The World Development Report: Implications for the CGIAR

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The World Development Report Implications for
the CGIAR
ICRAF, Nairobi, Nov 2nd
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Overall WDR message--To meet the MDGs,
agriculture must be given a more prominent place
in the development agenda

• Three functions of agriculture in dev.
• Lead sector for growth
• Source of livelihoods
• ? Food security and poverty reduction
• A way of better managing natural resources

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Outline

• Background Where we are coming from
• Past drivers and impacts
• Global drivers of RD priorities
• The food production issue
• Other driversMDGs etc
• Dealing with an increasingly diverse world
• Implications for the CG

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Over the past 40 years, agriculture has met
effective food demand globally
(but still a huge hunger problem)
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Rapid yield gains in cereals but not in
Sub-Saharan Africa
SS Africa
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Past Successes Reflect Investments in RD
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Despite Private RD Growth, Public Funding of
Agric RD Dominates in Developing Countries
Total Global Investment - 33.2 billion, 2000
10.2 billion
11.5 billion
Public
Public
Developing
Developed
Private
Private
0.7 billion
10.8 billion
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Growth of Public Agricultural RD Spending has
Slowed
From 1990, spending on agricultural RD fell in
about half of African countries
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Agricultural-based countries spend too little on
agriculture (and RD)
Ag GDP/GDP
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Donor support to agriculture also declined
despite MDG to halve poverty
rural poverty
ODA to Ag
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The CGIAR has an increasing share of the donor
pie for agriculture
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Significant changes within CGIAR allocations
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CGIAR Changing Mode of FundingCore vs
Restricted Funding
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Drivers of Agricultural RD Funding
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Actors and Processes in the Demand for RD
P Expressions of problems and needs I
Innovations S Science possibilities
Consumers(and their orgs.)
P
P
P
P
Value chains (with private RD)
Evidence

P,
S
P
, P
Producers(and their orgs)
I
P
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Demand drivers have evolved over time

• 1950s-70s
• Global and national food security
• Population growth in Asia
• Geopolitics (Cold War and global RD)
• 1980s-90s
• Environmental sustainability
• Poverty reduction
• Nutrition, food safety and quality,
  diversification of diets

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Global drivers today

• Markets
• Changing food markets and globalization
• Relative prices (especially water and energy)
• Millennium Development Goals (MDGs)
• Poverty and hunger
• Environment
• Gender
• Health (as related to agriculture)
• Global processes/analytical work/evidence
• AfricaBlair Commission, Annan report on ST
• Climate changeStern report, IPCC, An
  Inconvenient Truth
• Comprehensive Water Assessment for Agriculture
• AgricultureWDR2008?
• Agric STIAASTD?

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Global food markets food demand
An increasingly urbanized world
Rural population has already started to decline
in East Asia and Latin America
All developing countries Rapidly rising urban
population
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Changing diets ? a new agriculture of high
value products and non-traditional exports
Global food markets food demand
Developing country exports
Developing country consumption
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Global food markets food demand
Biofuels ? rapid rise in demand for feedstocks
240 kg of maize (100 liters of ethanol) to fill
one SUV tank
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Acute land and water constraints in most regions
Global Food Markets ? Food Supply
Cropland per capita of agricultural population
of population in absolute water scarcity
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Growth rates of yields for major cereals in
developing countries is slowing
Global Food Markets ? Food Supply
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Climate vulnerability is already high and will
worsen with climate change
Global Food Markets ? Food Supply
Rainfall variability GDP growth Zimbabwe
1979-1997
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Increased energy prices affect agricultural
prices through the demand (biofuels) and supply
side (higher costs of production)
Global Food Markets ? Food Supply
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Future perspectives
Developing countries will become even bigger
markets for grains exported largely by
high-income countries
Cereal Net Trade
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Food productioncontinuing challenges in the 21st
century

• A greater global challenge
• The end of long-term falling grain prices?
• Acute resource scarcity and competition from
  diversification
• Reducing the environmental footprint
• Priority for Sub-Saharan Africa
• Basis for overall growth
• Limited tradabilitydomestic production critical
• Increased uncertainties
• Climate change, energy prices, Asian demand

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Beyond food productionMillennium Development
Goals drivers
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MDG1 Reducing poverty is a major driver of
global funding
And most poor depend on agriculture
Global extreme poverty 2002, 1.08 a day

• 2.5 billion people related to agriculture,
• 800 m smallholders
• 75 of poor are rural and the majority will be
  rural to about 2040
• 900 m extreme rural poor (1/day)

Global Urban poor 287 mill.
South Asia rural 407 mill.
MENA rural 5 mill.
East Asia rural 218 mill.
ECA rural 5 mill.
Sub-Saharan Africa rural 229 mill.
LAC rural 27 mill.
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Agricultural growth has unique powers for poverty
reduction
GDP growth from agriculture benefits the poorest
half 2 times more than GDP growth from
non-agriculture
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Agricultural productivity growth has driven
poverty reduction in Asia
Headcount index and average farm yields Rural
India 1959-1994
Headcount index and average farm yields Rural
China 1980-2001
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GhanaA breaking story of rural poverty reduction
in Africa

• Rural poverty halved with increased agricultural
  productivity, higher cocoa prices, reduced food
  prices, and income diversification

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Other relevant MDGs

• MDG on Environment
• Efficient use of water
• Climate changeboth mitigation and adaptation
• Substitution of fossil energy
• MDG on Health
• Nutrition (MDG1)
• Animal diseases, malaria, HIV/AIDs
• MDG on Gender
• Stronger emphasis on action on inclusion of women

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Dealing with an Increasingly Diverse Agriculture
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WDR Three worlds of agriculture
Differing roles of agriculture in growth and
poverty
Agriculture based countries 82 of population in
SSA
Urbanized countries 88 of population in ECA 88
in LAC
Urbanizing
Transforming countries 98 of population in
SA 96 of EAP 92 of MENA
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Growth rates are accelerating in Sub-Saharan
Africa
but Lagging productivity
Accelerating agricultural growth in Africa
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Extent of less favored areas (agro-ecology,
market access) differs by region
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Sources of household income differ by country
context
Smallholders are also highly diverse
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Diversity of Actors

• Increasing role of the private sectors
• Agribusiness and the supermarket revolution
• Rise of civil society
• Rapid increase in producer organizations
• Growing role of NGOs
• New era of philanthropy
• Gates
• ? New opportunities for public-private-civil
  society partnerships in using agriculture for
  development and for RD

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Research processes to better capture demand in a
heterogeneous world

• Participatory methods
• Empowering farmer organizations
• Research decisionmaking (Mexico, Senegal)
• Co-financing of RDunderutilized opportunity
• Public-private partnerships in value chains
• Consortia etc to link actors in a value chain
• Competitive funding for innovation
• Private co-financing
• Vertical coordinationlocal-national-regional-
  global?

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Final words

• Many needs and many voices but
• Agriculture continues to be a fundamental
  instrument for sustainable development and
  poverty reduction
• Productivity growth even more important for
  growth and poverty reduction over the next 30
  years
• Several trends suggest an increase in demand for
  funding for RD
• Public, philanthropic, private
• But competing demands imply a more complex
  research agenda
• Overall optimism that it can be done
• But high transactions costs will continue

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Thank you

• www.worldbank.org/WDR2008