Farm incomes set to rise over next decade, but volatility threatens gains – report
However, low-income countries, particularly in Sub-Saharan Africa, are expected to continue facing food security and nutrition challenge
KAMPALA, July 1, 2026 – Global average gross agricultural income per worker is projected to rise by 9 per cent by 2035, driven by productivity improvements and broadly stable agricultural prices, according to a new report released on Tuesday by the Food and Agriculture Organization of the United Nations [FAO] and the Organisation for Economic Co-operation and Development [OECD].
However, the report warns that these gains remain vulnerable to market volatility triggered by crises and conflicts.
According to the findings, if the pattern of shocks seen in recent years persists, there is a 25 per cent chance that agricultural incomes in 2035 could fall below current levels.
Short-term risks also remain significant. Recent increases in energy prices and the resulting decline in fertiliser use are expected to affect agricultural production in 2027. While high-income countries are likely to absorb these shocks, low-income countries face worsening food security.
The OECD–FAO Agricultural Outlook 2026–2035 provides medium-term projections for agricultural and fisheries markets at national, regional and global levels.
Under stable conditions, global agricultural and fisheries production is expected to expand by 13 per cent over the next decade, largely driven by productivity gains and production intensification. Growth is projected to be strongest in Asia, Sub-Saharan Africa and Latin America.
The report also highlights the consequences of temporary economic shocks.
If the average 33 per cent rise in energy prices recorded during the first half of 2026 continues through the remainder of the year, global grain production is projected to decline by 0.9 per cent in 2027 and by as much as 1.7 per cent in low-income countries.
Lower agricultural output, reduced farm incomes and rising food prices would force households in poorer countries to cut consumption and shift towards lower-cost food options.
“Our agrifood systems are under pressure, and our farmers are on the front line of rising energy and fertiliser costs,” OECD Secretary-General Mathias Cormann said.
“Their resilience is our food security. Protecting it requires stronger support to withstand shocks, sustained investment in productivity, and open, well-functioning global markets.”
FAO Director-General QU Dongyu said resilience must become central to future agricultural planning.
“To sustain productivity growth in agrifood systems, we must strengthen their resilience. Resilience is not about surviving the last shock; it is about preparing for the next one,” he said.
He added that investment in diversified trade routes, regional reserves of key agricultural inputs, resilient infrastructure and broader energy sources could reduce vulnerability and prevent temporary disruptions from escalating into food crises.
The report notes that although productivity gains are expected to drive most growth in agricultural output, some expansion in crop land and livestock numbers will still be required.
As a result, direct greenhouse gas emissions from agriculture are projected to rise by 6.5 per cent over the next decade.
Livestock is expected to account for around 77 per cent of the increase, while synthetic fertilisers are projected to contribute the remaining 23 per cent through higher nitrous oxide emissions by 2035.
Productivity gains are also expected to place downward pressure on real agricultural commodity prices.
While lower prices may benefit consumers, they could create challenges for smallholder farmers, who are often more exposed to market volatility and have limited access to productivity-enhancing technologies.
The report recommends that governments support productivity growth while improving market access and delivering locally tailored support programmes.
Consumers in lower middle-income countries are expected to diversify their diets, with increased consumption of livestock products as incomes rise.
However, low-income countries, particularly in Sub-Saharan Africa, are expected to continue facing food security and nutrition challenges.
Meanwhile, excessive food consumption is projected to remain common in wealthier economies.
Southeast Asia is expected to account for 39 per cent of global consumption growth by 2035, driven by population growth and rising per capita demand.
The report concludes that multilateral cooperation and rules-based international agricultural trade remain essential to strengthening food security, promoting diversified diets and stabilising farm incomes.
Key projections
• Global cereal production is expected to reach a record 3.22 billion tonnes by 2035, driven mainly by annual yield growth of 0.9 per cent, while cereal-growing land expands by only 0.1 per cent annually.
• By 2035, around 40 per cent of cereals will be consumed directly by people, while 34 per cent will be used for animal feed. Wheat and rice will continue to be used mainly for food, while maize will remain primarily a feed crop.
• Global demand for biofuels is projected to grow by 1.4 per cent annually, led by Brazil, India and Indonesia, while growth in high-income countries slows as electric vehicle adoption increases.
• Sub-Saharan Africa is expected to contribute 16 per cent of additional global agricultural production by value by 2035, up from 11 per cent in the previous decade, although food insecurity risks will persist.
• The Asia-Pacific region is projected to account for 58 per cent of additional global agricultural output, with India alone contributing 26 per cent, driven largely by dairy expansion and improved milk yields.
• In high-income countries, growth in meat consumption is expected to slow as consumers shift from beef to poultry due to prices, health concerns and environmental considerations.
• Global fisheries and aquaculture production is projected to rise by 11 per cent by 2035, with aquaculture accounting for 56 per cent of total output. Asia is expected to remain the main driver of global seafood demand and supply growth, although expansion in China is forecast to moderate.
https://thecooperator.news/fao-food-price-index-rises-in-february-for-first-time-in-five-months/
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