OPEC Fund Quarterly - 2023 Q2

The OPEC Fund for International Development OPEC FUND QUARTERLY 2 2023

Feeding a world of 10 billion people Agriculture 4.0

PLUS

Technology revolution Tradition revival OPEC Fund Development Forum

The OPEC Fund Quarterly is published four times a year by the OPEC Fund for International Development. The OPEC Fund works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The organization was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. The OPEC Fund Quarterly is available free. If you wish to be included on the distribution list, please contact us via opecfund.org . Back issues of the magazine can be found on our website. The contents of this publication do not necessarily reflect the official views of the OPEC Fund or its Member Countries. Any maps are for illustration purposes only and are not to be taken as accurate representations of borders. Editorial material may be freely reproduced, providing the OPEC Fund Quarterly is credited.

EXECUTIVE EDITOR Nadia Benamara EDITOR Axel Reiserer EDITORIAL TEAM Howard Hudson, Carlos Opitz, Basak Pamir, Nicholas K. Smith, Julia Zacharenkova PHOTOGRAPHS Abdullah Alipour Jeddi, Carlos Opitz (unless otherwise credited) PRODUCTION Iris Vittini Encarnacion DESIGN Robin Turton, More Tea Design Ltd PRINTED IN AUSTRIA Druckerei Odysseus This publication is printed on paper produced from responsibly managed forests. FRONT COVER ILLUSTRATION: Александра Гвардейце – stock.adobe.com; aliaksei_7799 – stock.adobe.com; Gvardgraph/Shutterstock.com; incomible – stock.adobe.com; Liu zishan/Shutterstock.com; topvectors – stock.adobe.com; Robin Turton

PUBLISHERS The OPEC Fund for International Development Parkring 8, A-1010 Vienna, Austria Tel: (+43-1) 51564-0 Fax: (+43-1) 51392-38 www.opecfund.org

CONTENTS 2/2023

4-41

AGRICULTURE 4.0

How can new technology solve the global hunger crisis? A Special Feature

23-25 New tech and old traditions: The fear over “Frankenfood” 26-29 Interview Sarada Krishnan, Crop Trust: “Ask not for a larger garden, but for finer seeds” 30-32 Interview Melissa Siegel, UNU: The asymmetry of migration 33-35 Interview Leni Kinzli, WFP: “Reaching people is half the struggle” 36-37 Back to basics: Rediscovering traditional farming for climate resilience 38-41 Guest contribution by Dina Saleh, IFAD: “A brighter future depends on getting

4-5

Editorial: New agriculture, new promise, new hope

26-29 Conserving genetic diversity

6-11 How to feed 10 billion people 12-15 System innovation: Root and branch revolutions? 16-19 Climate change & agriculture: “A double bind for food systems” 20-22 Interview Gerd Müller, UNIDO:

“Building bridges to facilitate technology, knowledge and investment transfer”

PHOTO: Scharfsinn/Shutterstock.com

20-22 Global food security innovation

30-32 The asymmetry of migration

our crisis response right today”

PHOTO: UNIDO

PHOTO: Manoej Paateel/Shutterstock.com

IN OTHER SECTIONS...

In the Field 42-43 The Shire Valley Transformation Program in Malawi

Development News 44-49

The OPEC Fund wins Arab Financial Institutions’ Development Award

New OPEC Fund projects in Bangladesh, Kyrgyz Republic, Madagascar, Paraguay, Uzbekistan Spotlight 50-53 OPEC Fund Development Forum 2023 Events 54-61 54-55 The OPEC Fund at the World Bank/IMF Spring Meetings

57 58

SEforALL and UNCDF workshop Asian Development Bank Annual Meeting

59 Islamic Development Bank Annual Meeting 60-61 Inter-American Development Bank Annual Meeting OPEC Fund 62 Vienna City Marathon marks its 40th anniversary

PHOTO: SVTP.GOV.MW

EDITORIAL

FEED THE WORLD

Dear reader,

The world is nowhere near to achieving the Sustainable Development Goals (SDGs). Mahmoud Mohieldin, the United Nations Special Envoy on Financing the 2030 Agenda, told the OPEC Fund Development Forum in June: “Less than 15 percent of the SDGs are being achieved, 50 percent are off track and the rest are suffering from regression or U-turns.” (Read more about the OPEC Fund event on page 50) The warning is particularly serious when it comes to existential questions such as SDG 2, also known under the banner “Zero Hunger”. As reported in the previous issue of our magazine, progress made in earlier decades has lately been reversed and the number of people who do not know where their next meal is coming from has increased sharply to almost 830 million today. This would make them the third largest nation in the world behind India (1,428 million) and China (1,425 million) and far ahead of the United States (339 million). After realizing how serious and multifaceted the challenge is we started looking into ways to feed a soaring global population under conditions where climate change takes its toll in front of our eyes: Rising temperatures, extreme weather events in rapidly increasing frequency and severity,

desertification, marine plastic pollution – the list is long and growing longer by the day. But there is hope, and it is coming from an unexpected place: 12,000 years ago agriculture stood at the cradle of civilization. Mastering the cultivation of soil and the husbandry of animals were the first steps towards today’s high-tech societies – and perhaps the first example of a “system innovation”. Nowadays, the very latest developments such as Artificial Intelligence, robotics, synthetic biology, gene editing, blockchain, the Internet of Things, 3D printing and many more are revolutionizing agriculture in its entirety. There are still many hurdles, ranging from the giant investment needs to the social acceptance of technologies, which are often met with concern or suspicion as they are seen as manipulating the genetic makeup of “creation”. There is a huge – and necessary – ethical debate to be had. But what is beyond doubt is that the train has left the station. According to the US stock exchange Nasdaq, the global market for agriculture technology (AgTech) is forecast to grow by nearly 20 percent annually, rising to US$32.5 billion by 2027. While spending is falling on traditional forms of farming, start-ups are attracting billions in new funding.

