As Climate change could cause 29% spike in cereal prices: leaked UN report, because Food supply chains will get disrupted globally, the study warns. Report to be officially released in August informs Nitin Sethi, of New Delhi in this article of Business Standard.
As far as the MENA region is concerned, food has always been in short supply, but does this mean it would get worse.
The report will be put before all member countries of the UN Framework Convention and once it gets their stamp of approval by consensus it will be made public on August 8. Photo: Representative Image
“The rate and geographic extent of global land and freshwater resources over recent decades is unprecedented in human history,” a report authored by UN’s panel of scientists from across the world on climate change is set to inform. Business Standard reviewed a leaked copy of the draft report sent to the governments of 197 countries. The report warns that as the global temperatures rise, the stress on land resources and its productivity is set to rise.
The report by the UN Inter-governmental panel on climate change, is called, “IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse gas fluxes in terrestrial ecosystems.”
The report will be put before all member countries of the UN Framework Convention and once it gets their stamp of approval by consensus it will be made public on August 8.
The authors of the report, gleaning through state-of-art science research have concluded that, “Observed climate change is already affecting the four pillars of food security – availability, access, utilization, and stability – through increased temperatures, changing precipitation patterns, and greater frequency of some extreme events.”
Continuing climate change is expected to further “create additional stresses on land systems exacerbating risks related to desertification, land degradation and food security,” the report says.
In a significant finding for countries such as India, the authors say, at global warming of 2° Celsius, the population of drylands exposed and vulnerable to water stress, increased drought intensity and habitat degradation could be as high as 522 million. Scientists conclude that at current levels of greenhouse gas emission reductions committed by the countries under Paris Agreement there is a good likelihood for the planet to breach the 2° Celsius temperature rise barrier.
“In drylands, desertification and climate change are projected to cause further reduction in crop and livestock productivity, modify the composition of plant species and reduce biological diversity,” research endorsed by the scientific panel shows.
Half of the vulnerable population due to the climate-change induced aridity would be in South Asia. The degradation of land due to climate change is already leading to consequent shaving off of the global economy, the scientific panel notes. “There are increasingly negative effects on GDP from impacts on land-based values and ecosystem service as temperature increases,” the report says. But, it notes that, at the regional level, the impacts would vary. “Compound extreme events, such as a heat wave within a drought or drought followed by extreme rainfall, will decrease gross primary productivity of lands, the authors warn
The impact on agriculture in higher latitudes is recorded to be different than in lower ones, such as one covering India. “Increasing temperature are affecting agricultural productivity in higher latitudes, raising yields of some crops such as maize, cotton, wheat, sugar beets, while in lower-latitude regions yields of crops such as maize, wheat and barley are declining.
Modelling results, that the scientific panel reviewed, show that cereal prices could rise by up to 29 per cent in 2050 due to climate change, which would impact consumers globally through higher food prices, though the impact would vary by regions. The stability of food supply is expected to decrease as the magnitude and frequency of extreme events caused by climate change increases, disrupting food chains globally.
The increase in global temperatures and consequent climate change is already affecting the productivity of livestock, which is one a main-stay of Indian rural economy. The authors conclude, “Observed impacts in pastoral systems include pasture declines, lower animal growth rates and productivity, damaged reproductive functions, increased pests and diseases, and loss of biodiversity.”
At the same time coastal economies are already suffering an impact as well. “Coastal erosion is affecting new regions as a result of interacting human drivers and climate change such as sea-level rise and impacts of changing cyclone paths,” though the scientists hold a low level confidence in the scientific research that concludes the impact of climate change on cyclone paths.
Egypt’s 95% of populations live in the Nile delta and along its banks. The most heavily populated country of the MENA region that is like all countries of the Middle East going through rapid urbanisation has an issue of settlement of its population’s habitable space and yet not compromises its vital agricultural lands. Despite the successive governments trying to encourage the move towards some greened lands of the surrounding desert but in vain; fast going encroachments on Egypt’s state lands spread in those relatively small but habitable lands. Employment, higher standards of life, etc. were obviously difficult to get over, up until recently where the newly “voted in” president Al Sisi has embarked on a mission of clearing the rare and so-called State lands of its squatting occupants.
