Session 3 a aden aw-hassan

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Investment in Agricultural Research as a Development

Strategy

Aden Aw-Hassan

ICARDA

Food Secure Arab World A Roadmap for Policy and Research

International conference organized by The International Food Policy Research Institute (IFPRI) and the United

Nations Economic and Social Commission for Western Asia (UN-ESCWA)

February 6-7, 2012 – UN-ESCWA, Beirut, Lebanon

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Outline of the talk:

2

1. Examples of research impacts

2. Agricultural total factor productivity growth

3. The food security case of Tunisia

4. Conclusion

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The impacts of wheat crop variety improvement on poverty reduction

in Syria

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level of adoption of improved wheat varieties and their economic impacts.

Impacts of adoption of MV on rural poverty

Better targeting of wheat crop varieties

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Objectives were to determine:

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Map of Syria

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Methods

Farm survey (1010 households): Adoption rates from survey Poverty indicators of wheat growers estimated

Economic Surplus model: Adoption data Yield improvements (15% rainfed and 22% irrigated) Prices of wheat (USD 250/t) set by government For the period of 1985-2007 Gross annual research benefits for 2007 Small closed economy (price is set by the state) Only producer surplus is estimated

Propensity matching technique: To link likely greater adoption of new wheat varieties

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Varietal use by agro-ecology

Variety Rainfed Irrigated All

Cham6 74 69 71

Cham8 4 20 13

Others 22 11 16

100 100 100

Sample

(n) 175 235 410

Results (1) Adoption of soft wheat varieties 2007

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Frequency Percent

Poor 282 27.9

Non-Poor 728 72.1

Total 1010 100.0

Results (2): Wheat growers poverty rates, 2007

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Results (3): Economic benefits of modern wheat varieties

The estimated annual benefits from improved modern varieties:

• Durum wheat: USD mill 0.53 • Bread wheat: USD mill 1.65

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Results (4) Estimated reduction in poverty indicators with MV adoption

Poverty

indicator Durum Bread

Headcount 31% 60%

Depth 28% 65%

Severity 25% 64%

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Concern about adoption

Adoption of modern (first generation) is high Cham 6 and Cham 3

0

20

40

60

80

100

Cham 2 Cham 4 Cham 6 Cham 8 Others Cham 1 Cham 3 Cham 5 Others

Bread wheat Varieties Durum wheat Varieties

0.3 9

80

10

0.8 4.5

66

21

9 % f

arm

ers

%

%

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Implications

Seed multiplication and distribution need to adopt a more flexible business model of targeting varieties to their appropriate environments, and to increase the diversity of varieties available for farmers.

This will have a significant impact on farm income and poverty reduction, and will reduce the risk of losses due to disease epidemics.

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Other technologies evaluated with significantly positive impacts

Supplemental irrigation (Yigezu et al, 2012)

Alley cropping of shrubs (atriplex and cactus) in dry lands (shideed et al 2010)

Water harvesting for barley and shrubs (Akroush et al 2011)

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The total national impact (farm profits plus value added to the conserved water) of the shift to ISI at its current adoption level of 22.34% is estimated in the range of 52 – 691 million SYP per year.

Supplementary (improved) irrigation in Syria

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Returns to Atriplex adoption in Morocco

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Item IRR (%)

Cost components IRR (%) Cost components

FIRR 50

Opportunity costs 90 Opportunity costs

Establishment cost

EIRR 25 Opportunity costs 48 Opportunity costs

R&D costs R&D costs

Subsidy (establishment costs)

Establishment costs

Assumptions and computed rates of returns at Programme area and national levels

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Model for Badia Rehabilitation

Benchmark Project

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Results of Financial and Economic Benefit Cost Analysis (BCA) of different water harvesting

techniques at the study area in Jordan

Economic BCA Financial BCA

Water harvesting Technique

B/C Ratio

NPV (JD/ha) EIRR %

B/C Ratio

NPV (JD/ha) FIRR %

1.75 97 7.4 3.55 162 20.2 Traditional Pits

2.5 208 13 4.96 277 28 Shrubs with water harvesting

1.17 52 7.8 1.26 74 11.2 Barley farmer practice

1.16 63 17 1.31 109 29 Barley with water harvesting

NPV is computed at a discount rate of 10%)

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Regional level assessment of agricultural TFP growth

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TFP, is the product of ECh and TCh. Its value can be greater than, equal to, or less than one indicating whether agricultural productivity improves, remains unchanged or declines.

Efficiency change (ECh) refers to the degree to which

a country uses the minimum feasible amount of inputs to produce a given level of outputs.

Technical change (TCh) refers to shifts in agricultural

technology over time, indicating whether the production frontier is improving, stagnant or deteriorating.

Malmquist index for Total Factor Productivity (TFP)

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Efficiency Change (ECh), Technical Change (TCh) and Total Factor Productivity (TFP)

Period North Africa West Asia

Algeria Egypt Ethiopia Morocco Sudan Tunisia Iran Jordan Pakistan Syria Turkey Yemen

