Creating a nutritious home for all

THE FOOD CRISES: BACKGROUND & THE WAY FORWARD Dirk Troskie Specialist: Agricultural Economics Western Cape Dept. of Agriculture

% OF HOUSEHOLDS THAT REPORTS CHILDREN GOING HUNGRY DURING THE PAST YEAR

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history.

AGRICULTURAL GDP PER PERSON IN AGRICULTURE (2004)

TRANSFERS / CAPITA (Constant 2000 Rand) Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: vd Berg (2007)

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard.

FOOD PRODUCTION & POPULATION GROWTH Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Abstract (2008)

GROWTH OF AGRICULTURAL PRODUCTION PER CAPITA (1994 – 2004)

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth.

AGRICULTURAL IMPORTS & EXPORTS (Nominal values) Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Abstract (2008)

EXPORTS OF WINE Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: SAWIS (2008)

WESTERN CAPE EXPORTS Departement Landbou | Department of Agriculture | Isebe LezolimoPRODUCTVALUE% of TOTAL CUMUL -ATIVE % % CHANGE FruitR5,18619,4% 75% Wine, beer & spiritsR3,33312,5%31,9%58% FishR2,3118,7%40,6%28,5% Processed foodR1,6846,3%46,9%-2,4% Wood & productsR0,4291,6%48,5%75% Hides, skins, leatherR0,3711,4%49,9%-15,7 MeatR0,2270,9%50,8%-12,5% R13,54150,8% Source: Quantec (2008)

CONCENTRATION RATIO OF AGRICULTURAL EXPORTS (2002 – 2004)

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth. 4. SA shows growth in the net value of exports

NET TRADE IN FOOD (2002 – 2004)

SHARE OF FOOD IN TOTAL IMPORTS (2002 – 2004)

SHARE OF AGRICULTURAL EXPORTS IN TOTAL EXPORTS (2002 – 2004)

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth. 4. SA shows growth in the net value of exports 5. Yet, SA is a deficit exporter of calories

FAPRI % BFAP BASELINE PRICES: Wheat & Barley Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: BFAP (2007)

BIOFUELS IN THE US Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: OECD/FAO Outlook (2007)

ANIMAL PRODUCTS Index of nominal prices Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: OECD/FAO Outlook (2007)

PER CAPITA CONSUMPTION OF MEAT Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: OECD/FAO Outlook (2007)

WORLD CLOSING STOCKS Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: OECD/FAO Outlook (2007)

WORLD POPULATION Departement Landbou | Department of Agriculture | Isebe Lezolimo

POPULATION ON CONTINENTS Departement Landbou | Department of Agriculture | Isebe Lezolimo

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth. 4. SA shows growth in the net value of exports 5. Yet, SA is a deficit exporter of calories 6. We are experiencing a trend-break

IMPACT ON THE MOST VULNERABLE: LSM1 (Inflation = 6%; Food Inflation = 12%) Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Own Calculations based on LSM Data (2007)

% HH EXPENDITURE ON FOOD Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Troskie (2001)

RURAL POPULATION IN TOTAL POPULATION (2004)

THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth. 4. SA shows growth in the net value of exports 5. Yet, SA is a deficit exporter of calories 6. We are experiencing a trend-break 7. We need to protect the most vulnerable 8. Certain countries are preventing exports: a)Impact on WTO negotiations b)Export instability

THE WAY FORWARD

Feed the hungry Food aid Food for Tomorrow Income generation programmes Address research & knowledge gaps Scale down trade distorting subsidies Special focus on Africa UN DECLARATION Departement Landbou | Department of Agriculture | Isebe Lezolimo

Feed the hungry Food gardens Food stamps Consumer subsidies (BIG) Emergency feeding schemes Food from research farms Food for Tomorrow ResearchExtensionTraining PROPOSED WESTERN CAPE DEPT. OF AGRICULTURE RESPONSE Departement Landbou | Department of Agriculture | Isebe Lezolimo

COMMERCIAL VEGETABLE PRODUCTION Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Combud & own calculations (2008)

SCENARIO 1 Departement Landbou | Department of Agriculture | Isebe LezolimoPRODUCTYIELD (T/ha) COST (R/ha) 3 Harvest / 1 Ha117R Ha234R Ha on 2 farms468R Source: Own calculations (2008) Cost of buying 468 tons of veg. at Epping: R

SCENARIO 2 Departement Landbou | Department of Agriculture | Isebe LezolimoPRODUCTYIELD (T/ha) COST (R/ha) 2 Harvest / 1 Ha78R Ha312R Ha on 2 farms624R Source: Own calculations (2008) Cost of buying 624 tons of veg. at Epping: R

THE NATURE OF TECHNOLOGY Departement Landbou | Department of Agriculture | Isebe Lezolimo Preferred characteristic Time/Research input

RATE OF RETURN ON WHEAT RESEARCH Departement Landbou | Department of Agriculture | Isebe Lezolimo Source: Troskie (2001) ReferenceYearCountryPeriodRate of Return (%) Ardito-Barletta1971Mexico Eddleman1977USA Hertford et al1977Colombia Kislev and Hoffman1978Israel Pray1980Bangladesh Sundquist et al1981USA Yrarrazaval et al1982Chile Zentner1982Canada Nagy1983Pakistan Ambrosi and Cruz1984Brazil Furtan and Ulrich1985Canada Norton et al1987Peru Evenson and da Cruz1989Brazil Byerlee1990Pakistan

RESEARCH: IMPACT ON EMPLOYMENT Departement Landbou | Department of Agriculture | Isebe Lezolimo DOMESTIC PRODUCTIVITY INCREASE INTERNATIONAL PRODUCTIVITY INCREASE AfricanColrd/ Asian AfricanColrd/ Asian Factor Demand (Agriculture) Factor Demand (Food) Factor Demand (Other) Total Source: Provide (2005)

PRICE ELASTICITY Departement Landbou | Department of Agriculture | Isebe LezolimoPRODUCTDEVELOPINGDEVELOPED Demand (Short)-0,4-0,3 Demand (Long)-1,0 Supply (Short)0,1 – 0,20,1 Supply (Long)0,4 – 1,20,8 – 1,0 Source: Bonnen & Schweikhardt (1998)

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THE FOOD CRISIS: THE SITUATION 1. Fewer experience hunger than anytime in SA history. 2. Government interventions play a major role in this regard. 3. Food production keep track with population growth. 4. SA shows growth in the net value of exports 5. Yet, SA is a deficit exporter of calories 6. We are experiencing a trend-break 7. We need to protect the most vulnerable 8. Certain countries are preventing exports: a)Impact on WTO negotiations b)Export instability