- Year of progress and challenges in transforming agri-food systems
The year 2024 witnessed significant strides in the realm of food and agriculture, marked by a blend of achievements and challenges. One of the most compelling narratives of 2024 was the emphasis on transforming agri-food systems to be more inclusive, resilient, and sustainable.
According to the Food and Agriculture Organization’s (FAO) “The State of Food and Agriculture 2024,” the concept of true cost accounting gained prominence. This approach advocates for the full accounting of the environmental, social, and economic costs associated with agri-food systems, thereby promoting more informed policy-making and consumer choices. The report highlights the need for systemic changes that prioritize the well-being of all stakeholders, from smallholder farmers to consumers, ensuring equitable access to resources and benefits.
Global growth is expected to come in at a 3.1% pace in 2024, slightly lower than 2023, and below the pre-pandemic norm of 3.6% from 2000 to 2019. In 2025, It expected to accelerate to 3.2% before post-election policies in the US dampen global growth to 3.0% in 2026. The pace of inflation is forecast to continue cooling between now and mid-2025. The forecast thereafter depends heavily on the pace of tariffs and whether we see a full-blown trade war erupt.
In 2024, global food production is expected to experience mixed trends across commodities. The pace of inflation is forecast to continue cooling between now and mid-2025. The forecast thereafter depends heavily on the pace of tariffs and whether we see a full-blown trade war erupt.
Sustainability remained at the forefront of agricultural discourse in 2024. The FAO’s “Statistical Yearbook World Food and Agriculture 2024” provided comprehensive data on the economic, production, and environmental dimensions of agriculture. A notable achievement was the projected decline in the global greenhouse gas intensity of agriculture, as highlighted by the OECD-FAO Agricultural Outlook. This reduction is a testament to the concerted efforts to adopt more sustainable agricultural practices, including precision farming, agroecology, and the use of renewable energy sources.
Moreover, the yearbook emphasized the importance of addressing food security and nutrition challenges. Despite significant progress, pockets of hunger and malnutrition persisted, necessitating targeted interventions. The focus on sustainable diets, reduction of food waste, and improved food distribution networks were identified as critical components of a holistic approach to food security.
Geopolitical risk remains elevated. With the outcome of the US election, inflationary trade and immigration policies are expected to slow the pace of credit easing. Bond yields have already moved up in response to fears of mounting federal debt and higher inflation. Any major shift in tariffs in the US could trigger retaliatory measures.
Most major central banks, except for the Bank of Japan, have initiated rate-cutting cycles. The US dollar initially weakened following the start of the Federal Reserve’s first rate cut in September. However, the US dollar reversed course and moved up on higher inflation expected post-election. Russia and Turkey, along with Eastern European nations, are expected to struggle with inflation for longer.
Global inflation has cooled in response to higher rates, slower growth, excess supply and a drop in energy prices. Service sector inflation is beginning to moderate as well. A lingering concern is outsized wage gains in Europe where productivity growth lags. There is a backlash forming to foreign tourism, as it is further propping up service sector inflation.
Delays in the effects of monetary policy will push the influence of rate cuts into the second half of 2025 and 2026. We could see a tailwind for big-ticket consumer purchases and business investment. Much is contingent upon headwinds due to retaliatory tariffs.
Mergers and acquisitions activity is poised to increase with lower rates and a record amount of dry powder in the private equity space. Policy uncertainty, anti-corporate sentiment and protectionist policies could curb the largest and cross-border deals. Heightened levels of policy uncertainty tend to reduce the number of M&A transactions, increase the length of time to their completion and curb the premiums firms are willing to pay for deals.
Fiscal policy may be more stimulative . COVID-era appropriations have lapsed, but market participants are betting on a new wave of stimulus. The biggest gains in spending are expected to be in pensions, healthcare and defense. Tax cuts are expected to be extended in full in the US; what is unknown is how multinationals not located in the US will be treated.
On the order hand, Agri-food systems generate significant benefits to society, including the food that nourishes us and jobs and livelihoods for over a billion people. However, their negative impacts due to unsustainable business-as-usual activities and practices are contributing to climate change, natural resource degradation and the unaffordability of healthy diets.
Addressing these negative impacts is challenging, because people, businesses, governments and other stakeholders lack a complete picture of how their activities affect economic, social and environmental sustainability when they make decisions on a day-to-day basis.
