Transcript World Bank Group Agriculture Action Plan FY10-12

Agriculture for Development
and Feeding 9 Billion
Presentation to the Nuffield Farming Scholars
Washington, D.C.
March 8, 2010
Christopher Delgado
Strategy and Policy Adviser
Agriculture & Rural Development
World Bank
Outline
• Vision of the Global Challenges for
Agriculture—Analysis: The World
Development Report 2008
• What the World Bank Is Trying to Do: The
Agricultural Action Plan FY2010-FY2012
The Challenges
Analysis: WDR 2008
Agriculture for Development
75% of the world’s poor are rural and
most are involved in farming. In the
21st century agriculture remains
fundamental for poverty reduction,
economic growth and environmental
sustainability.
Three Functions of
Agriculture for Development
1. Lead sector for poverty reduction
2. Lead sector for growth
3. Major impact on natural resources
Agriculture’s share in growth 1990-2005
Three Worlds of Agriculture
80%
Agriculture based countries
Mainly SS-Africa
417 million rural people
20%
Transforming countries
Mainly Asia, MENA
2.2 billion rural people
Urbanized countries
Mainly Latin America
255 million rural people
0
0
50%
Rural poor/total poor, 2002
100%
1. Poverty Reduction
Global extreme poverty 2002, $1.08 a day
– 2.5 billion people
depend directly on
agriculture
Global
Urban poor
287 mill.
South
Asia rural
407 mill.
MENA rural
5 mill.
ECA rural
5 mill.
LAC rural
27 mill.
East Asia
rural
218 mill.
Sub-Saharan
Africa rural
229 mill.
– 800 m smallholders
– 75% of poor are rural
and the majority will
be rural to about 2040
Poverty and Hunger
• No. of chronically malnourished growing since 2006
not decreasing as desired in MDG 1
• Chronically malnourished higher in 2009 than
during food crisis in 2008!
• More than one billion people now go to bed hungry
every night
• Problem in 2007/08 was prices, but now income
compression added
• Roughly 80 million new mouths added every year,
mostly in developing countries; poverty alleviation
is necessary for alleviating hunger
Expenditure gains induced by 1%
GDP growth (%)
Growth from Agriculture is Especially
Effective for Poverty Reduction
GDP growth from agriculture
benefits the income of the
poor 2-4 times more than
GDP growth from nonagriculture (43 countries)
8
6
Agriculture
4
2
0
-2
Nonagriculture
Low est 2
3
4
5
6
7
Expenditure deciles
9
8
9 Highest
2. Economic Growth
The Millennium Development Goals cannot be met without higher
agricultural productivity, especially in Africa
–
–
–
–
Large sector for GDP growth
Affordable food and wage competitiveness
Comparative advantage in trade
Strong growth linkages
Average annual real agricultural growth
(%)
Accelerating agricultural growth in Africa
10
4.0
3.3
3.5
3.5
3.0
2.5
2.3
2.0
1.5
1.0
0.5
0.0
1980-1990
1990-2000
2000-2005
3. Environmental Sustainability
Important user of natural resources:
 70-75% of fresh water resources
 40% of land area
 25-30% of greenhouse gas emissions
Contributions to greenhouse
gas emissions
Developing
country
agriculture &
deforestation
21%
Industrialized
countries
64%
11
Developing
country
other
sources
15%
Many Opportunities:
Sustainable farming systems and
environmental services
(conservation farming, agroforestry,
managing landscapes for
climate resilience)
Agriculture is the 2nd Largest Emitter
Global Greenhouse Gases (GHG)
Agriculture for Development:
Improved Opportunities
Changing diets ̶ a new agriculture of high value
products and non-traditional exports
Developing country
exports
250
Meat
200
150
100
Horticulture
Cereals
50
0
13
1981 1984 1987 1990 1993 1996 1999 2002
Value of exports (1980=100)
Kcal consumption/capita/day
(1981=100)
Developing country
consumption
350
Horticulture
300
Meat
250
200
150
Traditional
exports
100
50
0
1980
1990
2000
2004
Improved Opportunities
The policy bias against agriculture is getting
better: e.g., lower levels of “taxation”
15
10
Average taxation %
5
0
-5
-10
-15
-20
-25
1980-84
-30
Agriculture-based
Transforming
2000-04
Urbanized
Improved Opportunities
•
Technological innovations:
–
Conservation farming, precision farming, improved and
resilient varieties – NERICA rice, Bt cotton
–
Information technology
•
Risk management innovations (weather insurance)
