Presentation at the Cassava Value Chains Workshop CIAT, Cali, Colombia. 24-26 August 2016 Speaker: Daniel Mason-D'Croz

1. Value Chains and IMPACT
Daniel Mason-D’Croz
Cali, Colombia
August 24, 2016

2. What is IMPACT
• IMPACT is a system of linked computer simulation
models, which allows for ex ante scenario analysis of
plausible futures for the global agriculture system
• Primary Model Results:
• Yields – sources of growth, climate effects by
commodity and region
• Prices – comparing socioeconomic and climate
effects
• Total demand – comparing commodities
• Per-capita food demand – by commodity and
region
• Composition of demand – by commodity and
region
• Net trade – by commodity and region
• Food security – by region
Climate
Models
IMPACT Global
Multi-market Model
IMPACT Water
Models
Crop Models
(DSSAT)
Water
demand
trends
Outputs :
Commodity
Prices
Trade
ConsumptionProduction
Harvested
Area
Yields
Macroeconomic
Trends
Post-solution Models
Nutrition and Health
Welfare Analysis
Benefit-Cost Analysis
CGE Models
Land-use

3. What are scenarios
• Scenarios are plausible futures
• Scenarios are what-if stories used to explore future uncertainties
• Scenarios can be told in narratives, numbers, and even images
• Scenarios are not predictions of the future, but are instead focused
on system dynamics and interactions and are based on knowledge of
past and current behavior

4. Moving from the Past to the Future
Future: broad
uncertainty
ForecastingPast
Present
perspective
Future: broad
uncertainty
ScenariosPast
Present
perspective

5. Why use scenarios?
• Scenarios provide concrete ways to deal with future uncertainty
• They allow us to identify current and potential challenges and
institutional vulnerabilities
• Allow us to test and develop policies ex-ante based on our current
understanding of system behavior

6. Time-steps in IMPACT
• The multi-market model is on yearly scale
• Water models on a monthly scale
• Averaged to the year to integrate with IMPACT
• Weather for the crop model inputs on a daily scale
• The daily weather is used in the DSSAT crop model, however, this is aggregated to provide a
yearly yield shock for IMPACT

7. IMPACT 3 Geography
159
• Countries
154
• Water Basins
320
• Food
Production
Units

8. IMPACT Commodities
• Current Commodity Scope
• Crops, Livestock, and Processed
• 62 total commodities in IMPACT
• 39 crop commodities
• 6 livestock commodities
• 15 processed commodities

9. • Complex models need a lot of data
• Core database drawn from FAOSTAT
• FAO Bulk Download for 3-year average
around 2005 (04-06)
• Disaggregated data comes from IFPRI’s SPAM,
and FAO’s AquaSTAT
• Have to harmonize this disparate
datasets
• Bayesian Work Plan
• Iterate with new information
• Never ending process
Processing IMPACT Database
Source Data (FAO,
SPAM)
Feedback to data
source
Priors on values and
estimation errors of
production, demand, and
trade
Estimation by Cross-
Entropy Method
Check results against
priors and identify
potential data problems
New information to
correct identified
problems

10. IMPACT Model – Detailed Schematic
• At its core is a highly disaggregated partial
equilibrium model focused on the agriculture
sector
• It models the interactions between
consumers, and producers at the national and
international level
• Modular design allows for the coupling of
many different modeling techniques to more
holistically analyze complex multi-
dimensional problems

11. Partial Equilibrium in IMPACT
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2Q0
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2Q0
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2Q0
Production
•Exogenous trends
•Own prices
•Input prices (land, feed, etc.)
Prices
•Global:
•Supply = Demand
•Net trade = 0
Demand
•Income
•Commodity prices
•Population

12. Linked Dynamic Model Integration
Food Model
• Crop areas
• Population
• GDP
• Livestock
numbers
• Prices
Water
Models
• Demand/Supply
• Water stress
Shock on crop
yields
Solve Food Model in
Stand Alone Mode
Fix Areas and Livestock
Numbers and call the
Water Model
Resolve the Food
Model using Fixed
Areas and Livestock
with new yields
including Water Stress

13. Water
Models
GCM
RCP
Crop
Models
Historical Trends and Expert Opinion
Exogenous
Endogenous
Exogenous + Endogenous Yield Effects

14. Mapping DSSAT Results to IMPACT
No Immediate DSSAT Proxy for the IMPACT Crop
Biophysically Similar Crops
DSSAT • Maize
• Wheat
• Rice
• Sorghum
• Soybeans
• Groundnuts
• Potatoes
IMPACT
• Barley
• Other Cereals
Wheat
• Sugarcane
Maize
• Millet
Sorghum
• Pulses (chickpeas, pigeon
peas, beans, cowpeas)
Groundnuts
1 to 1 Mapping
• Roots and Tubers
• Fruits and Vegetables
• Oilseed Crops
• All other crops (incl stimulants, sugar beets, and
cotton)
Average of C3 Crops
(all DSSAT crops excl.
maize)

