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IFPRI Policy Seminar "Food Policy in Disarray: The Challenges & Priorities" by Per Pinstrup-Andersen, 21 November 2011
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Food Policy in Disarray: The Challenges and Priorities
Per Pinstrup-Andersen
International Food Policy Research Institute
November 21, 2011
Understanding and Improving Food Policy
What?
Understanding and Improving Food Policy
What? How?
Understanding and Improving Food Policy
What? How? Who (Pol. Econ.)?
Understanding and Improving Food Policy
What? How? Who (Pol. Econ.)? A comprehensive systems approach
Understanding and Improving Food Policy
What? How? Who (Pol. Econ.)? A comprehensive systems approach Multisectoral/multidisciplinary
Understanding and Improving Food Policy
What? How? Who (Pol. Econ.)? A comprehensive systems approach Multisectoral/multidisciplinary A dynamic behavioral food system
A Dynamic Behavioral Food System
Change in behavior of:
Consumers
Producers
Market agents
Government
Resource owners
NGOs
Incentives
Regulations
Knowledge
Food System (Time period 1)
Food System (Time period 2)
Five Food Crises
1. International food price increase and volatility
Five Food Crises
1. International food price increase and volatility
2. Starvation in the Horn of Eastern Africa
Five Food Crises
1. International food price increase and volatility
2. Starvation in the Horn of Eastern Africa
3. Hunger, nutrient deficiencies and death among millions of children
Five Food Crises
1. International food price increase and volatility
2. Starvation in the Horn of Eastern Africa
3. Hunger, nutrient deficiencies and death among millions of children
4. Overweight, obesity, chronic diseases and death among millions of children and adults
Five Food Crises
1. International food price increase and volatility
2. Starvation in the Horn of Eastern Africa
3. Hunger, nutrient deficiencies and death among millions of children
4. Overweight, obesity, chronic diseases and death among millions of children and adults
5. The earth’s future productive capacity
The Unholy Trinity and the Jokers
The Trinity: Governments
News Media
Speculators
The Jokers: The Weather
Energy prices
Real Food Price Index1961-2000
Source: FAO
Behavior of Government, News Media and Speculators
Little policy action Little media attention (except 1995-96) No speculator interest
FAO Food Price IndexJanuary 2000-January 2007
Source: FAO
Behavior of Government, News Media, and Speculators (1)
Neither governments, nor the media, got the message
Behavior of Government, News Media, and Speculators (1)
Neither governments, nor the media, got the message
Export restrictions towards the end
Behavior of Government, News Media, and Speculators (1)
Neither governments, nor the media, got the message
Export restrictions towards the end Extreme weather events
Volatility in Weather Patterns
Drought Flooding Strong Winds
Production Volatility
Irregular RainfallPatterns
Production Volatility
Supply Responses
Government Policy
Market Information
Speculation
Government Policies
Energy Prices
Demand Changes
Price Volatility
FAO Food Price IndexJanuary 2007-July 2008
Source: FAO
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response Food riots
Behavior of Government, News Media, and Speculators (2)
Short-term government interventions Protection of middle-income urban consumers Export restrictions and reduced import tariffs Focus on national supplies and stock build-up Irrational expectations Exaggerated media response Food riots Moral hazards
FAO Food Price IndexJune 2008 – June 2009
Source: FAO
Behavior of Government, News Media, and Speculators (3)
Silence Delayed media response
FAO Food Price IndexOctober 2010-October 2011
(2002-2004 =- 100)
Oct-10
Jan-
11
Apr-1
1
Jul-1
1
Oct-11
180
190
200
210
220
230
240
250Food Price Index
Food Price Index
Source: FAO, www.fao.org/worldfoodsiutation/wfs-home/foodpricesindex/en
Behavior of Government, News Media and Speculators
Renewed apocalypse talk by media Nervous speculators Confusion among governments Waiting for the next extreme weather event
What are the Most Important Policy Challenges?
A Focus on the Smallholder?
Source: World Economic Forum, Realizing a New Vision for Agriculture: A roadmap for Stakeholders, 2010.
What are the Most Important Policy Challenges (1)?
Outside the farm
Why Outside the Farm?
Low total supply elasticity (old story)
Why Outside the Farm?
Low total supply elasticity (old story) Large yield gaps (old story)
Why Outside the Farm?
