Lower oil prices – you can hardly move without running into news of new lows, which should be good news for us all, right? They should reduce the cost of producing goods and delivering services, in addition to offering relief at the pump. But while the latter may hold true, the picture for goods and services is less clear. Yes, production costs will come down, although it turns out that the way savings are shared along supply chains and reach consumers is complex. In short, don’t expect big savings to hit your wallet soon.
The global food and agriculture industry is faced with a considerable conundrum. The current economic malaise has created an operating environment characterised by sluggish growth, soft demand and ample supply. Seemingly, consumers are the winners, as they reap the benefits of lower prices. Meanwhile, the thumbscrews have been put on retailers, producers and farmers: margins are being squeezed and confidence in businesses is ebbing away.
These days, individual companies are struggling to protect their share of the market; some of them are simply struggling to survive. And yet we need to look beyond this and focus on the long term. The demand for food is set to expand exponentially, driven by the powerful combination of a rapidly expanding global population, increased wealth and standards of living, and further urbanisation. The Food and Agriculture Organization of the United Nations (FAO) predicts a 60% increase (pdf) in global demand for food by the year 2050, with 9.15 billion mouths to feed.
In order to rise to this daunting challenge, global food production needs to be ramped up on a large scale and this needs to happen amid increasing competition for agricultural land and water resources.
Click here to read the full article published on The Guardian.