Food Security in the 21st Century: Actions for Better Governance, Market Functioning, and Investment in Public Goods

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Chatham House conference
London, October 6-7, 2008

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Food Security in the 21st Century: Actions for Better Governance, Market Functioning, and Investment in Public Goods

  1. 1. Food Security in the 21 st Century: Actions for Better Governance, Market Functioning, and Investment in Public Goods Joachim von Braun Director General International Food Policy Research Institute Chatham House conference London, October 6-7, 2008
  2. 2. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  3. 3. The short - and long-term challenges for food security in the 21st century 1. Poverty and malnutrition 2. Income and population growth 3. Productivity and limited resource base (land and water) 4. Energy and biofuels 5. Climate change Joachim von Braun, IFPRI, October 2008
  4. 4. Looking beneath the $1 a day line (2004) Poor ($.75 cents – $1) 485 million people Medial poor ($.50 cents – $.75 cents) 323 million people Ultra poor (less than $.50 cents) 162 million people Joachim von Braun, IFPRI, October 2008 Source: Ahmed et al. 2007.
  5. 5. The ultra poor concentrated in SSA ECA ECA 0.4 mln MENA LAC MENA LAC ECA 1. 1 mln MENA LAC 3 mln 0.2 mln 19 mln 3.3 mln 16 . 6 mln 0 . 9 mln 11.5 mln EAP SSA 8.8 mln EAP 87.0 EAP SSA 109.3 mln 5 1 mln 9 0 . 2 mln SA mln 19.7 mln SA SA SSA 263.6 16 2 . 9 mln 121 mln mln People living on People living on People living on $0.75-$1 a day: $0.50-$0.75 a day: <$0.50 a day: 485 million 323 million 162 million Joachim von Braun, IFPRI, October 2008 Source: Ahmed et al. 2007.
  6. 6. Slow progress in hunger reduction Most 1990 recent* Proportion of undernourished (%) 18.4 17.0 Underweight in children (%) 28.4 22.5 Under-five mortality rate (%) 9.2 7.1 *Undernourishment: 2007 Underweight: most recent year in 2001-2006 Mortality: 2006 Joachim von Braun, IFPRI, October 2008 Sources: FAO 2006 and 2008, UNICEF 2006, WHO 2008.
  7. 7. Performance in hunger index and income Trends in the GHI and GNI per capita (1981, 1992, 1997, 2003) 50 40 Ethiopia 30 GHI India 20 Ghana 10 China Brazil 0 0 2,000 4,000 6,000 8,000 Joachim von Braun, IFPRI, October 2008 GNI per capita Source: Wiesmann, IFPRI.
  8. 8. Increasing agricultural demand • Income growth (2005-07 per annum) - 9% in Asia, 6% in Africa - 2% in industrialized countries - slowed down in 2008 • Grains use in ethanol tripled from 2004 to 2008 • Since 2000, global grain use for: Food 5%, feed 8% Industrial purposes 38% Joachim von Braun, IFPRI, October 2008 Sources: IMF 2008; IGC 2008; FAO 2008.
  9. 9. Increasing competition for land In the past 12 months land prices in: • Brazil 16% • Poland 31% • UK 47% • Midwest USA 15% Joachim von Braun, IFPRI, October 2008
  10. 10. Increasing water scarcity • 1.1 billion people do not have access to safe water • Large growth in water demand for agriculture expected in coming decades • Persistent water shortages in arid and semi- arid regions • 10% of world’s diseases could be prevented with improved water supply, sanitation, hygiene, resource management Joachim von Braun, IFPRI, October 2008 Sources: World Bank 2008, Prüss-Üstün et al. 2008.
  11. 11. Declining productivity growth 6 maize Average annual growth rate (%) 5 rice wheat 4 3 2 1 0 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 Joachim von Braun, IFPRI, October 2008 Source: World Development Report 2008.
  12. 12. 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 NAWA 1.4 AVERAGE 2.1 Joachim von Braun, IFPRI, October 2008 Source: von Braun et al. 2008.
