Global food security, innovation, and the investment gap with Maximo Torero UNFAO

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Welcome to the AshCloud.
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I'm Asha Sweeting.
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The cost of living is an increasing global challenge.
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Food inflation in 2023 was 13.6%.
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However, food prices increased by up to 30% in many low-income countries.
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Currently, 60 to 80% of voters consider food price as a decisive factor in their choice of candidates.
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And across 60% of countries, food costs represent more than 25% of their CPI basket.
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Food insecurity is never just about hunger.
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Throughout history, the impacts of food crises have frequently included geopolitical instability, increased migration, and conflict.
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Today we are joined by Maximo Torero, chief economist at FAO, where he's working to build resilient, inclusive, and sustainable agri-food systems.
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Previously, Maximo served as executive director at the World Bank Group.
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Maximo, thank you very much for joining me today.
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A real pleasure to be with you today, Hush.
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So the global state of food and hunger and malnutrition, where is that at today and how is that changing over recent years?
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Yeah, look, if we look at the numbers, which is what we produce in our SOFI flagship publication, uh today we are in 673 million people in chronic hunger, which is 8.2% of the global population.
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That's the prevalence, which is an improvement from 8.7% that we have in 2022.
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So, yes, there is a slight improvement.
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This improvement comes mainly from Asia, South Asia, especially India, where there has been a significant reduction of the people in hunger, South America, especially Brazil, where they have moved out of the hunger map, but also countries like Dominican Republic, which reduced significantly the hunger, countries like the case of Costa Rica, but very few countries in other continents.
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The sad part is that the continent which is doing the worst is Africa.
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The level of hunger in Africa keeps growing and it's not declining relative to the other regions of the world.
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And if we project this to 2030, essentially what we know is that the total, the global number of hunger under the current conditions will be in 511 million people, of which 300.2 will come from Africa.
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So 60%, around 60%.
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So it's time for Africa to start to do the transformational to change.
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Now that's the that's calories, basically, no consumption of calories.
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Now, if we look to the other indicators, we have something called the PIES, the Food Insecurity Experience Scale, which measures basically undernourishment and overnourishment.
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There we see that we have uh around uh 2.3 billion people that have lack of regular access to adequate food in 2024.
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A slight improvement, but this is still 28% of the population.
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And in terms of healthy diets, we have 2.6 billion people that don't have access.
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A slight improvement from earlier years in 2020, we were 2.9 billion, but it's still significantly high.
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All the other nutrition, more structural indicators, are not going to achieve the targets, although there is an improvement in decreased stunting and also in promoting exclusive breastfeeding.
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And that's the situation, that's the sad photograph, although, as I said, improvement.
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So wonderful that you know, there's a lot of doom and gloom about the food industry and the food systems that we hear about, but there are successes.
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So I'd like to hear your thoughts on what's been driving that slight improvement.
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It is moving in the right direction over uh recent years, and also whether that those drivers of that improvement are kind of fit for purpose for the next set of challenges that we're facing.
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Look, I think that that the improvements, if you want to summarize on what is behind those improvements, if you look to Brazil, two things are happening in Brazil.
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Uh, you know, Brazil was out of the hanger map in the previous government of Lula, no?
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And now after two years, they became they move out because they fall into the hunger map, and then now they are moving out.
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And what are the major strategies they are following?
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Two, produce, they are producing and being more efficient in how they produce.
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Brazil has become a, of course, a global key exporter of seagulls to the world, but also they produce high-value commodities.
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And then the second component is they touch the most vulnerable people, and that's the social protection systems.
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It's not only cash transfers and conditional cash transfers, but it's also school meals programs.
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Those are the two big pillars.
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If you go to India, social protection has been a huge program, and that's how it allowed them to improve.
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They have some problems before, but now they have tried to digitalize beneficiaries and so on, which has allowed them to increase efficiency, but they have to keep improving.
