1. Drivers of agrifood systems

This chapter delves into the 18 key socioeconomic and environmental drivers that impact agrifood systems and related performances. Each section outlines the issues at stake, articulates the fundamental questions regarding the sustainability and resilience of agrifood systems raised above, provides facts and figures regarding the driver, looks at forward-looking work being done by others, and discusses some anticipatory signals that could reveal possible future trends and events.

Given that the analysis of drivers is supported by a large amount of quantitative data and the scenario narratives, albeit qualitative, rest on a set of projections of key variables, this report is complemented by a web-based data dashboard (available at www.fao.org/global-perspectives-studies/FOFA-dtt-dashboard), where users can visualize graphs and tables, download data files and interactively personalize their analyses.

The drivers analysed in Chapter 1 are summarized in Table 1.1 and briefly outlined below.

Population dynamics and urbanization (Driver 1). People are at the heart of agrifood systems, and few drivers are as crucial as population dynamics in shaping them. While the number of people and the structure of population only evolves slowly over time, the spatial distribution and occupation of people may change rapidly and impact agrifood systems. The world’s demographic centre of gravity is shifting to LICs.² World population has multiplied by 2.5 since 1960 and reached an estimated 7.8 billion people in 2020. Figure 1.11 depicts the considerable demographic diversity with respect to population growth rates in the various country groups considered in this report. Food consumption has been growing even faster than population because of changes in demographic structure, income and food preferences. Population increase, limited access to resources, the low quality of public goods and services, little or no increase in agricultural productivity and the lack of growth in non-agricultural activities are all factors that push people to migrate towards urban areas, especially megacities. This constitutes an overall aggravation of poverty, environmental degradation and vulnerability. The provision of employment to youths is a major challenge now and it will be in the future, particularly in regions such as sub-Saharan Africa (SSA), where the development of industries and services is not taking place fast enough to offer decent jobs to new urban dwellers.

Economic growth and structural transformation (Driver 2). The narrative of the shift of labour out of agriculture and into higher productivity economic activities that bring higher wages, growth and well-being, is the conventional wisdom regarding structural transformation and development. Yet, this interpretation faces two deep problems today: first, the benefits of the transformation are failing to materialize for many LICs (and people), thus revealing its social unsustainability; and second, economic activities, specifically in today’s HICs, are unsustainable on environmental grounds. From an ecological economics perspective, this implies that economic growth, and, in fact, the maintenance of the economic results achieved so far, have to be reconciled with the biophysical boundaries of the planet. Figure 1.12 shows that despite the decline in GDP per capita in HICs after the 2007–2008 financial crisis, and the impressive growth in middle-income countries, particularly China and India in the 2000s, the gap among HICs and LMICs remains extremely wide, with little evidence of convergence between these countries. SSA appears to be in a desperate condition as there is no sign of growth in per capita terms. From an ecological economics perspective, taken as a whole, humanity is exceeding biophysical “planetary boundaries”, leading to calls for a transition to “prosperity without growth”, specifically in HICs. For the world as a whole, a goal of sustainable development is to live within a “safe and just space”, remaining within the Earth’s ecological ceiling while pursuing global social justice.

Cross-country interdependencies (Driver 3). Cross-country interdependencies abound within agrifood systems. The global economy, and the global agrifood system within it, are interlinked through trade, finance and migrations, as well as through global commons, such as the atmosphere, oceans, or shared land, and also immaterial ties, such as traditions, common knowledge, global security and peace. Within this context, global governance, the national institutional set-up and contractual power relationships matter to determine the performances, sustainability and resilience of agrifood systems. Issues arising from the cross-country interlinkages, such as the commodity-dependency of many countries that jeopardizes their resiliency; the possibility to repurpose agricultural subsidies to achieve more sustainable and resilient agrifood systems, or the issue of illicit financial flows that drain resources from LICs, could be neglected or energetically addressed. Decisions taken in one direction or another could contribute to increasing or jeopardizing the overall sustainability and resilience of agrifood systems.

