FOODCROPS.VN. . 2015. Robert L Thompson. Essential Roles of Agricultural Technology and International trade in future food security

1. Essential Roles of Agricultural
Technology & International Trade
in Future Food Security
Robert L. Thompson
Professor Emeritus of Agricultural Policy
University of Illinois at Urbana-Champaign
21 September 2015

2. Outline
• Dimensions of Food ecurity
• Drivers of Global Demand for Food
• Global Agricultural Supply Potential and
International Investment Opportunities
• Future Prospects

3. Dimensions of Food Security
• Global Food Security
– Can the world’s farmers feed its larger population
better than today at reasonable cost without
damaging the environment?
• National Food Security
– Potential for self-sufficiency that is economically
efficient and environmentally sustainable
– Every country has to ensure that it has a reliable,
safe and nutritious, reasonably priced supply of
food from a combination of domestic production
and imports.
• Household Food Security
– Hunger caused mainly by lack of purchasing power
– The rich in no country go hungry, except in times of
war, natural disaster or politically-imposed famine.

4. Global Demand for Food

5. Projected Population Growth to 2030
(millions)
Region 2015 2030 Change Percent
World 7,336 8,505 + 1,169 + 16
High Income 1,254 1,295 + 41* + 3
Developing 5,144 5,910 + 766 + 15
Least developed 938 1,300 + 362 + 30
Source: Population Reference Bureau. 2015 World Population Data Sheet.
*Of the 1.2 billion additional mouths to be fed in the next 15 years, only 3.5% of
them will be in the high income countries. The potential growth markets of the
future are in the lower income countries.
-Of the projected 41 million increase in the population of high income countries, 38
million will be in the United States. The populations of most of the other high
income countries are declining. When the aging of their populations is also
considered, these are shrinking markets of the past.

6. Projected Population Growth to 2050
(millions)
Region 2015 2050 Change Percent
World 7,336 9,804 +2,468 + 34
High Income 1,254 1,310 + 56 + 4
Low Income 6,082 8,495 +2,413 + 40
East & S.E. Asia 2,237 2,411 + 174 + 8
South Central Asia 1,903 2,526 + 623 + 33
Sub-Saharan Africa 949 2,081 +1,132 +119
Latin America/Carib 630 776 + 146 + 23
N. Africa & W. Asia 479 779 + 300 + 63
Source: Population Reference Bureau. 2015 World Population Data Sheet.

7. 10 Largest Countries (millions)
2015 2050
1. China 1,372
2. India 1,314
3. United States 321
4. Indonesia 256
5. Brazil 205
6. Pakistan 199
7. Nigeria 182
8. Bangladesh 160
9. Russia 144
10. Japan 127
1. India 1,660
2. China 1,366
3. United States 398
4. Nigeria 397
5. Indonesia 366
6. Pakistan 344
7. Brazil 226
8. Bangladesh 202
9. Congo D.R. 194
10. Ethiopia 165
Source: Population Reference Bureau. 2015 World Population Data Sheet.

8. Urbanization Changes Diets:
How to Provision Megacities?
Source:http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK%3A20149913~menuPK%3A34457~pagePK%3A64003015~piPK%
3A64003012~theSitePK%3A4607,00.html
The U.N.
projects that
60% of world
population will
live in cities by
2030; 70% by
2050.

9. Hunger & Food Insecurity Widespread
• Of the world’s 7.3 billion people, 1.2 billion
live on less that $1.25 per day*.
– 780 million people (1 out of every 9 people in
the world) cannot afford 1,800 calories per
day, not enough to put in even a medium level
of physical activity.
• 2.4 billion (35% of the world population)
live on <$2.00 per day*.
– By $2.00 per day most hunger (calorie)
problems solved, but 2 billion still suffer
nutritional deficiencies.
• 2008 estimate; income corrected for differences in purchasing power
across countries. Source: World Bank Povcal database.

