Lincolnshire Agricultural Society, Spring Lecture 2009 Lincolnshire, March 12, 2009

1. How Secure is Our Food?
Joachim von Braun
International Food Policy Research Institute
Lincolnshire Agricultural Society, Spring Lecture 2009
Lincolnshire, March 12

2. What food security?
The world – countries - people
Availability Access
Food
Stability Utilization
& Safety
Joachim von Braun, IFPRI, March, 2009

3. A combination of stress factors for
world agriculture
Volatile input prices
Low R&D investment Limited capital
Climate change Subsidized biofuels
Agri-food
Water scarcity Biodiversity loss
system
Pests & diseases Land degradation
Lack of infrastructure Declining trade
Volatile output prices
Joachim von Braun, IFPRI, March, 2009

4. Are we living in unusual times?
1872-2008 prices and population
Wheat price Population (right)
2000 US$/ton, 3yr averages
1000 8
800
6
Billions
600
4
400
2
200
0 0
1876
1976
1872
1880
1884
1888
1892
1896
1900
1904
1908
1912
1916
1920
1924
1928
1932
1936
1940
1944
1948
1952
1956
1960
1964
1968
1972
1980
1984
1988
1992
1996
2000
2004
2008
Sources: J. von Braun, based on data from NBER Macrohistory database,
BLS CPI database, Godo 2001, OECD 2005, and FAO 2008;
Joachim von Braun, IFPRI, March, 2009 Population data from U.S. Census Bureau Int‟l database and UN1999.

5. Global changes and impacts

6. The changing position of farms in the
global food business value chain
Consumers
Agricultural Food
input processors Food
industry Farms and traders retailers
top 10: $55 bln Agricultural top 10: $426 bln top 10: $1,042
value added: bln
• Syngenta $1,674 bln • Nestle
• Monsanto • Cargill • Wal-Mart
$4,000 bln
• Bayer C No. of farms: • Unilever • Carrefour
• Dupont N ca. 450 mln • Tesco
• ADM
• Mosaic • Bunge • Metro G
Size distr.
• Kroger
>100 ha: 0.5%
< 2 ha: 85%
Joachim von Braun, IFPRI, March, 2009
Source: von Braun 2009

7. Farming matters for the economy
GDP:
• World: 4%; in 40% of countries > 20%
• UK: 3%
• Lincolnshire: 13%
Labor:
• World: 42 %
• Lincolnshire: 14%
Joachim von Braun, IFPRI, March, 2009

8. Declining world grain productivity growth
6
maize
Average annual growth rate (%)
5 rice
wheat
4
3
2
1
0
1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003
Joachim von Braun, IFPRI, March, 2009 Source: World Development Report 2008.

9. Majority of the world‟s farms are small…
Number of
Farm size (ha) % of all farms farms
(millions)
<2 85 451
2 - 10 12 62
10 - 100 2.7 14
> 100 0.6 3
Total 100 530
UK: 57 hectare average, 14% > 100 hectare
Source: country data and FAO Agricultural World Census.
Joachim von Braun, IFPRI, March, 2009

10. …and average farm sizes are getting smaller
Hectares Average farm sizes in selected countries
3.0
2.5
2.0
1.5
1.0
0.5
0.0
19 71
19 82
20 92
3
20 92
2
3
80
90
99
19 77
20 95
-0
-0
-0
-
-
-
-
19
19
19
19
19
70
81
91
02
89
01
02
19
India China Ethiopia Tanzania
Sources: Fan and Chan-Kang 2003, FAO Agricultural World
Joachim von Braun, IFPRI, March, 2009 Census and Indiastat.

11. Low agricultural productivity growth in
developing countries
Annual total factor productivity growth, 1992-2003
%
East Asia 2.7
South Asia 1.0
East Africa 0.4 Small farms
West Africa 1.6 can be very
productive
Southern Africa 1.3
Latin America 2.7
North Africa & West Asia 1.4
All regions 2.1
Joachim von Braun, IFPRI, March, 2009
Source: von Braun et al. 2008.

