Agriculture, food security and climate change the global context Dominique van der Mensbrugghe Center for Global Trade Analysis (GTAP) Purdue University Scaling in global, regional and farm models Trade M workshop Vienna, 24 September 214 Key policy relevant questions Long-term evolution of agricultural and food prices, food security and nutrition Dual challenge undernourishment and obesity Land expansion versus production intensification Impact of future climate change on prices, land use, trade, undernourishment Potential role of biofuels 1
Long-term downward trend in real agricultural prices though-out the 2 th century 1 ic ton Real prices in 21 $US per metri 9 8 7 6 5 4 3 2 1 Rice (Thai) Wheat (US HWT) Maize (US #2) 196 1962 1964 1966 1968 197 1972 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 Source: World Bank pink sheet (http://go.worldbank.org/4roccieq5, accessed 7-Jan-214) and own calculations Note: 4-year leading moving average (last year available = 213). Large quantity changes for major commodities 1961 25 Growth (index 1961=1, right-axis) 1.2 6 1. 5 8 4 Metric tons 6 4 3 2 2 1 Source: FAO. Meats Rice Wheat Coarse grains 2
Yield improvements account for over 7 percent of production growth 6. Average cereal yield, 1961 Average cereal yield, 25 Annual growth, percent 6 5. 5 Kilogram per hectare 4. 3. 2. 4 3 2 1. 1 World East Asia South Asia Near East & N. Africa sub-saharan Africa Latin America High-income Source: FAO. Global land expansion for crops of around 25 million hectares 1.2 Crop land use, 1961 Crop land use, 25 Growth (index 1961=1, right-axis) 3, 1. 2,5 Million hectares 8 6 4 2, 1,5 1, 2,5 World East Asia South Asia Near East & N. Africa sub-saharan Africa Latin America High-income, Source: FAO. 3
Radical change in the future? 196-21 Trend 21-25 w/o climate change 21-25 w/ climate change 12 1 8 6 Percent change 4 2-2 -4-6 -8 Wheat Maize Rice Source: World Bank pink sheet and own calculations for historical series, Nelson et al. (21) for future price scenarios. Slowing population growth, however 1. 9. 8. 7. 6. 5. 4. 3. 2. 1. Population, SSP2, million HIC ECA EAP LAC MNA SAA SSA 2,414 1,12 665 241 23 17 67 11 21 25 1. 9. 8. 7. 6. 5. 4. 3. 2. Population, SSP2 v. SSP3, million Developing countries High-income countries Note: 21-25 incremental change indicated in 25 column. High-income (HIC), Europe & Central Asia (ECA), East Asia & Pacific (EAP), Latin America & Caribbean (LAC), Middle East & North Africa (MNA), South Asia (SAA), Sub-Saharan Africa (SSA). 1. SSP3 SSP2 SSP2 SSP3 21 215 22 225 23 235 24 245 25 4
GDP per capita under SSP2 and SSP3, $27 7. 21 25 SSP2 25 SSP3 1.3 6. 1.1 5. 4. 3. 2. 2. 4.8 2.8 2.5 1..8 3.6 2 2. 3.2 World Developing East Asia & Pacific 5.1 3.3 South Asia 1.8 Europe & Central Asia 2.1 1.3 Middle East & North Africa 3.6 1.6 Sub-Saharan Africa 1.2 Latin America & Caribbean High-income Note: Growth rates, percent per annum, on top of columns. History vs. projected yield growth, percent per annum 4,5 197/199 199/21 21/23 23/25 4, 3,5 3, 2,5 2, 1,5 1,,5, World Developing High-income World Developing High-income World Developing High-income Wheat Rice Maize Source: 197/21 FAOSTAT (accessed 22-Jul-213), IFPRI s IPRs and own calculations Note: Slight differences in regional aggregations between history and projections. Maize yield projections equivalent to coarse grain definition in GTAP. 5
IFPRI vs. FAO AT projections IFPRI 21/23 IFPRI 23/25 FAO AT 25 26/23 FAO AT 25 23/25 2, 1,8 1,6 14 1,4 1,2 1,,8,6,4,2, World Developing High-income i World Developing High-income i World Developing High-income i Wheat Rice Maize Source: IFPRI s IPRs, Alexandratos and Bruinsma (212) and own calculations Note: Slight differences in regional aggregations between IFPRI and FAO projections. Maize yield projections equivalent to coarse grain definition in GTAP. Agricultural Model Intercomparison and Improvement Project AgMIP Wide range of model results Crop and economic models Confusing policy advice 6
AgMIP and global economic models 6 General equilibrium AIM (NIES, Japan), ENVISAGE (FAO, Italy), EPPA (MIT, USA), FARM (USDA, USA), GTEM (ABARES, Australia), MAGNET (LEI/Wageningen, Netherlands), 4 Partial equilibrium GCAM (PNNL, USA), GLOBIOM (IIASA, Austria), IMPACT (IFPRI), MAgPIE (PIK, Germany) Scenario design Harmonization of key exogenous drivers Population and GDP (SSP2) Exogenous yield growth (IFPRI) 3 Optics Socio-economic (SSP2 vs. SSP3) Climate change (2 crop models x 2 climate models) Bio-energy 7
