Overcoming the World Food and
  Agriculture Crisis through
  Policy Change and Science
            Joachim von Braun
     ...
Overview

       1. The food and financial crises

       2. India’s agri-food policy

       3. The role of innovations

...
Globalization of agriculture and food
                                       systems




                       Definition...
Broad patterns of consensus on
                                innovations
      1. Technological innovations in agricultu...
Food price spike, 2007-08

                 800                                   Price spike                       125
  ...
Food driving up overall inflation
             Bangladesh                                            6    India, wholesale...
India State Hunger Index (ISHI) by severity

                                           - 12 of 17 states:
               ...
High levels of hunger
                                       (2008 GHI vs. 1990 GHI)
                   40             Und...
Food protests and food prices

                     800                      Maize                                        ...
Recession scenarios with and without
                   agric. investment action
                                       No...
Low agricultural productivity growth in
                   developing countries
                 Annual total factor produ...
Output response forthcoming, but not from
               low-income countries
      Growth of cereal output in 2007-08:
  ...
Recent initiatives for Foreign Direct
              Investment in agriculture (G-2-G)




                                ...
Overview

       1. The food and financial crises

       2. India’s agri-food policy

       3. The role of innovations

...
Quick and comprehensive response to
                        food crisis

      • Increased investment in agric. and social...
Areas for attention

      • Grain stocks at 35 mil. tons (10 mil. above
        norm) and increasing
         - Release s...
Can small farm agriculture mitigate the
                    economic recession?
    Hectares                 Average farm ...
Overview

       1. The food and financial crises

       2. India’s agri-food policy

       3. The role of innovations

...
What innovations?

      • Organizations incl. in agricultural research,
           extension, education, input supplies, ...
Roles of institutions in strengthening
                          food markets
      1. Reduce transaction costs

      2. ...
Examples of institutional innovations

      • Public-private partnerships
      • Farm cooperatives
      • Contract farm...
Overview

       1. The food and financial crises

       2. India’s agri-food policy

       3. The role of innovations

...
Priorities for action

       1. Promote pro-poor agriculture growth
       2. Facilitate open trade and reduce market
   ...
1.a Actions for agricultural productivity

        • Access to finance
              (e.g. rural banks and micro-finance)
...
1.b For long-term agric. growth
                        Double agric. R&D to impact poverty

                             ...
2. Reduce food market volatility

   •        An internationally held emergency reserve

   •        International coordin...
3. Support pro-poor food and nutrition
                         interventions
     Protective actions e.g.:
        • Cash...
Policy, technology and institutional change

      • Policy failure: no sufficient focus on
        R&D and no strategy fo...
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Overcoming the World Food and Agriculture Crisis through Policy Change and Science

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Trust for Advancement of Agricultural Sciences,
4th Foundation Day Lecture
New Delhi, March 6, 2009

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Overcoming the World Food and Agriculture Crisis through Policy Change and Science