  13. 13. Further threats from climate change Climate change impact on agric. production, factoring in carbon fertilization (%) Joachim von Braun, IFPRI, October 2008 Source: Cline 2007.
  14. 14. Biofuels: Fundamental change in world food price determination Energy prices now strongly affect not just agric. input prices, but also output prices via grain and oil seed based biofuel competition Elastic energy demand creates price bands for agricultural commodities Increased biofuel demand in 2000-07 contributed to 30% of weighted average increase of global grain prices Joachim von Braun, IFPRI, October 2008
  15. 15. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  16. 16. Government effectiveness 2007 & food protests Joachim von Braun, IFPRI, October 2008 Source: Kaufmann, Kraay, and Mastruzzi 2008.
  17. 17. Number of food protests by type and gov. effectiveness [As of Aug. 2008] 18 Violent 15 Non-violent 12 8 9 2 3 9 6 11 8 8 9 3 0 0 -25th 25-50th 50-75th 75-100th From low to high Source: Protests – news reports; Joachim von Braun, IFPRI, October 2008 Gov. effectiveness classification – Kaufmann et al. 2008.
  18. 18. Food security policy tradeoffs Energy security Political security risks risks Food security risks + Mass protests in almost 60 countries + Inflation and macro-economic imbalances + Environmental sustainability consequences Joachim von Braun, IFPRI, October 2008
  19. 19. Food-related global public goods that must be addressed by governance architecture • Global food emergency responses • Trade and standards • Competition policy • International agricultural research • Food safety and agriculture – health links • Climate change adaptation and mitigation • Cross-boundary water • Natural resources (soils, genetic resources, etc.) Joachim von Braun, IFPRI, October 2008
  20. 20. Options for the new global governance system design 1. Improve existing institutions + umbrella structure for food and agriculture 2. Form an innovative government - to - government network 3. Expand current system to explicitly engage new players Joachim von Braun, IFPRI, October 2008
  21. 21. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  22. 22. Ad hoc trade measures add up to policy failures • Export bans/restrictions: - Reduce global market size, increase volatility, and harm import-dependent trading partners • Categories of speculators: - Governments, farmers, households, small traders - Commercial traders - Non-commercial traders In Q1 of 2008 futures & options up by 32% Joachim von Braun, IFPRI, October 2008
  23. 23. Distrust of markets leads to overseas investment in agriculture to secure supply Recent investments: • China in Kenya, Nigeria, Philippines, Russia, Sudan, Tanzania, Uganda • Egypt in Sudan • Libya in Ukraine • Saudi Arabia in Thailand; in talks with Sudan, Egypt, Ukraine, Pakistan, and Turkey • UAE in Sudan; in talks with Pakistan Joachim von Braun, IFPRI, October 2008
  24. 24. Virtual grain reserve policies needed 1. Independent emergency reserve • Supplied by major producing countries, funded by G8+5, managed by WFP 2. Virtual global reserve • Promissory resources by each participant • Guided by high-level technical commission • Intervention through futures markets Joachim von Braun, IFPRI, October 2008 Source: von Braun and Torero 2008.
  25. 25. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  26. 26. Impacts of high food prices Impacts driven by initial conditions and adjustments in labor, finance, and goods markets • A 50% increase in food prices in Bangladesh = 25% more prevalence of iron deficiency in women and children (Bouis 2008) •Other malign effects: withdrawal of girls from school, distress sale of productive assets, etc. Joachim von Braun, IFPRI, October 2008
  27. 27. Nutrition policies Priority areas: • Conditional cash transfers • Early childhood nutrition • School feeding • Employment-based food security programs Children’s nutrition is crucial for their productivity and earnings as adults Joachim von Braun, IFPRI, October 2008
  28. 28. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  29. 29. Underinvestment in agricultural R&D 250 Expenditure by the CGIAR 2005 constant USD, million 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 SSA Asia Latin America WANA Not enough resources to work at the frontiers of science (nanotech, biotech, etc.) Joachim von Braun, IFPRI, October 2008 Source: CGIAR.
