economic growth, structural transformation and the ...€¦ · the rise of a modern industrial and...
TRANSCRIPT
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Economic Growth, Structural
Transformation and the Evolving Food
Security Challenge
Prabhu Pingali Professor
Charles Dyson School of Applied Economics & Management
&
Director, Tata-Cornell Initiative for Agriculture &
Nutrition
Cornell University
Environment Change Institute’s “Big Ideas” Seminar
Oxford University. June 1st, 2016
College of Agriculture and Life Sciences
Tata-Cornell Agriculture and Nutrition Initiative (TCi)
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Outline
Economic Growth & Structural Transformation
Agricultural & Food System Transformation
Evolving Food & Nutrition Security Challenges
Agriculture-Environment Challenges (Trade-offs)
Towards food system renewal – its all about enhancing system diversity and quality
2
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Low Productivity
Agriculture
Commercialized
Agriculture
Modernizing
Agriculture
0
10
20
30
40
50
60
70
80
-1,000 4,000 9,000 14,000 19,000 24,000 29,000 34,000 39,000 44,000 49,000 54,000
SHARE OF
AGRICULTURE
(% GDP)
GDP (US$ PER CAPITA)
High Human
DevelopmentMedium Human
DevelopmentLow Human Development
Upper Middle Cutoff
TCi 2013©
Structural Transformation, Human Development, and Agricultural Performance
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Structural Transformation: what is it?
Four inter-related processes define structural transformation:
A declining share of agriculture in GDP and employment
A rural to urban migration that stimulates the process of
urbanization
The rise of a modern industrial and service sector
A demographic transition from high to low rates of births and
deaths
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Structural Transformation is a Historical
and Universal Phenomenon (1965-2000)
Peter Timmer
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Peter Timmer
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Why do we see slow progress or
stalling of structural transformation
Low agricultural productivity growth
Slow growth in non-agricultural employment
opportunities, especially in labor-intensive jobs
Inadequate rural public good investments, including in
education and public health
7
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The Four Transformations in Food
Systems
Structural Transformation & Rising Rural Wages
Agricultural Commercialization
Diet Diversification
Modernization of the Urban Food Supply System
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From Subsistence Systems to
Agricultural Commercialization
The gradual movement away from
agriculture as a way of life to
agriculture as a business.
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Characteristics of Food
Production Systems with
Increasing Commercialization
Source: Pingali, P.L. and Rosegrant, M.W., 1995. Agricultural
commercialization and diversification: Processes and policies.
Food Policy 20(3): 171-185.
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Diet Diversification in Developing
Countries, 1964 to 2030
Source: FAO,
World Agriculture
to 2015/2030
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Annualized percentage change in rice
consumption by quintile and location, Indonesia,
India, and Bangladesh. R refers to rural quintiles, U to urban quintiles. Period over which changes are calculated are 1967-2006 for
Indonesia, 1983-2005 for India and 1983-2005 for Bangladesh.
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
R1 R2 R3 R4 R5 U1 U2 U3 U4 U5
Indonesia India Bangladesh
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Modernization of the Urban
Food Supply System
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Rising GDP per capita is associated
with a larger share of supermarkets
in food retail
0%
20%
40%
60%
80%
100%
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
GDP per Capita, PPP, 2002
Sh
are
of
Su
perm
ark
ets
in
Fo
od
Reta
il
Source: data from Traill (2006) and World Bank World Development Indicators (2006)
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0
20
40
60
Thailand Mexico Turkey
Ma
rke
t Sh
are
(%
)
Supermarkets (%
of fresh fruits and
veg)
Supermarkets (%
packaged foods
sold)
Market share of supermarket sale of fresh
and packaged foods
Source: Euromonitor (2012a), Gorton et al. (2012
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Why has the supply of food diversity
not kept up with rising demand?
Persistence of Green Revolution focus on staple grains
Poor support for coarse grains, legumes, lentils, etc
Lack of attention to high relative prices of micro-nutrient
dense food – horticulture, livestock products
High costs of smallholder linkage to organized food chains
Increasing access to processed food
Pingali (2015): Agricultural Policy and Nutrition Outcomes - Getting Beyond the
Preoccupation with Staple Grains. Food Security
16
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17
TCi 2016©
The nature and magnitude of the food security & nutrition challenge varies by the stage of structural transformation of a country
Pingali, Ricketts & Sahn (2015)
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The Triple Burden of Malnutrition
Energy and protein deficiencies: Hunger
Specific nutrient deficiencies: Hidden Hunger
Excessive net energy intake: Overweight and Obesity
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Growth in Agricultural GDP and
hunger reduction in Sub-Saharan
Africa (1990-2014)
Data Source: FAO
Angola
Benin
Botswana
Burkina Faso
Cameroon
Central African Republic
Chad
Congo
Côte d'Ivoire
Ethiopia
Gabon
Gambia
Ghana
Guinea
Guinea-Bissau
Kenya Lesotho
Liberia Madagascar
Malawi
Mali
Mauritania
Mozambique
Namibia
Niger Nigeria
Rwanda
Senegal
Sierra Leone Sudan (former)
Swaziland
Togo
Uganda
Tanzania Zambia
-4%
-2%
0%
2%
4%
6%
8%
10%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
AN
NU
AL
RA
TE O
F P
RO
GR
ESS T
OW
AR
DS R
ED
UC
ING
UN
DER
NO
UR
ISH
MEN
T
ANNUAL RATE OF GROWTH IN AGRICULTURAL GDP
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Growth in Agricultural GDP and
Hunger Reduction in Asia (1990-
2014)
Data Source: FAO
Afghanistan
Armenia
Azerbaijan
Bangladesh Cambodia
China
India
Indonesia
Iran
Iraq
Jordan
Kazakhstan
Korea, Dem. Rep.
