1 an overview of the status of agricultural mechanization in the world and the role of bio-fuels by...

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1 Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure and Agro-Industries Division Food and Agriculture Organization of the United Nations (FAO) Rome, Italy

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Page 1: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

1

An Overview of the Status of Agricultural

Mechanization in the World and the Role of Bio-

fuels

by Dr. Geoffrey C. MremaDirector

Rural Infrastructure and Agro-Industries Division

Food and Agriculture Organization of the United Nations (FAO)

Rome, Italy

Page 2: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

2

Outline of the presentation

• Overview of actual agricultural situation in the World with special reference to the prevailing soaring food prices

• Elements of the FAO’s position on the World food situation

• Future prospective of the renewable energy originating from agriculture

and• Concluding comments

Page 3: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

3

Global Food Situation/Crisis The issue of soaring food prices dominates

discussion on current global food situation/crisis.

Soaring food prices caused by Low global stock levels - poor harvests in 2005/06 High energy prices – influence cost of inputs Increased use of grains for bio-energy Increased demand due to changes in diets – due to

economic growth & urbanization Medium term projections are that high prices

will prevail for the foreseeable future.

Page 4: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

4

World cereal production: NOT growing enough

-

500

1,000

1,500

2,000

2,500

3,000

1999 2001 2003 2005 2006

Mil

lio

n t

on

nes

Coarse grain Wheat Rice Total cereal production

Source: FAOSTAT

Page 5: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

5

Cereal stocks

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007

Mill

ion

tonn

es

China

Source: FAOSTAT

Total stocks

Page 6: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

6

World population

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1990 1995 2000 2005 2010* 2015* 2020* 2025*

Num

ber

of p

opul

atio

n (m

illio

ns)

World total population World rural population World urban population

Source: FAOSTAT

Page 7: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

7

Increased demand due to change in diets Population in Sub-Saharan Africa

0

100

200

300

400

500

600

700

1980 1990 2000 2010* 2020* 2030*

nu

mb

er

of

po

pu

lati

on

(m

illio

ns)

rural population

urban population

Source: FAOSTAT

Page 8: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

8

Tractor use by region

-

3

5

8

10

13

15

18

20

23

25

28

30

1980 1990 2000 2003

Nu

mn

er

of

tra

cto

rs in

us

e (

mill

ion

s)

1 - Sub-Saharan Africa 2 - North America3 - Latin America & Caribbean 4 - Asia & Pacific5 - Near East & North Africa 6 - Europe7 - WorldSource: FAOSTAT

1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 6

Page 9: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

9

Tractor use per 1000 ha arable land

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

1980 1985 1990 1995 2000 2003

Nu

mb

er o

f tr

acto

rs

1 - Sub-SaharanAfrica

2 - NorthAmerica

3 - Latin America& Caribbean

4 - Asia & Pacif ic

5 - Near East &North Africa

6 - Europe

7 - World

Source: FAOSTAT

1

3

4

5

7

2

6

Page 10: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

10

Tractor use per 1000 ha arable land in 1985 and 2003

0

5

10

15

20

25

30

35

40

45

Europe NorthAmerica

Near East &North Africa

Asia &Pacific

LatinAmerica &Caribbean

Sub-SaharanAfrica

Worldaverage

Nu

mb

er o

f tra

cto

rs

1985

2003

Source: FAOSTAT

Page 11: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

11

Sources of growth in crop production (%)1997/99-2030

0

10

20

30

40

50

60

70

80

90

Arable landexpansion (1)

Increases incropping intensity (2)

Harvested landexpansion (1+2)

Yield increases

pe

rce

nta

ge

1 - Sub-Saharan Africa 2 - Near East/North Africa

3 - Latin America and Caribbean 4 - South Asia

5 - East AsiaSource: FAO 2003

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Page 12: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

12

0.20 0.26 0.29 0.28 0.27

0.110.05

0.07

0.40 0.75

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1950 1960 1970 1985 1995

Years

kW

/ha

Mechanical andElectrical

Animate Pow er (Humanand animals)

Power availability per hectare in India 1950 - 1995

Page 13: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

13

Potential for increased use of machinery and implements in agriculture: Europe & North America and parts of Asia

reaching saturation levels: Numbers of agric. tractors peaked => continuous

decline due to use of larger units Trade - more replacement and/or introduction of new

models/features [GPS etc] Potential increased use of new implements due to

environmental concerns – Conservation Agriculture (CA)