12. Higher and more volatile food prices
500
Price spike
400
US$/ton
300
Wheat
200
100
0
Joachim von Braun, IFPRI, March, 2009 Source: IFPRI, Data from FAO 2009.

13. World wheat: Small changes – big effects
2005/06 2006/07 2007/08 2008/09 8/9:7/8 %
Production 621 598 609 688 + 13,0
Trade 110 110 110 118 + 7,3
Consumption 626 611 615 645 + 4,9
Stocks 134 120 115 157 + 36,5
Joachim von Braun, IFPRI, March, 2009

14. Good news for farmers?
High prices good, BUT:
• Higher production costs
• Farmgate price uncertainty
• Less capital for agriculture!?
Joachim von Braun, IFPRI, March, 2009

15. Who has responded?
Growth of cereal output in 2007-08:
11%: developed countries
0.9%: developing countries
1.6%: developing, excl. Brazil, China, India
Plans for investment scaled down as capital
becomes more scarce and expensive
Source: von Braun and data from FAO 2008.
Joachim von Braun, IFPRI, March, 2009

16. Deepening financial crisis
© Las Vegas Sun.
Joachim von Braun, IFPRI, March, 2009

17. Severe impacts on the poor
Expenditures:
Non-
food
Food:
50-70%
115 million more hungry in 2008,
compared to 2003-05
Joachim von Braun, IFPRI, March, 2009

18. Who is affected by hunger?
Joachim von Braun, IFPRI, March, 2009
Source: UN Millennium Project, Hunger Task Force, 2005.

19. Food protests
in more than 60 countries, 2007-08
25
Violent
20 Non-violent
14
15 1
7
10
1 14
5 9 9
6
0
Low income Lower-middle Upper-middle High income
income income
Source: Protests – news reports;
Joachim von Braun, IFPRI, March, 2009 Income group classification – World Bank 2007.

20. Food protests in more than 60 countries
Food riots in Mexico
25
20
15
Number of riots
10
© Panna.org .
5
0
Jul-08
Jul-07
Jan-08
Jun-08
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Mar-08
Aug-08
Sep-08
Oct-08
Feb-08
Apr-08
May-08
Joachim von Braun, IFPRI, March, 2009 Source: J. von Braun based on data from news reports.

21. Food and financial crises interlinked
Food crisis Financial
crisis
Serious implications!
Joachim von Braun, IFPRI, March, 2009 Source: von Braun; Dec 2008.

22. What factors drive change in the
world food system?

23. With globalization…
changes in the rest of the world are more
relevant than ever
Images from naturalspecialtyfoodsmemo.blogspot.com and enjoylincolnshire.co.uk.
Joachim von Braun, IFPRI, March, 2009

24. Main drivers of change
1. Income growth
2. Energy and biofuels
3. Low agric. investment
4. Trade policy and market speculation
5. Climate change and shocks
Joachim von Braun, IFPRI, March, 2009

25. (1) Income growth:
Rising and shifting consumption
Joachim von Braun, IFPRI, March, 2009

26. (2) Energy and biofuels
125 Biofuels must not
100 compete with food!
Oil, US$/barrel
75 Caused 30% of the
50 grain price change.
25
0
Source: Data from IMF 2009.
© Dave Reede Photography.
Joachim von Braun, IFPRI, March, 2009

27. (3) Low agric. investment
Our food reserves are getting smaller ...
China and India to the rescue: Image from MediaAmcor.com.
India: + 26% agric budget 2008
China stimulus 2009: agric. from 18 to 106 Bill. US$
Joachim von Braun, IFPRI, Bill. $ for stocks
incl. 26 March, 2009

28. (4) Trade policy and market
speculation
Rise in grain and oilseed futures and options
Number of contracts
Export bans
starve your
neighbor
Source: Chicago Board of Trade 2008.
Joachim von Braun, IFPRI, March, 2009 © Kanika Rehani.

