foreseeing the future: food security in 2025

Foreseeing the future Food Security in 2025

Center for Economic Research Tashkent, 2013

Uzbekistan’s approach to Food Security 1991-2013

Starting position in 1991: - Uzbekistan – a net importer of basic foods; - National agriculture heavily specialized in

cotton-growing; - Hard currency revenues and reserves

insufficient to close gap by imports; - Importance to strike a delicate balance to

achieve a number of development goals Food Security – one of the Priority issues for Government Government takes a pro-active role in the food policy regulation process

Policies employed: -Restructuring of the agricultural output mix; -Institutional reforms in agriculture; - Welfare improvement policies (price controls, social assistance to the target groups;) -National nutrition policy.

30% 53%

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Flour fortification Salt iodization

Covered Not covered

National nutrition policy: flour fortification & salt iodization

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1991 1995 2000 2005 2010 2011 2012

Grapes

Fruit andberries

Melons andwatermelons

Vegetables

Potatoes

Cotton

Grain

Restructuring of the agricultural output mix: structure of the sown area by types of crops(%)

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1995

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Rura

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Private farms Dekhkan farms Agricultural enterprises

Institutional reforms in agriculture: Structure of rural enterprises by categories, %

Structure of agriculture

Cotton

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GDP structure,

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Structure of trade

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1995200020052006200720082009201020112012

Welfare improvement policy: GDP per capita and poverty rate

GDP per capita(2000=100)Poverty rate, %

Starting position in 1991

Выступающий

Заметки для презентации

In 1991 Uzbekistan was a net importer of wheat and some other essential food items. After being abruptly disconnected from traditional suppliers, the nation did not have immediately available alternative sources of food – the national agriculture was heavily specialized in cotton growing, and hard currency revenues and reserves were insufficient to close the gap by imports at world market prices. In addition, Uzbekistan had to strike a delicate balance between several at times conflicting objectives – steeply increasing its own food production; finding a new place in the global economy; generating investment resources for industry and infrastructure development; maintaining safety nets for the growing population; and last but not least, gradually implementing marked reforms and supporting the nascent private sector. For these reasons, food security issues were among the priority ones for the government of Uzbekistan. In order to keep the optimum balance and achieve a number of objectives Government has taken a pro-active role in the food policy regulation process. The effective policies employed to ensure the nation’s food security include: Restructuring of the agricultural output mix and massive investments in modern agricultural technologies. The wheat cropping area was expanded, that is a major correction of the Soviet period distortion in allocation of arable lands when cotton was the dominant crop. The sown area for a number of other crops also increased. Institutional reforms in agriculture: administrative control combined with a number of private solutions (e. g. transfer to households of the smaller plots of land); creation of private farms and reduction of the scope of public procurement over the rural economy; a number of farm size optimization campaigns to improve the productivity of farms. Welfare improvement policy to ensure the access to food: robust economic growth supplemented by price controls and provision of support to vulnerable families, government programs for target groups (e.g. providing adequate nutrition to young children and babies). National nutrition policy: measures on prevention of micronutrient deficiency through food fortification, salt iodization, supplementation of food with vitamin A.

Uzbekistan’s Food Policy: Main Achievements

Achievements:

• Grain independence as well as the self-sufficiency in basic foods is attained;

• Steep rise in crop yield and output of meat, eggs, potatoes, fruit & vegetables;

• Improved access to the basic foods;

• Improved quality of nutrition, decline in child mortality and improvement in anthropometric indicators;

• Uzbekistan’s Food Policy proved its effectiveness and averted the threats to the nation’s food security;

• Elements of Uzbekistan’s Food policy are now widely recognized and considered as internationally accepted best practices

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1990 2012

Consumption of basic foods 1990 VS 2012 (kg/ year)

60708090

100110120130140

1992199419961998200020022004200620082010

Uzbekistan Low income countriesWorld Central Asia

Gross per capita food production index: Uzbekistan VS Other economies

(base 2004-2006)

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1995 2012

Crop yield : 1995 VS 2012

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Production of basic foods, ton per capita (left)Share of food products in total imports, %

Per capita production of basic foods VS food imports (1995-2012)

34,6 26 18,9 14,2 10,9 10,6

65,3

32,2 33,1 29,2 21 21,4

010203040506070

1990 1995 2000 2005 2010 2012

Infant mortality (per 1000 live births))

Maternal mortality (per 100 000 live births)

Maternal and infant mortality (1990-2012)



