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Ashley Dean
Matthew Shechmeister
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U.S. ethanol policy may be the single most significant contributor to world food price instability, states a Stanford study on the global costs of American ethanol. The rapid rise of biofuels has tied energy and agricultural markets together, making it difficult to assess one without understanding the other.

The price of corn recently hit an all time high, a departure from a long-term trend that has seen the cost of corn decline with each passing decade. Price spikes have happened before, and some experts viewed the latest jump as part of this familiar cycle. Stanford food policy economists Rosamond L. Naylor and Walter P. Falcon alternatively argue in a new paper released in The American Interest that we have entered a new era where agricultural commodity prices are increasingly driven by U.S. biofuel policies. This food and fuel linkage has, and will continue to have, major implications for global food prices and the world’s poor.

Over the last decade, the U.S. ethanol industry experienced a major increase in production and consumption as a result of beneficiary of tax breaks, tariffs and government mandates. In 2005, MTBE was phased out as a gasoline additive because of environmental and health risks, and ethanol became the preferred MTBE substitute. Production was further supported with a mandate to reach a minimum target of 15 billion gallons by 2015. 

A jump in the price of crude oil gave a further boost to ethanol as a potential replacement for petroleum. As a result, 40% of the U.S. corn crop is now devoted to ethanol production. These policies have been promoted under the banner of protecting the American farm industry, securing energy independence, and decreasing greenhouse gas emissions, and they have succeeded on a number of these fronts.

However, as a major global producer and exporter of corn, the rapid rise of ethanol production in the U.S. during such a short period of time has produced a fundamental change in the structure of demand for corn. Increased demand has led to higher and more volatile food prices, not only for corn but other agricultural commodities. If the United States, along with the rest of the G-20, is serious about stabilizing global food prices, U.S. domestic biofuels policy in its entirety will need to be re-examined.

High prices are a boon to the U.S. farm sector, but can be devastating for poor consumers with minimal income to spend on food. Food riots have broken out in several countries suggesting the new volatility in the price of staple crops has had a severe impact on developing economies. Where once the policies of the U.S. helped keep agricultural prices on an even keel, current support for the production of corn-based ethanol has reversed this stabilizing role. 

Given the bullish financial outlook for the U.S. agricultural sector, this is an ideal time to begin dismantling both ethanol and corn (and other major commodity) subsidies. Corn-based ethanol tax and tariff provisions together cost the federal government around $6 billion annually. Cutting these subsidies would help reduce the Federal budget deficit without harming the rural economy.

The trickier political and economic questions relate to reassessing mandates, and are likely off the table with the 2012 elections approaching. This is unfortunate, for these policies will continue to cause unrest in food markets far beyond American shores.

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Center on Food Security and the Environment
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Cargill Visiting Fellow
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Hertel is a Distinguished Professor of Agricultural Economics at Purdue University. His research focuses on the economy-wide impacts of global trade and environmental policies with a particular interest in the impacts of energy and climate policies on global land use and poverty. He is also Executive Director, and founder of the Center for Global Trade Analysis, and Past-President of the Agricultural and Applied Economics Association (AAEA).

During his stay at Stanford he undertook research into the impacts of climate change and climate policy on agriculture, food security and poverty. In the winter quarter he co-taught an FSE seminar (with David Lobell) on the long run determinants of global agricultural land use.

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Policies promoting ethanol and biodiesel production and use in the U.S., Europe, and other parts of the world since the mid-2000s have had profound—and largely unintended—consequences on global food prices, agricultural land values, land acquisition, and food security in developing countries. They have also created regional opportunities in the form of agricultural investments, crop yield growth, and booming farm economies. Rising incomes in emerging economies are generating increased demand for transportation fuels, thus stimulating further growth of the global biofuel industry. This seminar will explore the politics, economics, and global food security implications of the expanding biofuel sector. Several policy questions will be raised, including the role of biofuel mandates on food prices, the role of trade policies for stabilizing food prices in an era of increasingly tight demand, and the role of land policies and institutions for feedstock production and income distribution in the developing world.

