Agricultural Transformation and Food and Nutrition Security in EurAsia Issues, Challenges & Implications for Research

Transcription

1 Agricultural Transformation and Food and Nutrition Security in EurAsia Issues, Challenges & Implications for Research Johan Swinnen LICOS Centre for Institutions and Economic Performance KU Leuven, Belgium [With Saule Burkitbayeva, IAMO & LICOS] Annual Eurasian Food Security Conference Dushanbe, Tajikistan 2017

2 A Heterogenous Region Size (geographic, population, economic) Income, poverty, and food security Economic reforms Political transitions Resources Trade in agri-food products Linked through geography and institutional history

3 Outline 1. Heterogeneity & geography 2. State of agriculture & food security 3. Structural transformation 4. Farm restructuring 5. The role of value chains 6. International integration 7. Climate change and natural resources 8. Stimulating research exchange and cooperation

4 GDP per capita (constant 2011$) Strong income growth but large variation (constant GDP/capita 2011 USD) GDP per capita (in purchasing powe equiv.) (constant 2011 International $) Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan 0

5 Remittances as a share of GDP in 2013 (%) Importance of remittances 60% 50% 48% 40% 30% 31% 20% 21% 10% 0% 11% 05% 03% 02% 00% 00% Tajikistan Kyrgyzstan Armenia Georgia Ukraine Azerbaijan Belarus Russia Kazakhstan Source: World Bank

6 Poverty headcount at 1,9$ a day (2011 PPP) ( % of Population) Poverty declined strongly (2003 vs 2014) Kazakhstan Tajikistan Kyrgyzstan Source: World Bank Development indicators

7 Kazakhstan Kyrgyzstan Tajikistan Uzbekistan Turkmenistan Prevalence of Undernourishment (% of Population Prevalence of waisting, weight for height (% of children under 5) Significant improvements in FOOD SECURITY Malnourishment Indicators (2015) % of POPULATION % of CHILDREN under Research : From undernutrition to obesity ; from calories to micro-nutrients Source: World Bank Development indicators

8 Food security in Central Asia : Over the past 15 years: large decline in poverty and undernourishment due to a rapid increase in economic growth & remittances : economic crisis & food price spikes: decline in real GDP and remittances, but food security stable Recent years: negative spillovers from Russian embargo and economic crisis (with declining commodity prices) Research : Complex effects of commodity price fluctuations

9 RESTRUCTURING, GROWTH AND PRODUCTIVITY IN AGRICULTURE

10 Change in GAO Index (percent) Change in GAO Index (percent) Agricultural Production Central Asia Central Europe European CIS Caucasus Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

11 Lessons from Agricultural Transition Agricultural output is not (necessarily) a good indicator for success or failure of reforms Rozelle & Swinnen, J. Econ. Literature, 2004

12 Change in ALP Index (percent) Agric Labour Productivity Central Asia Central Europe European CIS Caucasus Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Source: FAO, ILOstat and Asian Development Bank

13 Change in Total Factor Productivity (1990=100) Total Factor Productivity Central Asia Central Europe European CIS Caucasus

14 GAO per hectare of agricultural land adjusted to rainfed-cropland equivalents (USD/ha) LAND PRODUCTIVITY Land & labor productivity within 1400 Central Asia Figure 2. Land and labor productivity in Central Asian Agriculture, GAO per economically-active worker in agriculture (USD/worker) Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan LABOR PRODUCTIVITY Source: Akramov, Park, Ilyanov (2017)

15 Large scale privatisation Small scale privatisation Governance &enterprise restruct. Kazak hstan Economic Reforms (EBRD indicator 2012) Kyrgy zstan Tajikist an Turkme nistan Uzbekista n Poland Russia 3,0 3,7 2,3 1,0 2,7 3,7 3,0 4,0 4,0 4,0 2,3 3,3 4,3 4,0 2,0 2,0 2,0 1,0 1,7 3,7 2,3 Price liberal. 3,7 4,3 4,0 3,0 2,7 4,3 4,0 Trade & Forex system Competition policy 3,7 4,3 3,3 2,3 1,7 4,3 4,0 2,0 2,0 1,7 1,0 1,7 3,7 2,7 Overall 3,1 3,4 2,9 1,8 2,3 4,0 3,3

16 Research: An (important) Puzzle Why have the least reformed countries in Central Asia performed better in terms of Less disruption (decline)? Higher productivity compared to 1990? Hypotheses : Data? Methodology? (esp productivity estimates) Interpretation? Implications for policy & reform advise?

