food security in the 21st century: actions for better governance, market functioning, and...

Food Security in the 21st Century: Actions for Better Governance, Market

Functioning, and Investment in Public Goods

Joachim von BraunDirector General

International Food Policy Research Institute

Chatham House conference

London, October 6-7, 2008

Joachim von Braun, IFPRI, October 2008

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


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


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

Source: Ahmed et al. 2007.


The ultra poor concentrated in SSA

People living on

$0.75-$1 a day:

485 million

People living on <$0.50 a day:

162 million

People living on $0.50-$0.75 a day:

323 million

SA

16 2 .9 mln

SSA

9 0 .2 mln

EAP

5 1 mln

LAC

16 .6 mln

MENA

0 .9 mln

ECA 1.1 mlnMENA

0.2 mln

ECA 0.4 mlnLAC

11.5 mln

EAP

8.8 mln

SA

19.7 mln

SSA

121 mln

LAC

19 mln

ECA

3 mlnMENA

3.3 mln

EAP

109.3

mln

SSA

87.0

mln

SA

263.6

mln

Source: Ahmed et al. 2007.


1990

Most

recent*

Proportion of undernourished (%) 18.4 17.0

Underweight in children (%) 28.4 22.5

Under-five mortality rate (%) 9.2 7.1

Slow progress in hunger reduction

Sources: FAO 2006 and 2008, UNICEF 2006, WHO 2008.

*Undernourishment: 2007

Underweight: most recent year in 2001-2006

Mortality: 2006


Performance in hunger index and income

Trends in the GHI and GNI per capita (1981, 1992, 1997, 2003)

0

10

20

30

40

50

0 2,000 4,000 6,000 8,000

GNI per capita

GH

I

Ethiopia

India

Ghana

ChinaBrazil

Source: Wiesmann, IFPRI.


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%

Sources: IMF 2008; IGC 2008; FAO 2008.


Increasing competition for land

In the past 12 months land prices in:

• Brazil 16%

• Poland 31%

• UK 47%

• Midwest USA 15%


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

Sources: World Bank 2008, Prüss-Üstün et al. 2008.


0

1

2

3

4

5

6

1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003

Avera

ge a

nnual gro

wth

rate

(%

)

maize

rice

wheat

Source: World Development Report 2008.

Declining productivity growth


Agricultural productivity growth in

developing countries

%

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

Annual total factor productivity growth, 1992-2003

Source: von Braun et al. 2008.


Further threats from climate change

Source: Cline 2007.

Climate change impact on agric. production, factoring in

carbon fertilization (%)


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


Overview


food security


architecture






Government effectiveness 2007 &

food protests

Source: Kaufmann, Kraay, and Mastruzzi 2008.


Number of food protests

by type and gov. effectiveness [As of Aug. 2008]

Source: Protests – news reports;

Gov. effectiveness classification – Kaufmann et al. 2008.

From low to high

8 8 911

8 9

32

0

3

6

9

12

15

18

0 -25th 25-50th 50-75th 75-100th

Violent

Non-violent


Food security policy tradeoffs

+ Mass protests in almost 60 countries

+ Inflation and macro-economic imbalances

+ Environmental sustainability consequences

Political security

risks

Energy security

risks

Food security

risks


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.)


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


Overview


food security


architecture






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%


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


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

Source: von Braun and Torero 2008.


Overview


food security


architecture






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.


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


Overview


food security


architecture






Underinvestment in agricultural R&D

Expenditure by the CGIAR

Source: CGIAR.

Not enough resources to work at the frontiers of

science (nanotech, biotech, etc.)

0

50

100

150

200

250

1998 1999 2000 2001 2002 2003 2004 2005 2006

2005 c

on

sta

nt

US

D,

milli

on

SSA Asia Latin America WANA


Doubling agricultural R&D*

Allocation for

poverty

reduction

Allocation for

maximum

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

*CGIAR investment rises from US$0.5 to US$1.0 billion

Source: von Braun et al. 2008.

Agricultural output growth, 2008-2020 (% pts.)


“Best Bets” for Research Investments

I. Food for People

Goal Approach Cost(Mil. US$)

Beneficiaries

1Increasing

Productivity of

Crop and

Livestock

Systems

Revitalizing yield growth

in intensive cereal

systems of Asia

150 More than 3

billion people

Ensuring productive and

resilient small-scale

fisheries

73.5 32 million people2

3

Reducing

Vulnerability to

Biotic and

Abiotic Stresses

Controlling wheat rust 37.5 2.9 billion people

Developing vaccine for

East Coast Fever in cattle

10.5 32 million people 4

5 Developing drought-

tolerant maize for Africa

100 320 million

people

6 Improving the

Nutritional

Quality of Food

Scaling up

biofortification

125 672 million

people



II. Environment for People


Beneficiaries

7 Addressing

Climate

Change

Increasing carbon

sequestration and

improving livelihoods of

forest people

45 48 million people

8 Increasing the

Resilience of

Agro-

ecosystems

Conducting climate

change and adaptation

research

127.5 1.2 billion people

9 Improving

Soil Fertility

Combining organic and

inorganic nutrients for

increased crop

productivity

55 400 million

people

10 Increasing the

Efficiency of

Water Use

Promoting sustainable

groundwater use

24 261 million

people



III. Innovation for People


Beneficiaries

11 Improving Genetic

Resource

Management

Enhancing

germplasm exchange

15 Global impact

12 Undertaking

Institutional

Innovation to

Improve Market

Access

Improving market

information and

value chains

10.5 45 million people

13 Ensuring That

Agricultural

Production

Benefits the Poor,

Especially Women

Including women in

extension and

innovation

30 200 million

people

14 Exploiting

agriculture-health

links to benefit the

poor

75 Global impact


Overview


food security


architecture






Overcoming the information and action gaps

Objectives Activities

1. Information

strengthening and

monitoring

• Internet-based portal

• Capacity-strengthening toolbox

• Facilitation of fast data collection and

estimations

2. Advisory services

for policy actions

• Assessment of impacts of high and

volatile food prices in countries

• Identification of risks and vulnerabilities

• and related actions

3. Closing important

information gaps

• Studies to strengthen actions and

implementation in countries

Source: Benson et al. IFPRI 2008.


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


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)

Source: Fan and Rosegrant 2008.


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

food security in the 21st century: actions for better governance, market functioning, and...

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