Low total supply elasticity (old story) Large yield gaps (old story) Successful farm-focused project (reduced yield
gaps, increased incomes) Sasakawa, One Acre Fund, Millennium Villages, etc. Underutilized potential gains from existing
technology Temporal removal of external constraints Gains not sustainable when project exits
Why Outside the Farm? (Cont.)
Demand constraints?
Why Outside the Farm? (Cont.)
Demand constraints? Large post harvest losses
Why Outside the Farm? (Cont.)
Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest
activities
Why Outside the Farm? (Cont.)
Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest
activities Insufficient research allocated to the post harvest
portion of the food system
Why Outside the Farm? (Cont.)
Demand constraints? Large post harvest losses Rapidly increasing demand for post harvest
activities Insufficient research allocated to the post harvest
portion of the food system Adverse trade policies
What are the Most Important Policy Challenges (1)?
Outside the farm Specific policy interventions context specific
Likely to include: Infrastructure investments Institutional innovation Input and output market developmentPre- and post harvest focused researchFacilitation of small-scale agri-business
What are the Most Important Policy Challenges (2)?
Sustainable intensification
Environmental Kuznets Curve
What are the Most Important Policy Challenges (2)?
Sustainable intensification Multiple wins
Hypothetical Relationships Between Income and Deforestation/Soil Mining
What are the Most Important Policy Challenges (2)?
Sustainable intensification Multiple wins Full costing (natural resources and climate change)
Hypothetical Relationships Between Income and Deforestation/Soil Mining
What are the Most Important Policy Challenges (2)?
Sustainable intensification Multiple wins Full costing (natural resources and climate change) International institutional innovation
What are the Most Important Policy Challenges (2)?
Sustainable intensification Multiple wins Full costing (natural resources and climate change) International institutional innovation
Achieving nutrition and health goals through the food system Identifying pathways, win-wins and trade-offs Pursuing diversity in production and consumption
What are the Most Important Policy Challenges (2)? (Cont.)
Strengthening international institutions Concentration, competition and anti-trust rules Land grabbing Enhancing price transmission Clarifying and enforcing trade rules
What are the Most Important Policy Challenges (2)? (Cont.)
Strengthening international institutions Concentration, competition and anti-trust rules Land grabbing Enhancing price transmission Clarifying and enforcing trade rules
Learning to live with food price volatility
Maize Weekly Price Minus12-Month Moving Average
1995
-80
-60
-40
-20
0
20
40
60
80
100
Rice Weekly Price Minus12-Month Moving Average
1990
-150
-100
-50
0
50
100
150
200
250
300
350
Wheat Weekly Price Minus12-Month Moving Average
19992001200420062009-100
-50
0
50
100
150
What are the Most Important Policy Challenges (2)?
Strengthening international institutions Concentration, competition and anti-trust rules Land grabbing Enhancing price transmission Clarifying and enforcing trade rules
Learning to live with food price volatility Learning to live with higher real food prices?
What are the Most Important Policy Challenges (2)?
Strengthening international institutions Concentration, competition and anti-trust rules Land grabbing Enhancing price transmission Clarifying and enforcing trade rules
Learning to live with food price volatility Learning to live with higher real food prices? Projections or predictions?
World Price Increases for Selected Crops Under Various Scenarios, 2010-2050
(Percent Change from 2010)
Source: IFPRI, Food Security and Climate Change, 2010, http://www.ifpri.org/sites/default/files/publications/ib66.pdf
Source: Growing a Better Future: Food Justice in a Resource-Constrained World, 2011, Oxfam
Real Food Price Changes Predicted Over the Next 20 Years (%)
Livestock Wheat Paddy Rice Maize0
20
40
60
80
100
120
140
160
180
200
2030 Baseline2030 Climate Change
Real Food Prices Need Not Increase
Moral hazard
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps
Reducing Yield Gaps
Removing off-farm constraints Infrastructure Institutions
Reducing Yield Gaps
Removing off-farm constraints Infrastructure Institutions
Risk management
Reducing Yield Gaps
Removing off-farm constraints Infrastructure Institutions
Risk management Property rights
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs End biofuel mandates and subsidies
Real Food Prices Need Not Increase
Moral hazard Reducing yield gaps Ending stock build-ups Drawing underused land into production Reduce post harvest losses Improve water use efficiency Reduce desalination costs End biofuel mandates and subsidies Take appropriate policy action
RhetoricDeclarationsPlansTargets
Action