Your Excellency, President of the Republic of Indonesia
Chairman, Indonesian Chamber of Commerce and Industry
Honorable Ministers, Excellencies
Ladies and Gentlemen
It is a great pleasure and honour for me to be with you this morning. On behalf of the FAO Director General Dr José Graziano da Silva and my own behalf, I wish to express my gratitude for the invitation from the Government of Indonesia to speak at this important event.
The topic of my speech today is the World Food Outlook and Challenges for the Year 2025 and Beyond. The world has been producing enough food for everyone and there have been substantial gains in per capita calorie consumption. However, there hasn’t yet sufficient progress in expanding the access to adequate, safe and nutritious food to maintain a healthy and active life for all people, at all times, as desired by the world leaders at the World Food Summit in 1996. As a result, one out of 7.5 people is suffering from chronic hunger on the planet. The situation is more critical in Sub Sahara Africa and South Asia.
In recent past, eradicating poverty and hunger has become more complex and challenging in the context of growing inequity, income inequality, environmental degradation, negative consequence of climate changes and the world economy sliding into recession. For the poor, who spend as much as 70 percent of their household budgets on food, high and volatile food prices have made their situation worse. In deed, a large number of social and political unrests seen recently in Africa and Middle East were originated from direct or indirect consequences of volatile food prices. The FAO’s food price index rose to 238 points at its highest level ever – exactly one year ago still remain over 200 points and two times higher than 10 years ago. Affordable and stable food prices are critical for our success in eradicating hunger.
The question before us in this challenging time is what is the food requirement to meet the needs of growing population and what is the outlook and future challenges in food production to ensure food security for our children and future generations. FAO has been looking at this question analytically for many years and produced a series of perspective studies projecting the state of world food and agriculture in the future. The last one looks at year 2050.
In summary, FAO’s baseline projections indicate that it should be possible to meet the food and feed demand of the projected world population of year 2050, making reasonable assumptions about growth in yields and in land and water use. Achieving the projected increase in production, however, will require several significant challenges to be met, and may have side-effects that need to be addressed.
I wish to share more details, starting from global and regional context. In a world of 7 billion people, FAO estimates that a total of 925 million people were undernourished in 2010, which was slightly reduced if compared with 1.02 billion in 2009, but remained higher than pre-2008 level. WHO estimates that 10 million children die before their 5th birthday every year, and that one third of these deaths are associated with under nutrition. Micronutrient malnutrition or “hidden hunger” is affecting around 2 billion people (nearly 30% of the world population) with serious public health consequences. On the other hand, we must not forget that there are about 1 billion people, nearly equal number of chronic hunger, are suffering from over weight and diet related non-communicable diseases such as diabetes, as a result of excess food intake.
In Asia and the Pacific region, despite of the fastest economic growth, there were 578 million undernourished people in 2010, which represented 62 percent of the world total. Ninety one (91) percent of them live in just 6 countries (India, China, Pakistan, Bangladesh, Indonesia, and Philippines). Despite of our continued efforts, the absolute numbers remain almost the same level of 20 years ago. The achievement of MDG goal No.1 to halve the proportion of extreme hunger from 20 percent in base year (1990) to 10 percent in 2015 become a real big challenge, if consider the rate remained at 16 percent in 2010.
I now wish to move focus on the future. The world economy is expected to grow further. This will be led by the fast growth in developing countries with an estimated annual GDP growth rate of 5-6 percent towards 2030. The world population is projected to reach 9.2 billion by 2050. The annual population growth rate is projected to slow down from present level of 1.2 percent to less than 0.5 percent in 2050. Sixty (60) percent of world population would live in urban cities in 2030 and nearly 70 percent by 2050.
On the demand side, per capita food consumption per day has reached 2770 kcal/person/day in 2005/07, while it was only of 2370 kcal/person/day at the beginning of the 1970s. There are identical differences among the regions. In our most recent (provisional) projections, the world average consumption is expected to be just over 3000 kcal/person/day in 2050.
