Farm Incomes Projected to Rise Over the Next Decade, But Global Risks Could Reverse Gains – FAO, OECD

Farm Incomes Projected to Rise Over the Next Decade, But Global Risks Could Reverse Gains – FAO, OECD

Global farm incomes are expected to improve over the next decade as advances in agricultural productivity continue to boost output, according to a new joint report by the Food and Agriculture Organization (FAO) and the Organisation for Economic Co-operation and Development (OECD). However, the report cautions that increasing market volatility, geopolitical conflicts, climate-related disruptions and rising input costs could threaten these gains, particularly for farmers in developing countries.

The OECD-FAO Agricultural Outlook 2026–2035 projects that average global gross agricultural income per worker will increase by approximately 9 percent by 2035, driven mainly by higher productivity and relatively stable agricultural commodity prices.

Despite this positive outlook, the report warns that the agricultural sector remains highly vulnerable to external shocks. Analysts estimate there is a 25 percent probability that global farm incomes in 2035 could fall below current levels if the frequency of recent crises—including conflicts, energy price spikes and supply chain disruptions—continues over the coming decade.

Productivity to Drive Global Agricultural Growth

Under normal economic conditions, global agricultural and fisheries production is forecast to expand by 13 percent over the next ten years.

The report attributes most of this growth to improved productivity rather than significant expansion in farmland. Technological innovation, improved crop varieties, better livestock management and more efficient farming systems are expected to become the primary drivers of future food production.

Growth is projected to be strongest across Asia, Sub-Saharan Africa and Latin America, where rising populations and increasing investment in agriculture are expected to stimulate production.

Energy Prices Remain a Major Threat

One of the biggest concerns highlighted in the report is the impact of rising energy costs on agricultural production.

According to the Outlook, if the sharp increase in global energy prices recorded during the first half of 2026 persists, global grain production could decline by nearly 1 percent in 2027, with low-income countries experiencing even larger reductions.

Higher fuel prices also increase the cost of fertiliser production, transportation, irrigation and farm mechanisation, forcing many farmers to reduce fertiliser application and other critical inputs.

Lower fertiliser usage could ultimately reduce crop yields and worsen food shortages, particularly in countries already struggling with food insecurity.

Low-Income Countries Face Greater Risks

While wealthier nations generally possess stronger financial systems and government support programmes that help farmers absorb economic shocks, the report notes that developing countries remain significantly more vulnerable.

Rising production costs, weaker infrastructure, limited access to finance and dependence on imported agricultural inputs leave many farmers exposed to sudden market disruptions.

The report warns that these challenges could worsen food insecurity in low-income countries if governments fail to strengthen agricultural resilience.

Climate and Sustainability Challenges Continue

Although agricultural productivity is expected to improve, expanding food production will still require modest increases in cultivated land and livestock populations.

As a result, direct greenhouse gas emissions from agriculture are projected to rise by approximately 6.5 percent by 2035.

Livestock production is expected to account for the majority of these additional emissions, while increased fertiliser use will also contribute through higher nitrous oxide emissions.

The report therefore emphasises the importance of investing in climate-smart agriculture, efficient irrigation, renewable energy and sustainable farming technologies.

Falling Commodity Prices May Challenge Small Farmers

Improved productivity is expected to place downward pressure on global agricultural commodity prices over the next decade.

While lower food prices could benefit consumers, they may create fresh challenges for smallholder farmers whose profit margins are already under pressure.

Without improvements in productivity and market access, many small-scale farmers could struggle to remain profitable.

The report recommends that governments complement productivity improvements with targeted support programmes, better extension services, improved market access and policies that help farmers manage price volatility.

Changing Global Food Consumption

The report also highlights changing food consumption patterns around the world.

As incomes rise in many lower-middle-income countries, demand for livestock products such as meat, milk and eggs is expected to increase significantly.

At the same time, consumers in wealthier countries are projected to reduce beef consumption while increasing demand for poultry, driven by health concerns, environmental awareness and relatively lower prices.

Sub-Saharan Africa is expected to contribute an increasing share of global agricultural production over the next decade. However, the region is still projected to remain highly vulnerable to food insecurity due to climate risks, weak infrastructure and limited investment.

Global Grain Production to Reach New Record

According to the report, global cereal production is expected to reach 3.22 billion tonnes by 2035.

Most of this increase will come from improved crop yields rather than expanding farmland, reflecting the growing importance of agricultural technology and modern farming practices.

The report also projects continued growth in aquaculture, with fish farming expected to account for more than half of global seafood production by 2035.

Commodity.ng Insight

The FAO-OECD Outlook reinforces a critical message for Nigeria: the future of agriculture will depend less on expanding farmland and more on improving productivity, resilience and efficiency.

Nigeria possesses enormous agricultural potential, but farmers continue to face multiple challenges, including insecurity, rising input costs, limited mechanisation, climate variability and poor rural infrastructure. These constraints make local producers particularly vulnerable to the same global shocks highlighted in the report.

For Nigeria, increasing farm incomes over the next decade will require sustained investment in mechanisation, irrigation, improved seed varieties, digital agriculture, extension services, climate-smart farming and affordable agricultural finance.

The report also serves as a reminder that food security cannot rely solely on increasing production. Protecting farmers from market volatility, improving storage and processing capacity, strengthening rural infrastructure and expanding access to local and international markets will be equally important.

Key Takeaways

• Global farm incomes are projected to rise by 9% by 2035 under stable economic conditions.
• Agricultural and fisheries production is expected to grow by 13%, driven largely by productivity improvements.
• Rising energy prices, conflicts and supply chain disruptions remain major risks to global food production.
• Smallholder farmers in developing countries face the greatest exposure to market volatility.
• Sub-Saharan Africa will increase its contribution to global agricultural output but will remain vulnerable to food insecurity without stronger investment.

Bottom Line

The next decade offers significant opportunities for global agriculture, but those opportunities will only translate into higher farmer incomes if countries build resilient agricultural systems capable of withstanding economic shocks, climate change and geopolitical disruptions. For Nigeria, investing in productivity, innovation and farmer resilience today will determine whether its agricultural sector can fully benefit from the promising global outlook.