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What if it's only the developing countries? What if the developed world
stays on its current trajectory and the developing world is
able to boost total factor productivity by 1% from base. Well
then you see farm output price
rise by 31%.
rather than the 116%.
So they sound like relatively small changes with immense
impact. Can we achieve this? And then down below
are the foot notes that the assumption of the model its a 0.7% per year
base line growth rate in the world population, distributed as you see
across the developing world. Total factor productivity assumptions
on the base line are again, these kind of lower than the historical
rate of total factor productivity improvement. So
scary but good news over all I guess.
Or at least reason for hope. For the remainder of the talk then
I'd like to turn to a sub-Saharan Africa. Do that for a couple of reasons. 1 is the fact here it is
1 of 2 regions of the world that has had persistently low progress against total factor productivity.
Another reason is that it has by far the highest rate
highest incidents of food in security in the world. And then the 3rd reason for
focusing on sub-Sharan Africa that's where I work, The Bill and Melinda Gates Foundation.
Within agriculture we have 85% of our work is in
sub-Sharan Africa, 15% in South Asia. So let's see if we can
run down some of these issue that were raised as policy drivers
of food insecurity or food security.
Here are 3 slides that will show
some of the dilemmas, the situation that agricultural
productivity or agricultural R and D in sub-Sharan Africa has.
If we look at the 1st line the arable and permenent crop
area we see that roughly speaking sub-Sharan Africa is the same
size or actually a little bit smaller than India or The United States.
But what we see is that because of the geographic
boundaries. We have nearly 8 times
as many public agricultural reasearch agencies in Africa, as we do in
the United States. More than 3 times as many as they have in Africa,
for a similar geographic region. It's true that there is a far
greater agricul-matic diversity in Africa than there is
sub-Sharan in South Asia or The United States.
But clearly it's a problem of fragmentation and the difficulty of acheiving
economies of scale and scope in agricultural reaseach.
The other thing that we notice is there are actually more agricultural research scientists
in sub-Sharan Africa than in either Asia or The United States.
But the problem there is that only 25% of those scientists
have a PHD versus 63% or 100% in The United States for instance.
And spending the amount of variable funds
that each individual scientist has to work with is very very low
in sub-Sharan Africa. So we need to kind of
look at this in a sober manner and say, "is
a system, in which you have
a large number of very small agricultural research agents,
staffed with under-trained scientists. With very little
operating funds?" Is that going to leads us to a 1% increase
in agricultural productivity growth that will be needed over the next 3 decades?
Of course the answer in "No."
Another aspect of that is that another R and D challenge
for sub-Sharan Africa, these you can't read the levels, so I just want to
draw your attention to the instability of the trends over time
in agricultural R&D investments in eight countries.
What you see is that in every single case; imagine yourself
in the chair of the research director in any of these countries -
and realise that you don't know what your budget is going to be next year
and you have no idea what it's going to be two years from now - so
go ahead and plan an innovation system based
on the fact that you don't know what your budget is going to be.
I think, um ... a kind of ...
interesting case in Nigeria. It's had great success
in increasing research investment. They've also increased the
percent of scientists that don't have a PhD during that time period
Why is that? Well, think about it. In the short term
you can't increase the number of PhD scientists in your country. It takes a long time to
develop that capacity. You can increase funding but your unlikely to get
any additional research output that's of any great value. So, that instability
- I think that's a huge issue and I think it's one that falls
within the purview of donors and others working with governments to try and
address. Um, ...
what we see here is that sub-Saharan Africa has a far lower rate of adoption
of improved varieties; an indicator of the diffusion of
technology into the hands of farmers. There's been
a very laudable number of varieties released. Those
were overwhelmingly releases of the international
CGIAR system - the Consultative Group for International Agricultural Research
- but they're not to farmers. Again,
another issue to be addressed.
