feeding and fueling the world to 2030 and beyond: land use change from a food security perspective

Feeding and Fueling the World to 2030 and Beyond

International Development Seminar Series

9-10 November 2009, Royal Savoy Hotel, Lausanne, Switzerland

Land Use Change from a Food Security Perspective

Siwa MsangiEnvironment and Production Technology Division, IFPRI

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2

Overview of future food needs at global level

The link between agricultural productivity and land use

Overview

Land use change w/in context of food & agriculture

Country case studies which show linkage to poverty

Country-level perspective on biofuels & well-being

Impact pathways that are relevant for food security

Implications for gov’t policy and local biofuel operators

The micro-level aspects of food security

Summary and conclusions


Diet change driven by increasing income and urbanization is inevitable

While cereal demand for food will decrease on a per capita basis – the need for feed will increase it in some regions (LAC/NAE)

Fast growth in meat consumption – especially Asia

Demand for grain and oils for biofuels will only increase the pressure on food markets and prices

Increasing Food Demand to 2030 and beyond

Socio-economic and demographic growth imply that food demand for cereal, meat and other products will increase rapidly to 2030 and beyond

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Ag. Growth: Extensification vs. Intensification

• There are two ‘margins’ along which expansion or substitutions can take place – either more extensive displacement of the agricultural landscape or more intensive use of inputs

• There might be constraints to one of these which means production growth has to rely more the other – such as land availability in Asia vs. Africa

• Either of these options have implications for the environment – loss of natural cover or forested area versus increased load of pesticides, fertilizer and water consumption


Where will new production come from?

The needed increase in production, to meet demand can come from additional yield on existing land or achieving a sufficient level of production on new land

total old old new newQ y A y A

totalQoldy oldA

newy newA

= change in production

= change in yield on harvested area previously cultivated

= average yield on additional land going into prod’n


Where is the land for agriculture?

Source: Fields et al, 2007

Global Land Areas from HYDE-3 LU data


While there has been steady growth in production and yield in agriculture – the rate of increase has remained stagnant or decreased

The decreased attention paid to agriculture in past years has contributed to its falling share in national spending

Consequently, agricultural research dedicated to productivity enhancement of staple crops has declined over the years despite the fact studies have shown that roughly 70 percent of food needs will be met through yield enhancements (FAO, 2006)

Maintaining the engine of crop yield growth

Agricultural yield growth as a longer-term driver


Observed and Future Trends in Agricultural Productivity

Past observed trends in agricultural productivity (global average across all crops) and required future trends in productivity increase under increasing pressures on land and water use (diet change, 200 EJ bioenergy demand in 2050, climate change, reduced trade) [Baseline: 9 billion people in 2055, constant current diets, no climate change, progressing globalization and increasing trade]

Source: Lotze-Campen and Popp 2009


Additional yield growth in cereals to offset malnutrition impacts of US biofuels target

Global Cereal Yield Growth

Malnourished children (0-5)

Additional (annual average) yield growth in cereals:

1% in developing world

0.5% in developed world

In other words….

Going from: 1.3% 1.8%

Avg annual yield growth, globally


Crop productivity and land use: MiniCAM model, Pacific Northwest National Laboratory

Crop area increases from 10% to 40% of arable land;

Source: Wise et al. 2008


Yield growth as a key driver of LUC

• Need to get more food while relying on less expansion in land than before – need to move along the ‘intensive’ margin

• The rate at which yield can grow has enormous consequences for future land use change

• Some agronomists fear that we’re already approaching the yield ‘ceiling’ in key regions for some major crops that we will need to rely on

• Yield growth ends up being a key factor to the competitiveness and human well-being outcomes of biofuels at the country level (as we will see next….)


Country-level perspective on linkage b/w Country-level perspective on linkage b/w biofuels, growth and povertybiofuels, growth and poverty


Example: Mozambique

• Example from recent work done on Mozambique (University of Copenhagen, IFPRI and others)

• A food-insecure country that is scaling up export-oriented biofuels production

• Some key trade-offs to consider – since Mozambique is land rich but labor scarce

• Study considered 5 scenarios (baseline included) – that look at ethanol from plantation-based sugarcane and biodiesel from Jatropha (based on out-grower scheme)

• Also with technology spillovers to food sector


Export crops &

proc.Forestry

& fishing

Other manu.

Other industry

Services

Distribution of reduced GDP shares

Combining sugar and jatropha scenarios causes…

• +0.7% GDP growth rate• +2.4% agriculture

• +1.5% manufacturing

• Biofuels = 5% of GDP by 2015• Mainly at the expense of export

crops

• -5.9% national poverty rate• -6.4% rural

• -4.9% urban

Combined Mozambique scenario results

Source: Arndt et al. 2008


Mozambique: Agricultural land use

Land allocated to export crops declines fastest…

…but most displaced land comes from food crops

-3 -2 -1 0

Maize

Sorghum

Rice

Tobacco

Sugarcane

Cotton

Average annual reduction in land area compared to Baseline (%)

Sugarcane scenario

Jatropha scenario

Jatropha + spillovers

Maize

Sorghum

Rice

Other foods

Tobacco

Sugarcane

Cotton

Other exports

Land displaced by biofuels (total = 415 000 hectares)

Source: Arndt et al. 2008


Example: Tanzania

• A case study country (among 3) for the FAO BioEnergy & Food Security (BEFS) project

• TZ is a food-insecure country that also wants to scale up biofuels production for both domestic use and export

• Key crops for ethanol: sugarcane and cassava

• Key crops for biodiesel: jatropha and palm oil

• BEFS considered 2 scenarios (+baseline) – one which projects 49 Ml ethanol (10%) and 55 Ml biodiesel (5%) by 2017 – and another which reaches 800 Ml ethanol and 695 Ml biodiesel, based on land requests (314 kha)

