The World Food Situation
-
Upload
joachim-von-braun -
Category
Documents
-
view
4.061 -
download
3
description
Transcript of The World Food Situation
The World Food
Situation
Joachim von Braun
International Food Policy Research Institute
CGIAR Annual General Meeting, Beijing December 3, 2007
Joachim von Braun, IFPRI, December 2007
Overview
1. New world food equation
2. Food: Scarcity and energy price links
3. Poverty, food, and nutrition
4. Pro-poor policy actions
Joachim von Braun, IFPRI, December 2007
Forces changing the world food equation
World food = f {income growth, climate
change, globalization, urbanization,
energy scarcity, biofuels, …}
Changes in food availability,
prices, and
(super) markets
will impact the poor and hungry, and farmers.
Joachim von Braun, IFPRI, December 2007
Changing supply, demand and price for
cereals 2000 - 2006
100
D2000
S2000
D2006
S2006
153
P
2,070 million tons
2000=100
1,917 Q
Source: Based on data from FAO 2003, 2005-07.
Joachim von Braun, IFPRI, December 2007
Drivers of change: Income growth
• Growth (2004-06 per annum)
- 9% in Asia
- 6% in Africa
• Scenario 2025: Consumption with 5.5% annual
GDP growth in South Asia
- meat, eggs, and fish 100%
- milk and vegetables 70%
- rice 4%
Sources: IMF 2007; Kumar, et al. 2007.
Joachim von Braun, IFPRI, December 2007
Shifting consumption
Joachim von Braun, IFPRI, December 2007
Drivers of change:
Urbanization and globalization
• 61% of population in urban areas by 2030
• Asian diets towards wheat, temperate zone
vegetables and dairy
• Rural poverty will continue to exceed urban
Joachim von Braun, IFPRI, December 2007
Consumption: 2005/1990 ratios of per
capita consumption
India China Brazil Nigeria
Cereals 1.0 0.8 1.2 1.0
Meat 1.2 2.4 1.7 1.0
Milk 1.2 3.0 1.2 1.3
Fish 1.2 2.3 0.9 0.8
Fruits 1.3 3.5 0.8 1.1
Vegetables 1.3 2.9 1.3 1.3
Source: Data from FAO 2007.
Future grain consumption is driven by
feed for meat and dairy production and
by population growth
Joachim von Braun, IFPRI, December 2007
World cereal production: not growing enough
and future growth hampered by climate change
0
300
600
900
1,200
1999 2000 2001 2002 2003 2004 2005 2006 2007*
800
1,200
1,600
2,000
Wheat Coarse grains Rice Total (right)
Source: Data from FAO 2003, 2005-07.
* Forecast.
Million tonsTotal
Million tons
Joachim von Braun, IFPRI, December 2007
Disruptions in production (2004-06)
However, coarse grain output 12% in China and
rice output 9% in India.
Wheat Coarse grains
US 16% 12%
EU 14% 16%
Australia 52% 33%
Source: Data from FAO 2006 and 2007.
Joachim von Braun, IFPRI, December 2007
The World eats more than it produces:
cereal stocks decline
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007*
Source: Data from FAO 2003, 2005-07.
* Forecast.
Million tons
Total stocks
China
Joachim von Braun, IFPRI, December 2007
High-value food production
on the rise (2004-06)
0.30.6
0.20.2
4.0
3.02.9
4.0
0
1
2
3
4
5
Vegetables Fruits Meat Milk
Developed countries Developing countries
Source: Data from FAO 2007.
Average production growth (%)
Joachim von Braun, IFPRI, December 2007
Trade policy: stagnation at global level,
movement at regional levels
• Global (WTO) agreement: stalled; gains for
developing countries not realized
• Regional agreements: number of deals increased
from 86 to 159 (2000-07)
• Share of developing countries in global exports
increased from 32% to 37% (2000-06), however,
share of Africa only from 2.3% to 2.8%
Source: UNCTAD 2007.
Joachim von Braun, IFPRI, December 2007
Food
retailers
top 10:$777bln
• Wal-Mart
• Carrefour
• Royal Ahold
• Metro AG
• Tesco
C o
n s
u m
e r s
$4
,00
0 b
illion
The world food chain from a corporate perspective
Food
processors
and traders
top 10: $363 bln
• Nestle
• Cargill
• Unilever
• ADM
• Kraft Foods
Agricultural
input
industry
top 10: $37 bln
• Syngenta
• Bayer
• BASF
• Monsanto
• DuPont
Farms
Agricultural
value added:
$1,592 bln
450 million
>100 ha: 0.5%
< 2 ha: 85%
Source: WDI 2007, von Braun 2005
Joachim von Braun, IFPRI, December 2007
A “corporate view” of the world food system
Sales of top 10 companies (billion $US)
Source: Planet Retail 2007, Morning Star 2007, company financial reports.
