Supply-demand modeling and

Transcription

1 Supply-demand modeling and planning for food security Presentation at the Food Security Expert Group Meeting Centre for Non-Traditional Security (NTS) Studies, S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore 04 August 2010 INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

2 Structure of presentation Need for models of supply and demand Modeling supply Modeling approaches Factors and issues to consider Data requirements Modeling demand d Modeling approaches Factors and issues to consider Data requirements Integrated models of supply and demand Illustration IMPACT model from IFPRI 2

3 Food security Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life World Food Summit, implications of the definition Adequate supply for all people Distribution channels for physical access Economic access household income, food price Enabling environment for nutrition absorption Multi-level (national, household, intra-household) and multi-sectoral problem 3

4 National level food security (NLFS) NLFS refers to overall availability of food in a country Persistent food surplus low price Improves food security of (poor) households Hurts farmers Persistent food deficit high price Worsens food security of (poor) households h May benefit farmers Fluctuations in food availability price volatility Uncertainty affects both farmers and consumers 4

5 Need for models of supply and demand Emerging issues that could affect food availability International trade in food and world price volatility Increasing cost of energy direct use on farms and cost of other inputs especially fertilizer Seed technologies privatization of research and its impacts on developing countries, particularly poor farmers Water availability Soil / environment degradation Climate change Assessment of NLFS is critical for policy interventions Protecting farmer incentives, price stabilization, consumption subsidies, Models can help through scenario simulations 5

6 NLFS = Supply Demand Modeling NLFS Surplus Exports Deficit Imports Supply = Production + Net-stock run down Demand = Final consumption + Intermediate demand + Wastage Households + Govt. Seed, feed, agro-processing All components have to be projected to assess NLFS Separate models of supply and demand Integrated models 6

7 Modeling food supply Crop output = Acreage Yield Approaches to modeling food supply Separate crop acreage and yield models Production models Determining factors a) Economic: Price of crop, price of competing crops, wages, infrastructure (general & specific), market structure, credit b) Agro-ecological: l Rainfall, soil type, temperature t c) Farm inputs: Irrigation, seed variety, fertilizer, pesticides, mechanization, research and extension services d) Government policy: Price supports, input subsidies, other market interventions 7

8 Modeling food supply Ideally data have to be crop specific, at farm level, and by cropping season E.g., Farm gate price of different crops in different seasons, input application on individual crops, Typically data are at some administrative level E.g., districts, states / regions, nation as a whole Often data on determining factors are incomplete or just not available E.g., Agricultural wages, credit, mechanization, market structure (trade margins), Alternative approaches such as time trend models Limited use only 8

9 Modeling food demand Households Approaches to modeling household demand a) Single commodity models rice, wheat, etc. b) Models with limited set of commodities food commodities c) Complete demand systems food and non-food commodities including services Data requirements increase (a) to (b) to (c) So also implementation difficulties But (c) is preferable theoretically Consumption surveys are the preferred database Sometimes surveys over several years are used Information on price is often weak in surveys 9

10 Modeling food demand Households Determining factors: Economic: Price of commodity, price of complements and substitute commodities, income Socio-economic: Income classes, location (rural / urban), social groups (ethnicity, i religion, i language, ) Demographic: Age profile, Government policy: Income transfer programmes, consumption subsidies, specific food/nutrition programmes (school meals, infants, mothers, ) 10

11 Modeling food demand other components Government demand policy determined Intermediate demand input-output (I-O) tables give estimates of seed, feed and agro-processing requirements Demand depends on efficiency levels Typical to assume that I-O structure does not change much in short-run Medium- /long-run changes depends upon improvements in efficiency in other sectors captured as alternative scenarios Wastage Estimates based on (infrequent) surveys Reflection of efficiency levels 11

12 Integrated models of supply & demand Supply and demand models are combined in a single integrated models Equilibrium conditions link supply and demand modules Commodity price is endogenous in these models it is the equilibrating variable affecting both supply and demand Single country / global models Partial Equilibrium models General Equilibrium models Commodity coverage Single All food, non-food incl. services Household income Exogenous Endogenous Dt Data requirement Limitedit Intense Range of issues for analysis Narrow Wide Model development Easy and less time consuming Difficult and time consuming Use and interpretation Easy Difficult 12

13 IMPACT model of IFPRI International Model for Policy analysis of Agricultural Commodities and Trade Rosegrant et al. 1995, Rosegrant et al A multi-commodity, ut od ty, multi-country t PE model Nevertheless allows for inter-sectoral linkage between agriculture and non-agriculture through growth multipliers Malnutrition impacts based on supply, demand and prices Supply side Growth in crop area and yield depends on crop prices, rate of technology change due to research, irrigation and other investments Similar approach for livestock products separate models for stock of animals and yield per animal 13

14 Demand side IMPACT model of IFPRI Demand of a commodity depends on prices, income and population growth The countries / regions are linked through international trade Surplus / deficits in individual countries determine their exports / imports World prices are determined at the market-clearing point when net world trade is zero Domestic prices are linked to world prices and depend on producer subsidy equivalents and consumer subsidy equivalents prevalent in countries 14

15 IMPACT model of IFPRI Source: Rosegrant et al

16 IMPACT-WATER model Recent variant (Rosegrant et al. 2008) Differentiates irrigated and rainfed agriculture Includes a water supply module (WSM) Climate change rainfall variability, temperature, evaporation, runoffs total water availability Population and economic growth, and increasing urbanization competing demand water for household and non-agricultural uses can affect water availability for agriculture Water supply, demand and crop production modeled at river basin level l crop production then scaled to national level l 36 countries / regions, 126 river basins, 281 food processing units, 38 commodities 16

17 IMPACT-WATER model Source: Rosegrant et al

18 IMPACT model studies Studies for individual items (cereals, meat, livestock, roots and tubers), and individual countries / regions (China, India, Asia ) For list of studies using the IMPACT model please see Rosegrant et al Main references: Rosegrant, M.W., M. Agcaoili-Sombilla, and N.D. Perez Global Food Projections to 2020: Implications for Investment Discussion Paper No. 5. Washington, D.C.: International Food Policy Research Institute. Rosegrant, M.W., C. Ringler, S. Msangi, T. B. Sulser, T. Zhu, S. A. Cline International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT): Model Description. Washington, D.C.: International Food Policy Research Institute. te 18