Long-term scenario building for food and agriculture: A global

overall model for FAO

Kostas Stamoulis

ad-interim ADG, ES Department

19/02/2016

GPS work and outputs

Corporate reports on key issues• E.g. report on “Achieving Zero Hunger - The critical

role of investments in social protection and agriculture” (2015)

World Agriculture towards 20XX• long-term projections of agriculture, food security

and natural resource use. Last baseline projection until 2050 (Alexandratos and Bruinsma, 2012)

Frequent requests for selected findings from GPS reports by colleagues at HQ and decentralized offices, national and international organizations, and member states

Global perspective studies (GPS) has a long tradition at

FAO. Selected outputs comprise:

Importance of FAO GPS findings

GPS findings are important strategic corporate outputs as they:

• Provide a reference framework to member countries for their long term development strategies for FNS and agriculture

• Nurture the global policy debate about long term sustainability of food and agriculture;

• Frame within a long term perspective and inform the next FAO’s strategic objectives;

• Highlight possible futures of food and agriculture, vis-à-vis climate change scenarios.

• Explore possible futures of access to food, in relation to structural changes of the agricultural sector, the role of smallholders, changing income distribution, capital ownership, human capital etc.

Work ahead for GPS

Given the strategic importance of GPS findings, FAO needs to update and upgrade its comprehensive long term forward looking exercise.

Indeed, FAO is preparing the next long term forward looking report:

“Food and Agriculture towards 2050-80” (FAT2080)

To this end, FAO needs to:

• Overhaul existing analytical tools for long term projections, to further improve their performance

• Endow the GPS team with additional analytical tools to cover relevant domains not covered so far and better addressing current and emerging issues.

This workshop is an important step in the process of preparing the next FAO forward looking exercise

Reinforcing the analytical framework

Alternative futures of FSN and sustainable agriculture depend on a set of interrelated variables determined by economy-wide dynamics, structural changes of economic systems affecting income generation and distribution, use and remuneration of production factors, capital accumulation, asset ownership, knowledge generation and human capital, population dynamics, etc.

To frame FSN and agriculture in the proper social, economic and environmental context a model capturing key economy-wide interrelationships is needed, as a complement to sector-specific models.

This workshop aims at setting up the operational framework to endow FAO GPS with a long-term global economy-wide model

GPS Cooperation and partnership

The Global Perspectives Studies Team is responsible for and has the leadership of FAO’s GPS work, but, the GPS fully relies on:

• In-house knowledge and expert judgement. So, GPS is a coordinated effort involving the entire FAO;

• Knowledge and experience of UN Rome-Based Agencies. RBAs according to their specificities, are most welcome to contribute and partner in this endeavor.

• Contributions and partnerships with relevant institutions, including UN Agencies, the World Bank, OECD, IFPRI as well as further organizations and academic institutions.

This workshop is a step in the direction of reinforced collaboration and future partnership. Many thanks to all of you, we value very

much your inputs today

Requirements for a global economy-wide model at FAO

Rob Vos, ESA Director,

19/02/2016

Major Topic: FSN in the Long TermFo

od

Sec

uri

ty a

nd

Nu

trit

ion

Access

Availability

Utilization

Stability

Agricultural and food production, stock levels, trade

Dimensions Components

Levels and distribution of incomes and assets, expenditure, markets, prices

Sufficient energy and nutrient intake by individuals, food preparation and storage

Climatic conditions, resilient and sustainable production systems, economic factors

Qualitative and Quantitative Analyses and Projections

Implications for Analytical ToolsR

equ

irem

ents

fo

r to

ols

an

d r

esu

lts

Tractable

Consistent

Replicable

Open

Building on in-house data and results, grounding in economic theory and agronomic expertise, replicable by other users

Meeting informational demands of interested audiences, available to the public

Sources of counter-intuitive results should be clearly identifiable and explainable

Tools should be available in-house and releasable to interested users without restrictions. They should be usable in combination and individually, depending on exercise, and changeable by staff, and to the extent possible, by remote users