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Still, they have a problem on the production side, but they are improving and they are trying to move towards more diversity of diets.
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If you go to the Dominican Republic, which is another country that there has been a significant improvement, again, you see a significant increase by the current government on social protection.
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They are universalizing school meal programs, they are investing more in cash transfers and conditional cash transfers.
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And on the other hand, they are really investing in their agriculture.
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So they are increasing substantially productivity.
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So I think when we touch both pillars, what we call better production and better life, which is looking at the touch, but also touch better nutrition through the diversity of the commodities, that is helping countries to improve.
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There are countries that, for example, have destroyed their social protection programs, they have not targeted properly, and they have increased the numbers.
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There are countries where social protection is not there, which many are in Africa, and therefore they are affected in terms of the numbers.
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But there is a driver there which is complicated in Africa, which is conflicts.
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Conflict has become the first driver in Africa that creates a problem over hunger.
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Of course, that makes them more vulnerable to climate, and that makes them more vulnerable because the macroeconomic situation is not good.
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So that's the three drivers are acting together in Africa with a bigger intensity in conflict.
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In Latin America and the Caribbean, you don't see that.
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You don't see conflict, basically very small.
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You don't see they are more stable macroeconomically.
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Most of the countries, there are some exceptions.
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The major exception is Haiti, which has a lot of political instability.
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But you see that they are more resilient and they are more so if you look at South America, for example, Brazil, Argentina, Paraguay, and Uruguay key exporters of cereals.
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Peru, Chile, Ecuador, Colombia, key exporters of high-value commodities.
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So it's a region that is really pushing up the supply and exports to the world, and they have very good social protection programs in place.
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Haiti is such a, or Haiti and the Dominican Republic is such a fascinating example that I think is probably worth highlighting because it's essentially the same island with quite a different history, and also the fact that the amount of deforestation and land degradation on Haiti is is almost diametrically opposed to what's in the Dominican Republic.
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And so obviously, climate weather all very, very similar.
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The the kind of the nature of the population, you know, that basically came from the same the same ancestral population.
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So what do you think we can learn from that Haiti Dominican Republic um situation?
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You know, one's moved out of hunger and out of the uh off the list, and the other one is is one of the most um you know, the most difficult places to actually um get positive outcomes.
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It's an excellent question because if you look from the top, it's a perfect contrafactor, no?
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So you have the the left and the right of the island, and you say, okay, what better experiment I can do?
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It's a kind of a perfect experiment.
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And the differences are huge, no?
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Just looking at the satellite photograph of the deforestation, you know where the border is, no?
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And I think here initial conditions matter a lot, no, and the history matters a lot.
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I think Dominican Republic had also a tough history, no, it's not a simple history, but I think they learn a lot from their problems and their mistakes, and they are trying to build a stronger institutionality and trying to open to markets and trying to accelerate the process of transformation in the agri-food systems.
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In Haiti, this has been superly complicated because of the political instability, uh, and that's linked to historical issues, uh, which has put them in a very weak situation.
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Now, one of the challenges for us as FAO is okay, what do we do?
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No, because yes, it's true, they have also earthquakes, they have, but you know, the Dominican Republic also has climate issues, cyclones, and so on.
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But how we can have this country that has this turmoil of political instability, no?
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And and what we see and what we're trying to do now, for example, because our mission right now is to turn around Haiti.
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We need to turn around Haiti and we are putting all the efforts possible to do that.
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Um so if two years from now you see better numbers, we did we succeed.
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If you don't, then we fail, and we have to recognize that we fail.
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But the point right now for us is okay, let's go to the areas where we can really make a difference in production.
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So we are investing in the north and in the south.
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We are forgetting for a time for the city, because that's where the problem is.
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And trying to see if we can bring strong agricultural activities in the north and the south.
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And bringing all our resources to bring technology, innovation, and accelerate that process.
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Because our expectation is if I want to make farmers resilient, no matter what happens politically, we need to increase technology, we need to increase productivity, we need to increase efficiency.