New technology will be essential to feed a global population that is forecast to reach 10 billion by 2050. However, it will only succeed if it is embedded in and delivered through an integrated approach. “System innovation” is the key concept here and it is motivated by the realization that system-wide changes are necessary to make economies socially, economically and environmentally sustainable. See page 12 for how this approach can be applied to agriculture and truly feed the world. Innovation is not only the keyword for the sector, it is also its watchword. As we are finding out, agriculture is both one of the main causes and one of the main victims of climate change. About a third of global greenhouse gas emissions come from our food systems and agricultural products. Ireland’s recent announcement that it was considering culling 200,000 cows at the expense of US$640 million in order to cut emissions was a stark reminder of how serious the situation is. At the same time the World Bank warns of dramatic consequences of climate-induced crop failures (see page 16). Some are seeking solutions via alternative approaches. We portrait the Fukuoka Agriculture Method (see page 36) which combines simplicity,

PHOTO: arrowsmith2/Shutterstock.com

There is hope... The very latest

natural processes and sustainability. The method has inspired a revival of organic farming around the world and we share one concrete example from the central Anatolian province Çankırı in Türkiye. Its credo is: “A different way of agriculture is possible.” While we usually see agriculture as the embodiment of conservatism and traditional ways of living, the opposite may actually be true: The current tech developments in the sector are already its fourth revolution. The third revolution is only two generations old, emerging in the 1950s and 1960s with large-scale mechanization, mass deployment of chemical fertilizers and increases in crop yields of over 40 percent. It can be argued that in many respects we have not yet digested the

fallout of Agriculture 3.0 as we are entering Agriculture 4.0 full steam. As we embark on this transition, we are proud and thankful to present prominent contributors such as UNIDO Director General Gerd Müller, Senior Research Scientist Andy Hall, Professor of Migration Studies Melissa Siegel, as well as Sarada Krishnan, Director of Programs at the Crop Trust, Leni Kinzli, Head of Communications at the World Food Programme Sudan, and Dina Saleh, Regional Director at the International Fund for Agricultural Development, who are joining us in this edition in search of the most effective and sustainable ways to feed the world. We wish you a satisfying read.

developments such as Artificial Intelligence, robotics, synthetic biology, gene editing, blockchain, the Internet of Things and 3D printing are revolutionizing agriculture in its entirety.

Axel Reiserer, Editor

SPECIAL FEATURE AGRICULTURE 4.0 CAN TECHNOLOGY SOLVE THE GLOBAL HUNGER CRISIS? AN EXAMINATION

W hile the world needs more food, the amount of arable land is decreasing due to soil exhaustion and the impacts of climate change. Rising temperatures and falling water levels enforce radical changes of cultivation patterns. New technology and alternative approaches could offer solutions we cannot afford not to examine – and to adopt.

GLOBAL OVERVIEW

HOW TO FEED 10 BILLION PEOPLE

Only a revolution can save us. Luckily, it is already underway. Technology, science and big data are radically changing agriculture around the world By Axel Reiserer, OPEC Fund

I n 2015, the international community committed itself to ending hunger in Sustainable Development Goal 2 of the 2030 Agenda under the banner “Zero Hunger”. Today, we are far off track from achieving this goal. According to the latest estimates by the UN World Food Programme (WFP), currently as many as 830 million people are unsure of where their next meal is coming from. More than 325 million people are facing high levels of food insecurity in 2023 – more than double the number in 2020. The reasons why “the world is hungrier than ever”, as the WFP puts it, are manifold: The number one driver

remains conflict, with 70 percent of the world’s hungry people living in areas afflicted by war and violence. Secondly, climate shocks destroy lives, crops and livelihoods and undermine people’s ability to feed themselves. The effects of the war in Ukraine have disrupted global fertilizer production and exports – reducing supplies, raising prices and threatening harvests. High fertilizer prices could turn the current food affordability crisis into a food availability crisis, with production of maize, rice, soybean and wheat all falling in 2022.

to increase food production. The world’s population is expected to grow to nearly 10 billion by 2050 and according to the UN Food and Agriculture Organization (FAO) 70 percent more food will be needed in 2050 than was produced in 2009, the

year FAO made its calculation. Experts have identified four main developments that are putting pressure on agriculture to meet the demands of the future: demographics, scarcity of natural resources, climate change and food waste.

