Economics and politics of a rapidly changing global food system

By Christopher Adam and Doug Gollin, Department of International Development

A new issue of the Oxford Review of Economic Policy discusses the economics and politics of the rapidly changing global food and agricultural system. 

In the long history of mankind, food has never been so plentiful, so varied or so cheap. A remarkable process of industrialization and globalization of food and agriculture over recent decades has seen food supply chains lengthen dramatically, as the physical distance from farm to plate has increased and as the consumption of processed, package, and prepared foods have increased in all but the poorest rural communities. Nonetheless, persistent and widespread hunger and under-nutrition remains a huge challenge in many parts of the world, while at the same time, and often in the same communities, obesity and the diseases of overconsumption blight the lives of many more.

Behind this extraordinary global abundance, however, the changes taking place in the world’s food systems pose major challenges for policy, regulation, and for public understanding. Popular discussion has not fully caught up to the realities of modern food systems. In both popular conversation and policy circles, there is a tendency to assume that food comes from farms and that food and agriculture are essentially one and the same. But the reality has changed. In rich countries – and increasingly in poor countries – food is now better understood as an output of the manufacturing sector and the services sector.

Chocolate manufacturing in Japan; Photo: cegoh, Pixabay

Not too many decades ago, the global food system was dominated by small scale and highly seasonal agricultural production, primarily serving local markets. Today, an industrialized food system has emerged in which farm-based production – ‘pure agriculture’ -- accounts for only a small fraction of gross spending on food in rich countries. Industrialization means food marketing systems have become more and more concentrated and monopolistic, as economies of scale and other forces for agglomeration have overcome the spatial dispersion of production and consumption. And for consumers in industrialized economies, the extraordinary variety and year-round availability of perishable foods reflects a dense and sophisticated network of highly industrialized processing and real-time distribution, linking farmers with consumers across continents.

The latest issue of the Oxford Review of Economic Policy tackles the big public policy questions associated with this transformation. At the heart of the discussion is the core question of food security and whether the contemporary food system is capable of meeting the needs of a global population that is projected to peak at over 9 billion mid-century, despite severe pressures on land and water resources are increasing. The consensus view is that it probably can, but this leads to further questions. Can public policy address the so-called ‘double burden of malnutrition’ where extreme hunger and extreme over-consumption co-exist? Can the huge problem of food waste, estimated by the UN to be as much as one third of total food produced for human consumption, be tackled? And can national and global regulatory structures protect producers and consumers against the accretion of monopoly power by large vertically integrated agro-industrial multinational enterprises? 

The papers show how the shift in economic and political power away from traditional agriculture towards the industrial component of the system has led to new challenges for the governance of global food systems – and perhaps also created new spaces for policy and regulation.  It is not yet clear what institutions and policies will be needed to govern the emerging food systems, but new sources of profits, new coalitions of interest groups, new analytic tools, and new understandings of the problems of food systems have arguably set the stage for a rich policy dialogue.

Christopher Adam and Douglas Gollin, Department of International Development, University of Oxford. Editors: OXREP Volume 30(1).

Photo of  factory automation with industrial robots for palletizing food products in Germany by KUKA Roboter GmbH, Bachmann, via Wikimedia Commons
Photo of chocolate factory in Japan by cegoh, Pixabay.

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