Main achievements of the policies having been pursued: By late 1990s Uzbekistan has achieved wheat self-sufficiency – imports as the share of domestic wheat consumption dropped from over 80% at the outset of independence to less than 5% ten years later. Self-sufficiency has been accomplished for most other food groups as well. Wheat harvest increased six-fold. Milk and meat harvest grew even faster. Average yield per hectare of fruits and vegetables grew by resp. 30 and 50%. As a result, access to food improved, consumption of basic foods increased significantly. Improved nutrition contributed to the decline in child mortality, and significant improvement of antropometric indicators. Uzbekistan’s food policy proved its effectiveness and averted the threats to the nation’s food security. A number of key elements of Uzbekistan’s food security strategy, such as targeted support of young children and women at the time of pregnancy, distribution of assets to households, integration of food security programs with the national healthcare system are now considered as internationally accepted best practices. One of the success factors of the strategy has been its ability to adapt to changing conditions and respond to new tasks and challenges in pragmatic pursuit of national interests. Presently is the time for yet another reassessment and adjustment of Uzbekistan’s approach to food security to properly reflect the changes in internal and external conditions and meet more demanding and ambitious economic development and welfare improvement targets.

How to sustain the achieved results: Main challenges

• Current and expected trends in the global and national economy are posing new challenges for sustaining nation’s food security in the long term:

• Population growth and change in the demographic pattern + growth of personal income transformations of the lifestyle and behavioral stereotypes increased demand for food and transformed food consumption pattern

• Aggravating problems of deteriorating land quality and diminishing water supply (due to the climatic and geopolitical factors)

• Rise of world food prices growing demand for food in the third world countries + limited food supply due to the climate factor and expanding biofuel production

• To cope with the new challenges more comprehensive and complex approaches, methods and policy instruments need to be implemented

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Index of land quality against GDP per capita (1993-2012)

Index of land quality

GDP per cap (th. USD)

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Expected longevity (right)Birth rate

Demographic trends: population, natality, expected longevity

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Population (thous.p.), rightShare of population above 60Share of population above 80Average age

Transformation of the demographic pattern: Ageing

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GDP per capita (USD)

Growth of personal income: GDP and cash income per capita

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Projections of price indexes for selected food categories

1990-92=100

2009 2015 2020



A number of current and expected trends in the global and national economy are posing new challenges for sustaining nation’s food security in the long term. For the one thing, expected changes in the demographic pattern, growth of personal income and related transformations of the lifestyle and behavioral stereotypes will eventually lead to the substantial increase in demand for food products and transform people’s food consumption pattern. 3. For another, there will be challenges associated with the expected rise of world food prices due to the growing demand for food in the third world countries and the deteriorating food supply because of the expanding biofuel production. This fundamental changes need to be reflected in the “next generation” food security programs. 4. Therefore, in order to ensure the nation’s food security in the long term more complex and comprehensive approaches and policies need to be implemented.

Complex approach to the Food Security: 3 key dimensions

Food Security

Balanced and high-quality

nutrition

Food Availability

Access to food

• Food Security should be considered as an integrated concept incorporating 3 key dimensions

• The principal benchmarks of food policy should be determined in the three key areas:

Goal 1 – to ensure the availability of the required amount of food;

Goal 2 – to ensure the access to the essential foods for all the strata of the population;

Goal 3 – to maintain a balanced and high-quality nutrition in order to improve the nation’s gene pool.



1. To cope with the new challenges food security concept needs to incorporate multiple dimensions. 2. Food security should be considered as an integrated issue incorporating triad of requirements: 1) food availability; 2) access to food; and 3) balanced and high-quality nutrition. 3. The principal benchmarks of food policy should be determined in this three key areas.

Goal 1: Food Availability

• Projections of food production and consumption in 2025 inertial development pattern will lead to the deficit of food and will not ensure the availability of the required amount of food

Scenarios to cover the deficit: • Scenario 1 – sustaining a balance between the consumption and

production of food by: • boosting productivity and crop yield; • expanding the sown area.

• Scenario 2 – focus on production of foods in which Uzbekistan has a comparative advantage

• Reallocate 42 thous. ha from grain to fruit and 60 th. ha from cotton to vegetables;

• Increase crop yield of fruit twice, of vegetables – by 1,6 times.

