Emerging Issues in Developing Countries’ Food and Agriculture: Challenges for Policy and Research

Emerging Issues in Developing
Countries’ Food and Agriculture:
Challenges for Policy and
Research
Joachim von Braun
Director General
International Food Policy Research Institute

IFAD seminar
Rome, September 22, 2006

IFPRI basics
• A research center supported by the CGIAR
• Staff of 260 (ca. 80 PhDs, 70% econ.; from
about 30 countries)
• A networked institute, cooperating with all
CGIAR centers and many partners
• Decentralized (Washington, Addis Ababa and
New Delhi)
• Budget: about US$ 40 million (2006); grew from
25 to 40 mill. 2002 - 06
• Governed by a board of trustees
• 5 research divisions
Joachim von Braun, IFPRI, September 2006

IFPRI’s offices

Washington DC Beijing

New Delhi
San Jose
Addis Ababa

Hunger and malnutrition

1000 Number of hungry people in millions
950
900
Developing world
850
800
750
700 Developing world without China
650
600
550
500
1969-1971 1979-1981 1990-1992 1995-1997 2001-2003 2002-2004
provisional prelim inary
Data source: FAO 2006


Territory size based on the proportion of
underweight children that live there

Source: SASI Group (University of Sheffield) and Newman (University of Michigan) 2006


Overview

1. Big drivers of the food, health and
agriculture situation
2. Innovation in the “how-to” of cooperation
between research and development
actors
3. Priorities: Attention beyond the MDGs
and the role of agriculture and rural
change


Driving forces of the food, health and
agriculture situation

Economic
growth and
distributions

Linkages among them, and
each with different risk/opportunity profiles

The corporate world food system, 2005

Consumers
Agricultural Food
input processors Food
industry Farms and traders retailers

top 10: $37 bln Agricultural top 10: $363 bln top 10:$777bln
value added:
• Syngenta $1,315 bln • Nestle • Wal-Mart
• Bayer • Cargill • Carrefour

$4.000 billion
• BASF 450 million • Unilever • Royal Ahold
• Monsanto >100 ha: 0.5% • Metro AG
• ADM
• DuPont • Kraft Foods • Tesco
< 2 ha: 85%

Source: von Braun 2005

Transformation of small farm agriculture

• Shrinking farms
• Growing food processors
• Even more growing retailers

Rural-to-urban job exports?
Rural industrialization?
Rural urbanization?


What future for the small farms?
Fast transformation but a long run issue

Number of farms
Farm Size (ha) % of all farms
(millions)
<2 85 387
2 - 10 12 54
10 - 100 3 12.5
> 100 0.5 2
Total 100 456
The numbers still increase in Africa and diminish very slowly in Asia


Big Picture on farm, services, and industry
employment 2005 – 2020 (Billions)

Farm SI-Rural SI-Urban Total
Areas Areas
2005 0.9 0.6 1.5 3

2020 0.6 1.0 1.9 3.5

Change - 0.3 +0.4 +0.4 +0.5
2005-2020

SI refers to services and industry
Source: von Braun based on Tarantino 2005, UN World Population Prospects and ILO 2005


Disappointing progress in
WTO Doha negotiations
Little achieved in December 2005 Hong
Kong Ministerial conference
although parties agreed to
• eliminate agricultural export subsidies by
2013

• grant LDCs free access to OECD markets
for at least 97 % of ag. and manufacturing
tariff lines by 2008

A more substantial agreement still elusive
 breakdown of talks in July 2006


WTO Doha negotiations: Potential
scenarios
Developed Middle income Low-income
countries countries countries

Initial share in real world income 80 18.7 1.2

Basic scenario
Real income gain (billions of US$) 32 21.7 1

Share of real income gain (%) 58.5 39.6 1.9

Free LDC access to OECD
Real income gain (billions of US$) 38.9 23 7


Fewer sensitive/special products
Real income gain (billions of US$) 38.3 22.6 1.1


Source: Bouët 2006

Science and Technology

• Traditional technology:
Innovations at the local level in
water and crop resource use

• Innovations in less favored areas

• Innovations in molecular biology

• ICT revolution and development

Classification of favored
Access to infrastructure and Markets and less favored areas

Favored Less
High Areas Favored
Areas

Less Less
Lowa
Favored Favored
Areas Areas

High Lowb
aSocial economic constraints
bBiophysical
Agriculture potential
constraints
Source: Pender 2004

Why be concerned about
less favored areas?
 Over 1 billion inhabitants

 Problems of low agricultural productivity,
poverty, and natural resource
degradation severe and worsening