Siwa Msangi, Senior Research Fellow in the Environment and Production Technology Division at the International Food Policy Research Institute (IFPRI) will provide commentary. Msangi's work focuses on the major socio-economic and bio-physical drivers affecting agricultural production and trade, and their impacts on nutrition, poverty and the environment. Dr. Msangi manages a research portfolio that includes the economic and environmental implications of biofuels, and has coordinated the project Biofuels and the Poor in partnership with FSE.  

Biofuels videos: Roz Naylor talks food security and energy with Near Zero

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Senior Fellow, Stanford Woods Institute and Freeman Spogli Institute for International Studies
William Wrigley Professor of Earth System Science
Senior Fellow and Founding Director, Center on Food Security and the Environment
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PhD

Rosamond Naylor is the William Wrigley Professor in Earth System Science, a Senior Fellow at Stanford Woods Institute and the Freeman Spogli Institute for International Studies, the founding Director at the Center on Food Security and the Environment, and Professor of Economics (by courtesy) at Stanford University. She received her B.A. in Economics and Environmental Studies from the University of Colorado, her M.Sc. in Economics from the London School of Economics, and her Ph.D. in applied economics from Stanford University. Her research focuses on policies and practices to improve global food security and protect the environment on land and at sea. She works with her students in many locations around the world. She has been involved in many field-level research projects around the world and has published widely on issues related to intensive crop production, aquaculture and livestock systems, biofuels, climate change, food price volatility, and food policy analysis. In addition to her many peer-reviewed papers, Naylor has published two books on her work: The Evolving Sphere of Food Security (Naylor, ed., 2014), and The Tropical Oil Crops Revolution: Food, Farmers, Fuels, and Forests (Byerlee, Falcon, and Naylor, 2017).

She is a Fellow of the Ecological Society of America, a Pew Marine Fellow, a Leopold Leadership Fellow, a Fellow of the Beijer Institute for Ecological Economics, a member of Sigma Xi, and the co-Chair of the Blue Food Assessment. Naylor serves as the President of the Board of Directors for Aspen Global Change Institute, is a member of the Scientific Advisory Committee for Oceana and is a member of the Forest Advisory Panel for Cargill. At Stanford, Naylor teaches courses on the World Food Economy, Human-Environment Interactions, and Food and Security. 

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This paper serves as background to the fourth presentation in a Symposium Series on Global Food Policy and Food Security hosted by the Center on Food Security and Environment at Stanford University and supported by the Bill and Melinda Gates Foundation.


Political dynamics, not economic analysis, drive the domestic policy response to sharply rising food prices. The political objective during a food price crisis is almost always to keep it from happening. In the short run, this means “stabilizing” domestic food prices despite whatever is happening in world markets. Stabilizing domestic food prices in the face of sharply escalating world prices is not a foolish goal—most countries try to do it. The real issue is whether this can be done effectively and efficiently. The answer is always “no” unless the country has planned well ahead for such a contingency and already has an operational food price stabilization program in place. 

As a matter of “good practice,” all countries are discouraged by international donors from conducting such programs. Instead, countries are urged to implement “social” safety nets in times of food price spikes. The economic rationale is clear: let market prices signal the scarcity of food resources so that supply and demand can adjust, and then compensate the poor for deterioration in their standard of living when food prices rise. The problem is that safety nets that reach the poor quickly and effectively take considerable time to design and implement, and are quite costly in fiscal terms if the poor are a substantial share of the total population. Historically, unless the country is already running a cash transfer program to the poor, the emergence of a food price crisis is too sudden for an effective government response. Gearing up emergency food relief safety nets is not an effective response to a sudden spike in food prices.

