overcoming the world food and agriculture crisis through policy change and science
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Overcoming the World Food and
Agriculture Crisis through
Policy Change and Science
Joachim von BraunInternational Food Policy Research Institute
Trust for Advancement of Agricultural Sciences,
4th Foundation Day Lecture
New Delhi, March 6, 2009
Joachim von Braun, IFPRI, March 2009
Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009
Globalization of agriculture and food
systems
Definition:
Integration across national borders of production, processing, marketing, retailing, and
consumption of agriculture and food items
Source: von Braun and Diaz-Bonilla 2008.
Joachim von Braun, IFPRI, March 2009
Broad patterns of consensus on
innovations
1. Technological innovations in agriculture are critical
for growth and crisis prevention
2. Science alone cannot change world food situation;
institutional innovations and change must facilitate
access to and use of technology
3. But lack of consensus on best design of institutional
arrangements
4. Institutional innovation is lagging behind science
and technology innovation
Joachim von Braun, IFPRI, March 2009
Food price spike, 2007-08
0
25
50
75
100
125
0
200
400
600
800
US
$/b
arre
lU
S$
/to
n
Corn
Wheat
Rice
Oil (right scale)
Price spike
Source: Data from FAO 2009 and IMF 2009.
Prices fell partly because of
financial crisis and recession
Joachim von Braun, IFPRI, March 2009
Food driving up overall inflation
Bangladesh India, wholesale
Pakistan
Source: Data from government statistics.
-3
0
3
6
Jan-05 Jan-06 Jan-07 Jan-08
Overall
Food
-3
0
3
6
Jan-05 Jan-06 Jan-07 Jan-08
OverallFood
-3
0
3
6
Jan-05 Jan-06 Jan-07 Jan-08
Overall
Food
------- ---------
--------
Joachim von Braun, IFPRI, March 2009
India State Hunger Index (ISHI) by severity
Source: Menon et al. 2008.
- 12 of 17 states:
“alarming”
- Madhya Pradesh:
“extremely alarming”
Joachim von Braun, IFPRI, November 2008
Joachim von Braun, IFPRI, March 2009
High levels of hunger (2008 GHI vs. 1990 GHI)
0
10
20
30
40
GHI 1990
GHI 2008
GHI 1990
GHI 2008
GHI 1990
GHI 2008
Sub-Saharan Africa South Asia India
Under-five mortality rate
Proportion of undernourished
Proportion of undernourished
Source: von Grebmer et al. 2008.
India ranks 66th out of 88 countries in the GHI
Joachim von Braun, IFPRI, March 2009
Food protests and food prices
0
5
10
15
20
25
0
100
200
300
400
500
600
700
800Jul-
07
Aug
-07
Sep
-07
Oct-
07
Nov-0
7
Dec-0
7
Jan
-08
Feb
-08
Mar-
08
Ap
r-08
May-0
8
Jun
-08
Jul-
08
Aug
-08
Sep
-08
Oct-
08
# o
f riotsU
S$/t
on
Maize
Wheat
Rice
Riots (right)
Source: J. von Braun based on data from FAO 2009 and news reports.
Joachim von Braun, IFPRI, March 2009
125
150
175
200
225
250
275
0
50
100
150
200
250
2005 2010 2015 2020
Millio
n
US
$/t
on
Non-recession
Same-investment
Low-investment
Maize price
(left )
Malnourished children (right)
Source: von Braun, Rosegrant, IFPRI IMPACT, Oct. 2008.
Recession scenarios with and without
agric. investment action
16 mln more malnourished children
with recession and low investment
Joachim von Braun, IFPRI, March 2009
Low 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
North Africa & West Asia 1.4
All regions 2.1
Annual total factor productivity growth, 1992-2003
Source: von Braun et al. 2008.
Joachim von Braun, IFPRI, March 2009
Output response forthcoming, but not from
low-income countries
Growth of cereal output in 2007-08:
11%: developed
0.9%: developing
1.6%: developing, excl. Brazil, China, India
Plans for investment scaled down as capital
becomes more scarce and expensive
Source: FAO 2008.
Joachim von Braun, IFPRI, March 2009
Recent initiatives for Foreign Direct
Investment in agriculture (G-2-G)
Source: Data from GRAIN 2008. Note: Thicker lines reflect investments >100,000 ha; for some thinner lines, data on investment size is not available.