CAIRO — Egyptian President Abdel Fattah al-Sisi recently expressed his anger at the illegal acquisition of state lands and issued a strong warning to those encroaching upon these lands. “It is no longer acceptable for anyone in Egypt to encroach upon state lands. It is no longer acceptable for people to take lands that belong to the state,” he said in a May 14 speech delivered during his visit to Qena province to inaugurate a set of projects.
Sisi tasked the armed forces and the police with putting an end to the illegal seizure of state lands and fully reclaim all the usurped state territories by force by May 31. “We are all for new investment projects and for facilitating the work of investors. As a state, we are trying to organize the process so that it does not spin out of control. It is not acceptable and will never be acceptable for people to [illegally] acquire such lands.”
During a June 7 conference to reveal the results of the campaign to retrieve state lands, Prime Minister Sherif Ismail said the government, with the help of its executive agencies, had managed to reverse 69% of the infringement cases so far. He added that during the next phase, the governors will play a more active role and government efforts will continue, with the aim to protect state lands from encroachment and prevent any new violations, while continuing to remove any previous violations.
This was not the first time that Sisi sought to confront the illegal use of state lands across the republic. On Feb. 18, Sisi issued a presidential decree to form a committee tasked with retrieving seized public land in all possible legal ways as well as drafting reports on the factors that led to their seizure, in order to propose solutions aimed at preventing future cases.
Encroachments on state lands spread like wildfire in Egypt following the January 25 Revolution in 2011, as the government failed to fight the phenomenon amid a state of chaos and the breakdown of the state apparatus. Those involved include businessmen and farmers.
The committee — headed by the assistant to the president of the Republic for National and Strategic Projects, Ibrahim Mahlab — includes Minister of Local Development Ahmed Zaki Badr; representatives of the ministries of justice, defense and interior; and representatives of the General Intelligence, the Administrative Control and the Public Funds Investigation departments within the Ministry of Interior, the Notaries Union of Egypt and the Egyptian Survey Authority.
This committee, however, failed to achieve the objective for which it was established, as the government and the executive bodies were not so cooperative, Majdi Malak — member of the Committee on Agriculture in the House of Representatives — told Al-Monitor.
Malak added, “President Sisi ordered the armed forces and police to get rid of all kinds of encroachments on the state lands due to the committee’s failure to deal with the issue. There are thousands of acres of agricultural lands that have been seized for the establishment of resorts and luxury compounds. This led to the accumulation of irregularities and to the rise of a complicated process to reverse them.”
“After the Jan. 25, 2011, revolution and the ensuing chaos and insecurity that plagued the country, Egyptian governorates witnessed several encroachments on agricultural lands for construction purposes, as the state stood silent without taking a decisive position against the aggressors,” he said.
On April 30, an official report from the Ministry of Agriculture’s Central Committee for Land Protection pointed out that the violations of fertile agricultural land since the January 25 Revolution until April 23, 2017, amounted to 1,690,734 cases, covering an area estimated at 75,216 acres. The report pointed out that only 377,490 cases covering 21,204 acres have been reversed.
Meanwhile, one of the most recent scientific studies of the government’s National Authority for Remote Sensing and Space Sciences revealed June 1, 2015, through satellite images analyzed by its scientists, that the rate of urban encroachment on agricultural land has increased by 23% annually in recent years in several governorates, thus resulting in a shortage in agricultural lands.
Scientists in the said authority predicted that by 2050, Egypt will lose about 17% of the delta area as a result of indiscriminate urbanization.
On Dec. 19, 2013, Ayman Farid Abu Hadid, then-Minister of Agriculture, pointed out in television statements that the agricultural areas in Egypt did not exceed 8.5 million acres, and he said that the surface is very small compared to the large population. He stressed that the area needed by Egypt to cover the needs of its population goes up to 18 million acres.
The Central Agency for Public Mobilization and Statistics said April 5 that Egypt’s population reached 92.75 million at home and 8 million people abroad. Thus, it added, Egypt has officially surpassed 100 million people, and the population growth rate reached 2.4%.