More active measures to prevent food price spikes are needed, both domestically and internationally. One starting point would be for countries with large populations to gradually build their grain reserves to the point where they do not feel vulnerable to spikes in world prices and to possible grain embargoes from their regular suppliers. It would be desirable to have such stockholding strategies coordinated internationally, but this is unlikely in other than rhetorical terms. Still, the mere existence of these stocks, even if domestically controlled, would have a calming influence on world grain markets (especially on the very thin world rice market). With calmer markets, recourse to more open trade policies becomes politically feasible (and it is almost always economically desirable). Eventually, the reality of the high costs of grain storage will stimulate a more balanced approach to food security, with both reserves and trade playing significant roles.

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Peter Timmer
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Join Professor Falcon for a discussion of where our food comes from now, where it will come from in the future, and how these changes may affect international relations. Lunch will be provided!

Room 280A in the Law school (Crown Quadrangle, 559 Nathan Abbott Way)

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1936-2023
Helen Farnsworth Professor of International Agricultural Policy, Economics (Emeritus)
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Walter Falcon was former deputy director of the Center on Food Security and the Environment, former director of the Freeman Spogli Institute for International Studies, and Farnsworth professor of International Agricultural Policy and Economics at Stanford University (Emeritus). He died on August 2, 2023. Read his obituary here.

In 1972, Falcon moved from Harvard University to Stanford University's Food Research Institute where he served as professor of economics and director until 1991. From 1991-1998, he directed the Freeman Spogli Institute for International Studies, and from 1998-2007 he co-directed the Center for Environmental Science and Policy. He also served as senior associate dean for the social sciences, a member of the academic senate, and twice a member of the University's Advisory Board.

Falcon consulted with numerous international organizations, and had been a trustee of Winrock International and chairman of the board of the International Rice Research Institute (IRRI) and the International Center for Wheat and Maize Improvement (CIMMYT). Falcon became a Fellow of the American Association for the Advancement of Science in 1991. Falcon was cited as the outstanding 1958 graduate of Iowa State University in 1989 and in 1992 he was awarded the prestigious Bintang Jasa Utama medal of merit by the government of Indonesia for twenty-five years of assistance with that country's development effort. His recent co-authored papers have analyzed the effects of El Nino on Asian agriculture; Mexican agricultural policy; food price volatility; and biofuels.

Falcon received a BS in Agricultural Economics at Iowa State University in 1958, an MA in Economics at Harvard University in 1960, and a PhD in Economics from Harvard University in 1962.

FSI Senior Fellow, Emeritus
Stanford Woods Institute Senior Fellow, Emeritus
Walter Falcon Speaker
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Melissae Fellet
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Agriculture in Africa has grown steadily for the past 15 years. But that economic improvement is just making up for the preceding two decades of stagnation, says Ousmane Badiane, Africa director for the International Food Policy Research Institute (IFPRI).

And future progress toward industrialization depends on continued agricultural growth, he says.

Badiane will deliver a lecture on April 7, titled Why Has Africa Been Slow in Developing its Agriculture?. He will discuss the current state of agriculture in Africa, the technological resources available and policies needed for economic growth, and how agriculture can address the country's challenge of poverty.

The talk will begin at 4 p.m. at the Bechtel Conference Center in Encina Hall. It is free and open to the public.

A citizen of Senegal working in IFPRI's Washington, D.C., office, Badiane coordinates the organization's food policy research and communications throughout Africa.

From 1998 until mid-2008, Badiane worked at the World Bank as a lead specialist for food and agricultural policy for the Africa region.

As a senior research fellow at IFPRI from 1989 until 1997, Badiane led the institute's work on market reforms and development. He taught as an adjunct professor at the John Hopkins School of Advanced International Studies from 1993 until 2003.

Stanford's Program for Food Security and the Environment (FSE) sponsors the two-year Global Food Policy and Food Security Symposium Series, which is funded by a $1 million grant from the Bill and Melinda Gates Foundation.

Jeff Raikes, chief executive officer of the Gates Foundation, and Greg Page, chief executive officer and chairman of Cargill Inc., delivered the first lecture, Improving Food Security in the 21st Century: What are the Roles for Firms and Foundations, in February.

Future seminars will cover policy development to increase wealth, agricultural productivity and resource stewardship.

