Rising role of china in global food security

Click to edit Master title styleShenggen Fan, March 2012

Click to edit Master title styleKey messages China’s food security is increasingly linked to global food security Challenges and opportunities influence global and China’s food security Policies, investments and technologies are needed to enhance both global and China’s food security Shenggen Fan, March 2012

Click to edit Master title styleChina’s food security is increasinglylinked to global food securityShenggen Fan, March 2012

Global food insecurity remains a seriousClick to edit Master title styleconcern… 26 countries have alarming / extremely alarming levels of hunger (2011 GHI) GHI components: •Proportion of undernourished •Prevalence of underweight in children •Under-five mortality rate Source: von Grebmer et al. 2011 Shenggen Fan, March 2012

…micronutrient deficiencies remainClick to edit Master title stylepervasive Iron deficiency anemia • Africa and South Asia have the highest prevalence • In some parts of India, 90% of girls suffer from this deficiency Vitamin A deficiency • 163 mil. are vitamin A deficient in developing countries • 44.4% of children in South Asia suffer from this deficiency Iodine deficiency • 1.7 bil. people worldwide are affected by iodine deficiency, and 1.3 bil. of them are in Asia Source: UNSCN 6th Report and Bharati et al. 2009Shenggen Fan, March 2012

…and 1.3edit Master title styleClick to billion people remain poor % of population below $1.25 Number of people (millions) a day in 2005 PPP below $1.25 a day in 2005 PPP EAP ECA LAC 1,00070 MENA SA SSA 90060 800 70050 60040 50030 40020 300 20010 100 0 0 1990 1993 1996 1999 2002 2005 2008 1990 1993 1996 1999 2002 2005 2008 Source: World Bank 2012 Shenggen Fan, March 2012

China: many remain poor and hungryClick to edit Master title styledespite rapid progress Poverty headcount ratio at $1.25 Prevalence of a day (PPP) undernourishment (% of population) 2008 (% of population) 2006-08 10% 13% 170 million 130 million Chinese people live below Chinese people are the poverty line undernourished Source: FAO 2012; World Bank 2012 Shenggen Fan, March 2012

China’s weather events increasingly linked Click to edit Master title styleto global food price trends International food prices (US$) 2006-12 2011 Yangtze River 800 Maize basin summer Wheat drought Rice 600 • affected global US$/metric ton rice production 400 2008, 2011 Winter Northern China 200 • affected global wheat production 0 and prices Jul-09 Nov-07 Dec-09 Jan-07 Jun-07 Jan-12 Apr-08 Oct-10 Sep-08 Aug-11 Feb-09 Mar-11 May-10 Source: FAO 2012 Shenggen Fan, March 2012

China is growingly vulnerable to high food Click to edit Master title styleinflation January 2012 CPI China’s retail prices (100 = 01/2011) (Nat’l average – kg) 6 2009-12 Fruits 5.5 Rice Wheat flourVegetables 5 Eggs 4.5 Meat 4 Grain 3.5 Food 3 0 50 100 150 Source: National Bureau of Source: FAO GIEWS 2012 Shenggen Fan, March 2012 Statistics China 2012

Hunger, malnutrition, and poverty areClick to edit Master title stylestrongly interrelated Source: FAO 2008 Shenggen Fan, March 2012

China plays a large role in global foodClick to edit Master title style security  Large producer of food  Large consumer of food  Large trader of foodShenggen Fan, March 2012

Click to edit Master title style

China: Large share in global foodClick to edit Master title styleconsumption 60 China’s share of global food consumption 2007 50 40Percent share (%) 30 20 10 0 Source: FAO 2012 Shenggen Fan, March 2012

China: to edit Master title styleClick Big player in global food trade China’s food and agriculture raw China’s share of selected materials exports 2000-10 global imports 2010-11 30 60 Developing 25 52 Developed 50 20US$ billions 40 Share (%) 15 30 10 20 5 10 6 4 2 0 0 Maize Oilcrops Rice Wheat Source: UNCTAD 2011 Source: FAO 2011 Shenggen Fan, March 2012