• Under #2 – biofuels prodn exceeds domestic demand


Key results for Tanzania

• Biofuel production accelerates economic growth and reduces poverty

• No food-fuel trade-off appears in the medium term

• The exchange rate appreciates as biofuel exports increases (or fuel imports decrease) – which puts traditional export commodities at a competitive disadvantage

• The relatively large export sector for Tanzania allows the biofuels-driven land & labor displacement to take place without hurting food production much

• Engaging small-holders has a poverty-reducing effect

• Small-holder cassava is more cost competitive at current yields

• Increasing yields makes outgrower sugarcane feasible as well


Connections to household food securityConnections to household food security


Micro-level connections to biofuels

• We have looked at the macro-level implications – but we worry about micro-level effects

• The macro-level prices for food and energy products affects hhold –level decisions/outcomes

• Food security hinges around issues of availability, access, utilization and stability

• Access (e.g. purchasing power) and utilization (e.g. quality) have strong micro-components which are important – maybe more than availability

• Distributional implications become important when considering price effects at household level


Poverty impacts of food prices

• Ivanic and Martin (World Bank) did a study of 9 developing countries to tease out the difference in impacts from food price increases

• The results varied country-to-country depending on food commodity in question• Bolivia: wheat strongest effect (maize the least)• Vietnam: largest impact in rice (price incr. cuts poverty)• Malawi & Zambia: incr. in maize price incr poverty• Pakistan: incr. in rice/dairy/wheat prices lowers poverty

in rural areas – but raises it in urban areas• Cambodia: rice price incr. raises poverty in rural/urban,

while incr in beef prices lowers rural poverty


Impact pathways of food security

Retail food prices

Income

Price transmission

World Price Changes

Household-level decisions & outcomes

Macro-scale market

conditions

National commodity prices

Off-Farm income sources

Own cons’n

Nutrition, health & well-being

Marketed surplus

Markets

(marketing policy)

Processing & marketing

Producer decisions

Consumer decisionsFood

purchases(subsidies & policy)


Food security impacts through prices

• The impact pathways that go from biofuels-driven indirect land use change and food security – depend mostly on prices

• There are winners and losers from price changes, depending on whether they are producers or consumers – and net buyers or sellers of the good

• The magnitude of shocks along these pathways depend upon degree of price transmissions and policies that affect costs & margins along marketing chain and the final prices seen by hhold

• The household can adjust along several dimensions


Key dimensions of household choices

Expenditure

Trade-off

market opportunities

Income

Savings

(mkt return)

food

non-food

farm

non-farm

cash crop

food crop

agric.

non-agric.

own production

marketed foodallocation

Labor/resource allocation

diversification

Preferences & market conditions

market opportunities

Could be biofuel-related


Protecting food security at hhold-level

• Policy can have an influence on food security outcomes through maintaining the household’s access to food – especially under shocks

• This can come through directly increasing the household’s purchasing power through income transfers or providing subsidized/free food to supplement the little that the hhold can buy directly

• Land use policy enters in when the productive land assets (or access to commons) of hholds is at risk of being taken away by commercial interests

• Increasing on-farm yields of hholds has big impact


What can operators do to protect food security at project-level?

• Allowing farmers to use (through borrowing or hire) machinery for their own on-farm production

• Offer safety-nets or a ‘menu’ of contracts to outgrowers that targets those hholds most likely to fall into food insecurity (combination of pay & food)

• Exercise caution in dealing with land that may be deemed ‘marginal’ or ‘unproductive’ but which might be important for livelihoods [gov’t plays role here]

• Many communities want social services too (schooling facilities, water access) – the operator cannot replace the gov’t role, of course, but workers might feel more loyalty if they perceive goodwill


Concluding ThoughtsConcluding Thoughts


Global orchestration is needed for those policies which require coordination on international level (trade and climate policy, enactment of regulation & law) – establishing certain strategic funds & response systems

National-level action to protect vulnerable areas and people, and to continue making necessary investments in agriculture and national infrastructure

Local-level monitoring, interventions, enforcement of regulations and implementation of best practices

Global-to-local dimensions of food security

Action needed both at the global, national and local levels – with coordination between all of them


Future food security is tied as much to changes in consumption as it is to production and land availability

More food production involves tradeoffs with environmental & ecosystem quality – LUC is a key part

Changes in both land use and food security operate through market mechanisms that produce ‘spillovers’ – but need different policy instruments to deal with them

Food insecurity occurs at household level and interventions need to happen there – operators can play a role in trying to mitigate this at the project-level

But the heavy-lifting needs to happen at gov’t policy level

Food security and iLUC


Thank You!Thank You!


Extra slidesExtra slides


Regional per cap variation stands out …. especially meat

Per capita Cereal Demand to 2050

Per capita Meat Demand to 2050


Outlook for cereal production

Total Cereal Production to 2050

Per Capita Cereal Production to 2050

Continue to depend on key regions to deliver...


A varied pattern of child malnutrition

IMPACT model projections

Prevalence of pre-School Child Malnutrition in Asia and Africa(% of population aged 0 to 5)

Total Levels of pre-School Child Malnutrition in Developing World(millions of children aged 0 to 5)

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-5

-4

-3

-2

-1

0

National poverty

Rural poverty

Urban poverty

Add

ition

al c

hang

e in

pov

erty

rat

e (%

)

SugarcaneJatrophaJatropha + spillovers

Mozambique example: poverty

Biofuels investments reduce poverty (raises returns to land and labor)

Jatropha out-grower scheme is more pro-poor (absolute and relative def.)

Urban households benefit from processing and indirect jobs (raises semi-skilled wages)

(Arndt et al., 2008)