  30. 30. Doubling agricultural R&D* *CGIAR investment rises from US$0.5 to US$1.0 billion Agricultural output growth, 2008-2020 (% pts.) Allocation for Allocation for poverty maximum reduction output SSA 2.8 1.1 S Asia 2.4 1.8 TOTAL (incl. other regions) 1.1 1.6 Poverty reduction (Mil.) 282 204 Joachim von Braun, IFPRI, October 2008 Source: von Braun et al. 2008.
  31. 31. “Best Bets” for Research Investments I. Food for People Goal Approach Cost Beneficiaries (Mil. US$) 1 Revitalizing yield growth 150 More than 3 Increasing in intensive cereal billion people Productivity of systems of Asia Crop and 2 Livestock Ensuring productive and 73.5 32 million people Systems resilient small-scale fisheries 3 Controlling wheat rust 37.5 2.9 billion people Reducing 4 Vulnerability to Developing vaccine for 10.5 32 million people Biotic and East Coast Fever in cattle 5 Abiotic Stresses Developing drought- 100 320 million tolerant maize for Africa people 6 Improving the Scaling up 125 672 million Nutritional biofortification people Quality of Food Joachim von Braun, IFPRI, October 2008
  32. 32. “Best Bets” for Research Investments II. Environment for People Goal Approach Cost Beneficiaries (Mil. US$) 7 Addressing Increasing carbon 45 48 million people Climate sequestration and Change improving livelihoods of forest people 8 Increasing the Conducting climate 127.5 1.2 billion people Resilience of change and adaptation Agro- research ecosystems 9 Improving Combining organic and 55 400 million Soil Fertility inorganic nutrients for people increased crop productivity 10 Increasing the Promoting sustainable 24 261 million Efficiency of groundwater use people Water Use Joachim von Braun, IFPRI, October 2008
  33. 33. “Best Bets” for Research Investments III. Innovation for People Goal Approach Cost Beneficiaries (Mil. US$) 11 Improving Genetic Enhancing 15 Global impact Resource germplasm exchange Management 12 Undertaking Improving market 10.5 45 million people Institutional information and Innovation to value chains Improve Market Access 13 Ensuring That Including women in 30 200 million Agricultural extension and people Production innovation 14 Benefits the Poor, Exploiting 75 Global impact Especially Women agriculture-health links to benefit the poor Joachim von Braun, IFPRI, October 2008
  34. 34. Overview 1. Short- and long-term challenges for food security 2. Global and national food governance architecture 3. Food market policy 4. Nutrition and social protection policy 5. Agricultural science policy 6. Priorities for action Joachim von Braun, IFPRI, October 2008
  35. 35. Overcoming the information and action gaps Objectives Activities 1. Information • Internet-based portal strengthening and • Capacity-strengthening toolbox monitoring • Facilitation of fast data collection and estimations 2. Advisory services • Assessment of impacts of high and for policy actions volatile food prices in countries • Identification of risks and vulnerabilities • and related actions 3. Closing important • Studies to strengthen actions and information gaps implementation in countries Joachim von Braun, IFPRI, October 2008 Source: Benson et al. IFPRI 2008.
  36. 36. Policies for emergency response and for resilience 1. Nutrition: Expand emergency assistance and invest in social protection 2. Productivity: Undertake 1) key fast-impact production programs and 2) scale up agric. investment and innovation 3. Trade: Re-build trust in regional and global trade, market-oriented regulation of speculation, virtual reserves 4. Energy: Change biofuel policies; invest in innovations that are pro-food and pro-climate Joachim von Braun, IFPRI, October 2008
  37. 37. High costs with high payoffs Annual incremental public agric. investment required to achieve MDG1 by 2015: • Developing countries = $14 billion • SSA = $4.8 billion (if countries fulfill commitment to invest 10% of budgets to agriculture) Joachim von Braun, IFPRI, October 2008 Source: Fan and Rosegrant 2008.
  38. 38. Implementation of actions must be sound • Country-driven and -owned programs – with prioritization and sequencing • Accountability at international and national levels: independent monitoring and assessment • New global governance architecture of agriculture, food, and nutrition needed Joachim von Braun, IFPRI, October 2008

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