February 10th marked the launch of the Program on Food Security and the Environment's Global Food Policy and Food Security Symposium Series. Setting the stage for the two-year series were Jeff Raikes, CEO of the Bill & Melinda Gates Foundation, and Greg Page, CEO and Chairman of Cargill Inc. As CEOs from the largest foundation and the largest agricultural firm in the world they provided important perspectives on global food security in these particularly volatile times. Full video and clips of the event are now available - Improving Food Security in the 21st Century: What are the Roles for Firms and Foundations.

Jeff Raikes: A Perspective from the Bill & Melinda Gates Foundation

Catalytic philanthropy

The Gates Foundation, through its Agricultural Development Initiative, has been a leader in addressing global food security issues. The Foundation allocates 25% of its resources to global development and to addressing the needs of the 1 billion people who live in extreme poverty ($1/day). 70-75% of those people live in rural areas and are dependent on subsistence agriculture for their livelihoods.

The Gates Foundation is driven by the principle: how can it invest its resources in ways that can leverage performance and address market failures? Its approach embodies a novel concept driven by both private sector motives and public responsibilities. Raikes describes this as catalytic philanthropy.

"The Foundation identifies where its investments can create an innovation, a new intervention that can really raise the quality of lives for people," said Raikes. "If successful, it can be scaled up and sustained by the private sector if we can show that there is a profit opportunity or the public sector if we can show that this is a better way to improve the overall quality of society through investment in public dollars."

Image Photo credit: Michael Prince

In the realm of agriculture, allocating resources across the agricultural value chain has proven to be the most effective approach. As an example of this strategy, Raikes talked about a farmer-owned, Gates-supported dairy chilling plant in Kenya. The cooling facility provided the storage necessary to provide a predictable price at which to sell farmers' milk. This price knowledge and market access gave farmers the confidence to invest in better technology and better dairy cattle. The plant also provided artificial insemination services and extension services to teach farmers how to get greater amounts of milk from the cattle.

"I love the concept. I also love the numbers," said Raikes. "In just two or three years there were now 3,000 farmers in a 25 kilometer radius that were able to access this dairy chilling plant and able to sell their milk."

In addition to improving incomes, Raikes remarked that very consistently what he hears is when farmers are able to improve their incomes the first thing they do with the money is invest in the education of their children.

Upcoming challenges to food security

During the next 40 years or so, global food production must double to accommodate a growing and richer population. Climate change and water scarcity contribute to this challenge. The places that will suffer the most severe weather are also the places where the poorest farmers live. 95% of sub-Saharan agriculture is rain fed with very little irrigation.

"If we are going to be able to feed the world we are going to have to figure out how to achieve more crop per drop," cautioned Raikes. "This includes trying to breed crop varieties that will better withstand water shortages. Early results show that you can get as much as a 20% increase in yield or more under stressed conditions when you have varieties that are bred for that need."

These challenges are compounded by the current economic crisis that is putting pressure on budgets in both donor and developing countries. In 2009, the G20 committed 22 billion dollars to agricultural development in recognition of the importance of agricultural development to food security. However, of the 22 billion promised, 224 million dollars went to five countries in the first round of grants in June. By November, when 21 additional countries submitted their proposals, just 97 million dollars were available to be dispersed and 17 countries were turned away empty handed.

High- and low-tech solutions

In an effort to alleviate some of this deficit, the Gates Foundation has committed 300 million dollars in six grants that span the value chain. These include investments in science and technology, farm management practices, farmer productivity, and market access as well as the data and policy environment to support the Foundation's work. The grants are intended to support about 5 ½ million farm families in sub-Saharan Africa and South Asia.

"We believe innovative solutions can come from both high-tech and low-tech," said Raikes. "On the high-tech end, submergent genes are allowing rice crops to survive periods of flooding up to 15 days. In areas of rice farming prone to flooding, this can save entire crops traditionally wiped out by such weather disasters."

