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Investment in Agriculture

Investment in Agriculture. IFADC International Food Aid and Development Conference 27 – 29 June 2011 Kansas City, USA. Outline. Why is investing in agriculture important? What has happened in investment in agriculture? What are the needs? Conclusion.

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Investment in Agriculture

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  1. Investment in Agriculture IFADC International Food Aid and Development Conference 27– 29 June 2011Kansas City, USA

  2. Outline • Why is investing in agriculture important? • What has happened in investment in agriculture? • What are the needs? • Conclusion

  3. Investment in agriculture is clearly associated with hunger reduction GDP growth originating in agriculture benefits the poorest half of the population substantially more Source: Ligon and Sadoulet 2007. Estimating the effects of aggregate agricultural growth on the distribution of expenditures. The World Bank, 2007

  4. Investment in agriculture is clearly associated with hunger reduction Source: von Cramon-Taubadel et al. 2009

  5. Domestic public investment in agriculture has been neglected Share of Total Government Spending in Agriculture 1980 - 2002 Source: Public Spending in Developing Countries: Trends, Determination, and Impact – Shenggen Fan and Anuja Saurkar

  6. Foreign public investment in agriculture has been neglected Official Development Assistance, 1980 - 2009

  7. Investment in agricultural capital, 1976-2007 130 142 (2009$) Source: von Cramon-Taubadel et al. 2009

  8. Investment in agricultural capital, 1975-2007 Average annual rates of ACS growth before and after 1990

  9. Food demand to 2050 • Food demand to increase by 70 % • Population growth • Income growth • Dietary changes • The natural resource base is adequate to meet the demand • Natural degradation stopped or significantly slowed • Climate change addressed • Small increase in cultivated area • 90 % from increased yields and cropping intensity

  10. Investing in agriculture to meet 2050 demand • $189 billion in 2007, • $278 billion for 2050 • assumed public = 1/3 private • about 50% higher to meet • demand in 2050 • $142 billion private in 2007 Source: FAO (preliminary estimates)

  11. Investing in agriculture to reduce hunger • + $50 billion public • assumed that • private investment • would increase in • proportion Source: FAO (preliminary estimates)

  12. Most investment is funded by domestic private sources in developing countries • $8 billion ODA • to agriculture • in 2007 • $3 billlion FDI in • developing country • agriculture in 2007 • assumed to grow • proportionately Source: FAO (preliminary estimates)

  13. Conclusions • Investment in agriculture should be strengthened if we want to reduce hunger and poverty around the world • Will current political commitment be sustained and translate into actual financing? • Positive signs and less positive signs • Questions for future work • Investment in what areas? For what? From where?

  14. Thank you

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