Sunday, April 17, 2011

Which Country is the World's Largest Food Producer?

In 1890, the United States' 'non-farm' GDP surpassed 'farm' GDP for the first time. Currently in most industrialized countries GDP from agriculture accounts for less than 5% of GDP (according to the CIA World Factbook the US derives less than 2% of its GDP from agriculture). Despite its low 'ranking' in GDP methodology, agriculture forms the base of an economy on which other economic activities stand, in so far that workers cannot work if they don't have food.

It is interesting to ask which country is the world's largest food producer. There are overall two main methods to show which country is the world's largest producer of food. First, by food production by total calorie content (one could say this is a way to judge if the country has sufficient resources to feed its population) and second, by monetary value of the food categories produced. Interestingly, the monetary value appears to get more attention from statisticians and economists -- actually the author is unaware of calculations showing total calorie production by country by food category.

Below in Figure 1 this information is presented -- utilizing USDA production numbers across grain, protein, dairy and selected fruit categories and then taking the average calorie content per ton per food item.

Source: author's calculations, USDA for production, NutritionData for calorie Content, total calories in 1000's Note a limitation of the above chart is that it does not account for all food categories, such as marine food, nuts, oats and other grains and vegetables.

According to calculations presented in Figure 1, China is clearly the world's largest producer of food by calories. The largest percentage of calories produced in China came from rice at 34% of the total (China accounts for approximately 26% of world production of rice), and wheat at 32% of the total. India, in second place, narrowly beating the total calorie production of the US, derives 37% of its total from rice. The United States is slightly behind India, but ahead of the EU-27 -- the US is unusual due to its relatively large production of corn -- 39% of total calories are produced from corn across the major grain, meat, dairy and fruit categories in the US.

One would expect countries which comparative advantages in land, sun and water to be the food's largest agricultural producers, according to economic theory from Ricardo and Heckscher-Ohlin's theories. However, necessity appears to play an equally important (if not more important role). China and India with the world's two largest populations of citizens, requires high food production for domestic food self-sufficiency. Further, labor also may play a high role in certain crops, such as rice and fruit, which are highly labor intensive.

Taking into account the value in monetary terms, China also appears to be the world's largest agricultural producer, although more narrowly beating out the US. India falls to the bottom of the 5 countries surveyed by monetary value of food produced. The US is a relatively larger producer of protein -- beef, pork and poultry account for 9% of all calories produced in the US (although note that China is a much larger producer of pork than the US, with more than 4x the production of pork in 2010). Meat tends to sell for a significantly higher price than grains. India produces a relatively low level of meat, with poultry, beef and pork only accounting for approximately 2% of the total calories consumed in India in 2010.

Source: author's calculations, USDA, Moneycnn for commodity price data

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