•
Stronger producer organizations
•
Public-private-civil society partnerships
15
Improved Opportunities
Expanding sources of income in the
rural non-farm economy
Mexico:
Sources of income rural population
Bangladesh:
Sources of income rural population
100%
100%
90%
90%
80%
80%
70%
Other
70%
60%
Transfers
60%
NonAgIncome
50%
AgWage
40%
50%
40%
30%
Farm
20%
10%
30%
20%
10%
0%
1992
2002
0%
1992
2002
Challenges
Increasing land and water constraints
Cropland per capita of agricultural population
180
140
% of population in absolute water scarcity
ECA
LAC
120
70
60
100
MENA
EAP
80
SA
60
Percent (%)
50
40
30
20
SSA
10
40
-
SSA
20
2003
1997
1991
1985
1979
1973
18
1967
0
1961
Index of cropland per ag population (1961=100)
160
SA
EAP
MENA
ECA
LAC
Challenges
•
Making growth pro-poor
–
Connecting smallholders to new markets
–
Improving assets of the poor, especially women
• Weaknesses in governance
– New state roles, coordination, decentralization
– Global governance issues (trade, standards,
animal health, biodiversity, climate change,
donor support)
19
Challenges
Agricultural-based countries spend too little on
agriculture (and R&D)
Ag GDP/GDP
Public Spending on Ag (% of Ag GDP)
Spending on Ag R&D (% of Ag GDP)
35
12
percent
25
10
20
16
15
10
10
percent
30
14
29
8
6
4
5
2
0
Agriculture-based
Transforming
Urbanized
0
Agriculture based
Transforming
Urbanized
20
Challenges
“Misinvestment” is also pervasive
7
Subsidies
Percent of Ag. GDP
6
5
4
3
Public Investment
2
1
0
1975-79
21
1980-84
1985-89
1990-94
1995-99
2000-02
1
Initial year
Pakistan
1999-2001
India
1989-1999
3
Bangladesh
1991-2000
Indonesia
1993-2002
Vietnam
1992-2001
China
1985-2001
Cambodia
1997-2004
Thailand
1990-2002
Guatemala
1989-2002
Ratio of urban to rural median income
Challenges
Rising rural-urban disparities
3.5
End year
2.5
2
1.5
Challenges
100
90
80
14
% rural poverty
12
10
70
60
50
40
30
8
6
% ODA to Ag
4
20
10
2
-
0
1990
23
1992
1994
1996
1998
2000
2002
2004
% ODA to agriculture
% poverty in rural areas
Donor support to agriculture
Donor Support to Agriculture
1980-2009
Early 1980s
Official development assistance
(ODA): 17%
World Bank lending: 30%
Early 1990s
Official development assistance
(ODA): 12%
World Bank lending: 15%
World Bank lending
is recovering …..
World Bank lending: 14%
Early 2000s
Official development assistance
(ODA): 4%
World Bank lending: 7%
…but overall
ODA just
starting to
recover
Challenges
AGRICULTURE
WORLD POOR
4%
OFFICIAL
DEVELOPMENT
ASSISTANCE
(12% in 1990)
AGRICULTURE
RURAL
75%
4%
PUBLIC SPENDING
(Sub-Saharan Africa)
Going About
Doing It
WBG Agriculture Action Plan: FY10-12
• Operationalizes the
WDR 2008:
Agriculture for
Development
• 3 year time frame
aligns with internal
planning horizons
Global Challenges to Focus On
Poverty
reduction
• Agriculture has been effective at reducing poverty,
enhancement requires linking farmers to markets
Feeding the
World
• Food crop demand is rising (population growth,
biofuels) yet grain crop yield growth has declined
• Agriculture is part of the problem (deforestation,
Climate change pollution) and is part of the solution (productivity,
soil carbon, managing intensification)
• Increasing agricultural incomes can temper the rise
Economic
in rural-urban income disparities, and the
transformation associated political and social tensions
Food &
• Volatile grain prices and lower purchasing power
financial crises are hurting poor producers and consumers
What we will try to do in FY10-12
Five Focal
Areas
Raise
agricultural
productivity
Link farmers to
market &
strengthen
value chains
Reduce risk
and
vulnerability
Facilitate
agricultural
entry, exit &
rural non-farm
income
Enhance
environmental
services and
sustainability
1. Raise agricultural productivity
[selective areas]
Reverse the decline in crop yield growth rates
• Better use existing
technology
• Improve water
management
• Strengthen tenure
security and land
markets
• Invest in technology
generation
2. Link farmers to markets & strengthen value chains
[selective areas]
Reduce transaction costs
e.g. focus on infrastructure to open
high potential areas to markets (Africa)
…focus on
organization to
integrate
smallholders
into higher value
markets (LCR)
