Food price volatility:Long-term trends and outlook for

child undernutrition in Africa

McGill Conference on Global Food Security

5 October 2011

Will MastersProfessor and Chair, Department of Food and Nutrition Policy

Friedman School of Nutrition Science and Policy, Tufts University www.nutrition.tufts.edu

sites.tufts.edu/willmasters

Food price volatility today: Two spikes, and a new plateau?

Monthly average prices for wheat, maize and rice, Jan. 2000-Sep. 2011

Source: FAO Global Information and Early Warning System data (www.fao.org/giews/pricetool2), downloaded Oct 3, 2011. All are monthly export prices, normalized to Jan. 2000=100, for US No. 2 Hard Red Winter Wheat, US No. 2 Yellow Maize, and Thai 100% Broken Rice.

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Wheat (US Gulf, No. 2 Hard Red Winter)

Maize (US Gulf, No. 2 Yellow)

Rice (Bangkok, Thai 100% B)

How will people respond?Producers & consumers, activists & officials

April 2008 January 2011

Can we learn from history?

Source: Computed from http://books.google.com/ngrams, 3 October 2011. Method detailed in J-B Michel et al., 2010. Quantitative Analysis of Culture Using Millions of Digitized Books. Science, Dec. 2010.

1970-1990:The green revolution

1990-2008:The great forgetting

1900-1970:Cycling between food and farm crises

Share of all two-word phrases in English-language books, 1900-2008

Words in books follow world food prices

Source: K. Anderson (2006), “Reducing Distortions to Agricultural Incentives: Progress, Pitfalls and Prospects.” <www.worldbank.org/agdistortions>. Data shown are an index of export prices in US dollars for all major traded agricultural products, deflated by the MUV index which is the unit value of manufactures exported from France, Germany, Japan, UK and US, with weights based on those countries’ exports to developing countries.

Relative price of food on world markets, 1900-2005 (1977-79=100)

Share of all two-word phrases in English-language books, 1900-2008

1990-2008:Complacency

Will we respond now as they did then?

Source: K. Anderson (2006), “Reducing Distortions to Agricultural Incentives: Progress, Pitfalls and Prospects.” <www.worldbank.org/agdistortions>. Data shown are an index of export prices in US dollars for all major traded agricultural products, deflated by the MUV index which is the unit value of manufactures exported from France, Germany, Japan, UK and US, with weights based on those countries’ exports to developing countries.

Relative price of food on world markets, 1900-2005 (1977-79=100)

April 1973

February 1917August 1918

Even after the Green Revolution, under-nutrition persisted…

Source: K. Anderson (2006), “Reducing Distortions to Agricultural Incentives: Progress, Pitfalls and Prospects.” <www.worldbank.org/agdistortions>. Data shown are an index of export prices in US dollars for all major traded agricultural products, deflated by the MUV index which is the unit value of manufactures exported from France, Germany, Japan, UK and US, with weights based on those countries’ exports to developing countries.

Relative price of food on world markets, 1900-2005 (1977-79=100)

March 13, 2002World: Many Hungry Mouths Around 815 million people -- 13 percent of the world's population -- suffer from hunger and malnutrition, mostly in developing countries, said Jacques Diouf, head of the United Nations Food and Agriculture Organization.

At the all-time

low prices of

2002…

Source: CG Victora, M de Onis, PC Hallal, M Blössner and R Shrimpton, “Worldwide timing of growth faltering: revisiting implications for interventions.” Pediatrics, 125(3, Mar. 2010):e473-80.

Extreme under-nutrition happensmainly in infancy, among the very poorest

The most extreme under-nutrition is here, among infants aged 4-12 months

Mean weight-for-height z scores relative to WHO standards, by region (1-59 mo.)

In Asia, where undernutrition was worst, we now have 30 years of improvement

National trends in prevalence of underweight children (0-5 years)Selected countries with repeated national surveys

Source: UN SCN. Sixth Report on the World Nutrition Situation. Released October 2010, at http://www.unscn.org. 

In Africa, undernutrition has begun to improve only recently, in some countries

National trends in prevalence of underweight children (0-5 years)Selected countries with repeated national surveys

Source: UN SCN. Sixth Report on the World Nutrition Situation. Released October 2010, at http://www.unscn.org. 

Asia has had 30 years of poverty decline;Africa’s poverty decline began 20 yrs. later

Source: Author’s calculation from World Bank (2011), PovcalNet (http://iresearch.worldbank.org/PovcalNet/), updated 11 April 2011. Estimates are based on over 700 household surveys from more than 120 countries, and refer to per-capita expenditure at purchasing-power parity prices for 2005.

Source: Reprinted from W.A. Masters, “Paying for Prosperity: How and Why to Invest in Agricultural Research and Development in Africa” (2005), Journal of International Affairs, 58(2): 35-64.

Africa’s green revolution is at least 20 years behind Asia’s

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SS Africa

S Asia

SE Asia

Rest of World

Total dependency rates (ages 0-14 and 65+), 1950-2030 Africa had the world’s most severe

demographic burden (>45% )

Source: Calculated from UN Population Projections, 2008 revision (March 2009), at http://esa.un.org/unpp.

Child and elderly dependency rates by region (0-15 and 65+), 1950-2030

The rise then fall in Africa’s child-survival baby boom is also 20 years behind Asia’s

now a demographic gift

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

SS Africa

S Asia

SE Asia

Rest of World

Rural population growth (decade averages), 1950-2030

Below zero = more land/farmer

Source: Calculated from FAOStat (downloaded 17 March 2009). Rural population estimates and projections are based on UN Population Projections (2006 revision) and UN Urbanization Prospects (2001 revision).

Over 2% annual growth for 30 years!

Under 1.3% annually, and falling

Rural population growth rates by region, 1950-2030

The rise then fall in Africa’s rural population growth is also 20 years later

Conclusions on price volatility, long-term trends and outlook

• The two-spike, new plateau world of price volatility is bad– Unless increased public investment deepens the green revolution

• Child undernutrition and extreme poverty is worse– And it persisted into 2000s, despite low and stable food prices

• Long-term trends promise gradual improvements– Asia has had 30 years of slow improvement– Africa’s trends paralleled Asia’s, but 20+ years later

• Worsening and then improvement in:– poverty rates– child dependency– rural population growth

– Africa has already begun to reverse its impoverishment

National trends in prevalence of underweight children (0-5 years)Selected countries with repeated national surveys

Source: UN SCN. Sixth Report on the World Nutrition Situation. Released October 2010, at http://www.unscn.org. 

In Africa, undernutrition is less severe but is improving in only some countries