Still large differences in long-term price projections, though sharp narrowing after comparison exercise 23 orig.* 25 orig.* 1,4 1,3 Price index (25** = 1) 1,2 1,1 1,,9,8 AIM ENVISAGE EPPA FARM GTEM MAGNET GCAM GLOBIOM IMPACT MAgPIE * original: relative to model-standard numéraire; rebased: relative to the price index for global GDP ** trended 25, i.e. hypothetical in the absence of short-term shocks Source: von Lampe et al (214). Variation of world prices across commodities in 25 2.5 (25=1) Price index in 25 2. 1.5 1..5 AGR WHT RIC CGR CR5 Note: All agriculture (AGR), wheat (WHT), rice (RIC), coarse grains (CGR), index for wheat, rice, coarse grains, oil seeds and sugar(cr5). Source: AgMIP global economic runs, February 213 and own calculations. 8
Cereal production all above AT 25 scenario 4. MAGNET 3.5 tons Cereal production, million metric t 3. 2.5 2. 1.5 IMPACT AT 25 1. 5 1961 1971 1981 1991 21 211 221 231 241 Source: 1961/25 FAOSTAT (accessed 2-Feb-214) and model simulations for 25/25. Cropland projections vary significantly across models Cropland, million hectare 2. 1.9 1.8 1.7 1.6 1.5 1.4 1.3 MAGNET AIM ENVISAGE MAgPIE GCAM GLOBIOM IMPACT EPPA GTEM FARM 1.2 1.1 1. 1961 1971 1981 1991 21 211 221 231 241 Source: 1961/25 FAOSTAT (accessed 2-Feb-214) and model simulations for 25/25. 9
The climate modeling chain: from biophysical to socioeconomic Climate Biophysical Economic General circulation models (GCMS) Temp Prec Global gridded crop models (GGCMs) Yield (Biophysical) Global economic models Area Yield Cons Trade RCP s Farm practices CO 2 Pop. GDP Source: Nelson et al., PNAS (213). Four potential yield outcomes for maize in 245 under RCP 8.5 Source: Müller and Robertson (214). Excludes CO 2 effects. 1
Simulated impacts for the four climate scenarios: global average for major crops in 25 wrt reference 5 Wheat Rice Coarse grains Oil seeds Sugar CR5-5 -1-15 -2-25 IPSL/LPJ HADGEM2/LPJ IPSL/DSSAT HADGEM2/DSSAT Source: Shocks from IFPRI as interpreted for use in the ENVISAGE model, Nelson, van der Mensbrugghe et al. (214). Climate induced changes in world average producer prices for five main crops (CR5) relative to reference in 25 8% IPSL & LPJ HadGEM & LPJ IPSL & DSSAT HadGEM & DSSAT enario, 25 Price change relative to reference sce 7% 6% 5% 4% 3% 2% 1% % AIM ENVISAGE EPPA FARM GTEM MAGNET GCAM GLOBIOM IMPACT MAgPIE Source: von Lampe et al. (214), based on model results as of February 15, 213. Note: All changes relative to the reference scenario for the same year. 11
Take away messages Fifty years of substantial progress, but Significant pockets of poverty and undernourishment Areas of unsustainable farm practices In many aspects, next 5 years appear less daunting Declining population growth and reaching food saturation thresholds, Albeit with continued significant pockets of poverty (SSA and South Asia) and concerns with sustainability soils, water, etc. However, new issues emerge: Climate change Bio-energy Quantitative analysis in the future will require more cooperation Model comparison and validation Model integration (climate, crop and economic) Further reading Alexandratos, N. & J. Bruinsma (212), World Agriculture Towards 23/25: The 212 Revision,, FAO, Rome. http://www.fao.org/docrep/16/ap16e/ap16e.pdf Special issue of Agricultural Economics (214): http://onlinelibrary.wiley.com/doi/1.1111/agec.214.45.issue-1/issuetoc von Lampe, Willenbockel et al., Why do global long-term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison Robinson, van Meijl, Willenbockel et al., Comparing supply-side specifications in models of global agriculture and the food system Valin, Sands, van der Mensbrugghe et al., The future of food demand: understanding differences in global economic models Schmitz, van Meijl et al., Land-use change trajectories up to 25: insights from a global agro-economic model comparison Müller and Robertson, Projecting future crop productivity for global economic modeling Nelson, van der Mensbrugghe et al., Agriculture and climate change in global scenarios: why don t the models agree Lotze-Campen, von Lampe, Kyle et al., Impacts of increased bioenergy demand on global food markets: an AgMIP economic model intercomparison Proceedings of the National Academy of Sciences (PNAS) (213): http://www.pnas.org/content/early/213/12/12/122246511.full.pdf+html Nelson et al., Climate change effects on agriculture: Economic responses to biophysical shocks Special issue 12