The United States continues to endure the worst drought to hit the country in over 50 years. Although conditions have improved, 53 percent of the US is still experiencing moderate or worse levels of drought. The United States Department of Agriculture (USDA) projected last week that the drought will reduce the nation’s corn yield by 13 percent and soybean yield by 12 percent. As the world’s largest exporter of corn, soybean and wheat, this major disruption in U.S. supply is already having an impact on global food prices.

Is this summer a glimpse of what our future could look like under a changing climate, and what does that mean for the world’s poor who are disproportionately impacted by volatile food prices? What policy options are available to help avoid a repeat of the 2007-2008 food crisis? I sat down with FSE visiting scholar Thomas Hertel, an agricultural economist from Purdue University, to discuss these questions and related research as he wraps up his sabbatical year here at Stanford.

DEAN: The current drought has already had a dramatic impact on US corn prices, exceeding record highs of $8 a bushel. While American consumers are unlikely to feel the impacts until next year, the spike in corn prices has sparked debate over whether to drop or temporarily suspend US ethanol mandates to free up supply and ease the pressure on world food prices. In April, you published a paper in Nature Climate Change with Stanford environmental scientist Noah Diffenbaugh that looked at this very scenario.

How are current biofuel policies affecting the market’s ability to respond to extreme weather events like the current drought?

HERTEL: The remarkable thing about that paper is how timely it was. We predicted a volatile interplay between an extremely hot summer and the Renewable Fuel Standard for corn ethanol, and that is what we are now seeing, with the value of the mandates’ Renewable Identification Numbers (RINs) accruing greater value as the drought deepens. There are increasing calls for a waiver of the mandated 13.2 billion gallons of corn ethanol needed to meet this year’s federal renewable-fuel standards. This new source of demand (about 40 percent of production last year) has absorbed virtually all of the increased output the US has generated over the past eight years. By limiting the ability of commodity markets to adjust to yield fluctuations, biofuel mandates work in exactly the wrong direction. These price spikes are likely to be even larger in the future if these policies are not altered.

DEAN: In that same paper you warn that extreme weather events, like the current drought, are likely to become more common and potentially even more intense under a changing climate. To better understand the impacts of climate change on global agricultural production, trade, prices and poverty you have developed a global trade analysis model (GTAP), now used by over 10,000 members. Some of those results were published in a 2010 paper with FSE fellow David Lobell and FSE affiliated researcher Marshall Burke.

What have been some of the most interesting findings to come out of that model?

HERTEL: Prior to the publication of our 2010 paper in Global Environmental Change, most studies of climate change and poverty focused on the likely impact on prices and low income food consumers. Our paper was one of the first to examine the impact on wages and farm incomes. We found that low income farm households in regions of the world that are relatively less hard hit by climate change may actually benefit from the ensuing rise in world prices. Of course, low income consumers worldwide, as well as farmers in the regions hardest hit by climate change, such as Southern Africa and South Asia, will be hurt.

DEAN: Poor households in developing countries spend a disproportionately large amount of their disposable income on food. Even small price spikes can have a large impact.

What policies are needed to help protect the world’s poorest from price volatility?

HERTEL: This is an important question. Being a trade economist, I think immediately of trade policies and their role in improving or worsening the situation. From a global perspective, the best thing that can be done is for all regions of the world to share in the needed adjustments to events like the US drought of 2012. If all countries were to adjust their corn use by just a modest  amount, the shortfall could be accommodated more easily. However, the evidence from the 2007-2008 commodity crisis suggests that many countries – most notably India and China – responded to the crisis by adjusting border policies so as to shield domestic consumers from the price rise, thereby failing to share in the adjustment. This, in turn, made the world price rise larger and worsened the situation for low income households in other developing countries.

DEAN: In addition to focusing on climate change impacts on agriculture and poverty, you have a long-standing interest in agricultural impacts on the environment, and the role economics can play in mitigating agriculture’s destructive planetary impacts. The latter is particularly important given that agricultural production accounts for 70 percent of global freshwater consumption, 38 percent of total land use, and 14 percent of the world’s greenhouse gas emissions.

How are economic forces impacting the kind of farming we see today?