As if this were not enough, the world is also facing huge demand

Global urbanization between 2020 and 2050 could lead to a net addition of 2.4 billion people to towns and

URBANIZATION

cities. Urbanization stimulates improvements in infrastructure, such as “cold chains” for food safety, and it tends to raise incomes, increasing demand for processed foods and animal-sourced food: Annual per capita meat consumption is projected to reach 45.3 kg per person in 2030, up from 36.4 kg in 1997-99, the World Health Organization (WHO) says. The consumption of food, however, comes at a price. Increased meat production has severe impacts on the environment: Raising livestock accounts for nearly 25 percent of all global water

While the world’s population is growing rapidly and putting existing food systems under huge

strain, the global diet is changing too as a result of shifting demographics: There is a growing demand for high-value animal protein, a trend that is being driven by urbanization and rising incomes. Urbanization also means that the

rural population is shrinking and ageing with severe implications for the workforce and production patterns.

use in agriculture and is responsible for 18 percent of human-caused greenhouse gas (GHG) emissions. It takes 4 kg of CO₂ to make 1 kg of red meat.

ILLUSTRATION: Hurca! – stock.adobe.com

SPECIAL FEATURE

Agriculture is one of the primary producers of GHG and emissions over the past 50 years have nearly doubled. Agriculture contributes the

According to FAO, 80 percent of the causes behind an unpredictable

largest share of global methane and nitrous oxide emissions. Projections suggest a further increase by 2050. Agriculture causes about 23 percent of human- caused GHG emissions and uses up to 92 percent of the world’s fresh water. One effect of climate change is a marked increase in severe weather events ranging from heavy floods to extended droughts with serious impacts on arable land and crop yields. Although higher temperatures can improve crop growth,

harvest for cereal crops in areas like Africa’s Sahel come down to climate variability. In other areas like Bangladesh and Viet Nam, coastal farmlands are often flooded by saltwater due to rising sea levels, which kills off rice crops. With half of Viet Nam’s national rice production centered

ILLUSTRATION: robu_s – stock.adobe.com

Climate change will affect every aspect of food production. Increasing variability of precipitation and more droughts and floods are likely to reduce yields. Climate change will contribute to existing long-term environmental problems such as groundwater depletion and soil degradation, which will affect food and agriculture production systems.

in the Mekong Delta, even a minor flood can have major implications.

studies have shown that crop yields decline significantly when daytime temperatures exceed a certain crop-specific level.

As climate change threatens to

reduce the amount of food produced, it also reduces the

The world’s farmland is becoming increasingly unsuitable for production with 25 percent of all farmland already rated as highly degraded and another 44 percent moderately or slightly degraded. Water resources are highly stressed, with more than 40 percent of the world’s rural population living in water-scarce areas. Land shortage has resulted in smaller farms, lower production per person and greater landlessness – all adding to rural poverty.

amount of food people can access. This simple supply-and-demand function has big impacts, leading to massive price spikes, which tend to hit the most vulnerable the hardest: According to the World Bank, people living in urban areas under the poverty line spend up to 75 percent of their budget on food alone.

Between 33 percent and 50 percent of all food produced globally is never eaten. The value of this wasted food is more than US$1 trillion, says the industry consultancy Oliver Wyman.

To put that into perspective: US food waste represents 1.3 percent of total GDP. Food waste is a massive market inefficiency. At the same time 830 million people go to bed hungry every night and each and every one of

them could be fed on less than a quarter of the food that is wasted in the USA and Europe each year.

Agriculture is a primary cause

of farmland degradation. Soil erosion is caused by overcutting of vegetation, while excessive use of fertilizers to restore yields is leading to an imbalance in nutrients. Approximately 80 percent of global deforestation is driven by agricultural firms, while clearing

Food waste is also bad for the environment. It takes a land mass larger than China to grow

food that ultimately goes uneaten – land that has been deforested, species that have

vegetation to make way for farmland is eroding water resources.

been driven to extinction, indigenous people that have been evicted from their land, soil that has been degraded – all to produce food that is then thrown away. In addition, food that is never eaten accounts for 25 percent of all fresh water consumption globally. The problem, however, does not stop there: When food waste goes to the landfill, which is where the vast majority of it ends up, it decomposes without access to oxygen and creates methane, which is 23 times

Growing populations exacerbate water security and scarcity: The investment necessary for irrigation and water management in developing countries is estimated at US$1 trillion until 2050, says the World Government Summit, a global platform. Meanwhile, a projected investment of US$160 billion will be necessary for soil conservation and food control.

more potent than carbon dioxide. If food waste were a nation, it would be the third- largest GHG emitter after China and the USA.

ILLUSTRATION: PlutusART – stock.adobe.com

Herbicides face stricter

regulation and in some cases are being banned

AGRICULTURE 4.0

G iven the challenges ahead there is no doubt: Business as usual will not work. Agriculture and food systems must change dramatically. The bad news is: This will be expensive, with FAO saying that US$265 billion is needed globally per year to end hunger. The good news is: The transformation has already begun. Over the past 50 years, the green revolution has enabled the production of cereal crops to triple with only a relatively small increase in the area of land under cultivation. The combine harvester ushered in an era of intensive, industrialized farming – and the world has come a long way since its invention in the 1830s. Today autonomous tractors, robots tending to crops and drones precisely dispersing inputs are a big leap forward from 20th century farms. Thanks to the Fourth Industrial Revolution that has supplied every industry with new technologies, agriculture too is undergoing revolutionary changes. Experts have dubbed it Agriculture 4.0 and three general trends have been identified, where technology is disrupting the industry: l Produce differently using new techniques. l Use new technologies to bring food production to consumers, increasing efficiencies in the food chain. l Incorporate cross-industry technologies and applications. While innovations create excitement about tech’s potential on the farm, they only scratch the surface of how technology can help to tackle pressing challenges like climate change and food supply constraints. With AgriTech investments at an all-time high, start-ups and major players are thinking about ways to apply innovations like Artificial Intelligence (AI) across the entire agricultural value chain. These emerging applications could shape the future of agriculture. AI can improve the earliest phase of the agricultural lifecycle: creating better crop inputs before seeds are in the ground. For example, the gene- editing technology CRISPR could help to design more resilient, high-yield seeds. Companies are applying AI to improve