In this context, per capita consumption in East Asia is expected to approach saturation levels, reaching 3225 kcal/person/day in 2050. Indonesia is expected to be about 11 percent below the regional average, reaching 2862 kcal/person/day in 2050. In Indonesia, rice consumption is expected to reach 54 million tonnes, corresponding to a 28 percent increase on the level of 2005-07. This, however, corresponds to a marginal decrease in per capita terms, of 1.6 percent. Meat consumption, instead, is expected to increase by a factor of 1.7, reaching 27.6 Kg per capita per year.
Despite these gains, our 2050 projections indicate that in several countries there will be only small reductions in the number of undernourished. World prevalence of undernourishment is expected to reach 4.1 percent in 2050. Sub-Saharan Africa would still be the area with the highest prevalence; while the highest absolute number of undernourished population is expected to be in Southern Asia, as it happens today. Therefore, food insecurity is set to remain a significant challenge, especially in some countries and regions. This may happen especially in the economies that will remain dominated by agriculture, where food consumption is likely to remain largely influenced by local production; and the balance between population and agricultural resources is set to worsen. In East Asia, instead, according to FAO baseline projections the number undernourished is expected to decline to 62 million people, or 2.8 percent of the expected population.
On the other hand, there would be changes in food composition of diet. As a group, developing countries may pass from the 2619 kcal of 2005-07 to almost 3000 kcal in 2050. These changes will imply a switch towards energy-dense diets, high in saturated fat, sugar and salt, and low in unrefined carbohydrates. Combined with lifestyle changes driven by urbanization, such transitions are likely to be accompanied by increase in diet-related chronic non-communicable diseases. A relevant policy challenge, in this area, is orienting consumers toward healthy diets and lifestyles, allowing to reduce the social and economic burden of food-related diseases. In East and South Asia, diets will continue to be dominated by cereals, which are projected to account for about 50 percent of the total caloric intake in 2050. The role of meats, vegetable oils and sugar is expected to increase considerably.
Let us now turn to the supply side. Given the highlighted expected evolution of consumption, how much more should be produced in 2050? A lot, in absolute terms; and this is another significant challenge. According to our most recent projections, in 2050, compared to 2005/07, the world would produce every year one more billion tons of cereals; 196 more million tons of meats; 660 more million tons of roots and tubers; 172 more million tons of soybeans; 429 more million tons of fruits; 365 more million tons of vegetables.
Overall, world agricultural production would need to increase by about 60 percent between 2005/07 and 2050. However, if we compare these expected developments with the past, we realize that this is a slow down: in terms of growth rates, as world agricultural production has recorded an increase of about 170 percent between 1961-63 and 2005-07, largely contributed by green revolution.
Do we have enough land to support the projected increase in production? FAO projections indicate that the most likely – not necessarily desirable! – outcome will be an intensification of production. At world level, about 91 percent of the growth in production is expected to derive from increases in yields, while 4.3 percent would originate from area expansion and another 4.5 percent from an increase in crop intensity. In developing countries, 12 percent of the projected growth in crop production would come from an increase in arable land, while higher cropping intensities would account for 3 percent and about 85 percent would originate from increased yields. The projected intensification will carry increased environmental pressure that needs to be addressed through improved and more eco-friendly and climate-smart cultivation techniques.
According to FAOSTAT, in 2005/07 about 12 percent of the globe’s land surface was used for crop production, corresponding to little more than 1.5 billion ha. In 2050 arable land is expected to expand by some 70 million ha, or less than 5 percent. Such expansion would happen mainly in Sub-Saharan Africa, Latin America and part of Asia. Most of the projected increase in arable land use is concentrated in a small number of developing countries, including Brazil, Indonesia, Nigeria, Ethiopia. The size of arable land in some of Asian counties such as China and Vietnam started to decline.