In a government effort to increase the size of agricultural lands, Prime Minister Ismail’s government announced on Feb. 1, 2016, the start of the new Egyptian Countryside Development Company activities to reclaim 1.5 million acres with a capital of 8 billion Egyptian pounds ($441.9 million).
The spokesman for the Ministry of Agriculture, Hamed Abdel Dayem, told Al-Monitor that Sisi’s initiative to reclaim all the usurped state land significantly contributed to confronting the mafia looting state lands, and several provinces succeeded over the past few days in completely recovering agricultural land from looters.
Maj. Gen. Khaled Said, the governor of al-Sharqiya province, announced May 26 that 736 cases of infringement covering 48,112 acres in al-Sharqiya have been eliminated.
Meanwhile, Dakahlia Gov. Ahmed al-Sharaoui announced May 20 that the governorate got rid of 90% of the cases of infringement on state property.
“Agricultural land is a national security issue, and its protection is a national duty because constructions on agricultural lands threaten food insecurity, especially in light of Egypt’s food needs, dependence on imports and constantly increasing population,” Abdel Dayem said.
A study by the National Center for Agricultural Research, a government agency, revealed on July 18, 2016, that Egypt imported 65% of its food needs, including 9 million tons of wheat, 6 million tons of corn and 1 million tons of soybean.
“I expect the state to declare soon that it has reclaimed all of its territory, has reversed all of the related encroachments and will prevent any further infringements on its territory, especially after the adoption of a new agriculture law,” Abdel Dayem concluded.
The Egyptian parliament is currently discussing several bills to amend the current Agriculture Law and the provisions related to the penalties of building on agricultural land. Each bill includes different penalties for building on agricultural land ranging from fines of up to 5 million Egyptian pounds ($275,520) to up to five years’ imprisonment. The parliament is seeking to increase the penalty in order to deter violators. In addition, some of the bills call for the establishment of a new police under the Ministry of the Interior under the name of the Agricultural Land Protection Police, which has an internal building and is responsible for eliminating any encroachment on agricultural lands as soon as it occurs.
Under the current law, offenders face a penalty of imprisonment and a fine ranging from 10,000 to 50,000 Egyptian pounds ($551 to $2,755), depending on the number of irregularities. The parliament’s Constitutional and Legislative Affairs Committee is still discussing the draft laws for approval.
Yesterday May 1st, 2017, we would have liked to ponder on Israel’s current housing situation. The idea was spurred by Al Jazeera that on April 28th had on their show animated by one of their sharpest Mehdi Hassan looking at the very topic but in a different way asked Israeli diplomat Dani Dayan “ Have settlements killed the two-state solution? “
This latter did not waste time defending settlement building and / or housing units development as undertaken and / or allowed by the Israeli government despite all the noise that this is engendering. This made one wonder if all of the above was the result of what is presently on-going in not far from the West Bank territories where most of those above developments usually take place, but as it were in Israel proper. According to a RealtyToday citing a recent Bloomberg report on the matter and like for all countries developed and developing alike, lack of sufficient and / or suitable housing as elaborated on in this article sounded as if coming as a surprise of some sort to all.
Here it is with thanks to the authors and publishers :
Israel is facing a housing crisis with home prices continuing in the upward trend and home inventory lacking 100,000 apartments.
As reported by Bloomberg, the housing market could determine how the Israeli politicians would fare in the upcoming election in the country. The publication noted that while the country is home to top scientists and engineers, the housing problem can seem to be solved.
House prices, which have more than doubled in less than a decade, resulted in a mass protest back in 2011. Last year, Israel’s home prices rose 7.8 percent, largely driven by the government’s low benchmark rate. The average home price in the country stands at $360,000.
There is a need to increase the country’s housing supply, but building data doesn’t seem good. Last year, housing starts rose 3.9 percent, but completion rate dropped 2.8 percent.
Finance Minister Moshe Kahlon has some measures to introduce but analysts are skeptical they would generated results in the near future. While waiting for the long-term policies to bring results, Kahlon introduced some short-term measures such as the increase in taxes for investors. These, however, fail to address the core issues, said Michael Sarel, a former Finance Ministry chief economist.