Big data (Driver 4). Managing big data is the process of gathering, storing, analysing and extracting knowledge from high-volume and complex data, often by means of artificial intelligence (AI) and algorithms, including machine learning. Big data, along with its data-driven analysis, seems to be successful in many domains, but it started being applied to agrifood systems only relatively recently, particularly in the context of precision agriculture, smart farming and digital farming. With the multiplication of data and of the means of collecting them, users will increasingly want to protect the ownership and privacy of their data. While policy and regulations that govern personal data are becoming more frequent, there are currently few, if any, legal or regulatory frameworks aimed specifically at agriculture and food data that clarify who can create value from data, including those generated by the “Internet of Things” (IoT) sensors bound together with devices of all sorts, and under which conditions. As big data and related data analytics are potential game changers, the changes will be for the good or the bad of smallholders and the overall sustainability of agrifood systems, depending on whether effective institutions and governance mechanisms at national and global level will be able to set the rules of the game to ensure positive outcomes.

Geopolitical instability and increasing impacts of conflicts (Driver 5). Increasing instability and conflicts, including resource- and energy-based ones, form a major driver of food insecurity and malnutrition. In recent years, the world has witnessed a decline in global cooperation and security. There have been multiple internationalized wars – civil wars with involvement of external parties and ongoing large-scale humanitarian crises, rising nationalism, transnational terror organizations, cyber-attacks, sustained levels of violence in nominally “post-conflict” countries and a drastic increase in the number of non-state violent agents. Extractive activities tend to be concentrated in rural areas, particularly affecting Indigenous Peoples’ territories, where the majority of the remaining natural resources and biodiversity are concentrated. This has been a recurrent reason for socioeconomic and – territorial conflicts generating displacement and violence. Military expenditure has been increasing in HICs and in many LMICs since the turn of the century, after a global slowdown in the aftermath of the end of the “cold war”. This report also demonstrates that conflicts, or protracted crises, affect the outcomes of agrifood systems: in countries where conflicts or protracted crises are ongoing, the prevalence of undernourishment is two to three times higher than in LMICs, on average. At the same time conflicts are also be trimmed within agrifood systems: food price surges often act as catalysts for other grievances such as unemployment, low incomes, unpaid salaries, political marginalization and lack of access to basic services.

Risks and uncertainties (Driver 6). Despite the growing mass of knowledge and experience accumulated and technologies developed by humanity, the world remains full of risks and uncertainties. In fact, uncertainty may have become the zeitgeist of a period marked by a human health crisis which exacerbates unfolding global emergencies associated with climate change, biodiversity loss, pollution, conflicts and the resulting increase of world food insecurity. There are clear signals that uncertainty is growing. The cumulative impact of multiple risks and interconnected crises has turned into a major source of insecurity and uncertainty, and it may create conditions where cascading, cumulative and synergetic impacts have the potential to generate a snowball effect and lead to a tipping point, beyond which the world would enter unknown territory and massive global emergency. However, as knowledge on key issues and their underlying processes improve, there is hope that their future evolution should be less prone to uncertainties, and that risks and impacts could be more precisely assessed, monitored, managed and prevented.

Poverty and inequality (Drivers 7 and 8). The decreasing poverty and inequality trends have been reversed because of the COVID-19 pandemic, demonstrating the fragility of past achievements. Although the 2030 Agenda for Sustainable Development is grounded on the principle of “Leave no one behind”, in many instances, specific groups within societies, such as the elderly, children and youth, women, migrants and Indigenous Peoples, still confront high risks of discrimination and marginalization that can place them in situations of vulnerability, inadequate access to entitlements and economic poverty. Several traits of agrifood systems perpetuate poverty and inequalities: land distribution and access, low incomes resulting from low food price policies and exclusion of small producers from agrifood value chains. Moreover, smallholder farmers lack the means to cope with natural resources degradation and climate change. In the case of SSA, significantly higher poverty levels than in other regions are probably a consequence of the slow structural transformation of the economy, characterized by a stable share of agriculture in GDP and a relatively slow development of manufacturing and services that do not generate sufficient decent employment and income opportunities. Poverty is also associated with deforestation and degradation of forests, and unsustainable management of marginal land. Whether strategies to reduce the striking inequalities between HICs and LMICs and to address within-country inequalities will be adopted or not, the world could move towards a future characterized by more inequality, or better distributed income and wealth.