10. Dynamics of Food Demand Growth
• As their incomes rise from about $2 to $10
per day, people can afford a more
balanced diet and eat more meat, dairy
products, eggs, edible oils, fruits &
vegetables causing rapid growth in raw
agricultural commodity demand.
• After people’s incomes reach about $10/
day, the small part of each increment that
gets spent on food is spent on conveni-
ence, packaging, processing, variety, and
luxury forms, not more raw commodities.

11. Meat Consumption Dynamics

12. Population Living on <1.25/Day

14. Projected World Food Demand
• World food demand is projected to grow about
two-thirds between now and 2050:
– 33% increase from world population growth – from
7.3 to 9.7 billion – almost all in developing countries
– 33% increase from broad-based economic growth
and urbanization in low income countries
• How many presently low income consumers,
who spend the largest fraction of their incomes
on food, escape from poverty is the most
important uncertainty concerning future global
demand for food.
• With the growing use of agricultural commodities
as raw materials in the of the bio-based
economy, including biofuels, world demand for
grain and oilseeds could double by 2050.

15. The world’s arable land is not
distributed around in the world in the same
proportions as is population.
Distribution of Arable Land Distribution of World Population
East and South Asia have more than twice as much of the
world’s population than of the arable land, and virtually all of
their arable land is already in production. The Middle East &
North Africa have land, but not water.

16. Growing Agricultural Trade
• With population growth, urbanization and broad-
based economic development, growth in many
low-income countries’ food consumption will
outstrip their production capacity.
• No matter how much they invest in developing
their agriculture, many will become larger net
importers—on either commercial or
concessional terms.
• A larger fraction of world agricultural production
is expected to move through world trade.

17. Global Supply Potential

18. Croplands of the Earth
Interpretation: The darker the shading, the larger the percent of the land under that pixel that is in crops.
Source: Center for Sustainability and the Global Environment (SAGE), University of Wisconsin.

19. The Land Constraint
• There is at most 12% more arable land available
worldwide that isn’t presently forested or subject
to erosion or desertification, and…
• Loss and degradation of many soils continues:
– Urbanization & infrastructure construction
– Nutrient mining
– Erosion
– Desertification
– Natural reserves
– Reforestation

20. The Land Constraint (cont’d.)
• The area of land in farm production could be
doubled…
– But only by massive destruction of forests and loss of
wildlife habitat, biodiversity and carbon sequestration
capacity
• The only environmentally sustainable alternative
is to double productivity on the fertile, non-
erodible soils already in crop production.
• Most available cropland is in remote areas of
South America and Sub-Saharan Africa where
infrastructure is minimal and soils are inferior in
quality to many already in production.

21. Inherent Land Quality

22. Climate Constraints Changing
• Warming greater over land than over water and greatest
at higher latitudes.
• Changing spatial distribution of precipitation
• Increased frequency of extreme climatic events
Source: International Institute for Applied Systems Analysis, Laxenburg, Austria.

23. Source: IPCC 4 Working Group 1. Summary for Policymakers, p . 15.

24. Source: IPCC 4 Working Group 1. Summary for Policymakers, p. 16.

25. Agriculturally Important Effects
of Climate Change
• More carbon dioxide enhances plant growth
• Higher temperature extends growing season in
high latitudes, but likely detrimental in low
latitudes
• Available water (increase demand for irrigation?)
• Increased risk from greater climatic variability
and more frequent extreme events
• Proliferation of pests and diseases further north
• Sea-level rise causes loss of cropland
• Loss of soil fertility and increased erosion

26. Adaptations Will be Required
Due to Global Climate Change
• As all agro-ecosystems shift with climate
change, need larger investments (public
and private) in adaptive plant and animal
breeding just to sustain present
productivity levels.
– e.g. introduce more drought or heat tolerance.
• Change the mix of what crops are
produced in a some geographic locations.
• Rely more on international trade.