CRISPR's speed and efficacy. Because many crops are so genetically complex – corn has 32,000 genes compared to 20,000 in humans – AI is invaluable in helping researchers understand the effects of editing multiple genes. Companies are already using these technologies to bump up crop yields while requiring less water and other inputs. Increasing yields of staple crops like corn, soy and wheat is critical. Meanwhile, combining DNA-encoded libraries and machine learning models is helping to identify new solutions to protect crops from pests. Tailored, resilient seeds and crop protection for the evolving growing needs of each region can create a more stable web of staple crops, lessening the dependency on global food supply chains and strengthening local resilience. Weed control is essential for improving crop yields, but it is getting increasingly difficult. Some weeds are becoming resistant to herbicides, which face stricter regulation and in some cases are being banned. When chemicals are required on crops, both tractor-towed systems and agribots could apply microdoses to the individual plants that require them, rather than spraying an entire field. Some trials have suggested microdosing could reduce the amount of herbicide being sprayed on a crop by 90 percent or more. Weeding is a chore that most farmers would happily hand to robots. But for a robot to do the job properly it must be able to distinguish a weed from what is being cultivated. That is becoming easier with advances in computer vision. Agribots, driverless tractors and other types of farm automation form an industry that is expected to grow at around 23 percent a year and to be worth more than US$20 billion by 2025, according to the research firm MarketsandMarkets. Self-contained agribots will have to compete with systems towed by smart tractors. Most modern tractors and combine harvesters can steer themselves across fields using satellite positioning and other sensors. Some tractors use digital maps of crops obtained by satellites and drones to highlight the places that require fertilizer or pesticides. Big tractor producers are

developing fully autonomous tractors. As climate change effects worsen, growers need detailed real-time data to determine exactly how and when to treat their crops. AI and machine learning improve crop yield prediction through real-time sensor data and visual analytics data from drones. The amount of data captured by smart sensors and drones providing real-time video streaming gives agricultural experts entirely new data sets they have never had access to before. It is now possible to combine in-ground sensor data of moisture, fertilizer and natural nutrient levels to analyze growth patterns for each crop over time. Machine learning can harvest massive data sets to give advice on how to optimize crop yields. Sensors are another valuable tool. They gather data pinpointing threats to a crop, like dehydration or disease, in a specific area – allowing a farmer to apply crop protection, water or nutrients only in that area. Depending on farmers’ circumstances and needs, they can select other technologies to pair sensors with. Connecting sensors with virtual reality can create crops’ “digital twins.” Growers can use these to access their fields from anywhere and make informed decisions based on real-time data. Using sensor data to inform precision spraying of safe, effective crop protection can produce higher yields of healthier crops. In precision agriculture, real-time weather forecasting helps farmers with day-to-day decisions on when and how much to irrigate, fertilize and apply pesticides to their crops. Controlled-environment agriculture promises to further reduce the impact. Some smart greenhouses are completely automated, run by algorithms that ensure optimal conditions for plant growth by adjusting inputs like roof ventilation, artificial lighting and heating. Ultra-high resolution imaging can spot early symptoms of disease, water stress and soil degradation, while drones spray fertilizer, pesticides and water with pinpoint accuracy. By reducing the

SPECIAL FEATURE

The technologies transforming agriculture

Cellular agriculture The production of agricultural products from cell cultures using biotechnology, tissue

Synthetic biology A field of science that involves redesigning organisms for useful purposes by engineering them to solve problems in medicine, manufacturing and agriculture.

Nanotechnology Science, engineering and technology conducted at the nanoscale, or the study and application of extremely small things.

Robotics and drones Design, manufacture and use of robots and drones.

engineering, molecular biology and synthetic biology.

Blockchain A secure, decentralized and transparent way of recording and sharing data, with no need to rely on third-party intermediaries.

Computer vision A field of AI that trains computers to interpret and understand the visual world.

Gene-editing technology A group of technologies that give scientists the ability to edit an organism’s DNA. CRISPR is the most commonly used technology to edit genes.

Artificial Intelligence Computers that can recognize complex patterns, process information, draw conclusions and make recommendations.

Internet of Things Describes the idea of everyday items – from medical wearables that monitor users’ physical condition to cars and tracking devices inserted into parcels – being connected to the internet and identifiable by other devices.

3D printing Allows manufacturing businesses to print their own parts, with less tooling, at a lower cost and faster than traditional processes.

Machine learning An application of AI that provides systems with the ability to automatically learn and improve from experience without being explicitly programmed.