2004 2006
Agricultural
input industry
Food processors
and traders
Food retailers
1,0914094077736337
Joachim von Braun, IFPRI, December 2007
Overview
1. New world food equation
2. Food: Scarcity and energy price links
3. Poverty, food, and nutrition
4. Pro-poor policy actions
Joachim von Braun, IFPRI, December 2007
Surge in cereal and oil prices
0
100
200
300
400
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
0
20
40
60
80Corn
Wheat
Rice
Oil (right scale)
Source: Data from FAO 2007 and IMF 2007.
Commodity prices (US$/ton) Oil
Joachim von Braun, IFPRI, December 2007
Meat and dairy prices
50
100
150
200
250
300
Jan-0
0
Jul-0
0
Jan-0
1
Jul-0
1
Jan-0
2
Jul-0
2
Jan-0
3
Jul-0
3
Jan-0
4
Jul-0
4
Jan-0
5
Jul-0
5
Jan-0
6
Jul-0
6
Jan-0
7
Jul-0
7
Beef Poultry
Butter Milk
Source: Data from FAO 2007.
January 2000 = 100
Joachim von Braun, IFPRI, December 2007
What policy response not to choose to
deal with the high prices?
Not:
• Export stops (starving your neighbor)
• Food subsidies for vocal middle class
• Slow change in outdated production control
policies
• Continued public underinvestment in
agriculture productivity increases
But needed: sharing through open trade and
increased aid
Joachim von Braun, IFPRI, December 2007
World and domestic prices:
Maize in Mexico
60
80
100
120
140
160
Jan-0
4
Apr
-04
Jul-0
4
Oct
-04
Jan-0
5
Apr
-05
Jul-0
5
Oct
-05
Jan-0
6
Apr
-06
Jul-0
6
Oct
-06
Jan-0
7
Apr
-07
Jul-0
7
Mexico maize
World maize
Source: Data from Bank of Mexico 2007 and IMF 2007.
(Jan. 2004 = 100)
Joachim von Braun, IFPRI, December 2007
Biofuels: hopes and threats
• Can foster rural growth, and jobs: needs small farmer friendly technology
• Can mitigate climate change
• Can be positive or negative for forests, and soils
• Can create new lobbies: Subsidies for biofuels are anti-poor
Needed:
A global trade regime with transparent standards for biofuels
Criteria that internalize the positive and negative effects of biofuels (energy balance; and CO2 net- emissions)
Main concern: Food – fuel competition and food security of the poor
Sources: IEA 2004 and Henniges 2005.
Joachim von Braun, IFPRI, December 2007
The biofuels boom
0
5
10
15
20
25
30
35
40
1975 1980 1985 1990 1995 2000 2005
Billio
n lit
ers
Source: Worldwatch Institute, 2006.
Ethanol > 90% of biofuel production;
Brazil and US dominate ethanol
market
0
1
2
3
4
1991 1993 1995 1997 1999 2001 2003 2005B
illio
n lit
ers
Biodiesel: EU is the largest
producer and consumer
World ethanol and bio-diesel production, 1975-2005
Joachim von Braun, IFPRI, December 2007
Countries’ plans for expansion
Ethanol Biodiesel
USA: 16% USA: 19%
EU: 45% EU: 37%
Brazil: 8% Malaysia: 248%
India: 15% Indonesia: 143%
China: 3% Thailand: 70%
Source: USDA, 2006; 2007.
Annual growth in biofuel production…2010/12
Joachim von Braun, IFPRI, December 2007
IMPACT-Model: Biofuel scenarios by 2020
Scenario Biofuel expansionPrice changes
(% by 2020)
1Actual plans & assumed
expansions
corn: +26
sugar: +12
oilseeds: +18
2Doubling of Scenario 1
expansion
corn: +72
sugar: +27
oilseeds: +44
Source: IFPRI IMPACT–model projections.
Joachim von Braun, IFPRI, December 2007
Calorie consumption changes in 2020
compared to baseline (%)
Source: IMPACT-WATER.
-9 -6 -3 0
EAP
ECA
LAC
MENA
S Asia
SSA
N America
Biofuel expansion Drastic biofuel expansion
Joachim von Braun, IFPRI, December 2007
Reducing the food-fuel competition
• Second-generation technologies will:
- utilize waste biomass
- use less land (and water?) resources
2nd generation technologies will not overcome
the food-fuel competition unless they are
smart (e.g. joint product technology like
sweet sorghum; or algae based technologies)
Implications:
1.Slow down on biofuels now ! (wait smart 2nd )
2.Accelerate general food crop productivity
investments !
Joachim von Braun, IFPRI, December 2007
What Price Food in the future?
Projections have underestimated price increases.
Will they continue to do so?
FAPRI:
Wheat and corn P to by 2 and 4% by 2016
OECD-FAO:
Wheat and coarse grain P to by 20 and 34% by
2016
Projections need to accommodate the complex nature
of the world food equation
Joachim von Braun, IFPRI, December 2007
Modeling cereals price changes
(2000-05 and 2006-15)
Source: M. Rosegrant (prelim. results with IMPACT-WATER)
.
