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sustainable solutions for ending hunger and poverty

Agriculture in Asia: Challenges and Opportunities

Mark W. Rosegrant, Claudia Ringler, Timothy B. Sulser, Siwa Msangi, Tingju Zhu, Rowena Valmonte-Santos, and Stanley Wood Presented during the Conference on “Agricultural and Rural Development for Reducing Poverty and Hunger in Asia: In Pursuit of Inclusive and Sustainable Growth”, Asian Development Bank, Manila, Philippines, August 9-10, 2007

Overview

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Key Messages Challenges for Agricultural Technology and Policy Scenarios for Agricultural Technology Strategic Policy and Investment Directions

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Key Messages

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Cereals and meats - real world food prices projected to rise 20-40 percent Price increases driven by both demand and supply factors Population growth and regional economic growth increased growth in demand for food and changing composition of demand Biofuel demand - competes with land and water resources used for food Growing resource scarcity, particularly of water Climate change and variability - reduced production growth in the poorest countries and regions

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Key Messages

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High commodity prices create investment and income opportunities but threaten poor consumers Despite rapid economic growth, Asia remains home to the world’s largest number of poor and hungry people Agriculture in Asia increasingly influences



global agricultural markets and developments

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large and growing export and import volumes of food (including fish) and feed

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Key Messages

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Resource competition and environmental degradation require new focus on integration of growth and sustainability policy Crop breeding has failed to achieve significant impacts in risk-prone or resource-poor areas, which will likely expand in size Innovative research and development in agricultural technology will be crucial to address these challenges and pressures on food systems

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Types of Asian Farming System Rice-Wheat system house largest number of stunted children in Asia Marginal upland areas house small numbers but largest concentration of poor Source: Hyman et al. forthcoming Directly related to malnutrition outcomes INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

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Water Scarcity and Drought Stresses in Asia Proportion of failed growing seasons for rainfed cultivation, 100 year weather simulation Source: Hyman et al. forthcoming

•

Note: The figure illustrates 100 year weather simulation based on historic data analysis Drought

 

lowers average expected yields Increases production risk, reducing technology adoption of poor farmers

Water Scarcity and Drought Stresses 100 90 80 70 60 50 40 30 20 10 0 Irrigation water availability is declining Irrigation Water as Share of Total Used in Agriculture 2000 2050 All Asia China India Southeast Asia Other South Asia

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Climate Change

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Exacerbates stresses on agricultural production

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particularly for low- and mid-latitude developing countries, including those of Asia Will adversely affect wheat productivity in the Indo-Gangetic Plains [CIMMYT] Will reduce rice yields from increased nighttime temperature [IRRI] Increases demand for water

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Agricultural Research and Technology

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Increasing crop productivity: water management, agricultural research and rural investment

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Emphasis on crop breeding for both irrigated and rainfed agriculture

–

genetic modifications to develop stress tolerant materials to address water scarcity, salinization and groundwater contamination

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Water harvesting, minimum tillage, integrated soil fertility management

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Rural infrastructure investment to improve access to markets, credit, inputs

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Biotechnology for Agriculture

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Significant progress is being made on drought tolerance, salt tolerance, and nitrogen use efficiency Largest benefits could be in rainfed and marginal environments, increasing crop yields and income and reducing pressure on irrigated environments Must still resolve public acceptance and biosafety issues and transfer of technology Public-private partnerships for development and commercialization of biotech/GMO varieties

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Biofuels: Pro-Poor Pathways

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Production processes for biofuels can bring benefits to the poor

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Need to design production systems that will integrate rural households into the value chain

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Allow for on-farm addition of value, rather than just extracting raw biomass (scale economies?) More straightforward for the ‘first generation’ processes for producing biodiesel and ethanol, compared with emerging ligno-cellulosic technologies Mitigation and adaptation funding to support bioenergy transitions in developing countries

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Create and Expand Markets in Natural Resources

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Establish economic incentives for water use

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Create water rights for users, pay irrigators to use less water Develop markets for agricultural and forest carbon , generating new value streams in rural areas Expand markets for environmental services (watershed management, biodiversity)

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Scenarios for Agricultural Technology

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Business-As-Usual Scenario High investment in agricultural research and knowledge (ARK) Low investment in ARK ARK ++ plus complementary investments

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Irrigation expansion and water use efficiency

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Rural roads

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Access to water

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Secondary female education

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Sources of Food Production Growth, BAU, 2050 2.5

2.0

1.5

1.0

0.5

0.0

SSA LAC -0.5

Area expansion INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE ESAP CWANA NAE Yield improvement

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Sources of Food Production Growth, ARK_high, 2050 2.5

2.0

1.5

1.0

0.5

0.0

-0.5

SSA LAC ESAP CWANA NAE Area expansion Yield improvement INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

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Projected Food Prices under Alternative Scenarios, 2050 Rice 450 400 350 300 250 200 150 100 50 0 Year 2000 BAU INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Wheat ARK_high Maize ARK_low ARK_high ++

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Projected Child Malnutrition Trends, Alternative Scenarios, Asia 120 100 80 60 40 20 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 High ARK High ARK ++ Low ARK Low ARK --

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Strategic Directions for Policy and Investments

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Value chains start at the farm level

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new production technology embedded in improved management systems is crucial for pro-poor growth

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Biotechnology, including GMOs, is likely to central to development of technology adapted to less-favored areas

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Staple food crops remain essential for poverty-reducing growth

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Strategic Directions for Policy and Investments

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Need full integration of policies aimed at growth and environmental sustainability

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Dealing with scarce land and water resources and trade-offs with environment can only be met by bringing externalities into the growth equation

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Create markets and new value streams for agricultural ecosystem services

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Thank You!

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