All lectures will be videotaped and posted on the symposium website, Global Food Policy and Food Security Symposium Series.

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Scott Rozelle
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OMAHA (DTN) -- China is the world's No. 1 producer and consumer of pork and poultry, producing more than five times the pork raised in the U.S. and 80 percent as much poultry. With its economic growth and increasing middle class, it is inevitable that meat consumption will rise.

The question is: Will China be able to continue to boost production sufficiently to meet that demand? The answer has implications for U.S. grain and meat producers.

"Rapidly rising incomes will have wrenching effects on the demand for food," said Scott Rozelle, agricultural economist at Stanford University. "As increasingly well-off consumers get fewer of their calories from rice and wheat, they will demand more from high-value products such as meat, fish, dairy and fruit. Urbanization has similar impacts, dampening the demand for rice and wheat and raising the demand for meat, fish, dairy and fruit. Trying to meet these rising -- and shifting -- demands will pose a large challenge."

Most importantly, given the great constraints China faces in arable land and water, the government has chosen to focus its agriculture in two ways: staple food crops such as rice and oilseeds and value-added products, said Francis Tuan, with USDA's Foreign Agriculture Service. It is aiming for a high percentage of self-sufficiency in staples to ensure its population doesn't go hungry. On the other hand, it wants to garner as much economic growth from agricultural production as possible.

"China is exporting more labor-intensive fruits and vegetables and higher-value commodities, while it is importing more land-intensive agricultural commodities, such as soybeans, cotton, sugar and dairy," Rozelle added. "These shifts are obviously more in line with China's comparative advantage."

One example of that trend is China's purchases of raw soybeans to be crushed in China for oil. Another is some farmers leaving crop production to focus on livestock.

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Conference presentations and tutorials now available

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Stanford experts from a range of disciplines discuss the interconnections and interactions among humanity's needs for and use of food, energy, water, and environment. Drawing on their own research, the speakers will illustrate and evaluate some of the ways in which decisions in one resource area can lead to trade-offs or co-benefits in others. Symposium attendees participate in breakout sessions, led by Stanford students and faculty, on a range of challenges associated with sustainable food systems.

Stanford faculty participants include: Stacey Bent (Center on Nanostructuring for Efflicient Energy Conversion) Welcome; Roz Naylor (Program on Food Security and the Environment, Woods Institute for the Environment) The Global Food Challenge; Chris Field (Carnegie Institution Department of Global Ecology) The Food-Energy Nexus; David Lobell (Program on Food Security and the Environment, Woods Institute for the Environment) The Food-Climate Nexus; Buzz Thompson (Woods Institute for the Environment) The Food-Water Nexus; Mariano-Florentino Cuellar (Center for International Security and Cooperation, Freeman Spogli Institute for International Studies) The Food-Security Nexus; and Pamela Matson (School of Earth Sciences) The Way Forward. Breakout session topics include how to lower the carbon footprint of food, aquaculture, and how to make meat more sustainable.

Bishop Auditorium
518 Memorial Way
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The Jerry Yang and Akiko Yamazaki
Environment and Energy Building
Stanford University
473 Via Ortega, Office 363
Stanford, CA 94305

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Senior Fellow, Stanford Woods Institute and Freeman Spogli Institute for International Studies
William Wrigley Professor of Earth System Science
Senior Fellow and Founding Director, Center on Food Security and the Environment
Roz_low_res_9_11_cropped.jpg
PhD

Rosamond Naylor is the William Wrigley Professor in Earth System Science, a Senior Fellow at Stanford Woods Institute and the Freeman Spogli Institute for International Studies, the founding Director at the Center on Food Security and the Environment, and Professor of Economics (by courtesy) at Stanford University. She received her B.A. in Economics and Environmental Studies from the University of Colorado, her M.Sc. in Economics from the London School of Economics, and her Ph.D. in applied economics from Stanford University. Her research focuses on policies and practices to improve global food security and protect the environment on land and at sea. She works with her students in many locations around the world. She has been involved in many field-level research projects around the world and has published widely on issues related to intensive crop production, aquaculture and livestock systems, biofuels, climate change, food price volatility, and food policy analysis. In addition to her many peer-reviewed papers, Naylor has published two books on her work: The Evolving Sphere of Food Security (Naylor, ed., 2014), and The Tropical Oil Crops Revolution: Food, Farmers, Fuels, and Forests (Byerlee, Falcon, and Naylor, 2017).