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And Haitians are very good farmers.
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Dominican Republic benefits from them a lot.
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They go and not only the Dominican Republic, Panama too.
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When there is the harvest time, they fly there and they are the people doing the harvesting.
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So they are very good farmers, very hardworking people.
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It's just the issue that they don't have the inputs.
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So we believe that if we look at territorial approaches and we move out of the urban areas and try to grow well in the rural areas, that could start to create a change of what is happening today.
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But again, it's a historical issue: lack of institutionality, lack of infrastructure, just basically thinking in the today, extracting as much as you can today, that's the deforestation, and forgetting about the tomorrow.
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And that's a major problem in the agri-food systems, is that people are thinking of how much I produce today, but they don't understand that if they don't produce efficiency today, they don't minimize emissions, they don't minimize deforestation, they don't take care of their soils, they could be good today, but tomorrow they won't have food.
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So I think that is a clear reflection of what is happening there.
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There's so many places we could go from there.
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Um, so, so many places.
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In the 1930s in the United States, there was the Dust Bowl.
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And following, um, and it was in the middle of the Great Depression, so once again you had this agricultural food side of big huge challenge, but you also had broader um poverty employment um challenges all on top of each other.
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And as a result of that, the the president of the time, Franklin Um D.
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Roosevelt, introduced the whole concept of land grant universities, where universities would not only be responsible for uh research and education, but also for extension.
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Um, and you know that's that's led to the US has not gone through a similar situation um as the Dust Bowl.
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Um, and I think that you know everyone a lot of people contribute um give give the whole Land Grant University side of things credit for for the resilience of the US.
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Obviously, there's the the the climate as well.
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Is there things that we can learn from that experience that we can then roll out um more broadly?
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Or I guess the other example of of a country that's moved very much from a food importer to a major exporter is Brazil and how they've traditioned, transitioned their their food systems.
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What can we learn from those two examples that would be applicable to the places like Africa where we have the biggest challenges?
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Yeah, no, I think it's a great lesson and it's understanding this intertemporal issue.
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I think um Roosevelt with the Grand Deal also and with the changes they did he did, he was understanding that this was he needs to invest today to be able to profit tomorrow.
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That was the only way.
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The same is in Brazil.
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If you look, the major investments in the Embrapa allow to transform the savannah.
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If you go to my country, Peru, uh the coast became from a desert, became to an agri exporter because we bring knowledge and investing infrastructure.
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So, and these are long-term investments.
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If you look to China, for example, the gorgeous dam was built to minimize the problem of flooding.
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So again, it was but they also built other small types of storage of water to opt, but they were responding to a nature that was out of their control and trying to build resilience.
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In the case of the Grand uh Grand Land Brace Universities, basically what they were doing is trying to bring innovation and technology so that you can build resilience, but you also can increase productivity and efficiency, and you see how the productivity increases.
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And that's why also why the CIR centers were created at some point, also as a result of what Burlock does and how we can increase technology.
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So, but those investments are not uh they will they won't give you the return tomorrow, quickly.
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They take time.
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The problem is if we forget about that and we don't invest now to get that benefit 10 or 15 years from now, we will be in big challenges.
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And the same applies to big infrastructure.
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So I think there is a lot to learn from there.
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And all the successes uh are based on those innovations, no, and that's how technology leapfrogs and you can move, and other countries can learn from it.
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So, today, for example, uh we have a big stock of innovation in gene editing and other technologies that could allow us to bring varieties which are resistant to weather shocks and which is what we need today.
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That's the science-based element of it.
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Uh, but not necessarily that is happening, no, and because institutionality is not there, the regulatory processes sometimes are too complex and doesn't allow these technologies to be used properly.
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When we look at resilience, which is honestly the way I see today, is the way we need to handle the shocks that we are facing and the frequency and intensity of these shocks.
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I always talk about two components of resilience.
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One is early warning, which is the preventive one.