 Problems give rise to conflict, emigration
to other areas, & have negative
environmental consequences


Returns to investments in India
Impacts on agricultural production
Irrigated High potential Low potential
Investment Units areas rainfed areas rainfed areas
HYV’s Rps/ha 63 243 688
Roads Rps/km 100,598 6,451 136,173
Canal Rps/ha 938 3,310 1,434
irrigation
Private Rps/ha 1,000 -2,213 4,559
irrigation
Electrification Rps/ha -546 96 1,274
Education Rps/ha -360 571 902

Source: Fan and Hazell 1999


Returns to investments in India
Impacts on poverty reduction
Investment Units Irrigated High potential Low potential
areas rainfed areas rainfed areas
HYV’s Persons/ha 0.00 0.02 0.05
Roads Persons/km 1.57 3.50 9.51
Canal Persons/ha 0.01 0.23 0.09
irrigation
Private Persons/ha 0.01 -0.15 0.30
irrigation
Electrificati Persons/ha 0.01 0.07 0.10
on
Education Persons/ha 0.01 0.23 0.01

Source: Fan and Hazell 1999


Returns to Investments in Uganda
Impacts on agricultural production
(Ush/Us invested)
Investment Central East West North
Ag. R&D 12.49 10.77 14.74 11.77
Education 2.05 3.51 3.80 2.10
Feeder roads 6.03 8.74 9.19 4.88
Murram roads n.s. n.s. n.s. n.s.
Tarmac roads n.s. n.s. n.s. n.s.
Health 1.37 0.92 0.96 0.37

Source: Fan, et. al. 2004


Returns to investments in Uganda
Impacts on poverty reduction
(persons/million USh inv.)
Investment Central East West North

Ag. R&D 21.75 66.31 48.91 175.52

Education 3.57 21.60 12.62 31.38

Feeder roads 10.51 53.85 30.49 72.82

Murram roads 4.08 11.88 9.77 14.80

Tarmac roads 2.58 13.12 9.39 62.92

Health 2.60 6.15 3.46 5.95
Source: Fan, et. al. 2004


Climate change

• Changed perception and concern
• Largest impact on the poor
• Need for an ecosystem
perspective


Global warming
Earth temperature: 1,000–2,100 (IPCC)

Joachim von Braun, IFPRI, September 2006 Source: IPCC 2001

World food and energy prices
1995–2005
Price indices 1995= 100
350
Sugar
300 Crude oil
Maize
250
Rice
Wheat
200

150

100

50

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: World Economic Outlook, IMF, April 2006


Biofuels: Agriculture as a producer of
energy has become competitive
Net cost of Bio-ethanol production (US cents/liter)
US cents / liter
60
55
50

40
30
30 26

20 16

10

0
Brazil (cane) Thailand (cassava) United States EU (wheat) large
(maize) plant

Source: Henniges 2005 and European Commission 2005


Growth matters a lot:
hunger - income linkage
Hunger and GDP/ capita in developing countries
Undernourishme
nt (% of pop)
Log. (1990-1992)
50
Log. (2001-03)
Log. (1995-1997)
40

30

20

10

0
0 1000 2000 3000 4000 5000 6000
GDP per Capita (in constant 2000 US$)

Source: von Braun, regressions based on data from World Bank (2005) and FAO (2005)


But in some countries growth has been
accompanied by increased poverty…
Out of 30 developing countries,

 Increased poverty with growth in
12 countries: e.g. Peru, Uganda,
Pakistan

 Reduced poverty with growth in 18
countries

 Implications for social protection


Sub-Saharan Africa
Agriculture value added and GDP growth rates

Five year average of annual growth rates (in %)

1980-84 1985-89 1990-94 1995-99 2000-04

Agriculture, value
added 0.1 4.5 1.1 4.5 3.5

GDP growth 1.7 2.6 0.6 3.5 3.8

Data source: World Bank 2006


Traditional but still relevant conceptual
issues
 Agricultural and growth
linkages

 Food and nutrition
security
• Availability
• Access
• Safety


Regional income multipliers from agricultural
growth: typical magnitudes

• Asia: 1.6 – 1.9
(each additional $1 of income generated
in agriculture leads to another $ .6 to .9
of income in the local RNFE)

• Africa: 1.3 - 1.5

• Latin America: 1.4 – 1.6
Source: Haggblade, Hazell and Reardon 2005


Conceptual issues:
Newly understood complications
1. Poverty
• Pathways and dynamics of
transformations
• Poverty traps and thresholds