17 Share of Agriculture in Total GDP (Percent) Agricultural employment (% of Total Employment) ROLE OF AGRICULTURE 40.0 % GDP % Employment Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Uzbekistan Source: ILO and National Statistics

18 Agriculture in the Economy The Global Relationship INCOME (GDP/CAPITA)

19 Agriculture % of GDP Agricultural Transformation with Economic Growth (Transition Countries 2015) % of GDP % of Employment 28,0 24,0 Tajikistan Albania 20,0 Armenia Uzbekistan 16,0 Kyrgyzstan Ukraine 12,0 Turkmenistan Georgia Belarus Russian Federation 8,0 Azerbaijan Kazakhstan Romania Hungary Slovakia 4,0 Bulgaria Latvia Slovenia Poland Lithuania Estonia Czechia 0, Income per person, by PPP (in $ 2011 adjusted for inflation and prices) Sources: World Bank, Gapminder Research : Better understanding/measurement on actual contribution of agriculture to the economy

20 FARM STRUCTURES & LAND USE

21 FARM STRUCTURES Extreme farm DIVERSITY among transition countries within some countries E.g. Kazakhstan Large grain farms in the North Small dairy & FV farms in the South Current diversity is likely to be PERMANENT

22 Share of arable land in individual use Source: CISSTAT 2010, Lerman 2010 as presented in Djanibekov (2016)

23 SCALE ECONOMIES in AGRICULTURE Efficiency of Large and Small Farms SMALL FARMS MORE EFFICIENT LARGE FARMS MORE EFFICIENT Labor intensive (eg DAIRY, F&V) Land & Capital intensive farm systems (eg WHEAT)

24 SMALL farms (share of land use) actor intensity and shift to small farms An International Perspective 100 China Central Eur Core CIS Caucasus Balkan CENTRAL ASIA 1995 CENTRAL ASIA LARGE SMALL 0.8 FARMS MORE Labor intensity (person/ha) FARMS MORE EFFICIENT EFFICIENT

25 SMALL farms (share of land use) actor intensity and shift to small farms An International Perspective 100 China Caucasus Balkan Kazakhstan SOUTH Kazakhstan (Dairy) 20 0 Central Eur Core CIS NORTH Kazakhstan (Wheat) 0 LARGE SMALL 0.8 FARMS MORE Labor intensity (person/ha) FARMS MORE EFFICIENT EFFICIENT

26 Share in land use (%) Share in GAO (%) Large Output from Small(er) Farms Tajikistan Land use (%) Agricultural output (%) 100% 90% 80% 70% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Corporate farms Peasant farms (mid-sized, commercially oriented) Households 60% 50% 40% 30% 20% 10% 0% Corporate farms Peasant farms (mid-sized, commercially oriented) Households Source: Lerman and Sedik (2009)

27 Research Challenges and opportunities Many non-traditional farm structures & land rights Information/data on actual farm structures Role of property rights & land market constraints on productivity : important lessons Gender relationships in land and farming Etc

28 VALUE CHAINS AS ENGINE OF AGRICULTURAL TRANSFORMATION

29 KEY ROLE FOR VALUE CHAINS in bringing finance and technology to farms 69% of 35 billion $ credit in the Brazilian agri-food system is supply-chain credit Banco do Brasil (March 2004) Trade credit from suppliers comprised virtually all of the family farm credit and the biggest share of liabilities of agricultural companies World Bank study on Lithuania (2005)