Transparent

Relevant

Modular

Accessible

State of the Art I

Multi-regional, multi-commodity partial equilibrium model• 110 regions • 42 agricultural activities (supply) which produce 35 commodities• 41 activities are modelled, 1 is used to derive “other” land

demand• 32 commodities are derived from FAO-FBS• 3 commodities are used to close balances on calories • Modell allows for joint production (cotton) and multi-activity

production (e.g. sugar beet & cane, vegetable oils, milk)

Dynamic parameters calibrated to AT2030/50 report (Alexandratos & Bruinsma, 2012) and conditional on income/price/supply elasticities taken over from IMPACT v3.0

Global Agriculture Perspectives System (GAPS-PE)

State of the Art II

Multi-regional, multi-commodity general equilibrium model• Abridged recursive-dynamic multi-country version of IFPRI

standard model• Build on GTAP 9 database augmented with SNA data• 14 Activities, distinguishing farming and food production, 1

household, number of regions depending on available data

Used for testing of alternative specification for formal representations of agents and markets and data requirements

Test version of a Global CGE Model

What FAO-GPS has done so far and how?

Global perspective studies (GPS) has a long tradition at FAO:

• Since the 70s: “Indicative World Plan for Agricultural Development (1970)”.

• Series of publications “World Agriculture towards 20XX”: long-term projections of agricultural, food security and natural resource use.

• Multiple analyses of global trends and perspectives of agricultural investments, natural resources use (land, water), fertilizers use, and links to food security and nutrition.

• In-house database development in collaboration FAOSTAT, specialized teams working on food security and natural resources (ES, NRL, NRC), etc.

Future work should build on this

Objectives of this Workshop

1. Discuss the nature of the scenario analysis to underpin FAO’s global perspectives work

2. Identify how the scenario analysis can be supportedby a global model framework and what would be itsdesirable characteristics

3. Identify usable existing models (including GAPS) and what it would take to tailor these and combine to FAO’s needs

4. Define steps to operationalize the model-based scenario analysis

5. Discuss partnerships to make this happen (model development and application)

Forward-looking scenarios:Key questions for the FAT 2080

exercise(and related modeling efforts)

Lorenzo Giovanni Bellù

Senior Economist

FAO-GPS team leader

19/02/2016

• World Agriculture towards 2030-2050 (AT 2050): Single long-term scenario reflecting a (most plausible?) future state of agriculture with a focus on use/availability of natural resources in different regions, built upon FAOSTAT food/commodity balance sheets, other data sources and expert judgement.

• Representative Concentration Pathways (RCPs). On a parallel development the integrated assessment modelling teams produced detailed Representative Concentration Pathways (RCPs), which were used by climate modelling teams and were considered in the 5th Assessment Report of the Intergovernmental Panel of Climate Change (IPCC)

• Shared Socio-economic Pathways (SSPs). Developed by IAM Consortium, SSPs are five narratives for alternative futures based on “reference assumptions” related to key socio economic variables (to replace the Special Report on Emission Scenarios (SRES) (see for example Krieger et al., 2012; van Vuuren et al., 2012). Augmented with climate policy dimensions (Shared Climate Policy Assumptions – SPAs)

A comprehensive review is beyond the scope here, and will be the object of a next

exercise, but we highlight selected works, as they help to “set the scene” for our

modelling efforts.

Scenarios for possible futures: who has done what

Scenarios for possible futures (Cntd.)

• OECD: Alternative Futures for Global Food and Agriculture (OECD alt.fut). von Lampe, M. (2015). Alternative Futures for Global Food and Agriculture: Developing Robust Strategies. TAD/TC/CA/WP(2015)1/FINAL, OECD.