1961–70

ECh 1.01 1.00 1.00 1.01 1.00 1.03 1.00 1.05 1.05 1.00 1.00 1.00

TCh 1.02 1.02 0.89 1.01 0.98 1.01 0.97 1.00 0.96 0.96 0.99 0.97

TFP 1.03 1.02 0.89 1.02 0.99 1.04 0.97 1.05 1.00 0.96 0.99 0.97

1971–80

ECh 1.12 1.00 1.00 1.11 1.09 1.16 0.98 1.08 0.99 1.00 1.00 1.00

TCh 1.08 1.05 0.92 1.01 1.00 1.05 0.97 1.05 1.01 1.04 1.07 0.87

TFP 1.21 1.05 0.92 1.12 1.09 1.22 0.95 1.14 1.00 1.04 1.07 0.87

1981–90

ECh 1.02 1.00 1.00 1.04 1.00 1.03 0.98 0.98 0.97 0.99 1.01 0.99

TCh 1.05 1.05 0.99 1.00 1.12 1.03 1.02 1.05 1.03 1.01 1.06 1.03

TFP 1.07 1.05 0.99 1.03 1.12 1.06 1.00 1.03 1.00 1.00 1.07 1.01

1991–2000

ECh 1.00 1.00 1.00 0.99 1.00 1.00 1.05 0.97 1.03 1.04 1.00 1.02

TCh 1.02 1.04 1.02 1.05 1.07 1.01 1.01 1.00 1.03 1.02 1.02 1.04

TFP 1.02 1.04 1.02 1.04 1.07 1.01 1.06 0.98 1.06 1.07 1.02 1.06

2001–07

ECh 1.00 1.00 1.00 1.02 1.00 1.00 1.02 1.08 1.03 1.00 1.01 0.98

TCh 1.16 1.01 1.12 1.09 1.02 1.08 1.07 1.06 1.03 1.06 1.10 1.19

TFP 1.16 1.01 1.12 1.11 1.02 1.08 1.10 1.15 1.06 1.06 1.12 1.16

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0

500

1000

1500

2000

2500

0 200 400 600 800 1000 1200 1400

Agr

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GD

P (

US

$)

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agr

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wo

rker

Agricultural GDP (US$) per unit of land (hectare)

Algeria (Al) Ethiopia (Et) Iran (Ir) Jordan (Jo)Morocco (Mo) Pakistan (Pa) Sudan (Su) Syria (Sy)Tunisia (Tu) Turkey (Tk) Yemen (Ye)

Tu Sy

Tk

Ir

Su

Al

EtYe

Pa

MoJo

45º line

Agricultural GDP per agricultural worker and per hectare of agricultural land

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Tunisia

• Agricultural Value Added per Worker, increased more than three times (1960 – 2007).

• Average Fertilizer Consumption increased by four times (6 – 23 kg/ha);

• One tractor served every 300 ha in 1960s, increased tractor use dropped the area per one tractor to 127 ha by 2001–07.

• Irrigation systems continuously increased larger areas from 110,00 to 350,000 ha (1960 – 2007).

• Investment in agricultural R& D is among the highest in the region

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Exports Stock Variation Domestic production Imports

842

1018

1165

1723

1670

312

498

1207

1599

2716

4.6

5.6

7.2

8.8

9.8

(78%)

(67%)

(49%)

(55%)

(43%)

(29%)

(33%)

(51%)

(51%)

(70%)

167

187

209

217

208

3.0

3.7

3.0

8.5

4.6

3.3

25.1

19.7

12.8

-50% 0% 50% 100%

1961-69

1970-79

1980-89

1990-99

2000-07

Pop (million)

Cereal supply

(kg/person

/year)

Undernourished (% pop)

Under-weight

in children under 5

(%)

Below 2

$/day (%

pop)

Cereal Wheat, rice, barley, maize, rye, oats, millet and sorghum

435

438

598

819

1041

39

43

60

76

88

(115%)

(112%)

(107%)

(103%)

(103%)

(1%)

(2%)

(2%)

(2%)

(4%)

-(16%)

-(13%)

-(9%)

-(6%)

-(8%)

-30% 0% 30% 60% 90% 120%

1961-69

1970-79

1980-89

1990-99

2000-07

Fruit supply

(kg/person /year)

Fruits

56

82

122

185

253

(100%)

(98%)

(92%)

(96%)

(98%)

(1%)

(2%)

(9%)

(5%)

(2%)

12

15

18

22

26

-20% 0% 20% 40% 60% 80% 100%

1961-69

1970-79

1980-89

1990-99

2000-07

Meat supply

(kg/person /year)

Meats (5): Bovine, mutton, goat and

poultry meats, and offals

462

823

1185

1666

2258

81

125

145

162

194

(107%)

(102%)

(100%)

(103%)

(106%)

(0%)

(0%)

(2%)

(2%)

(1%)

-(7%)

-(2%)

-(2%)

-(4%)

-(7%)

-20% 0% 20% 40% 60% 80% 100%

1961-69

1970-79

1980-89

1990-99

2000-07

Vegetable supply

(kg/person /year)

Vegetables (3): Tomatoes, onions and

other vegetables

Tunisia: Total Domestic Food Supply (1000 tons)

Sources: Own elaboration based on data from the World Development Indicators online database for Prevalence of undernourished; Prevalence of underweight in children; and

Poverty headcount. All other variables were obtained from FAOSTAT online database.

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1,018

1,165

1,722 1,670

917 873 902 788

-

500

1,000

1,500

2,000

2,500

1961-69 1970-79 1980-89 1990-99 2000-07

Tunisia Cereal production under current and 1960s average productivity levels

Source: Own elaboration based on World Development Indicators database

1000 tons

Solid line: Represent actual cereal production quantities. Dotted line: Represent production of cereals using the 1960s average agricultural productivity (kg/ha) levels.

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TCh has been the main driving force of TFP. • Investing in agricultural research is the main lever to increase productivity, • It is also essential for food security and rural poverty reduction.

Low ECh values indicate long-time lags between agricultural research investments and agricultural extension programs

• Policies that support technology transfer, access to inputs & finance are needed to reduce adoption lags.

Conclusion

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