Cover Image
close this book2020 Global Food Outlook - Trends, Alternates, and Choices (IFPRI, 2001, 28 p.)
View the document(introduction...)
View the documentPreface
View the documentIntroduction
View the documentRecent Trends in Food Supply and Demand
View the documentThe World to 2020: Baseline Scenario
View the documentAlternative Futures
View the documentThe Cost of Food Security
View the documentConclusion
View the documentNotes
View the documentBack Cover

The Cost of Food Security

What will it cost to generate the modest levels of agricultural production growth and human welfare improvement envisioned by the baseline scenario? Investments by developing countries in five key sectors - irrigation, rural roads, agricultural research, clean water provision, and education - are projected to total US$ 579 billion between 1997 and 2020 (Table 3). These investments are certainly feasible. To put them into context, if total government expenditures in the developing world stayed constant at 1997 levels, the investments foreseen in the baseline scenario would amount to just 3.6 percent of total government spending by developing countries from 1997 to 2020.

The economic burden represented by these investments, however, varies significantly from region to region. South Asia and Latin America will have the highest total expenditures, at US$ 148 billion and US$ 140 billion respectively. Whereas Latin America’s annual investment will represent just over 2 percent of its total 1997 government spending, South Asia’s investments will represent 11 percent. Sub-Saharan Africa’s investment requirements, totaling US$ 107 billion between 1997 and 2020, will represent a sizeable 18.6 percent of 1997 government spending on an annual basis. China will require investments totaling US$ 41 billion to achieve baseline results.

Of the five sectors, irrigation will account for 30 percent of the total investment, with agricultural research and rural roads accounting for another 21 percent each (Table 4). Education’s share in investment is the lowest, 13 percent. Rural road construction will be particularly important in Sub-Saharan Africa and Latin America, where it will represent 35 percent and 26 percent of total investment in the five investment sectors, respectively, because road construction will be required to support relatively rapid area and crop yield growth in these regions. Even with these relatively high levels of investment, Sub-Saharan Africa will still have an extremely underdeveloped transportation system, and further improvements will remain essential despite their expense.

Education will represent 27 percent of total investment expenditures in West Asia and North Africa under the baseline in large part because of rapid population growth. Clean water, representing 15 percent of total investment expenditures across the developing world, is projected to account for 35 percent of China’s expenditures between 1997 and 2020. Agricultural research will account for particularly large shares of China’s and West Asia and North Africa’s total investment expenditures at 35 percent and 31 percent, respectively, and relatively high shares of Southeast Asia’s and Latin America’s total investment expenditures at 27 percent and 26 percent, respectively. Public agricultural research will account for only 7 percent of Sub-Saharan Africa’s total investment expenditures between 1997 and 2020.

Table 3 - Total projected investments, baseline, optimistic, and pessimistic scenarios, 1997-2020

REGIONS

BASELINE

OPTIMISTIC

PESSIMISTIC

ANNUAL INVESTMENT AS % OF 1997 GOVERNMENT EXPENDITURE


Billions of US$

BASELINE

OPTIMISTIC

PESSIMISTIC





Percent

Latin America

140.4

179.1

75

2.2

2.9

1.2

West Asia/North Africa

80.5

1 12.3

52

2.8

3.9

1.8

Sub-Saharan Africa

106.9

133.3

63.9

18.6

23.2

1 1.1

South Asia

148.2

198.4

70.3

11.1

14.9

5.3


India

110.5

137.8

54.5

10.3

12.8

5.1

Southeast Asia

12.6

69.7

27.1

4.2

5.6

2.2


China

41.4

83.5

26.8

1.5

3.0

1.0

Developing Countries

578.9

802.4

322.7

3.6

4.9

2.0

SOURCE: Government expenditures are from World Bank 2000.

NOTE: In addition, international agricultural research expenditures by the CGIAR centers between 1997 and 2020 are projected to total US$ 9.65 billion for the baseline scenario, US$ 10.37 billion for the optimistic scenario, and US$ 7.53 billion for the pessimistic scenario.

Table 4 - Investments in food security under the baseline scenario, 1997-Z020

REGION/COUNTRY

IRRIGATION

RURAL ROADS

EDUCATION

CLEAN WATER

NATIONAL AGRICULTURAL RESEARCH

TOTAL INVESTMENTS


Billions of US Dollars

Latin America

44.8

36.7

12.1

9.8

37.0

140.4

West Asia/North Africa

17.9

7.3

21.5

8.5

25.3

80.5

Sub-Saharan Africa

28.1

37.0

15.7

17.3

8.0

106.9

South Asia

61.3

27.4

14.5

27.0

18.0

148.2


India

42.5

23.5

10.5

18.4

15.6

110.5

Southeast Asia

18.6

3.9

6.8

9.4

14.1

52.6


China

3.2

6.8

2.4

14.4

14.6

41.4

Developing countries

174.6

120.3

75.9

86.5

121.7

578.9

SOURCE: IFPRI IMPACT projections, June 2001.

Total investment under the pessimistic scenario declines to US$ 323 billion, a decline of 44 percent from the baseline level (Table 3). This savings comes at the cost of leaving an additional 46 million children malnourished in 2020. It is possible - indeed, it is necessary, for the health of millions of people - to do even better. The alternative future outlined in the previous section as the optimistic scenario can be achieved if governments and the private sector make a concerted effort to finance significantly larger investments. The optimistic scenario would require a total investment amounting to a 39 percent increase over baseline projections, or US$ 802 billion between 1997 and 2020.

In the optimistic scenario, the largest single additional investment is in irrigation. Spending on irrigation would almost double compared with the baseline, amounting to US$ 343 billion between 1997 and 2020. Spending on education would increase by 36 percent from the baseline scenario, with the increases concentrated in Latin America and Sub-Saharan Africa. Investment in rural roads would increase by an additional 7 percent, with larger increases projected in Sub-Saharan Africa.

The most important result of this simulation is not the exact distribution of the incremental investments among these different areas. Equally impressive results can be achieved by investing additional money in roads or agricultural research, for instance, rather than in irrigation. Indeed, in combating childhood malnutrition, investments in education and clean water are among the most important factors, in addition to efforts devoted narrowly toward increases in agricultural production.

What this simulation shows is that even this optimistic future can be achieved. It illustrates the total investments required to make significant, even dramatic, improvements in the world food situation. These investments represent less than 5 percent of government expenditures in the developing world over the next 20 years. This relatively modest level of commitment would increase food security for millions more people than the business-as-usual baseline scenario.