In Indonesia, arable land is expected to expand substantially, by about 5.6 million ha between 2005-07 and 2050, mainly as a consequence of increases in areas planted with maize, oil palm, coconuts and, to a lower extent, rubber. In developed countries and in the Middle East/North Africa there would be no expansion, where pressure on the land is already considerable. Combating further land degradation is thus another significant challenge that we need to face.
Do we have enough water to support the projected increase in production? Historically irrigation has been a major determinant of increased production and productivity. Agriculture uses about 70 percent of the water resources of the planet. Projections in this area are particularly difficult; they reflect scattered information on irrigation and potentials for its expansion. However, if we aim to increase agricultural production by 60 percent towards 2050, increase in demand for water use for agriculture is predicted and the pressure on water resources would be increased considerably. Therefore, another major challenge will be improving irrigation technology and increasing the efficiency of irrigation systems. Competition with non-agricultural uses of water also needs to be addressed through a more integrated management of this key resource.
According to recent FAO projections, the world total area equipped for irrigation is expected to expand by about 20 million ha or 6 percent between 2005/07 and 2050. This constitutes a slow-down compared to what was observed in the past: areas equipped for irrigation increased at an average rate of 1.8 percent per year between 1961 and 2007. The projected increase implies an annual growth of 0.1 percent between 2005-07 and 2050.
I mentioned earlier, about 91 percent of the global growth in production is expected to derive from increases in yields. Historically, a large part of yield gains has been achieved by plant breeding and narrowing the gap between average farm yields and the yields obtained in experimental fields. This gap can be closed by applying improved agronomic techniques. However, closing yields gaps is not a matter of just transferring technologies. Farmers are likely to adopt technologies only if these are economically viable: yield gaps can only be closed if there is an economic incentive to do so. On the other hand, annual yield growth of cereals is expected to slow down considerably in next 40 years. At the global level, the projected yield growth is half of the rate of growth observed over the historical period: 0.8 percent per year is the expected growth between 2005/07 and 2050, against a 1.7 percent per year between 1961 and 2007. This slowdown is a gradual process which has been under way for some decades, and is expected to continue in the future. In absolute terms, however, yields will still need increase to meet demand.
So far, just by considering the long term outlook for demand and supply we highlighted a number of major challenges that world agriculture has to face. We can easily identify more of them if we consider the uncertainties that surround this outlook. Two elements are particularly important: one is climate change, and the other is the development of biofuels.
According to most credited scientists, key climate variables are likely to change over the coming decades. Global mean surface temperatures are projected to increase between 1.8°C and 4.0°C by 2100. This entails higher carbon dioxide concentrations, changes in the pattern of precipitation, increased weeds, pests and diseases. Impacts on agricultural production are likely to be unevenly distributed. Broadly speaking, the Southern hemisphere may suffer damages in terms of declining yields and greater frequency of extreme droughts and floods. The estimated aggregated negative impact on African agricultural output ranges from 15 percent to 30 percent. This scenario is likely to adversely affect food security. And developing countries are expected to increase their food imports under climate change scenarios. In the Northern hemisphere, instead, higher temperatures may benefit agriculture, expanding potentially suitable crop areas and yields.
In Asia and the pacific region, negative consequences of climate change are seen as a frequent occurrence of natural disasters such as floods and droughts which has doubled in past 10 years. These have affected food production and price stability.
A second major uncertainty in the long-term outlook is the development of biofuels. With current conversion technology, and at the current level of energy prices, the use of agricultural feedstock in the bioenergy production is economically viable in few countries. This is the case, for instance, of ethanol produced from sugarcane in Brazil. Should these market conditions continue to prevail in the future, the impact of biofuel development in agricultural markets may remain limited.
