Consumption and Consumerism in global economy - position of agriculture in global economy Doc. Ing. Luboš Smutka, Ph.D. Department of Economics Faculty of Economics and Management Office: E 376

Test for the beginning

Test for the beginning – part I Do you know the size of global economy? Specify the global GDP value: Specify the global merchandise and services trade value: Specify the number of people living around the World: Can you specify the value of global consumption?

Test for the beginning – part II Do you know the position of agricultural sector in global economy? Specify the share of agriculture in global GDP: Do you know the value of global agricultural GDP?: Specify the share of agricultural trade in global merchandise trade: Do you know the value of global trade in agricultural and foodstuff products? Do you know the share of people working in agricultural sector?

Test for the beginning – part III Do you know the share of secondary sector (industry) in global economy? Do you know the share of services sector (tertiary sector) in global economy? Global crises affected all countries around the world. The most affected countries were developed or developing countries?

Test for the beginning – part IV Do you know the country with the highest value of per capita consumption? Do you know the number of people living in developing countries? Do you know the value of global GDP per capita?

Test for the beginning – part V Do you know the share of developed countries in global economy and trade? Do you know the number of people living in developed countries? Do you know the share of the most rich 20% in global consumption? Do you know the number of people suffering by undernourishment? Do you know a difference between specific and chronicle hunger?

Correct answers

Test for the beginning – part I Do you know the size of global economy? Specify the global GDP value: 70 tril. USD Specify the global merchandise and services trade value: 22 tril. USD Specify the number of people living around the World: 7.1 bil. Can you specify the value of global consumption? 30 – 35 tril. USD

Test for the beginning – part II Specify the share of agriculture in global GDP: 3-4% Do you know the value of global agricultural GDP?: cc 3 tril. USD Specify the share of agricultural trade in global merchandise trade: 9-10% Do you know the value of global trade in agricultural and foodstuff products? tril. USD Do you know the share of people working in agricultural sector in the world? cc 30-40%

Test for the beginning – part III Do you know the share of secondary sector (industry) in global economy? (20%) Do you know the share of services sector (tertiary sector) in global economy? (70%) Global crises affected all countries around the world. The most affected countries were developed or developing countries? (developed)

Test for the beginning – part IV Do you know the country with the highest value of per capita consumption? (Luxemburg) Do you know the number of people living in developing countries? (over 5.5 bil.) Do you know the value of global GDP per capita? (cc USD)

Test for the beginning – part V Do you know the share of developed countries in global economy and trade? (70%) Do you know the number of people living in developed countries? (1.2 – 1.5 bil.) Do you know the share of the most rich 20% in global consumption? (over 75%) Do you know the number of people suffering by undernourishment? (cc 950 mil.) Do you know a difference between specific and chronicle hunger? (missing some components vs. low level of foodstuff products)

GDP = C + I + G + NX Gross domestic product Consumption Investments Government expenditures Trade

15 World GDP and Trade (millions of USD) World GDP70 tril. USD Merchandise trade 17.8 tril. USD Trade in services 4.2 tril. USD Total world trade 22 tril. USD

World GDP

GDP Distribution

GDP growth rate, US$ (UN DPAD/Link estimates)

GDP/capita

GDP per capita, annual growth rate, 2000 US$ (UN DPAD/Link estimates)

GDP/cap., USD (FAO)

GDP per capita, constant prices, US$ (UN estimates)

Consumption development trends World consumption has expanded at an unprecedented pace over the 20th century, with private and public consumption expenditures reaching over $35 trillion in 2012, twice the level of 1975 and six times that of In 1900 real consumption expenditure was barely $1.5 trillion. The benefits of this consumption have spread far and wide. More people are better fed and housed than ever before. Living standards have risen to enable hundreds of millions to enjoy housing with hot water and cold, warmth and electricity, transport to and from work-with time for leisure and sports, vacations and other activities beyond anything imagined at the start of this century.

Household consumption expenditure, PPP (const international $)

Annual Personal Consumption Expenditure in Constant 2005 International Dollars CountryTotalHealthHousingFoodApparelEducationTransport U.S. 15,8161,0686,0722, ,336 Canada 15, ,6132, ,886 Germany 14, ,6322, ,012 UK 14, ,1622, ,463 Switzerland 14, ,7883, ,764 Finland 12, ,3302, ,892 Austria 12, ,9762, ,368 Sweden 12, ,8142, ,717 France 12, ,7582, ,938 New Zealand 11, ,5511, ,967 Japan 9, ,7072, ,255 Hong Kong 9, ,0091, ,040 Korea 8, ,1172, ,476 Singapore 8, , ,941 Czech Republic 5, ,6601, Latvia 5, , Slovakia 5, , Hungary 4, ,0951, Brazil 4, , Lithuania 4, , Poland 4, ,0901, Mexico 3, Thailand 2, China 2, Philippines 2,

Problems connected with global consumption development

World population development

World historical and predicted populations (in millions) Region World ,2621,6502,5215,9788,9099,746 Oceania Northern America Latin America Europe Asia ,4023,6345,2685,561 Africa ,7662,308

