Transcript
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Transformation of food systems in the
developing world: Implications forresearch and policy
Prabhu Pingali,Prabhu Pingali,
Head, Agricultural Policy & StatisticsHead, Agricultural Policy & StatisticsBill and Melinda Gates FoundationBill and Melinda Gates Foundation
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Drivers of Change
Rising Incomes, Urbanization anddiet transition
Changing patterns oftrade and FDI
Transformation of food markets
Changing food and productionsystems
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GDP per capitaannual average percent change
-3
-2
-1
0
1
2
3
4
5
6
7
Developing
Countries
East Asia
and Pacific
Europe and
Central Asia
Latin
America and
Caribbean
Middle East
and N.
Africa
South Asia Sub-
Saharan
Africa
realGDP
percapita
,annualaverageperce
ntchange
1980
1990
2001-2005
2006-20015
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Urban Population to Outnumber Rural
Source: UN, World Population Assessment 2002
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Rising Incomes, Urbanization anddietary transition
Cereal based diets to energydense diets
Higher share of processed
pre-prepared food
Growing concerns on food safety
Dual problem of under and overnutrition
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-4
-3
-2
-1
0
1
2
3
4
1961-75 1976-90 1991-03
Percentp.a.
Cereals
Roots
Sugar
Pulses
Oilcrops
Horticulture
Meat
Milk
Change in per capita consumption ofdifferent commodities in developingcountries
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Consumption of different meatcommodities in developing countries
0
20
40
60
80
100
120
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
kcal/person/day
Bovine Meat
Mutton & Goat Meat
Pigmeat
Poultry Meat
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The long run real commodityprices have been declining
Real prices for commodity group
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The agricultural trade deficit ofLDCs is widening
Billion US$
0
2
4
6
810
12
14
61 65 69 73 77 81 85 89 93 97 01 03
total agricultural exports total agricultural imports
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Share in Agricultural Exports,1981-90 to 1991-2000
0%
20%
40%
60%
80%
100%
1981-1990 1991-2000
Least Developed
Other Developing
Developed
0%
20%
40%
60%
80%
100%
1981-1990 1991-2000
Primary Products Processed Products
Source: FAO 2004, Stateof Commodity Markets
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Agricultural trade is concentrated ina few developing countries
Half of all developing countries captured by Argentina,Brazil, Malaysia and Thailand
E.g., Brazil trade balance vs. other developing countries:
Source:FAO 2004
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Changing patterns of trade
Low competitiveness of domesticcereal and livestock production
Trade in processed productsexpanding rapidly
Capacity limitations in meeting
sanitary and phyto-sanitarystandards
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Food markets are changing
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FDI: The other face of globalization
FAO: State of Food Insecurity, 2004
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Supermarket share of Retail FoodSales
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The Changing Food System
Inputs Primaryproduction
Processingandpackaging
Distributionand retail
Consumption
Individuals Enterprises
Governed by Institutions:Rules and regulations
Markets (Contracts)
Transport Services
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Evolution of food systems
Skill basedTradition basedManagement
Highly sciencebased
Local + sciencebasedKnowledge
+ Post harvestProductionoriented
Technology
DifferentiatedStaple basedSystem type
NewOld
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New Rules for a New Game
Centralization of procurement Squeezing of supplier lists
Shift from spot markets to specializedwholesalers New intermediaries and logistics
Contract farming Exclusion of small farmers
Rise of private standards Quality, safety
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Who wins and who loses out?
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Food System Transformation:Country-level heterogeneity
ImportantNot ImportantNot ImportantScale
Economies
Highlydifferentiated
Food Staples+ Export Crops
Food StaplesOutput
Mix
InternationalNationalSubsistenceMarket
Orientation
50%Share of Ag
labor in total
30%Share of Ag
in GDP
Industrialized
Agriculture
Modernizing
Agriculture
Traditional
Agriculture
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Key issues for small farmers
Size matters
Location is crucial Land quality is important
Public good investments are essential
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Issues for Agricultural R&D
Intensification of cereal systems whileallowing for diversification out of cereals
Focus on cereal productivity improvementin marginal environments
Research on small holder post harvest
operations enhancing quality & safety Enhance environmental sustainability
Deal with the rising costs of labor
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Policy focus:
Policy redirection towards creating the enablingenvironment
Facilitate the transitional process Ensure those small farmers that enter modern food
systems, stay in for the long run (winners)
Facilitate the entry of those farmers that have potential
(possibles) Exit strategies for the ones not able to enter the
food system (losers)
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Conclusions
The transformation process can contributeto agricultural and overall growth
The transition is not frictionless and ispainful
Governments need to concentrate onbeing facilitators, regulators and providersof safety nets
Pay attention to inter-regional and intra-societal differences
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