Agriculturefor Development - ACIARaciar.gov.au/files/node/7512/Dr Byerlee WDR08.pdf · per capita...

Agriculturefor DevelopmentThe Future Context for International Ag R&D

Crawford Lecture, Canberra, 8th Feb, 2008

2

World Development Report 2008

Agriculture for development in the headlines

Three Functions of Agriculture for Development

1. Contribution to growth (especially in the early stages)

2. Source of livelihoodsFood security and poverty reduction

3. A way of better managing natural resources

4


2.3

3.33.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1980-1990 1990-2000 2000-2005

Ave

rage

ann

ual r

eal a

gric

ultu

ral g

row

th(%

)

Large sector for GDP growthAffordable food and wage competitivenessComparative advantage in tradeStrong growth linkages

1. A trigger for overall growth in early stages

Accelerating agricultural growth in AfricaAccelerating agricultural growth in Africa

Success:China, India, Vietnam

(and Africa?)

Success:China, India, Vietnam

(and Africa?)

5


2.5 billion people related to agric., 800 m smallholders

75% of poor are rural and the majority will be rural to about 2040

Rural income growth accounted for 75% of poverty reduction, 1993-2002.

GlobalUrban poor

287 mill. South Asia rural 407 mill.

Sub-SaharanAfrica rural

229 mill.

East Asia rural

218 mill.LAC rural27 mill.

ECA rural5 mill.

MENA rural5 mill.

2. Agriculture – a major source of livelihood

900 million rural poor ($1/day, 2002)900 million rural poor ($1/day, 2002)

6


Agriculture

Non-agriculture

-2

0

2

4

6

8

Low est 2 3 4 5 6 7 8 9 Highest

Expenditure deciles

Expe

nditu

re g

ains

indu

ced

by 1

% G

DP

grow

th (%

)

Growth from agriculture is especially poverty reducing

GDP growth from agriculture can benefit the income of the poor 2-4 times more

than GDP growth from non-agriculture

GDP growth from agriculture can benefit the income of the poor 2-4 times more

than GDP growth from non-agriculture

7


Agricultural productivity growth has driven poverty reduction in Asia

3.4

3.6

3.8

4

4.2

1959 1963 1967 1971 1975 1979 1983 1987 1991Years

Log

of H

eadc

ount

inde

x (r

ural

are

as)

4

4.2

4.4

4.6

4.8

5

5.2

Log

of a

vera

ge f

arm

out

put

per

acre

Rural Po(left axis)

Yields(right axis)

2.4

2.9

3.4

3.9

4.4

1980 1983 1986 1989 1992 1995 1998 2001Years

Log

of H

eadc

ount

(ru

ral a

reas

)

4.6

4.7

4.8

4.9

5.0

5.1

5.2

5.3

Log

of a

vera

ge f

arm

out

put

per

acre

Rural P0(left axis)

Yields(right axis)

Headcount index and average farm yieldsRural India 1959-1994

Headcount index and average farm yieldsRural China 1980-2001

8


Important user of natural resources: 80% of fresh water resources40% of land areaMajor source of deforestation21+ % of greenhouse gas emissions

Contributions to greenhouse gas emissions

Developing country

agriculture & deforestation

21.4

Developing country

other sources

15.2

Industrialized countries

63.4

Can be an important source of environmental services

Conservation farming, watershed management, agroforestry

Can be an important source of environmental services

Conservation farming, watershed management, agroforestry

3. Agriculture as a Steward of the Environment

9


Agriculture based countries(mainly SS-Africa.

417 million rural people)

Transforming countries(mainly Asia

2.2 billion rural people)

Urbanized countries(mainly Latin America

255 million rural people)

Agr

icul

ture

’s s

hare

in g

row

th 1

990-

2005

Rural poor/total poor, 2002

The three worlds of agriculture

0 100%

80%

0

50%

20%

0 100%

80%

0

50%

20%

10

World Development Report 2008Main WDR 2008 message

To meet the MDGs, agriculture must be given a much more prominent place in the development agenda

Today there are improved opportunities to use agriculture for development

But not business as usualMore and better investmentsMultisectoral & decentralized approaches

Past Successes Reflect Investments in R&D

12


Over the past 40 years, agriculture has met effective food demand globally

0

50

100

150

200

250

300

1961 1971 1981 1991 2001

Inde

x (1

961=

100)

Food Production

Food Productionper capita

Cropland percapita

Food Prices

(but still a huge hunger problem)

13


Rapid Yield Gains in Cereals but not in Sub-Saharan Africa

0

1

2

3

4

5

619

61

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

Yie

lds

(ton/

ha)

East Asia Latin America South Asia

Sub Saharan Africa Developed countries

14


Use of Modern Varieties as a Catalyst for Yield Growth

0

10

20

30

40

50

60

70

80

90

Sub SaharanAfrica

Middle East Latin America South Asia East and SEAsia

perc

ent o

f cer

eal a

rea

20001980

Adoption of modern varieties for cereals

15


Spending on R&D Increased Rapidly from the 1970s (except Africa)

