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From FAO - How to feed the world 2050 - High-level expert forum

Rome - 12-13 October 2009

Technical papers from the Expert Meeting on How to Feed the World in 2050

FAO, Rome, 24-26 June 2009

These papers were commissioned by FAO to provide technical background material for the High-Level Expert Forum on "How to Feed the World in 2050" to be held at FAO, Rome, 12-13 October 2009. Please see the Expert Meeting report for expert comments on these papers as well as additional presentations made at the June 2009 Expert Meeting.*

Session 1: Global agriculture to 2050: How will the world’s food and agriculture sector develop in a dynamically changing economic and resource environment?

Macroeconomic environment, commodity markets: A longer term outlook
(Dominique van der Mensbrugghe, Israel Osorio-Rodarte, Andrew Burns and John Baffes)

The recent commodity boom was the longest and broadest of the post-World War II period. Although most prices have declined sharply since their mid-2008 peak, they are still considerably higher than 2003, the beginning of the boom. Apart from strong and sustained economic growth, the recent boom was fueled by numerous other factors including low past investment in extractive commodities, weak dollar, fiscal expansion in many countries, and, perhaps, investment fund activity. On the other hand, the diversion of some food commodities to the production of biofuels, adverse weather conditions, global stock declines to historical lows and government policies, including export bans and prohibitive taxes, accelerated the price increases that eventually led to the 2008 rally. This paper concludes that the increased link between energy and non-energy commodity prices, strong demand by developing countries - when the current economic downturn reverses course - and changing weather patterns will be the dominant forces that are likely to shape developments in commodity markets.

Poverty, growth and inequality over the next 50 years
(Evan Hillebrand)

Global poverty has fallen dramatically over the last two centuries, and the fall has intensified in recent decades, raising hopes that it could be eliminated within the next 50 years. As industrialization, specialization, and trade raised economic growth and living standards in Western Europe and the European offshoots in the 19th century, much of the rest of the world also started growing rapidly after 1950. Poverty reduction, however, has been very uneven across countries. Since 1980, China alone accounted for most of the world’s decline in extreme poverty. Even though there has been a huge rise in income inequality within China, economic growth has been so strong that hundreds of millions of people have risen out of extreme poverty and the poverty ratio has plummeted. Sub-Saharan Africa, at the other extreme, has seen its poverty headcount continue to rise; the negative impact of low economic growth has far outweighed modest improvements in within-country income inequality.

Session 2: The resource base to 2050: Will there be enough land, water and genetic potential to meet future food and biofuel demands?

World food and agriculture to 2030/2050. Highlights and views from mid-2009
(Nikos Alexandratos/FAO)

We examine the long-term projections in the FAO Study World Agriculture: Towards 2030/50, prepared in the years 2003-05 (from historical data to 2001 and base year 1999/20013) for selected broad country- and commodity-group aggregates. An overview of the Study’s findings is attached as Annex. The objective of the examination is to establish if and to what extent the projections are still valid as predictions of what may be in store in world food and agriculture to mid-century. We test the projections against (a) actual outcomes, as far as available data permit, in the first eight years of the projection period (to 2008), and (b) against the just-completed 10-year projections 2009-2018 of OECD/FAO, both with and without the quantities of crops used as biofuels feedstocks. On both counts, but without accounting for the impact of biofuels (not included in the Study), the projections have been found to be still broadly valid at the level of the aggregates considered. A fresh look is required to take on board the possible effects of biofuels. The existing medium-term projections of biofuels production and, in some cases, also of the crop quantities to be used as feedstocks, indicate that further growth is in prospect, though not at the very high rates of the last few years. The quantities of cereals by which, in these projections, world aggregate consumption would be higher because of biofuels would be still relatively modest (7 percent of world consumption in 2018, up from the current 4.8 percent), much of which will likely come from increased production over and above what it would be without biofuels. However, the potential exists for biofuels to be a major disruptive force conditioning agricultural futures, because of the growing integration of the energy and agriculture markets. This is a theme which, together with the possible impact of climate change, must inform all future attempts to speculate about long-term futures of world food and agriculture.