  1. 1. Overcoming the World Food and Agriculture Crisis through Policy Change and Science Joachim von Braun International Food Policy Research Institute Trust for Advancement of Agricultural Sciences, 4th Foundation Day Lecture New Delhi, March 6, 2009
  2. 2. Overview 1. The food and financial crises 2. India’s agri-food policy 3. The role of innovations 4. Needed global policy action Joachim von Braun, IFPRI, March 2009
  3. 3. Globalization of agriculture and food systems Definition: Integration across national borders of production, processing, marketing, retailing, and consumption of agriculture and food items Joachim von Braun, IFPRI, March 2009 Source: von Braun and Diaz-Bonilla 2008.
  4. 4. Broad patterns of consensus on innovations 1. Technological innovations in agriculture are critical for growth and crisis prevention 2. Science alone cannot change world food situation; institutional innovations and change must facilitate access to and use of technology 3. But lack of consensus on best design of institutional arrangements 4. Institutional innovation is lagging behind science and technology innovation Joachim von Braun, IFPRI, March 2009
  5. 5. Food price spike, 2007-08 800 Price spike 125 Corn Wheat 100 600 Rice US$/barrel US$/ton Oil (right scale) 75 400 50 200 25 0 0 Prices fell partly because of financial crisis and recession Joachim von Braun, IFPRI, March 2009 Source: Data from FAO 2009 and IMF 2009.
  6. 6. Food driving up overall inflation Bangladesh 6 India, wholesale 6 Overall Overall Food Food 3 ------- 3 --------- 0 0 -3 -3 Jan-05 Jan-06 Jan-07 Jan-08 Jan-05 Jan-06 Jan-07 Jan-08 6 Pakistan Overall 3 Food -------- 0 -3 Jan-05 Jan-06 Jan-07 Jan-08 Joachim von Braun, IFPRI, March 2009 Source: Data from government statistics.
  7. 7. India State Hunger Index (ISHI) by severity - 12 of 17 states: “alarming” - Madhya Pradesh: “extremely alarming” Joachimvon Braun, IFPRI, March 2009 2008 Joachim von Braun, IFPRI, November Source: Menon et al. 2008.
  8. 8. High levels of hunger (2008 GHI vs. 1990 GHI) 40 Under-five mortality rate Proportion of undernourished Proportion of undernourished 30 20 10 0 GHI GHI GHI GHI GHI GHI 1990 2008 1990 2008 1990 2008 Sub-Saharan Africa South Asia India India ranks 66th out of 88 countries in the GHI Joachim von Braun, IFPRI, March 2009 Source: von Grebmer et al. 2008.
  9. 9. Food protests and food prices 800 Maize 25 700 Wheat Rice 20 600 Riots (right) 500 # of riots 15 US$/ton 400 300 10 200 5 100 0 0 Jul-07 Jul-08 Jan-08 Jun-08 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Aug-08 Sep-08 Oct-08 Apr-08 Feb-08 Mar-08 May-08 Joachim von Braun, IFPRI, March 2009 Source: J. von Braun based on data from FAO 2009 and news reports.
  10. 10. Recession scenarios with and without agric. investment action Non-recession 275 250 Maize price Same-investment (left ) 250 200 Low-investment 225 US$/ton 150 200 100 Malnourished children (right) 175 Million 50 150 0 125 2005 2010 2015 2020 16 mln more malnourished children with recession and low investment Joachim von Braun, IFPRI, March 2009 Source: von Braun, Rosegrant, IFPRI IMPACT, Oct. 2008.
  11. 11. Low agricultural productivity growth in developing countries Annual total factor productivity growth, 1992-2003 % East Asia 2.7 South Asia 1.0 East Africa 0.4 West Africa 1.6 Southern Africa 1.3 Latin America 2.7 North Africa & West Asia 1.4 All regions 2.1 Joachim von Braun, IFPRI, March 2009 Source: von Braun et al. 2008.
  12. 12. Output response forthcoming, but not from low-income countries Growth of cereal output in 2007-08: 11%: developed 0.9%: developing 1.6%: developing, excl. Brazil, China, India Plans for investment scaled down as capital becomes more scarce and expensive Joachim von Braun, IFPRI, March 2009 Source: FAO 2008.
  13. 13. Recent initiatives for Foreign Direct Investment in agriculture (G-2-G) Source: Data from GRAIN 2008. Note: Thicker lines reflect investments >100,000 ha; Joachim von Braun, IFPRI, March 2009 for some thinner lines, data on investment size is not available.
  14. 14. Overview 1. The food and financial crises 2. India’s agri-food policy 3. The role of innovations 4. Needed global policy action Joachim von Braun, IFPRI, March 2009
  15. 15. Quick and comprehensive response to food crisis • Increased investment in agric. and social protection by 24%, irrigation by 80% in 2008 • Set up National Food Security Mission, 2007 • Expanded subsidies on crude oil, fertilizers, and food • Scaled up safety net programs such as PDS and NREGS Joachim von Braun, IFPRI, March 2009