Virtual reality Offers immersive digital experiences that simulate the real world.

guesswork in farming, smart agriculture enables crops to reach their full genetic potential without the excessive use of chemical inputs. Biotechnology is another field that continues to make breakthroughs. Advances in seed science are making crops more resistant to drought, pests and infestation, boosting agricultural productivity and increasing the resilience of food producers to environmental shocks. These are fundamental and complex changes. The word revolution does not appear out of place. A study by the

Tony Blair Institute for Global Change on “Technology to Feed the World” says: “The interconnected nature and complexity of the food system highlights the need to take a systems approach to food policy, where any intervention or innovation is evaluated across multiple elements.” This means that technology cannot simply be applied, according to an “anything goes” approach. Considering the global challenges and the agri- sector’s universal responsibility, policy is key: Decision makers must identify the opportunities these innovations

present, uncover unintended consequences, assess the maturity, feasibility and transformative potential of new technologies and applications and identify barriers to successfully implementing innovations globally and at scale. Modern food systems must provide proper health and nutrition, deliver economic opportunities and growth and promote environmental sustainability. The technology to feed the world will soon be available. It is a question of political will to make it happen for everyone.

NEW APPROACHES

SYSTEM When people partner up and support each other they can forge an entirely new system – much as they

did in past millennia By Howard Hudson, OPEC Fund

A griculture was humanity’s first revolution. Around 12,000 years ago, small bands of hunter gatherers coalesced into larger better-fed communities in the Eastern Mediterranean. Those small farming communities grew into cities, nations and empires, vying for power, rising and falling in turn. The invention of the plow was a catalyst, but the pivotal moment was the mass change of mindset – that another way of life was not only desirable, but actually possible. “We can do this,” said our ancestors. And they did. But it was always about the community as much as the crop. That revolution can also be called a “system innovation” because people partnered up and intensively supported each other with new skills and tools while forging a new direction. When humanity put down roots, the system changed. Which in many ways is the goal of the UN 2030 Agenda, as the international community attempts to transition to a new way of living in a more sustainable global system. That “We can do this” statement has, however, shifted to

“Can we do this?” – because although our capacities are infinitely greater, global conditions are far more complex and deteriorating fast. A recent snapshot of partnership building comes in the form of the UN Framework Convention on Climate Change (UNFCCC) Decision 3/27, adopted in Sharm El-Sheikh in November 2022. A decision that aims at: “Promoting a holistic approach to addressing issues related to agriculture and food security... Enhancing coherence, synergies, coordination, communication and interaction between Parties... strengthening engagement, collaboration and partnerships among national, regional and international organizations and other relevant stakeholders.” Truly a lockstep text, with nine different synonyms for seeking alignment to support one another; encouraging a disparate group to be more than the sum of its parts.

SPECIAL FEATURE

PHOTO: Miha Creative/Shutterstock.com

INNOVATION ROOT AND BRANCH REVOLUTIONS?

All that glitters The fact remains that many people, even in government, see the word “innovation” and assume that new technology can be a silver bullet. This is missing the point, according to Andy Hall of the Commonwealth Scientific and Industrial Research Organisation (CSIRO), because “the game changer is not new technology per se but the capacity of systems to innovate”. In other words: Promoting a progressive mindset backed up by a dedicated administrative and technological framework in order to “graduate”

PROFILE: ANDY HALL Andy Hall is a Senior Research Scientist at the Commonwealth Scientific and Industrial Research Organisation in Canberra, Australia. He is a science and technology policy analyst with a specialization in the study and design of agriculture innovation processes, policies and practices. He holds a PhD in Science and Technology Policy Studies from the University of Sussex, UK.

to a more advanced and sustainable way of life. Hall puts that in context: “Government policies have historically sought technological fixes to solve our sustainability problems,

PHOTO: Courtesy of Andy Hall

BANGLADESH: Mass marketing treadle pumps: an appropriate technology pathway to transformation

“The history of the case begins in the early 1980s and a programme led by an NGO, International Development Enterprises, to facilitate smallholder access to irrigation in Bangladesh. The NGO took proven manual pump technology and sought to facilitate the development of markets for manufacturing, retail, installation and maintenance of the pumps that would persist independently of project support. “At the household level, significant production and income benefits were recorded from the relatively small investment required to purchase a pump, providing autonomy to small farmers on irrigation timing and amount, without the additional cost of fuel. The treadle pump is also said to have contributed to the restructuring and development of water markets in Bangladesh, challenging the established monopolies of large landholders in water access… “The total donor investment of US$10 million is estimated to have leveraged an investment of US$40 million from smallholders and generated a net return of US$150 million a year. The NGO involved was somewhat unusual in that it was pioneering the delivery of products and services to the poor via a market mechanism. Having demonstrated the value of this inclusive innovation, local informal sector

engineers copied the pumps, reverse engineering the design to produce low-cost versions, which quickly became popular. This led to the establishment of an integrated system of suppliers and repairers in rural areas. The public sector contributed by agreeing to remove subsidies from other small-scale pumps in the market that were discouraging the private sector from producing and supplying pumps. “While this case is often presented as a technology narrative (over a million pumps were sold), the real transformation process was the way in which poor households were enabled to participate in water markets. Technology certainly helped, but there was a degree of serendipity in that it was introduced at a time of wider agrarian change in Bangladesh.”