15. • Multivariable outcome that encompasses
supply, access, quality, and stability across
time and in the face of shocks to the food
system
• IMPACT focuses primarily on Food Supply
although we are starting to move in areas of
food quality with respect to nutrition, and
potential variability.
• Diet is an important predictor of health
• Working with Martin School at Oxford we’ve
linked the IMPACT food supply results to a
Health model to estimate changes in non-
communicable diseases based on changing
diets
16
Going Beyond Food Supply
IMPACT Food
Supply
Changes in
Food
Consumption
Oxford’s
Health Model
Changes in
deaths due to
diets

16. USAID Project - Modularity in Action
• USAID funded project assessing the benefits
and costs of different CGIAR investment
portfolios
• Project incorporates 9 different models to not
only assess economic effects, but also
changes in welfare, nutrition, water quality,
GHG emissions, land-use change, and
biodiversity
• No single model can adequately analyze all of
the dimensions of the food system. Building
an integrated system of models permits the
application of expertise from a wider range of
discipline

17. Activity-Commodity Framework
• IMPACT 3 is a structural model
• Describes the production process in a reduce form
• Activities
• Represent production processes
• Farms, ranches,
processing plants
• Demand factors of
production
• Produce commodities
18

18. Activity-Commodity Framework
• Commodities are:
• Produced
• Traded
• Consumed
• Can be endogenous
or exogenous
• Maize has endogenous production
and demand
• Oilseeds have endogenous
production and both endogenous
and exogenous demand (biofuels)
• Fertilizers could be considered an
exogenous commodity
19

19. 20
Crop Example
Activity
• Soybean
Farm
(jsoyb)
• Demands
land,
fertilizer,
labor
Activity Output
• Soybean
Commodity
(csoyb)

20. 21
Processed Commodity Example
Activity
• Soybean
Processing
(jsbol)
• Demands
soybeans
(csoyb) at
market price
Processed
Commodities
• Soybean Oil
(csbol)
• Soybean
Meal
(csbml)

21. 22
Complete Oilseed Activity-Commodity Chain
Activity
• Soybean
Farm
(jsoyb)
• Demands
land,
fertilizer,
labor
Activity Output
• Soybean
Commodity
(csoyb)
Activity
• Soybean
Processing
(jsbol)
• Demands
soybeans
(csoyb) at
market price
Processed
Commodities
• Soybean Oil
(csbol)
• Soybean
Meal
(csbml)

22. Imagining a value chain for Cassava in IMPACT
• Currently there is just one activity,
which produces primary equivalent
cassava that is globally traded
• Most traded cassava is processed,
capturing this could improve how
cassava is treated in IMPACT
• Possible cassava activities are
literally endless. How detailed do
you need to be to answer your
research question
CassavaCassava
Processing
Starch
Chips
Other
Cassava
Chips
Processed Food
Starch Processing
Feeds
Starch
Alcohol
Etc.

23. Imagining a value chain for Cassava in IMPACT
• What would be needed
• Lots of new data and knowledge
• Production numbers, technical coefficients, demand/consumption/trade statistics, behavioral
trends for producers and consumers, etc.
• How would these processes change over time and in the face of shocks
• Where are these activities taking place
• Where are the commodities being traded and consumed
• Perhaps raw cassava isn’t traded internationally in the future, and is only a domestic
commodity where consumers and cassava processors have to compete with each other to
purchase raw cassava from farmers
• Some new commodities may be more complex than others to model correctly
• For example starch. Can we model cassava starch adequately without also considering the
broader starch market that would include potential substitutes like maize and potato starch

24. Imagining a value chain for Cassava in IMPACT
• What can IMPACT directly model?
• Production, consumption, and trade
• Effects on food security, potentially health and nutrition
• How cassava and its processed commodities can or will compete with other commodities
• Incorporate into new livestock module to better reflect cassava’s potential as a feed crop
• Potential effects of scaling up
• Need to add additional models or select a different tool
• Income effects, input costs and trends (i.e. country CGE models)
• Sub-national changes (gender, poverty, etc.)
• Policies are exogenous and would need to be represented by scenarios
• We can’t endogenously make a country go from a non-producer to a producer easily.
National policies that change equilibrium conditions need to be handled exogenously
• Market thresholds however can be captured if we know where these thresholds are

25. Thank you
d.mason-dcroz@cgiar.org