the challenges of sustainably feeding a growing planet

The Challenges of Sustainably

Feeding a Growing Planet

By Thomas W. Hertel

In collaboration with Uris L.C. Baldos

Center for Global Trade Analysis

Purdue University

1 Presentation at IFPRI Policy Seminar, January 18, 2017

Overview of the talk

• History is key to understanding the future

• Understanding drivers of global food system:

- Changing relative importance of pop and income

- Key role of technology

- Climate change as a source of uncertainty

• Critical adaptations:

- International trade

- Investments in R&D

Looking back to project forward

• We can draw inspiration from climate

scientists who begin any research on future

climate change with extensive analysis of past

• Important to validate models against history

before attempting to project into future

• If cannot reproduce key elements of past, what

hope do we have of providing useful

information about the future?

Some key historical changes in global food economy:

1961-2006

Source: Hertel and Baldos (2016) under segmented markets and historical data from FAOSTAT (2014) and World Bank GEM Database (2014)

0

40

80

120

160

200

Total Subtotals

Actual Data Model Output

% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Yield

-100

-75

-50

-25

0

25

50

75

100

Total Subtotals


Crop Price

0

50

100

150

200

250

Total Subtotals


% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Production

-30

-15

0

15

30

45

Total Subtotals


Crop Land

SIMPLE (a Simplified International Model of Prices,

Land-use and the Environment) reproduces broad

historical changes in global food economy: 1961-2006


0

40

80

120

160

200

Total Subtotals


% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Yield

-100

-75

-50

-25

0

25

50

75

100

Total Subtotals


Crop Price

0

50

100

150

200

250

Total Subtotals


% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Production

-30

-15

0

15

30

45

Total Subtotals


Crop Land

SIMPLE allows for attribution across drivers:

Population was key demand driver: 1961-2006

0

40

80

120

160

200

Total Subtotals


% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Yield

-100

-75

-50

-25

0

25

50

75

100

Total Subtotals


Crop Price

0

50

100

150

200

250

Total Subtotals


% t

ota

l ch

an

ge

: 1

96

1-2

006

Crop Production

-30

-15

0

15

30

45

Total Subtotals


Crop Land

050100150200250

Total Subtotals

%

cu

mu

la

tiv

e …

Crop ProductionFarm Productivity Population Income


Future replicates past!! Population remains a

dominant driver of food demand in naïve forecast

Naïve projections of global crop price to 2050:

SIMPLE model, based on past trends of key drivers

Based on Baldos

and Hertel (2016)

However, population growth is slowing and the

absolute decadal increment is shrinking rapidy

Annual increments to global population (10-year average), 1750-2050: Source: UNPD, 2000, 2011

Population growth is most rapid in Africa:

Per capita food consumption more modest

Extracted from Leslie Roberts, “9 Billion?”, Science vol. 333, 29 July, 2011.

When we impose future population growth rates,

projected change in global crop prices falls sharply…

Relative contribution of population drops sharply by 2050

Based on Baldos

and Hertel (2016)

Global population

growth rate drops

from 1.7 to 0.8%;

Developed regions’

growth drops from

0.6 to 0.1%/yr

But income growth will affect food

consumption: 2006 vs. 2050

0

500

1000

1500

2000

2500

3000

3500

Food consumption (grams/cap/day)

Crops Livestock Processed FoodSource: Baldos and Hertel (2014)

More rapid growth in developing economies translates

into larger impact of income growth on demand

For the first time, income dominates population as a driver of

agricultural demand

Based on Baldos

and Hertel (2016)

Impact of

higher

income

growth in

poor

countries

Productivity growth is critical for future crop prices: Continued fast TFP

growth could lead to a stronger decline; slowdown leads to rising prices

Source: Baldos and

Hertel (2016)

Ludena et al Global

Crops TFP Growth p.a. Years

Baseline 0.94 2001-40

Slow Rates 0.70 2031-40

Fast Rates 1.30 2001-10

Monte Carlo

Analysis: 5,000

different model

predictions

Projections about the future must account for

uncertainty in drivers as well as economic

responses66% of simulations

show a LR price

decline

Source: Hertel, Baldos and van der

Mensbrugghe (2016)

But can’t rule out

significant price

rises if:

