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Global Food Security Challenges and Opportunities: the new role of agriculture

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Global Food Security Challenges and Opportunities, USAID Agriculture Course, Washington DC, June 6, 2011

Global Food Security Challenges and Opportunities, USAID Agriculture Course, Washington DC, June 6, 2011

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  • In Asia, self-reported food insecurity declined sharply in 2007/08, especially in China and India and more modestly in Indonesia before rising again in 2009. This is consistent with the fact that food inflation was modest in all three countries whilst economic growth was rapid. Self-reported food insecurity is estimated from the World Gallup Poll on whether a household has experienced difficulties affording food over the previous 12 months. The Gallup Poll was conducted over the period 2005-2010 and it covered almost 90 percent of the developing world population. While such data may not be ideal, it offers a useful barometer for gauging the welfare impacts of the global food crisis.
  • The Bangladesh study examined two components of the Vulnerable Group Development (VGD) program: (1) Income-Generating VGD (IGVGD) and (2) Food Security VGD (FSVGD). Both target poor women. IGVGD has a built-in mechanism to provide credit and training on income-generating activities in agriculture; The FSVGD program provides a combination of food and cash to program participants.
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    • 1. Global Food Security Challenges and opportunities:The New Role of Agriculture
      Shenggen FanDirector General
      International Food Policy Research Institute
      USAID Agriculture Core Course, Washington, DC, June 6, 2011
    • 2. Key messages
      Global food security challenges remain large and complex
      A comprehensive strategy is needed to address challenges, harness opportunities, and protect poor people
      The new role of agriculture, especially small-scale farming, must be leveraged for achieving broad development outcomes
    • 3. Global food security challenges remain large and complex
    • 4. Challenges to global food security include
      Food price volatility
      Energy/Biofuels
      Population growth and demographic changes
      Land and water constraints
      Climate change
      Conflicts
    • 5. Global food price hikes and volatility
      Global hikes since June 2010
      Maize: 100%
      Wheat: 98%
      Source: Data from FAO 2011
    • 6. Domestic prices are also rising rapidly
      Retail prices in China, national average
      Wholesale prices in Ethiopia, Addis Ababa
      Retail prices in Vietnam, Dong Thap
      Retail prices in Indonesia, national average
      Source: Data from FAO 2011
    • 7. High and volatile food prices affect food security, but outcomes vary
      Self-reported food insecurity in select countries
      Source: Headey 2011
    • 8. Stronger link between oil and food prices influence food security
      Rising oil prices make biofuels more profitable, and agricultural production more expensive
      Correlation between oil and food prices have increased overtime (correlation coefficient 0.93 since 2000)
      Source: Data from IMF 2011
      Note: Oil = Average crude oil price of U.K. Brent, Dubai, and West Texas Intermediate
    • 9. Rapidly growing population and demographic change
      World population reaches 9 billion by 2050
      All growth to come from urban areas
      Most growth to come from developing countries
      Source: FAO 2009
      Larger and more urban population will demand more and better food
    • 10. Climate change will affect average crop yields
      NCAR A2a
      Source: Nelson et al. 2009.
    • 11. Conflicts affect food security and development
      Incidence ratio of undernourishment, poverty and other ills for fragile, recovering, and non-fragile developing countries
      Source: World Bank 2011
    • 12. A comprehensive strategy is needed to address challenges, harness opportunities, and protect poor people
    • 13. Actions needed to reduce food price volatility and protect the poor
    • 14. Invest in productive social safety nets
      Bangladesh Vulnerable Group Development program
      Increased per capita food consumption by 45-66 kcal per taka transfer (Ahmed et al. 2009)
      Ethiopia Productive Safety Nets Program (PSNP)
      With access to both safety nets and agric. support, beneficiaries are more food secure and productive (Gilligan, Hoddinott, and Taffesse 2009)
      Nigeria Fadama II Development Project
      Increased the value of individual productive assets by about 50% (Nkonya et al. 2008)
    • 15. Establish global and regional strategic grain reserves
      Global emergency reserve:
      created with grain donations from large food exporters and producers, e.g. US, France, China, India
      located also in poor food importing countries, e.g. Horn of Africa
      owned and managed by an institution such as WFP
      Some regional initiatives are emerging e.g. Asean+3 Emergency Rice Reserve, Sahel and West Africa Regional Food Stocks (RESOGEST) etc.
      Properly managed reserves can address food crises, but operating costs must be low and challenges must be overcome
    • 16. Support transparent, fair, and open global trade
      Eliminate harmful trade restrictions and prevent new ones to:
      increase market efficiency
      reduce price fluctuations
      Potential costs of a failed Doha Round could be high (Bouet and Laborde 2009):
      • 11.5% loss of developing country exports
      • 17. US$353 billion loss in world welfare
      Quick completion of the Doha Round is crucial
    • 18. Promote smallholder productivity
      Invest in agricultural R&D and infrastructure
      Agricultural research and new technologies tailored to smallholders
      Access to high-quality seeds and fertilizer
      Rural infrastructure (electricity and feeder roads in particular)
      Promote innovations for smallholders
      Financial services e.g. community banking
      Risk-management mechanisms e.g. weather-based index insurance
      Institutional arrangements e.g. producer cooperatives
    • 19. The new role of agriculture, especially small-scale farming, must be leveraged
    • 20. Agric-led growth is still important for poverty reduction…
      Poverty-growth elasticities
      Source: Diao et al. 2010
    • 21. …agric-led growth is still important for hunger reduction
      Poverty-growth and calorie-growth elasticities, Tanzania (2000-07)
      Source: Pauw and Thurlow 2010
    • 22. …but a new role of agriculture is emerging
      Smallholder agriculture can, especially, be leveraged for:
      • improving nutrition and health
      • 23. promoting climate change adaptation and mitigation
      • 24. building conflict resilience
      • 25. narrowing gender gaps
    • Improving nutrition and health
      Improved productivity and competitiveness of small farmers can lead to:
      • more nutritious, less expensive food, and increased incomes
      • 26. improved nutritional content of main staple foods
      • 27. production of more diverse foods of higher nutritional content
      • 28. improved agricultural practices to decrease the risks of agriculture-associated diseases
    • Promoting climate change adaptation and mitigation
      By 2030 the cost of adaptation has been projected to be US$40 - 170 billion (UNFCC, 2007)
      Adaptation-driven actions can have positive mitigation consequences -> residue returned to fields to improve water-holding capacity also sequester carbon
      Mitigation potential in agriculture is estimated to be worth US$32 - 420 billion* (IFPRI, 2009)
      Mitigation-driven actions in agriculture can have positive adaptation consequences -> carbon sequestration projects with positive drought preparedness aspects
      * at carbon prices between US$20 and US$100 (t CO2-eq.-1)
    • 29. Building conflict resilience
      Agriculture, especially small-scale farming, is the largest source of jobs in many conflict-prone countries (World Bank, 2011)
      Agriculture has the potential to reduce the main causes of conflict e.g.poverty, underemployment, and inequalities in natural resources (Collier et al. 2003)
      Agriculture can help to re-establish livelihoods and build resilience in conflict-prone countries (World Bank, 2011)
    • 30. Narrowing gender gaps
      Women make up a majority of small farmers
      Lower productivity persists in female-owned plots and female-headed households (Peterman et al. 2010)
      If women had the same access to productive resources as men (FAO 2011)
      -> total agricultural output could increase by 2.5 to 4%
      -> global number of undernourished people could reduce by 12 to 17%
    • 31. Investments and policies must leverage the new role of smallholder agriculture for development