27. Water--A Growing Constraint
• Farmers account for 70% of the world’s fresh
water use.
• With the rapid urbanization underway, cities will
outbid agriculture for available fresh water.
• The world’s farmers, who are being called on to
double food production, will have to do it using
less fresh water than they are using today.
– i.e., they will have to more than double the “crop per
drop,” the average productivity of the water they use.
• This will require investments in research to
develop water saving technologies and to
increase the drought tolerance and water use
efficiency of the crop varieties being grown.

28. Solving the Water Constraint
• There is one source of optimism that the
productivity of the water used in agriculture can
be increased. Water is priced at zero to most of
the world’s farmers, signaling that it is much
more abundant than it is in reality.
– Anything priced at zero will be wasted.
• There are better technologies available today to
increase water use efficiency than farmers are
using in many parts of the world, but with water
priced at zero, it doesn’t pay to adopt them.
• If the politically difficult hurdle of charging
farmers for water can be overcome, this would
stimulate adoption of the available technologies.

29. Sustainability Will Require Increased
Global Food System Productivity
• Make presently unusable soils productive
• Increase genetic potential (of individual crops
and/or farming system) (ditto for farm animals)
• Achieve as much of that potential as possible by:
– Improving nutrition of that crop
– Increasing water availability and control
– Reducing competition from weeds for water, nutrients
and sunlight
– Reducing losses from disease and insects
• Reduce post-harvest losses

30. Post-Harvest Losses
• It is estimated that one third* of world food
production is lost between farmers’ fields and
the consumer.
– In low income countries this occurs principally
between the field and retail.
– In high income countries this occurs principally
between retail and the garbage pail.
• In a resource-constrained world, isn’t it immoral
to use so many resources--land, water, energy,
and fertilizer--to produce so much food that
never gets from farmers’ fields to consumers?
*There are no very good data on the magnitude of post-harvest losses. All
published numbers are crude estimates.

31. Grain Yields Around the World
Interpretation: Grain yields (in metric tons per hectare) rise from lowest (dark blue) to highest (dark red)
Source: Center for Sustainability and the Global Environment (SAGE), University of Wisconsin.

32. Crop
Yield
Gap
Sources: Center for Sustainability and the Global Environment (SAGE), University of Wisconsin, and FAO. State of
Food an Agriculture 2012, p. 106

33. Sources of Observed Differences
in Crop Yields in Different Locations
- Genetic potential embodied in the seeds of
the crop being grown.
- Climatic conditions (level and variation in
temperature and precipitation)
- Quality of soil (fertility, water holding
capacity; resilience)
- Supplementation of soil fertility and
precipitation with fertilizer and irrigation.
- Losses of yield potential from disease and
insect infestations and competition from
weeds.

34. Need to Exploit Irrigation Potential

35. Fertilizer Use by Region
1961-71 to 2001-2011
Source: FAO data

36. More Sources of Observed Differences
in Grain Yield in Different Locations
- Existence of markets to supply farmers
inputs that embody improved technologies
(and available credit) and buy their outputs
- Requires a business friendly investment
climate
- Remunerative input and output prices
- Reflect public policy and state of
transport and communications
infrastructure.
- Knowledge and skill of farmers.

37. Efficiency in Livestock and
Poultry Production Must Increase
• Continue to increase potential feed conversion
rates through improved genetics, nutrition and
herd/flock health.
• Reduce the gap between actual feed conversion
rates and what is possible with present state of
nutrition knowledge (balance rations).
• Increase fraction of world meat and milk
production from species with highest feed
conversion rates.
• Reduce methane production per unit of milk and
meat produced by ruminants.