Food prices (Driver 9). Analyses conducted in this report show clear signs that food prices are on the rise at all levels. At the global bulk markets level, as illustrated by the FAO Food Price Index, agricultural prices in real terms (that is, compared to the prices of manufactured goods) have been increasing since the turn of the century, after four decades of declining or stagnant trends (see Figure 1.41). Ongoing degradation of natural resources, the impacts of climate change on yields, pests and diseases, and the impacts of pollutants on pollinators and changing policies, all contribute to create uncertainty and tensions that might push food prices further up. Prices would plausibly further increase if externalities were accounted for and internalized to reorient food systems towards greater sustainability, or if bioeconomy agricultural commodities are increasingly used to produce non-food goods, or if prices of energy continue to rise. At the farm level, prices are strongly influenced by incentives and subsidies, aimed at keeping consumer prices low and advantaging national products. This also creates unduly negative externalities, including GHG emissions, although the trends in HICs may be changing. At the consumer level, food prices have followed an upward direction, albeit more limited than bulk and producer prices. If, specifically in HICs, the signs currently indicating some movement by consumers towards less resource-intensive dietary patterns with better nutritional and environmental outcomes are confirmed, and if this movement accelerates, it would considerably diminish the pressure on agricultural demand, although some food items could be more labour-intensive, and thus more expensive particularly in HICs, where agricultural wages are comparable to those in the rest of the economy.

Innovation and science (Driver 10). There is a need to innovate to help transform dysfunctional agrifood systems, as the current model generates a series of ills that are compromising prospects for the future. Anthropogenic GHG emissions responsible for climate change, loss of biodiversity, degradation of land and water and resources, and food waste are some of the negative impacts of how agrifood systems have been managed so far. Science and innovation are fast advancing fields whose promise is immense, but there are also risks, as rapid developments can outpace the ability of societies to adapt, and existing socioeconomic inequalities and adverse environmental effects can be exacerbated. Eighty percent of global investment in research and development (including, but not limited to, the agricultural sector) is concentrated in ten countries. If past trends continue unaltered, large middle-income countries will likely play a greater role in innovation and science, aside from HICs, that dominate the field; whereas LICs, particularly in SSA, risk to be marginalized and remain “technology takers”. This applies to science, technology, engineering and mathematics research in general, but also for research specifically related to agrifood systems. Biotechnologies as well digitalization and geoengineering have an important potential but face strong resistance based on the need to improve knowledge concerning possibly unknown side effects. Agroecological and other alternative, environment-friendly approaches also address social inequalities, as do some supply chain innovations. In this endeavour, consideration of traditional knowledge and the transformative potential of Indigenous food and knowledge systems may help. In the field of policy, innovations such as citizens’ conventions or assemblies made up by members drawn by lot, or legal actions aimed at curving government policies, are becoming more numerous, but their impact has yet to be felt. A major issue in the near future will be how and in which institutional framework are technologies and innovations to be governed, who will benefit from them and what will guide their regulation. In particular, how will the relative weight given to productivity, sustainability and inclusiveness be determined. In fact, the outcomes of the technologies and innovations listed in this chapter depend on the extent to which they address the needs of small-scale producers, whether civil rights are enforced, and an effective legal system ensures the respect of contracts as well as the protection of ownership (including Intellectual Property Rights), and that society operates on the basis of transparent rules.

Investment in agrifood systems (Driver 11). Investment plays a central role in transforming agrifood systems. It has been growing and engaging new private actors such as pension funds, specialized investment funds, endowment funds and impact investors, in addition to pre-existing private corporations, traders and public organizations. Hybrid mechanisms, such as blended finance, that strategically utilize public funds to attract private investment are increasingly important. However, considerable disparities across countries exist. For instance, per capita investment in HICs, which, together with China, total more than half of the overall investment, is five times larger than in SSA. Foreign direct investment is low in agrifood systems, relative to other sectors, and mostly linked to exports. In contrast, self-financing remains the largest source of investment for farmers, who often rely on informal providers such as credit cooperatives and village savings associations, particularly in LMICs. Evidence also suggests that the lack of domestic investments in downstream segments of value chains does not permit capturing value addition, creating jobs and benefitting from their economy-wide multiplier effects. If past trends continue unaltered, private investment will continue to be the main source of funding. However, smallholders, with little or no capacity to save, may become increasingly marginalized. More than ever, public action and investment are critical to provide indispensable public goods and ensure both inclusivity and sustainability of private investment. Unfortunately, if China is excluded, the proportion of public resources allocated to agriculture is globally much less than the sector’s weight in the economy and decreasing in most regions (see Figure 1.50).

