Changing Diets in a Changing World: The Impact of Urbanisation on Agriculture

Two thirds of the world’s population is projected to live in urban areas by 2050; rising from 54% in 2014 (United Nations,2014). Coupled with economic growth, the trend for increasingly wealthy urban consumers is expected to have important implications for the pattern of food demand and consequently, agricultural production. Key differences in the diets of urban consumers relative to rural consumers imply that large-scale urbanisation will have significant impacts on the agricultural sector; through lower expenditures on staple goods and higher consumption of high value products. These consumption-side effects are coupled with production-side effects as people move from rural to urban areas impacting agricultural labour markets. We analyse the impact of projected trends in urbanisation on agriculture in China, India and Ghana for the period 2010-2030 using the MAGNET model which includes a household module based on the MyGTAP model and a nutrition module that reports the macronutrients associated with consumption. We examine the impact of urbanisation on agriculture by comparing a baseline scenario and a high urbanisation scenario. The baseline scenario follows SSP2 (“Middle of the Road”) in which urbanisation follows current trends and developing countries follow the experiences of more developed countries. The high urbanisation scenario follows higher rates of urbanisation taken from SSP 1. The preliminary results indicate that higher incomes in urban areas boost demand for food in all categories, with the largest increases seen in the higher value products. The decline in incomes in the rural area lead to a reduction in consumption across all food products with the largest reduction in staples and fruit, vegetables and other crops. The shifts in consumption and changes in the supply of labour arising from urbanisation lead to a contraction in the agricultural sector.