She is a Fellow of the Ecological Society of America, a Pew Marine Fellow, a Leopold Leadership Fellow, a Fellow of the Beijer Institute for Ecological Economics, a member of Sigma Xi, and the co-Chair of the Blue Food Assessment. Naylor serves as the President of the Board of Directors for Aspen Global Change Institute, is a member of the Scientific Advisory Committee for Oceana and is a member of the Forest Advisory Panel for Cargill. At Stanford, Naylor teaches courses on the World Food Economy, Human-Environment Interactions, and Food and Security. 

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Rosamond L. Naylor Speaker

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Phone: 650.736.4352

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Perry L. McCarty Director of the Stanford Woods Institute for the Environment.; Professor for Interdisciplinary Environmental Studies, School of Earth, Energy & Environmental Sciences; FSI Senior Fellow, by courtesy
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Chris Field is the Perry L. McCarty Director of the Stanford Woods Institute for the Environment.

His research focuses on climate change, ranging from work on improving climate models, to prospects for renewable energy systems, to community organizations that can minimize the risk of a tragedy of the commons.

Field has been deeply involved with national and international scale efforts to advance science and assessment related to global ecology and climate change. He served as co-chair of Working Group II of the Intergovernmental Panel on Climate Change from 2008-2015, where he led the effort on the IPCC Special Report on “Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation” (2012) and the Working Group II contribution to the IPCC Fifth Assessment Report (2014) on Impacts, Adaptation, and Vulnerability.

Field assumed leadership of the Stanford Woods Institute for the Environment in September 2016. His other appointments at Stanford University include serving as the Melvin and Joan Lane Professor for Interdisciplinary Environmental Studies in the School of Humanities and Sciences; Professor of Earth System Science in the School of Earth, Energy & Environmental Sciences; and Senior Fellow with the Precourt Institute for Energy. Prior to his appointment as Woods' Perry L. McCarty Director, Field served as director of the Carnegie Institution for Science's Department of Global Ecology, which he founded in 2002. Field's tenure at the Carnegie Institution dates back to 1984.

His widely cited work has earned many recognitions, including election to the U.S. National Academy of Sciences, the Max Planck Research Award, the American Geophysical Union’s Roger Revelle Medal and the Stephen H. Schneider Award for Outstanding Science Communication. He is a fellow of the American Academy of Arts and Sciences, the American Association for the Advancement of Science, and the Ecological Society of America.

Field holds a bachelor’s degree in biology from Harvard College and earned his Ph.D. in biology from Stanford in 1981.

Christopher Field Speaker

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Professor, Earth System Science
Senior Fellow at the Freeman Spogli Institute for International Studies
Senior Fellow at the Stanford Woods Institute for the Environment
Senior Fellow at the Stanford Institute for Economic Policy Research (SIEPR)
Affiliate, Precourt Institute of Energy
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PhD

David Lobell is the Benjamin M. Page Professor at Stanford University in the Department of Earth System Science and the Gloria and Richard Kushel Director of the Center on Food Security and the Environment. He is also the William Wrigley Senior Fellow at the Stanford Woods Institute for the Environment, and a senior fellow at the Freeman Spogli Institute for International Studies (FSI) and the Stanford Institute for Economic Policy and Research (SIEPR).

