Long-term modelling of global agricultural markets : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

The 20th Century saw declining real food prices. Rising prices and volatility in the 21st century, however, have called this paradigm of declining real food prices into question, increasing concerns about global food security. Additionally, many of the challenges facing global agriculture manifest over a long time horizon such as: land-use change; climate change; and agricultural productivity. There is a need, therefore, to understand the structural changes in agricultural supply and demand underlying these price increases, as well as a need to take into account the current long-term challenges for global agriculture. However, many of the traditional tools used for assessing changes in agricultural markets are focused on the medium- or short-term. This thesis addresses this gap by examining real price impacts in global agriculture over longer time horizons using a partial-equilibrium modelling framework. This analysis provides informed perspectives on long term relationships in global supply and demand of agricultural commodities in order to assess the impacts of population growth, climate change, and R&D spending on real commodity prices, and thus the long term prospects for agricultural production and food security. Special consideration is given to TFP growth from returns using long-lags in spending on agricultural R&D. The modelling finds stable or declining agricultural commodity prices over the long-term, with the exception of non-ruminant products, which are expected to rise under most modelled scenarios. TFP supported by investment into agricultural R&D is key to maintaining stable or declining world prices, as well as mitigating emissions from livestock. The modelling also indicates the importance of utilising endogenous measure of productivity growth.