30 A simple value chain model Input/Technology Company Finance PRODUCT (Technology & Inputs) Farmer Finance PRODUCT (Raw Material) Processor Finance PRODUCT (Processed) Consumer

31 A simple value chain model Input/Technology Company Finance PRODUCT (Technology & Inputs) Farmer Finance PRODUCT (Raw Material) Finance Processor Consumer PRODUCT (Processed) Problems! => Value chain breaks down

32 Value chain finance innovation 1 Technology Company Farmer TECHNOLOGY Finance Raw Material Processor Finance Processed product Consumer

33 Value chain finance innovation 2 Technology Company TECHNOLOGY Farmer Processor Raw Material Finance Joint Company Finance Processed product Consumer

34 Share of suppliers with own c.t. (%) IMPACT Example: Polish Dairy Small farms investing in cooling equipment through value chain finance Mlekpol Lowicze Mazowsze Kurpie Size (# cows) Invests (%) Uses VCF (%) > ALL

35 VCF in Cotton Sector in Kazakhstan (2003) % of FARMERS Credit 89 Water 73 Seeds 65 Fertilizer 40 Agronomic Support 4 Farm loan guarantees 0 Investment loans 0

36 VALUE CHAINS FINANCE in KAZAKHSTAN -- Examples Wheat (large farms): through agroholdings specialized in wheat production Cotton (small farms): Interlinked contracting with cotton gins who pay in advance for inputs and labour (World Bank, 2003) Various other sectors with small farms (ADB 2008; EBRD,2011)

37 Research What type of value chains have (not) emerged? What is constraining investments in the food industry and agribusiness? (Doing Business indicators) How are the value chains organized? (incl contract farming, vertical integration, ) What are the spillover effects on the farms (inputs, finance, technology, productivity, incomes, )? What standards (private and public) are (not) introduced in value chains? What can policy do to improve?

38 INTERNATIONAL INTEGRATION & AGREEMENTS International agreements WTO Kyrgyzstan (1998), Armenia (2003), Georgia (2000), Russia (2012) and Ukraine (2008), Tajikistan (2013) EEU Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan (2015) International integration Recent harmonization of border-crossing procedures China s One Belt. One Road Affect many aspects Goods: Trade (quantity & quality (standards)) Labor/people : Migration Capital: Investment (& remittances) Water RESEARCH : Need for trade, investment & migration models (-- may need to be integrated!)

39 Cereal Import Dependency Index Imports as portion of domestic availability, Ukraine Russian Federation Kazakhstan Republic of Moldova Belarus Turkmenistan Uzbekistan Kyrgyzstan Azerbaijan Tajikistan Armenia Georgia 0% 10% 20% 30% 40% 50% 60% 70% Imports as portion of domestic availability, Source: FAOstat

40 Questions with staple food import dependency Can you afford it? Can the exporters produce enough? Is it reliable? (Also during crisis times?) Need to balance (static) efficiency and (reduced) dependency?

41 % Food Imports as % of Merchandise Export 45 Value of Food Imports in total merchandise exports (percent) Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan 5 0

42 Origin of Grain Imports (average of ) Chart Title Kyrgyzstan Azerbaijan Georgia Kazakhstan Russia Ukraine Rest of the world Armenia 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: FAOstat

43 Grain production potential? Area planted with agricultural crops in Kazakhstan (thousand ha) Wheat Other grain crops Fodder crops Other crops (see panel B) Source: National Statistics