38. Agricultural Research Potential
• There remains more productivity enhancement
potential from classical plant and animal
breeding, especially with modern genomics, and
genetic engineering opens new frontiers:, e.g.
– Improve nutritional content of grains, etc.
– Increase tolerance to drought, wetness, temperature,
salt, aluminum toxicity, …. (to increase yields and/or
planted area under adverse or variable conditions)
– Increase resistance to certain diseases; viruses
– Reduce pesticide use, especially insecticides
– Herbicide-resistant varieties
– Slow down product deterioration

39. Agriculture Has Been Off the
Global Development Agenda
• Agricultural and rural development were priorities for
foreign aid and international development bank lending
up until the mid-1980s, but:
– Between 1980 to 2005, foreign aid to low income countries for
agricultural development dropped from $8 billion to $3.4 bill./yr
(from 17 to 3% of the whole)
– In the 1980s, 25% of U.S. foreign aid went to agriculture; dropped
to 6% by 1990 and 1% by 2008.
– Share of World Bank lending going to agriculture fell from 30% in
1978 to 16% in 1988 to 8% in 2006.
• The share of foreign aid and development bank
lending invested in agricultural research fell by an
even larger percentage during this period.

40. *ARD = Agriculture and rural development
Source: OECD DAC.

41. Long-Run Prospects
• The world’s farmers need to almost double
agricultural production in the next 35 years
using less water and little more land than
today.
• Malthus has been wrong for more than two
centuries, and there is no more reason for
him to be right in the 21st century than in
the 19th and 20th.
• However he will continue to be wrong only
if investments in agricultural research
increase global agricultural productivity
faster than demand grows.

42. Long-Run Prospects
• Whether world market prices trend upwards,
downwards or sideways in the 21st century
will depend on whether agricultural research
increases land and water productivity faster,
slower or at the same speed as world
demand for food grows.
• The drop in public sector investments in
agricultural development (and ag research in
particular) must be reversed if there is to be
any chance of avoiding an upward trend in
prices, which would be devastating to low
income consumers who spend a large
fraction of their incomes on food.

43. Thank You.
Dr.Robert.L.Thompson@gmail.com

44. Household Food Security
• Availability: Is there a safe, reliable, and reasonably
priced supply of all essential nutrients available from
local production or the market year around? Food
processing has an essential role in making this
possible.
• Access: Does a household have the purchasing
power to access a nutritionally balanced diet from
home grown sources or the marketplace?
– To solve the world’s chronic hunger problem, you
have to solve the world’s poverty problem.
– Low income people spend the largest fraction of their
income on food, so they are particularly vulnerable to
increases in the price of food.

45. Long-Run Prospects
• Since Malthus, many prophets of doom have
argued population growth will increase food
demand faster than agricultural production and
food availability can grow.
• Public and private sector investments in
agricultural and food science research have
increased productivity of the food system faster
than food demand has grown, resulting in a 150-
year downward trend in real price of food.
• Now demand for food is projected to grow by 67%
more by 2050, but there is little more land and less
fresh water available with which to grow the
additional production. Can productivity grow so
much sustainably?

47. Two Essential Facts
• All food is “organic.”
• No one alive today has ever eaten a
mouthful of food that has not been
genetically modified.

48. Advantage of Genetic Engineering
over Classical Plant Breeding
Source: Cornell University College of Agricultural and Life SciencesSource: College of Agriculture and Life Sciences. “Agricultural Biotechnology—Informing the Dialogue,” Cornell University, 2002

49. Two Separable Issues
• The biological research tool of genetic
engineering
– Every national academy of science that has looked at
it says biotech plants are neither safer nor less safe
than the products of classical plant breeding.
• Who does the research (public vs. private)? Is it
patented? Do farmers have to buy inputs (every
year) to access the improved technology?
• Failure to recognize that these are completely
separate issues confuses a great deal of the
debate concerning GMOs.

50. Academies of Science, International
Organizations and Government Agencies
Acknowledge Safety of Biotechnology
Academies of Science
• Brazil
• China
• France (both Science and
Medicine)
• India
• Italy
• Mexico
• Morocco
• Philippines
• Third World
• United Kingdom (Royal
Society)
• United States
Government Agencies
• WHO
• FAO
• AMA
• IFT
• FDA
• EPA
• USDA
• EU Joint Research Council
• EU Food Safety Authority
• AAAS

51. Public vs. Private Biotech Research
• Private sector role in biological ag research only
took off after late 1970s when Congress and
European parliaments cut appropriations and
encouraged private sector to take on this role
• As tools of biotechnology were being developed,
governments were reducing investments in ag
research – both at home and in their foreign aid
– The latter often due to strong lobbying by transna-
tional NGOs which now demonize the private sector
for controlling most of the biotech-based technology.
• There is nothing inherent in biotechnology that
says it must be done by private sector.