HERTEL: One of agriculture’s most important impacts on the environment has been its contribution to global greenhouse gas emissions (GHGs). Farming accounts for a disproportionate share of GHGs, including nitrous oxide emissions from fertilizer applications, methane emissions from livestock and paddy rice, as well as indirect emissions from the conversion of tropical forests to agricultural uses. There is little doubt that the globalization of agriculture has contributed to an acceleration of land conversion in some regions which had previously been insulated from world markets. New agricultural technologies offer great hope for moderating such GHG emissions – both by reducing the emissions intensity of agricultural production and by reducing the total amount of land required to feed the world. And there is evidence that more rigorous enforcement of restrictions on land conversion in places like the Amazon can have a tangible impact on global emissions. So the answer lies in a combination of investments, regulations and enforcement. We have explored the potential for agriculture and land-based mitigation policies to contribute to reduced GHG emissions – as well as the implications for food security – in a joint project with the UN-Food and Agriculture Organization. These findings are forthcoming in a paper in the Proceedings of the National Academy of Sciences.

DEAN: While at Stanford, you have had the opportunity to work closely with climate and earth system scientists to conduct research on the energy-water-land-agriculture-climate nexus under the umbrella of John Weyant’s Integrated Assessment Modeling (IAM) project and with former Purdue colleague, Noah Diffenbaugh.

How did you enjoy working in such an interdisciplinary environment?

HERTEL: This was the first deeply interdisciplinary experience of my career and it was both challenging and rewarding. Noah is the person who first stimulated my research interest in climate change five years ago. The idea that extreme events could have an important impact on agriculture, food prices and poverty is something that we have been exploring intensively since that time. However, it was only in the context of this sabbatical—with the help of Martin Scherer and Monika Verma—that we were able to really get our teeth into the issue, resulting in the April paper.

DEAN: You also taught an interdisciplinary graduate seminar with FSE fellow David Lobell on global agricultural land use change in 2050.

What sort of lessons did you learn from teaching an interdisciplinary seminar?

HERTEL: I really enjoyed the opportunity and the challenge of teaching an interdisciplinary course. I was fortunate to work closely with David Lobell in designing this course, as the structure was different from the typical economics course which I have taught in the past. Teaching the course also changed my perspective on which research questions are most important. Sometimes the points that most intrigue economists are of little broader relevance, while some of those issues which seem obvious to economists are deserving of much greater attention, more thorough investigation and better communication to the broader scientific community. I plan to offer this course when I return to Purdue, and I am also planning to write a textbook based on this course.

DEAN: You have also been working on the launch of an open source data program called GEOSHARE (Geospatial, Open-Source Hosting of Agriculture, Resources and Environmental Data).

What does GEOSHARE do and why is it needed?

Hertel: Feeding 9 billion people in 2050 in the face of a changing climate, while preserving the environment and eliminating extreme poverty, is one of the most important challenges facing us today. Yet the data currently available to understand how global and local phenomena affect the agriculture-environment-poverty nexus are insufficient to advance needed discovery and enable effective decision making. In order to address this limitation, we have initiated GEOSHARE. During my time at Stanford I was able to finalize funding for a two-year pilot effort aimed at providing proof of concept. It will prototype this freely available, global, spatially explicit database which will be accompanied by analysis tools and training programs for new scientists, decision makers, and development practitioners.

What will you take away with you from your time spent here on the Farm?

HERTEL: I greatly enjoyed my colleagues and conducting research, auditing courses (including a course in Geographical Information Science and David Lobell’s course in Climate and Agriculture) and teaching. But I also had great fun cycling and hiking in the hills around Palo Alto, windsurfing, singing in a local choir, and partaking of all that San Francisco has to offer. This is a lovely place to spend a sabbatical leave!

My wife and I are spending the summer of 2012 at our farm near Cedar Rapids, Iowa. It is a relatively small corn, soybean, and cow/calf operation in the east central part of the state. We are surrounded by other farmers, many of whom are getting on in years, who typically farm between 500 and 1,000 acres. A few also feed cattle and there is one confined pork operation nearby.

