Transcript FDI in Agriculture in EAC

Tackling Climate Change and Food
Insecurity: Challenges and
Opportunities for EAC
Putting Our Abundant Water Resources to Work
Total Renewable Water Resources (Km3/year)
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Tanzania = 96
Uganda = 66
Kenya = 31
Burundi = 13
Rwanda = 10
Presentation at the Inception Meeting of the PACT-EAC Project
Nuhu Hatibu; CEO – Kilimo Trust
Arusha - Feb 23rd, 2012
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… because, the main impacts of
climate change on food security and
economy … occur through water
For example , GDP Growth (%/annum) in Tanzania
25
Annual Growth of GDP (%)
20
15
10
5
(5)
-20
-10
4
10
(10)
(15)
(20)
(25)
Arusha - Feb 23rd, 2012
% Variation of Rainfall from the Mean
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… another example of impacts
…through water..
3,000
18
16
14
2,000
Loses as % of Total GDP
Economic Loss in US$
Millions
Damages to infrastructure, and economic loses in Kenya
1,000
12
10
8
6
4
2
-
A: 1997-98 El Nino B: 1998-2000 La
Nina
A: 1997-98 El Nino B: 1998-2000 La Nina
After – the UN World Water Development Report 3 – pg 70-71
Arusha - Feb 23rd, 2012
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BUT, the Problem is the LIMITED
Infrastructure to Manage “Water & its
Variability” …
For example, it is the lack of storage, that makes the abundant water
resources (and its variability) - a cause of misery rather than – the water itself
Arusha - Feb 23rd, 2012
Thousands
Water Storage Gap - SSA vs Rest of
the World
Water Storage m3 per capita
 Installed capacity in
SSA is about 500 m3
per capita - USA or
Australia have more
than 5,000 m3 per
capita;
 Of the world’s 45,000
large dams, only 1,000
(2%) in SSA;
7
6.15
6
5
4
3.3
3
2
1.3
1
0.5
0.75
0.05
0
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… therefore LIMITED
Infrastructure is very costly …
and will become worse with
Climate Change
However, Heavy investment in developed countries
shows high returns - which proves that investment pays
For example, in Japan,
heavy investment in
infrastructure since
the 1970s has
reduced annual
economic losses
due to floods from
20% of GNI, to less
than 0.5%; and
Arusha - Feb 23rd, 2012
In the USA, many of
the largest federal
infrastructural
investments have
been on water
control, storage,
management and
abstraction.
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… one consequence is
that, most of our Godgiven “free” Rainwater
Go to Waste!
 Rainfall total in the
EAC is about 1,750
Km3 per year; or
 About 13 m3 per
person/year; But
 Most of this water
is lost to
evaporation or flow
to the oceans
Arusha - Feb 23rd, 2012
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… so, Adaptation of Food
Security to CC, requires as the
1st priority, the management
of rainwater on the farm
WHY?
The soil provides the largest “free” water
storage infrastructure;
Compared to Irrigation, RWH and SWC
can be implemented virtually
everywhere; and
Adoption of SWC in the USA made the largest
single contribution (45%) to the increase
in average wheat yields from 750 kg/ha
to 1,800 kg/ha from 1936 to 1977. This
was ahead of improved varieties (30%),
other equipment (20%) and fertilizer
practice (5%).
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100
100
90
90
80
70
60
50
40
30
20
10
0
% Utilization of Irrigation Potential
% Utilization of Irrigation Potential
… also, Expand, Improve its
Efficiency, and Adapt to CC,
conventional irrigation
80
70
60
50
40
30
20
10
0
EAC
Arusha - Feb 23rd, 2012
South
Asia
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… plus, for Adaptation to CC, expand
use of modern inputs to reduce water
requirement for food production
(a) Relationship between water
productivity and yields
Current water of productivity- ET per
harvest (m3 /Kg)
9000
Banana
3.9
Banana
2.1
Beans
3.3
Beans
1.7
Beef
6000
5000
4000
3000
33
Cassava
1.5
Dairy
2.4
Irish potato
0.33
Maize
2.8
Rice
2000
0
5
Yields (MT /ha)
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10
Cassava
0.8
Dairy
1.3
Irish potato
0.14
Maize
1.4
3.2
Sweet…
1
0
0
10
Rice
5.6
Sweet potatoes
1000
Beef
Commodities
7000
Commodities
Water productivity (m3/tonne)
8000
Water of productivity with
Optimum Commodity
yields(m3/Kg)
20
40
Evapo-transpiration
(m3/Kg)
0
0.5
5
10
15
Evapo-transpiration (m3/Kg)
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… for serious Adaptation of the
Economy, to Climate Change; we
require …
Necessary and Sufficient Water Control and
Storage Infrastructure (with integrated water
use) that is adapted to the anticipated climate
change
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…BUT, we also require
regional markets and trade –
for sustainable Food Security
Because, the world market for food is very thin …
Food Imports as a Proportion of Total
Consumption (%)
100
90
80
70
60
CEREALS
PULSES
50
MEAT
40
30
20
10
0
FRANCE
Arusha - Feb 23rd, 2012
UK
USA
GERMANY
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…Because…
 Food self-sufficiency and/or
command and control, is a
human trait;
 That is why “land-grabbing”
is as old as human
civilization – although it has
nothing to do we land – but
rather a lot to do with
water!
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… and because it would very costly to
achieve 100% adaptation to climate
variability & change
We need a robust weather-indexed insurance
• To transfer some of
the Risk to the Global
Insurance Industry;
because
• Potential for weatherindexed agricultural
insurance is expanding
as the OECD countries
shift from direct
agricultural subsidies,
to subsidies for agriinsurance
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…however, there are
serious challenges …
1. Very low trust in insurance;
2. Difficult to make index-insurance;
comprehensible to the never-before
insured;
3. Limited “livelihood-focused” indexes
4. Inadequate historical data for rating
the selected indexes; leading to
5. High basis-risk (poor correlation (r2
< 90%) of index and actual losses).
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…which require serious work,
including to: …
• Create informed demand (increase awareness,
acceptability, and willingness to pay);
• Ascertain the availability and quality of data;
• Build necessary capacities, databases and
models;
• Create a proposition of real value to the insured;
• Integrate agri-insurance onto a wider package of
agricultural services – and make it regional wide;
• Engage the private sector to graft onto existing
delivery channels; and
• Establish enabling legal and regulatory
frameworks.
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otherwise…
…
• Pilots die as pilots; and
• Anybody who tells you that
she can offer index agriinsurance at short notice
and without the necessary
investment – is deceiving
you!
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In summary and conclusion
• It is essential that:
– all decision-makers in the EAC, from
– farmers in their fields to the highest Council
of Ministers, are
– aware of the need, and
– have the capacity to improve innumerable
climate-sensitive decisions, through
– effective risk reduction investment, actions,
and management.
• We are pleased that PACT-EAC will be
working on this, but more dedicated
action is required.
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THANK YOU!
For more information & follow-up, please visit
WWW.kilimotrust.ORG
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