Population characteristics

Population Growth

GDP/cap

Using latest figures available, in 2008, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.3% Breaking that down slightly further, the poorest 10% accounted for just 0.5% and the wealthiest 10% accounted for 59% of all the consumption –More specifically, the richest fifth: Consume 45% of all meat and fish, the poorest fifth 5% Consume 58% of total energy, the poorest fifth less than 4% Have 74% of all telephone lines, the poorest fifth 1.5% Consume 84% of all paper, the poorest fifth 1.1% Own 87% of the world’s vehicle fleet, the poorest fifth less than 1% Inequalities

Global Aid $U.S. Billions Basic education for all6 Water and sanitation for all9 Reproductive health for all women12 Basic health and nutrition13 Developing countries priorities

Developed countries priorities Global Priority $U.S. Billions Cosmetics in the United States8 Ice cream in Europe11 Perfumes in Europe and the United States12 Pet foods in Europe and the United States17 Business entertainment in Japan35 Cigarettes in Europe50 Alcoholic drinks in Europe105 Narcotics drugs in the world400 Military spending in the world780

Consumption trends in selected areas: Agricultural and foodstuff Water management Fishery Fertilizers Deforestation – wood and land supply Energy Industry – car industry case study New technologies – internet, cell phones Negative trends

Food consumption

World Agriculture

The most important commodity groups development ( )

Global agriculture - Intensification (arable and agricultural land area is limited) Available land/cap development World (in hectares) available arable land per capita available agricultural land per capita total available area per capita Agricultural production per one hectare of agricultural land Animals (head) Poultry (1000 head) Crops production (tonnes) Animal production (tonnes)

Agricultural and Food Production Development

Food production index ( = 100) Country Name Arab World Caribbean small states East Asia & Pacific (all income levels) Europe & Central Asia (all income levels) European Union OECD members Latin America & Caribbean (all income levels) Least developed countries: UN classification Middle East & North Africa (all income levels) North America OECD members Pacific island small states South Asia Sub-Saharan Africa (all income levels) World

Agricultural products consumption development

Consumption structure

Non-Food Utilization of Agricultural Production Fuels Feedings Bulding Materials etc.

Region World Developing countries Near East and North Africa Sub-Saharan Africa a Latin America and the Caribbean East Asia South Asia Industrialized countries Transition countries Global and regional per capita food consumption (kcal per capita per day)

Per capita consumption of livestock products Region Meat (kg per year)Milk (kg per year) World Developing countries Near East and North Africa Sub-Saharan Africa a Latin America and the Caribbean East Asia South Asia Industrialized countries Transition countries

World food consumption kg/cap/year

Food price development

Food Security Risk

Current Situation

Economy and Undernourishment

Fight against hunger

Basic development trends

HUNGER Chronicle Hunger (about 950 mil.) Vs. Specific Hunger (plus additional several hundreds million)

The reason of starvation Facts Vs. Myths

MYTHS Population growth The low level of production Natural disasters Limited land area

I. Economic Reasons -Liberalization -Price development -Global food market and the role of distributers -Investment Policy -Energy policy II. Political Reasons -instability - wars and internal conflicts III. Global environment problems -Climate changes -Unsustainable natural sources exploitation THE REASONS OF UNDERNURISHMENT

THE MAIN REASON OF UNDERNURISHMENT IS POVERTY -Unequal distribution of sources, incomes and wealth, -Inability to ensure the functioning infrastructure, -Low level of education and limited access to education, -Social exclusion, -Marginalization of women, old people, minorities etc.

Germany: The Melander family of Bargteheide - 2 adults, 2 teenagers Food expenditure for one week: Euros or $500.07

United States: The Revis family of North Carolina - 2 adults, 2 teenagers Food expenditure for one week: $341.98

Japan: The Ukita family of Kodaira City - 2 adults, 2 teenagers Food expenditure for one week: 37,699 Yen or $317.25

Poland: The Sobczynscy family of Konstancin-Jeziorna - 4 adults, 1 teenager Food expenditure for one week: Zlotys or $151.27

Egypt: The Ahmed family of Cairo - 7 adults, 5 kids Food expendit ure for one week: Egyptian Pounds or $68.53

Ecuador: The Ayme family of Tingo - 4 adults, 5 teenagers Food expenditure for one week: $31.55

Bhutan: The Namgay family of Shingkhey Village - 7 adults, 6 kids Food expenditure for one week: ngultrum or $5.03

Chad: The Aboubakar family of Breidjing Camp - 3 adults, 3 kids Food expenditure for one week: 685 CFA Francs or $1.23

Germany: The Melander family of Bargteheide - 2 adults, 2 teenagers Food expenditure for one week: Euros or $500.07

But main problem is sustainability and equal opportunities

Germany: The Melander family of Bargteheide - 2 adults, 2 teenagers Food expenditure for one week: Euros or $500.07

Chad: The Aboubakar family of Breidjing Camp - 3 adults, 3 kids Food expenditure for one week: 685 CFA Francs or $1.23

That is all – Thank you very much for your attention Do you have any questions?