Transcript PowerPoint - Agricultural Policy Analysis Center

Biofuels, Food Security and
Environmental Sustainability:
Global Challenges and Opportunities
Daniel G. De La Torre Ugarte
The Politics of Food Conference
September 22 - 24, 2008
Raleigh, NC
Agriculture and Poverty
 Developing world
 5.5 billion people
 2.5 billion are in households involve in Ag
 1.5 billion are smallholder households
 800 million people food insecure
 80% of food insecure people are in rural areas
 In many developing countries:
 >50% of employment
 >25% of GDP
 Increase in GDP from Ag is twice more
efficient for poverty reduction than any sector
Long term trend in
agricultural commodity prices
30+ years of declining and or flat prices
Source: International Financial Statistics Online, IMF February 10,2008. Except for real price in 2007,
which is estimated by author.
Agricultural commodity prices
and Food Security
Global Anthropogenic GHG Emissions
Source: Fourth Assessment Report, IPCC (2007)
(a) Global annual emissions of anthropogenic GHGs from 1970 to 2004. (b) Share of different anthropogenic GHGs in total emissions
in 2004 in terms of CO2-eq. (c) Share of different sectors in total anthropogenic GHG emissions in 2004 in terms of C0 2-eq (Forestry
includes deforestation.)
GHG for ag and forestry is to address the 31% of annual
emissions coming. If we take care of this we take care of
0.26% Searchinger, et al.
Grains for Feed and Fuel Use
700,000
600,000
Feed long term driver of ag. demand
000 tons
500,000
400,000
300,000
Developing countries are reproducing diet of the west
based on high content of animal protein
200,000
Biofuels demand, the straw that broke
the camel’s back
100,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
World Feed Demand
Feed Demand minus USA
Source: OECD-FAO Agricultural Outlook 2007-2016 - OECD © 2007 - ISBN 9789264025097
Fuel Demnd
Source: USDA
Corn
Wheat
Rice
20
06
/
20
04
/
20
02
/
20
00
/
19
98
/
19
96
/
19
94
/
19
92
/
19
90
/
19
88
/
19
86
/
19
84
/
19
82
/
19
80
/
19
78
/
07
05
03
01
99
97
95
93
91
89
87
85
83
81
79
Percent of total use
Biofuels Expansion took-off when
world inventories were declining
0.36
0.30
0.24
0.18
0.12
0.06
0.00
Public Spending in Agriculture has stagnated
and it is the least where is needed the most
The story thus far:
Increase in agricultural commodity prices is
structural (consumption pattern) and policy
driven
Biofuels are “the straw that broke the camel’s
back
Current industrial agricultural system is not
sustainable; biofuels sustainability largely
depend on the way feedstock are produced
Today’s agricultural economic, environmental,
and social problems are not caused but
exacerbated by biofuels.
The Question is
 Under which conditions biofuels can be
an opportunity for:
 Poverty reduction
 Climate change / environmental benefit
 Energy crisis / energy independence
Increased Ag prices could drive new
investment into agriculture
 Type on investment matters. A LOT !
Trade off Between Agricultural
Prices and Food Security
Ag Prices
Increase in ag. prices is not necessarily a
bad for food security, specially if coming from
low prices
P1
P0
% Food Security
Expand the Impact of Higher
Prices in Food Security
Ag Prices
Investments directed to improve share of high
prices capture by farmers would improve food
security
P1
P0
% Food Security
Strategy for Poverty Reduction
Increase farmers ability to capture larger
share of higher prices:
 Invest in farmers’ access to markets, improving
marketing & distribution systems
 Improve product quality
Democratize access to land, water and
productive resources
Invest in research and extension to improve
productivity to supply the now profitable local
market
Implement programs to ensure access to food
for vulnerable population
Trade-off Between Agricultural Prices
and Environmental Cost
Ag Prices
P1
P0
Under current agricultural practices and food consumption patterns,
an increase in ag prices could accelerate environmental costs
Environmental
Cost
Higher Ag Prices Create Conditions to
Invest in reducing Environmental Cost
Ag Prices
Investment in agricultural technologies less intensive in
fossil inputs, and in tune with local soil and food habits
would reduce environmental cost of agriculture
P1
P0
Environmental
Cost
Strategy for Climate Change
 Drastically change diet composition towards more
efficient sources of protein and food from local
origin
 Invest in Research & Extension oriented to:
 Reduce use of fossil based inputs in agriculture
 Improve management practices which increase the
environmental performance of production agriculture
 Ensure the best use of soils and landscape
 Recuperate the complementarity of crop and
livestock activities in the farm
 Integrate GHG emissions and other environmental
impacts into farmers balance sheet
Institutional Investment
Strengthen land property rights and
enforcing mechanisms to protect small
holders
Re-develop domestic institutionality to
support transformation of agriculture
International food reserve system
Global coordination of biofuel
development
Concluding Remarks
 If nothing is done, missed opportunity for poverty
reduction, agriculture, and climate change
 Biofuels could result in a massive transfer of
resources to the ag sector, specially in the South.
 Biofules provides the profitability to invest in
agriculture and radically change what, how, and where
we produce
 Countries could benefit from biofuels without
producing them
Thanks !
Bio-based Energy Analysis Group
http://beag.ag.utk.edu/
Agricultural Policy Analysis Center
http://agpolicy.org/
Department of Agricultural Economics, Institute of Agriculture
University of Tennessee http://www.agriculture.utk.edu/