Now to another of these policy issues that are so greatly important to food security
Um, ... the ...
continent of Africa is the most food self-sufficient
of any region of the world -
but they're the least food secure
by all measures - but they're the most food self-sufficient. There's very little
food that either exported or imported in Africa relative to the size
of the population. So of course the
balance there is that ... um,
that they're not food secure by any means because of the huge number of
hungry people. In fact, international
trade is relatively minor. You have a very unusual geographic
situation - it's not like Asia or Latin America where the majority
of the population now resides in coastal, urban areas
with great access to imports. A large share of the population of Africa
is cut off by poor infrastructure. You have local markets, you have
a very poor price integration across the continent
It certainly argues for regional integration of trade
- and towards that end you have ten different
regional economic communities. They're at various levels
of integration. There are common currencies
- a common currency in west Africa - there's movement in that direction
- towards tariff free zones in other parts, in east Africa
Those are hugely important
activities. They're very long term and they're also very
essential. We can look back to 2008
- this kind of inevitable, it seems, political policy response of
putting on export bans once food prices peak
I think in some of the analyses, of course, you've seen blame
- a lot of the spike in 2008 relating
to countries like India putting on export bans
and isolating the world from the export supply of major suppliers in order to
preserve internal price stability. To reduce internal price.
It's a perfectly effective policy for supressing internal prices
in the short run. A disastrous policy in the long run because, of course, it takes away the incentive
to invest of your own farmers. if every time prices go up the Government steps in and
shoves them back down that really isn't going to lead a productive agricultural sector.
So trade policies are immensely important.
In terms of the role of the donors in sub-Saharan Africa
it's unique. You see that far higher levels of total investment
in the region come from foreign sources, from donor sources
- a rate of nearly 20% of investment
in sub-Saharan Africa - in the purple there - versus
less than 5% in any other region of the world. So, the role that the donor
plays is much enhanced in this region - and the region has been leading the way in
a certain sense. The 2005
- no it must be 2003 Paris Declaration on aid effectiveness
declared that assistance should be led by countries rather than
donors, it should be harmonised and coordinated, that donors should get together
among themselves, that they should harmonise with country priorities, that they should work with governments
on a listed set of investment priorities rather than going in there individually
and identifying their own projects and their own special interests. This is
a very, very long run hope
for improved effectiveness of donor assistance. The other
side of this agreement - in addition to the donors
getting on a different way of behaving - is countries
committing to invest of their government budget in
agriculture; which would be a doubling for most of the countries in Africa.
Finally ...
my last slide - I hope I'm still on time here -
just to kind of review a couple of points that I've mentioned and maybe
not had time to mention quite as well. Food insecurity
by my definition is a chronic world problem. A billion people in the world are hungry
Immense progress was made during the green revolution
period, spurred by more food being produced
and you can think of a lot of contributors to that - it was good policy, it was expansion
of area, it was higher input use, it was a new way of delivering
agricultural research inovations - which is the CGIR system -
but much depends on future productivity
growth and we're very uncertain as to what the future holds there.
Sub-Saharan Africa has the highest incidence of food insecurity
and certainly has special challenges for improving agricultural productivity
but there is hope. We saw that agricultural GDP growth
is very strong in Africa over the last decade. That's an
imperative to maintain sane trade regimes. The absolute worse thing
that could happen during times like these when food prices are disturbed
is that countries start closing off their borders and cutting back on their commitment to free trade.
Huge uncertainties about a lot of these
issues will determine that food balance. Again, we're not
sure what's going to happen with productivity expectations, like climate change
- we know some things about but there's a lot more that we don't know. We don't know how to deal with it.
We don't know exactly where its going to extract its highest toll - or when.
Land expansion potential, if you will - the land grabs issue
that in Africa echoes a lot of the
discusion that Professor Drysdale
kind of raised yesterday about Chinese investments in
Australia. And then water scarcity is
an issue again that I didn't even touch on - but that again maybe
the most scarce resource of all. So with that
- thank you very much for my time.