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If I can tell you today, like what happened with the last uh cyclone that touched some of the islands, no, we knew days in advance when it was going to impact.
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So we can deliver cash, we can be pre-prepared, and that minimizes the problem.
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But that requires technology, that requires modeling, that requires information, high frequency information, so that we can use these models.
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The same applies with insurance, no?
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It's preventive.
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If I can pay insurance to do anticipatory action, then I get one to seven of return, one dollar, seven dollars of return.
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But if I wait for the event to happen and then pay the insurance, zero or negative.
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So the first component is this preventive.
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The second component is capacity of absorption.
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So we know the shock will happen.
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The issue is how prepared I am for that shock.
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So for the poorest, social protection, no, it's cool meals, programs, and so on.
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But for the agricultural sector, it's innovation, it's technology, is to have varieties which are resistant to flooding, for example, or varieties which are resistant to extreme climate, extreme temperatures.
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That will minimize the losses because of these shocks.
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So I will be more resilient.
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So those two components are central, and the only way you can get those two components is through technology, through knowledge, innovation.
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And that requires investment.
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And I think that's what uh uh Roosevelt brought up, and that's what Embrapa brought up in the case of Brazil.
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That was the reason for the CIR creation.
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Um I think these are very important issues that we tend to forget.
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It's like we forget that data costs, and people assume that the data will be there.
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And you know, it's a very costly process, and one point in time doesn't give you nothing.
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You need to have a series to be able to look at the differences and the changes.
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But people don't value that because they have it there.
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But the day there is a crisis, for example, right now we are losing a lot of the data to calculate the acute food insecurity, which is the basis of the APC.
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And if we stop investing in that data, how will we identify where the hot spots of hunger are in the world?
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How we will identify where to intervene.
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But we don't realize of the importance of these goods that we have there.
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When you look at the current financing um and sort of climate finance and especially, and you look at how how much um is put into the food system compared to how much is put into other other areas.
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And you know, there's there's little doubt that the food system's hugely important to everyone on the planet, all of us, our well-being and our survival.
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Uh, there's little doubt that um it's impacted by climate change.
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There's little doubt that if we manage it better, that we can have a real positive impact on climate change as well as food security and the follow-on benefits for you know social cohesion and lack of conflict and all those sorts of potential follow-on um events.
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However, the investment doesn't seem to materialize in the levels that would be appropriate for how important everyone realizes it is.
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And and I guess it's the you know the $53 million question, but you know what's what's happening there?
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Yeah, look, um I think there are two sectors that are the major sectors for climate issues energy and agri-food systems.
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Energy is trying to resolve their problem with very concrete targets with their own private sector and evolving, and there is a lot of investment in energy right now.
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The agri-food system only receives four percent of the climate financing in the world.
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Four percent.
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Now, the agri food system generates around 10% of the emissions directly and 30% overall with the whole value chain and the whole process.
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So they are one-third of the emissions in the world, and especially they are the methane contributors to the world.
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So, and at the same time, we always forget they produce food.
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So if you don't eat, why we need a world?
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There is no world, no?
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So it's a kind of a contradiction, no?
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Why the sector which is giving you the food, which is the key element that you need to be able to survive in this world, and the sector which is having all these inefficiencies that you can improve, is not the sector that is receiving most of the money to do that check.
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And if you go to smallholders, it's even worse.
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So, again, we need to find a way to change the way we think and the way we prioritize investments, and that is what we are missing.
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And that's why it's so important to keep pushing in the COPs.
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I just came from the COP 13 Belem, no, and there was a food security declaration, but that's not enough, no?
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We need to do more.
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We really need to do this loss and damages fund, the forestry fund, that but we need to substantially increase the investment in the agri-food systems.
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That's the only way, because if you look at the space that you can improve in the agri-food system, it's enormous relative to other sectors.
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So the return will be high in terms of the global public goods, but at the same time, you will be able to have food.