Image Photo credit IRRI/Ariel Javellana

The sub1gene seeds are now being used by 400,000 farmers and are on track to be used by 20 million rice farmers by 2017. On the low-tech end, the Gates Foundation is providing $2 triple layer bags to farmers to reduce crop loss from pests; an affordable solution that has increased average income per farmer by $150/year.

"We primarily support conventional breeding, but we also support biotechnology breeding. In some cases we think that breeders in Africa and South Asia will want to take advantage of the modern tools we use here in our country to provide better choices for their farmers," explained Raikes.

Reasons for optimism

After years of diminished support, US Agricultural Development assistance to sub-Saharan Africa has gone from about 650 million in 2005 to about 1.5 billion in 2009. In developing countries, the Comprehensive Agricultural Development Program (CADP) in Africa has challenged countries to dedicate 10% of their national budgets to agriculture with the goal of improving annual agricultural growth by 6%. 20 countries have signed on to the CADP compacts, and 10 countries are exceeding the 6% growth target. Finally, since 1990, 1.3 billion people worldwide have lifted themselves out of poverty primarily through improvements in agricultural productivity.

Raikes pointed to Ghana as a success story. Since 1990, casaba production, an important staple food for poor smallholder farmers, has increased fivefold. Tomato production increased six fold. The cocoa sector has been revived and hunger has been cut by 75%.

"The key to success in Ghana was a combination of getting the right developing country policy with the right macroeconomic reform, the right institutional reform, smart public investment, and an overall good policy environment," said Raikes.

Supporting good policy is an important part of the Foundation's food security strategy, and was a strong motivation behind its funding of FSE's Global Food Policy and Food Security Symposium series.

"We see this symposium series as an opportunity to gather policy leaders who will bring new ideas of what will be effective policy approaches and effective economic environments in the countries we care a lot about, in particular sub-Saharan Africa and South Asia," said Raikes.

Raikes concluded his remarks by reminding everyone that the key to improving food security globally is making sure women, who make up at least 70% of the farm labor population, are included in the equation.

Greg Page: Balancing the race to caloric sufficiency with rural sociology

As the largest global agricultural firm, Cargill has an influential role to play in the world of food and agriculture. Cargill is a major supplier of food and crops and a provider of farmer services, inputs, and market access.

Image Photo credit: Olaf Hammelburg

Together with the Gates Foundation, Cargill has reached out and trained 200,000 cocoa farmers in the Ivory Coast, Ghana, and Cameroon. One tribe and one small village at a time the company has helped improve food safety, quality maintenance, and storage; benefiting the farmers, Cargill, and customers further down the supply chain. Cargill has also assisted, through financing and product purchasing, 265,000 farmers in Benin, Burkina Faso, the Ivory Coast, Malawi, Uganda, Zambia, and Zimbabwe.

Can the world feed itself?

A billion people lack sufficient caloric intake on a daily basis. In sub-Saharan Africa, 38% of all children are chronically malnourished, largely the result of inadequate agricultural productivity. While nine of the ten countries that have the highest prevalence of malnourishment are in sub-Saharan Africa, the two countries with the largest absolute number of malnourished people are India and China.

"This points to the difficulty of this problem," said Page. "India exports corn and soybean protein and China has 2.5 trillion dollars of hard currency reserves. These issues aren't necessarily of ability to feed people, but a willingness and commitment to do so."

Can the world feed itself? Yes, said Page.

When you break down the number of calories needed per malnourished person per day and convert that to tons of whole grains required to extinguish that hunger you get 30 million tons; 1/6 the amount of grain we converted to fuel globally last year. In the U.S. alone, 40% of our corn goes to ethanol.

"It isn't an issue of caloric famine-it is an issue of economic famine," stated Page. "In other words, this is not a food supply problem, but rather the lack of purchasing power to pay for a diet. An adequate price must be assured to reward the farmer for his efforts and to provide enough money that she can do it again the following year."