For someone interested in agricultural price volatility, this summer has been a three-month seminar in real time. There was an early spring in Iowa, and record acres of corn and beans were planted. Some of our neighbors even brought conservation-reserve land back into production. Plantings were fencerow to fencerow—although fewer fences line the landscape as farmers move out of the livestock business and fences are removed to accommodate the larger 12- and 16-row equipment that is now commonplace. Early commodity prices were good, but not spectacular in April and May, and with prospects for a large crop, many of our neighbors made forward contracts to deliver large quantities of corn and beans to local ethanol and bean-crushing plants. 

Temperature and rainfall at the time of pollination and grain filling dramatically affect corn yields—and this year the combined effect was dreadful. The corn crop literally curled up and died before our eyes. The corn on sandy hills burned up first, but the crop on deeper, blacker soils soon followed. National corn prices followed the thermostat. Cash prices of corn went from about $6 per bushel in May to more than $8 in early August. And then came June and July. National reserve stocks of corn were very low, so price stability was dependent on average or better weather. Instead, extreme weather came in all forms. Average temperatures at the Cedar Rapids weather station for June, July and the first week of August were the highest in recorded history. Maximum temperatures for 22 of the past 70 days exceeded 90 degrees. Total rainfall was only 1.1 inch, compared to an historical average of 8.1 inches. It is the driest summer since 1910.

With the corn crop currently denting, and thus “fixed” (more rain would not now improve yields), all attention turned to soybeans. Beans have a resilient character to them, with the capacity to shed blossoms until growing conditions “are right.” Having lost much of the corn crop, our neighbors are busy reassuring each other that “the bean crop is made in August”—but only if rains arrive. Unfortunately, there is little moisture predicted in the medium-term forecasts.

Worst hit of all have been the livestock producers. Pastures are toast, and watering holes and rivers are drying up. The sizeable creek that runs through our farm is now the tiniest of trickles. The likelihood of having to move the cows and calves is growing daily, and the question of whether our farm well will have enough capacity to supply both the animals and us is now a critical issue. The problems of cattle feeders are even more dire. Prices for fed cattle are down, and the extreme heat is taking its toll—quite literally. Fat cattle weighing 1,400 to 1,500 pounds do not gain weight well, nor do they even breathe well. Farmers who own the two operations nearest us report that they dare not sort and ship steers to market because of the heat. They each report having lost two animals from heat-related respiration problems, each animal valued at about $1,600. Moreover, even without heat losses, they are faced with extremely high feed costs. And high prices do not end with corn and soybean meal. 

Forage and hay prices have been even more affected by climate variability. The large round bales that weigh upwards of a ton and typically sell for $60 are now selling for $250! The price is partly driven up by truckers from Missouri and Arkansas, locations hit earlier and even more severely, coming to eastern Iowa to purchase forage. So tight is the forage market that farmers are baling grass from the Conservation Reserve (recently permitted by the government), waterways, and even ditches. Plants with any sort of green tint to them are being mowed and baled.

The talk among farmers is, as always, most interesting. About four miles from home is the small town of Waubeek—a tiny burg in a part of Iowa made famous by Grant Wood, best known for painting "American Gothic" and other scenes of the rural Midwest. Each morning at about 8:30, locals gather in a limestone building called (perhaps miscalled) a restaurant to have watery coffee and rolls, to trade stories, and to establish bragging rights on a variety of issues from yields, to prices, to number and sizes of tractors. Conversation over the years has always centered on the dreadful nature of weather, prices and the government, though this year there are nuances in the stories being told. They range from the very happy, “I sold a load of old-crop corn this morning for $8.14, the highest price in my whole life as a farmer;” to the “I walked my corn fields this morning. Where I got 220 bushels last year, I don’t think the crop will make 80 bushels this year.” No one at the table thought their corn crops would yield more than 120 bushels; and everyone noted that virtually all of those yields would be discounted in price because of low test weights.

Talk then turned to new seed varieties, mostly from Pioneer and Monsanto, which have transgenic drought resistance built into them. Bags (80,000 kernels) of seed—enough to plant about 2.5 aces—range in price from $300 to $400. There is hope, but not much confidence, that the new seeds will help compensate for the low rainfall. The farmers report that the companies, which are far from loved because their seed prices are perceived as being too high, are backing away from yield claims. The conversation also took up the pros and cons of “green” chopping the stalks and immature corn to make silage. It turns out that this strategy is fraught with nitrate problems arising mainly from this year’s weather. The laughing summary comment was “anyway, we have way too much standing corn and way too few cattle to make that solution work.” Laughter continued as they talked about those 10,000 “crazy folks” who were riding bicycles across Iowa in the heat as part of the annual ride across Iowa.