Bio-energy crops due to substitution and no new land area brought under cultivation

New manufacturers => global players in the market for machinery and implements

Page 14: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

14

Potential for increased use of machinery and implements in agriculture In Latin America and parts of Asia:

Potential for increased use of tractors due to new land or consolidation of farms; replacement of draft animals

New manufacturers’ dominant; their exports to other regions

Bio-energy crops => opening up of new lands especially in Latin America

Environmental friendly practices like CA will spread Agro-industries & super markets may be more

involved in financing of contract agric. production

Page 15: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

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Potential for increased use of machinery and implements in agriculture For Sub-Saharan Africa [SSA]:

Comparatively large scale agric. mechanization projects of the 1960s -70s were not successful

Followed by draft animal traction projects in the 1980s -90s mostly donor funded – limited success

High economic growth rates from 2000 has fueled interest in agric. mechanization:

New suppliers from China; India; Brazil More liberal agric. policies e.g. medium & large farms Increased demand for food due to urbanization Problems which led to failure of earlier projects still

there – low tractor utilization rates; lack of credit etc

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Potential for increased use of machinery and implements in agriculture –SSA

Chances of repeating mistakes of the 1960s & 70s quite high due to:

new suppliers and new leaders in place reasons of earlier failures not that well documented

FAO quite concerned by this and is: Publishing a new report: Agricultural Mechanization

in SSA: Time for a new look Together with UNIDO convened an Expert Consultation in

Vienna in November 2007; report just out. Follow up activities in 2008/09 link with rural

infrastructure & new financing mechanisms.

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17

World primary energy demand for 2005

Oil35%

Biomass and waste10%

Coal25%

Nuclear6%

Gas21%

Hydro2%

Other renewables1%

Source: World Energy Agency, World Energy Outlook 2007

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18

Bio-energy Use of Grains

Ethanol production (billion litres)

0

10

20

30

40

50

1975 1980 1990 2000 2005

bil

lio

n l

itre

s

Source: Global Subsidies Initiative 2007

Biodiesel production (billion litres)

0

2

4

6

8

10

1991 1995 2001 2005 2007

bil

lio

n l

itre

s

Page 19: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

19

Trend in demand for transport biofuels and its percentage of total overall energy demand

0

20

40

60

80

100

120

1990 2005 2015 2030

Tre

nd

in

bio

fuel

dem

and

(mil

lio

n t

on

nes

of

oil

eq

uiv

alen

t)

0

1

2

3

4

5

6

7

8

9

10

Tre

nd

in

bio

fuel

dem

and

% o

f tr

ansp

ort

en

erg

y d

eman

d

Source: World Energy Agency, World Energy Outlook 2007

Page 20: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

20

Recommendations of FAO Expert Consultation on Bio-energy – February 2008

Bio fuel production has:

Important implications to global food security, trade, rural and urban sectors, especially in developing countries

Rapid increase in bio fuel production is largely supported by subsidies in OECD countries

Still many unknowns from technical, policy, ecological, economical, equity and food security perspectives

Need for a globally based information and data clearing warehouse on bio fuels.

BIOENERGY POLICY, MARKETS AND TRADE AND FOOD SECURITY. TECHNICAL BACKGROUND DOCUMENT FROM THE EXPERT CONSULTATION HELD ON

18 TO 20 FEBRUARY 2008. FAO, ROME

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Guideposts for policy development for bio fuel sector

Policies should be more market-oriented and outward looking

Incorporate environmental impacts including land use changes

Promote R&D for improving economic and physical efficiencies for both feedstock production & bio fuel conversion processes

Protect the poor and food insecure – both from food availability and energy perspective

Page 22: 1 An Overview of the Status of Agricultural Mechanization in the World and the Role of Bio-fuels by Dr. Geoffrey C. Mrema Director Rural Infrastructure

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Conclusions Mechanization will remain an important input in

agricultural production Most regions of the world should reach high levels

of mechanization in the next 2-3 decades Bio fuel production likely to catalyse

mechanization and change the energy situation of the rural areas

New players are likely to attain a more prominent role in supply of agricultural machinery and implements globally

Thank you.