food security, environmental sustainability and ...food security, environmental sustainability and...

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Food Security, Environmental Food Security, Environmental Sustainability and Bio Sustainability and Bio-fuels: fuels: Global Challenges and Opportunities Global Challenges and Opportunities Daniel G. De La Torre Ugarte Daniel G. De La Torre Ugarte Regional FAO/NGOs - CSOs Consultation for Europe Agricultural 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

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Page 1: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 2: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

Outline

o Before the crisiso Nature of Agricultureo Path to the current crisiso Triggers of the crisiso Opportunitieso Concluding remarks

Page 3: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 4: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 5: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

Biofuels Biofuels are notare not thethe Solution to:Solution to:

o Climate Change

o Energy crisis

o Economic development / Poverty

Reduction

Page 6: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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.

Page 7: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 8: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 9: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 10: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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 )

Page 11: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 12: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel
Page 13: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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.

Page 14: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 15: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 16: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 17: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 18: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 19: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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 !

Page 20: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

ThanksThanks

!!

www.ecofair-trade.org

Agricultural Policy Analysis Center

www.agpolicy.org

!!

Page 21: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 22: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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

Page 23: Food Security, Environmental Sustainability and ...Food Security, Environmental Sustainability and BioSustainability and Bio--fuels: fuels: Global Challenges and Opportunities Daniel

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