Most surprising to me is the fact that the conversations are not gloomier. What I had not realized was the increased role that crop insurance was playing in most farmers' operations. Upon checking, I found that about 90 percent of the land is covered by a joint public/private insurance program, in which private companies offer insurance, with the government and farmers sharing in the premia. Many of these policies provide for both price and yield protection and cover losses in excess of 25 percent. For most crop farmers, therefore, the year 2012 will not be good, but it will be far from a disaster. 

But there were also some truly downcast faces at morning coffee. Livestock producers curse the cost of corn and the fact that they are getting little program assistance from the government. They choose their words carefully, but the livestock producers would also be delighted if somehow the ethanol industry went away. Similarly, crop farmers who have no crop insurance, and /or who contracted forward to sell what they expected would be a large harvest at modest prices, now are facing the costly prospect of having to buy high priced corn on the market to fulfill their delivery contracts.

After more assurances to each other that “the bean crop is made in August,” conversations turned to the future. Will marketing be totally messed up because of low flows in the Mississippi River and disrupted barge traffic? What, they ask, will the heat and drought do to land prices? The local area has seen a rapid run-up in land prices, a 32 percent increase between 2011 and 2012, with land sales for the county now averaging $8,000 per acre for medium quality land. And what will happen to cash rents for farmland now averaging $270 per acre? Most of all they ask, what will happen to weather in 2013?  Most of them can see their way through one year of really difficult weather; their primary concern is what happens if there are two 2012s in a row. Opinion divides on whether next year will return to normal, or whether 2012 is a good predictor of many years to come.

One thing of course never changes: their views of the government that range from dismay to disgust. The fact that the current Congress seems unable to pass either a new farm bill or a special bill covering drought, especially for livestock producers, is the subject for special derision. 

Meanwhile, everyone watches the markets, waits, and prays for rain.

Indonesia’s rainforests are among the world’s most extensive and biologically diverse environments. They are also among the most threatened. An increasing population and growing economy have led to rapid development. Logging, mining, colonization, and subsistence activities have all contributed to deforestation.

But the recent and booming expansion of palm oil plantations could cause the most harm to the rainforests, and is generating considerable concern and debate among industry leaders, environmental campaigners and scholars.

Joanne Gaskell in Sumatra, Indonesia.

Joanne Gaskell has dedicated her graduate studies to better understanding the tradeoffs and demand side of this dilemma. The doctoral candidate and researcher for the Center on Food Security and the Environment recently defended her thesis before an audience of advisers, friends, and fellow students from Stanford’s Emmett Interdisciplinary Program in Environment and Resources (E-IPER).

“You need to understand the economics and politics of palm oil demand if you want to understand the regional dynamics of oil production and associated environmental impacts,” Gaskell said. “From a conservation perspective, this is as important as understanding supply since demand patterns affect the incentives facing producers.”

In the past 25 years, palm oil has become the world’s leading source of vegetable oil. Indonesia is currently the world’s top palm oil producer. Since the 1980s total land area planted to palm oil has increased by over 2,100 percent growing to 4.6 million hectares – the equivalent of six Yosemite National Parks. Plantation growth has predominately occurred on deforested native rainforest with major implications for global carbon emissions and biodiversity.

And Gaskell projects the demand for palm oil for food will double by 2035, requiring more than 8 million new hectares for production. Plantation expansion has already begun in Kalimantan and Papua, and Indonesian companies are now looking beyond Indonesia for new investment opportunities. Just as palm oil production spread from Malaysia to Indonesia to escape rising land and labor costs, palm oil production is now spreading to parts of Africa, where the crop is native, and Latin America.

Demand for palm oil is quickly rising in Asian markets – notably India and China – where it is used for cooking and industrial processes. Indonesia has the highest level of per capita palm oil consumption, resulting not just from population and income growth, but also from government policies that promoted the use of palm oil instead of coconut cooking oil.

“Taste preferences and investment more than international prices have driven palm oil demand in Indonesia,” Gaskell said.