29. (4) Climate change and shocks
Droughts in some places…
And floods in others
Image from freewebs.com.
© MoD/Crown.
Joachim von Braun, IFPRI, March, 2009

30. UK self sufficiency in foods declining
1988: 71%
1998: 67%
2007: 59%
Depending more on trade is secure
as long as trade is secure.
A new emphasis on food self
sufficiency is not the answer.
Joachim von Braun, IFPRI, March, 2009

31. What does the future look like?

32. Recession + less agric. investment
= less agric. production (1)
© Dave Reede Photography.
Joachim von Braun, IFPRI, March, 2009

33. Recession + less agric. investment
= higher food prices (2)
© 2008 D.C. Miel.
Joachim von Braun, IFPRI, March, 2009

34. Recession + less agric. investment
= more hunger (3)
Image from southasia.oneworld.net
© Marta Ramoneda/Polaris/LAIF.
Joachim von Braun, IFPRI, March, 2009

35. Further threats from climate change
Climate change impact on agric. production, factoring in
carbon fertilization (%)
Joachim von Braun, IFPRI, March, 2009
Source: Cline 2007.

36. Climate change:
mixed news for Lincolnshire?!
Temperature
and rains !
Sea level raise?
twice as fast as
we thought
Joachim von Braun, IFPRI, March, 2009

37. Recession scenarios 2005-2020
Scenarios
baseline: econ. growth as in past years
1: Recession: econ. growth falls by 2-3%,
agric. investment maintained
2: Recession: econ. growth falls by 2-3%,
agric. investment reduced
Joachim von Braun, IFPRI, March, 2009

38. Prices under recession and alternative
agricultural investment scenarios
Non-recession Maize
200 Same-investment Rice
300
Low-investment
150
250
100
2005 2010 2015 2020 200
2005 2010 2015 2020
Wheat
200
150
100
2005 2010 2015 2020
Joachim von Braun, IFPRI, March, 2009 Source: Rosegrant, von Braun; IFPRI IMPACT, Dec. 2008.

39. Number of malnourished children rises by
16 million with recession and low investment
210
World (excluding SSA)
SSA
180
150
Millions
120
90
60
30
0
2005 2020
Joachim von Braun, IFPRI, March, 2009 Source: Rosegrant, von Braun; IFPRI IMPACT, Dec. 2008.

40. So what should be done?

41. Three priorities for global action needed
1. Promote pro-poor agriculture
growth
2. Reduce market volatility
3. Expand social protection and child
nutrition action
Joachim von Braun, IFPRI, March, 2009

42. Increased investment for agricultural
productivity
In the
developing
world
In high
productivity
zones, like
Lincolnshire
Image from greekshares.com.
Joachim von Braun, IFPRI, March, 2009

43. Actions for smallholder agric. productivity
1. Access to finance
(rural banks and micro-finance)
2. Expansion of risk management
(e.g. crop insurance)
3. Access to inputs
(quality seeds, fertilizer, animal feed, veterinary
drugs)
4. Access to services, extension
5. Investment in rural infrastructure
(e.g. rural roads, electrification, irrigation)
Joachim von Braun, IFPRI, March, 2009

44. Invest in science and technology
for agric. productivity
Joachim von Braun, IFPRI, March, 2009 © Dave Reede Photography and shimadzu.com.

45. Calm markets
© Washington Post.
Joachim von Braun, IFPRI, March, 2009

46. Support open trade
Joachim von Braun, IFPRI, March, 2009 Image from http://www.tjm.org.uk/.

47. Facilitate open trade: Scenario of the
costs of protectionist trade policy
Doha „Up to bound‟ tariff
(July 2008 modalities) increases
+1.46% trade - 7.7% trade
- 11.5% developing
country agric. trade
+ $336 bil. in trade - $1,774 bil. in trade
+ $59 bil. in welfare - $353 bil. in welfare
Joachim von Braun, IFPRI, March, 2009
Source: Bouet and Laborde 2008.

48. Provide social safety nets for the poor
Joachim von Braun, IFPRI, March, 2009 Image from stresssafetynets.com/.

49. So: How Secure is Our Food?
•“our “ food is pretty secure
•“their” food is not, i.e. the bottom
half of the world / the poor
•global action is needed for food
and security

50. www.ifpri.org
Joachim von Braun, IFPRI, March, 2009