52. Intellectual Property Protection
• To satisfy their shareholders, the private
sector has to be able to internalize return
on its investment in ag research
• If public sector doesn’t pay for the
agricultural research, farmers must pay for
it (both successes and failures) in the price
of the inputs they buy each year
• The challenge is how to serve low income
farmers’ needs in foreign-exchange
constrained countries.

53. Is GMO Food Safe to Eat?
• Over 300 million Americans and millions more in
Canada, Argentina and Australia have been
eating GMO foods for a decade with NOT ONE
illness attributable to GMOs.
• Most beer and cheese consumed in the world is
produced with GMOs already (as are
innumerable pharmaceuticals, e.g.
immunizations against Hepatitis A and B).
• GMO foods are subjected to an unprecedented
amount of testing before being put on the market

54. Environmental Benefits
• Large reduction in insecticide use
• More effective weed control using less
energy
• Natural resistance to diseases
• Increase water use efficiency
• Preserve hundreds of millions of hectares
of forests
• Reduce pressure on fragile lands

56. Hunger & Food Insecurity Widespread
• Of the world’s 7.3 billion people, 1.2 billion
live on less that $1.25 per day*.
– 780 million people (1 out of every 9 people in
the world) cannot afford 1,800 calories per
day, not enough to put in even a medium level
of physical activity.
• 2.4 billion (35% of the world population)
live on <$2.00 per day*.
– By $2.00 per day most hunger (calorie)
problems solved, but 2 billion still suffer
nutritional deficiencies.
• 2008 estimate; income corrected for differences in purchasing power
across countries. Source: World Bank Povcal database.

57. People Living in Extreme
Poverty (<$1.25/day*), 2010
Region Millions Percent
South Asia 507 31.0
Sub-Saharan Africa 414 48.5
East Asia & Pacific 251 12.5
Latin America & Carib 32 5.5
E. Europe & Central Asia 3 0.7
Middle East & N. Africa 8 2.4
Total 1,215 20.6
*Income corrected for differences in purchasing power across countries.
Source: World Bank. World Development Indicators, 2014..

58. Malnutrition Has a High Cost
• While 780 million people suffer calorie deficit,
over 2 billion suffer nutritional deficiencies.
– Most common: vitamin A, iron, iodine, zinc
• Malnutrition from -9 to +24 months can cause
permanent stunting of a child’s mental and
physical development.
• Malnutrition reduces the learning capacity of
school-age children and adults’ labor
productivity and earning potential.
• Malnutrition increases people’s susceptibility to
diseases caused by pathogens.

59. Global Prevalence of Micronutrient
Malnutrition, Percent of Population
Region* Vit. A Iodine Iron Zinc
South & East Asia 69 41 99 71
E. Asia & Oceania 27 31 72 19
Sub-Saharan Africa 49 48 73 68
Middle East/N. Africa 22 74 72 74
The Americas 20 25 34 46
Europe & Russia -- 32 17 8
*WHO regions. They do not strictly match World Bank regions used elsewhere.
Source: Usha Ramakrishnan. “Prevalence of Micronutrient Malnutrition
Worldwide,” Nutrition Reviews, vol. 60, no. 5, May 2002, page S47.

60. Mortality from Nutritional Deficiencies
• More people die each year from starvation
and other nutritional deficiencies than from
HIV/AIDS, malaria and tuberculosis
combined—yet nutritional deficiency
diseases (from insufficient energy, protein,
vitamins and/or minerals in the diet) hardly
get a mention in discussions of non-
communicable diseases, which focus
exclusively on problems associated with
over-nutrition (obesity).