Biodiesel production and speculation have also contributed to the rapid expansion of palm oil plantations, but to a lesser extent. Gaskell said the success of palm-based biodiesel hinges on remaining cheaper than petroleum diesel and whether governments subsidize the industry, as the United States has done with corn and soybean farmers.

Interest in palm oil as a cleaner burning fuel is already waning in Europe and the United States. The short-term carbon costs of deforesting and preparing land, fertilizing and managing the crops, then processing and transporting them outweigh the benefits. This is particularly true when palm oil plantations are grown on peat soils that release potent methane gas when drained for growing palm oil.

Palm oil seedlings ready for planting. Photo credit: Wakx/flikr

Growing plantations on ‘degraded land’, land that had been previously converted for other purposes, such as logging, is a much more favorable option over forest expansion. In theory, there is an abundance of degraded areas that can be profitably converted into palm oil plantations. But there are hurdles: The areas are not necessarily contiguous, making it difficult to organize a plantation, and ownership rights in these areas are often contested.

Palm oil’s considerable productivity and profitability offers wealth and development where help is most needed. Half of Indonesia’s population lives on less than $2 a day. But along with the negative ecological impacts, palm oil production increases competition for land and could exacerbate inequalities between the rich and the poor.

Gaskell believes sustainable expansion strategies are possible, and says smaller mills and different processing technologies are needed so production is affordable in scaled-down, more distributed systems.

Palm oil plantation in Cigudeg, Indonesia. Photo credit:  Achmad Rabin Taim/flickr

Her work is feeding an international conversation about palm oil production. The Roundtable on Sustainable Palm Oil (RSPO), an international organization of producers, distributors, conservationists and other stakeholders, has promoted better ways of managing palm oil production and encouraging transparency and dialogue among corporate players, governments, and NGOs.

“We need to protect the most ecologically valuable landscapes from agricultural production and we need to make sure that, in areas where palm oil agriculture occurs, there are ecological management strategies in place such as riparian buffers, wildlife corridors, and treatment systems for mill effluent,” she said. “From a food security perspective, small palm oil producers, who might be giving up rice production or the production of other food staples, need strategies to minimize the economic risk associated with fluctuating global palm oil prices.” 

In the first decade of the 21^st century, global production of ethanol and biodiesel increased nearly tenfold. If that trend continues, says Rosamond L. Naylor, director of Stanford University’s Center on Food Security and the Environment, national biofuels policies will have an increasingly powerful impact on food prices, food security, energy security, and rural incomes in the developing world.

During a two-hour symposium held on the Stanford campus last Wednesday, Naylor addressed the role of biofuels in global food price volatility and the implications of biofuels development in rural Africa and Asia. Although she acknowledged that global income and population growth have contributed to increased demand for biofuels, she also emphasized “the unbelievable dominance of policy” in driving current trends.

“The main part of this that I think is so significant is the use of mandates,” Naylor said. “Policies such as the United States’ Renewable Fuels Standard (RFS), which sets a national target of using 15 billion gallons of corn-based ethanol per year by 2015, have reshaped price and supply dynamics in both food and fuel markets. “

“When you think about the fact that the US provides half of the world’s corn…the fact that we’re using so much in our gas tanks, biofuels really is changing the nature of global markets,” Naylor said. Policies that fix demand for corn from the ethanol market, she explained, have a destabilizing effect on corn prices, especially in the face of supply shortages.

“When you have mandates you have a quantity that you’re absolutely insisting you use, regardless of the price,” she said. “That inelastic demand leads to more volatile prices with supply shocks.”

Because of the substitutability of basic food commodities, Naylor said, price volatility in the corn market has far-reaching consequences. “Prices of corn ripple through all of the world food economy markets…it affects the demand and supply of wheat and rice and soy, and other things,” she explained. And for poor households in the developing world, she said, “it has big income effects…when you’re spending 70 to 80 percent of your budget on food, you’re going to be hurt the most.”

However, Naylor also noted that biofuel mandates in the developed world could provide valuable market opportunities for developing-country farmers.

In rural Africa and Asia, she said, farmers “see the US having a big mandate, EU having a big mandate, and they think, can they supply into that mandated need?”

