Meeting the Food Challenge of the twenty-first Century

STEPHAN VON CRAMON-TAUBADEL, MANFRED ZELLER

Published: 01.09.2000  〉 Heft 9-10/2000  〉 Resort: Articles 
Submitted: N. A.   〉 Feedback to authors after first review: N. A.   〉 Accepted: N. A.
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ABSTRACT

The main theme of the world exhibition EXPO 2000 in Hannover, Germany, is the relationship between 'Humankind - Nature - Technology'. This theme is closely linked with the global objective of sustainable development as defined in the Brundtland report (1987). In the area of food and agriculture, the major challenge posed by this objective is how to ensure sufficient, affordable, and high quality food for every human being in a growing world population while at the same time protecting the earth's natural resources so that future generations can prosper. Conflicts over the use of scarce land and water resources between food production, expanding industries and rising urbanization are increasing. These conflicts pose a challenge for natural and social scientists, policy makers and other actors in agribusiness sectors and in rural and urban development. Food safety, biotechnological innovations, more efficient and equitable agricultural production and food distribution systems, economic and social development of rural areas where most of the poor in this world live, the protection of soils, biodiversity and other natural resources, the search for new institutions mediating problems at the local, national and international level, and the fight against poverty, crises and food insecurity: These are all elements of the overall Food Challenge in the 21st century. This special edition of the Agrarwirtschaft explores the food challenge by featuring six papers that describe and analyse recent developments on world and regional food markets, food and agricultural policy, technological innovations and their impact on food security and nutrition. The first paper by PER PINSTRUP-ANDERSEN, RAJUL PANDYA-LORCH, and MARK ROSEGRANT, begins by reviewing major trends in demand and supply of food, mainly grains, tubers and livestock, and predicts likely developments in world food markets until 2020. The authors conclude that, despite continuing population growth of about 73 million people per year until 2020, per capita food availability in the developing world will likely increase while real food prices will remain constant or decline slightly. Most of the required increases in production of food and feed will have to come through increases in yields, as farmland becomes increasingly scarce world-wide. However, PINSTRUP-ANDERSEN et al. also point out that the number of malnourished children under five years of age will only decline from 160 million in 1995 to 135 million in 2020. Food insecurity and malnutrition will continue to persist in 2020 and beyond, in particular in South Asia and Sub-Saharan Africa. Hence, the authors argue that there is no room for policy complacency. Indeed, the evolution of the world food situation could be significantly better or worse than projected in their most likely scenario depending on how policy at all levels deals with six emerging issues. First, poor countries and poor people risk missing out on the economic benefits of future trade liberalization, and their interests need to be more effectively represented in world trade negotiations. Second, wars and conflicts at the local, national and regional level will contribute to future poverty, food insecurity and natural resource degradation. In a recent study of acute crises and famines, the FAO comes to the conclusion that today over one half are rooted in war, revolution and insurrection, in other words, man-made (see DE HAEN, 2000, p. 34). PINSTRUP-ANDERSEN et al. stress that addressing the food challenge can help avoid many conflicts, as these are often rooted in poverty and inequality. Third, the increasing scarcity of fresh water may well emerge as the key constraint to global food production in the 21st century. Finally, PINSTRUP-ANDERSEN et al. assert that increased investment in agricultural research, making use of biotechnology and adapted agro-ecological approaches, as well as investment in rural development in general, especially by making use of emerging information technologies, offer tremendous potential to resolve the food challenge in the 21st century. MARTIN VON LAMPE employs the WATSIM modelling system, a partial equilibrium model of regional and international agricultural commodity markets, to prepare projections of developments on world food markets to the year 2020. In comparison to the IMPACT model employed by PINSTRUP-ANDERSEN et al., WATSIM contains a relatively rich depiction of the different agricultural policy tools implemented by different countries around the world (e.g. tariffs, direct payments, minimum market prices, production quotas and acreage set-aside). An interesting innovation in VON LAMPE's approach is that income elasticities of demand - clearly important parameters that drive many of the results of world food market projections given the expectation of continued income growth especially in Southern and Eastern Asia - are not assumed to be constant but rather are modelled as functions of per capita income. The results of VON LAMPE's simulation experiments indicate that prospects on world food markets strongly depend both on income growth at the regional and global level, and on agricultural policy changes in the EU. The author's baseline projections largely confirm that real world food prices can be expected to remain roughly constant through to 2020, with annual declines in the neighbourhood of 1-1.5 % projected for grains, and slight increases projected for meats. A simulation in which income growth rates in Asia are increased by 1 % in comparison with the baseline produces projections in which most world prices fall (or increase) by roughly one-third of one percent less (more) than in the baseline. Like PINSTRUP-ANDERSEN et al., VON LAMPE's results also indicate that cereal production in developing countries will increase, but not enough to keep pace with demand.NIKOS ALEXANDRATOS, JELLE BRUINSMA and JOSEF SCHMIDHUBER focus on China, a country that, by virtue of its population and its expected rapid economic growth, will likely have a huge impact on the outcome of efforts to address the world food challenge in the 21st century. China combines, at the national level, many of the factors that are mentioned in connection with the world food challenge - for example, pressures on the availability of agricultural land, the impact of income growth on the volume and composition of demand, and the issue of household and individual vs. national food security. ALEXANDRATOS et al. recall the fears that were expressed in the mid-1990s, when China temporarily became a sizeable net importer of cereals, that Chinese cereal imports could grow very rapidly in coming decades, accentuating world scarcities. Many will recall BROWN's (1995) projections of Chinese net cereal imports of over 350 million tons by 2030. ALEXANDRATOS et al. argue that these fears are unfounded because China will soon have passed the phase of most rapid growth in food demand and has already achieved fairly high levels of food consumption, and because new data suggest that China has significantly more agricultural land than is indicated by official data. The