“Raising taxes on investors simply reduces the number of rental apartments, which hurts the middle and lower classes as well,” he told Bloomberg.
The government recently issued a call for bids from foreign construction companies. According to Globes, six firms will be chosen and each will be allowed to bring up to 1,000 workers to Israel. The call aims to boost construction of residential properties in the country and consequently close the gap between supply and demand. The shortage in housing supply has been driving housing prices in recent years.
An article written by Jonathan Woetzel, Jaana Remes, Kevin Coles, and Mekala Krishnan and published on the McKinsey is reproduced here for its clear view on this very common issue of the Urban World and the demographic challenge. It goes without saying that cities in the MENA region would also be concerned about the same issues highlighted in here.
The days of easy growth in the world’s cities are over, and how they respond to demographic shifts will influence their prosperity.
Cities have powered the world economy for centuries. Large cities generate about 75 percent of global GDP today and will generate 86 percent of worldwide GDP growth between 2015 and 2030. Population growth has been the crucial driver of cities’ GDP growth, accounting for 58 percent of it among large cities between 2000 and 2012. Rising per capita income contributed the other 42 percent.
However, the world’s cities are facing more challenging demographics, and the days of easy growth are over. In the past, city economies expanded largely because their populations were increasing due to high birthrates and mass migration from rural areas. Both of those sources of population growth are now diminishing. Global population growth is slowing because of declining fertility rates and aging. At the same time, rural-to-urban migration is running its course and plateauing in many regions. How cities adjust to the new reality is important not only for their prospects but also for those of nations that will continue to rely on thriving cities for rising prosperity.
The double hit of slowing population growth and plateauing urbanization caused population to decline in 6 percent of the world’s largest cities—with the largest share in developed economies—between 2000 and 2015. From 2015 to 2025, we expect population to decline in 17 percent of large cities in developed regions and in 8 percent of all large cities. In the developed world, the urban population in Canada and the United States grew at a compound annual rate of 2.2 percent between 1950 and 1970 but dropped to only 1.0 percent from 2010 to 2015. That rate is expected to persist until 2025 and then to decline even further, to 0.8 percent from 2025 to 2035. Although the demographic shift is more advanced in developed regions, it also affects emerging regions.
This is a challenge to the economic prospects of cities that marks a distinct break from recent history. The past 50 years were truly unusual in demographic terms, as large cohorts of working-age populations fueled the growth of cities and nations. In the new demographic era, we are likely to see a much more fragmented urban landscape, with pockets of robust expansion but also areas of stagnant and declining populations. Cities’ growth prospects will reflect very different demographic footprints and dynamics shaped by their local birth and death rates, net domestic migration, and net international migration.
In a new report, Urban World: Meeting the demographic challenges, the McKinsey Global Institute (MGI) compares three developed countries and regions to understand the implications (exhibit):
Japan. Japan’s challenges are the most acute of the three developed regions. Urban-population growth in Japan was 0.9 percent between 1990 and 2015, and only 0.6 percent between 2010 and 2015. Urban population is projected to be flat going forward. Some urban hubs continue to grow, while most surrounding cities are aging and experiencing slow or negative population growth. The populations of Nagoya and Tokyo are still growing, largely reflecting inward domestic migration; the city of Sapporo, however, has relatively slow population growth because of negative homegrown growth and relatively low inward domestic migration. The population of almost 40 percent of Japan’s cities declined between 2012 and 2015.
United States. Overall urban-population growth in the United States is projected to decline slightly, from 1.3 percent between 1990 and 2015 to 1.0 percent over the next decade. The United States benefits from a higher fertility rate and greater migration than Japan and Western Europe. The US urban system is much more diversified and more dynamic than that of either Japan or Western Europe, with many large cities, a broad swath of middleweight cities, and many “niche” cities. And there is significant differentiation among cities that vary in their demographic footprints and dynamics. Raleigh, North Carolina, and Houston, Texas, are experiencing high population growth driven by all three factors. In contrast, Pittsburgh, Pennsylvania, and Cleveland, Ohio, are seeing their populations flatten or even shrink, and both have had to rethink their visions of the city.
