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transport costs and stimulated biofuel production (see box).
This coupling can have devastating implications for global pov-
erty and food security.
The impact of climate change is a particularly difficult issue in
the long-term forecasts for agricultural prices. Forecasts of the
rise in temperature and its impact on agriculture over the next
two decades are extremely uncertain. Climate change threatens
yields in many developing countries, although most of this ef-
fect is not likely to be felt until after 2030. The World Bank
assumes an overall decline in agricultural productivity of be-
tween 1–10% by 2030 (compared with a future where average
global temperatures remain stable), with Canada and Europe
least affected and India, Sub-Saharan Africa, and parts of Latin
America most affected. Were there to be no climate change be-
tween now and 2030, global agricultural productivity would be
nearly 4% higher and the world price of food 5.3% lower. Over
the longer term, the impacts of climate change could be much
more serious, with agricultural productivity in many develop-
ing regions, notably Africa, potentially declining much higher
than the global average (Cline, 2007).
In Global Economic Prospects 2009, the World Bank has
run a number of simulations to quantify possible outcomes.
Should global agricultural productivity rise by only 1.2% per
year on average, instead of the 2.1% projected in the baseline,
then prices, rather than declining, can be expected to rise by as
much as 0.3% per year. If cereal production could increase as
projected without any environmental constraints, it is expect-
ed to grow by 1.5–1.5% to 2030 according to demand, and by
0.9–1.0% between 2030 and 2050 (FAO, 2006; World Bank,
2008). However, the current scenarios of losses and constraints
due to climate change and environmental degradation – with
no policy change – suggest that production increases could fall
to 0.87% towards 2030 and only 0.5% between 2030–2050
(World Bank, 2008).
Alternatively, biofuels could have a significant impact on food
prices if oil prices remain high or the cost of biofuels produc-
tion declines. With a permanent increase in the rate of growth
of demand for food products as source material for biofuels (as-
suming a doubling in biofuel production compared to the base-
line), food prices will decline by only 0.5% a year. In general,
OECD-FAO estimates confirm this sensitivity to key assump-
tions about yield and biofuels production (OECD-FAO, 2008).
Overall, soaring food prices are blamed for their impacts on hu-
man vulnerability. However, there are two sides to this picture.
Increasing food prices do have a positive effect on net food-sell-
ing households (FAO, 2008), augmenting their incomes and
allowing more possibilities for farmers to afford investments in
production inputs. This underlines the need to minimize short-
term price volatility and stimulate slow increases in long-term
food prices, in order to enhance investments in the agricultural
system and bridge the gap between developed and developing
countries as well as between rural food producing and urban
food consuming regions. Ideally, these developments should
take the environmental aspects previously described into ac-
count to achieve sustainable agricultural systems that will meet
the food demand of all the world citizens and eradicate hunger.
However, increasing yield and food supply without simply con-
tinuing the conventional expansion of cropland and rangeland
and use of fertilizers and pesticides – at the cost of biodiversity
and future generations – will require major investments and
implementation of food energy considerations in the entire
food production and consumption chain.