Click to edit Master title styleLong-term trends are affecting globaland China’s food securityShenggen Fan, March 2012

Challenges Master title styleClick to edit  Population growth and shifting demographics  Strong economic growth and diet changes  Natural resource constraints  Climate change  Rising rural labor shortage / costsShenggen Fan, March 2012

Population growth and demographicClick to edit Master title stylechanges Population growth, 1960-2050 Rural vs. urban population growth, 1950-2030 Source: CropLife International 2010 Larger and more urban population will demand Source: CropLife International 2010 more and better foodShenggen Fan, March 2012

Shifting demographics in ChinaClick to edit Master title style China growing urban population China growing middle class 1970-2010 2009-2030 100% 90% Cumulative percent of population 80% 70% 60% Rural 50% 40% 30% 20% 10% Urban 0% Annual income (2005 PPP$, log scale) Source: World Bank 2012 Source: OECD 2010 51% of China’s population lives in urban areas Shenggen Fan, March 2012

Strong to edit Master title styleClick economic growth and diet changes16 GDP growth 2000-2010 (%) China food consumption changes (%) 1997-200714 China 14 milk12 World 12 fruits and vegetables10 10 eggs 8 meat 6 8 cereals 4 6 starchy roots 2 0 4-2 2-4 0 -2 Source: World Bank 2012 Shenggen Fan, March 2012

Click to edit Master title styleGrowing natural resource scarcities Global loss of annual net primary productivity, 1981-2003 Source: Bai et al. 2007 (LADA, FAO/ISRIC) Source: Cordell et al. 2009 Physical and economic water scarcity With “business as usual,” high water stress by 2050 puts at risk globally: • 52% of population • 49% of grain production • 45% of GDPShenggen Fan, March 2012 Source: IWMI 2007 Source: Veolia Water and IFPRI 2011

Click environmental stresses in ChinaHigh to edit Master title style Environmental degradation in Environmental protection lags China’s grain production behind 2012 Environmental Performance Index rank = 116th out of 132 countries Double burden of air and water pollution harm wellbeing and growth • Total cost of air and water pollution = 5.8% of GDP Source: You, Spoor, Ulimwengu 2010Shenggen Fan, March 2012

Climateto edit Master title style Click change impact on crop yields Rainfed Wheat Rainfed Rice Source: IFPRI 2011 Shenggen Fan, March 2012

Rising to edit Master title styleClick rural labor shortage /costs Nominal minimum wage in China, 2009-10 Source: Manufacturers Alliance MAPS 2010 Higher labor costs in China = higher costs of production Shenggen Fan, March 2012

OpportunitiesClick to edit Master title style Growing role of emerging countries including China Emerging role of the private sector Mutual learning of development experiences Increasing south-south cooperation Shenggen Fan, March 2012

China: to edit Master title styleClick Increasing role in global FDI China’s Inward and outward FDI, US$ billions 700 Inward  Provides cushion for 600 developing countries Outward 500 during recent crisisUS$ billions 400  Often promote 300 technologies and 200 business practices more suitable for 100 developing country 0 markets Source: UNCTAD 2012 Shenggen Fan, March 2012

China: to edit Mastersouth-south tradeClick Growing role in title style SSA exports to China SSA imports from China (US$ thousands) (US$ thousands)3,500 1,600 Agriculture Agriculture raw 1,400 material3,000 raw material 1,200 Food2,500 Food 1,0002,000 8001,500 6001,000 400 500 200 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: UNCTAD 2011 Shenggen Fan, March 2012

China:to edit Master title styleClick Evidence of effective reforms Gradual external openness and liberalization (1994-2001) Services Market-led agricultural Manufacture marketing reforms (1985- 93) Improving smallholder Agriculture farmers’ incentives for production (1978-84) Source: Gulati and Fan 2007 Shenggen Fan, March 2012

Green to edit Master title styleClick Revolution successes Agriculture-led growth in China Source: IFPRI 2008 Green Revolution - Investments in Agriculture R&D - Development of High Yield Varieties Shenggen Fan, March 2012