• Continue support for the
Doha trade round
• Expand infrastructure
• Strengthen producer
organizations
• Expand business models
for market integration
• Improve access to
finance
3. Reduce risk and vulnerability
[selective areas]
Better manage volatility… which may
be increasing
• Safety nets, fiscal support
• Better manage national
food imports
• Further explore policy
options to address price
volatility
• Protect assets from
catastrophic loss (insurance
innovations)
• Reduce risk of livestock
disease outbreaks
4. Facilitate entry and exit, and rural non-farm income
[selective areas]
• Improve land markets
– Rental and sales markets
– Code of conduct for foreign investment
– Safety nets to reduce distress sales
• Improve the local investment climate
– Rural investment climate assessments
• Upgrade skills
– Vocational training
– Private sector links to curricula development
5. Enhance environmental services & sustainability
[selective areas]
• Climate change adaptation and mitigation
– More drought tolerant crops and livestock breeds
– Reduce barriers to access (soil) carbon markets
• Manage intensive livestock systems
– Pollution and disease risk
• Reduce forest degradation
– Improve incentive systems, institutional capacity
– Complementary agriculture investments
• Improve fisheries sustainability
– Awareness raising for improved fisheries governance
– Capacity building for implementation and enforcements
Agriculture’s share in growth 1990-2005
Mix of Support Varies Across Three Worlds of Agriculture
80%
Agriculture based countries
(mainly SS-Africa.
417 million rural people)
20%
Transforming countries
Urbanized countries
0
0
36
(mainly Asia, MENA.
2.2 billion rural people)
(mainly LAC, ECA.
255 million rural people)
50%
Rural poor/total poor, 2002
100%
Mix of Support Varies Across Three Worlds of Agriculture
Action Plan Focal
Areas
Agriculture-based
Transforming
Urbanized
Agricultural
productivity
Close the crop yield and
livestock productivity gap,
expand irrigated areas and
improve rainfed systems,
improve security of land rights,
invest in agricultural research
Improve productivity in higher
value markets (including
livestock products and
aquaculture), and in lagging
regions, strengthen land rental
and sales markets, improve
water use efficiency
Improve equality in land
access, invest in agricultural
research, focus on grains and
oilseeds, as well as higher value
markets
Link farmers to
markets
Improve market information,
infrastructure, strengthen
producer organizations, and
finance
Improve food safety, standards,
market integration business
models, and finance
Improve international trade,
food safety, standards, and
market integration business
models
Risk and
vulnerability
Provide safety nets, asset
protection against catastrophic
loss
Better manage food imports,
reduce risk of livestock disease,
provide safety nets
Provide safety nets, reduce risk
of livestock disease outbreaks
Rural non-farm
income
Improve the rural investment
climate, expand infrastructure
Upgrade skills, decentralize nonfarm activities, expand rural
livelihoods approaches
Upgrade skills, expand
territorial development
Environment
services, and
sustainability
Improve rangeland
management, support for
carbon market access
Manage intensive livestock
systems
Reduce deforestation, expand
payment schemes for
environmental services
Program Composition: FY10-12
Ongoing program: $10 bn to be
disbursed over FY10-12
Areas of emphasis for new
commitments: FY10-12
Investment support
 Productivity
– Extension, land, research
– Gender responsive
 Link farmers to market
– Infrastructure, market
information
 Reduce vulnerability
AAA
Agricultural productivity
Linking farmers to markets
Rural non-farm
 Public expenditure
 Managing risk
 Productivity
Program Size: FY10-12 Projections
US$ billions
Annual Average: IBRD/IDA & IFC
9
8
7
6
5
4
3
2
1
0
Low Case
High Case
8.3
Other ag. related investments
Ag. production & markets
6.2
IFC
4.1
3.0
2.3
FY2000-02
FY2003-05
FY2006-08
FY2010-12
Achieving targets dependent on:
1. Continued strong client demand
2. The extent of impacts of the financial crisis
3. Adequate staff and budgets
4. IDA 16 replenishment
FY2010-12