However, pro-biofuel policies may be intensified, given their environmental content, especially in the framework of the measures aimed at mitigating climate change. This may result in a further expansion of the bio-energy market. Moreover, should energy prices increase significantly, biofuel production may quickly attract increasing use of agricultural products and put the prices under pressure. Energy commodities, in fact, are far more price elastic than food commodities. A typical example is maize price which increased tremendously in accordance with the hike of crude oil prices and corresponding bio-ethanol price. Then, it affected the maize price for animal feeds which led the increase in meat prices.
On the other hand, bio-energy crops compete with food crops on the use of land and water which are already scarce and hence threat food security. A comprehensive food security and bio-energy policy is needed to promote appropriate land use planning and to ensure that food security would not be compromised by the excess expansion of bio-fuel production.
For the 183 coastal countries of the world, where approximately 50 percent of the global population resides, a healthy marine environment is a critical component of a viable economy and food security. Marine and ocean resources are the basis of the Blue Economy, and play a vital role in the South Pacific, Caribbean and Indian Ocean region’s livelihoods, food security, and economy.
In these areas, a Green Economy needs to be combined with the Blue Economy based on sustainable management of oceans and coasts, the protection of marine ecosystems, and the conservation of marine resources. Action is needed to manage overfishing and destructive fishing practices and increase the resilience of marine ecosystems to the impacts of climate change and ocean acidification.
To conclude, what is the policy perspective that we can draw from the long term picture of world food and agriculture? FAO projections indicate that resources may be sufficient for 9.2 billion people, provided that considerable investment is devoted to increase productivity and to improve the management of resources. If this is a credible outlook, policy implications point to the need to:
- promote agricultural research and increase in agricultural productivity, in order to ease the balance between demand and supply;
- harmonize policy between food security and bio-energy development, and strengthen land use planning;
- improve and disseminate technologies that reduce carbon emissions and the environmental impact of agriculture;
- promote agricultural adaptation to climate changes and mitigate risks;
- improve safety nets and risk management, in order to address the increased variability of quantities and prices;
- promote Blue Economy towards sustainable management of oceans and coasts, protection of marine ecosystems, and coastal livelihood development.
- improve the functioning of markets and price transmission, in order to ensure that scarcity signals are properly orienting producers and consumers.
Moreover, an increasing number of countries will be called upon facing malnutrition phenomena arising from high food intake and the switch towards more fat and livestock products. Orienting consumer choices towards reducing the health consequences of such changes is also likely to become a higher priority for policy makers.
Overall resource management needs to improve substantially, especially for land and water. This is an even more pressing demand, if we consider the perspective and the uncertainty surrounding climate change that may place additional burden especially on the poorest and most vulnerable population groups. Needless to say, a wide and strengthened international policy co-ordination is a prerequisite for these challenges to be met in a world of increasing economic interdependence.
I strongly believe Indonesia will face these emerging challenges domestically and ensure sustainable food security to its people through sound policies and programmes that accelerate production sustainably and create employment and opportunities for the small farmers and the poor in general. Besides this, it will contribute to regional and global food security through leadership, cooperation and understanding.
In this regard I would like to mention a Letter of Intent signed on 29 March 2009 between FAO and the Indonesian Government on South-South Cooperation providing the basis for the transfer of Indonesian expertise in agriculture to other countries and beyond. Indonesia is the only Asian country, after China that has signed a Letter of Intent on South-South Cooperation with FAO. We intend to contact our Indonesian counterparts to discuss how to operationalize the Letter of Intent into action and support to a country to start with. We also look forward for opportunities to learning good practices and policy and programmatic lessons from Indonesia’s national programmes for food security and nutrition security, such as “Desa Mandiri Pangan” (Village Food Resilience), for further upscaling in Indonesia and/or replication in other countries with appropriate adjustment under South-South Cooperation.
Finally, I wish to express my gratitude once again for inviting FAO for this important gethering and look forward to Indonesia and FAO working together for a better food and nutrition security situation in the world as well as in this region. I have the honor and privilege to assure FAO’s full cooperation and support to Indonesia in this undertaking.