Joachim von Braun, IFPRI, March 2009
Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009
Quick and comprehensive response to
food crisis
• Increased investment in agric. and social
protection by 24%, irrigation by 80% in 2008
• Set up National Food Security Mission, 2007
• Expanded subsidies on crude oil, fertilizers,
and food
• Scaled up safety net programs such as PDS
and NREGS
Joachim von Braun, IFPRI, March 2009
Areas for attention
• Grain stocks at 35 mil. tons (10 mil. above
norm) and increasing
- Release stocks in a timely manner and
consider new institutional arrangements
• Rising costs of PDS and NREGS
- Revise targeting mechanisms, coverage, and
cost-effectiveness
• Export bans and suspension of grain futures
trading
- Curb new protectionist trends
Joachim von Braun, IFPRI, March 2009
Can small farm agriculture mitigate the
economic recession?
India China Ethiopia Tanzania
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1970
-71
1981
-82
1991
-92
2002
-03
1980
1990
1999
1977
1989
-92
2001
-02
1995
2002
-03
Hectares Average farm sizes in selected countries
Sources: Fan and Chan-Kang 2003, FAO Agricultural World
Census and Indiastat.
Joachim von Braun, IFPRI, March 2009
Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009
What innovations?
• Organizations incl. in agricultural research,
extension, education, input supplies, marketing, and
collective action
• Technologies along the whole food value chain
• Institutions incl. laws, regulations, traditions,
customs, beliefs, norms
• Public policies for promoting agriculture
Joachim von Braun, IFPRI, March 2009
Roles of institutions in strengthening
food markets
1. Reduce transaction costs
2. Manage risk
3. Build social capital
4. Enable collective action
5. Restore missing markets
Particularly important for commodities
produced, bought, and sold by smallholders
Joachim von Braun, IFPRI, March 2009
Examples of institutional innovations
• Public-private partnerships
• Farm cooperatives
• Contract farming
• Social networks for adoption of innovations
All of these have been successful in specific
contexts, but none is a universal solution
Institutional innovations should be inclusive of
smallholders and disadvantaged groups
Joachim von Braun, IFPRI, March 2009
Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009
Priorities for action
1. Promote pro-poor agriculture growth
2. Facilitate open trade and reduce market
volatility
3. Expand social protection and child
nutrition action
Action needed for all 3
Joachim von Braun, IFPRI, March 2009
1.a Actions for agricultural productivity
• Access to finance (e.g. rural banks and micro-finance)
• Expansion of risk management (e.g. crop insurance)
• Access to inputs (e.g. quality seeds, fertilizer, feed, veterinary drugs)
• Access to services, extension
• Investment in rural infrastructure (rural roads, electrification, water and irrigation)
Joachim von Braun, IFPRI, March 2009
1.b For long-term agric. growthDouble agric. R&D to impact poverty
CGIAR investment to rise from US$0.5 to US$1.0
billion as part of this expansion
Source: von Braun, Fan, et al. 2008.
R&D allocation
(mil. 2005 $)
in # of
poor (mil.)
2008-2020
+ Agr. output
growth (% pts.)
2008-20202008* 2013
S Asia 908 3,111 -124.6 2.4
Developing
World 4,975 9,951 -282.1 1.1
Joachim von Braun, IFPRI, March 2009
2. Reduce food market volatility
• An internationally held emergency reserve
• International coordinated grain reserves
scheme (with Indian participation)
• A virtual global reserve against price spikes
- Institutional arrangement at int’l level with
engagement of commodity exchanges
- Implemented by G8+5 and other large grain
exporting countries
Source: von Braun and Torero 2008.
Joachim von Braun, IFPRI, March 2009
3. Support pro-poor food and nutrition
interventions
Protective actions e.g.:
• Cash transfers
• Employment-based food security programs
Preventive actions e.g.:
• School feeding
• Early childhood nutrition programs
Focus on children, women, and poorest
Joachim von Braun, IFPRI, March 2009
Policy, technology and institutional change
• Policy failure: no sufficient focus on
R&D and no strategy for institutional
innovations
• Policy neglect: isolated R&D focus and
no strategy for institutional innovations
• Policy for success: R&D acceleration
with institutional innovations
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