Increased investments in agricultural R&D could have significant benefits according to a global model. Doubling investments in agricultural R&D by national programs and CGIAR by 2020 was modeled. This led to higher crop yields, lower food prices, increased production, food consumption and improvements in food security indicators by 2030 compared to the baseline. The number of malnourished children and population at risk of hunger declined by around 25% globally due to increased agricultural R&D investments.

1. Rising Food Prices? The Role of
Agricultural R&D
Mark W. Rosegrant, Director
Environment and Production Technology Division
2013 AAEA & CAES Joint Annual Meeting
Session 1019: Whither Global Food Prices?
Marriott Wardman Park, August 4‐6, 2013

2. Outline
 Drivers of agricultural growth and food
security
 Model description
 Baseline projections of supply, demand
and food security
 Scenario of increased investments in
agriculture R&D
 Conclusions and policy implications

3. Drivers of Agricultural
Growth, Prices, and Food
Security

4. Supply and demand pressures affect
agricultural growth and food security
Demand pressures Supply pressures
▪ Population growth – direct
– Increased domestic /
urban use
– Increased food demand
▪ Economic growth –
– Increased urban water
use
– Increased industrial
water use
– More resource-intensive
diets
▪ Biofuels/Bioenergy
▪ Climate mitigation
▪ Conservation and
biodiversity
▪ Land and water scarcity
▪ Climate change
▪ Investments in agricultural
research
▪ Science and technology
policy
▪ Management and
governance reform
Higher food prices
More variable
food prices
Pressures on
ecosystems
(quantity and
quality impacts)
Increased
competition and
higher prices for
natural resources
Economic /
political conflict
Food security at risk

5. Model Description

6. The IMPACT Model
 IMPACT – “International Model for Policy
Analysis of Agricultural Commodities and
Trade”
 Global partial equilibrium model
 Global
• 115 countries
• 281 food production units (countries x river
basins)
• 46 agricultural commodities

7. Flow Chart of IMPACT Model

8. IMPACT Model Structure
 Crop area is a function of crop prices, irrigation investment,
water input, climate change
 Yield is a function of crop price, input price, irrigation
investment, water inputs, exogenous yield growth
 Yield growth is a function of investment in agricultural
research, irrigation, and rural roads
 Food demand is a function of commodity prices, income,
and population
 Feed demand is a function of livestock production, feed
prices, and feeding efficiency
 Biofuel demand is computed based on policy mandates and
targets
 Crush demand is a function of crush profit margins

9. Baseline Projections of
Supply, Demand
and Food Security

10. Annual Average Growth in Per Capita GDP
between 2010 and 2030 – Baseline Projections
0
1
2
3
4
5
6
Percent Growth Rate per Year
Source: IFPRI IMPACT Model

11. Annual Average Growth in Population between
2010 and 2030 – Baseline Projections
0
0.5
1
1.5
2
2.5
Percent Growth Rate per Year
Source: IFPRI IMPACT Model

12. World Crop Yields
Annual Average Growth Rate
0
0.5
1
1.5
2
2.5
3
3.5
Maize Rice Soybeans Wheat
Percent Growth Rater per Year
1970‐1990 (FAO) 1990‐2010 (FAO) 2010‐2030 (IMPACT Baseline)
Source: IFPRI IMPACT Model

13. World Crop Area‐
Baseline Projections
0
50
100
150
200
250
300
Rice Wheat Maize Millet Sorghum Other Grains
Million Hectares
2010 2030
Source: IFPRI IMPACT Model

14. Source of Cereal Production
Growth, 2010 ‐ 2030
‐10
0
10
20
30
40
50
60
70
Percent Change
Area Expansion Yield Improvement
Source: IFPRI IMPACT Model

15. Percent Change in World Prices of
Cereals between 2010 and 2030
0
5
10
15
20
25
Rice Wheat Maize Millet Sorghum Other grains
Percent Change
Source: IFPRI IMPACT Model

16. Percent Change in World Prices of
Meats between 2010 and 2030
0
5
10
15
20
25
30
Beef Pork Lamb Poultry
Percent Change
Source: IFPRI IMPACT Model

17. Per Capita Cereal Demand‐
Baseline Projections
0
20
40
60
80
100
120
140
160
180
Developed Developing South Asia Sub Saharan
Africa
Kg per Capita
2010 2030
Source: IFPRI IMPACT Model

18. Per Capita Meat Demand‐
Baseline Projections
0
10
20
30
40
50
60
70
80
90
100
Developed Developing South Asia Sub Saharan
Africa
Kg per Capita
2010 2030
Source: IFPRI IMPACT Model

19. Number of Malnourished Children
0
20
40
60
80
100
120
140
160
Developing South Asia Sub Saharan Africa
Millions
2010 2030
Source: IFPRI IMPACT Model

20. Population at Risk of Hunger
0
100
200
300
400
500
600
700
800
900
1000
Developing South Asia Sub Saharan Africa
Millions
2010 2030
Source: IFPRI IMPACT Model

21. Scenarios of Increased
Investments in
Agricultural R&D

22. Investment in Ag R&D – CGIAR
CGIAR (million 2005 US$)
Region 1992 2000 2010
Sub Saharan Africa 171 157 278
Asia Pacific 145 124 171
Latin America & Caribbean 65 63 70
Central and West Asia and
North Africa
45 35 46
Source: Agricultural Science and Technology Indicators, IFPRI

23. ‐4
‐3
‐2
‐1
0
1
2
3
4
5
6
7
Sub Saharan
Africa
Asia Pacific Latin America &
Caribbean
Central and
West Asia and
North Africa
% Rate of Growth
1992‐2000 2000‐2010
Source: Agricultural Science and Technology Indicators, IFPRI
Investment in Ag R&D –
Rate of Growth CGIAR