For now, it seems, the answer is “maybe.” In Africa, for example, efforts are underway to increase the use of jatropha – an inedible, drought-resistant shrub – as a biofuel feedstock. But Naylor said that low yields and high labor costs are likely to severely limit the economic returns from jatropha-based biofuels.

And in marginal growing conditions, the use of more conventional feedstocks is often restricted by resource availability. In India, for example, where almost all sugarcane is grown under irrigated conditions, expansion of sugarcane area to supply the ethanol market could lead to water shortages. Even if these countries can make large-scale biofuel production economically viable, the benefits to poor farmers could vary widely depending on the structure of the market.

“The implications of biofuel development are going to be quite different,” Naylor said, “depending on the organization of the value chain.”

Dr. Siwa Msangi, a Senior Research Fellow with the International Food Policy Research Institute, agreed. In comments following Naylor’s presentation, Msangi said biofuel development contributes most effectively to rural income growth “when you can have vertical integration…people all along the value chain have to be making money.”

Msangi also noted that commodity price increases, including those driven by ethanol mandates, could benefit small farmers if they are controlled and predictable. “Sharp, fast, sudden price rises – those are the ones that are bad for consumers,” he explained. But prices rises “can be positive…especially if those price rises can be gradual and sustained over time, because that gives people the opportunity to mobilize resources to make use of higher returns.” For example, small farmers at the local or national level can increase their production of crops in high demand for biofuel production.

The emerging connections between agriculture and energy markets are complex, Msangi said, but can be advantageous if handled carefully. “If there are good opportunities for agribusiness, I think there’s a case for taking them,” he said, “but also for being aware of the context and all the issues.”

This was the eighth talk in FSE’s Global Food Policy and Food Security Symposium Series. 

Stanford opened a research and education center at China’s Peking University, strengthening an already close academic bond and building a stronger tie to one of the world’s fastest-growing countries.

“Globalization is the defining characteristic of the 21^st Century,” Stanford President John Hennessy said during an opening ceremony on March 21 that drew hundreds of academics, donors and government officials to the opening of the Stanford Center at Peking University.

“It is increasingly important for our students to understand what it means to be citizens of the world, to bring a more international perspective, to be able to communicate with others from different backgrounds or with different expertise,” he said. “Both Peking University and Stanford are stepping up to that challenge and moving to become more global institutions to address the challenges of this century. This new center exemplifies that.”

"It is increasingly important for our students to understand what it means to be citizens of the world, to bring a more international perspective, to be able to communicate with others from different backgrounds or with different expertise," Stanford President John Hennessy said at the opening of SCPKU.

FSI faculty already doing research in China showcased their work during conferences held in conjunction with the opening of the center.

The new building is available to the several hundred Stanford scholars studying, researching and conducting university activities in China each year. It also offers the opportunity for Stanford faculty to work with academics from Peking University and other universities throughout China.

“Stanford is one of the most valued partners of Peking University,” PKU President Zhou Qifeng said. “The center will create more opportunities through collaborative research, student and faculty exchange programs, joint teaching and other activities.”

The center makes Stanford the first American university to construct a building for its use on a major Chinese university campus. SCPKU will allow current educational programs to expand, but will not grant Stanford degrees.

The center’s distinctiveness is reflected in the building that houses it – a 36,000-square-foot structure that combines Chinese and Western architecture. The courtyard building was constructed with interlocking mortise-and-tenon joinery – a classic Chinese technique that eliminates the need for nails or glue.

Hand-painted scenes depicting typical Chinese landscapes and views from Stanford’s campus are featured on the building beams. At the point where beams and columns meet, artists added Chinese symbols for teaching, learning and scholarship.

State-of-the-art classrooms, conference rooms and meeting spaces fill out the two floors below the courtyard. Skylights, interior gardens and a reflecting pool invoke a natural setting.

The melding of styles brings as much substance as symbolism.

The SCPKU opening drew hundreds of academics, donors and government officials.

“There are virtually no problems in the world today that cannot be solved if the people – the scientists and engineers, and the business people – of the United States and China join together,” Locke said. “And this center will help make that happen.”

Stanford’s relationship with China dates to the late 1970s, when the university began accepting Chinese graduate students. Students from China have accounted for the largest number of Stanford’s foreign graduate students for the past decade, with about 600 enrolled last year.