Source: Hall, A. and Dijkman, J. 2019. Public Agricultural Research in an Era of Transformation: The Challenge of Agri-Food System Innovation . Rome and Canberra: CGIAR Independent Science and Partnership Council (ISPC) Secretariat and Commonwealth Scientific and Industrial Research Organisation (CSIRO); pp.29, 32

including greenhouse gas emissions. But the truth is that technological change can only happen if it’s based on a much broader set of adaptations or innovations, which are largely still missing. These adaptations range from creating different forms of partnerships and infrastructure to putting a value

from 2017 about “the situation of various emerging economies, which have a global pool of advanced technology that they could be accessing to leapfrog over other countries and secure economic growth – but for some reason they’re not. The reason is that there’s a series of missing capabilities and capacities within their systems. Governments try to get businesses to invest in innovation, but very often as soon as they step away, the pilots fall apart because the broader institutional environment to support innovation is missing. Simply put: If countries don’t have the capability to manage technological change and set the framework conditions, their efforts will be wasted.” That view is echoed by Ijeoma Emenanjo, Country Manager for West and Central Africa, Public Sector

The truth is that technological change can only happen if it’s based on a much broader set of adaptations or innovations, which are largely still missing.

on emissions in economic, policy and regulatory terms. In fact, the

sustainability agenda has forced us to think not just about innovation as a good thing per se, but as something that needs to be supported and purposefully directed.” The question of support and direction explains why some countries are able to harness innovation while others fail, despite throwing considerable resources into the mix. Hall points to The Innovation Paradox , a World Bank book

Andy Hall, Commonwealth Scientific and Industrial Research Organisation, Senior Research Scientist

SPECIAL FEATURE

Operations at the OPEC Fund, who previously worked for the World Bank

and continents to learn from each other. To see what is possible in similar development contexts. To put a premium not only on South-South cooperation for its own sake, but on mutually supportive system innovation. Going deeper, a recent report co- authored by Hall features several case studies, including new approaches to irrigation in Bangladesh (see box on page 14) and sustainable food production in Australia (see box below). Both studies capture the gear-like components of system innovation, including the importance of entrepreneurship, the leveraging of new technologies and the mutually supportive interplay between public and private sector, amid societal “revolutions”. The first case study also provides an early insight into the circular economy — as the new system involved not only the sale of pumps but also their maintenance, repair and recycling.

Ijeoma Emenanjo, OPEC Fund Country Manager for West and Central Africa, Public Sector Operations

across various parts of Africa and Asia. Drawing a direct comparison, he says: “Southeast Asia is in

West Java. The reservoir helps irrigate almost 250,000 hectares of rice fields, which is more than 10-20 times the size of average irrigation projects in Africa. By contrast, the first project I did in the Zambezi area was 10,000 hectares. So, I aimed to bring not only larger irrigation systems but a new mindset on the importance of these systems over rainfed agriculture to Zambia and other countries across Southern Africa. Clearly, a lot of development is about changing mindsets, convincing people that change for the better is possible.” Against that backdrop, system innovation in the developing world can also be understood as helping countries

many ways around 20 years ahead of sub-Saharan Africa in terms of development. But if you look back to the 1960s, you’ll see that Malaysia, Indonesia, even Singapore had similar human development index scores as many African countries. I’ve spent a lot of time studying how and why many of these Southeast Asian countries transitioned ahead of their African counterparts. Bringing those lessons to my work in Africa is what I’ve done for most of my career. “The first project that I worked on in Indonesia was the multipurpose Jatiluhur Dam, an irrigation scheme in

AUSTRALIA: Sundrop farms: sustainability pioneers in the Australian food system

“In 2012, Sundrop Farms, a UK-based agri-business with operations in Australia, Portugal and the United States, developed and patented a system of greenhouse crop production that does not depend on fossil fuels, arable land and fresh water resources. The company estimates total annual cost savings at between 5 and 15 percent compared with fossil-fuel-powered glasshouses. “Reductions in carbon dioxide emissions, fresh water and diesel fuel use are estimated to amount to 26,000 tonnes, 450 million litres, and 2 million litres, respectively. The Sundrop Farms System™ integrates established technologies from across the world (solar thermal systems, greenhouse design, hydroponic systems, vertical farming, desalination technology, etc.) in a novel form. The company received considerable venture capital support and government investment in Australia. It notably signed a 10-year contract with one of Australia’s major supermarket chains to supply all of its tomatoes. “The role a sustainability pioneer like Sundrop plays in the transition is that it helps demonstrate a

sustainable alternative and provides evidence that such an alternative can benefit different value chain actors, including consumers. This is typical of the sorts of activity that emerge in the early take-off phase of transition and that help create societal and political awareness of new directions. While this example is private sector-led, it received significant public support.”

PHOTO: Mansouraboud68

CLIMATE CHANGE

“CLIMATE A DOUBLE

Global food security is threatened by a dual

challenge: Climate change is affecting agriculture, while increasing food production greatly contributes to climate change. Mitigation and adaptation strategies are key to build sustainable and resilient food systems for the future By Julia Zacharenkova and Başak Pamir, OPEC Fund

C limate change poses a significant challenge to agriculture worldwide, threatening global food security and exacerbating existing vulnerabilities. As temperatures rise, extreme weather events become more frequent and precipitation patterns change, the agriculture sector faces unprecedented risks. It is, however, a double-edged sword: Agriculture affects the climate and is affected by it at the same time. In fact, the sector is one of the biggest drivers of climate change: According to the Intergovernmental Panel on Climate Change (IPCC), food systems, including production, processing, transportation and consumption account for up to 37 percent of total greenhouse gas emissions.

abstract global system – front cover?

