The advent of the AfCFTA: new possibilities and implications for the African land-water-climate-food nexus

The African Continental Free Trade Area (AfCFTA) was signed in 2018, and came into effect in 2019. Still in an early phase, there is much to expect from the AfCFTA’s implementation over the coming decades. While the major expectations for AfCFTA are for increased inter-regional trade and overall levels of economic integration, there will doubtlessly be implications for the Land-Water-Climate-Food nexus in a continent where agriculture is estimated to contribute 15 percent of GDP (Mzali 2019) and employ over 60 percent of the active population (ILO, 2019), continent-wide. One important effect of the implementation of the AfCFTA will be the reduction of tariff barriers to inter-regional trade which is expected to have an impact on the agricultural and food system. Reduced tariffs will lead to lower food prices which will affect food and nutrition access. At the same time, as the access to regional markets are anticipated to open up, farmers may be drawn to change the crops they grow as well as the intensity of irrigation and fertilizer used or to expand production into land previously unused in agriculture. These changes will have an impact on the land and water systems as well as the greenhouse gas emissions resulting from agricultural activity

The distribution of food security impacts of biofuels, a Ghana case study

The demand for biofuels is expected to increase significantly in the coming years. However, there are major concerns on the impact of increased biofuel production on food security. As biofuel affects food security in various ways, it is important to assess the impacts on the four pillars of food security, availability, access, utilisation and stability. The objective of this study is to ex-ante quantify impacts of biofuel production on the four pillars of food security for urban and rural households in a developing country. We illustrate this for Ghana, which proposed a 10% biodiesel and 15% ethanol mandate for 2030 and which faces food security issues. We used the computable general equilibrium (CGE) model MAGNET in combination with a household and a nutrition module to quantify 13 food security indicators. The results show that the largest food security effects of the biofuel mandate are negative impacts on food prices and import dependency. However, the projected food security impacts of the biofuel mandate in 2030 are relatively small compared to the projected food security effects of economic development in Ghana towards 2030. Our approach enables ex-ante quantification of the effects of biofuel on the four pillars of food security and the differentiation of the effects between urban and rural households. Although improvements can be made, the approach means a big step forward compared to the state-of-the-art knowledge on food security impacts of biofuel production and it could contribute to identify options to minimise negative and optimise positive food security effects

Challenges of Global Agriculture in a Climate Change Context by 2050 (AgCLIM50)

This report presents a global integrated assessment of the range of potential economic impacts of climate change and stringent mitigation measures in the agricultural sector. The analysis employs five global multi-region multi-commodity models and covers selected combinations of socioeconomic storylines and climate signals by mid-century. Model inputs are harmonised by using the same projections for population and GDP growth, as well as relative biophysical crop yield changes due to climate change. Model results can differ depending on model characteristics and the specific quantitative implementations of the socioeconomic storylines.JRC.D.4-Economics of Agricultur

European Case Study SDM data

Baseline data and Impacts of Policy Cards for the for the System Dynamics Model of the European Case Study in Sim4Nexus

Consequences of national food system transitions in Ethiopia for ending hunger and achieving healthy diets

Countries have committed themselves to achieve Sustainable Development Goals, such as Zero Hunger (SDG2), and Life on Land (SDG15). Many countries are still far from reaching the targets as expressed in these goals. To help steer these developments, the necessary transitions in the food system of a country for achieving healthy and affordable diets for all people need to identified, while minimizing negative environmental impacts. The transition to healthy diets means a change in the demand for and consumption of various agricultural commodities. This change in demand will drive price changes, both for consumers and at the farm gate. This affects agricultural incomes, domestic food production and patterns of trade. Changes in domestic food production will in turn alter land use patterns, fertilizer use and other agricultural inputs which have environmental consequences with respect to land demand for agriculture, nutrient emissions, greenhouse gas emissions and irrigation water demand. In this study we investigate a number of aspects of this challenge by linking a biophysical (BIOSPCAS) and an economic (MAGNET) model, and simulating consequences of a transition to a healthy diet in Ethiopia in 2030. The impacts of economic and environmental consequences of a transition to a healthy diet in Ethiopia are compared with the SSP2 (O’Neill et al. 2017) business as usual future projections of the Ethiopian economy and agricultural system in 2030 with the current patterns of consumption, to illustrate the differences and highlight the impacts of the transition. Further as domestic food prices are linked to the global marketplace for agricultural commodities, we explore a scenario where the rest world makes the transition to a healthy diet as well. This global transition will affect the demand for Ethiopian exports and the prices for imports facing farmers and consumers

The Advent of the AfCFTA: New Possibilities and Implications for the African Land-Water-Climate-Food Nexus

The African Continental Free Trade Area (AfCFTA) was signed in 2018, and came into effect in 2019. One important effect of the implementation of the AfCFTA will be the reduction of tariff barriers to inter-regional trade which is expected to have an impact on the agricultural and food system. Reduced tariffs will lead to lower food prices which will affect food and nutrition access. At the same time, as the access to regional markets are anticipated to open up, farmers may be drawn to change the crops they grow as well as the intensity of irrigation and fertilizer used or to expand production into land previously unused in agriculture. These changes will have an impact on the land and water systems as well as the greenhouse gas emissions resulting from agricultural activity. In this study, we employ the MAGNET computable general equilibrium model to examine the possible impacts of the AfCFTA on the land, water, food and climate nexus in Africa with a particular focus on Burkina Faso. Preliminary results show that at the macro-economic level, with the implementation of the AfCFTA, GDP is expected to increase across the continent. This increasing wealth comes from the increase in industry trade and hence the increases in manufacturing production expansion. In Burkina Faso this increase in manufacturing pulls resources away from agriculture which increases the cost of production and reduces output. While there are a myriad of factors which account for this, we importantly note that additional complementary domestic policies may be key to the success of the AfCFTA from a country level