authors present the results of FAO estimates that point to net Chinese cereals imports of 33 million tonnes in 2030, results that are of a similar magnitude as those produced by, for example, the World Bank, the USDA and other authors (see QU, 1998).All three of the contributions discussed so far either present or draw on the state of the art in modelling and predicting changes in world food markets. All authors stress the conditionality of their models and the corresponding projections, a point which cannot be stressed enough. Consider, for example, the projections of world grain prices that the OECD produces as a part of its annual Agricultural Outlook. In the figure we see that even the relatively short run projections produced by this respected institution have been revised considerably from year to year. The point is not, of course, to criticize the OECD, but rather to remind ourselves just how little we can predict with anything approaching certainty, especially when the horizon extends to 2020 and beyond. This conclusion is humbling but should also firm our resolve to continue to pursue improved modelling methods, to reduce at least the man-made sources of uncertainty on world markets (in particular policy induced uncertainty), and to invest in agricultural research and rural development as a form of long-run insurance against down-side risk.JEAN SENAHOUN, FRANZ HEIDHUES and DANIEL DEYBE analyse the impact of structural adjustment policies on agricultural production and food security in Benin. Their results show that the production of cotton, the major export crop, significantly increased as a result of macroeconomic reforms. However, the main beneficiaries of this policy have been wealthier farmers; poor subsistence farmers and the urban poor face increased food costs as a result of higher import prices for food. Their analysis thus illustrates the well-known food price dilemma that policymakers in particular in developing countries face. SENAHOUN et al. conclude that although Benin's macroeconomic and sectoral policy reforms were necessary, they have not been sufficient for combating poverty and food insecurity. Increased investments in smallholder agriculture in particular, and in other economic sectors that benefit the rural and urban poor, such as micro-finance, the promotion of non-farm micro-enterprises and targeted safety net programs, are required to improve the food purchasing power of the poor. UWE LATACZ-LOHMANN reminds us that agriculture not only produces food but also a variety of environmental 'goods' and 'bads'. The liberalization of trade and the increased recognition of agriculture's environmental outputs are two of the most important factors affecting agriculture as we enter the 21st century. While both factors can be expected to lead to improvements in social welfare, there may be tradeoffs between environmental protection and trade liberalization, especially if the former is interpreted widely to include the much-cited 'multifunctionality' of agriculture. LATACZ-LOHMANN conceptualizes multifunctionality as a positive externality of agricultural production and incorporates it into a partial equilibrium framework that can be used to analyse interactions with trade liberalization. He concludes by deriving a promising procedure for determining the legitimacy of agri-environmental national policies within the framework of the WTO. The development of mechanisms that guard against the misuse of multifunctionality in coming rounds of WTO negotiations is of particular interest to developing countries. As pointed out by PINSTRUP-ANDERSEN et al., these countries have weak negotiation positions in international trade discussions, which in the past have often appeared more bi- (EU-US) than multilateral. LATACZ-LOHMANN's proposal could help developing countries avoid a situation in which industrialized countries further protectionist agendas by appealing to agri-environmental concerns. In this sense, his proposal is part of a broader appeal to the industrialized countries to behave responsibly by considering the impact of their agricultural policies (for example sugar policies) on developing countries. MATIN QAIM and DETLEF VIRCHOW argue that biotechnology is not a panacea for solving the food challenge. They assert that biotechnology, and genetic engineering in particular, offers outstanding potential to increase the speed and cost efficiency of improving the yield and quality of crops while potentially reducing the use of water, pesticides, nitrogen fertilizers, and other inputs. In two selected case studies from Kenya and Mexico, the authors demonstrate that transgenic crops can be beneficial for farmers and consumers alike in developing countries. Biotechnology offers the possibility to increase rural incomes of smallholder farmers while reducing food prices in developing countries. Both effects are crucial for solving the food challenge as about 60 to 70 % of the world's poor currently reside in rural areas and depend either directly or indirectly on agriculture. QAIM and VIRCHOW argue that the private sector can and should play an important role in providing developing countries with access to biotechnology. However, there are a number of technology areas - in particular in semi-subsistence crops such as tubers, or crops that need to be adapted to marginal agro-ecological environments - that will not be tackled by private research owing to market failures. The public sector will have to address these market failures if biotechnology is to contribute to poverty reduction. QAIM and VIRCHOW conclude "that profound and pro-poor institutional adjustments in research and regulatory frameworks are essential to ensure that biotechnology does not bypass those who need it most."The share of development aid directed towards agriculture has been declining (VON BRAUN et al., 1993). This suggests that the policy complacency mentioned by PINSTRUP-ANDERSEN et al. is indeed a real danger, and that renewed efforts are urgently needed. In Germany and other industrialized nations, policy makers' attitudes towards funding for research and education in agriculture appear to be driven by short term considerations. There is no denying that agriculture's share in GDP and employment is falling in the industrialized countries. Nevertheless, the moral and economic reach of the world food challenge is, to use an over-used word in a truly fitting context, global, and it is in this context that the returns to investment in research and education in agriculture must be measured. Developing country issues have traditionally been an important focus of agricultural research and education in the industrialized countries, and the world food challenge justifies an intensification of this focus. Much progress in reducing food insecurity has been achieved through investments in agriculture and rural development in past decades, and a sustained effort in research and education in these areas, including an increased effort for protection of natural resources, is a prerequisite for ensuring that all people in this world will have access to sufficient food at all times by the end of the 21st century.
CONTACT AUTHOR
Prof. Dr. STEPHAN VON CRAMON-TAUBADEL and Dr. MANFRED ZELLER, Institute of Agricultural Economics and Institute of Rural Development, respectively, Georg-August University, Göttingen
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