Lobell's research focuses on agriculture and food security, specifically on generating and using unique datasets to study rural areas throughout the world. His early research focused on climate change risks and adaptations in cropping systems, and he served on the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report as lead author for the food chapter and core writing team member for the Summary for Policymakers. More recent work has developed new techniques to measure progress on sustainable development goals and study the impacts of climate-smart practices in agriculture. His work has been recognized with various awards, including the Macelwane Medal from the American Geophysical Union (2010), a Macarthur Fellowship (2013), the National Academy of Sciences Prize in Food and Agriculture Sciences (2022) and election to the National Academy of Sciences (2023).

Prior to his Stanford appointment, Lobell was a Lawrence Post-doctoral Fellow at Lawrence Livermore National Laboratory. He holds a PhD in Geological and Environmental Sciences from Stanford University and a Sc.B. in Applied Mathematics from Brown University.

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David Lobell Speaker

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Robert E. Paradise Professor of Natural Resources Law
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JD

A leading expert in environmental and natural resources law and policy, Barton H. “Buzz” Thompson, Jr., JD/MBA ’76 (BA ’72), has contributed a large body of scholarship on environmental issues ranging from the future of endangered species and fisheries to the use of economic techniques for regulating the environment. He is the founding director of the law school’s Environmental and Natural Resources Program, Perry L. McCarty Director and senior fellow of the Woods Institute for the Environment, and a senior fellow (by courtesy) at the Freeman Spogli Institute for International Studies. In 2008, the Supreme Court appointed Professor Thompson to serve as the special master in Montana v. Wyoming (137 Original). Professor Thompson is chairman of the board of the Resources Legacy Fund and the Resources Legacy Fund Foundation, a California trustee for The Nature Conservancy, and a board member of both the American Farmland Trust and the Sonoran Institute. He previously served as a member of the Science Advisory Board for the U.S. Environmental Protection Agency.

Before joining the Stanford Law School faculty in 1986, he was a partner at O’Melveny & Myers in Los Angeles and a lecturer at the UCLA School of Law. He was a law clerk to Chief Justice William H. Rehnquist ’52 (BA ’48, MA ’48) of the U.S. Supreme Court and Judge Joseph T. Sneed of the U.S. Court of Appeals for the Ninth Circuit.

Senior Fellow, Stanford Woods Institute for the Environment, and (by courtesy) the Freeman Spogli Institute for International Studies
Barton H. Thompson Speaker
Mariano-Florentino Cuéllar Speaker
Pamela A. Matson Dean of the School of Earth Sciences, Goldman Professor of Geological and Environmental Sciences and FSI Senior Fellow Speaker Stanford University
Conferences
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Thom Jayne, Professor of International Development from Michigan State University will answer the following questions: What are the trends in land access? How can smallholder farmers get higher value out of scarce land and how does that relate to food and non-food markets? Smallholder vs. large enterprises in Africa. Derek Byerlee, independent scholar and director of the 2009 World Development Report will provide additional commentary.

Thomas Jayne's professional career has been devoted to promoting effective policy responses to poverty and hunger in Africa. Jayne is Professor, International Development, in the Department of Agricultural, Food, and Resource Economics and a member of the Core Faculty of the African Studies Center at Michigan State University. He is involved in research, outreach, and capacity building programs in collaboration with African universities and government agencies, mainly focusing on food marketing and trade policies and their effects on sustainable and equitable development. Jayne's secondary research focus has been on measuring the current and long-term effects of HIV/AIDS on African agriculture. Jayne sits on the editorial boards of two development journals, received a top paper award in 2004 by the International Association of Agricultural Economists, co-authored a paper (with graduate student Jacob Ricker-Gilbert) awarded the T.W. Schultz Award at the 2009 International Association of Agricultural Economists Triennial Meetings, and received the 2009 Best Article Award in Agricultural Economics (with co-authors Xhying Xu, William Burke, and Jones Govereh). Jayne's work has also been recognized at the 1996 World Food Summit in Rome and the Secretariat of Global Agricultural Science Policy for the Twenty-First Century.

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Thom Jayne Professor of International Development Speaker Michigan State University
Derek Byerlee Independent Scholar and Director, World Development Report, 2009 Commentator
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