Western Europe. Urban-population growth in Western Europe was 0.7 percent annually between 1990 and 2015. It is projected to decline to 0.5 percent to 2025 and to 0.4 percent between 2025 and 2035. Like Japan and the United States, Western Europe is agingunevenly and is likely to experience more differentiation in the future. The capital cities of Berlin, London, Oslo, Paris, and Stockholm all have growing populations. However, many cities are already experiencing population decline. This includes cities in Germany (for example, Chemnitz, Gera, and Saarbrücken) and Italy (Genoa and Venice).
Jonathan Woetzel is a director of the McKinsey Global Institute, where Jaana Remes is a partner and Mekala Krishnanis a fellow; Kevin Coles is an alumnus of McKinsey’s Toronto office.
What path of development for the 2016 to 2030 Algeria ?
I would like to thank Mr Prime Minister for extending his kind invitation to me as an independent expert, to the Tripartite meeting of June 5th, 2016, where in its final resolution, it adopted the proposal of a follow-up Committee that I had already suggested back in November 2014 and which I recently renewed prior to the start of the tripartite. Algeria, Facing the fourth industrial revolution, and how to cope with its imminent upcoming, and during the meeting, the Prime Minister had a discourse of truth, avoiding both the free pessimism, as well as being lulled into complacency, reiterated that the country has, though subject to certain strict conditions, all potentialities out of the crisis.
We must nevertheless be aware of the seriousness of the situation: the cash-cow milking of SONATRACH days are over; I’ll stick to the growth model that engages the future of the country, hence its security.
1.– The growth model must clearly be the future challenge of Algeria which is to grasp the dialectical relationship between the progressive evolution of the State – annuity – market functions in the context of globalization, of the fourth industrial revolution and the new global environmental challenge. The rapport must be synchronized in time, by dated and precise quantification. It should not be based on a deterministic as if in linear vision and Algeria mastered all endogenous and external factors by offering a unique solution. As from my experience in international institutions, and as a universal rule, any realistic operational model, engaging the future of any country should provide decision-makers, and the society at large, assuming a social and political consensus, two to three scenarios, that depend on the evolution of different energy, economic, geostrategic mutations of a turbulent world.
Then, the model must, as a factor of adaptation to these changes, take into account the internal interactions between macroeconomic and macro-social frameworks, that themselves evolving through demographic pressure, atomisation of the family and the tribes, cultural impact of new technologies are shaping new behaviours. The purpose of the new governance, pillar of the new model of growth, must be to relieve all enterprise, be they public or private, local and / or international, without any distinction as stipulated in the new Constitution by the reform of the institutions (Decentralization with involvement of local actors), of the socio-educational system (improvement of the level of the knowledge-based economy), of the financial system (one-stop shops), and by the lifting of the constraint of land. Ultimately it is the rehabilitation of the competition, and moving far from any monopoly detrimental to both the economic sectors and all collective services through outsourcing.
All this implies a change in the functions of the State. According to the different budgetary constraints, (far from the Venezuelan type of populism that lead to bankruptcy of all State social welfare), it will be to reconcile economic efficiency with that of equity as per all economists whereas politicians speak of social justice policies. It is a social model that should be adapted to the new situations (Labour Code reconciling flexibility and fairness, with management of pension funds to prevent their implosion). This is by any mean unique to Algeria hence the importance of social dialogue.
