value chains and impact
TRANSCRIPT
Value Chains and IMPACTDaniel Mason-D’Croz
Cali, Colombia
August 24, 2016
What is IMPACT• IMPACT is a system of linked computer simulation
models, which allows for ex ante scenario analysis of plausible futures for the global agriculture system
• Primary Model Results:
• Yields – sources of growth, climate effects by commodity and region
• Prices – comparing socioeconomic and climate effects
• Total demand – comparing commodities
• Per-capita food demand – by commodity and region
• Composition of demand – by commodity and region
• Net trade – by commodity and region
• Food security – by region
Climate Models
IMPACT Global Multi-market Model
IMPACT Water Models
Crop Models (DSSAT)
Water demand trends
Outputs :
Commodity Prices
Trade
ConsumptionProduction
Harvested Area
Yields
MacroeconomicTrends
Post-solution Models
Nutrition and Health
Welfare Analysis
Benefit-Cost Analysis
CGE Models
Land-use
What are scenarios
• Scenarios are plausible futures
• Scenarios are what-if stories used to explore future uncertainties
• Scenarios can be told in narratives, numbers, and even images
• Scenarios are not predictions of the future, but are instead focused on system dynamics and interactions and are based on knowledge of past and current behavior
Moving from the Past to the Future
Future: broad uncertainty
ForecastingPast
Present perspective
Future: broad uncertainty
ScenariosPast
Present perspective
Why use scenarios?
• Scenarios provide concrete ways to deal with future uncertainty
• They allow us to identify current and potential challenges and institutional vulnerabilities
• Allow us to test and develop policies ex-ante based on our current understanding of system behavior
Time-steps in IMPACT
• The multi-market model is on yearly scale
• Water models on a monthly scale
• Averaged to the year to integrate with IMPACT
• Weather for the crop model inputs on a daily scale
• The daily weather is used in the DSSAT crop model, however, this is aggregated to provide a yearly yield shock for IMPACT
IMPACT 3 Geography
159• Countries
154• Water Basins
320
• Food Production Units
IMPACT Commodities
• Current Commodity Scope
• Crops, Livestock, and Processed
• 62 total commodities in IMPACT
• 39 crop commodities
• 6 livestock commodities
• 15 processed commodities
• Complex models need a lot of data
• Core database drawn from FAOSTAT
• FAO Bulk Download for 3-year average around 2005 (04-06)
• Disaggregated data comes from IFPRI’s SPAM, and FAO’s AquaSTAT
• Have to harmonize this disparate datasets
• Bayesian Work Plan
• Iterate with new information
• Never ending process
Processing IMPACT DatabaseSource Data (FAO,
SPAM)
Feedback to data source
Priors on values and estimation errors of
production, demand, and trade
Estimation by Cross-Entropy Method
Check results against priors and identify
potential data problems
New information to correct identified
problems
IMPACT Model – Detailed Schematic
• At its core is a highly disaggregated partial equilibrium model focused on the agriculture sector
• It models the interactions between consumers, and producers at the national and international level
• Modular design allows for the coupling of many different modeling techniques to more holistically analyze complex multi-dimensional problems
Partial Equilibrium in IMPACT
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2 Q0
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2 Q0
Simplified Supply Curve
P
Q
S
D
P0
P2
P1
Q1 Q2 Q0
Production
• Exogenous trends
• Own prices
• Input prices (land, feed, etc.)
Prices
• Global:
• Supply = Demand
• Net trade = 0
Demand
• Income
• Commodity prices
• Population
Linked Dynamic Model Integration
Food Model
• Crop areas
• Population
• GDP
• Livestock numbers
• Prices
Water Models
• Demand/Supply
• Water stress Shock on crop yields
Solve Food Model in Stand Alone Mode
Fix Areas and Livestock Numbers and call the
Water Model
Resolve the Food Model using Fixed
Areas and Livestock with new yields
including Water Stress
Water Models
GCM
RCP
Crop Models
Historical Trends and Expert Opinion
Exogenous
Endogenous
Exogenous + Endogenous Yield Effects
Mapping DSSAT Results to IMPACT
No Immediate DSSAT Proxy for the IMPACT Crop
Biophysically Similar Crops
DSSAT• Maize• Wheat• Rice• Sorghum• Soybeans• Groundnuts• Potatoes
IMPACT
• Barley
• Other CerealsWheat
• SugarcaneMaize
• MilletSorghum
• Pulses (chickpeas, pigeon peas, beans, cowpeas)
Groundnuts
1 to 1 Mapping
• Roots and Tubers
• Fruits and Vegetables
• Oilseed Crops
• All other crops (incl stimulants, sugar beets, and cotton)
Average of C3 Crops
(all DSSAT crops excl. maize)
• Multivariable outcome that encompasses supply, access, quality, and stability across time and in the face of shocks to the food system
• IMPACT focuses primarily on Food Supply although we are starting to move in areas of food quality with respect to nutrition, and potential variability.
