INDIA could overtake China as a major driver of world economic growth within the next 50 years, the ABARE regional outlook conference in Toodyay was told last week.
India could become the fastest growing economy because China faced a serious aging problem due to its one child policy.
ABARE executive director Brian Fisher, in his commodity overview at Toodyay, said by the time China's economy began to slow India would be in a growth.
"India and China are going to drive growth really hard in the next 50 years," Mr Fisher said.
He said the US would still be a key economic driver of world economic growth in the next 30 years.
Japan also faced an aging problem and by 2050 its population would have a disproportionately higher number of older females, which might present some trade opportunities for organic vegetable juices.
"There are some important things happening in the world economy related to demographics," Mr Fisher said.
"Japan is still a very rich country, you can't write it off, but it certainly is going to have some challenges in the next 20 years."
Mr Fisher said world economic growth, or gross domestic product (GDP), was averaging 4pc and anything below that would lead to reduced demand for commodities and an easing in their prices.
"In 2006 expect to see some easing in economic growth," he said.
Mr Fisher said that in general the terms of trade for Australia had been good since the 1980s, when exports were fetching higher prices than imported goods.
He said Australian agricultural productivity growth had been 2.3pc in the past 30 years, with crops at 2.7pc, beef 1.6pc and wool 0.7pc.
"If real prices are falling more than productivity growth, incomes are going to fall," Mr Fisher said.
On average farm incomes over the longer term had been dropping in income because productivity growth had not been rising fast enough.
Mr Fisher said wool industry productivity had been unable to stop farm incomes from dropping out of bed.
This was reflected by the falling sheep flock, which had declined from 173 million in the 1980s to 98 million in 2005.
Mr Fisher did not think the growth in China and India would cause a big increase in transportation costs for Australians in regional areas, because if prices rose too high substitutes would begin to appear.
He said the world oil prices had been rising due to a shortfall in world refining facilities for light crude oil, which had been more in demand due to environmental considerations.
"There is reduced supply of light crude and reduced capacity to refine heavy crude," Mr Fisher said.
"There are a lot of product alternatives and if the price is high enough even a rooster will lay an egg."