2 – The repayment of the debt in advance which has been negotiated by the Ministry of Foreign Affairs, currently allows a margin of flexibility. Per the (central) Bank of Algeria, the exchange reserves of Algeria were $162.2 billion by end of 2010 against $148.9 billion at end of 2009, of $193.3 billion at end of June 2014, and $185,273 billion in late September 2014, $178.9 billion dollars at end of 2014 and $143 billion by end of 2015 and the Prime Minister announced that in May 2016 there is a relatively low external debt of $136 billion. Due to the weakness of internal productivity and production, the value of the Dinar is correlated with 70% of foreign exchange reserves that themselves come mainly from the production of hydrocarbons. At ten billion Dollars of foreign exchange reserves, the Central Bank would value the Dinar at more than DZD200 a Dollar with an impact on production costs on both public and private companies alike as well as on the purchasing power of households all outsourced from abroad. Therefore, it is a matter of maintaining the level of Reserves Exchange at a tolerable level. And this is how the issue of well-understood debt comes in where only competitive productive sectors should be concerned. You want to draw at any price on reserves could inevitably lead to a creeping devaluation of the Dinar. Thus for SONELGAZ, according to the APS as of June 5th, 2016, SONELGAZ Group is in negotiations with foreign creditors to contract credits for the purpose of financing its investment as, according to its CEO: “deficit is huge, we have no other choice but go to external debt. . . . For the moment, there are proposals, but we expect the financial conditions that will be certainly costly because despite the implementation of the bank overdraft bought back in late 2010 by the Treasury for DZD370 billion together with granted facilities for the financing of investment, the low income of the Group has generated, according to this assessment, a deficit of DZD98 billion, in 2015″.
Furthermore, we must be rather pragmatic avoiding decisions based on ideological reasons. Let us remember the Romanian communist experience, of one zero debt but an economy in ruins.
What is actually offered by those who are against targeted debt in case of the oil price fluctuating between $40 to $50 a barrel, the price of gas (more than 33% of the revenue of SONATRACH) being linked to oil, Algeria running as based on a more $90 per barrel in 2016 and as compared with the $110 of between 2014 and 2015 according to the IMF, but take advantage of the current low rates offered by the international institutions at levels fluctuating between 0 and 1% ?
3 – The economy war that some want to apply today, which was advocated in 1992 was a failure and has led the country right to the suspension of payments and rescheduling in 1994. Renewing this experience in 2016, would disconnect from both local and global realities those who defend the interests of Rentier annuity under false nationalist discourses can only lead to depletion within three years of foreign exchange reserves, and return to the IMF between 2018/2019 with implications of social and geostrategic tensions at the level of the region. While the Algerian people have been traumatized by recourse to the IMF in 1994, while it should analyse the bad policies of the time, the target debt is not synonymous with underdevelopment. It is the case of the majority of developed countries that are indebted but have powerful productive sectors, managing their debt with caution in order not to pass on this burden to future generations. Thus, the global public debt rises between 2014/2015 to almost $55,000 billion compared with $26,000 billion in 2005. If we add private debts, world debt reached even $100,000 billion according to a study recently published by the Bank of International Settlements.
By comparison, global GDP in 2013 was $74 000 billion. The American government debt rises in 2015 to $18,300 billion, or 110% of the national GDP. France’s debt has reached more than €2,100 billion by 2015 approaching 98% of GDP. The public debt of the Italy exceeds 135% of GDP, Portugal 130% and Japan 230% of GDP. According to international studies, household and corporate debt reached 270% of GDP in Ireland, 222% the Denmark. If one combines public and private borrowing, debt reached in 2015 approximately 270% of GDP.
4 – Four solutions are on offer for the Government of whose three are short term: either the budget deficit; reduce operating expenses and better manage expenditures by targeting segments with real added-value. In any case, avoid prestige investments, assuming also the easing of the ownership rule of 49 / 51% where in fact, Algeria bears all additional costs, or move towards a targeted external debt. But the lasting solution, and the great challenge in the medium and long terms is to have a strategic vision within the framework of the new global changes, in order to achieve both energy transition as well as the economic transition. One could not revive economic activity by a government Decree or neither through investment legislation without strategic objectives nor through State voluntarism of an obsolete vision of the rentier mentality.
The new model of growth must ensure the supremacy of the real sphere onto the financial sphere, by synchronizing these; whilst reconciling the economic dynamics and the social dynamics for the “right” distribution of national revenue between the different social strata, which cannot mean egalitarianism source of motivation.
Algeria is at a crossroads path. There is now some sort of consensus amongst international institutions and credible Algerian experts that Algeria is before the alternative of either deepening its structural reforms related to freedoms and social cohesion, or go straight back to the IMF (1).