1. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 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

2. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2 Overview Key MessagesKey Messages Challenges for Agricultural Technology and PolicyChallenges for Agricultural Technology and Policy Scenarios for Agricultural TechnologyScenarios for Agricultural Technology Strategic Policy and Investment DirectionsStrategic Policy and Investment Directions

3. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 3 Key Messages Cereals and meats - real world food prices projected to rise 20-40 percentCereals and meats - real world food prices projected to rise 20-40 percent Price increases driven by both demand and supply factorsPrice increases driven by both demand and supply factors Population growth and regional economic growth - increased growth in demand for food and changing composition of demandPopulation 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 foodBiofuel demand - competes with land and water resources used for food Growing resource scarcity, particularly of waterGrowing resource scarcity, particularly of water Climate change and variability - reduced production growth in the poorest countries and regionsClimate change and variability - reduced production growth in the poorest countries and regions

4. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 4 Key Messages High commodity prices create investment and income opportunities but threaten poor consumersHigh 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 peopleDespite rapid economic growth, Asia remains home to the world’s largest number of poor and hungry people Agriculture in Asia increasingly influencesAgriculture in Asia increasingly influences  global agricultural markets and developments  large and growing export and import volumes of food (including fish) and feed

5. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 5 Resource competition and environmental degradation require new focus on integration of growth and sustainability policyResource 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 sizeCrop 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 systemsInnovative research and development in agricultural technology will be crucial to address these challenges and pressures on food systems Key Messages

6. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 6 Types of Asian Farming System Source: Hyman et al. forthcoming Rice-Wheat system house largest number of stunted children in Asia Marginal upland areas house small numbers but largest concentration of poor Directly related to malnutrition outcomes

7. Water Scarcity and Drought Stresses in Asia Proportion of failed growing seasons for rainfed cultivation, 100 year weather simulation Note: The figure illustrates 100 year weather simulation based on historic data analysis Source: Hyman et al. forthcoming DroughtDrought  lowers average expected yields  Increases production risk, reducing technology adoption of poor farmers

8. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 8 Irrigation water availability is declining Water Scarcity and Drought Stresses

9. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 9 Climate Change Exacerbates stresses on agricultural productionExacerbates stresses on agricultural production  particularly for low- and mid-latitude developing countries, including those of Asia Will adversely affect wheat productivity in the Indo-Gangetic Plains [CIMMYT]Will adversely affect wheat productivity in the Indo-Gangetic Plains [CIMMYT] Will reduce rice yields from increased nighttime temperature [IRRI]Will reduce rice yields from increased nighttime temperature [IRRI] Increases demand for waterIncreases demand for water

10. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 10  Increasing crop productivity: water management, agricultural research and rural investment Emphasis on crop breeding for both irrigated and rainfed agricultureEmphasis on crop breeding for both irrigated and rainfed agriculture –genetic modifications to develop stress tolerant materials to address water scarcity, salinization and groundwater contamination Water harvesting, minimum tillage, integrated soil fertility managementWater harvesting, minimum tillage, integrated soil fertility management Rural infrastructure investment to improve access to markets, credit, inputsRural infrastructure investment to improve access to markets, credit, inputs Agricultural Research and Technology

11. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 11 Biotechnology for Agriculture Significant progress is being made on drought tolerance, salt tolerance, and nitrogen use efficiencySignificant 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 environmentsLargest 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 technologyMust still resolve public acceptance and biosafety issues and transfer of technology Public-private partnerships for development and commercialization of biotech/GMO varietiesPublic-private partnerships for development and commercialization of biotech/GMO varieties

12. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 12 Biofuels: Pro-Poor Pathways Production processes for biofuels can bring benefits to the poorProduction processes for biofuels can bring benefits to the poor  Need to design production systems that will integrate rural households into the value chain  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 countriesMitigation and adaptation funding to support bioenergy transitions in developing countries

13. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 13 Create and Expand Markets in Natural Resources Establish economic incentives for water useEstablish economic incentives for water use  Create water rights for users, pay irrigators to use less water Develop markets for agricultural and forest carbon, generating new value streams in rural areasDevelop markets for agricultural and forest carbon, generating new value streams in rural areas Expand markets for environmental services (watershed management, biodiversity)Expand markets for environmental services (watershed management, biodiversity)

14. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 14 Scenarios for Agricultural Technology Business-As-Usual ScenarioBusiness-As-Usual Scenario High investment in agricultural research and knowledge (ARK)High investment in agricultural research and knowledge (ARK) Low investment in ARKLow investment in ARK ARK ++ plus complementary investmentsARK ++ plus complementary investments  Irrigation expansion and water use efficiency  Rural roads  Access to water  Secondary female education

15. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 15 Sources of Food Production Growth, BAU, 2050

16. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 16 Sources of Food Production Growth, ARK_high, 2050

17. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 17 Projected Food Prices under Alternative Scenarios, 2050

18. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 18 Projected Child Malnutrition Trends, Alternative Scenarios, Asia

19. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 19 Strategic Directions for Policy and Investments Value chains start at the farm levelValue chains start at the farm level  new production technology embedded in improved management systems is crucial for pro-poor growth Biotechnology, including GMOs, is likely to central to development of technology adapted to less-favored areasBiotechnology, including GMOs, is likely to central to development of technology adapted to less-favored areas Staple food crops remain essential for poverty-reducing growthStaple food crops remain essential for poverty-reducing growth

20. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 20 Strategic Directions for Policy and Investments Need full integration of policies aimed at growth and environmental sustainabilityNeed full integration of policies aimed at growth and environmental sustainability  Dealing with scarce land and water resources and trade-offs with environment can only be met by bringing externalities into the growth equation  Dealing with scarce land and water resources and trade-offs with environment can only be met by bringing externalities into the growth equation  Create markets and new value streams for agricultural ecosystem services

21. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 21 Thank You!