Preeti Ahuja Practice Manager, Agriculture & Food Global Practice
. ARGENTINA IN THE GLOBAL FOOD SYSTEM – Challenges and Opportunities Looking Ahead June 2019 Preeti Ahuja Practice Manager Agriculture & Food Global Practice
OUTLINE OF THE PRESENTATION 1. Global Food System Challenges 2. Argentina’s Agriculture: Role and Contributions 3. Argentina in the Global Food System: Challenges and Opportunities 4. The Way Forward: SOME OVERARCHING IDEAS 3
GLOBAL FOOD SYSTEM CHALLENGES 4
WHAT DOES THE FUTURE ASK OF THE GLOBAL FOOD SYSTEM? 2050 Food gap Land gap Emissions gap ¼ GHG emissions are Agriculture land 9.8B people from agriculture & required land-use change Need to reduce ~600 M ha. Increasing food Twice the size of demand by 60- 70% 70% of AGR GHG emissions to keep India global warming below 2 °C
GLOBAL FOOD SYSTEM OPPORTUNITIES Emissions gap Food gap Land gap Food demand growth Efficient land management Emissions reduction opportunity opportunity opportunity To increase food quality, To adopt Climate Smart To enhanced Natural production, incomes Agriculture & Integrated Resources Management & and employment Risk Management leverage technologies for techniques better land use and management
GLOBAL SUSTAINABLE & INCLUSIVE DEVELOPMENT Sustainable Development Goals: World Bank Twin Goals: Reducing the food, land and emission gaps, among other factors, are vital for achieving the SDGs Ending Extreme Poverty From 18% to 3% of world population by 2030 Boosting Shared Prosperity Increased incomes for bottom 40% of every country 7
VISION How can LAC help contribute to adequately and nutritiously feeding nearly 10 billion people and billions more of livestock by the year 2050 in ways that help combat poverty , modernize the sector for better jobs, and allow the world to meet climate goals , and reduce pressures on the environment ?
ARGENTINA’S AGRICULTURE: ROLE AND CONTRIBUTIONS 9
ARGENTINA’S AGRICULTURE: A SNAPSHOT • ~7% GDP (primary production) & ~23% (agro-processing goods) • >50% of total exports • 17% of total employment • 2nd grain producer in Latin America and Caribbean • 4th soybean, maize & citrus producer • 2nd wheat producer in LAC/ 7th globally 10
STRATEGIC IMPORTANCE OF ARGENTINA’S AGRIFOOD SYSTEMS • 1 of every 6 private jobs • 1 of every 10$Ar GDP • 1 of every 10$Ar tax collection • 7 of every 10USD total exports 11 Source: Fundación agropecuaria para el desarrollo de argentina
ARGENTINA’S WHEAT PRODUCTION Wheat yields, 2014 The 2018/2019 season likely to be strong : Over 6 million hectares of wheat Over 19 million tons of wheat Strong and growing global demand But how to repeat this strong performance in the face of challenges around climate and other risks, and productivity gaps? 12 Source: Bolsa de Cereales
ARGENTINA IN THE GLOBAL FOOD SYSTEM : CHALLENGES AND OPPORTUNITIES 13
CHALLENGE # 1 : COMPETITIVENESS AND MARKETS Opportunity to increase productivity and value addition • 50% total exports are agricultural products, but… • Just 3 products account for ~70% of total agricultural exports, and • Only 35% of total agricultural exports are processed products (10% in the case of wheat) Top wheat world producers Exported value (Mlns USD) Agri-food chains participation in total exports (%) 14 Source: ARGENTRIGO & Secretaria de Agroindustria & Banco de Cereales
CHALLENGE # 2 : INCLUSIVE FOOD SYSTEMS Opportunity to address duality of rural populations and lagging Argentina’s Family Farmers map regions • 67% small-scale farmers live in rural areas • 300.000 family farms = 75.5% total farms • 50% of food’s consumption is produced by smallholders Types of Food Produced by small-scale farmers 88% Cuya - Mandioca 62% Yerba Mate 44 % Cotton 22 % Sugar Cane 41% Vegetables in field 30% Beekeeping 49% Porcine 17 % Fruits Source: Censo 2002 15
