Global Food Security
Understanding itMeasuring it
Assessing price impacts
24 February 201424 February 2014Rabat
Leo AbruzzeseGlobal Forecasting Directorg
Background
• About 842m people in 2013, or one in eight globally, suffered from chronic hunger, according to the FAO.
• The world’s population will grow from 7bn now to 9.3bn in 2050, an increase of one-third.
ik i f d i h hi hli h d f d i• Recent spikes in food prices have highlighted food-security vulnerabilities, as have natural disasters and weather shocks.
• Many factors are behind the food security crisis:Ri i i Rising energy prices
Declining agricultural sector investment Stagnating/declining agricultural productivity Rising demand for food due to economic growth,
higher incomes and population pressureshigher incomes and population pressures Trade-distorting subsidies Ecological degradation Substituting subsidised bio-fuels for food production
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Measurement tools
FAO: Suite of food security indicators
• Four food security dimensions can be identified: food availability, economic and physical access to food, food utilization and stability (vulnerability and shocks) over timetime.
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IFPRI: Excessive Food Price Variability Early Warning System
• Identifies periods of extreme food commodity price variation (volatility) that exceed the 95th percentile.
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IFPRI: Global Hunger Index
• A tool designed to comprehensively measure andcomprehensively measure and track hunger globally and by region and country
• Highlights successes and failures• Highlights successes and failures in hunger reduction
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Food Secure: EU Research project
• Objective: to develop advanced tools that may help to improve the ability of decision makers to foresee and respond to future food and nutrition security
icriseso an indicator-based trigger for policy response to upcoming price-related food criseso toolbox of long term global economic and biophysical models to explore possible
f t d l t i f d d t iti itfuture developments in food and nutrition security
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Global Food Security Index
Overview: The Global Food Security Index
The Economist Intelligence Unit was commissioned by DuPont to research and produce a comprehensive Global Food Security Index.
Defining food security• Food security exists when people at all times have physical, social and economic
access to sufficient and nutritious food that meets their dietary needs for a
The Global Food Security Index:
access to sufficient and nutritious food that meets their dietary needs for a healthy and active life.*
ranks 107 countries
according to their relative levels of food security
using 27 indicators divided into three categories: Affordability; Availability; Quality and Safety.
* Adapted from the 2009 Declaration of the World Summit on Food Security
Index framework
• Food consumption as a share of household expenditure
• Percent of population under global poverty line
• Sufficiency of supply: food supply in kcal/person/day and chronic food aid dependency
• Public expenditure on agricultural R&D
AvailabilityAffordability
• GDP per capita, $US, PPP
• Agricultural import tariffs
• Presence of food safety nets
• Agricultural infrastructure
• Volatility of ag production
• Political stability risk
Index
• Access to finance for farmers • Corruption
• Urban absorption capacity
Food Price Adjustment Factor
Quality and Safety
External Adjustment
• Diet diversification
• Government commitment to increasing nutritional standards
Food Price Adjustment Factor
• FAO global food price index adjusted for income growth, pass-through coefficient of
• Micronutrient availability
• Protein quality
• Food safety
pass through coefficient of global to national food prices, exchange rates and import dependency
• Applied to Affordability score
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Applied to Affordability score
* Composite indicators are bolded.
Capturing the full timeline of food insecurity
Structural /
long-term
Policy driven /
medium term
High frequency /
short termlong-term medium term short term
GDP per head Government
d li
Global commodity
Infrastructure
trade policy
Food safety
commodity prices
Exchange rates
Food consumption / h h ld
programmes
National nutrition
g
Income changehousehold expenditure
nutrition standards
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Results for the 2013 Global Food Security Index
12 Base annual index, without quarterly price adjustment factor
Top and bottom countries in the Index
S /
BEST ENVIRONMENT NEEDS IMPROVEMENT
RankScore /
100
1 United States 87.0
2 Norway 86.0
98 Sierra Leone 28.8
99 Malawi 28.5
3 Netherlands 85.1
4 Belgium 84.5
5 Austria 84.2
100 Zambia 28.2
101 Haiti 27.9
102 Mali 26.9
6 France 84.1
7 Switzerland 83.8
8 Ireland 82.8
k
103 Burundi 26.4
104 Sudan 25.1
105 Togo 22.8
106 Ch d 22 29 Denmark 82.4
10 Canada 82.3
106 Chad 22.2
107 Congo (Dem. Rep.) 20.9
13 Base annual index, without quarterly price adjustment factor
Tool has analytical functions: correlations, weights, etc
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Price trends
Food commodity prices since 1845
3000 First published in 1864, with figures stretching back to 1845, The Economist's commodity-price index is probably the world's oldest regularly published price
2000
2500 index.
1000
1500 Economist food price index
500
1000
0 1845-50
1861-Ja
1868
1875
1882
1889
1896
1903
1910
1917
1924
1931
1938
1945
1952
1959
1966
1973
1980
1987
1994
2001
2008
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0 an
1845=100. Nominal; US dollar terms. Source: The Economist
Food commodity prices: High volatility, but how harmful?
80The food price spike between June 2010 and February 2011 pushed 44m people in emerging markets into “extreme poverty,” according to the World Bank. But the FAO now says that recent data suggest that food price hikes at the primary commodity level generally have little effect on consumer
i
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60prices.
20
-20
0
-40 Jan-9
Mar-9
May-
Jul-9
Sep- 9
Nov-9
Jan-9
Mar-9
May-
Jul-0
Sep- 0
Nov-0
Jan-0
Mar-0
May-
Jul-0
Sep- 0
Nov-
Jan- 1
Mar-1
FAO IMF WB
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91 92 93 4 95 96
98 99 00 1 02 03
05 06 07 8 09 10
12 13
Food commodity prices indices: Jan 2001=100. Sources: FAO, IMF, World Bank; Haver Analytics
Price adjustment factor: Rough & ready guide to vulnerability
• We took the quarterly change in global food prices (FAO index) for the last 10 years and compared it
ith f d i i fl ti (CPI) f ll t i i thwith food price inflation (CPI) for all countries in the index to determine a long-run relationship.
• Each quarter, we adjust this “pass-through” priceEach quarter, we adjust this pass through price factor for exchange rates, import dependency and estimated per capita income growth.
W l th dj t t t th A il bilit• We apply the adjustment to the Availability score.
• The PAF does not consider unique, short-term developments in each country, such as recent p y,political turmoil, transportation or distribution issues, local food shortages or policy responses to food price shocks, such as price controls or export restrictions.
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restrictions.
Visit www.foodsecurityindex.eiu.com
Explore drivers of food security Compare country scores Find country profiles
Perform scenario analysis by adjusting indicator weights or
’
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a country’s score