Those scholars are part of the 160,000 Chinese students studying in American colleges and universities every year, a number that eclipses the 16,000 American students taking classes in China, Locke said.

“We have to know much more about each other’s cultures, customs, traditions, values and languages so we can build a mutual trust and understanding that will allow us to face all of the challenges we face,” he said. “The way to build that trust starts with building people-to-people interactions. It starts with more student exchanges…and it most certainly starts with the Stanford center here at Peking University.”

Over the last 30 years, Stanford’s bond with Peking University has grown from an initial collaboration between the schools’ Asian language departments to a wide range of joint research and academic exchanges.

In 2004, Stanford’s undergraduate study abroad and internship programs began at Peking University. The study abroad program continues to be managed by the Bing Overseas Studies Program, which hosts roughly 60 undergraduates every year on the Peking University campus.  The internship programs are coordinated by the International, Comparative, and Area Studies Program.

The overseas studies program offers a broad curriculum taught by a Stanford faculty-in-residence who spends a 10-week quarter with the students in Beijing.  A range of topical and language courses are taught by Peking University faculty.

“The new center at PKU allows us to continue this dynamic program in a new environment designed to encourage interaction across disciplines and with graduate students and faculty from both universities,” said Irene Kennedy, the program’s executive director. “We also plan to continue supporting and developing interactions between Stanford and PKU students through language partnering and by including Chinese students in classes taught by Stanford faculty and associated field trips.”

Jean Oi and Andrew Walder – both senior fellows at the Freeman Spogli Institute – began building on that relationship in 2006 by envisioning a way to bolster Stanford research, teaching, training and outreach activities in China. Their ideas led to the creation of SCPKU and several new academic programs, including a law school exchange program.

The $7 million project is funded entirely from gifts made to the Stanford International Initiative. The lead donor was the charitable foundation of the family of Chien Lee, a Hong Kong-based private investor and Stanford emeritus trustee who received his bachelor's and master's degrees from the university in 1975 and his MBA from the Graduate School of Business four years later.

The SCPKU building is named for his father, the late Lee Jung Sen, who attended Peking University in the mid-1930s when it was Yenching University. Lee’s mother, Leatrice Lowe Lee, graduated from Stanford in 1945.

A bust of Lee Jung Sen sits in SCPKU’s courtyard, one level above the modern facility and surrounded by the more familiar, traditional Chinese architecture.

The demand for food, feed and fuel will continue to rise as the world population grows and becomes more affluent. Meeting this demand will be especially challenging because of global warming, say climate experts, and the impacts of climate variability could make food markets even more volatile, adds Rosamond L. Naylor, professor of environmental Earth system science at Stanford University.

Naylor led a symposium on the compound effects of climate change and climate variability on food security at the annual meeting of the American Association for the Advancement of Science (AAAS) February 17th.

The symposium focused on two examples of climate variability: changes in growing-season temperature extremes beyond the range observed in the historical record, and changes in the El Niño–Southern Oscillation (ENSO) phenomenon – the most energetic form of year-to-year climate variability known.

Panelist David S. Battisti, professor of atmospheric sciences at the University of Washington, addressed key challenges in assessing the impact of extreme temperatures in coming decades. According to Battisti, global warming models forcast that temperature variability will increase as the average temperature warms, greatly compounding the likelihood of extreme heat and droughts. Unfortunately, these models typically have too much temperature variability in their simulations of present-day climate, he said. Battisti's talk focused on the cause of these modeling biases and their impact on climate forecasting.

Panelist Daniel J. Vimont, associate professor of atmospheric and oceanic sciences at the University of Wisconsin-Madison, discussed the impacts of El Niño in a warmer world. ENSO impacts can be severe in regions in and surrounding the tropical Pacific, and can extend around the globe, he said. ENSO variability – its return period and intensity – are very sensitive to changes in mean conditions in the tropical Pacific, he added, but these conditions are notoriously difficult to simulate using the present generation of global climate models. Vimont presented results from the linear ocean atmosphere model (LOAM), a new scientific tool for estimating global warming's impact on ENSO variability.