Capital and information intensity of production (Driver 12). “Capital deepening”, that is, the increase of capital per unit of labour, occurred in the last decades both in HICs and middle-income countries, leading to labour productivity growth. However, without considering LICs, the labour productivity gap between these countries is still huge and barely converging. This partially explains the vast wage differentials that exist between similar jobs in different countries. In contrast, since the 1950s capital productivity was stagnant in HICs and fell in middle-income countries, thus the gap was closed in the 1990s. This not only signals an essentially “labour-saving” technological change, but has further implications for the wage differential between the two groups of countries. Investors demand higher profits rates in middle-income countries because they are riskier. In the past, higher profit rates in those countries were granted by higher capital productivity. Today they can only be granted by comparatively lower wages. This also explains the important wage gaps that exist. New technologies automate jobs that had until now been irreplaceable. Depending on where (in which groups of countries) they will be predominantly applied, the wage gaps could increase (if applied predominantly in HICs) or, conversely, decrease. In addition, the new technologies influence both the value-added sharing between labour (workers) and capital (owners), but, depending on their ownership (whether domestic or foreign), as well as the value-added sharing between domestic and foreign agents.

With the development of automated and digital technologies, low-skilled routine jobs are being replaced by high-skilled jobs. With information and communication technology, there will be gainers and losers, as literate farmers stand to gain, while others may have to move to other sectors, in search of still existing low-skilled, low-wage jobs. On the natural resource side, those technologies are expected to reduce resource use per unit of output, including land, water and agrochemicals. But resource savings can be offset if the output increases. Therefore, protecting natural resources for a sustainable future cannot be left to productivity growth alone. In this context, the concept of “information intensity” of production still requires to be clearly defined. What is clear is that rapidly falling costs of robust sensors may cause data gathering through digital technologies to become widespread, even in LICs. The concern is that the data collected there will typically be stored on platforms (very often foreign) that control the technology and use data to further control processes and/or sell processed information to their customers for other uses. Overall, if not properly governed, technological change, through the foreign ownership of capital and the foreign (or at least off-farm) ownership of data, can shift patterns of ownership and control over production and resources.

Market concentration of food, and agricultural inputs and outputs (Driver 13). Recent history of the food and agriculture sector has been characterized by concentration. Large corporations have emerged at every level of the food systems, from agricultural inputs provision to food retail. In agriculture proper, farm size has grown in HICs, while in LMICs, a mass of nearly 600 million increasingly fragmented smallholders coexists with mega-farms. The spectacular growth of international trade in agricultural commodities has led to new forms of organization. Global value chains structure the world food economy and have become major suppliers of food and agricultural products around the planet, governed by powerful lead firms that define private production and processing standards to meet consumers’ requirements. With the advent of supermarkets, during the twentieth century, and now of digital platforms whose role in food has been accelerated by the COVID-19 pandemic, new forms of economic power are being concentrated in a handful of corporations that cut across interlinked markets. Innovations such as zero-price markets, multi-sided platforms, attention markets and big data analysis create new opportunities for concentrating economic power and accumulating wealth. If past trends continue, further concentration in food systems may be expected, with uncertain impacts on hundreds of millions of smallholders whose odds of being excluded and pushed towards urban areas throughout the world, particularly in LMICs, may increase. If the “consume local” movement that was boosted during the COVID-19 pandemic, gains further strength at the global level, an alliance of consumers and producers able to take the lead in piloting the food systems through a transition towards greater sustainability could contribute to changing the rules of the game.