CHALLENGE # 3 : RESILIENCE TO CLIMATE CHANGE Opportunity to strengthen resilience to risks: extreme weather; climate change 1. Forgone revenues: USD5 Bln in harvest loss (Infobae 2018) USD 1.12 Bln loss in tax collection (Infobae 2018) 2. Emergency response expenditures Spend through the Agriculture Emergency Fund (FONEDA) 3. Lack of investment in CSA technologies and inputs ( e.g. soils, silvopastoral systems and seeds; storage solutions; irrigation; c urrent irrigated area ~5% total cultivated areas) Estimated economic losses due to extreme climate events Source: Infobae
THE WAY FORWARD: SOME OVERARCHING IDEAS 17
AGRI-FOOD SYSTEMS: NEXT LEAP FORWARD RISK RESILIENCE (INCL. CLIMATE CHANGE) Actors COMPETITIVENESS & MARKETS INCLUSION • • • Support enabling environment for Enable small-holders coordination (e.g. Support Adopt Integrated Risk Management • investments in agri-food production, to productive alliances) for access to inputs, Strengthen strategic approach, systems and PUBLIC diversification & value addition infrastructure and markets institutions • • • Ensure access to transparent, Increase institutional procurement of food Promote investment in natural capital • integrated information/research Support inclusion of lagging regions and management and Climate Smart Agriculture (production, markets, weather) vulnerable populations , as well as women and practices and technologies • • Develop concrete, strategic youth Enable development of a diversified, • development and implementation Support human capital development competitive agri-food system plans backed by comprehensive diagnostics for key value chains • Conducive Policy & Governance PUBLIC • Public Infrastructure investments (transport, water management systems, energy) CROSS-CUTTING • Foster Technology Diffusion and Innovation (digitalization, big data, AI, bio-physical) • • • Further development of inputs and Financial options for small-scale agricultural Financial instruments to mitigate climate or services (seeds, nutrients, storage, cold investments market shocks (emphasis on small-scale PRIVATE • chain, processing, financial services, Improve inputs and processing, logistics and farmers) • insurance, guarantees) commercialization services to small-scale Technology packages for climate resilience and • Improve efficiencies to reduce costs agriculture, Productive Alliances inputs (droughts resistant seeds) • Innovations & bio-digital technology services (market information, trading, drought resistant cultivars) • Financial solutions for longer term investments
ARGENTINA: BOOSTING ADVANTAGES AND SEIZING OPPORTUNITIES Argentina - Comparative advantages • Rich in natural capital assets, technological uptake, youth engagement in sector • Well positioned in the world’s agricultural sector Argentina –The road ahead 1- Increase COMPETITIVENESS in the overall FOOD SYSTEM and exploit MARKET OPPORTUNITIES 2-Boost INCLUSION, focus on LAGGING REGIONS & VULNERABLE PEOPLE 3- Improve RESILIENCE to CLIMATE CHANGE & OTHER SHOCKS
CURRENT WORLD BANK OPERATIONS IN ARGENTINA • Proyecto de Inclusión Socio-Económica en Áreas Rurales (PISEAR) - US$52.5 MILLION Objective : to increase the socio-economic inclusion of rural poor (small producers, indigenous people, and rural workers) Scope : investment in 10 provinces Results: 104 rural investment subprojects approved (101 in implementation) and 13 productive alliances approved (11 in implementation) • Gestión Integral de los Riesgos en el Sistema Agroindustrial Rural (GIRSAR) - US$150 MILLION Objective : to improve the management of agricultural risks by eligible beneficiaries and selected public institutions. Scope : investments in 8 to 12 provinces Projected results: 10 provincial integrated agricultural risk management plans • Food Loss & Waste Knowledge Product Food Lost and Waste Study on solutions for efficiency and competitiveness of the agricultural sector – e.g., analyzing the case of apples and pears in Argentina. Cost-benefit of reducing FLW; potential to improve productivity and profitability through the reduction of food loss
Agriculture & Food Global Practice, World Bank June 2019
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