Rural sociology premium

What we face is the need to keep smallholders on the farm-despite the fact that they may not be the low-cost producer of foodstuffs-in order to avoid a rural population migration that would be unsustainable. As a result, the challenge the world faces is who is going to pay that rural sociology premium? If it costs more to raise crops on small farms is that burden going to be borne by the urban poor or is there going to be an alternative funding mechanism that allows smallholders to succeed?

Image Photo credit: Cargill

What is the survival price for a smallholder farmer? Page explained that if you wanted a family of four on a farm in sub-Saharan Africa to receive an income commensurate with the average per capita income of the urban population, you would come up with a price near $400 a ton.

"To put this in context, the highest price for maize that has ever been reached here in the United States is about $275 a ton," said Page. "This rural sociology premium to sustain smallholders is not an insignificant amount of money. How do we achieve fairness between the revenue received by the rural smallholder and the price borne by the urban consumer?"

State of disequilibrium - complacency to crisis

Today we are experiencing incredible price volatility where commodity prices are in a continuous state of disequilibrium. Very small changes in production have outsized impacts on price. This is in contrast to the last two and a half decades when the world operated with fairly robust stocks due to crop subsidies in the United States and Western Europe.

"This period of subsidization was when the western world probably did more harm to sub-Saharan Africa and South Asia than any other period in history," said Page. "We refused to allow price to signal to western farmers to produce less. As a result, the world price of grains fell far below the ability of any smallholder to compete. We then shipped those surpluses to developing countries, which then failed to invest in their agriculture for decades."

Today we are lurching from complacency to crisis. The ability of information and market speculation to be transmitted rapidly is affecting purchasing decisions of thousands to millions of consumers. Rising fuel prices, export restrictions, increasing demand for crops for biofuels, and unpredictable weather have all contributed to higher prices. Some of the drivers of price, however, are good things, such as the increase in per capita income and the capacity of more people to have a more dense and nutritious diet.

"Interestingly, the upside of the ethanol and biofuels program is that it brought prices back to a sufficiency that reinvigorated investment in agriculture," noted Page. "On one level I think a very good argument could be made that the biofuels program brought the world further from famine than it ever had been because of the price."

Critical food security factors

Page concluded by summarizing the elements that Cargill believes are critically important to increase food security. The first is the ability to understand the tradeoffs between a fast path to caloric sufficiency and the needs of rural sociology. Second, that crops be grown in the right soil, with the right technology, and relying on free trade so we can harvest competitive advantage to its fullest.

Another critical factor is rural property rights. Smallholders must have the ability to own the land, have access to it, and transfer it to future generations if you want a farmer to reinvest in his farm, said Page.

"Smallholders in developing countries need some degree of revenue certainty and access to a reliable market if we expect them to do what their countries really need them to do, which is raise productivity," explained Page. "Today they are often forced to sell at harvest, often below the cost of production, and lack the storage capabilities and capital to provide crops sufficiently and continuously."

Open, trust-based markets also play a key role in ensuring food security. Governments need to support trade. When Russia, Ukraine, and Argentina turned to embargos as a way to protect domestic food prices open markets were jeopardized and price volatility increased. Finally, there are very important roles for the world's governments in the creation of infrastructure that is vital to provide access to markets.

"I believe fully and completely in the world's capacity to harvest photosynthesis to feed every single person and to do it at prices that can be borne by all," concluded Page.

A hidden trove of historical crop yield data from Africa shows that corn - long believed to tolerate hot temperatures - is a likely victim of global warming.

Stanford agricultural scientist David Lobell and researchers at the International Maize and Wheat Improvement Center (CIMMYT) report in the inaugural issue of Nature Climate Change next week that a clear negative effect of warming on maize - or corn - production was evident in experimental crop trial data conducted in Africa by the organization and its partners from 1999 to 2007.