2. Risks and uncertainties

3. Linkages & externalities


Re 1: Pathways and dynamics of
transformations

Pathways from poverty:
• Institutional rigidities (capital
and assets) e.g. urban assets
• Transformation of small farm
agriculture


Who is affected by hunger?
Why rural/agriculture focus is so relevant

Urban poor
20%
Fishers, herders

Land less, rural Small Framers
20% 50%

Source: UN Millennium Project, Hunger Task Force, 2005


Re 2. Risks and uncertainties
General types of risks and uncertainties

Political
Economic and social

 Technological
Health
Environmental
...and their adverse combinations and links;
…and more and less man-made

Framework: severity & likelihood of
risks
Severity

High Severity Oil price
Low Likelihood High Severity shocks
High Likelihood
Avian Flu –
end of
globalization

Mass migration
away from
smallholder
farming
Low Severity Low Severity
Low Likelihood High Likelihood

Source: adapted from World Economic Forum 2006
Likelihood

Poor people themselves cope with risk
and uncertainty
Diversification
Innovation
Networks
Migration
Savings

and should be supported in these autonomous
strategies with innovation, market access,
social protection


Re 3. Linkages & externalities:
Example of agriculture & health
Expanding the value chain concept

AGRICULTURAL
Producers Agricultural Agricultural
SUPPLY CHAIN outputs
system
PROCESS/GOVERNANCE
POLICY AND POLICY

INTERMEDIARY Labor Environmental Income Access
PROCESSES

Occupa- Water- Food-
tional vector-born Nutrition borne HIV/AIDS Livestock-
HEALTH health diseases
illnesses related
OUTCOMES
illnesses


Development strategies and the role of
food and agriculture
FROM • Growth linkages between
Growth agriculture and rest of the
Linkages economy
• Political economy of food policy
• Role of agriculture “on the road
toward industrialization”
• Agricultural commercialization
TO
• Microfinance and gender
Economywide
• Public investment to reduce
Policy Analysis
poverty

Priorities for research and development
actions

Connecting new concepts to priorities for
research and development in food and
agriculture

development Experimentation
strategies


Macro framework
Building a Strategic Analysis and Knowledge System (SAKSS) to inform
the design and implementation of rural development strategies

Source: IFPRI 2005

Example: Ethiopia SAKSS

•smallholder commercialization
•ag/non-ag linkages
•price stabilization
•public investment

•development domains
•water harvesting Source: IFPRI 2005

•access to markets and space

Experiments – the how to

A new basis for cooperation of
research with development policy

Toward “experimentalism”


Experiments & evaluation design
New standards
Good quantitative evaluation design requires the
use of data collected:
• Before and after the intervention is implemented
And
• From both beneficiaries and non-beneficiaries (those
“with” and “without” the intervention

Pre-program/treatment and control groups
have to be as alike as possible


Example 1: Conditional cash transfer program
Nicaraguan Pilot Red de Protección Social
• Specific objectives of Red de Protección Social
• Supplement household income to increase expenditures on food
• Increase healthcare and nutritional status of children under age five
• Increase primary school enrollment and attendance for grades 1-4

• Targeted to six poor rural municipalities in Central
Region of Nicaragua

• Transfers made to households who then must comply
with program requirements, otherwise they do not
receive next transfer

• Size of transfer between 13-21% household
expenditures (in Phase I)

Joachim von Braun, IFPRI, September 2006 Source: Adato and Maluccio, 2005

Design of the quantitative evaluation

• Phase I evaluation based on
randomization and therefore very
powerful design

• Phase II based on matched census areas,
that appear to have been slightly better
off and had more new (health)
interventions over the period 2002-04

Source: Adato and Maluccio, 2005


RPS overall targeting

NICARAGUA
MAPA DE POBREZA EXTREMA

Honduras

Madriz

Matagalpa

Océano
Pacífico
Mar Caribe

Rangos de la Brecha de Pobreza Extrema
Pobreza Severa
Pobreza Alta
Pobreza Media
Pobreza Menor Costa Rica

Source: Adato and Maluccio, 2005

Example 2: Estimating impact of rural
electrification and ICT programs in Ethiopia
Objectives of evaluation:
• measure the impact that program has on
the welfare of the population

• investigate whether specific interventions
are more effective than others in
achieving positive outcomes.

