Agribusiness and Global Macroeconomic Factors
The world has a total land area of about 130 million square kilometers and this territory determines many of planet Earth’s capabilities to sustain life. From cities and farms to water sources and forests, the world’s total land area is a major social, economic, and political factor. Today, the majority of the global population is urban as opposed to rural. However, this is only a recent development. Back in 1960, little over 66% of the global population lived in a rural setting, whereas less than 46% do so today. Technically, the global transition from a mostly rural to a mostly urban population is very recent as it dates back to 2007 and 2008. Nevertheless, there are dozens of countries, mainly in developing regions, where the population is still mostly rural, such is the case of Pakistan, Senegal, and Egypt. Due to rapid demographic growth, the overall population of the world’s rural areas has also increased from 2 billion people back in 1960 to 3.4 billion rural dwellers in 2016.
Agribusiness and Global Macroeconomic Factors
Meanwhile, another macroeconomic factor that has evolved throughout the last half century is the percentage of land devoted to agriculture worldwide. Back in 1961, some 36% of the world’s land was devoted to agricultural production. This percentage peaked in 1991, when 39.5% of the world’s land was devoted to agriculture, and then decreased to 37.5% in 2014. Simultaneously, the amount of arable land as a percentage of the world’s total land area has increased from 9.7% in 1961 to almost 11% in 2014. However, as the global population continues to increase rapidly, the amount of arable land available per capita has decreased substantially. Back in 1961, the world had little under 0.4 hectares of arable land per person, which had decreased to less than 0.2 hectares by 2014.
Conversely, as technology has evolved, agricultural yields have increased. Back in 1961, the global average for annual cereal production was 1,421 kilograms per hectare, which had increased to more than 3,900 kilograms per hectare by 2014. In terms of cereals, the land devoted to cereals production worldwide has gone from 521.6 million hectares back in 1961 to 721.4 million hectares in 2014. Another trend that has marked the last several decades is that of an accelerated deforestation. Back in 1990, almost 32% of the world’s total land area was forested, but this amount had decreased to less than 31% by 2015. In terms of territory worldwide, this represents a decrease from approximately 41.3 million square kilometers of forests in 1990 to less than 40 million square kilometers of forests in 2015.
In the specific case of Russia, which is the largest country in the world, it has a total territory of some 17 million square kilometers, which equates to more than 10% of the global land area. Likewise, the country has a total population of little over 142 million citizens, more than 74% of which live in an urban setting. Lastly, Russia devotes 13% of its territory to agricultural production, while another 49% is forested.
(Read more about Traditional Market Cycles and Agribusiness)