Global Food Security and Trade

Transcription

1 Food Security and Trade in the Asia-Pacific ifi & LAC Region Brazil's Role in Global Food Security and Trade Marcos S. Jank Agribusiness and bioenergy leading expert Former CEO of the Brazilian Sugarcane Industry Association (UNICA) IPC Member Washington DC, May 17 th, 2012

2 A CHALLENGING SCENARIO World population to reach 9.3 billion people by 2050 and consumption to double due to increase in income per capita. Middle class consumers to increase by 3 billion people by % increase in commodity prices since the turn of the century (adjusted for inflation). Minerals and oil scarcity 100% increase in the average cost of bringing a new oil well online over the past decade. Agricultural sector to produce food and inputs for textiles, bioenergy and biochemicals in a sustainable way. Sources: Mckinsey Resource revolution: meeting the world s energy, materials, food, and water needs, United Nations Population Fund (2011)

3 EVOLUTION OF THE WORLD POPULATION 7.0 Billion peop ple Urban Rural Source: FAO.

4 SHARE OF URBAN POPULATION IN TOTAL POPULATION 100% 90% 80% 70% South America North America Europe Oceania 60% 50% 40% 30% 20% 10% Asia Africa 0% Source: FAO.

5 PER CAPITA FOOD CONSUMPTION (kcal/person/day) Developed countries Latin America Transition economies Eastern Asia Middle East & North Africa Southern Asia Sub-Saharan Africa / Over the next 40 years, we need to produce as much food as we did in the last 8,000 years! Note: Latin America includes the Carribbean. Transition economies include Eastern Europe and the countries of the CIS. Source: FAO (2006).

6 21 ST CENTURY: BEGINNING OF A NEW ERA Biomass (firewood) Hydro Nuclear We are here Modern Biomass 60 Natural Gas Solar 50 % Oil Coal Other Sources: Nakícenovic, Grübler and MacDonald, 1998 ENERGY SOURCES NEED TO DIVERSIFY

7 POTENTIAL LAND AND WATER AVAILABILITY Land Water 7000 Land: Million hec ctares m3/year ter: Trillion Wa Note: Land suitable non-cropped, non-protected (including pastures). Water Total Renewable Water Sources. Sources: Fischer and Shah (2010), cited in World Bank, 2010 (Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits?), ICONE, FAO.

8 IMPACT OF CHINESE INCREASING PER CAPITA CONSUMPTION ON DEMAND Product Current Per Capita Consumption (kg) Impact of a Chinese 1 kg per capita consumption increase on exports China Brazil World Brazil Beef % 51% Poultry Meat % 21% Sugar % 5% Notes: exports in carcass weight equivalent. Scenario: Increase in China s demand was considered to be met fully by imports; for Brazil exports, highest share in world exports in the last three years was considered. Source: USDA, FAO. Elaboration: ICONE.

9 MAIN EXPORTERS OF AGRI-FOOD PRODUCTS (2010) % Annual Growth Rates % Billion US$ % 3.9% 11.8% % 11.2% 11.3% 14.3% 5.1% 15.7% 11.4% 10.5% 8.0% 80% 10.1% 0 Source: WTO Elaboration: ICONE

10 BRAZILIAN AGRI-FOOD EXPORTS DYNAMISM Soybean Sugar/ Chicken Bovine Orange Pork Coffee Tobacco Ethanol Meat Meat Juice Meat Maize Cocoa Cotton Ranking 2nd 1st 1st 1st 1st 1st 1st 3rd 4th 8th 3rd Share World 35% 46% 36% 33% 17% 77% 27% 8% 95% 9.5% 4% 10% US$ billio ons Average Average 2009/2011 Sources: AGROSTAT/Ministry of Agriculture, ITC, COMTRADE. Elaboration: ICONE

11 BRAZILIAN AGRICULTURE EXPORTS: THE IMPORTANCE OF DEVELOPING COUNTRIES Developed countries (CAGR 21%) US$ Billio on Developing Countries (CAGR 10%) Source: Agrostat/MAPA. Elaboration: ICONE.

