Impacts of the Global Economic and Financial Crisis on Food Security - - PowerPoint PPT Presentation
Impacts of the Global Economic and Financial Crisis on Food Security William H. Meyers Professor of Agricultural Economics and Co-Director, FAPRI and Co-Director, FAPRI University of Missouri Social Impact of the Economic Crisis in Eastern
Professor of Agricultural Economics and Co-Director, FAPRI and Co-Director, FAPRI University of Missouri Social Impact of the Economic Crisis in Eastern Europe, Central Asia and Turkey Almaty, Kazakhstan 7-8 December 2009
Food price surge and (partial) retreat
Where from and where to?
Macroeconomic crisis and (slow) recovery How is food security jeopardized? Challenges and opportunities Challenges and opportunities Policy priorities
Short term Long term
Gradual declining in stocks set the stage
Declining real prices, aided by OECD subsidies Slowing production growth Area declining Area declining Yield growth slowing Consumption growth also slowing but not as much
Then the perfect storm
1960-1970 1970-1980 1980-1990 1990-00 2000-07 Grains Yields 2.7 1.9 2.1 1.23 1.56 Area 0.5 0.9
0.47 Production 3.3 2.8 1.6 0.82 2.03 Production 3.3 2.8 1.6 0.82 2.03 Consumption 3.3 2.6 1.7 0.94 1.70 Grains and Oilseeds Area 1.6 1.3
0.18 0.79 Production 4.0 3.0 2.0 1.29 2.32 Consumption 4.1 2.9 2.0 1.31 2.05 Source: USDA PSD
Reduced grain production
Economic growth in Asia
Sharp increase in global
Financial crisis and world Economic growth in Asia
Weaker dollar Higher petroleum prices Rapid biofuel expansion Policy interventions Speculation rose Financial crisis and world
Stronger dollar Lower petroleum prices Slower biofuel growth Many interventions stop Speculation declined
Good weather and yields in 08/09, but costs
Price surge has abated, BUT not everywhere Trade “safeguard” interventions mostly gone Trade “safeguard” interventions mostly gone Biofuel growth slowed, but policies remain Strong influence of petroleum price continues
Oil price US dollar The global financial crisis and The global financial crisis and
trade financing Weather
Reduction in the quantity and/or quality of
High food prices
Loss of employment or reduction of wages
Market disruption or policy reaction that
Reduction in food production
High prices of feed and other inputs Lack of credit access
Reduction in the quantity and/or quality of
High food prices Decline of government/international donor
Macro instability, market disruption or policy
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Short run
Twin track approach
Expand food assistance and early warning and rapid
Target food production programs with inputs, credit Target food production programs with inputs, credit
Accelerate local adaptation and dispersion of
Complete the Doha Round of trade negotiations
Long run (but start yesterday)
Investment (not land grabs) in agric. development
Improve market functioning to facilitate price
Risk management tools for farmers Enhance rural development and rural infrastructure
Invest in social protection or safety net measures to