World Agriculture in a Dynamically-Changing Environment: IFPRI’s Long-term Outlook for Food and Agriculture under Additional Demand and Constraints
(Siwa Msangi and Mark Rosegrant)

In this paper, we explore the nature of several key drivers of change in food systems, and examine a number possible entry points for policy intervention, in order to determine their effect on food prices and other marketdriven outcomes. Among the drivers of change that we discuss are those of policy-driven growth in biofuel production, which has had a role to play in the rapid increase in food prices, along with other factors. We demonstrate the off-setting impact that supply growth could have on the socio-economic impacts of biofuels, both in terms of price changes, as well as changes in nutrition status. We also look at some evidence that points towards the significant impact that climate change could have on the agriculture and agricultural prices in the future. Combining our quantitative experiments with cited evidence from other studies, we suggest a range of policy interventions that could be instrumental in offsetting the negative impacts of food prices, and helping to promote those benefits in situations where they might exist. Among these suggestions, we encourage increased investments in the agricultural sector, so as to reverse the steadily declining growth of research and development spending and change decades of counter-productive agricultural trade and national-level sector policies.

The resource outlook to 2050. By how much do land, water use and crop yields need to increase by 2050?
(Jelle Bruinsma/FAO)

This paper discusses the natural resource implications of the latest FAO food and agriculture baseline projections to 2050 (FAO, 2006a). These projections offer a comprehensive (food and feed demand, including all foreseeable diet changes, trade and production) and consistent picture of the food and agricultural situation in 2030 and 2050. The main purpose of this paper is to provide an indication of the additional demands on natural resources derived from the crop production levels in 2030 and 2050 as foreseen in the FAO 2006 projections. It does not deal with additional demand for agricultural products used as feedstock in biofuel production or the impacts of climate change (these are dealt with in another paper, G. Fischer 2009, for this expert meeting), nor the additional production needed to eliminate (or to accelerate the elimination of) the remaining undernourishment in 2050.
Growth in agricultural production will continue to slow down as a consequence of the slowdown in population growth and of the fact that an ever increasing share of world population is reaching medium to high levels of food consumption. Nevertheless, agricultural production would still need to increase by 70 percent (nearly 100 percent in developing countries) by 2050 to cope with a 40 percent increase in world population and to raise average food consumption to 3130 kcal per person per day by 2050. This translates into an additional billion tonnes of cereals and 200 million tonnes of meat to be produced annually by 2050 (as compared with production in 2005/07).

How do climate change and bioenergy alter the long-term outlook for food, agriculture and resource availability?
(Günther Fischer)

Accumulating scientific evidence has alerted international and national awareness to the urgent need to mitigate climate change. Meanwhile, increasing and reoccurring extreme weather events devastate more and more harvests and livelihoods around the world.
Biofuels development has received increased attention in recent times as a means to mitigate climate change, alleviate global energy concerns and foster rural development. Its perceived importance in these three areas has seen biofuels feature prominently on the international agenda. Nevertheless, the rapid growth of biofuels production has raised many concerns among experts worldwide, in particular with regard to sustainability issues and the threat posed to food security (FAO, 2008a).
As recent events have shown, a number of factors including the adoption of mandatory biofuels policies, high crude oil prices, increasing global food import demand, below average harvests in some countries and low levels of world food stocks resulted in sudden and substantial increases in world food prices. The consequences were food riots around the world from Mexico to Haiti to Mauritania to Egypt to Bangladesh. Estimates indicate that high food prices increased the number of food insecure people by about 100 million.
This paper presents an integrated agro-ecological and socio-economic spatial global assessment of the interlinkages of emerging biofuels developments, food security, and climate change. The explicit purpose is to quantify as to what extent climate change and expansion of biofuel production may alter the long-term outlook for food, agriculture and resource availability developed by the FAO in its Agriculture Toward 2030/50 assessment (Alexandratos, 2009; Bruinsma, 2009; FAO, 2006).
International Institute for Applied Systems Analysis’ (IIASA)’s modeling framework and models have been developed to analyze spatially the world food and agriculture system and evaluate the impacts and implications of agricultural policies. The modeling framework has recently been extended and adapted to explicitly incorporate the issues of biofuel development. A brief summary of the methods and models applied in this study is presented below.