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You will be able to have the right food.
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So I think that still is not uh well understood in the world.
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Now, the other issue which is important, we did a two-year publication here called The SOFA, the State of Food and Agriculture, on the true cost accounting.
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And we look at the true cost accounting, we found that the agri-food system brings around 11.6 million of externalities to the world.
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And there are three types of externalities: environmental, health, and social.
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The environmental are around 3 billion, the health are around 8.1 billion, and the social are 600 million.
00:20:33.680 --> 00:20:44.240
Now, so outside of the environmental, which is huge, is also the social the health, which is we are eating food that not necessarily is a healthy diet.
00:20:44.240 --> 00:20:47.759
And that has a cost in terms of NCDs, non-communicable diseases.
00:20:47.759 --> 00:20:50.079
So we are missing also that point, no?
00:20:50.079 --> 00:20:57.119
That if we invest in this agri-food system, we also will reduce this externality of health, in addition to the externality of environment.
00:20:57.119 --> 00:21:00.720
So we have a double wind there that can easily be achieved.
00:21:00.720 --> 00:21:11.279
Of course, it's not easy, it's complex, but at least if we put the property investment there, uh it will be, I think, a big game changer and a big return to why you are investing in that sector.
00:21:13.680 --> 00:21:17.200
In 1917, the in St.
00:21:17.200 --> 00:21:49.200
Petersburg, there were a bunch of um bread protests, and the people were unhappy about the high price of bread and the availability of food, and we kind of know where that all went to and how the the um the ripples from that event are still affecting us day to day that led to the Russian Revolution, the overthrow of the Tsar, the formation of the Soviet Union, the Cold War, and you know, that's kind of the war in Ukraine and from a food, global food perspective, how that's affected trade, access to fertilizer, all sorts of things.
00:21:49.200 --> 00:21:51.759
So, you know, that's well over a hundred years ago.
00:21:51.759 --> 00:22:09.200
Um is the and then there's the Arab Spring, and which was started off around food prices, um, and also there was a big drought in 2000 or the early 2000s that led to um less grain being traded, which was one of one of the triggers of the Arab Spring.
00:22:09.200 --> 00:22:20.000
So food insecurity and food price instability can have huge, exceptionally costly geopolitical consequences.
00:22:20.000 --> 00:22:25.279
And is that something that needs more attention?
00:22:25.279 --> 00:22:44.720
Um, you know, especially in light of getting the investment that we need to actually make the um make the changes that will have real impact um if it's seen as a national security, global security uh priority, not just a uh a food and hunger and nutrition and health priority.
00:22:45.119 --> 00:22:45.839
No, for sure.
00:22:45.839 --> 00:22:52.960
Look, there are three key potential risks that we run if we are not careful about food inflation, which is what you are referring to.
00:22:52.960 --> 00:22:58.400
And in the last years, we have seen food inflation running very fast relative to the overall inflation.
00:22:58.400 --> 00:23:08.319
The biggest peak we have on food inflation uh was 13.6% in 2023, uh which was the peak in the world of food inflation.
00:23:08.319 --> 00:23:10.720
But in low-income countries it was around 30%.
00:23:10.720 --> 00:23:11.519
Okay.
00:23:11.519 --> 00:23:13.680
The global inflation was lower.
00:23:13.680 --> 00:23:16.880
So you see a divergence between global inflation and food inflation being high.
00:23:16.880 --> 00:23:18.960
Now, what are the key potential risks?
00:23:18.960 --> 00:23:23.359
One is political stability, as you mentioned, and we have historical evidence of the political instability.
00:23:23.359 --> 00:23:32.960
Even today, if you look at the surveys that they have done, 46% to 80% of the voters consider food price as a decisive factor in their election choice.
00:23:32.960 --> 00:23:36.319
And we have seen what has happened in the latest elections about this.
00:23:36.319 --> 00:23:39.599
The second element is macroeconomic stability.