Source: Torero, 2006


Distribution of
observations by
control and
treatment groups
• Identification of 17
substations
• Identification of the
towns that fall in the 100k
radius
• Identification of towns
that do not have access
to electricity
• Non parametric
matching to control for
any additional selection
bias as a result of the
feasibility study

Source: Torero, 2006


Innovations in finance, insurance and
social protection

 Credit for the poor (micro-finance)

 Crop insurance for farmers

 Health insurance (PPP)

 Employment programs


Combining risks and opportunities
Governance is key:
Essential elements at the national level

 Political stability and control
of corruption
 Rule of law
 Voice and accountability
 Regulatory quality
 Government effectiveness


Government effectiveness map

Green: Best quartile (over 75th percentile),
with top 10th colored in darker green
Yellow: second best quartile (over 50th)
Orange: third quartile (over 25th)
Red: fourth quartile, with bottom 10th in darker red.
Source: Kaufmann et al., 2005


Combining risks and opportunities
Public investments are key
Example from China
Returns to Number of poor
poverty reduced per 10,000
reduction from Yuan expenditure Returns to rural Average for all regions
investments in (average from all GDP from (Yuan per Yuan
regions) investments in expenditure)
Education 8.8 R&D 9.59
R&D 6.79 Roads 8.83
Roads 3.22 Education 8.68
Electricity 2.27 Telephone 6.98
Telephone 2.21
Irrigation 1.88
Irrigation 1.33
Electricity 1.28
Poverty loan 1.13

Source: Fan, Zhang and Zhang 2002

Combining risks and opportunities:
Scenarios of IMPACT Model
Progressive Policy Actions Scenario:
 New Focus on Agricultural Growth and Rural
Development

Policy Failure Scenario:
 Trade and Political Conflict, rise in protectionism
worldwide

Technology and Resource Management Failure
Scenario:
 Adverse technology/natural resource interactions

Projected world cereal yields
5,000

4,500

4,000
kg/ha

3,500

3,000

2,500 Progressive Policy Actions
Policy Failure
Technology and Resource Management Failure
2,000
1997 2015 2030 2050

Source: IFPRI IMPACT projections (February 2005 )


World Cereal Production (million mt)

Progressive Policy Actions
3,500 Policy Failure
Technology and Resource Managem ent Failure
3,000

2,500

2,000

1,500
1997 2015 2030 2050



Percentage of malnourished children

Progressive Policy Actions

35 Policy Failure
Technology and Resource Managem ent Failure
30

25

20

15

10
1997 2015 2030 2050



Summing up 1: Linking conceptual innovations to
risks and opportunities in the changed drivers of
food and agriculture
Drivers Concepts
• Consumer & corporate Poverty
driven agri-food system • Pathways and dynamics
of transformations
• Demographics • Poverty traps and
• Science & technology thresholds

• Energy and climate
Risks and uncertainties
• Disease
• Growth and Linkages & externalities
distributions


Summing up 2: goal and context specific
linking of drivers and concepts
[where strategy and where experiments?]

1. Macro policy and governance (strategy)
2. Agricultural growth promotion through rural
infrastructure, and agriculture innovation (strategy and
experiments)
3. Rural non-farm employment and small business
facilitation (strategy and experiments)
4. Targeted programs for strengthening health and
education (experiments)
5. Insurance and social protection (experiments)
Posing a challenge for complex campaigns

Summing up 3: Reaching the “other half” left
aside by MDG1 - soon after 2015

Attention beyond the MDGs with new initiatives
needed…
1. Governance strengthening (country specific)
2. Rural infrastructure and agriculture public
investment for pro-poor growth
3. Targeted programs for strengthening capabilities of
the poor
4. Insurance and social protection
Posing a challenge for more complex campaigns
around the MDGs


Priority setting criteria at IFPRI

1. Program / projects must conform to
IFPRI mission (policy solutions that
reduce hunger and malnutrition),
2. Address emerging issues
3. Dynamic comparative advantage
4. Stakeholders’ and partners’ voice

All 4 criteria together, not in isolation


15 themes


Emerging Issues in Developing Countries’ Food and Agriculture: Challenges for Policy and Research

Recomendados

Recomendados

Mais conteúdo relacionado

Destaque

Destaque (20)

Semelhante a Emerging Issues in Developing Countries’ Food and Agriculture: Challenges for Policy and Research

Semelhante a Emerging Issues in Developing Countries’ Food and Agriculture: Challenges for Policy and Research (20)

Mais de Joachim von Braun

Mais de Joachim von Braun (20)

Emerging Issues in Developing Countries’ Food and Agriculture: Challenges for Policy and Research