Food Policy in Disarray

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IFPRI Policy Seminar "Food Policy in Disarray: The Challenges & Priorities" by Per Pinstrup-Andersen, 21 November 2011

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Food Policy in Disarray

  1. 1. Food Policy in Disarray: The Challenges and Priorities Per Pinstrup-AndersenInternational Food Policy Research Institute November 21, 2011
  2. 2. Understanding and Improving Food Policy What?
  3. 3. Understanding and Improving Food Policy What? How?
  4. 4. Understanding and Improving Food Policy What? How? Who (Pol. Econ.)?
  5. 5. Understanding and Improving Food Policy What? How? Who (Pol. Econ.)? A comprehensive systems approach
  6. 6. Understanding and Improving Food Policy What? How? Who (Pol. Econ.)? A comprehensive systems approach Multisectoral/multidisciplinary
  7. 7. Understanding and Improving Food Policy What? How? Who (Pol. Econ.)? A comprehensive systems approach Multisectoral/multidisciplinary A dynamic behavioral food system
  8. 8. A Dynamic Behavioral Food System Change in behavior of:  ConsumersFood System  Producers Food System(Time period 1) (Time period 2)  Market agents  Government  Resource owners  NGOs Incentives Regulations Knowledge
  9. 9. Five Food Crises1. International food price increase and volatility
  10. 10. Five Food Crises1. International food price increase and volatility2. Starvation in the Horn of Eastern Africa
  11. 11. Five Food Crises1. International food price increase and volatility2. Starvation in the Horn of Eastern Africa3. Hunger, nutrient deficiencies and death among millions of children
  12. 12. Five Food Crises1. International food price increase and volatility2. Starvation in the Horn of Eastern Africa3. Hunger, nutrient deficiencies and death among millions of children4. Overweight, obesity, chronic diseases and death among millions of children and adults
  13. 13. Five Food Crises1. International food price increase and volatility2. Starvation in the Horn of Eastern Africa3. Hunger, nutrient deficiencies and death among millions of children4. Overweight, obesity, chronic diseases and death among millions of children and adults5. The earth’s future productive capacity
  14. 14. The Unholy Trinity and the Jokers The Trinity: Governments News Media Speculators The Jokers: The Weather Energy prices
  15. 15. Real Food Price Index 1961-2000Source: FAO
  16. 16. Behavior of Government, News Media and Speculators Little policy action Little media attention (except 1995-96) No speculator interest
  17. 17. FAO Food Price IndexJanuary 2000-January 2007 Source: FAO
  18. 18. Behavior of Government, News Media, and Speculators (1) Neither governments, nor the media, got the message
  19. 19. Behavior of Government, News Media, and Speculators (1) Neither governments, nor the media, got the message Export restrictions towards the end
  20. 20. Behavior of Government, News Media, and Speculators (1) Neither governments, nor the media, got the message Export restrictions towards the end Extreme weather events
  21. 21. Volatility in Weather Patterns IrregularDrought Flooding Rainfall Strong Winds Patterns Production Volatility
  22. 22. Production VolatilitySupply Responses SpeculationGovernment Policy Government PoliciesMarket Information Energy Prices Demand Changes Price Volatility
  23. 23. FAO Food Price IndexJanuary 2007-July 2008 Source: FAO
  24. 24. Behavior of Government, News Media, and Speculators (2) Short-term government interventions
  25. 25. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers
  26. 26. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs
  27. 27. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up
  28. 28. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations
  29. 29. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response
  30. 30. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response Food riots
  31. 31. Behavior of Government, News Media, and Speculators (2) Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response Food riots Moral hazards
  32. 32. FAO Food Price IndexJune 2008 – June 2009 Source: FAO
  33. 33. Behavior of Government, News Media, and Speculators (3) Silence Delayed media response
  34. 34. FAO Food Price Index October 2010-October 2011 (2002-2004 =- 100) Food Price Index 250 240 230 220 210 200 Food Price Index 190 180 Oct-10 Jan-11 Apr-11 Oct-11 Jul-11Source: FAO, www.fao.org/worldfoodsiutation/wfs-home/foodpricesindex/en
  35. 35. Behavior of Government, News Media and Speculators Renewed apocalypse talk by media Nervous speculators Confusion among governments Waiting for the next extreme weather event
  36. 36. What are the Most Important Policy Challenges?
  37. 37. A Focus on the Smallholder? Source: World Economic Forum, Realizing a New Vision for Agriculture: A roadmap for Stakeholders, 2010.
  38. 38. What are the Most Important Policy Challenges (1)? Outside the farm
  39. 39. Why Outside the Farm? Low total supply elasticity (old story)
  40. 40. Why Outside the Farm? Low total supply elasticity (old story) Large yield gaps (old story)
  41. 41. Why Outside the Farm? Low total supply elasticity (old story) Large yield gaps (old story) Successful farm-focused project (reduced yield gaps, increased incomes)  Sasakawa, One Acre Fund, Millennium Villages, etc.  Underutilized potential gains from existing technology  Temporal removal of external constraints  Gains not sustainable when project exits