12 BRAZILIAN AGRICULTURE EXPORTS BY DESTINATION % EU+USA 23% 25% Asia (Excluding China) 3% 11% 59% China Rest of the World 24% 28% ASIA (incl. China) = 14% ASIA (incl. China = 52% Source: AGROSTAT/Ministry of Agriculture

13 PROFILE OF BRAZILIAN AGRICULTURAL EXPORTS TO ASIA Others Juices Tobacco and products Cereals, flours and preparations Leathers and derived products Coffee Fibers and textile products Forest products Sugarcane complex Meats Soybean complex Source: Agrostat. Elaboration: ICONE 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 US$ Millions

14 500 CHANGES IN THE FOOD COMMODITY COMPOSITION IN SOUTH ASIA Meat /71 = Vegetable oils, oilseeds Milk and dairy Roots and tubers 150 Sugar 100 Cereals, food 50 Pulses / / / / Sources: FAO, World Agriculture: Towards 2030/2050

15 AGRICULTURAL PRODUCTIVITY (TFP) GROWTH (2000 to 2008, average annual % over period) Brazil Former Sovi et Union Sou uth Africa China Southe east Asia Arg, Chile, Par, Uru Asia, de eveloped So outh Asia Europe U.S.A & Canada Australia, N Zealand TFP (Total Factors Productivity): represents resource efficiency on labor, capital and land. Sources: Alston, J,M,, B,A, Babcock, and P,G, Pardey eds (2010), The Shifting Patterns of Agricultural Productivity Worldwide, CARD MATRIC Electronic Book, Center for Agricultural and Rural Development, The Midwest Agribusiness Trade Research and Information Center, Iowa State University, Ames, Iowa, Available at: www,matric,iastate,edu/shifting_patterns

16 LAND USE IN BRAZIL Native vegetation: 554 Mn ha (66% of total area) Pastures: 198 Mha (23%) In 2050, Brazil will account for 2.4% of the world population, p Asia will account for more than 50% Annual crops Crops: 60 Mha (7%) Sources: Land use - INPE/Terra Class, MMA, Embrapa, PAM 2010, Censo 2006, Sparovek et. al (2011) e ICONE. Population - FAO.

17 THE RECENT SUCCESS OF BRAZILIAN AGRIBUSINESS: TECHNOLOGICAL INNOVATIONS AND MORE Natural Resources: Land: cheap and available land, large scale farms Water availability Suitable climate Technology: Continuous adoption of new tropical technologies, including biotech No-till agriculture 25 million ha (combined with crop rotation) Double cropping (2 crops in the same year) Crop-livestock integration Professional and Innovative Management: 150,000 students in agrarian sciences Average farmer age 42 (USA: 60 and EU: 70) Enhancement of managerial capabilities Modern marketing capabilities (ex.: future and derivative markets) Others: Coordination of agri-food chains: integration ti and contracts t Consolidated practices for mitigation of GHG emissions (ex: biofuels, bioelectricity, elimination of biomass burnings, etc.)

18 CHALLENGES FOR BRAZILIAN AGRIBUSINESS Logistics saturated) Custo Brasil Lack of good transport system (16% of roads are paved) High transportation costs and dependence on road transportation (74%) Inefficiency of ports, especially older ones (the largest ports are saturated) Poor infrastructure Regulatory Weak institutions Risks Unstable rules Legal uncertainty due to unstable legislation over time Lack of clear rules on land use (acquisition by foreign capital), property rights, the environment (reform of the Forest Code), and labor regulations (RN 31) Rising trade and investment protectionism impacting supply chains Other challenges Expanding while preserving Exchange rate: overvaluation and high volatility Agricultural protectionism around the world: tariffs, subsidies Lack of suitable financing and insurance mechanisms New technological breakthroughs Improved organizational structures to combine agricultural expansion and environmental conservation

19 CONCLUDING REMARKS Deep structural changes are coming due to strong population growth, higher per capita income and intense urbanization process in developing countries, and especially in SE Asia. Abundant natural resources and good technology performances are necessary conditions but not sufficient to ensure the future food security of the most dynamic regions. The equation is much more complex. It is fundamental to create international/regional integrated and efficient value chains. Identifying opportunities and removing potential bottlenecks require a special attention on: How countries are inserted into the global agribusiness value chains Trade policies that reduce agri-food protectionism Who are the main players involved in each of the supply chains Efficiency of land and maritime logistics (domestic and international) Availability of modern trade and project finance instruments Potential technology improvement and technology transfer How (natural) resources can be used sustainably

20 THANK YOU!