.

Irrigation and water resources

A large share of the world's crops is already produced under irrigation. In 1997-99, irrigated land made up only about one-fifth of the total arable area in developing countries. However, because of higher yields and more frequent crops, it accounted for two-fifths of all crop production and close to three-fifths of cereal production.

This share is expected to increase further in the next three decades. Based on the potential for irrigation, national plans for the sector and the moisture needs of crops, the developing countries as a whole can be expected to expand their irrigated area from 202 million ha in 1997-99 to 242 million ha by 2030. This is a net projection - that is, it is based on the assumption that land lost due, for example, to salinization and water shortages will be compensated by rehabilitation or by the substitution of new areas.

Most of this expansion will occur in land-scarce areas where irrigation is already crucial: South Asia and East Asia, for example, will add 14 million ha each. The Near East and North Africa will also see significant expansion. In land-abundant sub-Saharan Africa and Latin America, where both the need and the potential for irrigation are lower, the increase is expected to be much more modest - 2 million and 4 million ha respectively.

Although the projected expansion is ambitious, it is much less daunting than what has already been achieved. Since the early 1960s, no less than 100 million ha of new irrigated land have been created. The net increase projected for the next three decades is only 40 percent of that. The expected annual growth rate of 0.6 percent is less than a third of the rate achieved over the past 30 years.

The FAO study did not make projections for irrigation in the developed countries, which account for around a quarter of the world's irrigated area. Irrigation in this group of countries grew very rapidly in the 1970s, but by the 1990s the pace of growth had slowed to only 0.3 percent per year.

Is there enough irrigable land for future needs?

As with land in general, it has been suggested that the world may soon experience shortages of land suitable for irrigation. There is concern, too, that vast areas of presently irrigated land may be severely damaged by salinization. Once again, at global level these fears seem exaggerated, though serious problems may occur at local level.

FAO studies suggest there is still scope for expanding irrigation to meet future needs. However, irrigation potential is difficult to estimate accurately, since it depends on complex data on soils, rainfall and terrain. The figures should therefore be taken only as a rough guide. The total irrigation potential in developing countries is nevertheless estimated at some 402 million ha. Of this around half was in use in 1997-99, leaving an unused potential of 200 million ha. The projected increase by 2030 would take up only 20 percent of this unused potential.

In some regions, however, irrigation will come much closer to its full potential: by 2030, East Asia and the Near East and North Africa will be using three-quarters of their irrigable area, and South Asia (excluding India) almost 90 percent.

Is there enough water?

Another frequently voiced concern is that much of the world is heading for water shortages. Since agriculture is responsible for about 70 percent of all the water withdrawn for human use, it is feared that this will affect the future of food production. Once again, at global level there seems to be no cause for alarm, but at the level of some localities, countries and regions, serious water shortages appear highly likely to arise.

The assessment of potential irrigated land used for this report already takes into account the limitations imposed by the availability of water. The renewable water resources available in a given area consist of the amount added by rainfall and incoming river flow, minus the amount lost through evapotranspiration. This may vary greatly across regions. For example, in an arid region such as the Near East and North Africa, only 18 percent of rainfall and incoming flows remain after evapotranspiration, whereas in humid East Asia the share is as high as 50 percent.

The water used for irrigation includes, besides that actually transpired by the growing crop, all the water applied to it, which may be considerable in the case of crops that are flooded, such as rice. In addition, there are the losses through leakage and evaporation on the way to the fields, and the water that drains away from the fields without being used by the crop. The ratio between the amount of water actually used for crop growth and the amount withdrawn from water sources is known as water use efficiency.

There are large regional differences in water use efficiency. Generally, efficiency is higher where water availability is lower: in Latin America, for example, it is only 25 percent, compared with 40 percent in the Near East and North Africa and 44 percent in South Asia.

In the developing countries as a whole, only about 7 percent of renewable water resources were withdrawn for irrigation in 1997-99. But because of differences in efficiency and in water availability, some regions were using a much higher proportion than others. In sub-Saharan Africa, where irrigation is less widespread, only 2 percent were used, and in water-rich Latin America a mere 1 percent. In contrast, the figure in South Asia was 36 percent and in the Near East and North Africa no less than 53 percent.

The projections for developing countries imply a 14 percent increase in water withdrawals for irrigation by 2030. Even then, they will be using only 8 percent of their renewable water resources for irrigation. The shares in sub-Saharan Africa and Latin America will remain very small.

Water availability is considered to become a critical issue only when 40 percent or more of renewable water resources are used for irrigation. This is the level at which countries are forced to make difficult choices between their agricultural and their urban water supply sectors. By 2030 South Asia will be using this level, and the Near East and North Africa no less than 58 percent.

Out of 93 developing countries studied for this report, 10 were already using more than 40 percent in 1997-99 and another 8 were using more than 20 percent - a threshold which can be considered to indicate impending water scarcity. By 2030 two more countries will have crossed this lower threshold and one in five developing countries will be suffering actual or impending water scarcity.

Two countries, Libyan Arab Jamahiriya and Saudi Arabia, are already using more water for irrigation than their annual renewable re-sources, by drawing on fossil groundwater reserves. Groundwater mining also occurs at local levels in several other countries of the Near East and North Africa, South Asia and East Asia. In large areas of India and China, ground-water levels are falling by 1 to 3 metres per year, causing subsidence in buildings, intrusion of seawater into aquifers and higher pumping costs.