0

2

4

6

8

10

Asia Latin America SS Africa

Gro

wth

(%

/yr)

1975-801981-901991-00

From 1990, spending on agricultural R&D fell in about half of African countries

From 1990, spending on agricultural R&D fell in about half of African countries

16


Returns to investment in agricultural R&D have been high

The Emerging Context for Agriculture R&D for Development

Changes and Uncertainties

18


Drivers of Spending for International Agric Research

MarketsChanging food markets and globalizationRelative prices (especially water and energy)

Millennium Development Goals (MDGs)Poverty and hungerEnvironment GenderHealth (as related to agriculture)

Global processes/”Flagships”Africa—Blair Commission, Annan report on Agriculture S&TClimate change—Stern report, IPCC, An Inconvenient TruthComprehensive Water Assessment for AgricultureAgriculture—WDR2008?Agric S&T—IAASTD?

19


Urban

Rural

0.0

1.0

2.0

3.0

4.0

5.0

1950 1970 1990 2010 2030

Bill

ion

peop

le

An increasingly urbanized world

Rural population has already started to decline in East Asia and Latin America

Rural population has already started to decline in East Asia and Latin America

All developing countries:Rapidly rising urban population

All developing countries:Rapidly rising urban population

Global Markets: Food Demand

East Asia South Asia

Sub Saharan

Africa

Latin America

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1950 1970 1990 2010 2030

Bill

ion

peop

le

20


Traditional exports

Meat

Horticulture

0

50

100

150

200

250

300

350

1980 1990 2000 2004

Val

ue o

f exp

orts

(198

0=10

0)

0

50

100

150

200

250

1981 1984 1987 1990 1993 1996 1999 2002

Kca

l con

sum

ptio

n/ca

pita

/day

(1

981=

100)

Changing diets ̶ a new agriculture of high value products and non-traditional exports

Developing country exports

Developing country consumption

Meat

Cereals

Horticulture


21



240 kg of maize(100 liters of ethanol)

to fill one SUV tank

Biofuels ̶ rapid rise in demand for feedstocks(20+% of US maize harvest)

22


-

10

20

30

40

50

60

70

SubSaharanAfrica

SouthAsia

East Asia MiddleEast

Europe &Central

Asia

LatinAmerica

Perc

ent

(%)

Latin America

Europe & Central Asia

Middle East

East AsiaSouth Asia

Sub Saharan Africa

0

20

40

60

80

100

120

140

160

180

1961

1967

1973

1979

1985

1991

1997

2003

Inde

x of

cro

plan

d pe

r ag

popu

latio

n (1

961=

100)

Increasing land and water constraints

% of population in absolute water scarcity

Cropland per capita of agricultural population

Challenges—Growth

Declining farm size in much of AsiaDeclining farm size in much of Asia

23


Growth rates of yields for major cereals in developing countries is slowing

0

1

2

3

4

5

6

1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003

Aver

age

annu

al g

row

th ra

te (%

) maize

rice

wheat

Global Markets ̶ Food Supply

24


Climate vulnerability is already high and will worsen with climate change

Rainfall variability & GDP growthZimbabwe 1979-1997

Global Markets ̶ Food Supply

-10

-5

0

5

10

15

20

1979 1982 1985 1988 1991 1994 1997 2000

GD

P gr

owth

(%

)

-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

Rai

nfal

l var

iabi

lity

(dev

iati

ons

from

mea

n)

GDP growth (annual %) Rainfall

25


Global Food Markets ̶ Food Supply

Increased energy prices affect agricultural prices through the demand (biofuels) and supply side (higher costs of production)

0

50

100

150

200

250

300

350

400

Jan-

00

Jul-0

0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Inde

x Ja

n '0

0=10

0

Crude Petroleum

Wheat

Maize

Soybean Oil

26


-200-150-100-50

050

100150200250

HighIncome

Europe &CentralAsia

LatinAmerica

EastAsia

SubSaharanAfrica

SouthAsia

MiddleEast

Milli

on to

n

2000 (actual) 2030 (projected)

Future perspectives

Cereal Net Trade

Developing countries will become even bigger markets for grains exported largely by high-income countries

27


Food Production—Continuing Challenges in the 21st Century

A greater global challengeThe end of long-term falling grain prices?Urgency of reducing the environmental footprintA new energy economy

Priority for Sub-Saharan AfricaBasis for overall growthLimited tradability—domestic production critical

Increased uncertaintiesClimate change, energy prices, Asian demandFuture policies on biofuels

28


Global Forces Indicate Strategic Research Priorities at a Global Level

Higher yield potential to revamp productivity growth

Abiotic stressesEfficient use of water and drought tolerance

Heat tolerance to confront climate change

Biotic stressesContainment of globally significant pests and diseases

Improved nutritional valueTargeted biofortification)

Conservation of genetic resources (for above)

Reduction of GHGs (e.g., methane from livestock, conservation tillage)

Energy efficient agriculture (0-tillage, biological N fixation?)