Led by Lobell, the researchers combined data from 20,000 trials in sub-Saharan Africa with weather data recorded at stations scattered across the region. They found that a temperature rise of a single degree Celsius would cause yield losses for 65 percent of the present maize-growing region in Africa - provided the crops received the optimal amount of rainfall. Under drought conditions, the entire maize-growing region would suffer yield losses, with more than 75 percent of areas predicted to decline by at least 20 percent for 1 degree Celsius of warming.

"The pronounced effect of heat on maize was surprising because we assumed maize to be among the more heat-tolerant crops," said Marianne Banziger, co-author of the study and deputy director general for research at CIMMYT."

"Essentially, the longer a maize crop is exposed to temperatures above 30 C, or 86 F, the more the yield declines," she said. "The effect is even larger if drought and heat come together, which is expected to happen more frequently with climate change in Africa, Asia or Central America, and will pose an added challenge to meeting the increasing demand for staple crops on our planet."

Similar sources of information elsewhere in the developing world could improve crop forecasting for other vast regions where data has been lacking, according to Lobell, who is lead author of the paper describing the study.

"Projections of climate change impacts on food production have been hampered by not knowing exactly how crops fair when it gets hot," Lobell said. "This study helps to clear that issue up, at least for one important crop."

While the crop trials have been run for many years throughout Africa, to identify promising varieties for release to farmers, nobody had previously examined the weather at the trial sites and studied the effect of weather on the yields, said Lobell, who is an assistant professor of environmental earth system science and fellow at Stanford's Program on Food Security and the Environment.

"These trials were organized for completely different purposes than studying the effect of climate change on the crops," he said. "They had a much shorter term goal, which was to get the overall best-performing strains into the hands of farmers growing maize under a broad range of conditions."

The data recorded at the yield testing sites did not include weather information. Instead, the researchers used data gathered from weather stations all over sub-Saharan Africa. Although the stations were operated by different organizations, all data collection was organized by the World Meteorological Organization, so the methods used were consistent.

Lobell then took the available weather data and interpolated between recording stations to infer what the weather would have been like at the test sites. By merging the weather and crop data, the researchers could examine climate impacts.

"It was like sending two friends on a blind date - we weren't sure how it would go, but they really hit it off," Lobell said.

Previously, most research on climate change impacts on agriculture has had to rely on crop data from studies in the temperate regions of North America and Europe, which has been a problem.

"When you take a model that has been developed with data from one kind of environment, such as a temperate climate, and apply it to the rest of the world, there are lots of things that can go wrong" Lobell said, noting that much of the developing world lies in tropical or subtropical climates.

But he said many of the larger countries in the developing world, such as India, China and Brazil, which encompass a wide range of climates, are running yield testing programs that could be a source of comparable data. Private agribusiness companies are also increasingly doing crop testing in the tropics.

"We're hoping that with this clear demonstration of the value of this kind of data for assessing climate impacts on crops that others will either share or take a closer look themselves at their data for various crops," Lobell said.

"I think we may just be scratching the surface of what can be achieved by combining existing knowledge and data from the climate and agriculture communities. Hopefully this will help catalyze some more effort in this area."

Lobell is a Center Fellow at the Program on Food Security and the Environment, a joint program of Stanford's Woods Institute for the Environment and Freeman Spogli Institute for International Studies.

The work was funded by the Rockefeller Foundation

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.

With 2011 already off to such a wet start in many parts of the world, concerns of what flooding will do to food prices and availability in the coming months are starting to creep into the news. In Sri Lanka, flooding has devastated rice crops, and in North Dakota, heavy rain and snow is already threatening the spring wheat crop. And all this after last summer's Russian drought and heat wave helped drive global wheat prices higher.

But while farmers have always had to contend with the vagaries of the weather, a question of increasing importance is how agriculture will be affected by the climate changes projected to occur over the next century. Many scientists are studying which regions of the world may be impacted the most by increasing temperatures and changing precipitation regimes, and what is bound to happen to the supplies of the world's biggest cash crops, like wheat, corn, rice and soybeans.

