food security, environmental sustainability and ...food security, environmental sustainability and...
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Food Security, Environmental Food Security, Environmental Sustainability and BioSustainability and Bio--fuels:fuels:
Global Challenges and OpportunitiesGlobal Challenges and Opportunities
Daniel G. De La Torre UgarteDaniel G. De La Torre Ugarte
Regional FAO/NGOs - CSOs Consultation for EuropeAgricultural Policy Response and Adjustment of Agriculture and Food Systems to
Increasing Food Prices and Impacts of Climate Change on Agriculture and Rural Areas.Innsbruck, Austria, 23-24 June 2008
Outline
o Before the crisiso Nature of Agricultureo Path to the current crisiso Triggers of the crisiso Opportunitieso Concluding remarks
Agriculture and PovertyAgriculture and Poverty
� Developing world
� 5.5 billion people
� 2.5 billion are in households involve in Ag
� 1.5 billion are smallholder households
� 800 million people food insecure
� 80% of food insecure people are in rural areas
� In many developing countries:
� >50% of employment
� >25% of GDP
� Increase in GDP from Ag is twice more efficient for poverty reduction than any sector
Global Anthropogenic GHG EmissionsGlobal Anthropogenic GHG Emissions
Source: Fourth Assessment Report, IPCC (2007)(a) Global annual emissions of anthropogenic GHGs from 1970 to 2004. (b) Share of different anthropogenic GHGs in total emissions in 2004 in terms of CO2-eq. (c) Share of different sectors in total anthropogenic GHG emissions in 2004 in terms of C02-eq (Forestry includes deforestation.)
0.26% Searchinger, et al.GHG for ag and forestry is to address the 31% of annualemissions coming. If we take care of this we take care of
Biofuels Biofuels are notare not thethe Solution to:Solution to:
o Climate Change
o Energy crisis
o Economic development / Poverty
Reduction
The Nature of Agriculture
o Productive capacity is highly dependant on natural endowment: land, soils, water, climate.
o Natural endowment can be enhanced through investment: research, infrastructure, support to producers. producers.
o Unlike factories Cropland can not be moved.
o Trade liberalization have little chance to enhance production capacity and alter trade flows.
Path to the current crisis
o Elimination of supply management programs and the role of government in keeping adequate level of food inventories
o Over-emphasis on trade in developing countries o Over-emphasis on trade in developing countries directed agricultural investment to high value export products: fruits and vegetables.
o Increased diet based on animal protein and displacement of local foodstuffs (cereals): production and consumption
Biofuels Expansion tookBiofuels Expansion took--off when off when world inventories were decliningworld inventories were declining
0.12
0.18
0.24
0.30
0.36
Per
cent
of t
otal
use
0.00
0.06
0.12
197
8/79
198
0/81
198
2/83
198
4/85
198
6/87
198
8/89
199
0/91
199
2/93
199
4/95
199
6/97
199
8/99
200
0/01
200
2/03
200
4/05
200
6/07
Per
cent
of t
otal
use
Corn Wheat Rice
Source: USDA
Long term trend in Long term trend in agricultural commodity pricesagricultural commodity prices
200
250
300
350
Pric
e In
dex
30+ years of declining and or flat prices
Soybeans and expansionof cropland
US supply managementweakened
0
50
100
150
1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007
Pric
e In
dex
Nominal Real
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007, which is estimated by author.
US supply management eliminated 1996
CAP Reform
Triggers of the Current Crisis
o Expansion of grains based biofuels
o Below normal production levels
Speculation (in financial markets )o Speculation (in financial markets )
Grains for Feed and Fuel UseGrains for Feed and Fuel Use
300,000
400,000
500,000
600,000
700,000
000
tons
Feed long term driver of ag. demand
Developing countries are reproducing diet of the west based on high content of animal protein
0
100,000
200,000
300,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
000
tons
World Feed Demand Feed Demand minus USA Fuel Demnd
Source: OECD-FAO Agricultural Outlook 2007-2016 - OECD © 2007 - ISBN 9789264025097
Biofuels demand, the straw that brokethe camel’s back
The story thus far:The story thus far:
o Roots of current crisis are mostly structural: consumption pattern, blind de-regulation, and lack of investment in food stuffs productive capacity
o Biofuels: “straw that broke the camel’s back”o Biofuels: “straw that broke the camel’s back”
o Current industrial agricultural system is not sustainable
o Today’s agricultural economic, environmental, and social problems are not caused but exacerbated by biofuels.
The Question isThe Question is
o Under which conditions high prices (and biofuels) can be an opportunity for:
• Poverty reduction
• Climate change / environmental benefit • Climate change / environmental benefit
• Energy crisis / energy independence
Trade off Between Agricultural Trade off Between Agricultural Prices and Food SecurityPrices and Food Security
Ag Prices
Increase in ag. prices is not necessarily abad for food security, specially if coming from low prices
% Food Security
P0
P1
Expand the Impact of Higher Expand the Impact of Higher Prices in Food SecurityPrices in Food Security
Ag PricesInvestments directed to improve share of high prices capture by farmers and reduce cost to consumers would improve food security
% Food Security
P0
P1
A
BC
Ag Prices
TradeTrade--off Between Agricultural Prices off Between Agricultural Prices and Environmental Costand Environmental Cost
EnvironmentalCost
P0
P1Under current agricultural practices and food consumption patterns,an increase in ag prices could accelerate environmental costs
Ag Prices
Higher Ag Prices Create Conditions to Higher Ag Prices Create Conditions to Invest in reducing Environmental CostInvest in reducing Environmental Cost
Investment in agricultural technologies less intensive in fossil inputs, and in tune with local soil and food habits would reduce environmental cost of agriculture
C B
EnvironmentalCost
P0
P1
C
A
BD
Concluding RemarksConcluding Remarks
o If nothing is done, missed opportunity for poverty reduction, agriculture, and climate change
o If nothing is done crisis would result in a massive transfer of resources to the Agricultural North
o We can not afford to go back to the pre -crisis o We can not afford to go back to the pre -crisis agriculture
o Agriculture priorities: production and consumption of local crops, invest in productive capacity in the S outh, revalorization of small holders and rural developmen t
o Be prepare for lower prices !
ThanksThanks
!!
www.ecofair-trade.org
Agricultural Policy Analysis Center
www.agpolicy.org
!!
Strategy for Poverty ReductionStrategy for Poverty Reduction
o Increase farmers ability to capture larger share of higher prices:• Invest in farmers’ access to markets, improving
marketing & distribution systems• Improve product quality
o Democratize access to land, water and o Democratize access to land, water and productive resources
o Invest in research and extension to improve productivity to supply the now profitable local market with local crops
o Implement programs to ensure access to food for vulnerable population
Strategy for Climate ChangeStrategy for Climate Change
o Drastically change diet composition towards more efficient sources of protein and food from local origin
o Invest in Research & Extension oriented to:• Reduce use of fossil based inputs in agriculture• Improve management practices which increase the • Improve management practices which increase the
environmental performance of production agriculture• Ensure the best use of soils and landscape
o Recuperate the complementarity of crop and livestock activities in the farm
o Integrate GHG emissions and other environmental impacts into farmers balance sheet
Institutional InvestmentInstitutional Investmento Strengthen land property rights and
enforcing mechanisms to support and protect smallholders and rural workers
o Re-develop domestic institutionality to support transformation of agriculture
o Direct research efforts in enhancing contribution of native food crops
o International food reserve system
o Global coordination of biofuels development