The Advent of the AfCFTA: New Possibilities and Implications for the African Land-Water-Climate-Food Nexus

The African Continental Free Trade Area (AfCFTA) was signed in 2018, and came into effect in 2019. One important effect of the implementation of the AfCFTA will be the reduction of tariff barriers to inter-regional trade which is expected to have an impact on the agricultural and food system. Reduced tariffs will lead to lower food prices which will affect food and nutrition access. At the same time, as the access to regional markets are anticipated to open up, farmers may be drawn to change the crops they grow as well as the intensity of irrigation and fertilizer used or to expand production into land previously unused in agriculture. These changes will have an impact on the land and water systems as well as the greenhouse gas emissions resulting from agricultural activity. In this study, we employ the MAGNET computable general equilibrium model to examine the possible impacts of the AfCFTA on the land, water, food and climate nexus in Africa with a particular focus on Burkina Faso. Preliminary results show that at the macro-economic level, with the implementation of the AfCFTA, GDP is expected to increase across the continent. This increasing wealth comes from the increase in industry trade and hence the increases in manufacturing production expansion. In Burkina Faso this increase in manufacturing pulls resources away from agriculture which increases the cost of production and reduces output. While there are a myriad of factors which account for this, we importantly note that additional complementary domestic policies may be key to the success of the AfCFTA from a country level

Consequences of national food system transitions in Ethiopia for ending hunger and achieving healthy diets

Countries have committed themselves to achieve Sustainable Development Goals, such as Zero Hunger (SDG2), and Life on Land (SDG15). Many countries are still far from reaching the targets as expressed in these goals. To help steer these developments, the necessary transitions in the food system of a country for achieving healthy and affordable diets for all people need to identified, while minimizing negative environmental impacts. The transition to healthy diets means a change in the demand for and consumption of various agricultural commodities. This change in demand will drive price changes, both for consumers and at the farm gate. This affects agricultural incomes, domestic food production and patterns of trade. Changes in domestic food production will in turn alter land use patterns, fertilizer use and other agricultural inputs which have environmental consequences with respect to land demand for agriculture, nutrient emissions, greenhouse gas emissions and irrigation water demand. In this study we investigate a number of aspects of this challenge by linking a biophysical (BIOSPCAS) and an economic (MAGNET) model, and simulating consequences of a transition to a healthy diet in Ethiopia in 2030. The impacts of economic and environmental consequences of a transition to a healthy diet in Ethiopia are compared with the SSP2 (O’Neill et al. 2017) business as usual future projections of the Ethiopian economy and agricultural system in 2030 with the current patterns of consumption, to illustrate the differences and highlight the impacts of the transition. Further as domestic food prices are linked to the global marketplace for agricultural commodities, we explore a scenario where the rest world makes the transition to a healthy diet as well. This global transition will affect the demand for Ethiopian exports and the prices for imports facing farmers and consumers

Distributing water between competing users in the Netherlands

The Netherlands is a delta country where water is usually abundant. Large investments in water infrastructure aim to prevent flooding, irrigate farmland and ensure the health of polder lands and nature. During the limited periods when water is scarce, agriculture is low on the priority list for water allocation: farmers may be restricted in expanding irrigation operations or be even temporarily forbidden from using the equipment already installed. This comes at a cost to agricultural production. Water in this context is a unique economic input that is not privately owned, not always scarce, and not always allocated according to market principles. Nonetheless, the framework of a computable general equilibrium model (CGE) can be very effective in assessing economy-wide changes from periods of water scarcity and weighing this against policy initiatives to reduce water scarcity. In this paper we explore adaptation possibilities to water scarcity from climate change with a particular focus on the challenges of interpretation of the CGE methodology for water in the context of the Netherlands. We explore this by examining three studies, each of which uses a CGE model. The first explores the extent of the autonomous market response. The second explores the planned adaptation of increased investment in irrigation water infrastructure in the agricultural sector, making a distinction between ground and surface water and the third study explores the planned adaptation of introducing explicit water markets between industry, agriculture and public water services. All three studies find that when assessing the economic impacts of climate change it is important to look at the larger economy wide effects including the sectors that are not directly affected by the aspect of climate change under examination. We further make a methodological point that even in a single country such as the Netherlands interpretations of water as a primary input can vary significantly

Distributing water between competing users in the Netherlands

The Netherlands is a delta country where water is usually abundant. Large investments in water infrastructure aim to prevent flooding, irrigate farmland and ensure the health of polder lands and nature. During the limited periods when water is scarce, agriculture is low on the priority list for water allocation: farmers may be restricted in expanding irrigation operations or be even temporarily forbidden from using the equipment already installed. This comes at a cost to agricultural production. Water in this context is a unique economic input that is not privately owned, not always scarce, and not always allocated according to market principles. Nonetheless, the framework of a computable general equilibrium model (CGE) can be very effective in assessing economy-wide changes from periods of water scarcity and weighing this against policy initiatives to reduce water scarcity. In this paper we explore adaptation possibilities to water scarcity from climate change with a particular focus on the challenges of interpretation of the CGE methodology for water in the context of the Netherlands. We explore this by examining three studies, each of which uses a CGE model. The first explores the extent of the autonomous market response. The second explores the planned adaptation of increased investment in irrigation water infrastructure in the agricultural sector, making a distinction between ground and surface water and the third study explores the planned adaptation of introducing explicit water markets between industry, agriculture and public water services. All three studies find that when assessing the economic impacts of climate change it is important to look at the larger economy wide effects including the sectors that are not directly affected by the aspect of climate change under examination. We further make a methodological point that even in a single country such as the Netherlands interpretations of water as a primary input can vary significantly