Consumption and nutrition patterns (Driver 14). With the acceleration of dietary transitions in many LMICs towards higher consumption of resource-intensive foods and Western-style diets, three major interrelated challenges lie ahead for the coming decades: malnutrition in all its forms (undernutrition, micronutrient deficiencies, overweight and obesity), resurging undernourishment and the current unsustainability of agrifood systems. The exacerbated consumption of food of animal origin, particularly in HICs, may reduce the efficiency of food systems, because of low energy and protein conversion rates from feed to food, thus generating high GHG emissions and undue pressure on natural resources. Dietary patterns with better nutritional and environmental outcomes are possible and have a transformative potential for agrifood systems on a scale not achievable with supply-side technological changes only, by contributing to limit the required increases of agricultural output in the next decades (see scenario “towards sustainability” in Figure A of Box 1.41). There are signs that highly educated and well-off consumers in urban areas have started to adopt alternative behaviours, swayed by influencers, activists or consumer movements and associations. However, consolidating these changes requires guidance (e.g. nudges, food labelling, information and education) and incentives from public authorities. In fact, a majority of vulnerable consumers with limited information and reduced purchasing power may be left out of this movement if they are not provided support. However, on the one hand, it is particularly important not to neglect major structural, power and political challenges that compromise scaling-up these changes. On the other hand, if past trends in food consumption continue, the risk is high that the impact of agrifood systems on climate change and natural resource degradation will further increase.

Notes: Linear trend on historical data: y=-2.83 +1.45x; R2 = 0.98. Historical gross production value (index 2014–2016=100) is plotted using a three-year right-aligned moving average. The historical gross production value index is calculated on the basis of the gross production value in constant USD of 2014-2016. Projections by scenario are calculated as annual variations of projections by scenarios with respect to the base year (2012), as reported in FAO. 2018. The future of food and agriculture – Alternative pathways to 2050. Rome.
Sources: Authors’ elaboration. Historical gross production value based on FAO. 2022. Value of Agricultural Production In: FAOSTAT. Rome. Cited 29 June 2022. www.fao.org/faostat/en/#data/QV; projections are based on FAO. 2018. The future of food and agriculture – Alternative pathways to 2050. Rome. www.fao.org/3/I8429EN/i8429en.pdf

Scarcity and degradation of natural resources (Driver 15). A review of the causes and impacts of natural resource scarcity and degradation, and of the relations between natural resources and agrifood systems, illustrates the systemic interlinkages between agrifood systems and natural resources. Agrifood systems are highly dependent on natural resources and natural resources are strongly affected by activities conducted within agrifood systems, as agrifood systems are one of the major reasons of degradation of natural resources. Biodiversity is following an irrevocable and continuing decline of genetic and species diversity, and this trend may be accelerating, with the risk of precipitating a sixth mass extinction. Causes include land-use change, agricultural practices, overexploitation of resources, climate change, pollution and invasive species. Consequences include disruption in ecosystems services, affecting vital processes such as those provided to plants by soil biodiversity or pollinators. Deforestation, resulting from expansion of agriculture, endangers forests along with the goods and services they offer, while depletion of marine resources by unsustainable fishing threatens future production. If past trends continue at the current rate in the future, scarcity and degradation of natural resources will create an untenable situation as agrifood systems greatly depend on them. This would drive the world along a path incompatible with achieving the Sustainable Development Goals and securing the emergence of agrifood systems that are sustainable from economic, social and environmental perspectives. To come up with more sustainable and resilient agrifood systems, understanding the key values of Indigenous Peoples’ food and knowledge systems – such as the respect for all forms of life (biocentrism); the circularity of biological processes, including food generation, consumption and disposal; and the management of natural resources at community level – may shed further light on the complex mutual relationships between agrifood systems and natural resources. Achieving the Sustainable Development Goals would require serious changes in the way food is being produced and processed, in the diets adopted by consumers, and in the incentives and guidance provided by policies to all actors operating within agrifood systems.

Epidemics and degradation of ecosystems (Driver 16). The remarkable growth of agriculture, mostly through intensification, land use change, monoculture and reliance on a reduced number of species, and within species and of varieties, deforestation, the encroachment into wild areas and forests and climate change as well as massive global rapid travel and trade, are deeply transforming the planet’s ecosystems and their internal processes. These changes trigger imbalances, some of which feed back into agriculture and human health, such as the multiplication of crop and animal pests and diseases or emerging zoonotic infectious diseases, antimicrobial resistance, foodborne diseases and pesticide poisoning, with their cohort of victims and their imprint on the global economy. Intensive livestock systems with high-density populations of low genetic diversity, exposure of livestock to wildlife, ineffective management and biosecurity measures, as well as insufficient vaccination, are responsible for the spreading of animal diseases. The inappropriate use of drugs in animal production is aggravating antimicrobial resistance, while unsafe food and water are responsible for hundreds of millions of foodborne disease cases. The scale and intensification of agriculture, as well as the lack of prompt intervention in cases of outbreaks, are major causes of plant pests and diseases. At the same time, massive application of pesticides impacts on human health and biodiversity. Unless the determinants that are deeply transforming the planet’s ecosystems and their internal processes are tackled, it is most probable that the consequences of this transformation on plant, animal, human and environmental health will worsen. Addressing these causes will imply modifying significantly the way agrifood systems operate (e.g. production technologies, spatial expansion of agriculture, speed of movements of goods and people and consumption) as well as implementing preventive and mitigation strategies, including ecological interventions, using a One Health approach, and integrating One Health Intelligence across sectors, and including early warning and risk assessments.