• OECD. Securing livelihoods for all. (OECD sec. liv.) Foresight for action, Development Centre Studies (2015). Not necessarily mutually exclusive

• IFAD. Scenarios for investments in rural development. Proceedings from the workshop “Towards a high-Impact Demand-Driven research agenda” Dec. 1-3, 2015

• Agrimonde Terra foresight study. Focus on land

• European Commission Foresight. Maggio, A., van Criekinge, T., Malingreau, J. P. (2015). Global Food Security 2030: Assessing trends with a view to guiding future EU policies. Foresight Series, JRC Science and Policy Reports, European Commission

Scenarios for possible futuresFAO AT2050 RCPs SSPs OECD

alt.fut.OECD sec. liv. IFAD Agrimonde EC 2030

Single scenario, no climate change, constant agric. prices

+2.6 W/mq peak (2060) CO2concentr. and decline to 400 PPM CO2 by 2100

SSP1:Sustainability: taking the green road

Sustainability:(Greening, environmental and social focused

“Automated North” (inequality increases, south slower)

Low institutional capacity and high-growth pattern

Land uses for food quality and healthy nutrition (RCP 2.6)

Single scenario “Rosy vision” to 2030, to be realized

+ 4.5 W/mqStabilization by 2100 at 570 PPM CO2

SSP2: Middle of the road (“moderate” of everything)

Globalization: Economic growth focused

Droughts and joblessness in the south (Migrations, inequality)

High institutional capacity and high growth

Land uses for regional food systems (RCP4.5)

+ 6.0 W/mqStabilizationbeyond 2100 at 750 PPM CO2

SSP3: regional rivalry (resurgent nationalism). A rocky road

Separate growth: Sovereignty and self sufficiencyfocused

Global financial crash (protectionism, fragmentation, governments failure, inequa.)

Moderate institutional development with any growth

uneven land uses driven by massiveurbanization(RCP 8.5)

+ 8.5 W/mqIncreasingCO2concentr.(1250 PPM at 20100

SSP4: Inequalityacross and within countries. A road divided

Regenerativeeconomies (sustainable energy, jobs, virtuous transf.

Very low institutional capacity

fragmented world andLand as commons for rural comm.

SSP5: Fossil Fueled development. Taking the highway

Creative societies. Technology Unemploymentsocial experim.

Basic elements for scenario building

Demographics • Total population and age cohorts• Migration within and between countries

Economic development • Global and regional GDP• Inequality between and within countries• Investment, savings and capital accumulation• Structure of sectoral income

Environmental trends • Availability of natural resources and degree of degradation

• Climate change, adaptation and mitigation• Sources of emissions

Energy • Sources of energy (e.g fossil-based/renewables, nuclear, other)

• Demand for energy and type of uses

Technology • Rate of technological change and factor productivity• Emerging and new technologies

Enabling environment • Institutions• Policies• Preferences

Scenarios for FAT 2080: Not there yet, but key elements can already be identified…

Key questions for FAT 2080

1. Population growth and migration Pressure on natural resources? Migrations? Urbanization?

2. Limits to natural resource uses FNS achievements in danger? Yield increases and/or land expansion? Land degradation? Water?

3. Investment for development and domestic asset generation

Investment needs in rural areas? Public vs private? Foreign vs domestic? Investment for devt targets? Need for CSA/mitigation? Doubling smallh. Prod?

4. Income generation and distribution Within and across countries? Convergence? Dietary patterns? Asset accumulation? SME and/or SP?

5. Structural change Jobless development? Implications of Clim.Smart. Agriculture? Migrations? Job absorption by manuf?

6. Emerging global food value chains Which type of Glob. VC are good for FNS? Income distribution?

7. Climate change and development perspectives

Impacts on yields and land? Mitigation where? CSA? Payments for envir services?

8. The Energy-Agriculture-Climate Change nexus

Biofuels? CSA and energy requirements? Carbon taxes and food prices?

Scenarios for FAT 2080: …and key questions can already be raised:

The workshop

• Agenda

• Modalities

• Rules:

– focus on the workshop objectives

–write down your main ideas and recommendations

• Logistical announcements

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