Session 3: The investment challenge to 2050: How much, where to invest, what priorities and what sources?

Investment requirements under new demands on world agriculture: Feeding the world with bioenergy and climate change
(Siwa Msangi, Simla Tokgoz, Miroslav Batka and Mark Rosegrant)

In this paper, we explore the sectoral spending that is needed to sustain global agricultural food production at the level needed to feed the world to 2050. We examine the key sectors most closely associated with agricultural performance and human well-being improvement, and see how these sectoral needs change under the additional challenge of the future climate change. The results of our analysis reveal a significant level of additional spending needed for key regions like sub-Saharan Africa and South Asia, which hold most of the world’s poor and undernourished, and which will be hard-hit by climate change. The role of irrigation becomes important for regions like Africa, which heavily depend on rainfed agricultural production. The need for roads is also crucial as a means for increasing the market access of producers and maintaining a vigorous level of performance within agriculture and other sectors. We discuss the role of the international agricultural research system in terms of providing global public goods, in the form of research innovations that benefit the global food system through both higher levels of availability, under increasing environmental and socio-economic stress, and through lower food prices.

Capital requirements for developing countries' agriculture to 2050
(Josef Schmidhuber, Jelle Bruinsma and Gerold Boedeker)

Cumulative gross investment requirements for developing countries’ agriculture add up to a total of nearly US$9.2 trillion over the next 44 years (2005/07-2050). This amount would be necessary to remain consistent with FAO’s long-term outlook for global agriculture (World agriculture: towards 2030/50).
Broken down by type of investment, more than US$5.5 trillion or 60 percent of the total would be required to replace the existing capital stock (or new capital items that are being added and subsequently depreciated over the 44 year period to 2050); the rest, i.e. about US$3.6 trillion would need to be added to the existing capital stock to increase (nearly double) output and raise productivity. Broken down by activity, primary agriculture accounts for about US$5.2 trillion of the total, while the remaining US$4.0 trillion is absorbed by downstream needs (processing, transportation, storage, etc.). Within primary agriculture, mechanization accounts for the single biggest investment item (25 percent) followed by expansion and improvement of irrigation (nearly 20 percent). Broken down into annual amounts, the cumulative investments result in yearly averages of about US$210 billion gross and US$83 billion net, respectively. All estimates, gross and net, cumulative and annual, are in constant 2009 dollars.

Investment in Developing Countries’ Food and Agriculture: Assessing Agricultural Capital Stocks and their Impact on Productivity
(Stephan von Cramon-Taubadel, Gustavo Anriquez, Hartwig de Haen and Oleg Nivyevskiy)

Between 1975 and 2005, global dietary energy supplies grew faster than the world population, which itself more than doubled. On global average, the food availability per person increased from 2400 to nearly 2800 kcal/person/day over those 30 years. In the developing countries the increase was even slightly steeper, from 2200 to 2600 kcal/person/day. This was a remarkable achievement of the global food and agriculture system, which was the result of significant investment and technical progress. As a result, the share of the world population with adequate access to food grew markedly. Most of the increases in consumption in developing countries were met by their domestic production, but food imports also expanded strongly. Unfortunately, the growth in global per caput food supplies was not accompanied by a reduction in the number of the under-nourished. Although the prevalence of under-nourishment in the developing countries declined from 20 to 16 percent between 1990/92 and 2003/05, the absolute number of under-nourished individuals increased from 840 to nearly 850 million people. According to preliminary estimates by FAO, the high food prices in 2007 and 2008 may have driven up this number by a further 100 million. This rising trend could continue as a result of the global financial crisis.

International investments in agricultural productions
(David Hallam, FAO.)