Difference between amount of supply and demand,

thousand tons

Crop yield, centners/hectar

e Crop areas, thousand

hectares

2012 2025 2012 2025 Grain -1542.5 42.4 55.00 1472.3 1500 Vegetables -1650 300 440 162.8 195.5 Fruits -400.4 100 160 244.3 269.3

Cotton Feed crops

Change in crop areas, thousand hectares -311 311 Change in production, thousand tons -839.7 11,184 Production costs, million USD -327.6 103.8 Additional costs for meat and milk production, million USD 1,730.1 Change in cotton export revenue, million USD -416.5 Potential benefits from decreased imports of meat and milk, million USD 3,909.2 Total gain, million USD 1,331

Demand,

thousand tons Production, thousand tons Shortfall, thousand tons

Feed 15,614 4,430 11,184

Veget. VS Cotton Fruit VS Wheat

Change in crop areas, thousand hectares 60.0 -60.0 42.00 -42,00

Increase in crop yield, centners/hectare 180.0 1.2 100.0 2,4

Change in production, thousand tons 5,810.4 -11.94 3,283.0 165.19

Change in production costs, billion UZS 1,154. 4 -59. 8 149.1 -26.5

Change in export revenue (import costs), million USD. 2,232.2 -256.4 4,866.8 -57.2

Additional investments, million USD 728.363 1,576. 7

Change in employment 125.81 -28.2 37.7 -1.68 Total gain, million USD 1,384.2 3,398.2 Additional jobs created, thousands 97.6 36

Scenario 1. Sustaining a balance between food production and consumption

Projections on supply and demand for forage crops

Scenario 2. Focus on production of crops with the comparative advantage

Consumption, production and deficit of food in 2025 (consumption =100%)



The first goal is to ensure the availability of the sufficient amount of food. To develop policy recommendations to achieve this goal the projections of demand and supply of food products in the long term have been estimated. Diagram 1 shows the expected deficits by types of food. To cover the deficits and ensure the availability of food in the long term 2 scenarios are considered. First scenario is aimed at sustaining a balance between food production and consumption. Implementation of this scenario will require to find an optimum combination of expansion of the sown area and boosting the crop productivity to cover the deficit. The second scenario shifts the focus to increasing the production of foodstuffs, in which Uzbekistan has a comparative advantage. Implementation of this scenario will contribute much to the expansion of food exports. This requires: 1)reduction of crop areas for grain by 42,000 hectares on drylands and use of these lands for fruit production; 2)reduction of crop areas for cotton on low-yield lands by 60,000 hectares and use of these lands for vegetable production.

Goal 1: Food Availability: Recommendations to implement the scenarios

Effective implementation of either of the scenarios will require to: 1) Improve the water management and water use system to produce the required amounts

of food:

2) Introduce advanced agro-technologies to raise the crop yield and livestock productivity

3) Step up research and development in agriculture to create more efficient local varieties of plants and breeds of animals and improve the quality of animal-husbandry technologies (90 mln. USD) 4) Expand and improve the quality of the veterinary services: in 2025 30,3 thousand veterinary personnel need to be present within the sector. (Now - 8,3 thousand specialists (27% of the required level))

Drip irrigation is applied for 1,012 mln ha

Investments of 4554 mln USD are required

30% less fertilizers are needed to grow crops

Production costs decrease Productivity and total revenue increase by 40%

Land laser levelling

technology is introduced

Reduction of mechanisation costs by 14%

Reduction of labor costs by 23%

Decrease of water use by 30%

Rise of productivity by 4 centners per ha

Profitability increase by 22% in a year and by 37% in 2

years



The successful implementation of either of the scenarios will require to: Improve the water management and water use system to produce the required amounts of food Introduce advanced agro-technologies to raise the crop yield and livestock productivity 3) Step up research and development in agriculture to create more efficient local varieties of plants and breeds of animals and improve the quality of animal-husbandry technologies 4) Expand and improve the quality of the veterinary services

Goal 2: Food Accessibility 1) Reformation of the agrarian institutions and optimization of the farm size by expanding the animal

farms to 1000 heads of livestock, vegetable-growing farms - to 85 ha, fruit-growing farms - to 40 ha.

2) Create an efficient system of procurements, distribution, processing and sales of agricultural food products

a) Establish an efficient cold storage system for fresh and processed foods

b) Develop an efficient system of food processing c) Develop the efficient sales, marketing and distribution system - Reformation of institutions in agriculture will require the shift from bazaar trade to the grocery store and supermarket trade to minimize transaction, transportation and administrative costs and ensure food safety - By 2025, 70% of retail food sales should take place in stores and supermarkets (now – 37%) 430 additional supermarkets need to be built by 2025