• Diet is an important predictor of health
• Working with Martin School at Oxford we’ve linked the IMPACT food supply results to a Health model to estimate changes in non-communicable diseases based on changing diets
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Going Beyond Food Supply
IMPACT Food Supply
Changes in Food
Consumption
Oxford’s Health Model
Changes in deaths due to
diets
USAID Project - Modularity in Action
• USAID funded project assessing the benefits and costs of different CGIAR investment portfolios
• Project incorporates 9 different models to not only assess economic effects, but also changes in welfare, nutrition, water quality, GHG emissions, land-use change, and biodiversity
• No single model can adequately analyze all of the dimensions of the food system. Building an integrated system of models permits the application of expertise from a wider range of discipline
Activity-Commodity Framework
• IMPACT 3 is a structural model
• Describes the production process in a reduce form
• Activities
• Represent production processes
• Farms, ranches, processing plants
• Demand factors of production
• Produce commodities
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Activity-Commodity Framework
• Commodities are:
• Produced
• Traded
• Consumed
• Can be endogenousor exogenous
• Maize has endogenous production and demand
• Oilseeds have endogenous production and both endogenous and exogenous demand (biofuels)
• Fertilizers could be considered an exogenous commodity
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Crop Example
Activity
• Soybean Farm(jsoyb)
• Demands land, fertilizer, labor
Activity Output
• Soybean Commodity(csoyb)
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Processed Commodity Example
Activity
• Soybean Processing (jsbol)
• Demands soybeans (csoyb) at market price
Processed Commodities
• Soybean Oil (csbol)
• Soybean Meal (csbml)
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Complete Oilseed Activity-Commodity Chain
Activity
• Soybean Farm(jsoyb)
• Demands land, fertilizer, labor
Activity Output
• Soybean Commodity(csoyb)
Activity
• Soybean Processing (jsbol)
• Demands soybeans (csoyb) at market price
Processed Commodities
• Soybean Oil (csbol)
• Soybean Meal (csbml)
Imagining a value chain for Cassava in IMPACT
• Currently there is just one activity, which produces primary equivalent cassava that is globally traded
• Most traded cassava is processed, capturing this could improve how cassava is treated in IMPACT
• Possible cassava activities are literally endless. How detailed do you need to be to answer your research question
Cas
sava
Cas
sava
Processing
Starch
Chips
Other
Cas
sava
Chips
Processed Food
Starch Processing
Feeds
Starch
Alcohol
Etc.
Imagining a value chain for Cassava in IMPACT
• What would be needed
• Lots of new data and knowledge
• Production numbers, technical coefficients, demand/consumption/trade statistics, behavioral trends for producers and consumers, etc.
• How would these processes change over time and in the face of shocks
• Where are these activities taking place
• Where are the commodities being traded and consumed
• Perhaps raw cassava isn’t traded internationally in the future, and is only a domestic commodity where consumers and cassava processors have to compete with each other to purchase raw cassava from farmers
• Some new commodities may be more complex than others to model correctly
• For example starch. Can we model cassava starch adequately without also considering the broader starch market that would include potential substitutes like maize and potato starch
Imagining a value chain for Cassava in IMPACT
• What can IMPACT directly model?
• Production, consumption, and trade
• Effects on food security, potentially health and nutrition
• How cassava and its processed commodities can or will compete with other commodities
• Incorporate into new livestock module to better reflect cassava’s potential as a feed crop
• Potential effects of scaling up
• Need to add additional models or select a different tool
• Income effects, input costs and trends (i.e. country CGE models)
• Sub-national changes (gender, poverty, etc.)
• Policies are exogenous and would need to be represented by scenarios
• We can’t endogenously make a country go from a non-producer to a producer easily. National policies that change equilibrium conditions need to be handled exogenously
• Market thresholds however can be captured if we know where these thresholds are