44 RUK : Bread Basket for the World/EurAsia? Potential for wheat production RUK INTENSIFICATIO 60% of the Yield Potential Base line INTENSIFICATION RECULTIVATION CLIMATE CHANGE + INTENSIFICATION INTENSIFICATION + RECULTIVATION + CLIMATE CHANGE AREA (Mha) 2013 Total Extra Land Russia 46,2 46,2 51,5 5,3 47,2 52,5 Ukraine 16,1 16,1 16,9 0,9 16,4 17,3 Kazakhstan 15,4 15,4 17,8 2,4 15,5 17,8 Total 77,6 77,6 86,2 8,5 79,1 87,6 YIELDS (t/ha) % of Yp 80% of actual yields 60% of Yp 60% of Yp Russia 2,1 2,3 2,0 1,6 2,3 2,3 Ukraine 3,2 3,6 3,0 2,0 3,5 3,5 Kazakhstan 1,2 1,4 1,1 0,9 1,4 1,3 PRODUCTION TOTAL GROWTH TOTAL GROWTH TOTAL GROWTH TOTAL GROWTH (Mt) Russia 95,0 107,2 12,2 103,5 8,6 110,1 15,2 120,0 25,1 Ukraine 49,3 57,0 7,7 51,0 1,7 58,1 8,8 60,0 10,7 Kazakhstan 17,2 21,2 4,0 19,4 2,2 21,3 4,1 23,8 6,6 Total 161,5 185,4 23,9 174,0 12,5 189,5 28,0 203,8 42,3 Source: Swinnen et al (2017) in Global Food Security

45 Source: Sedik (2011) But: Export Volatility!

46 CLIMATE CHANGE AND NATURAL RESOURCES

47 Climate change and yield changes Source: World Bank

48 Water & Energy in Central Asia Upstream and downstream states opposed demand patterns for water and energy The numbers on the map indicate where there are dams build are currently under construction.

49 Research Understanding of local impacts How to build resilient food systems How can trade & international agreements play a role

50 STIMULATING EXCHANGE AND COOPERATION IN AGRI-FOOD RESEARCH IN EURASIA

51 Potential for collaboration with Agricultural Agricultural Regional association of agricultural/food economists (to be created with support of the IAAE)

52 Concluding comments Heterogenous region Agriculture is important throughout the region but for different reasons Major challenges Policies, institutions, infrastructure, Major opportunities Lots of areas where research can improve insights and thus a better basis for policymaking

53 Some references Swinnen, Burkitbayeva and Liefert, 2017, Agricultural Development in Eurasia in Fan and Otsuka, Agricultural Development: A Global Perspective, IFPRI Swinnen, Burkitbayeva et al, 2017, Production Potential in the Bread Basket of Eastern Europe and Central Asia, Global Food Security. Kuijpers, R. and J. Swinnen, 2016, Value Chains and Technology Transfer to Agriculture in Developing and Emerging Economies, American Journal of Agricultural Economics, Macours, K. and J. Swinnen, 2002, Patterns of Agrarian Transition, Economic Development and Cultural Change, 50(2): Macours, K. and J. Swinnen, 2005, Agricultural Labor Adjustments in Transition Countries: The Role of Migration and Impact on Poverty, Review of Agricultural Economics, 27(3): Macours, K. and J. Swinnen, 2008, Rural-Urban Poverty Differences in Transition Countries, Rizov, M. and J. Swinnen, 2004, Human Capital, Market Imperfections and Labour Reallocation in Transition, Journal of Comparative Economics, 32: Rozelle, S. and J. Swinnen, 2004, Success and Failure of Reforms: Insights from Transition Agriculture, Journal of Economic Literature, XLII (June): Swinnen, J. and L. Vranken, 2010, Reforms and Agricultural Productivity in Central and Eastern Europe and the Former Soviet Republics: , Journal of Productivity Analysis, 33(3): Swinnen, J. (ed.), 2006, The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia. Case Studies, Washington DC: World Bank Publications. Swinnen, J. (ed.), 2007, Global Supply Chains, Standards, and the Poor, CAB International Publications. Swinnen, J., Deconinck, K., Vandemoortele, T. and A. Vandeplas, 2015, Quality Standards, Value Chains and International Development. Economic and Political Theory, Cambridge University Press. Swinnen, J. and S. Rozelle, 2006, From Marx and Mao to the Market. The Economics and Politics of Agricultural Transition, Oxford: Oxford University Press. Swinnen, J. and K. Van Herck, 2011, Food Security and the Transition Region, FAO Investment Centre, Rome.

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