Size of animal farms is expanded to 1000 heads

Extra investments of 929,6 mln USD required

Due to the economies of scale productivity of farms

increase by 35%

If the additional amount of meat is exported extra

revenue will be 2,25 bln. USD

Ensure 5,8 cubic meters of cold

storage facilities in 2025

30% decrease in losses due to the

ineffective storage

Additional investment of 1,4 bln USD required

Total benefit of the nation = +2,095

bln. USD

Multiplier effect for other sectors

2,4 bln. USD

Access to food provided throughout all the seasons, seasonal volatility of food

prices is smoothed

In 2025 Uzbekistan needs to become an

upper middle income country

Transformation of lifestyle, behavioral

stereotypes, structure and mode

of nutrition

Annual benefits of 600 mln USD

67275 jobs generated

Share of processing should increase: - for meat from 6,9% to 30% - For milk – from 11% to 50%

- For fruit and veg. – from 13,3% to 30% - For grapes – from 15% to 35%

Additional investment of 4,3 bln USD required



To achieve the second goal of food security and ensure the access to essential foods for all strata of the population it is important to: Reform the agrarian institutions and optimize the farm size Create an efficient system of procurements, distribution, processing and sales of agricultural food products.

Goal 3: Balanced nutrition and Quality of Food

1) Balanced and high-quality nutrition is essential to improve the nation’s gene pool

2) If the balanced and high-quality diet is provided:

- Health expenditures will decline by 1,68 bln. USD by 2025;

- Benefits from improvement of the quality of human capital will account for 1,36 bln. USD;

3) Instruments to achieve these results are: - Implementation of programs to improve

the nutrition of pregnant women, breast-feeding mothers and children under 5 (1,14 bln USD);

- Introduction of dietary standards and guidelines according to the ISO-2000 (257,8 mln USD);

- Raising public awareness and dissemination of the information on healthy lifestyle and appropriate nutrition.

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Consumption per capita: actual consumption against norms, 2025 =100%

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Developing economies Developed economies Uzbekistan

Consumption levels of the various food groups: Uzbekistan VS Other economies (kg per cap)



The third goal of food security is focused on maintaining balanced and high-quality nutrition in order to improve the nation’s gene pool. Improvement of nutrition requires that dietary guidelines be optimized. Providing a high-quality diet will significantly improve health indicators. In addition, benefits will be obtained from the improvement of the quality of human capital. For example, an improvement in children’s health through better nutrition will help improve academic performance and later ensure higher labor productivity, thus contributing to economic growth. A reduction of child and infant mortality will also help to expand the working-age population in future thus contributing to the nation’s GDP. The value of these benefits is estimated at USD 1.36 billion a year.

Focus on the regional context is important!

1) Regional context should be taken into account while developing the National Food policies;

2) Production, consumption and deficit of food products in other economies of the region are estimated

Opportunities for the regional cooperation: • Exports of fruit to Russia, Kazakhstan, Tajikistan

• Exports of vegetables to Kyrgyzstan & Tajikistan

• Imports of vegetable oil from Kazakhstan & Russia

• Imports of grain from Kazakhstan Processing of grain in Uzbekistan consumption on the domestic market + exports to Afghanistan

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Production Deficit

Expected consumption in 2025

Uzbekistan: Consumption, production and deficit of food in 2025 (Scenario 2)

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Production Deficit


Russia: Consumption, production and deficit of food in 2025

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Production Deficit


Kazakhstan: Consumption, production and deficit of food in 2025

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Grain Meat Milk Vegetables FruitProduction Deficit

Tajikistan: Consumption, production and deficit of food in 2025


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Production Deficit


Kyrgyzstan: Consumption, production and deficit of food in 2025



Regional context should be taken into account while developing the National Food policies For this purpose, the estimations on food consumption, production and deficit have been conducted for 5 economies of the region. The results of estimations show the opportunities for the effective cooperation within the region (not only in trade but also in food processing).

Findings

• The complex multidimensional approach to food security needs to be implemented;

• There is a need for multi-optional scenarios and estimations;

• Forecasting methods should go beyond the extrapolation, but rather take into account the transformative processes in all spheres;

• Food Security Strategy needs to be integrated into the broader framework of the country development strategy;

• The regional development context is important to develop the National Food Security Strategy.

Questions for discussion

• Are there any dimensions, critical issues which were

omitted, should get considered in more detail?

• What approaches, methods and indicators need to be revised?

• What’s next? How can we jump to formulating the detailed Action Plan and Road Map? Suggested formats and models.

• Are there windows for synergies?

Thank you!

Resources in English: http://www.cer.uz http://transformation.cer.uz/ https://www.facebook.com/CER.Uzbekistan

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foreseeing the future: food security in 2025

Food

food production index

future food security

limited food supply

leftshare of food products

selected food categories1990

improvement policy

policy instruments

foodfood security