YANGCHEN LHAMO
Thimphu
Maximo Torero Cullen, Chief Economist of the Food and Agriculture Organization (FAO), delivered a comprehensive analysis of global trends in agrifood trade and investment at a recent Agrifood Trade and Investment Forum 2024, Thimphu.
His insights focused on the significant developments, challenges, and opportunities within the agrifood sector, with a specific focus on Bhutan’s potential for growth.
Cullen began by referencing the OECD-FAO Agricultural Outlook 2023-2032, which underscores a dramatic expansion in food and agricultural exports since 1995. ‘‘Food and agricultural exports have more than tripled in nominal terms since the mid-1990s,’’ he remarked.
The share of global exports from low-and middle-income countries rose from 30 percent in 1995 to 40 percent by 2011, demonstrating a significant shift in the global trade landscape.
He pointed out that while the pace of globalization has slowed since the 2008 financial crisis, the world remains significantly more interconnected than it was in 1995. ‘‘Emerging economies have become vital players, integrating more effectively into global markets,’’ Cullen observed.
Cullen emphasized that trade is an indispensable component of global agrifood systems. ‘‘All countries engage in food trade, regardless of their income levels,’’ he remarked. ‘‘Low-income countries import about 14 percent of their total food consumption, while high-income economies rely on global food markets for approximately 60 percent of their needs.’’
He pointed out that today’s trade network is more complex and interconnected, with an increase in Global Value Chains (GVCs) where production processes span multiple countries. ‘‘This structural transformation underscores the need for maintaining open, transparent global markets to ensure food security and nutrition,’’ he added.
While globalization has slowed, regional trade integration has intensified. ‘‘Trade intensity is higher within regions than across them, driven by geographic proximity, similar preferences, and trade agreement,’’ Cullen explained.
He noted that regionalization is evident in all regions except Africa, where intra-regional trade is still developing. Cullen highlighted significant growth prospects in agricultural production within emerging economies.
‘‘Middle- and low-income countries are expected to lead this growth, with nearly 60 percent of the increase originating from Asia,’’ he detailed. Yield improvements are projected to account for 80 percent of crop production growth, and livestock herds in these regions are anticipated to expand further.
Cullen identified several critical factors impacting global food and agricultural trade, including population growth, demographic changes, conflicts, climate change, and trade costs. ‘‘Urbanization is associated with considerable changes in lifestyle and consumption patterns, significantly impacting the demand for food and agricultural products,’’ he said.
Climate change, in particular, poses a significant threat, with regions experiencing declines in agricultural production likely needing to increase imports to meet food needs.
Turning his focus to Bhutan, Cullen acknowledges the country’s unique challenges and opportunities within the agri-food sector. ‘‘Bhutan faces high reliance on imports, food security in rural areas, and fragmented value chains, he noted.
However, he emphasized Bhutan’s diverse agro-climatic conditions and its comparative advantage in producing high–value agrifood products. The FAO has been actively supporting Bhutan through various initiatives.
Under the joint EU-FAO-CIRAD initiatives for Food Systems Assessment (FSA) conducted in 50 countries, Bhutan was one of the first to undergo this assessment in 2021. The findings from the FSA have provided critical input for UNFSS dialogues and are guiding efforts to attract investment,’’ Cullen explained.
A significant initiative is the Climate-Smart Agriculture Investment Plan (SAIP), developed in collaboration with the World Bank and the Ministry of Agriculture and Livestock. ‘‘SAIP is a strategic document proposing high-potential investments in climate-smart agriculture to attract public and private investments,’’ Cullen stated.
Cullen also spotlighted Bhutan’s active participation in the FAO’s Hand-in-Hand initiative, which aims to accelerate agricultural transformation and sustainable rural development.
‘‘The initiative has supported the development of investment notes for high-potential products like asparagus, strawberries, quinoa, black pepper, rainbow trout, citrus, honey, buckwheat, and coffee,’’ he said. The Sustainable Agrifood Systems Initiative (SASI), supported by the FAO in collaboration with the European Union and Agrinatura, aims to strengthen institutional processes, policies, and investments in Bhutan, Cullen explained.
Cullen’s address emphasized the critical role of global trade and strategic investments in transforming Bhutan’s agrifood sector, highlighting the need for continued support and collaboration to achieve sustainable development goals.