PHOTO: Yupa Watchanakit/Shutterstock.com

SPECIAL FEATURE

CHANGE & AGRICULTURE: BIND FOR FOOD SYSTEMS ”

The multidimensional relationship between climate change and agriculture presents a significant challenge. The increasing frequency and intensity of extreme weather events such as heatwaves, droughts, floods and storms pose substantial risks to crop production, livestock health and overall productivity. Additionally, changing rainfall patterns challenge the delicate balance necessary for optimal plant growth and development. According to the World Bank, about 80 percent of the global population most at risk from crop failures and hunger from climate change live in sub-Saharan

disproportionately poor and vulnerable. Without solutions, falling crop yields, especially in the world’s most food- insecure regions, will push more people into poverty – an estimated 45 million people in Africa alone could fall below the poverty line in 2030 as a result.

Resilience building in agriculture refers to the capacity of farming systems to withstand and recover from shocks and stresses, including those induced by climate change. It involves equipping farmers with the knowledge, resources and tools necessary to adapt to changing conditions, minimize risks and sustainably manage their activities. Take the example of Honduras: Agriculture plays a crucial role in the economy, contributing significantly to

Solution: investing in adaptation and mitigation

Ensuring agricultural resilience is a key priority to solve this dilemma. This is why it is imperative to invest in adaptation and mitigation practices. Adaptation practices focus on enhancing agricultural systems’ resilience to climate-related challenges. On the other hand, mitigation aims to reduce greenhouse gas emissions.

employment, rural livelihoods and food security. According to the International Fund for Agricultural Development (IFAD), about 28 percent of the country is agricultural land and the agriculture

Africa, South Asia and Southeast Asia, where farming families are

Without solutions, falling crop yields, especially in the world’s most food-insecure regions, will push more people into poverty – an estimated 45 million people in Africa alone could fall below the poverty line in 2030 as a result.

sector employs about 39 percent of the population. The sector predominantly consists of smallholder farmers who rely on subsistence farming and the cultivation of cash crops like coffee, bananas and palm oil for export. Today, Honduras faces considerable challenges due to climate change and its agriculture sector is exposed to significant risks. Extreme weather events such as hurricanes and droughts and unpredictable rain patterns negatively impact crop yields, leading to reduced productivity and income stability for farmers. The PROINORTE project, which the OPEC Fund is co-financing together with IFAD and the government of Honduras, targets some of these challenges in the northeastern region of the country, an area characterized by high poverty and food insecurity. The project aims to enhance incomes and living conditions for some 70,000 people in rural communities and boost livelihoods for women

OPEC FUND ’ S FOOD SECURITY ACTION

In June 2022, the OPEC Fund launched its US$1 billion Food Security Action Plan with projects in Jordan and Paraguay. Channeling public and private sector loans as well as grants, the facility is helping developing countries that were hit by supply and trade disruptions following the war in Ukraine, which pushed up food and fertilizer prices worldwide. The action plan is providing immediate assistance to cover the import costs of basic commodities such as seeds, grains and fertilizers, while supporting the medium- and long-term security of food supply in partner countries. It is by building up the resilience of agriculture sectors and strengthening regional food value chains – all to future-proof against global shocks. Addressing global food insecurity and protecting the most vulnerable and affected populations has always been a priority for the OPEC Fund. Since its establishment in 1976, the Fund has committed US$2.6 billion to agriculture projects, representing more than 10 percent of its total operations. The OPEC Fund has specifically targeted investments in rural infrastructure, development of production and storage facilities, trade in agricultural goods as well as training, capacity and institution building.

Zimbabwe – Smallholder Agriculture Cluster Project (SACP) To help improve food security in Zimbabwe, the OPEC Fund approved a US$15 million loan in support of the Smallholder Agriculture Cluster Project under its Food Security Action Plan. Co-financed with IFAD and private sector partners, the program will help transform small- scale farming and increase farmers’ participation in market-oriented and climate-smart value chains.

and youth. Around 90 producer organizations will be supported to enhance their organizational and business capacities to increase access to market value chains and optimize primary production, transformation and commercialization models.

Investing in research By providing the evidence base necessary to design effective adaptation and mitigation strategies, research plays a pivotal role in addressing the complex challenges posed by climate change in the agriculture sector. Recognizing the importance of research, the OPEC Fund has long supported initiatives that foster innovation in agriculture. In 2018, the OPEC Fund provided a US$200,000 research grant to the International Center for Agricultural Research in the Dry Areas (ICARDA) for a project dedicated to the promotion of efficient and nutritious agri-food systems in South Asia. The goal was to enhance the productivity, profitability, resilience and marketability of micronutrient- rich food legumes such as lentil, chickpea, faba beans and grass pea by incorporating energy and labor-saving

PHOTO: IFAD/Oxfam Novib

Côte d’lvoire – “2PAI-Nord” Project Even though Côte d’lvoire is the world’s leading producer of cocoa and a major exporter of raw cashew nuts, the processing of agricultural products remains negligible and the country depends on agricultural imports rather than realizing its tremendous potential. The “2PAI-Nord” project is designed to demonstrate that alternative approaches are possible – and viable. Financed jointly by the OPEC Fund and the African Development Bank, the project aims to increase private investment, particularly in processing agricultural products like rice, meat and fish, cashews, mango and shea, and facilitate farmers’ access to markets.

