Partnering for Impact_Brussels Haniotis

Food Security Foresight:some reflections

Partnership for ImpactIFPRI-European research Collaboration

Brussels, 25 November 2013

Tassos HaniotisDirector

Economic analysis, perspectives and evaluationsDG Agriculture and Rural Development

European Commission

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From the shifting balance of constant needs…

Food

Feed

Fibre Fuel

Population, incomeand demand driversPopulation, incomeand demand drivers

Policy challengesin globalised

markets

Policy challengesin globalised

markets

Supply constraints and productivity

Supply constraints and productivity

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Domestic and trade policies (from G-2 and 3 pillars to G-20 and

export bans)

Weather variability increased due to climate change

… to a framework for analysing food security challenges

Food supply and demand interaction

Financialisation of

commodities

Energy links (high energy prices,

biofuels)

Domestic and trade policies (from G-2 and 3 pillars to G-20 and

export bans)

Weather variability increased due to climate change

Macro linkages (GDP, interest

rates, exchange rates)

Macro linkages (GDP, interest

rates, exchange rates)

Energy links (high energy prices,

biofuels)

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1948

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

0

50

100

150

200

250

300

350

400

450(World Bank MUV-deflated indices, 2005 = 100)

Agriculture Polynomial (Agriculture) Fertilizers Energy

Metals & minerals

Source: World Bank. Note: 2013 figures are forecasts as of September 2013.

Long term commodity price trends

Cumulative price change

Period 2000-12 2006-12

Sector (real)

Agriculture + 82 % + 61 %

Fertilisers + 286 % + 115 %

Energy + 261 % + 55 %

Metals & minerals + 217 % + 44 %

Crops (nominal)

Wheat + 275 % + 163 %

Maize + 337 % + 245 %

Rice + 278 % + 185 %

Soybeans + 279 % + 220 %

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Long term energy price trends1982M

01

1982M

09

1983M

05

1984M

01

1984M

09

1985M

05

1986M

01

1986M

09

1987M

05

1988M

01

1988M

09

1989M

05

1990M

01

1990M

09

1991M

05

1992M

01

1992M

09

1993M

05

1994M

01

1994M

09

1995M

05

1996M

01

1996M

09

1997M

05

1998M

01

1998M

09

1999M

05

2000M

01

2000M

09

2001M

05

2002M

01

2002M

09

2003M

05

2004M

01

2004M

09

2005M

05

2006M

01

2006M

09

2007M

05

2008M

01

2008M

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2009M

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2010M

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2010M

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2011M

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2012M

01

2012M

09

0

25

50

75

100

125

150

175

200(World Bank nominal prices)

Crude oil, Brent ($/bbl) Crude oil, WTI ($/bbl Coal, Australian ($/mt)

Source: World Bank.

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Long term natural gas price trends1982M

01

1982M

09

1983M

05

1984M

01

1984M

09

1985M

05

1986M

01

1986M

09

1987M

05

1988M

01

1988M

09

1989M

05

1990M

01

1990M

09

1991M

05

1992M

01

1992M

09

1993M

05

1994M

01

1994M

09

1995M

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1996M

01

1996M

09

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1999M

05

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2000M

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2001M

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2002M

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2002M

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2003M

05

2004M

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2004M

09

2005M

05

2006M

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2006M

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2007M

05

2008M

01

2008M

09

2009M

05

2010M

01

2010M

09

2011M

05

2012M

01

2012M

09

0

2

4

6

8

10

12

14

16

18

20(World Bank nominal prices, $/mmbtu)

Natural gas, US Natural gas, Europe Liquefied natural gas, Japan

Source: World Bank.

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World annual growth in consumption/population (%)

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* Based on estimations for 2011-2012. Size of bubbles represents total average consumption over a period. Sources: FAO, USDA

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What is new in the Foresight debate?

What sort of "insecurities" drive the current policy debate?

• Recent commodity price developments: volatility, co-movement and level• Price volatility and price co-movement are declining• However, the agricultural price level is expected to stay higher in the future

Three challenges linked to research and modelling needs

• Global: energy-link shifts from biofuels to gas, impacts input use and competiveness• Developing world: dilemma from opposite impact of high prices on rural vs urban poor• Developed world: how to address ″jointness″ between private and public goods?

Role of research in getting the "problem definition" right

• Important to anticipate future problems, instead of assuming continuation of past ones • Need to target research to broader, often inter-disciplinary, policy-relevant issues • Need to communicate in simple, targeted and result-oriented ways with policy makers

Thank you

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