Naylor addressed the impacts of climate on global markets for major staple commodities, which are already under pressure from increased population-, income-, and energy-driven demands. She outlined the potential effects of climate variability on regional trade patterns, price volatility, policy responses and human welfare. 

Mark Shwartz is the Communications/Writer at Precourt Institute for Energy at Stanford University.

In Kenya, 11 million people suffer from malnourishment. Twenty percent of children younger than five are underweight, and nearly one in three are below normal height. In a typical day, the average Kenyan consumes barely half as many calories as the average American.

But Kenya – and other underfed countries throughout Sub-Saharan Africa – have more than enough land to grow the food needed for their hungry populations.

The juxtaposition of food deprivation and land abundance boils down to a failure of national agriculture policies, says Thom Jayne, professor of international development at Michigan State University. Governments haven’t helped small farmers acquire rights to uncultivated land or use the land they own more productively, he said.

Speaking earlier this month at a symposium organized by the Center on Food Security and the Environment, Jayne said lifting African farmers out of poverty will require a new development approach.

The focus, he said, should be on increasing smallholder output and putting idle land to work in the hands of the rural poor.

Much of Sub-Saharan Africa’s fertile land, Jayne explained, falls under the ownership of state governments or wealthy investors who leave large tracts of land unplanted.

Meanwhile, population density in many rural areas exceeds the estimated carrying capacity for rainfed agriculture – approximately 500 persons per square kilometer, according to the U.N. Food and Agriculture Organization. Above this density threshold, farm sizes become so small, farming becomes economically unsustainable.

“As farm size shrinks, it’s increasingly difficult to produce a surplus,” Jayne said. “As it’s difficult to produce a surplus, it becomes difficult to finance investments in fertilizer and other inputs that could help you intensify.”

Agricultural development policies, Jayne said, have exacerbated these problems. One Zambian fertilizer subsidy program, for example, delivered support payments to over 50 percent of farms greater than five hectares in size – but only reached 14 percent of farmers whose holdings measured one hectare or smaller.

“This was a poverty reduction program that was targeted to large farms,” Jayne said. “Where’re the allocations to R&D appropriate to one hectare farms, tsetse fly control, vet services, all the things that are going to make that one hectare farm more productive?”

He stressed that investments in small farms could reduce poverty.

“Fifty to seventy percent of the population in these countries is engaged in agriculture,” he said. “There aren’t very many levers to reduce poverty and get growth processes going except to focus on the activities that that fifty to seventy percent are primarily engaged in.”

Smallholder-based growth strategies delivered stunning results in Green Revolution-era India – while large-farm strategies in Latin American countries have largely failed to alleviate rural poverty, he said.

Symposium commentator Byerlee, a rural policy expert and former lead economist for the World Bank, agreed with Jayne. In particular, Byerlee expressed skepticism about the benefit of large land investments by foreign agricultural interests.

“The social impacts aren’t going to be very much,” he said of the large-scale mechanized farming operations favored by foreign investors.

“They don’t create many jobs,” he said. “That’s really what we should be focusing on in terms of poverty reduction – job creation.”

Byerlee also stressed the need to formalize Sub-Saharan Africa’s land tenure systems. Currently, he said, about eighty percent of Africa’s land is titled informally under “customary” rights.

“When you have this population pressure, and on top of that you have commercial pressures coming in from investors, this system is just not going to stand up,” he said. “If you had better functioning land markets, it could reduce the transaction costs for investors, allow smallholders to access land, and provide an exit strategy for people at the bottom end.”

Jayne suggested reforms and new policies should include mechanisms to help small farmers gain access to unused fertile land. He called for comprehensive audits of land resources in Sub-Saharan African nations, a tax on uncultivated arable acreage, and a transparent public auction to distribute idle state lands to small farmers.

Additionally, he said, governments can help by improving infrastructure in remote rural areas and clearing fertile land of pests – such as tsetse flies – that threaten crops and human health.

But whatever particular policies they choose to pursue, Jayne said, African governments cannot afford to ignore the problems associated with inequitable land distribution and low smallholder agricultural productivity and. Failure to implement broad-based, smallholder-focused growth strategies will result in “major missed opportunities to reduce poverty in Sub-Saharan Africa,” he said.

This was the seventh talk in FSE's Global Food Policy and Food Security Symposium Series.