There has been a recent resurgence of interest in international investment in agricultural land. Purchases and leasing of agricultural land in Africa by investors in various Gulf States for food production in support of their food security strategy have perhaps attracted most attention until now, although these are just one of a variety of actual or planned investment flows with different motivations. Other countries outside Africa are also being targeted and major investments have also been made or are being planned by Chinese and, rather controversially, investors of the Republic of Korea. Investment companies in Europe and North America are also exploring opportunities motivated by potentially high expected returns on investment partly due to higher food prices and especially where biofuel feedstock production is a possibility.
The main driver for the recent spate of interest in international investment in food production appears to be food security and a fear arising from the recent high food prices and policy-induced supply shocks that dependence on world markets for foods supplies or agricultural raw materials has become more risky. Investment in food production overseas is one possible strategic response among others. At the same time, a number of developing countries in Africa are making strenuous efforts to attract such investments to exploit “surplus” land, encouraging international access to land resources whose ownership and control in the past have typically been entirely national.
Not surprisingly, the apparently anomalous situation of food insecure, least developed countries in Africa selling their land assets to rich countries to produce food to be repatriated to feed their own wealthier people has attracted substantial media interest. It has also attracted international concern more generally, including at the recent G8 agricultural ministers’ meeting. Some argue that these investments could mark the beginning of a fundamental change in the geopolitics of international agriculture. Certainly, complex and controversial issues – economic, political, institutional, legal and ethical – are raised in relation to food security, poverty reduction, rural development, technology and access to resources, especially land. On the other hand, the low level of investment in developing country agriculture, especially in sub-Saharan Africa, over decades has been highlighted as a matter of concern and the underlying root cause of the recent world food crisis so any possibility of additional investment resources cannot be dismissed out of hand. The focus needs to be on how these investments can be made “win-win” rather than “neo-colonialism”.

Session 4: The investment challenge and the technology challenge to 2050

Can technology deliver on the yield challenge to 2050?
(R.A. Fischer, Derek Byerlee and G.O. Edmeades)

This paper focuses on the yield prospects of wheat, rice and maize since these cereals dominate human diet, and since continued yield growth is considered the major route to meeting future global demand for food, feed and fuel. We define for a region farm yield (FY), attainable yield (AY, as reached with the best technology and prudent economics), and potential yield (PY, yield with the best varieties and agronomy and no manageable biotic or abiotic stresses). FY progress is a function of progress in PY and in closing the gap between PY and FY (we express this gap as a percent of FY). Globally wheat and rice annual yield increases (as a percent of current yield) are falling and are now just below 1 percent, while that for maize is 1.6 percent. For rice and wheat, the growth of yields in absolute terms (kg/ha/year) are also falling in developing countries. Global demand modelling to 2050 predicts large real price sensitivity to yield growth rates, with significant price increases if current rates cannot be increased.

Setting meaningful investment targets in agricultural research and development: Challenges, opportunities and fiscal realities
(Nienke Beintema and Howard Elliott)

This paper is ultimately aimed at policymakers who ask “Is there enough investment in agricultural research and development (R&D)?” They are constantly being reminded by declarations made, commitments signed and targets held up that assert that they must do more or better. In order to provide some analytical structure and limits to the discussion, we look at “underinvestment” separately from the demand and the supply sides and then at the investments, policy actions and institutional arrangements that are needed to bring supply and demand into balance.
This paper has four sections in addition to this introduction. Section 2 sets the scene by providing historical trends in human and financial investments in agricultural research and development (R&D). Section 3 looks at “underinvestment” in three ways (two technical and one political). First, evidence of a continuing high rate of return relative to the social rate of discount is a formal definition of “underinvestment” since additional investment would add more to social gains than to social costs. Second, failure to maintain on-farm productivity growth at its historical trend and potential contribution is a sign of underinvestment. Finally, if there are large gaps between the resources required to attain political commitments, e.g. the Millennium Development Goals (MDGs) with respect to poverty and hunger; there is underinvestment with respect to political commitments. We do not say anything at this point about how fast the gaps must be eliminated if we want to avoid waste.
Turning to the “supply side” in Section 4, we pose the question whether a country’s national effort is commensurate with its financial and human resource capacities to permit it to “do more” to deliver on commitments to investment targets set in various international fora. On the finance side, we go into several public finance issues on the taxation and expenditure sides (which are not independent of each other). We create an identity out of the agricultural research intensity ratio, analyze the four components that determine its value, and comment on what might be done to increase investment in R&D. On the human resource side, we identify gaps in both research and higher education that affect the ability of research institutions to ramp up their effort in response to emerging challenges. The financial resource needs cut across the global to local scales.
Section 5 deals with new challenges imply not just reinvestment in agricultural R&D but also necessary investment in other parts of the knowledge system for balanced growth. A demand for more highly trained researchers to deal with climate change, price volatility in global markets, or water scarcity is a demand on the university system to expand MSc and PhD training. The expanded cadre provides valuable research support to existing scientists while learning the advanced skills needed to become senior researchers.