Emergingedit Master title styleClick to role of the private sector  Motivated by push and pull factors → profit generation + favorable reputation • agribusinesses i.e. pig slaughter houses in China that give piglets to small farmers for yard fattening  Private-public partnerships • joint initiative between PepsiCo and the Chinese Ministry of Agriculture on irrigation, fertilizer and crop management techniques  Potential to improve food security by providing effective investment, unique expertise, and innovation at greater scale Shenggen Fan, March 2012

Increasing south-south cooperation (1) Click to edit Master title style China’s aid features agriculture since 1950s • Since 1960, 44 African countries have hosted Chinese agriculture aid projects Source: BangoBang • More than 10,000 Chinese technical experts have served in Africa Active China and FAO south-south cooperation program • More than 4,000 Africans trained on Source: IFPRI.org agriculture between 2003-08 Source: Brautigam 2011 Shenggen Fan, March 2012

Increasing south-south cooperation (2) Click to edit Master title styleChina-Africa AgriculturalDemonstration Centers Led by China National Agricultural Development Corporation Source: GSR.org In partnership with countries CAAS and BMGF and private sector Green Super Rice Ministry of Commerce announced a total of 20 centers would be opened Source: Brautigam 2011 Source: GSR.org Shenggen Fan, March 2012

Click to edit Master title style Policies, investments, and technologies are needed to enhance both global and China’s food securityShenggen Fan, March 2012

1. Improve China’s and global foodClick to edit Master title stylesecurity  Improve agricultural productivity • increase agricultural R&D • promote access to productive assets, inputs, & services • enhance nutritional value of food crops Promote climate-smart agriculture • adaptation/mitigation/productivity “triple wins” • exploit GHG reduction potential of agriculture • integrate smallholders into carbon trading markets Provide market incentives • Improve infrastructure and information technologies • Support new institutional arrangements for vertical coordination Shenggen Fan, March 2012

2. Promote mutually beneficial tradeClick to edit Master title style  Eliminate harmful trade China-Africa trade restrictions  Prevent resource exploitation and subsequent Dutch- disease effects on agricultural sector  Develop capacity of developing countries to export Source: Renaissance Capital and Afrographique.tumblr.com more agricultural and value- added products Shenggen Fan, March 2012

3. Increase pro-poor FDI styleClick to edit Master title Increase focus of FDI on: • Agricultural and rural development • Diversified and higher value-added sectors • Linking producers with markets, e.g. rural infrastructure New approaches for (public-private) partnerships Promote corporate social responsibility that reflects challenges and issues facing emerging/developing countriesShenggen Fan, March 2012

Click to edit Master title style4. Support mutual learning of experiences Diverse development experiences of emerging countries more accurately reflect current geo- economic and -political landscape Alternative to Washington Consensus and its successors • Broad-based agricultural development (China and Vietnam) • Pragmatic and evolutionary trial-and-error approach (China) Shenggen Fan, March 2012

5. Improve coordination betweenClick to edit Master title style emerging countries and other donors  “Competition is good for business”? • Major consequences on bargaining power of recipient states → alternative sources of financing  Engage emerging donors in dialogue at multilateral, regional, and sectoral levels • Promote inclusive process with emerging donors on setting common standards in aid system • Share key experiences on what has and has not worked • Use existing and new institutional structuresShenggen Fan, March 2012

6. Promoting positive role of ChinaClick to edit Master title styleEngagement with developing countries Fair competition Stronger linkages with domestic markets Greater engagement of the local workforce Adoption of higher environmental standards Greater transparency and cooperation with other donors in aid delivery Shenggen Fan, March 2012

6. Promoting positive role of ChinaClick to edit Master title style Diversify trade towards agriculture Increase FDI in agriculture Build up the agricultural research and extension systems in developing countries Continue investment in infrastructure and policy- making capacityShenggen Fan, March 2012

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Rising role of china in global food security

by Shenggen Fan on Apr 02, 2012

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