Climate change (Driver 17). The interaction between food systems and the climate is a major driver of change. Food systems play a key role in the dynamic of anthropogenic GHG emissions causing climate change, as they may emit or absorb variable volumes of GHG, depending on the way they are managed. On the other hand, climate change affects food systems, forcing adaptation in the manner food is produced, processed and consumed, and impacting both producers and consumers. Food systems generate around one-third of all anthropogenic GHG emissions. Over the last two decades, growing emissions in agriculture and in post-harvest activities are only partly compensated by reduced land-use-related emissions. Within agriculture, livestock and, to a lesser extent, fires and cultivation of soils rich in organic matter such as peatland, are the major sources of GHG emissions. Meanwhile, climate change is accelerating, and its impacts are being felt on food systems, affecting quantity, quality and accessibility of food. Higher temperatures and extreme weather events are two main elements through which food systems are impacted. The consequences of climate change (lower crop yields, lower quality of biomass produced by rangeland and pastures, alteration of forests and ecosystems dynamics, higher presence of crop and animal pests and diseases, reduced nutritional quality of food, loss of aquatic systems’ production capacity and large-scale redistribution of marine fish resources) threaten to erode, and even reverse, the gains made in the combat against hunger and malnutrition. Moreover, food quality under higher temperatures could turn into a major nutritional issue in the future. Future development of post-harvest activities and increased livestock production would add to the GHG emissions already emitted by agrifood food systems, while limitation in agricultural expansion and related deforestation would help reduce them. Adaptation of food systems to higher temperatures and extreme weather events will likely become an important domain for research, as future trends indicate that climate change will continue its course in the coming few decades, until the urgently needed mitigation measures, produce their effects.

Sustainable ocean economies (Driver 18). The concept of “sustainable ocean economies”, also referred to as “Blue economy” regards the implementation of Green Economy principles to aquatic environments in order to achieve greater sustainability in both traditional and emerging water-related activities.³ Fisheries, and particularly aquaculture, have been growing at a very fast rate over the last three decades and have become a major source of high-quality animal protein, polyunsaturated fatty acids and micronutrients provided that the quality of the fish produced is preserved, rather than just maximizing profits. Aquaculture is now the main provider of fish products and it supplies animal proteins, while emitting lower amounts of GHG per kilogramme of output than terrestrial animals, especially ruminants. However, the increasing level of marine litter, particularly plastic, impacts negatively fisheries production and quality of its outputs that run a greater risk of being contaminated. Furthermore, aquaculture makes extensive use of antimicrobials and pollutes waters, thus creating potential hazards for human health and negative impacts on biodiversity. If past trends persist, fisheries – and particularly aquaculture – will continue to grow, but, unless more sustainable practices are adopted in capture fisheries, marine fish stocks will probably decrease and their exploitation will require more fuel and generate more GHG emissions. The practical application of the “Blue economy” approach is constrained by weak national capacities, dubious “Blue economy” interventions with deleterious consequences, and insufficient involvement of fishers and fish workers in decision-making. This includes a lack of information to make accurate trade-off decisions when prioritizing one aquatic-based sector over another. If there is no general agreement on, and application of, the principles defining “Blue economy” – and if governance of aquatic activities is not more inclusive of fishers, fish farmers and fish workers – the implementation of the “Blue economy” concept could favour aquatic activities other than fisheries (e.g. tourism, maritime transport, water desalinization and bio-prospecting) and benefit large economic operators rather than fisher and fish farmer communities.