global value chain of food security for energy-expor7ng middle … · 2016-09-19 · global value...

• Morocco is one of the highest wheat consumers in the world and is a large importer • Morocco has over milling capacity and processes wheat for exports • Heavy state interven7ons throughout the wheat value chain in the Maghreb region create constraints • Misalignment between state policies and chain actors creates tension along the chain • MENA region depends on imports to feed its popula?ons • Social stability in the region is sensi7ve to high food prices and changes in wheat and bread subsidies • Firms are hesitant to export into the MENA region due to the uncertain policy environment • Infrastructure constraints exist in exporters and importers na?ons • Russian grain lead firms are very influen?al and are oDen ver?cally and horizontally integrated • Shi; to cheaper Black Sea grain exposes MENA importers to greater vola7lity • Conflict in wheat export and import countries impact global prices • Use of food power for poli7cal and economic influence con7nue to underlie policies in MENA and Russia INTRO Global Value Chain of Food Security for Energy-Expor7ng Middle East Na7ons Ghada Ahmed, Danny Hamrick, Sona Nahapetyan and Gary Gereffi – Duke CGGC at SSRI Lincoln Pratson – Nicholas School of the Environment at Duke INTRO Project Overview Global Value Chain Analysis Key Findings • Mul7-year project supported by US Dept. of Defense MINERVA Ini?a?ve and Army Research Office for University-Led Research • Collabora7on with the Nicholas School of the Environment to study food security in the Middle East and North Africa (MENA) • Food security is a major challenge facing countries in the MENA region. MENA is the largest wheat-impor?ng region in the world. • Rank food security of MENA countries based on mul?ple variables and data sources • Apply GVC approach to iden7fy vulnerabili7es and leverage points in key food commodi?es in MENA countries • Iden7fy risks and strategic op7ons to improve food security in the region • Trace the geographic spread of produc?on • Map the ecosystem of firms, ins?tu?ons and policies • Analyze governance structures & enabling environment • Determine upgrading trajectories and boLlenecks • Address economic, social and environmental challenges This research is supported by the Minerva Program, U.S. Department of Defense. For further informa?on contact Ghada Ahmed ([email protected]). MENA Wheat Trade Patterns and Vulnerabilities • Dependency on Russia or single source country is risky due to shiDs in policies and weather condi?ons • Access to foreign currency is fundamental to purchasing wheat in interna?onal markets and having diversified sourcing • MENA imports high volumes of corn that faces the same logis?cal and policy constraints. Ukraine is an emerging partner for MENA in corn supply Russia’s Importance in Wheat • Russia is the top wheat supplier to the MENA region • Weather, storage, transport and policy uncertainty constrain exports • Large agro-holdings dominate produc7on • Russia uses tariffs and export bans to control exports • Lead firms are ac7ve in Russia, Kazakhstan and Ukraine grain markets • Regional instability can impact wheat supply and global prices Threat to Morocco’s Value Chain Wheat GVC Challenges by Region Bottlenecks in Egypt Syrian Conflict’s Impact on Wheat • Policy failures drive boLlenecks, corrup?on, waste and high system losses • Government control discourage investment and expose the chain to disrup7ons and high global prices • Failure in the chain are likely to result in higher prices and/ or supply constraints which will impact social stability

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Page 1: Global Value Chain of Food Security for Energy-Expor7ng Middle … · 2016-09-19 · Global Value Chain Analysis Key Findings • Mul7-year project supported by US Dept. of Defense

•  Moroccoisoneofthehighestwheatconsumersintheworldandisalargeimporter

•  Moroccohasovermillingcapacityandprocesseswheatforexports•  Heavystateinterven7onsthroughoutthewheatvaluechainintheMaghreb

regioncreateconstraints•  Misalignmentbetweenstatepoliciesandchainactorscreatestensionalong

thechain

INTRO

•  MENAregiondependsonimportstofeeditspopula?ons•  Socialstabilityintheregionissensi7vetohighfoodpricesandchanges

inwheatandbreadsubsidies•  FirmsarehesitanttoexportintotheMENAregionduetotheuncertain

policyenvironment•  Infrastructureconstraintsexistinexportersandimportersna?ons•  Russiangrainleadfirmsareveryinfluen?alandareoDenver?callyand

horizontallyintegrated•  Shi;tocheaperBlackSeagrainexposesMENAimporterstogreater

vola7lity•  Conflictinwheatexportandimportcountriesimpactglobalprices•  Useoffoodpowerforpoli7calandeconomicinfluencecon7nueto

underliepoliciesinMENAandRussia

INTRO

GlobalValueChainofFoodSecurityforEnergy-Expor7ngMiddleEastNa7onsGhada Ahmed, Danny Hamrick, Sona Nahapetyan and Gary Gereffi – Duke CGGC at SSRI

Lincoln Pratson – Nicholas School of the Environment at Duke

INTRO

Project Overview

Global Value Chain Analysis

Key Findings

•  Mul7-yearprojectsupportedbyUSDept.ofDefenseMINERVAIni?a?veandArmyResearchOfficeforUniversity-LedResearch

•  Collabora7onwiththeNicholasSchooloftheEnvironmenttostudyfoodsecurityintheMiddleEastandNorthAfrica(MENA)

•  FoodsecurityisamajorchallengefacingcountriesintheMENAregion.MENAisthelargestwheat-impor?ngregionintheworld.

•  RankfoodsecurityofMENAcountriesbasedonmul?plevariablesanddatasources

•  ApplyGVCapproachtoiden7fyvulnerabili7esandleveragepointsinkeyfoodcommodi?esinMENAcountries

•  Iden7fyrisksandstrategicop7onstoimprovefoodsecurityintheregion

•  Tracethegeographicspreadofproduc?on•  Maptheecosystemoffirms,ins?tu?onsandpolicies•  Analyzegovernancestructures&enablingenvironment•  DetermineupgradingtrajectoriesandboLlenecks•  Addresseconomic,socialandenvironmentalchallenges

ThisresearchissupportedbytheMinervaProgram,U.S.DepartmentofDefense.Forfurtherinforma?oncontactGhadaAhmed([email protected]).

MENA Wheat Trade Patterns and Vulnerabilities

•  DependencyonRussiaorsinglesourcecountryisriskyduetoshiDsinpoliciesandweathercondi?ons

•  Accesstoforeigncurrencyisfundamentaltopurchasingwheatininterna?onalmarketsandhavingdiversifiedsourcing

•  MENAimportshighvolumesofcornthatfacesthesamelogis?calandpolicyconstraints.UkraineisanemergingpartnerforMENAincornsupply

Russia’s Importance in Wheat •  RussiaisthetopwheatsuppliertotheMENAregion•  Weather,storage,transportandpolicyuncertaintyconstrainexports•  Largeagro-holdingsdominateproduc7on•  Russiausestariffsandexportbanstocontrolexports•  Leadfirmsareac7veinRussia,KazakhstanandUkrainegrainmarkets•  Regionalinstabilitycanimpactwheatsupplyandglobalprices

Threat to Morocco’s Value Chain

Wheat GVC Challenges by Region Bottlenecks in Egypt

Syrian Conflict’s Impact on Wheat

•  PolicyfailuresdriveboLlenecks,corrup?on,wasteandhighsystemlosses•  Governmentcontroldiscourageinvestmentandexposethechainto

disrup7onsandhighglobalprices•  Failureinthechainarelikelytoresultinhigherpricesand/orsupply

constraintswhichwillimpactsocialstability

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