Kyrgyzstan Lao PDR Maldives
Mongolia
Nepal
Oman
Pakistan
Philippines
Sri Lanka
Tajikistan
Thailand
Turkmenistan
Uzbekistan
Viet Nam
Yemen
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
-2% -1% 0% 1% 2% 3% 4% 5% 6% 7%
AN
NU
AL
RA
TE O
F P
RO
GR
ESS T
OW
AR
DS R
ED
UC
ING
UN
DER
NO
UR
ISH
MEN
T
ANNUAL RATE OF GROWTH IN AGRICULTURAL GDP
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21 Webb P , and Block S PNAS 2012;109:12309-12314
Structural Transformation and Nutrition
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22
We have made progress on hunger reduction…..but
LIMITED PROGRESS in reducing micro-nutrient
malnutrition.
We have NOT YET STARTED to address the problem of
over-nutrition in the developing world.
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The solution to Hidden Hunger and
rising Obesity trends is the same –
Improving the supply and affordability of
diets that are rich in protein and
micronutrients – especially vegetables and
horticulture products.
Diversification of food systems is the priority
for addressing the emerging food
security challenges.
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Agriculture and environment
trade-offs
Agricultural production can impact or
exhaust ecosystem services critical for
sustaining productivity:
Forest cover
Soil health
Water
Biodiversity
Climate
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Propositions on sustainable
intensification of agriculture
systems
Structural transformation of agriculture could have a net positive impact on the sustainability of agricultural landscapes.
Future food requirements can be met by further intensification of existing land under cultivation rather than expanding cultivated area.
Although (better) technologies and management practices are available, sustainable intensification has been constrained by a poor policy environment.
Growing consumer preferences for food diversity, quality, and safety could drive the demand for more sustainable production practices.
Actions needed for dealing with climate change are compatible with those needed for sustainable intensification of agriculture.
25
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Positive effect of structural
transformation on agricultural
landscapes
Re-orientation of agriculture
landscapes – concentration of
production on lands with high returns to intensification;
Release of lands with
intrinsically lower returns to
intensification from agriculture
production;
Rising demand for non-
agricultural uses of agricultural landscapes (Forest cover,
biodiversity preserves, agro-
tourism, etc)
Source: FAO Forest Assessment 2010
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Intensification of currently
cultivated land can meet future
food needs
Current productivity gap can be
bridged by investments in
infrastructure and improved
producer incentives.
Intensification of high potential
environments is a proven
mechanism for meeting food
needs while reducing the
pressure on marginal production
environments.
Getting trade policy right is an
integral part of managing food
security sustainably.
Latin America & the
Caribbean 2004
Yield: 3.06 t/ha
Cereal Crop Yield (tons/ha)
Sub-Saharan
Africa 2004
Yield: 1.05 t/ha
Asia 2004
Yield: 3.48
t/ha
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Sustainable intensification is
possible where incentives are right
Distorted incentives have constrained
the adoption of efficiency-
enhancing/resource conserving
practices for fertilizer, water, and power
use.
Sustainable land use and land
management have been constrained
by a policy bias towards a few staple
cereal crops.
Property rights and tenancy laws that
encourage land conservation
investments are lacking.
High subsidies on urea
are leading to
unbalanced use of N, P
and K. For example,
while the recommended
ratio between N, P and K,
is 4:2:1, the actual ratio in
Punjab was 20:6:1 and in
Haryana 30:9:1 in 2005-
06, indicating a huge
inefficiency in the use of
fertilizers.
Ashok Gulati, 2008
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Changing consumer preferences drive the adoption of sustainable production
practices
Rising demand for food
diversity & quality
Consumer value for
sustainable production
Enforcement of quality &
safety standards
Branding & certifying
products – Rainforest
Alliance, Fair Trade, etc
For example, the rising demand for organic food in the U.S.
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Climate change adaptation & mitigation
practices are compatible with
sustainable intensification
Conservation tillage systems
Drought and water management practices
Incentives for moving agriculture out of marginal areas
Market mechanisms for carbon sequestration
Demand is growing for carbon
credits but agriculture is only
3% of market share
Demand is growing for carbon
credits but agriculture is only 3% of
market share
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31
TCi 2013©
So how do we get agriculture to work for sustainable food systems and food security?
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Paradigm shift from a focus on
quantity to quality and diversity
32
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The way forward
Promote crop-neutral intensification – a level policy field
Reduce transactions costs for linking small holders to urban value chains
Modern science and information technologies for reducing the environmental footprint of intensification
Invest in health and human capital especially for rural youth
Expand food security policy beyond the current “staple grain fundamentalism”
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Thank you!
Website: tci.cals.cornell.edu
Blog: tatacornell.tumblr.com
Twitter: @TataCornell