24. Investment in R&D – NARS
CGIAR (million 2005 US$)
Region 1990 2000 2008
East Asia Pacific 909 1405 2450
South Asia 368 615 834
Sub Saharan Africa 527 628 803
Latin America Caribbean 1373 1577 1819
West Asia and North Africa n.a. 698 824
Source: Agricultural Science and Technology Indicators, IFPRI

25. 0
1
2
3
4
5
6
7
8
East Asia
Pacific
South Asia Sub Saharan
Africa
Latin America
Caribbean
West Asia and
North Africa
% Rate of Growth
1990‐2000 2000‐2008
Source: Agricultural Science and Technology Indicators, IFPRI
Investment in R&D –
Rate of Growth NARS

26. Increased Investment Scenario
Compared to Baseline
 Increased Investment in Agricultural R&D
• Baseline assumes continuation of trend growth,
2000‐2008, in CGIAR and NARS agricultural R&D.
• Increased investment scenario: Level of CGIAR and
NARS investment in agricultural R&D is doubled by
2020 compared to the baseline, then baseline trend
to 2030

27. Changes in World Prices of Crops
Relative to Baseline, 2030
Commodity/Scenario Increased Investment
Rice ‐23.7%
Wheat ‐13.5%
Maize ‐9.4%
Millet ‐20.9%
Sorghum ‐15.6%
Other Grains ‐7.7%
Source: IFPRI IMPACT Model

28. Commodity/Scenario Increased Investment
Beef ‐14.6%
Pork ‐12.6%
Poultry ‐14.0%
Sheep & Goat ‐16.7%
Source: IFPRI IMPACT Model
Changes in World Prices of Meat
Relative to Baseline, 2030

29. Commodity/Scenario Increased Investments
East Asia and Pacific 22.0%
Europe and Central Asia 5.1%
Latin America and Caribbean 8.6%
Middle East and North Africa 21.6%
South Asia 21.4%
Sub‐Saharan Africa 20.2%
Developed ‐0.9%
Developing 16.9%
World 11.2%
Source: IFPRI IMPACT Model
Changes in Cereal Yield
Relative to Baseline, 2030

30. Commodity/Scenario Increased Investments
East Asia and Pacific ‐4.9%
Europe and Central Asia ‐5.1%
Latin America and Caribbean ‐5.7%
Middle East and North Africa ‐3.4%
South Asia ‐5.7%
Sub‐Saharan Africa ‐7.6%
Developed ‐5.6%
Developing ‐5.6%
World ‐5.6%
Source: IFPRI IMPACT Model
Changes in Cereal Crop Area
Relative to Baseline, 2030

31. Commodity/Scenario Increased Investment
East Asia and Pacific 16%
Europe and Central Asia ‐0.3%
Latin America and Caribbean 2.4%
Middle East and North Africa 17.5%
South Asia 14.5%
Sub‐Saharan Africa 11.0%
Developed ‐6.5%
Developing 10.4%
World 4.9%
Source: IFPRI IMPACT Model
Changes in Production of Cereals
Relative to Baseline, 2030

32. Commodity/Scenario Increased Investment
East Asia and Pacific 9.8%
Europe and Central Asia 10.5%
Latin America and Caribbean 8.6%
Middle East and North Africa 9.2%
South Asia 8.9%
Sub‐Saharan Africa 9.1%
Developed ‐2.0%
Developing 9.4%
World 6.0%
Source: IFPRI IMPACT Model
Changes in Production of Meat
Relative to Baseline, 2030

33. Commodity/Scenario Increased Investment
East Asia and Pacific 5.0%
Europe and Central Asia 3.0%
Latin America and Caribbean 3.1%
Middle East and North Africa 2.8%
South Asia 5.4%
Sub‐Saharan Africa 6.0%
Developed 4.0%
Developing 4.8%
World 4.7%
Source: IFPRI IMPACT Model
Changes in Consumption of Cereals
Relative to Baseline, 2030

34. Commodity/Scenario Increased Investment
East Asia and Pacific 5.4%
Europe and Central Asia 5.8%
Latin America and Caribbean 7.8%
Middle East and North Africa 6.5%
South Asia 7.8%
Sub‐Saharan Africa 8.9%
Developed 5.0%
Developing 6.4%
World 6.0%
Source: IFPRI IMPACT Model
Changes in Consumption of Meat
Relative to Baseline, 2030

35. Commodity/Scenario Increased Investments
East Asia and Pacific ‐16.5%
Europe and Central Asia ‐8.8%
Latin America and Caribbean ‐10.2%
Middle East and North Africa ‐11.6%
South Asia ‐4.2%
Sub‐Saharan Africa ‐7.8%
Developed ‐5.6%
Developing ‐7.1%
World ‐6.9%
Source: IFPRI IMPACT Model
Impact on Number of Malnourished Children
Relative to Baseline, 2030

36. Commodity/Scenario Increased Investments
East Asia and Pacific ‐13.4%
Europe and Central Asia ‐2.8%
Latin America and Caribbean ‐30.6%
Middle East and North Africa ‐11.7%
South Asia ‐32.2%
Sub‐Saharan Africa ‐27.3%
Developed ‐7.0%
Developing ‐26.0%
World ‐24.9%
Source: IFPRI IMPACT Model
Impact on Population at Risk of Hunger
Relative to Baseline, 2030

37. Conclusions and Policy
Implications

38. Conclusions
 Doubling of public investment in agricultural
R&D by 2020: direct positive effects on crop
yields
 Indirect impacts on prices, crop area,
production, food consumption and food security
 World prices of major commodities decline
relative to baseline
 Significant improvements in food security
indicators ‐ number of malnourished children
and population at risk of hunger