The State of Food and Agriculture 2023 looks into the true cost of food for sustainable agri-food systems. The report introduces the concept of hidden environmental, health and social costs and benefits of agri-food systems and proposes an approach – true cost accounting (TCA) – to assess them. To operationalize the TCA approach, the report proposes a two-phase assessment process, first relying on national-level TCA assessments to raise awareness and then moving towards in-depth and targeted evaluations to prioritize solutions and guide transformative actions.
It provides a first attempt at national-level assessments for 154 countries, suggesting that global hidden costs from agri-food systems amount to at least to 10 trillion 2020 PPP dollars. The estimates indicate that low-income countries bear the highest burden of the hidden costs of agri-food systems relative to national income.
Despite the preliminary nature of these estimates, the analysis reveals the urgent need to factor hidden costs into decision-making for the transformation of agri-food systems. Innovations in research and data, alongside investments in data collection and capacity building, are needed to scale the application of TCA, especially in low- and middle-income countries, so that it can become a viable tool to inform decision- and policymaking in a transparent and consistent way.
Recent in-depth research reveals important trends. Emerging economies will be pivotal in shaping the global agricultural landscape, with India expected to overtake China as the leading player. Yet calorie intake growth in low-income countries is projected to be only 4%. Agriculture’s global greenhouse gas intensity is projected to decline, although direct emissions from agriculture will likely increase by 5%. If food loss and waste could be halved, however, this would have the potential to reduce both global agricultural GHG emissions by 4% and the number of undernourished people by 153 million by 2030.
Well-functioning international agricultural commodity markets will remain vital for global food security and rural livelihoods. Expected developments should keep real international reference prices on a slightly declining trend over the next ten years, although environmental, social, geopolitical, and economic factors could significantly alter these projections.
Conflicts are one of the driving food crises and is a factor in almost all of the world’s hunger emergencies. While the link between violence and food insecurity is well-understood, policy analysts have less frequently studied the fact that war-displacement-hunger crises occur in countries that continue to rely heavily on primary product exports, such as food, agriculture, and extractive industry commodities.
In 2023, crisis-level hunger reached an all-time high, with conflict as a key driver. The number of refugees and internally displaced persons—uprooted most often by conflict—likewise hit a record level of 117.3 million, with 77% of them in countries affected by hunger crises.
Almost all of the violent conflicts that the world witnessed in 2023 and so far this year are what we call “food wars,” in which combatants manipulate food and hunger as weapons, and damage food and food-related water and energy infrastructure, whether intentionally or as a bi-product of the fighting. Frequently, hunger, can in turn trigger conflict when desperate people perceive no other options for livelihoods and survival.
Active conflict also directly interferes with food supply chains, nutrition, and essential health care related to nutrition and indirectly leads to food insecurity among the people forcibly displaced by it. All too often, these unstable conditions spill over and affect those hosting refugees and living in surrounding areas.
Even after wars officially cease, food insecurity often persists. If the injustices and inequalities that served as root causes of earlier fighting are not effectively addressed, discontent sows the seeds of renewed violence, as seen for example in Mozambique, where fighting has resumed after years of relative peace. This legacy of conflicts disrupts social institutions and destroys livelihoods, lands, livestock, markets, and critical infrastructure, including for food storage and water access. Landmines and unexploded ordnance are another war legacy; they not only reduce potential food and export crop production, but further threaten security and peace.
Oxfam’s new briefing paper, “Food Wars: Conflict, Hunger, and Globalization, 2022-2023,” looks at 54 countries and territories with active conflicts, refugee populations, or a legacy of conflict in 2023. These 54 nations were home to 278 million people facing “crisis-level” acute food insecurity—that is, at Phase 3 or higher according to the Integrated Food Security Phase Classification (IPC), accounting for 99% of the global crisis-level hunger population in 2023 (282 million people). In all 54 countries, conflict was a major cause of hunger, although in some, extreme weather or economic shocks may have contributed substantially. With a few exceptions, IPC data are not sex-disaggregated. So, regrettably, we cannot measure the impact of the conflict-hunger connection through a gender lens, although we know that women, girls, and other vulnerable populations are disproportionately harmed in conflict situations. It’s undeniable that conflict causes catastrophic food insecurity. For years, reports from UN agencies and many other sources have pointed to these links. What is less frequently studied is the fact that war-displacement-hunger crises occur in countries that continue to rely heavily on primary product exports—gold and livestock products in Sudan, petroleum in South Sudan, coffee in Burundi, and grain and oilseeds in Ukraine, where Russia has weaponized food and agriculture. Oxfam’s new report notes that in 26 of the 54 countries, the share of international trade in the respective country’s overall economy is higher than the global average. An even larger number of the countries (34 of 54) rely mainly on primary product exports, such as food, agriculture, and extractive industry products, or light assembly and low-end manufactures.