Session 5: Feeding the world in 2050: The global policy challenge

Evolving structure of world agricultural trade and requirements for new world trade rules
(Alexander Sarris)

The recent world food crisis of 2007-08 alerted the world and policy makers to the fact that global agricultural productivity growth has been slowing down, and highlighted the fact that current national agricultural trade policies and the current world trade rules as agreed in the World Trade Organization (WTO) Agreement on Agriculture may not be adequate to prevent such crises in the future. At the same time changes in climate may be precursors of more potential food crises, with significant negative impacts on many poor across the world. This necessitates a reconsideration of the factors that drive long term agricultural trade, and the needs of future global agricultural trade rules.
The objective of this paper is to highlight and analyze several factors impinging on future agricultural trade developments, in order to identify possible needs for future global agricultural trade rules. The paper first documents the recent food events and discusses factors behind these developments. It analyses the pattern of global agricultural market instability over the past 40 years and the factors that may affect it in the futures. New challenges facing the world agricultural trade system are analyzed next. Then a discussion of the growing vulnerability of some developing and least developed countries is illustrated. The paper finally tries to identify areas where the WTO system of rules on agricultural trade may need strengthening or adaptation.

Farm support policies that minimize distortionary effects
(Aziz Elbehri and Alexander Sarris)

The recent world food crisis highlighted the critical issue of global food security and the need to enhance global agricultural production capacity to meet current and future food demand. Increased investment in agriculture and adequate incentives to farmers are required to meet this global challenge. A key question is how to shape and design support to farmers in both the developed as well as the developing world while minimizing those distortions to global markets that are potentially harmful to developing countries, and at the same time promoting global food supply adequacy, food security for the undernourished, and poverty reducing and growth incentives for the farmers in low income food deficit countries.

Session 6: Africa’s special role, problems and needs: What development model for Africa?

Challenges and opportunities for African agriculture and food security: high food prices, climate change, population growth, and HIV and AIDS
(Hans P. Binswanger-Mkhize)

Over the past decade, economic and agricultural growth in sub-Saharan Africa (SSA) has resumed. The secular downward trend in agricultural prices ended in the early 1990s; growing incomes in Asia and Africa, combined with continued rapid population growth, are fueling food demand, which is expected to lead to a gradual upward trend in international real agricultural prices. For Africa the major agricultural growth opportunities will be in regional and domestic markets for food staples. Economic and agricultural growth have resumed despite continued high population, the AIDS crisis, and the onset of measurable climate change. Climate change will provide both challenges and opportunities, and countries need to strengthen their general capacities to deal with stresses and weather shocks in line with general agricultural development priorities. Population growth adds to the challenge of increasing per capita income and feeding Africa. It will also drive further agricultural intensification and in many place has led to improvements, rather than deterioration in the natural resource base. The fight against HIV and AIDS in rural areas is lagging badly and will need to be intensified via participatory approaches to prevention, expansion of HIV and AIDS treatment to rural areas, and massive improvements in rural safety nets. To seize the agricultural growth opportunities that derive from recent policy and price trends, SSA will have to support economic growth via continued sound macroeconomic policies, further improvements in the investment climate, and investments in infrastructure and institutions. More specifically in the agricultural sector, SSA will have to
(i) further reduce agricultural dis-protection in countries and commodities that still practice it;
(ii) reduce barriers to intra-regional trade in food and other agricultural commodities and properly finance the regional institutions that support regional trade, quality and phyto-sanitary controls, and other regional agricultural public goods;
(iii) sharply increase domestic and regional funding of agricultural science, science education, and research; and thereby regain the technology agenda from the donors; and
(iv) assist in the deepening of domestic markets and foster sharp improvements in smallholder services.

