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Water, Food, Energy and Institutions: Inextricably Linked
Uma Lele
Keynote Address
Consulting Partners Meeting
Global Water Partnership, Stockholm
August 18, 2011
Food Price Rise and Volatility?
19901991199219931994199519961997199819992000200120022003200420052006200720082009201020110
50
100
150
200
250
FAO Real Food Price Index(Annual)
(1990-2011)
Food Price Index
Source: www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/-
2002
-200
4=10
0
?
Trends in world hunger Undernourishment in 2010, by Region (mill.)
Largest Number of the world’s hungry in South Asia
Under Five Malnourishment Challenge: South Asia and SSA off track
East A
sia a
nd P
acific
Europ
e C
entra
l Asia
Latin
Am
erica
& C
aribb
ean
Midd
le Eas
t and
Nor
th A
frica
South
Asia
Sub-S
ahar
an A
frica
0
10
20
30
40
50
Child malnutrition rates re-main high in South Asia and
Sub-Saharan Africa2000 2009
Source: United Nations Children's Fund, World Heath Organization and WDI, World Bank
Pro
po
rtio
n o
f ch
ild
ren
un
der
ag
e 5
un
der
wei
gh
t fo
r ag
e (%
)
Progress on access to an improved water source
Progress on access to improved sanitation
By 2050 World Would Need to Feed 9 Billion+ PeopleFAO Projects:
– Almost all population and income growth will arise in developing countries, particularly in Asia and SSA
– Cereal Production (Net of Biofuels) would need to increase by 70%– Meat production by 220%, – Cereal Imports of Developing countries will increase by 220%
Will Food Supply Keep up With Growing Demand?Sources of Demand are Well Understood•Population Growth:
• All in LDCs•Income Growth •Mostly in LDCs•Urbanization:
• Up from 50% to 70%•Shift in Food Preferences:
• Rice, Wheat, Maize, Soybeans for Feed:
•Biofuels: maize, oilseeds•Processed Foods
Increased Risk and Uncertainty on the Supply Side•Climate Change•Limits to Land, Water, Soils, Biodiversity, Forests, Fisheries •Energy shortages and subsidies,•Last Frontiers?
• Brazil, SSA?•Increased Risks and Uncertainty (from climates, global market integration)•Slowing Productivity Growth•Stagnant Investment levels in R and D•Interlinked International Markets
Agricultural productivity growth is slowing(source Fuglie 2011)
Source: World Bank Development Report 2008 (figure refers to developing countries only)
WHERE IS LAND?
Where Is Water for Food?
72% of Irrigation in Asia
Two Likely Future Scenarios of Growth in Food Production
Further Intensification of Agriculture Will be required in Asia
•80% to 90% of increase in production will have to come from agricultural intensification
• Increased yields per ha• Changing cropping patters• Multiple cropping on unit of
land
Area Expansion: and Intensification in SSA> three times the cerrados in Brazil?
More Crop Per Drop?Regional Productivity Growth in Parts of China has been higher than anywhere elsewhere on a a scaled up basis”Top Ten Provinces
The top ten provinces in TFP growth for the 1985-2007 period. Six of them are on the east coast
1 Jiangxi 8.17%2 Guangdong* 8.11%3 Hebei* 7.95%4 Fujian* 7.89%5 Shandong* 7.37%6 Hubei 7.34%7 Inner Mongolia 7.26%8 Zhejiang* 7.19%9 Sichuan 7.18%10 Liaoning* 6.83%
Wang, Tuan, Gale, Somwaru, and Hanson. AAEA 2011
RAJASTHAN
ORISSAMAHARASHTRA
GUJARAT MADHYA PRADESH
BIHAR
KARNATAKA
ANDHRA PRADESH
UTTAR PRADESH
JAMMU & KASHMIR
TAMIL NADU
ASSAM
CHHATTISGARH
JHARKHAND
PUNJAB
WEST BENGAL
KERALA
HARYANA ARUNACHAL PRADESH
UTTARANCHAL
HIMACHAL PRADESH
MANIPUR
MIZORAM
MEGHALAYANAGALAND
TRIPURA
SIKKIM
GOA
DELHI
DADRA & NAGAR HAVELI
PONDICHERRYPONDICHERRY
DISTRIBUTION OF TFP GROWTH INDEX VALUES BY STATES IN INDIA: 1975-2005
TFP Growth Score ClassN.ABelow 60 [Low]60.00 - 70.00 [Moderate] (Major State Average=70.1)70.01 - 90.00 (High)Above 90 [Very High]
Note: (1999-2009)
(Red circle) Agricultural Growth Rates > 4% (Black circle) Agricultural Growth Rates 2% to 4% (while circle) Agricultural Growth Rates <2 %
Source: Based on Total Factor Productivity and Contribution of Research Investment to Agricultural Growth in India: Ramesh Chand et al. NCAP 2011
Improved Water Management in East and South East Asia and Scope for Knowledge Transfers/ South – South Learning: China and Vietnam and South Asia
1. In China and Viet Nam, agriculture water withdrawal as a percentage of total national water withdrawal has declined from 92.5 and 88.2 in 1990 to 68.1 and 67.7 in 2000 (FAO) and to 60% according to latest data (Khalid Mohtadullah)
2. Incentivized Irrigation Bureaucrats in China have helped improved water management ( Tushaar Shah)
