Food Security and Food Price Situation in the World and in Asia

and the Pacific Region

Hiroyuki KONUMA,Assistant Director-General and Regional Representative,

FAO Regional Office for Asia and the Pacific

Presentation to UNDG Asia-Pacific Meeting

1 March 2011Bangkok

Outline of presentation

• Present food insecurity and hunger situation

• Food production situation

• Food price hike and its causes, consequences (short term food security problem) and actions

• Medium/long-term food security challenges

Source: FAO SOFI 2010

Source: FAO SOFI 2010

Proportion of undernourished in the Asia-Pacific region

0

5

10

15

20

25

1990-92

1995-97

2000-02

2005-07

2009 2010

Proportion

Source: FAO SOFI 2010

Source: FAO SOFI 2010

Regional trends in the number of undernourished, from 1990-2 to 2010

Source: FAO SOFI 2010

Regional trends in the proportion of undernourished, from 1990-2 to 2010

Source: FAO SOFI 2010

Cereal production-demand forecast as of January 2011

• Production: 2.23 billion m/t (-1.4%)• Developing countries (+3.8%)• Developed countries (-7.6%)

• Utilization : 2.26 billion m/t (+1.8%)• Developing countries (+3.1%)• Developed countries (-0.3%)

• Stocks : 0.52 billion m/t (-5.8%)

Cereal production, utilization and stocks, 2000-2010

Rice production, utilization and stocks, 2000-2010

Wheat production, utilization and stocks, 2000-2010

Coarse grains production, utilization and stocks, 2000-2010

Food Price Hike

• Natural disaster (drought in Russia and CIS countries in July 2010)

• Restriction of grain exports by Russia• Bad weather in USA and Europe led to

production decline• Continuous natural disasters in Pakistan and

Australia (floods), drought in China, etc.• Food commodity markets became

increasingly sensitive to external shocks• Continuous increase in food demand• Lower food stocks• Crude oil price increase• US$ exchange rate

FAO Food Price Index Hike

• 231 points in January 2011 (3.4% up from December 2010)

• Record highest (higher than 213 points at the peak in 2008)

• FAO cereal price index in January 2011 stood at 62% higher than that of June 2010, but 11% lower than the peak in 2008.

FAO food price index, 2006-2011

FAO food price index by component, 2009-2011

Retail rice prices in China, India and Indonesia

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

Jan

Feb

Mar Abr

May

June July

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar Abr

May

June July

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar Abr

May

June July

Aug

Sep

Oct

Nov

Dec Jan

2008 2009 2010 2011

USD/

kg

CHINA INDIA INDONESIA

Negative consequences of food price hike

• Poor people spend 50-70% of income for foods; leading to increase in number of chronic hunger

• Food price hike since October 2010 pushed 44 million people into extreme poverty (World Bank, 15 February 2011)

• Increase in foreign debt of food importing developing countries; leading to political instability

• Food riots (Mozambique in September 2010, more than 10 countries in 2008)

• Political unrest

What can we do?

• Trade policy review, and put an end to market distortions and restrictive trade/export practices, complete Doha Round negotiations

• Improving the reliability of food security and market information, and promote market transparency

• Explore new measures to deal with excess speculations .

• Sharing experiences and lessons learnt from past experiences (2007/08 crisis) in other countries

• Building capacity of policy makers and promote their knowledge to various policy and programme options

What can we do? (cont.)

• Yield enhancing investment towards food productivity and production growth

• Reforming policies for grain based bio-fuels, and harmonize with food security policy

• Review of food stock policies and emergency food reserve

• Social safety nets, targeting approach to most vulnerable (children, etc), promotion of cash voucher scheme,etc.

• Natioanal/global level financial facility to help poor food importing nations

Planned Actions

• Short term: collection, monitoring and analysis of weekly food price data from member countries in the region.

• FAO with the support of USA and other partners is organizing a regional consultation on policy and programme actions to address high food prices in A-P (Bangkok 9-10 March, Fiji mid April)

• Medium term: preparation towards G20 Agricultural Minister’s Meeting in mid June 2011, followed by FAO Global Conference starting 25 June.

Medium/Long-Term Food Security Challenges

• World population reaches 9.1billion by 2050

• To feed these population, world has to increase food production by 70% (100% for developing countries) by 2050

• But, this has to be attained under various existing constraints

Water scarcity

Water scarcity

Source: FAO SOFI 2009

Source: FAO SOFI 2009Source: FAO SOFI 2009

Green revolution in Asia

 

Adoption of Modern

Varieties  

Fertilizer

Nutrient Use

 

Cereal Production

Wheat Rice

Irrigation

Tractors

 M ha / %

areamillion ha

million t

million

million t

1

9

6

1

0 /0

% 0 0/ % 87 2 02 309

1

9

7

0

1

4 /2

0

% 15 2/

0%10

6 10 05. 463

1

9

8

0

1

4 /2

0

% 55 4/

3%12

9 29 20. 618

1

9

9

0

6

0 /7

0

% 85 6/

5%15

8 54 34. 858

2

0

0

0

6

0 /7

0

% 100 /

74%18

1 70 48. 962

Source: FAOSTAT, July 2002 and Dr. Borlaug’s estimated on

modern variety adoption, based on CIMMYT and IRRI data

Lessons learned from Green Revolution

• - food price (adjusted inflation), declined by 40% since 196 which benefited consumers, especially

the poor.

• - World undernourished population fallen from 35%

in 1970 to 17% in 2000-2002.

• - Impact on soil erosion, loss of forests, water stress,

widening gap between rich and poor farmers

• -Decline in interest on agriculture and agricultural investment

Can we make it?

• Green revolution increased cereal production by 300% in 40 years

• Our target is 70% (100% in developing countries) in 40 years by 2050

Priority on agricultural research and development

• FAO estimates that 90% (80% in developing countries alone) of the production increase are projected to come from increase in yields and cropping intensity), and

• Only 10% (or 20% in developing countries) of the production increase would come from expansion of arable land.

Priority actions to attain food security

• Mobilizing political will and building up global awareness and solidarity

• Increase public and private sector investment in agricultural research and development, inputs supply (seeds, fertilizer, etc.), infrastructure development (irrigation system, road, market, etc.) value chain dev. ,etc.

• Coping with water scarcity, OFWM, water saving technology

• Sustainable natural resource management and conservation

• Empowering small scale farmers and pro-poor policy

• Reducing post-harvest losses

Cont.• Adaptation and mitigation to climate change and

natural disasters • Harmonization of bio-energy development with food

security, and promotion of 2nd and 3rd generation of bio-energy

• Responsible agricultural investment• Achieving broadly-based, inclusive economic growth• Establishing sustainable targeted safety nets for the

poor and vulnerable groups, and promote gender sensitive approach

• Strengthen farm & non-farm sector linkages, and non-farm employment

• Improve ability to respond to natural disasters, new pressures, uncertainties and shocks

• Promote public and private sector partnership and collaboration

• Thank you