A new report, The Food Gap, was released last week from the Universal Ecological Fund, and it has muddied the waters even further. The report reviews how global climate change will affect the fate of crop yields and food prices in 2020. Unfortunately, the report actually misinterpreted the connection between atmospheric concentrations of greenhouse gases like carbon dioxide (CO2) and expected global temperature increases - despite the fact that recent reports from the U.N. Intergovernmental Panel on Climate Change and the National Academy of Sciences clearly identify the most current peer-reviewed understanding of this. The food study suggests that within 9 years, average global temperatures will be an average of 2.4°C warmer than during preindustrial times - or almost 1.5°C warmer than it was just last year.

This exceptionally high temperature projection is completely baseless, as NASA climate modeler Gavin Schmidt explained on the RealClimate blog - it's more likely that the planet will experience this kind of temperature change over 100 years, not merely one decade. Nevertheless, a number of news outlets published stories on the report's projections of how this dramatic climate change could impact the global food supply by 2020. Some publications posted corrections to their own stories, but I thought it would be helpful to take a step back and examine climate change and food security in 2020 and beyond. I spoke with Stanford University's David Lobell, who studies how climate change affects crop yields and food prices. He helped clarify what the current research says about climate change and food security.

Read the full interview here.

An October 13 New York Times headline article warned that an increasing volatile market for grains could lead to a repeat of the 2008 food price run-up. That price spike left over 1 billion people in a state of food insecurity-a threshold symbolic in its extreme order of magnitude and in the challenges it presents for combating global hunger in the future. In a paper released December 20 in Population and Development Review FSE director Rosamond L. Naylor and deputy director Walter P. Falcon provide insight into the causes and consequences of these volatile events.

"Price variability, particularly spikes, has enormous impacts on the rural poor who spend a majority of their income on food and have minimal savings," said Naylor. "Impacts at the local level have not been well measured, yet are key to improving food security globally." 

Expectations--often faulty--have played a key role in price volatility over the past decade. Uncertain exchange rates and macro policies added to price misperceptions, as did flurries of speculative activity in organized futures markets, particularly as a result of the growing biofuels market.

"These events highlight new linkages between agriculture-energy and agriculture-finance markets that affect the world food economy today," explained Falcon. "More importantly, volatile markets compound problems of low crop productivity, increase reliance on food imports, and aggravate other internal causes of instability--conflict, weak institutions, and inadequate infrastructure--that typically plague the world's poorest countries."

To see how the rural poor were impacted on a local scale, Naylor and Falcon looked at Ghana, Uganda, Malawi, Guatemala, and India. Price changes at the local level during the 2008 price spike were frequently half that of international prices, primarily as a consequence of domestic food and trade policies.

"The price bubble was undeniably grim for poor consumers, particularly for households living under $1/day or $2/day, but not as debilitating as many commentators suggested," said Falcon. "Unfortunately, most price stabilization efforts aimed at the poor, however well intended, ended up helping larger net producers much more than those at the margin."

Additionally, domestic self-sufficiency polices tended to have long-term negative impacts on the international market when governments lacked the resources to defend a targeted price or were ‘large actors' with significant shares of global production or consumption.

For example, in the spring of 2008, the Indian government placed a ban on rice exports--a major staple in the country--when it feared significant increases in grain prices and a spread of Ug99 (wheat rust). This ban affected food prices from Asia to Africa, created mini-panics within food importing countries, and added to global grain price variability. It underscored the growing food-security and crop interdependencies among nations arising from pathogens, prices, and policies.

The extreme heat wave that hit Russia and Eastern Europe in the summer of 2010, coupled with floods in Pakistan, declining estimates of maize stocks in the U.S., and uncertainties about global GDP growth have captured the attention of many analysts and policymakers. What will happen to prices in terms of spikes, trends, and variations during 2011-2013 and beyond is uncertain.

What is known, said Naylor, is that the causes and consequences of food-price variability deserve much more attention if we are going to alleviate global food insecurity in the future.