- Fertility

declines slow

- Income growth

is stronger

- Productivity

pessimists are

proven right

However, price increases will not be

uniform due to market segmentation

• In SSA region, prices likely

to rise due to strong

population & income; slow

productivity growth

• Tighter market integration

will stem price rise, but will

also expose producers to

greater competition –

potentially massive imports

• Boosting agricultural

productivity growth is of

paramount importance

Source: Hertel and Baldos (2016)

What about climate change? Evidence that

it is already reducing yields of some crops

Source: IPCC, AR5, as presented by CSIRO/Mark Howden for the IPCC Food Security

Summit, Dublin, May 2015. Note: most of underlying studies do not include effects of

elevated CO2 which tends to boost yields

Climate impacts on wheat: 1, 2 and 3 degrees

Celsius warming

Source: Moore, Baldos, Hertel and Diaz, under revision

International trade as adaptation:

Integrated markets moderates nutritional impacts

of more severe climate scenarios in 2050

Source: Baldos and Hertel (2015)

Another important avenue for adaptation is

R&D aimed at drought and heat resilience

But it can take a long time for public R&D to

translate into increased agricultural productivity

On average, the productivity impact of public spending peaks after

two decades; lingers for 50 yearsSource: Baldos, Viens, Hertel and Fuglie, 2016

How much should we be investing in R&D?

Depends on future pop, income and climate

Source: Cai, Golub and Hertel (2017)

Optimal R&D

spending path rises

strongly to 2030,

then slows

R&D as a share of

GDP rises sharply, then

drops after 2030

Conclusions

• Great uncertainty about food system in 2050:

- Fertility rates and population growth

- Income growth

- Climate impacts

- Climate mitigation policies (not discussed here)

• Technological progress is key to food security: particularly critical in SSA region; but depends on R&D which has very long lag

• Adaptability is critical: The value of free and open trade will be greater under climate change

• Baldos, U. L. C, and T. W Hertel. 2013. “Looking back to Move Forward on Model Validation: Insights

from a Global Model of Agricultural Land Use.” Environmental Research Letters 8 (3): 034024.

doi:10.1088/1748-9326/8/3/034024.

• Baldos, U. L. C., and T. W. Hertel. 2014. “Global Food Security in 2050: The Role of Agricultural

Productivity and Climate Change.” Australian Journal of Agricultural and Resource Economics.

doi:10.1111/1467-8489.12048.

• Baldos, Uris Lantz C., and Thomas W. Hertel. 2016. “Debunking the ‘new Normal’: Why World Food

Prices Are Expected to Resume Their Long Run Downward Trend.” Global Food Security 8 (March): 27–

38. doi:10.1016/j.gfs.2016.03.002.

• Baldos, Uris Lantz C., Frederi G. Viens, Thomas W. Hertel, and Keith O. Fuglie. submitted. “R&D

Spending, Knowledge Capital and Agricultural Productivity: A Bayesian Approach.”

• Baldos, Uris L.C., and Hertel, Thomas W. 2015. “The Role of International Trade in Managing Food

Security Risks from Climate Change.” Food Security 7 (2): 275–90.

• Cai, Yongyang, Alla G Golub, and Thomas W Hertel. 2016. “Agricultural Research Spending Must

Increase in Light of Future Uncertainties.” In Review.

• Hertel, Thomas W., and Uris Lantz C. Baldos. 2016. “Attaining Food and Environmental Security in an

Era of Globalization.” Global Environmental Change 41 (November): 195–205.

doi:10.1016/j.gloenvcha.2016.10.006.

• Hertel, Thomas W., Uris Lantz C. Baldos, and Dominique van der Mensbrugghe. 2016. “Predicting Long-

Term Food Demand, Cropland Use, and Prices.” Annual Review of Resource Economics 8 (1): 417–41.

doi:10.1146/annurev-resource-100815-095333.

• Ludena, Carlos E., Thomas W. Hertel, Paul V. Preckel, Kenneth Foster, and Alejandro Nin. 2007.

“Productivity Growth and Convergence in Crop, Ruminant, and Nonruminant Production: Measurement

and Forecasts.” Agricultural Economics 37 (1): 1–17. doi:10.1111/j.1574-0862.2007.00218.x.

• Moore, Frances C., Uris Lantz C. Baldos, Thomas W Hertel, and Delavane Diaz. 2016. “Welfare Impacts of

Climate Change on Agriculture: Evidence from Over 1,000 Yield Studies.” In Review, October.

References

the challenges of sustainably feeding a growing planet

Education