PHOTO: Shutterstock.com

SPECIAL FEATURE

PHOTO: CGIAR/N. Palmer

Shifts in the growing seasons make it difficult for farmers to decide when to plant and what to plant.

THE ICARDA GENE BANK Agro-biodiversity supports the livelihoods of millions of people living in rural communities around the world. It is critical to protect genetic resources for global food security and stability amid the challenges presented by climate change, diminishing natural resources and a rapidly growing population. ICARDA’s gene bank system works alongside global networks to collect, conserve and develop vital genetic resources to protect agro-biodiversity in dry regions. ICARDA manages a gene bank network containing some 157,000 samples of landraces and wild relative species of major dryland cereals, food legumes, forage and rangeland species.

Aly Abousabaa, ICARDA, Director General

traits into the agricultural practices of Bangladesh, India, Pakistan and Nepal. Aly Abousabaa, ICARDA Director General, explains how research can help increase productivity and resilience: “The focus of our research programs is on helping countries to develop technologies that will help them to produce sufficient quantities of food that is nutritious and affordable. In many parts of the world we expect to see rising temperatures, reduced rainfall and, more critically, shifts in the growing seasons, which make it difficult for farmers to decide when to plant and what to plant.” With the shifting in seasons, Mr. Abousabaa says farmers are going to see new forms of pests and diseases

that did not exist in the past. Therefore, the technologies that were available and most suited to help will gradually become dated. This is why research matters. ICARDA is trying to deploy research capacity in Asia, bringing in the international dimension, sharing solutions and providing genetic diversity in its gene banks. Through national programs the institution joins research programs to help countries develop the crops for the future. In Asia, where the OPEC Fund financed research, most of the work has focused on lentil, grasspea, barley and chickpea. Abousabaa says: “We view resilience from different angles. One part of it is to make sure that the crops will not fail, or in case of severe weather events that the

drop in productivity is within reasonable limits so that farmers can still have a decent crop. We try to bring in the varieties that are known to perform well under high temperatures and extended drought conditions, or those that are able to still produce sufficient quantities even under rising temperatures and are resilient to pests and disease. The other dimension is the resilience of the livelihood of the people living in dry areas. We help them produce more food using the land that they have. In India, we used technologies of breeding and material from the gene bank and generated a new lentil variety that matures and gives a full crop within 60 days instead of 90. It’s a transformational impact.”

“WE ARE BUILDING BRIDGES TO FACILITATE TECHNOLOGY, KNOWLEDGE AND INVESTMENT TRANSFER” INTERVIEW Gerd Müller, Director General of the United Nations Industrial Development Organization (UNIDO), shares his views on the global food security challenge and on how technology, innovations and investments are key to address the issue By Başak Pamir, OPEC Fund

OPEC Fund Quarterly : What are the most pressing challenges facing global food security, and how is UNIDO addressing these challenges? Gerd Müller: The economic impact of the COVID-19 pandemic drove up inflation, while the Russia-Ukraine conflict has increased the prices of basic grains. Climate change and extreme weather events are fueling hunger. Almost 830 million people are unsure where their next meal is coming from. But a world without hunger is possible – through sustainable industrialization, technology and knowledge transfer and investment in agribusiness. UNIDO works to achieve food security so that all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food. We see agribusiness and sustainable food supply chains playing a crucial role. Every year over 30 percent of all food produced globally is lost before it reaches the consumer. One way to reduce post-harvest losses is preservation, the processing of agricultural products. The result is that less food is lost, and food costs less – thus increasing food security, while generating job opportunities in rural communities. To tackle the challenge, it is imperative to join forces and UNIDO’s interventions with a focus on post-harvest processing complement the activities of UN organizations such as the World Food

Programme (WFP) and the Food and Agriculture Organization (FAO). I would also stress that the processing of agricultural products in developing countries not only has huge potential to create jobs, it also increases export revenues and boosts economies. It addresses the challenge of food security but also makes an important contribution to the well-being of societies as a whole. OFQ : Which regions of the world are most at risk when it comes to food security and what specific strategies can help? GM: The conflict between the Russian Federation and Ukraine is having a serious impact on food security. These two countries are among the most important producers and exporters of agricultural commodities and products in the world. Many countries relied on Russian and Ukrainian supplies of foodstuffs and fertilizers. Worldwide, 36 countries imported more than half of their wheat from those two countries. The consequences for developing countries are severe, especially as increases in food prices hurt the poorest households the most. Food typically makes up one third to half of their spending. Higher global food prices and scarcity make developing countries’ food imports so expensive that they risk increasing rates of hunger and undernourishment.

PROFILE: GERD MÜLLER Gerd Müller has been Director General of the United Nations Industrial Development Organization (UNIDO) since December 2021. A German citizen, he has previously held numerous national and international positions, among them Federal Minister for Economic Cooperation and Development in the government of Germany. He has named the implementation of the 2030 Agenda and the Paris Agreement as priorities for UNIDO under his leadership.

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