3. Successful innovations in Gujarat in India
Water Management Challenges in India Irrigation Investment & Irrigated Area in India
Source: Amerasinghe et al
1960
-61
1963
-64
1966
-67
1969
-70
1972
-73
1975
-76
1978
-79
1981
-82
1984
-85
1987
-88
1990
-91
1993
-94
1996
-97
1999
-00
2002
-03
2005
-06
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Crops Livestocks
Fisheries Soil and Water conservation
Government Investment in Total Ag Research, On Soil and Water (incl. Education) in
Agriculture by Sub-sectors in India: 1960-1961 to 2007-08 (in million Rs at current prices)
Source: Total Factor Productivity and Contribution of Research Investment to Agricultural Growth in India: Ramesh Chand et al. NCAP 2011
China Stands out in Public Agricultural R and D Spending Relative to SSA, Brazil and India
Source: ASTI as reported in Beintema and Stads (2011)
Average ag TFP growth, 1970-2006 (% per year)
> 2%1-2%< 1%
Average annualTFP growth
Caribbean
Sub-Saharan Africa
Developing Oceania
Former USSR
Circled regions show persistently low TFP growth
Source: Keith Fuglie, Technology Capital, The Price of Admission to the Growth Club
Rainfed Agriculture Yields Are Converging Average Grain yields in Sub-Saharan Africa (37%) of Average Yields in Other Regions
Source: Food Security Assessment, 2010-20 / GFA-21; Economic Research Service/USDA
Source: Food Aid Flows Report 2009 by WFP and www.wfp.org/fais
INTERNATIONAL COOPERATION IN WATER AND FOOD
Goal 8
Fragmented Aid Architecture
DAC-Bilateral (2007): 73….of which:
USA 18.9Germany 7.9France 6.2Japan 5.8UK 5.6
Multilateral (2007): 28….of which:
EC 11.3IDA 7.5UN 3.5Global Fund 1.6
Private sources (2007): 60….of which:
USA 37UK 4.1France 1
NON-DAC (2007): 10….of which:
China 3Arab countries 2.6India 1Korea 0.8
(Source: OECD DAC database)
(Source: OECD DAC database)
(Source: Hudson Institute, Global Index of Philanthropy, 2009)
(Source: Homi Kharas, 2009*)
* Brookings Institute: Kharas, H., “Development Assistance in the 21st Century”, Contribution to the VIII Salamanca Forum, The Fight Against Hunger and Poverty, July 2009
Estimates of total aid (all sectors) in 2007(Source: Kharas, 2009)
Declining ODA to Agriculture (1979 – 2007)
External Investment in Irrigation and Drainage
Increased Opportunities for GWPDecline in Technical Capacity at the World Bank
Note: The above figure shows FAO’s regular program budget is funded by its members, through contributions, adjusted to the Euro/US dollar exchange rate fixed by the FAO Conference. This budget covers core technical work, cooperation and partnerships including the Technical Cooperation Program, knowledge exchange, policy and advocacy, direction and administration, governance and security.The FAO’s regular budget for the biennium 2010-2011 has been increased by 7.6% to US$ 1000.5 million from the biennium 2008–2009 US$ 929.8 million, adjusted to the Euro/US dollar exchange rate fixed by the FAO Conference. Member states froze FAO's budget from 1994 through 2001 at US$650 million per biennium. The budget was raised slightly to US$651.8 million for 2002–03 and jumped to US$749 million for 2004–05, but this nominal increase was seen as a decline in real terms. In November 2005, the FAO governing Conference voted for a two-year budget appropriation of US$765.7 million for 2006–2007; once again, the increase only partially offset rising costs due to inflation.
Total Biennial Resources Available (1994-2007)
This figure shows FAO’s biennial resources in terms of US K$ at 1994 constant prices.
Source: FAO: The Challenge of Renewal: Report of the Independent External Evaluation of the FAO: September
2007 (figure 7.1)
Implications for GWP and Partners
1. GWP’s mission is worthy
2. But development challenges have become more complex
3. Generating and disseminating Relevant Knowledge is a costly business
4. It is easier to explain differences in performance among regions and countries than to explain why or how and transferability of experience.
5. Donor resources have become limited and fragmented
6. More are being made available through Trust Funds
7. Donor expectations about demonstrating impact has increased
8. But donor time horizon has become shorter
9. Leadership, institutions, capacity and demand for knowledge in developing countries are key for success
10.GWP needs to mobilize the best of technical expertise. Quality of relations, trust and confidence with developing countries will be critical necessary conditions.
THANK YOU!