Global Food Security Challenges and

Opportunities

Shenggen Fan
Director General
International Food Policy Research Institute

University of Nebraska-Lincoln’s Interdisciplinary Research Initiative in Food, Water,

and Energy Resources Policy Event, Nebraska, April 13, 2011
 Key messages

 Food security challenges remain large

 A development agenda with greater support

for food security is needed

 The role of policy research is crucial

Shenggen Fan, April 2011

 Food security challenges remain large

Shenggen Fan, April 2011

 The goal of halving hunger is off-track

Number of hungry people, 1990-2015

946

584

Source: Fan 2010

Shenggen Fan, April 2011

 Challenges to global food security

 Food price volatility

 Energy/Biofuels
 Population growth and demographic
changes
 Land and water constraints

 Climate change

Shenggen Fan, April 2011

 Food price hikes and volatility
800 Global hikes since June 2010
Maize
• Maize: 90%
600
Wheat • Wheat: 82%
US$/metric ton

Rice
High domestic food inflation
400 • China: 10% (Jan. 2011, y-o-y)
• India: 11% (Feb. 2011, y-o-y)
200 • Driven by non-staples

Volatility due to
0 • Natural disasters
• Panic purchases
• Trade restrictions, etc.
Source: FAO 2011

Shenggen Fan, April 2011

 High and volatile food prices increase
food insecurity
Self-reported food insecurity in Sub-Saharan Africa
80
% of households reporting problems in

2006/2007 2007/2008* 2008/2009*

70
affording food in last 12 months

60

50

40

30

20

10

Source: Headey 2011

Shenggen Fan, April 2011

 Rapidly growing population and
demographic change
World population reaches
9 billion by 2050
 All growth to come from
urban areas
 Most growth to come
from developing
countries
Source: FAO 2009.

Larger and more urban population will demand more and

better food

Shenggen Fan, April 2011

 Rising energy prices influence food
security
 Rising energy prices Average crude oil price
140
cause food prices to
increase, rather than the 120

reverse (Heady and Fan 2010) 100

US$/barrel
80
 Rising energy prices
60
make biofuels more
profitable, rather than 40

agricultural production 20
more expensive 0
(Abbott, Hurt, and Tyner 2008)

Source: Data from IMF 2011

Shenggen Fan, April 2011

 Biofuel boom
World ethanol and biodiesel
production  Biofuel production to more
25 Ethanol 6
than double from 2007-09 to
Biodiesel 2019 (OECD-FAO 2010)
20 5

 Biofuel demand to grow

Billion gallons

Billion gallons
4
15
3 four-fold between 2008 and
10
2 2035 (IEA 2010)
5 1
 Biofuels support to rise
0 0
1995 2000 2005 2010 • 2009: $20 bn
• From 2010 to 2020: $45 bn
Source: Data from Earth Policy Institute 2011
• From 2011 to 2035: $65 bn

Shenggen Fan, April 2011

 Food-fuel competition
(e.g. U.S. maize)

400 Maize production 40 40 Biofuels maize

Estimated areas harvested to maize

Share of maize used 35 Non-biofuels
for ethanol maize
300 30 30

(Million ha)
25
Million tons

(%)
200 20 20

15

100 10 10

0 0 0
1995 2000 2005 2010

Source: Data from Earth Policy Institute 2011 Source: Data from USDA 2011; Headey 2011

Shenggen Fan, April 2011

 Biofuels will impact food security
(2020, compared to baseline)

Changes in calorie availability (%) Changes in number of malnourished children (‘000s)

Price changes (%)

Source: Rosegrant et al. 2008

Shenggen Fan, April 2011

 Growing land constraints

Arable land per capita

(ha in use per person)

Source: Bruinsma 2009

Global extent of soils with low

nutrient capital reserves

Source: Ahamed et al 2006

Shenggen Fan, April 2011

 Severe water constraints

With “business as
usual,” high water
stress by 2050 puts
at risk:
→ 52% of global
population
→ 49% of global
grain production
→ 45% of global GDP

Source: Veolia Water and IFPRI 2011

Shenggen Fan, April 2011

 Climate change will push up food prices
World food price increases under various scenarios, 2010–2050
(% change from 2010)

Source: Nelson et al. 2010

Shenggen Fan, April 2011

 A development agenda with greater
support for food security is needed

Shenggen Fan, April 2011

 Address food price volatility

 Promote effective policies and technology

investments to minimize food-fuel competition

 Support transparent, fair, and open global trade to

enhance efficiency of global agricultural markets

 Create global, physical, shared grain reserve to

address food price crises

 Establish an international working group to monitor

world food situation and catalyze action

Shenggen Fan, April 2011

 Invest in agriculture and smallholder
productivity
2005$int, bill 2005$int, bill
40 Transportation & Communication 100
Social Protection
35 Defense
Health 80
30 Education
Agriculture
25 60
Total (right axis)
20
15 40

10
20
5
0 0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
Source: Data from IFPRI SPEED database

Improve access to quality seeds, fertilizer, financial and extension

services, crop insurance, new technologies, rural infrastructure

Shenggen Fan, April 2011

 Promote safety nets that increase
productive capacity

Ethiopia’s Productive Safety Nets Program (PSNP)