Policy research and testing of institutional innovations

29


International R&D can Help Bridge “Technological Distance”

30


Challenges—Providing a Supporting Global Environment

Highly complex global agendaCross-sectoral and interconnected (trade, climate change, energy, diseases, IPRs)

Many new and diverse actors• Gates, Google and the BRICs

Challenges to coordination, focus and responsiveness

Proliferation of global initiatives

Investing More and Better in R&D

32


Ag GDP/GDP

29

16

10

0

5

10

15

20

25

30

35

Agriculture-based Transforming Urbanized

perc

ent

0

2

4

6

8

10

12

14

Agriculture based Transforming Urbanized

perc

ent

Public Spending on Ag (% of Ag GDP)Spending on Ag R&D (% of Ag GDP)

Challenges—More and Better Investments

Agriculture-based countries spend too little on agricultureAgriculture-based countries spend too little on agriculture

33


A Growing Global Divide

0

1

2

3

4

5

6

Developed Developing

Per

cent

of a

gric

ultu

ral G

DP

1981 2000 2000 + private

SS Africa17%

Other39%

Asia44%

Between developed and developing countries…

…and within developing countries

SS Africa11%

Other30%

Asia59%

19811981

20002000

34


-102030405060708090

100

1990 1992 1994 1996 1998 2000 2002 2004

% p

over

ty in

rur

al a

reas

0

2

4

6

8

10

12

14

% O

DA

to a

gric

ultu

re

Donor support to agriculture also declined despite MDG to halve poverty

% rural poverty

% ODA to Ag

Challenges—Implementation

35


Critical Issues for Better Investments

Institutional developmentSupply side—Human resources, efficiencyDemand side-Respond to markets and farmer needs

Regulatory environmentFood safety and standards, biosafety, IPRs

Dealing with diversityRainfed to irrigated, subsistence to commercial farmersDiversity of actors

• State—national, provincial, local gov• Private sector/agribusiness/supermarkets• NGOs• Farmers and their organizations

Growing role of partnerships

36


New Arrangements for Public Support to R&D

MoFinance

ARO’s – Universities- Private - and NGOs

Natl. Ag. Res. Council Local Ag. Res. Boards

State Government

Producer Associations

PROVIDERS

FUND ALLOCATION /COORDINATION

FUNDERS

Competition and Contracting

37


Research Processes to Better Capture “Demand” in a Heterogeneous World

Participatory methodsEmpowering farmer organizations

Research decision-making (Mexico, Senegal)Co-financing of R&D—underutilized opportunity

Public-private partnerships in value chainsConsortia to link actors in a value chainCompetitive funding for innovationPrivate co-financing

Vertical coordination to aggregate demand for global priorities

Local to national to regional to global?Sorting out comparative advantage of R&D at different levels of scale

38


The Bottom Line

Agriculture fundamental for sustainable development and poverty reduction

Productivity and sustainability even more important in the future for development

Urgent to invest more and better in S&TPublic, philanthropic, public and private donors

Institutional innovations to improve effectiveness

Expanded demand for global public goods of the CGIAR

But a more complex agenda and institutional landscape

Optimism that it can be done!

Thank you

www.worldbank.org/WDR2008

Off cuts

41


Demand drivers have evolved over time

1950s-70sGlobal and national food security• Population growth in Asia

Geopolitics (Cold War and global R&D)

1980s-90sEnvironmental sustainabilityPoverty reductionNutrition, food safety and quality, diversification of diets

42


Area planted to transgenics, 1996-2006

0

20

40

60

80

100

120

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

mill

ion

hect

ares

USA/Canada/Australia Latin America Asia Africa

In 2006, farmers in

22 countries planted

transgenic seeds on

about 100 million

hectares, about 8

percent of the global

crop area.

In 2006, farmers in

22 countries planted

transgenic seeds on

about 100 million

hectares, about 8

percent of the global

crop area.

43


Extent of less favored areas (agro-ecology, market access) differs by region

Agricultural potential

0

20

40

60

80

100

SSA SA EAP MENA ECA LAC

% o

f ru

ral p

opul

atio

n

Irrigated Humid/Sub-humid Arid/Semi-arid

Market access

0

20

40

60

80

100

SSA SA EAP MENA LAC% o

f ru

ral p

opul

atio

nHigh (0-1 hour) Medium (2-4 hrs) Low (more than 5 hrs)


Developing Countries Now Out-spend Developed Countries in Public Ag R&D

DevelopingCountries

Global R&D Spending - $33.2 b, 2000

DevelopedCountries

$11.5 billion

$10.8 billion

$0.7 billion

$10.2 billion

Public

Private

Public

Private

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