Trust for Advancement of Agricultural Sciences, 4th Foundation Day Lecture New Delhi, March 6, 2009

1. Overcoming the World Food and
Agriculture Crisis through
Policy Change and Science
Joachim von Braun
International Food Policy Research Institute
Trust for Advancement of Agricultural Sciences,
4th Foundation Day Lecture
New Delhi, March 6, 2009

2. Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009

3. Globalization of agriculture and food
systems
Definition:
Integration across national borders of production,
processing, marketing, retailing, and
consumption of agriculture and food items
Joachim von Braun, IFPRI, March 2009 Source: von Braun and Diaz-Bonilla 2008.

4. Broad patterns of consensus on
innovations
1. Technological innovations in agriculture are critical
for growth and crisis prevention
2. Science alone cannot change world food situation;
institutional innovations and change must facilitate
access to and use of technology
3. But lack of consensus on best design of institutional
arrangements
4. Institutional innovation is lagging behind science
and technology innovation
Joachim von Braun, IFPRI, March 2009

5. Food price spike, 2007-08
800 Price spike 125
Corn
Wheat 100
600 Rice
US$/barrel
US$/ton
Oil (right scale) 75
400
50
200
25
0 0
Prices fell partly because of
financial crisis and recession
Joachim von Braun, IFPRI, March 2009 Source: Data from FAO 2009 and IMF 2009.

6. Food driving up overall inflation
Bangladesh 6 India, wholesale
6 Overall Overall
Food Food
3 ------- 3 ---------
0 0
-3 -3
Jan-05 Jan-06 Jan-07 Jan-08 Jan-05 Jan-06 Jan-07 Jan-08
6 Pakistan
Overall
3 Food --------
0
-3
Jan-05 Jan-06 Jan-07 Jan-08
Joachim von Braun, IFPRI, March 2009 Source: Data from government statistics.

7. India State Hunger Index (ISHI) by severity
- 12 of 17 states:
“alarming”
- Madhya Pradesh:
“extremely alarming”
Joachimvon Braun, IFPRI, March 2009 2008
Joachim von Braun, IFPRI, November Source: Menon et al. 2008.

8. High levels of hunger
(2008 GHI vs. 1990 GHI)
40 Under-five mortality rate
Proportion of undernourished
Proportion of undernourished
30
20
10
0
GHI GHI GHI GHI GHI GHI
1990 2008 1990 2008 1990 2008
Sub-Saharan Africa South Asia India
India ranks 66th out of 88 countries in the GHI
Joachim von Braun, IFPRI, March 2009 Source: von Grebmer et al. 2008.

9. Food protests and food prices
800 Maize 25
700 Wheat
Rice 20
600
Riots (right)
500
# of riots
15
US$/ton
400
300 10
200
5
100
0 0
Jul-07
Jul-08
Jan-08
Jun-08
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Aug-08
Sep-08
Oct-08
Apr-08
Feb-08
Mar-08
May-08
Joachim von Braun, IFPRI, March 2009 Source: J. von Braun based on data from FAO 2009 and news reports.

10. Recession scenarios with and without
agric. investment action
Non-recession 275
250
Maize price
Same-investment (left ) 250
200 Low-investment
225
US$/ton
150
200
100 Malnourished children (right)
175
Million
50 150
0 125
2005 2010 2015 2020
16 mln more malnourished children
with recession and low investment
Joachim von Braun, IFPRI, March 2009 Source: von Braun, Rosegrant, IFPRI IMPACT, Oct. 2008.

11. Low agricultural productivity growth in
developing countries
Annual total factor productivity growth, 1992-2003
%
East Asia 2.7
South Asia 1.0
East Africa 0.4
West Africa 1.6
Southern Africa 1.3
Latin America 2.7
North Africa & West Asia 1.4
All regions 2.1
Joachim von Braun, IFPRI, March 2009
Source: von Braun et al. 2008.

12. Output response forthcoming, but not from
low-income countries
Growth of cereal output in 2007-08:
11%: developed
0.9%: developing
1.6%: developing, excl. Brazil, China, India
Plans for investment scaled down as capital
becomes more scarce and expensive
Joachim von Braun, IFPRI, March 2009
Source: FAO 2008.

13. Recent initiatives for Foreign Direct
Investment in agriculture (G-2-G)
Source: Data from GRAIN 2008. Note: Thicker lines reflect investments >100,000 ha;
Joachim von Braun, IFPRI, March 2009 for some thinner lines, data on investment size is not available.

14. Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009

15. Quick and comprehensive response to
food crisis
• Increased investment in agric. and social
protection by 24%, irrigation by 80% in 2008
• Set up National Food Security Mission, 2007
• Expanded subsidies on crude oil, fertilizers,
and food
• Scaled up safety net programs such as PDS
and NREGS
Joachim von Braun, IFPRI, March 2009

16. Areas for attention
• Grain stocks at 35 mil. tons (10 mil. above
norm) and increasing
- Release stocks in a timely manner and
consider new institutional arrangements
• Rising costs of PDS and NREGS
- Revise targeting mechanisms, coverage, and
cost-effectiveness
• Export bans and suspension of grain futures
trading
- Curb new protectionist trends
Joachim von Braun, IFPRI, March 2009

17. Can small farm agriculture mitigate the
economic recession?
Hectares Average farm sizes in selected countries
3.0
2.5
2.0
1.5
1.0
0.5
0.0
19 71
19 82
20 92
3
20 92
2
3
80
90
99
19 77
20 95
-0
-0
-0
-
-
-
-
19
19
19
19
19
70
81
91
02
89
01
02
19
India China Ethiopia Tanzania
Sources: Fan and Chan-Kang 2003, FAO Agricultural World
Joachim von Braun, IFPRI, March 2009 Census and Indiastat.

18. Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009

19. What innovations?
• Organizations incl. in agricultural research,
extension, education, input supplies, marketing, and
collective action
• Technologies along the whole food value chain
• Institutions incl. laws, regulations, traditions,
customs, beliefs, norms
• Public policies for promoting agriculture
Joachim von Braun, IFPRI, March 2009

20. Roles of institutions in strengthening
food markets
1. Reduce transaction costs
2. Manage risk
3. Build social capital
4. Enable collective action
5. Restore missing markets
Particularly important for commodities
produced, bought, and sold by smallholders
Joachim von Braun, IFPRI, March 2009

21. Examples of institutional innovations
• Public-private partnerships
• Farm cooperatives
• Contract farming
• Social networks for adoption of innovations
All of these have been successful in specific
contexts, but none is a universal solution
Institutional innovations should be inclusive of
smallholders and disadvantaged groups
Joachim von Braun, IFPRI, March 2009

22. Overview
1. The food and financial crises
2. India’s agri-food policy
3. The role of innovations
4. Needed global policy action
Joachim von Braun, IFPRI, March 2009

23. Priorities for action
1. Promote pro-poor agriculture growth
2. Facilitate open trade and reduce market
volatility
3. Expand social protection and child
nutrition action
Action needed for all 3
Joachim von Braun, IFPRI, March 2009

24. 1.a Actions for agricultural productivity
• Access to finance
(e.g. rural banks and micro-finance)
• Expansion of risk management
(e.g. crop insurance)
• Access to inputs
(e.g. quality seeds, fertilizer, feed, veterinary drugs)
• Access to services, extension
• Investment in rural infrastructure
(rural roads, electrification, water and irrigation)
Joachim von Braun, IFPRI, March 2009

25. 1.b For long-term agric. growth
Double agric. R&D to impact poverty
R&D allocation  in # of + Agr. output
(mil. 2005 $) poor (mil.) growth (% pts.)
2008* 2013 2008-2020 2008-2020
S Asia 908 3,111 -124.6 2.4
Developing
World 4,975 9,951 -282.1 1.1
CGIAR investment to rise from US$0.5 to US$1.0
billion as part of this expansion
Joachim von Braun, IFPRI, March 2009 Source: von Braun, Fan, et al. 2008.

26. 2. Reduce food market volatility
• An internationally held emergency reserve
• International coordinated grain reserves
scheme (with Indian participation)
• A virtual global reserve against price spikes
- Institutional arrangement at int’l level with
engagement of commodity exchanges
- Implemented by G8+5 and other large grain
exporting countries
Joachim von Braun, IFPRI, March 2009
Source: von Braun and Torero 2008.

27. 3. Support pro-poor food and nutrition
interventions
Protective actions e.g.:
• Cash transfers
• Employment-based food security programs
Preventive actions e.g.:
• School feeding
• Early childhood nutrition programs
Focus on children, women, and poorest
Joachim von Braun, IFPRI, March 2009

28. Policy, technology and institutional change
• Policy failure: no sufficient focus on
R&D and no strategy for institutional
innovations
• Policy neglect: isolated R&D focus and
no strategy for institutional innovations
• Policy for success: R&D acceleration
with institutional innovations
Joachim von Braun, IFPRI, March 2009