Can the smallholder model deliver poverty reduction and food security for a rapidly growing population in Africa?
(Steve Wiggins)

Despite the achievements of smallholders in Asia during the green revolution, there is scepticism that Africa’s smallholders — who dominate the farm area in most countries — can imitate this model and deliver agricultural growth. This paper assesses whether such pessimism is justified.
Given the high transactions costs of hiring labour of farms, diseconomies of scale can be expected when labour is relatively cheap and abundant compared to other factors of production: which may explain the survey evidence that small farms often produce more per hectare than larger farms. In conditions of low development with relatively cheap labour, small units may have advantages over larger ones.
The empirical record of performance of small and large farms in Africa is uneven and incomplete. Given the dominance of small farms in agriculture in many African countries, national data may be indicative of small farm performance. The record since the 1960s shows variable performance in agricultural growth through time and space, with slow growth in the 1970s followed by acceleration from the early 1980s. Even more striking is the difference in the performance of Northern and Western Africa compared to that of other regions of the continent. But the differences are not just regional: there is great variation across countries. While many African countries have a disappointing record of growth, thirteen doubled or more their production in the twenty years from the early 1980s onwards. These include countries where the bulk of output comes from small farms — Burkina Faso, Ghana, Mali, Niger, etc. Countries that have, or had, notable large-farm sectors such as Namibia, South Africa and Zimbabwe are well down the growth ranking. This proves little about scale since other factors are so much more important for agricultural growth, but it does show that to have an agriculture dominated by small farms is no obstacle to growth, and quite rapid growth at that.
On labour productivity, either by level or rate of growth, small farming suffers in comparison to large-scale farming. This is to be expected: small farms tend to apply much more labour per hectare than large units. This creates employment, but the statistics suggest that too often this is poorly rewarded.

African Agriculture in 50 years: Smallholders in a Rapidly Changing World?
(Paul Collier and Stefan Dercon)

For economic development to succeed in Africa in the next 50 years, African agriculture will have to change beyond recognition. Production will have to have increased massively, but also labour productivity, requiring a vast reduction in the proportion of the population engaged in agriculture and a large move out of rural areas. Climate change is likely to require an acceleration of this process, with commensurate faster and further migration of large populations. In this paper, we ask how this can be squared with a continuing commitment to smallholder agriculture as the main route for growth in African agriculture and for poverty reduction. We question the evidence base for an exclusive focus on smallholders, and argue for a much more open-minded approach to different modes of production.
Smallholders are heterogeneous and there is scope for large scale farmers as commercial enterprises, often in interaction with smaller scale farmers using institutional frameworks that encourage vertical integration and scale economies in processing and marketing. Furthermore, we question the case for smallholders as engines for growth and poverty reduction. The evidence is far more mixed than the exclusive emphasis upon the smallholder approach would lead us to believe. Indeed, much of the focus on smallholders may actually hinder large scale poverty reduction. Fast labour productivity growth is what is needed for large scale productivity reduction but smallholders and the institutions to support and sustain them are weak agents for labour productivity growth in Africa.
The current policy focus ignores one key necessity for labour productivity growth: successful migration out of agriculture and rural areas. In the final part of the paper, we consider the recent African vogue for ‘superfarms’: the emergence of investments in vast tracks of land of thousands of hectares for food crop agriculture focused on exports, such as to the Middle East. We argue that, while commercialization of African agriculture is desirable, the superfarms are fundamentally geopolitical rather than commercial and are not an appropriate vehicle for encouraging growth in African societies.

*The views expressed in these papers are those of the author(s) and do not necessarily reflect the views of the Food and Agriculture Organization of the United Nations.


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