0
100
200
300
2000 2005 2010 2015
Rice Wheat Maize
Oilseeds Soybean
US$/ton
Joachim von Braun, IFPRI, December 2007
Overview
1. New world food equation
2. Food: scarcity and energy price links
3. Poverty, food, and nutrition
4. Pro-poor policy actions
Joachim von Braun, IFPRI, December 2007
Price increase: Impact on the poor
Source: Adapted from World Bank 2007.
Country- and crop-specific outcomes
Staple foods Bolivia
2002
Ethiopia
2000
Bangladesh
2001
Zambia
1998
% of total expenditure of all poor
Purchases by the poor 11.3 10.2 22.0 10.3
Sales by the poor 1.4 2.8 4.0 2.3
Joachim von Braun, IFPRI, December 2007
Price-effects for Bangladesh five-person
household living on one dollar-a-day per person
Spend…their $5
$3.00 on food
$.50 on household energy
$1.50 on nonfoods
A 50 percent increase in food and energy prices
requires them to cut $1.50 of their expenditures
Cuts will be made most in food expenditures:
Reduced diet quality, and
Increased micronutrient malnutrition
Joachim von Braun, IFPRI, December 2007
Looking beneath the $1 a day line
Subjacent poor
($.75 cents – $1)
485 million people
Medial poor
($.50 cents – $.75 cents)
323 million people
Ultra poor
(less than $.50 cents)
162 million people
Source: Ahmed, et al. 2007.
Joachim von Braun, IFPRI, December 2007
Looking beneath the $1 a day line
Subjacent poor
($0.75 and <$1):
485 mln in 2004
Ultra poor
(<$0.50):
162 mln in 2004
Medial poor
($0.50 and <$0.75):
323 mln in 2004
SA
16 2 .9 mln
SSA
9 0 .2 mln
EAP
5 1 mln
LAC
16 .6 mln
MENA
0 .9 mln
ECA 1.1 mlnMENA
0.2 mln
ECA 0.4 mlnLAC
11.5 mln
EAP
8.8 mln
SA
19.7 mln
SSA
121 mln
LAC
19 mln
ECA
3 mlnMENA
3.3 mln
EAP
109.3
mln
SSA
87.0
mln
SA
263.6
mln
Source: Ahmed et al. IFPRI, 2007.
Joachim von Braun, IFPRI, December 2007
-31
-38
-27
5
29
-45
-30
-15
0
15
30
Developing World East Asia & PacificSouth Asia L America & Caribb.Sub-Saharan Africa
Mil
lio
nThe growing number of the poorest in SSA
Living below US$.50/day (1990-2004)
Source: Ahmed et al. 2007.
Joachim von Braun, IFPRI, December 2007
Global Hunger Index (GHI)
0
10
20
30
1990 2007 1990 2007 1990 2007 1990 2007 1990 2007
proportion of calorie deficient people
prevalence of underweight in children
under-five mortality rate
South Asia East Asia &
Pacific
Middle East &
N. Africa
L. America &
Caribb.Sub-Saharan
Africa
Source: Wiesmann, et al. 2007.
Contribution of components to the GHI
Joachim von Braun, IFPRI, December 2007
Performance in hunger index and income
Trends in the GHI and GNI per capita (1981, 1992, 1997, 2003)
0
10
20
30
40
50
0 2,000 4,000 6,000 8,000
GNI per capita
GH
I
Ethiopia
India
Ghana
ChinaBrazil
Source: Wiiesmann, IFPRI.
Joachim von Braun, IFPRI, December 2007
Hunger, growth and governance
1990-2004
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
-10 -5 0 5 10
Low gov effectiveness Higher gov effectiveness
Annual growth rate in GNI per capita, 1990-2004 (in %)
Pro
po
rtio
n o
f u
nd
ern
. p
rog
res
s i
nd
ica
tor
Congo, DR
Ethiopia
IndiaChina
Brazil
Ghana
Kenya
Nigeria
Tanzania
Uganda
Source: Wiesmann, 2007.
Low government effectiveness is assigned to countries in the
lowest quartile of Worldwide Governance Indicators.
Joachim von Braun, IFPRI, December 2007
Overview
1. New world food equation
2. Food: Scarcity and energy price links
3. Poverty, food, and nutrition
4. Pro-poor policy actions
Joachim von Braun, IFPRI, December 2007
Pro-poor policy actions (1)
1. Developed countries
- Eliminate agricultural trade barriers, and expand / re-visit aid priorities
2. Developing countries
- Increase investment in agriculture, rural infrastructure and market access for small farmers
3. Science and Technology (CGIAR and NARS)
- Facilitate production response by agriculture science- and technology-based solutions (China, India, Africa)
Joachim von Braun, IFPRI, December 2007
Pro-poor policy actions (2)
4. Social-protection measures
- Need expansion; productive safety nets; and
focus on early childhood under-nutrition
5. Climate change agenda
- Incorporate agriculture and food issues for
adaptation now and for long-run mitigation