 Improved daily/capita caloric acquisition in last 7 days
by 10%

 Enhanced food security in 2004-06 by 0.36 months

 Rise in credit use by 12% points

 Increased use of fertilizer by 11% points

 Increased use of improved seeds by 5% points

Source: Gilligan, Hoddinott, and Taffesse 2009

Shenggen Fan, April 2011

 Promote land productivity improvements
 Create awareness of sustainable land management (SLM)
practices
 Provide technical support for often knowledge-intensive
SLM practices
 Support generation of innovative SLM practices
(e.g. fertilizer micro dosing and packaging, biomass transfer,
manure management)
 Invest in water storage or distribution to improve irrigation
efficiency

 Increase finance of irrigation investments, esp. for small

farmers Source: Nkonya et al. 2011, forthcoming

Shenggen Fan, April 2011

 Sustainable land management (SLM)
practices have win–win outcomes
 SLM practices: (evidence from Kenya, Niger, Nigeria, and Uganda)
• control soil erosion
• increase soil carbon stock
• increase crop yields
• reduce climate-induced production risks
• enhance agricultural productivity and incomes

 Examples of SLM practices: irrigation, agroforestry,

fertilizers, mulching, crop residues, improved fallow,
compost
Source: Kato et al. 2010; Nkonya et al. 2011, forthcoming

Shenggen Fan, April 2011

 Promote water productivity improvements
 Higher levels of water reuse by all users of water

 Improvements and evolution of water technology

 Water and wastewater infrastructure

improvements

 Extension of services to rural and urban poor

populations

 Greater energy efficiency with increased use of

renewable energy
Source: Veolia Water and IFPRI 2011

Shenggen Fan, April 2011

 Sustainable water management has high
pay-offs
Compared to “business as
usual,” it can de-risk:
>1 bn people
~$17 trillion of GDP
>20% of children likely to
suffer from malnutrition
(with higher investments in rural water supply
and sanitation and female secondary education)

Source: Veolia Water and IFPRI 2011

Shenggen Fan, April 2011

 Invest in climate change adaptation and
mitigation esp. through agriculture
Adaptation: e.g.
• improved land management
• adjustment of planting dates
• introduction of new crop varieties

Mitigation: e.g.
• improved energy efficiency and crop yields
• land management techniques to increase carbon storage

At least additional US$7 billion agricultural productivity

investments are needed annually to offset adverse effects on
human well-being
Source: IPCC 2007; Nelson et al. 2009

Shenggen Fan, April 2011

 The role of policy research is crucial

Shenggen Fan, April 2011

 Changing global policy landscape

 Emerging issues and new actors

• High and volatile prices, increasing natural resource
stresses, climate change, demographic shifts etc.
• Emerging economies, private sector, philanthropic
organizations etc.

 Emphasis on country-driven and -owned

development strategies

Increased demand for policy research

Shenggen Fan, April 2011

 Role of policy research

 Policy research evolves beyond technology e.g.

to macroeconomics, trade, energy, and social protection

 Contribution of policy research to poverty and

hunger reduction
• Direct: Increases investment in food
security, agriculture, and rural development and
improves resource allocation
• Indirect: Creates enabling environment for agricultural
technology innovation and adoption in developing
countries

Shenggen Fan, April 2011

 Impacts of policy research
Vietnam rice marketing and policy research
• Influenced timing of changes in rice policies
• Generated benefits worth US$45-91 million

Bangladesh food-for-education program research

• Improved targeting and strengthened capacity
• Generated benefits of about US$248 million

Evaluation of Mexico’s PROGRESA

• Guided program investments and implementation

Public investment research

• Contributed to public investment strategies in many Asian
and African countries
Shenggen Fan, April 2011
 Policy research insights for resource
allocation
Ghana Uganda Tanzania Ethiopia China India Thailand

Returns to agriculture or rural income

Sector (local currency/local currency spending)
Agriculture 16.8 12.4 12.5 0.14 6.8 13.5 12.6
Education -0.2 7.2 9.0 0.56 2.2 1.4 2.1
Health 1.3 0.9 n.e. -0.03 n.e. 0.8 n.e.
Roads 8.8 2.7 9.1 4.22 1.7 5.3 0.9
Ranking in returns to poverty reduction
Agriculture n.e. 1 2 n.e. 2 2 1
Education n.e. 3 1 n.e. 1 3 3
Health n.e. 4 n.e. n.e. n.e. 4 n.e.
Roads n.e. 2 3 n.e. 3 1 2
Source: Fan, Mogues, and Benin 2009
Note: “n.e.” indicates not estimated

Shenggen Fan, April 2011

 Examples of policy research needs (1)
 Assessing the impacts of high and volatile food prices
on poor people (use of household surveys)

 Identifying strategic investments in pro-poor

agricultural technology development and adoption

 Understanding the impacts of biofuels and climate

change on agriculture and food security

 Identifying more effective strategies to promote

sustainable land management for poverty reduction

Shenggen Fan, April 2011

 Examples of policy research needs (2)
 Understanding the impacts of global change drivers on
current and future availability and accessibility of water
resources

 Identifying research-based options to address growing

water scarcity and water quality challenges

 Identifying strategies to build the capacity of small

farmers and the rural poor to adapt to climate change

 Understanding the linkages between climate change

and gender

Shenggen Fan, April 2011