00:23:39.599 --> 00:23:46.079
So 60% of countries' uh food products represent more than 25% of their CPI basket.
00:23:46.079 --> 00:23:51.200
So if we have food inflation, then we will have instability, macroeconomic instability.
00:23:51.200 --> 00:23:57.759
And that's why OECD countries rush so quickly to try to resolve their food inflation by increasing their interest rates.
00:23:57.759 --> 00:24:06.799
Because that's the typical measure that you do as a macroeconomist and monetary policy, which is to increase interest rates so that you have less currency and therefore inflation goes down.
00:24:06.799 --> 00:24:08.720
But it was not too easy to resolve.
00:24:08.720 --> 00:24:12.079
Still, we have a challenge, for example, in the US and in Europe.
00:24:12.079 --> 00:24:16.240
And the third element is food security and nutrition, because who is affected more?
00:24:16.240 --> 00:24:18.880
The people whose most of their expenditures are on food.
00:24:18.880 --> 00:24:21.359
And the bigger share of expenditures in food are the poorest.
00:24:21.359 --> 00:24:25.519
So they will be impacted, and the solution is to eat less or to eat lower quality.
00:24:25.519 --> 00:24:27.680
So we know that for sure.
00:24:27.680 --> 00:24:33.759
So we know it creates a political impact, and we know it creates could create a significant turmoil in the world.
00:24:33.759 --> 00:24:35.759
And that's why we need to be more sensitive.
00:24:35.759 --> 00:24:49.920
The the good thing, and I think what is starting to we're starting to see is that uh governments, especially the sector that looks more at conflicts and so on, are starting to get a little bit more concerned about this.
00:24:49.920 --> 00:24:57.680
And they are starting to get worried because they see that conflict is correlated with food insecurity, with food inflation, instability, and so on.
00:24:57.680 --> 00:25:06.319
And then we have structural issues that could become problematic, like lack of water and the frequency and intensity of climate events, which we know for sure will happen.
00:25:06.319 --> 00:25:09.759
We have already violated seven of the nine planetary boundaries.
00:25:09.759 --> 00:25:15.440
So no matter what we do in the next 10 years, we will have more climate shocks in frequency and intensity.
00:25:15.440 --> 00:25:19.039
So I think things need to change, and that's where the investment needs to come.
00:25:19.039 --> 00:25:19.519
Okay?
00:25:19.519 --> 00:25:23.920
Now we need to be, I think we need to be very blunt in terms of the investment.
00:25:23.920 --> 00:25:26.160
There are several buckets of investment, no?
00:25:26.160 --> 00:25:29.759
One is what the countries invest, and that's their own money.
00:25:29.759 --> 00:25:33.759
And we know that their own money not necessarily is being used in the most efficient way.
00:25:33.759 --> 00:25:39.359
That's the repurposing agenda and all the evidence we have brought in terms of how public money is being used.
00:25:39.359 --> 00:25:45.519
A lot of distortions being created, not targeting commodities that will increase access to healthy diets and so on.
00:25:45.519 --> 00:25:51.279
There is a big chunk of money there that can be repurposed and have an impact, but that mostly in developed countries.
00:25:51.279 --> 00:25:53.279
In developing countries is marginal.
00:25:53.279 --> 00:25:59.440
The second bucket is uh the money coming from the IFIs, the MDBs, the banks, the IFIs.
00:25:59.440 --> 00:26:03.279
And there is there is a big share of money there that can be used.
00:26:03.279 --> 00:26:16.400
Now, that pot of money is not too accessible for the poorest countries because they are in debt stress, and most of them in Africa and in food crisis countries, and they don't have mechanisms for debt distressed countries because it will reduce their ratings.
00:26:16.400 --> 00:26:18.720
No, so they won't lend money to those countries.
00:26:18.720 --> 00:26:22.720
Very difficult to them, very expensive because they will have to reach other sources.
00:26:22.720 --> 00:26:29.359
But it's accessible for the middle income and the high-income countries, and maybe some of the low-income countries.
