Farm incomes set to rise over next decade – but volatility puts gains at risk

Paris/Rome - Global average gross agricultural income per worker is projected to increase by 9 percent by 2035, driven by productivity gains and broadly stable agricultural prices, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD).

However, this outlook remains vulnerable to market volatility caused by crises and conflicts. The report estimates that if the frequency of shocks observed in recent years continues, there is a 25 percent probability that agricultural incomes in 2035 will be lower than current levels. Short term risks are also significant, as recent energy price hikes and resulting reductions in fertiliser use are likely to affect agricultural production in 2027. While high-income countries will likely be able to absorb these shocks, low-income countries face deteriorating food security.

The OECD-FAO Agricultural Outlook 2026-2035 provides a global baseline reference for medium-term prospects for agricultural and fisheries markets at national, regional and global levels. Under stable conditions, global agricultural and fisheries production is projected to expand by 13 percent over the next ten years, driven mainly by productivity improvements and production intensification, with growth concentrated in Asia, Sub-Saharan Africa and Latin America.

However, the Outlook also highlights the potential negative impacts of adverse shocks, even if they are temporary. If the 33 percent average surge in energy prices observed in the first half of 2026 were to continue in the second half of the year, global grain production would decline by 0.9 percent in 2027 and more sharply, by 1.7 percent, in low-income countries. Associated income losses and higher food prices would also force households in lower-income countries to reduce food consumption and shift towards cheaper food items.

"Our agrifood systems are under pressure, and our farmers are on the front line of rising energy and fertiliser costs," OECD Secretary-General Mathias Cormann said. "Their resilience is our food security. Protecting it means better support to weather shocks, sustained investment in productivity, and open, well-functioning global markets."

"To sustain productivity growth in agrifood systems, we must strengthen their resilience. Resilience is not about surviving the last shock; it is about preparing for the next one," said FAO Director-General QU Dongyu. "By investing today in diversified trade corridors, regional reserves of critical agricultural inputs, resilient infrastructure, and a more diversified energy mix across agrifood systems that reduces dependence on oil, we can transform vulnerability into preparedness and ensure that temporary disruptions do not become food security crises."

Under stable conditions where productivity gains are expected to account for most production growth, some expansion in crop areas and livestock numbers will still be necessary. As a result, direct greenhouse gas emissions from agriculture are projected to increase by 6.5 percent over the next decade. Livestock are expected to account for around 77 percent of this increase, reflecting growing animal herds, while synthetic fertilisers are estimated to contribute a further 23 percent through higher nitrous oxide emissions by 2035.

Projected productivity improvements are expected to exert downward pressure on real agricultural commodity prices. While this may benefit consumers, it could create significant challenges for smallholder farmers, who are more vulnerable to market volatility and often have limited capacity to adopt the technologies needed to increase productivity. Governments should therefore support productivity growth while also improving farmers' access to markets and providing locally tailored support programmes.

Consumers in lower middle-income countries are expected to further diversify their diets, particularly through higher consumption of livestock products as living standards rise, while low-income countries, particularly in Sub-Saharan Africa, are projected to continue lagging behind other regions in food security and nutrition. At the same time, excessive food consumption is expected to persist in wealthier countries. Southeast Asia is projected to account for 39 percent of global consumption growth by 2035, driven by population growth and rising per capita demand.

Multilateral cooperation and rules-based international agricultural trade remain vital to strengthening global food security, supporting more diverse diets, and helping stabilise farm incomes.

Main takeaways
-- Global cereal (grain) production is projected to increase steadily, reaching a record 3.22 billion tonnes by 2035. This growth will be driven mainly by yield improvements of 0.9 percent annually, while the land area under cereal cultivation is expected to expand by just 0.1 percent annually, less than half the rate recorded during the previous decade.
-- By 2035, 40 percent of all cereals are projected to be consumed directly by humans, while 34 percent will be used for animal feed. Food use will continue to dominate wheat and rice utilization, while maize is primarily a feed grain.
-- Global demand for biofuels is projected to grow by 1.4 percent annually over the next decade, driven mainly by Brazil, India and Indonesia. Growth in most high-income countries is expected to slow, as policy incentives weaken and electric vehicle adoption accelerates.
-- Sub-Saharan Africa will account for a rising share of global agricultural production over the next decade, contributing about 16 percent of additional global agricultural production in value terms by 2035, up from 11 percent in the previous decade. However, much of the region will remain vulnerable to food insecurity and external shocks. The Asia Pacific region is projected to account for 58 percent of additional global agricultural output by 2035, with India alone contributing 26 percent of the increase. This growth will be driven in large part by a rapidly expanding dairy herd and rising milk yields.
-- In high-income countries, meat consumption growth is projected to slow markedly, with consumers increasingly shifting from beef toward poultry amid high prices, health concerns and environmental pressures.
-- Global fisheries and aquaculture production is projected to increase by 11 percent by 2035, with aquaculture continuing to drive growth and accounting for 56 percent of total production, up from 53 percent today. Asia is projected to remain the engine of global seafood demand and supply growth, although expansion in China - the world's largest aquaculture producer - is expected to moderate.