  16. 16. Areas for attention • Grain stocks at 35 mil. tons (10 mil. above norm) and increasing - Release stocks in a timely manner and consider new institutional arrangements • Rising costs of PDS and NREGS - Revise targeting mechanisms, coverage, and cost-effectiveness • Export bans and suspension of grain futures trading - Curb new protectionist trends Joachim von Braun, IFPRI, March 2009
  17. 17. Can small farm agriculture mitigate the economic recession? Hectares Average farm sizes in selected countries 3.0 2.5 2.0 1.5 1.0 0.5 0.0 19 71 19 82 20 92 3 20 92 2 3 80 90 99 19 77 20 95 -0 -0 -0 - - - - 19 19 19 19 19 70 81 91 02 89 01 02 19 India China Ethiopia Tanzania Sources: Fan and Chan-Kang 2003, FAO Agricultural World Joachim von Braun, IFPRI, March 2009 Census and Indiastat.
  18. 18. Overview 1. The food and financial crises 2. India’s agri-food policy 3. The role of innovations 4. Needed global policy action Joachim von Braun, IFPRI, March 2009
  19. 19. What innovations? • Organizations incl. in agricultural research, extension, education, input supplies, marketing, and collective action • Technologies along the whole food value chain • Institutions incl. laws, regulations, traditions, customs, beliefs, norms • Public policies for promoting agriculture Joachim von Braun, IFPRI, March 2009
  20. 20. Roles of institutions in strengthening food markets 1. Reduce transaction costs 2. Manage risk 3. Build social capital 4. Enable collective action 5. Restore missing markets Particularly important for commodities produced, bought, and sold by smallholders Joachim von Braun, IFPRI, March 2009
  21. 21. Examples of institutional innovations • Public-private partnerships • Farm cooperatives • Contract farming • Social networks for adoption of innovations All of these have been successful in specific contexts, but none is a universal solution Institutional innovations should be inclusive of smallholders and disadvantaged groups Joachim von Braun, IFPRI, March 2009
  22. 22. Overview 1. The food and financial crises 2. India’s agri-food policy 3. The role of innovations 4. Needed global policy action Joachim von Braun, IFPRI, March 2009
  23. 23. Priorities for action 1. Promote pro-poor agriculture growth 2. Facilitate open trade and reduce market volatility 3. Expand social protection and child nutrition action Action needed for all 3 Joachim von Braun, IFPRI, March 2009
  24. 24. 1.a Actions for agricultural productivity • Access to finance (e.g. rural banks and micro-finance) • Expansion of risk management (e.g. crop insurance) • Access to inputs (e.g. quality seeds, fertilizer, feed, veterinary drugs) • Access to services, extension • Investment in rural infrastructure (rural roads, electrification, water and irrigation) Joachim von Braun, IFPRI, March 2009
  25. 25. 1.b For long-term agric. growth Double agric. R&D to impact poverty R&D allocation  in # of + Agr. output (mil. 2005 $) poor (mil.) growth (% pts.) 2008* 2013 2008-2020 2008-2020 S Asia 908 3,111 -124.6 2.4 Developing World 4,975 9,951 -282.1 1.1 CGIAR investment to rise from US$0.5 to US$1.0 billion as part of this expansion Joachim von Braun, IFPRI, March 2009 Source: von Braun, Fan, et al. 2008.
  26. 26. 2. Reduce food market volatility • An internationally held emergency reserve • International coordinated grain reserves scheme (with Indian participation) • A virtual global reserve against price spikes - Institutional arrangement at int’l level with engagement of commodity exchanges - Implemented by G8+5 and other large grain exporting countries Joachim von Braun, IFPRI, March 2009 Source: von Braun and Torero 2008.
  27. 27. 3. Support pro-poor food and nutrition interventions Protective actions e.g.: • Cash transfers • Employment-based food security programs Preventive actions e.g.: • School feeding • Early childhood nutrition programs Focus on children, women, and poorest Joachim von Braun, IFPRI, March 2009
  28. 28. Policy, technology and institutional change • Policy failure: no sufficient focus on R&D and no strategy for institutional innovations • Policy neglect: isolated R&D focus and no strategy for institutional innovations • Policy for success: R&D acceleration with institutional innovations Joachim von Braun, IFPRI, March 2009

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