In these countries and areas, policy changes and investments will be needed to improve the efficiency of water use, together with innovations to improve the capture and infiltration of water, such as water harvesting, tree planting and so on.

Potential for yield growth

Growth rates have slowed in the past decade

Most future increases in crop production will be achieved through improved yields. Yield advances have been uneven over the past three decades.

Global cereal yields grew rapidly between 1961 and 1999, averaging 2.1 percent a year. Thanks to the green revolution, they grew even faster in developing countries, at an average rate of 2.5 percent a year. The fastest growth rates were achieved for wheat, rice and maize which, as the world's most important food staples, have been the major focus of international breeding efforts. Yields of the major cash crops, soybean and cotton, also grew rapidly.

At the other end of the scale, yields of millet, sorghum and pulses saw only slow growth. These crops, grown mainly by resource-poor farmers in semi-arid areas, are ones for which international research has not so far come up with varieties that deliver large yield gains under farm conditions. There have been useful incremental gains, however, and farmers' yields are more stable than they used to be, thanks to the introduction of traits such as early maturity.

Overall growth in cereal yields slowed in the 1990s. Maize yields in developing countries maintained their upward momentum, but gains in wheat and rice slowed markedly. Wheat yields grew at an average of 3.8 percent per year between 1961 and 1989, but at only 2 percent a year in 1989 to 1999. For rice the respective rates fell by more than half, from 2.3 percent to 1.1 percent. This largely reflects the slower growth in demand for these products.

Is projected yield growth realistic?

The slower growth in production projected for the next 30 years means that yields will not need to grow as rapidly as in the past. Growth in wheat yields is projected to slow to 1.1 percent a year in the next 30 years, while rice yields are expected to rise by only 0.9 percent per year.

Nevertheless, increased yields will be required - so is the projected increase feasible? One way of judging is to look at the difference in performance between groups of countries. Some developing countries have attained very high crop yields. In 1997-99, for example, the top performing 10 percent had average wheat yields more than six times higher that those of the worst performing 10 percent and twice as high as the average in the largest producers, China, India and Turkey. For rice the gaps were roughly similar.

National yield differences like these are due to two main sets of causes:

• Some of the differences are due to differing conditions of soil, climate and slope. In Mexico, for example, much of the country is arid or semi-arid and less than a fifth of the land cultivated to maize is suitable for improved hybrid varieties. As a result, the country's maize yield of 2.4 tonnes per ha is not much more than a quarter of the United States average. Yield gaps of this kind, caused by agro-ecological differences, cannot be narrowed.
• Other parts of the yield gap, however, are the result of differences in crop management practices, such as the amount of fertilizer used. These gaps can be narrowed, if it is economic for farmers to do so.

To find out what progress in yields is feasible, it is necessary to distinguish between the gaps that can be narrowed and those that cannot. A detailed FAO/IIASA study based on agro-ecological zones has taken stock of the amount of land in each country that is suitable, in varying degrees, for different crops. Using these data it is possible to work out a national maximum obtainable yield for each crop.

This maximum assumes that high levels of inputs and the best suited crop varieties are used for each area, and that each crop is grown on a range of land quality that reflects the national mix. It is a realistic figure because it is based on technologies already known and does not assume any major breakthroughs in plant breeding. If anything, it is likely to under-estimate maximum obtainable yields, because in practice crops will tend to be grown on the land best suited for them.

The maximum obtainable yield can then be compared with actual national average yield to give some idea of the yield gap that can be bridged. The study showed that even a techno-logically progressive country such as France is not yet close to reaching its maximum obtainable yield. France could obtain an average wheat yield of 8.7 tonnes per ha, rising to 11.6 tonnes per ha on her best wheat land, yet her actual average yield today is only 7.2 tonnes per ha.

Similar yield gaps exist for most countries studied in this way. Only a few countries are actually achieving their maximum obtainable yield. When real prices rise, there is every reason to believe that farmers will work to bridge yield gaps. In the past, farmers with good access to technologies, inputs and markets have responded very quickly to higher prices. Argentina, for example, increased her wheat production by no less than 68 percent in just one year (1996), following price rises, although this was done mainly be extending the area under wheat. Where land is scarcer, farmers respond by switching to higher-yielding varieties and increasing their use of other inputs to achieve higher yields.

It seems clear that, even if no more new technologies become available, there is still scope for increasing crop yields in line with requirements. Indeed, if just 11 of the countries that produce wheat, accounting for less than two-fifths of world production, were to bridge only half the gap between their maximum obtainable and their actual yields, then the world's wheat output would increase by almost a quarter.

The outcome of research is always uncertain, particularly if it is strategic or basic in nature. However, if new technologies do become available through the genetic and other research currently under way, this could raise yield ceilings still further, while possibly also reducing the environmental costs of crop production.

Given the right economic incentives, world agriculture will respond to the demand expressed in the marketplace, as it has done in the past. Of course, many poor farmers in marginal environments will be in a position to respond only if they gain access to inputs, markets and technologies, and if the policy environment is favourable. In addition, research must develop the varieties and techniques needed to raise yields in difficult environments. These measures are essential if poor farmers and their families are not to find themselves trapped in poverty.