  42. 42. Why Outside the Farm? (Cont.) Demand constraints?
  43. 43. Why Outside the Farm? (Cont.) Demand constraints? Large post harvest losses
  44. 44. Why Outside the Farm? (Cont.) Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest activities
  45. 45. Why Outside the Farm? (Cont.) Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest activities Insufficient research allocated to the post harvest portion of the food system
  46. 46. Why Outside the Farm? (Cont.) Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest activities Insufficient research allocated to the post harvest portion of the food system Adverse trade policies
  47. 47. What are the Most Important Policy Challenges (1)? Outside the farm Specific policy interventions context specific  Likely to include:  Infrastructure investments  Institutional innovation  Input and output market development  Pre- and post harvest focused research  Facilitation of small-scale agri-business
  48. 48. What are the Most Important Policy Challenges (2)? Sustainable intensification
  49. 49. Environmental Kuznets Curve
  50. 50. What are the Most Important Policy Challenges (2)? Sustainable intensification  Multiple wins
  51. 51. Hypothetical Relationships BetweenIncome and Deforestation/Soil Mining
  52. 52. What are the Most Important Policy Challenges (2)? Sustainable intensification  Multiple wins  Full costing (natural resources and climate change)
  53. 53. Hypothetical Relationships BetweenIncome and Deforestation/Soil Mining
  54. 54. What are the Most Important Policy Challenges (2)? Sustainable intensification  Multiple wins  Full costing (natural resources and climate change)  International institutional innovation
  55. 55. What are the Most Important Policy Challenges (2)? Sustainable intensification  Multiple wins  Full costing (natural resources and climate change)  International institutional innovation Achieving nutrition and health goals through the food system  Identifying pathways, win-wins and trade-offs  Pursuing diversity in production and consumption
  56. 56. What are the Most Important Policy Challenges (2)? (Cont.) Strengthening international institutions  Concentration, competition and anti-trust rules  Land grabbing  Enhancing price transmission  Clarifying and enforcing trade rules
  57. 57. What are the Most Important Policy Challenges (2)? (Cont.) Strengthening international institutions  Concentration, competition and anti-trust rules  Land grabbing  Enhancing price transmission  Clarifying and enforcing trade rules Learning to live with food price volatility
  58. 58. Maize Weekly Price Minus 12-Month Moving Average100 80 60 40 20 0-20-40-60-80
  59. 59. Rice Weekly Price Minus 12-Month Moving Average350300250200150100 50 0 -50-100-150
  60. 60. Wheat Weekly Price Minus 12-Month Moving Average150100 50 0 -50-100 1998 1999 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
  61. 61. What are the Most Important Policy Challenges (2)? Strengthening international institutions  Concentration, competition and anti-trust rules  Land grabbing  Enhancing price transmission  Clarifying and enforcing trade rules Learning to live with food price volatility Learning to live with higher real food prices?
  62. 62. What are the Most Important Policy Challenges (2)? Strengthening international institutions  Concentration, competition and anti-trust rules  Land grabbing  Enhancing price transmission  Clarifying and enforcing trade rules Learning to live with food price volatility Learning to live with higher real food prices? Projections or predictions?
  63. 63. World Price Increases for Selected Crops Under Various Scenarios, 2010-2050 (Percent Change from 2010) Source: IFPRI, Food Security and Climate Change, 2010, http://www.ifpri.org/sites/default/files/publications/ib66.pdf
  64. 64. Real Food Price Changes Predicted Over the Next 20 Years (%)200180160140120100 2030 Baseline 80 2030 Climate Change 60 40 20 0 Livestock Wheat Paddy Rice Maize Source: Growing a Better Future: Food Justice in a Resource-Constrained World, 2011, Oxfam
  65. 65. Real Food Prices Need Not Increase Moral hazard
  66. 66. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps
  67. 67. Reducing Yield Gaps Removing off-farm constraints  Infrastructure  Institutions
  68. 68. Reducing Yield Gaps Removing off-farm constraints  Infrastructure  Institutions Risk management
  69. 69. Reducing Yield Gaps Removing off-farm constraints  Infrastructure  Institutions Risk management Property rights
  70. 70. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups
  71. 71. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production
  72. 72. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses
  73. 73. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency
  74. 74. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs
  75. 75. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs End biofuel mandates and subsidies
  76. 76. Real Food Prices Need Not Increase Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs End biofuel mandates and subsidies Take appropriate policy action
  77. 77. RhetoricDeclarationsPlans ActionTargets

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