Paradoxically, international financial institutions and many aid donors often assume that economic liberalization and attracting foreign investment offer the best or only pathway to lasting peace. However, warring parties often struggle for control over primary commodity profits that can fund more violence. In addition, pushing for de-regulation of land and product markets without first establishing inclusive governance can worsen inequality, put low- and middle-income countries that are emerging from conflict into a dependent position in the global economy, and create the potential for renewed conflict.
Cultivation of export crops in and of itself isn’t the problem. In fact, these commodities are often important sources of revenue for small-scale farmers and governments in conflict-affected, food-insecure countries. So it’s crucial to understand the conflict implications of export- and food-crop value chains as part of food-wars policy discussions and actions.
The vital questions are how high-value crops are produced, who benefits, and what the relevant food and financial policies look like; these determine the effects on local households and whether there is violence. Large-scale private investment—whether foreign or domestic in origin—adds to political and economic instabilities where investors seize control over land and water and displace local people. Careful vetting and regulation of markets for high-value primary commodities can go a long way toward ensuring peaceful outcomes, especially when policies hold private-sector actors accountable for not aiding violence.
Some new international production and marketing agreements might improve livelihoods and revenue streams. The Abidjan Agreement on cocoa between Côte d’Ivoire and Ghana, for example, attempts to regulate cocoa markets and prices for producers, processors, and marketers, and also tries to mitigate the environmental destruction and hunger associated with cocoa production. By promoting price stability, the agreement has the potential to de-link export commodity production and conflict, a fatal legacy experienced in Côte d’Ivoire (where armed actors used cocoa profits to fund conflict).
Global policy makers increasingly emphasise the importance of breaking down the silos separating humanitarian assistance, development, and peacebuilding as a means of achieving lasting peace and promoting sustainable development. An initiative in Colombia seeks to put this “triple nexus” approach into practice. It links cocoa production to peacebuilding, sustainable livelihoods, environmental restoration, and gender justice. Scaling efforts along these lines offers promise.
Solutions must also focus on more holistic national development strategies, including food-systems approaches that protect and promote the human right to food, as well as frameworks that more effectively consider conflict, globalisation, and climate change in food and nutrition policy. Support for peace transitions must address the livelihood needs of both long-suffering communities and returning refugees, so they can, in time, become food self-reliant. This has the potential to end cycles of grievance that fuel violent conflict, while promoting food security and a global economy that works for everyone, not just the richest 1%.
As 2025 is projected to be a year of unrelenting crises, the WFP Global Outlook highlights needs and WFP’s value proposition and key solutions to hunger. It includes operational requirements, the number of people we intend to reach, regional updates with operational requirements per country, and an overview of WFP’s footprint and portfolio of activities.
Acute hunger is on the rise again, affecting 343 million people in 74 countries where the World Food Programme (WFP) works. Up to 1.9 million people are estimated to be on the brink of famine, primarily in Gaza and Sudan – where famine was confirmed in one location in July – but also pockets of the populations in South Sudan, Haiti and Mali. WFP’s operational requirement for 2025 is US$16.9 billion, which would allow us to reach 123 million of the most vulnerable food-insecure people globally.
In summary, 2024 was a year of substantial progress and pivotal transformations in the field of food and agriculture. The emphasis on true cost accounting, the rising influence of emerging economies, and the continued drive towards sustainability collectively defined the year’s advancements. As the world navigates the complexities of feeding a growing population amidst environmental and economic challenges, the lessons and strategies of 2024 offer valuable insights for building resilient and equitable agrifood systems in the years to come.
The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at nazir_shaikh86@hotmail.com