The global agriculture industry recorded moderate positive growth in 2022, mainly driven by high commodity prices and global food inflation. Climate change, natural disasters, rising labour shortages, geopolitical tensions, rising protectionism and trade disputes are at the centre of a global agricultural slowdown, which is projected to remain during the forecast period. Governments are being pushed to increase industry protection measures and turn to technology to seek solutions.
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Fluctuating weather conditions in countries around the world have led to droughts, excessive rains, flooding and natural disasters which negatively affected harvests in 2022-2023. Countries in Southeast Asia and Europe have been particularly affected, with lower production of key commodities such as grains, vegetables, fruits and meat, leading to high global food inflation. Climate change is the main factor that is expected to continue to put a strain on the agriculture industry.
Emerging economies such as Brazil and India continue to lead the way in agricultural production and supply of agricultural commodities to countries around the world in order to meet the growing demand for food. Brazil has emerged as the world’s winner in agricultural production due to favourable weather conditions, high labour supply, growing yields, a stable currency and stronger cooperation with key partners such as China and the US.
There is an increasing move towards the use of technology in the agriculture industry in order to address rising labour shortages, help farmers plan for and deal better with unpredictable weather conditions and a decline in arable land, and increase the efficiency of the production process. Despite growing innovation, there is an uneven spread of technological resources in favour of developed countries, due to higher funding and high-skilled talent pool.
The onset of the war in Ukraine in 2022 destabilised the global supply of grain and fertilisers, significantly impacting the food security of African countries and leading to higher costs of agricultural production on a global level. Coupled with poor weather conditions, an increasing number of governments have prioritised the national supply of food and enacted protectionist measures, which has led to growing geopolitical tensions, trade disputes and tense cooperation, further contributing to higher food inflation.