00:26:29.359 --> 00:26:32.400
But that needs to create more consistency, more convergence.
00:26:32.400 --> 00:26:38.640
Right now, every financial agency is doing what they think is correct, and there is not too much of a convergence there.
00:26:38.640 --> 00:26:40.880
The third part is the private sector.
00:26:40.880 --> 00:26:43.519
But the private sector is very risk averse.
00:26:43.519 --> 00:26:45.599
They will argue that they are risk lovers, but they are not.
00:26:45.599 --> 00:26:48.559
They are risk averse because for them is they need to make profits.
00:26:48.559 --> 00:26:58.160
And where you will go, if you have to sell phones, you will go to the place where higher income is there, facilities are there, and then you will collect as much as you can.
00:26:58.160 --> 00:27:01.359
Once you finish that market, then you go to more risky markets.
00:27:01.359 --> 00:27:10.079
But why you will jump immediately to a risky market unless you have some side information that will so it makes all the sense of the world for them to be risk averse.
00:27:10.079 --> 00:27:12.640
And that's where comes the fine, the famous de-risking.
00:27:12.640 --> 00:27:19.359
And the de-risking is financial, so that you cover first losses, for example, and then the private sector will jump in.
00:27:19.359 --> 00:27:28.640
But that is very difficult to do in countries like DRC or Sudan, where they are in conflict and so on, even in South Sudan.
00:27:28.640 --> 00:27:37.920
But our job, for example, is trying to bring two concepts of de-risking, the financial one, which we work with the banks, but also the information one.
00:27:37.920 --> 00:27:43.359
Because we can provide more information that will reduce the uncertainties to these investments.
00:27:43.359 --> 00:27:48.000
And then the fourth basket is what we were talking about, the climate financing.
00:27:48.000 --> 00:27:52.720
Of course, there is the Bill Gates and others, but those are catalytic.
00:27:52.720 --> 00:27:54.880
But the big financing is climate financing.
00:27:54.880 --> 00:28:08.720
So I think we need to bring the four buckets together to help to cope with these huge risks that this sector could bring, which are linked to political instability, macroeconomic instability, and uh food and security and nutrition problems.
00:28:09.759 --> 00:28:16.720
You mentioned the uh philanthropy like the Bill the Gates Foundation, those sorts of organizations are catalytic.
00:28:16.720 --> 00:28:25.599
So you know, there's there's a huge importance of that if they can actually start something and create uh momentum by being that catalyst.
00:28:25.599 --> 00:28:42.960
In terms of you know, in in in in what you explained, I think there's there's a big part of that, that in there's in many ways the greatest opportunities to to make fast change are going to be in many of those developing countries where where the base is lower.
00:28:42.960 --> 00:28:53.839
Whereas, you know, to increase the efficiency of a of a European farm or a Australian or an American North American farm, there's a smaller delta to be gained between the top ones and the bottom ones.
00:28:53.839 --> 00:29:01.920
So, but there's also that risk profile working with the US, the Europeans or the Australians, etc., there's a lower risk for the private sector.
00:29:01.920 --> 00:29:05.119
And so that's where that de-risking comes into it.
00:29:05.119 --> 00:29:18.799
And and what kind of innovations or new thinking or opportunities are there to try and or excite you or you're passionate about that actually can change, change the dynamic in this space?
00:29:19.119 --> 00:29:23.039
Yeah, look, I think that there is a lot of space to improve.
00:29:23.039 --> 00:29:28.319
Look, if the change will come, it will come from South America and it will come from Africa.
00:29:28.319 --> 00:29:30.480
In South America, we're already on path.
00:29:30.480 --> 00:29:35.119
We have a lot more space to keep improving in terms of agricultural productivity.
00:29:35.119 --> 00:29:37.680
And that is going to happen, I hope.
00:29:37.680 --> 00:29:40.880
Uh if things align and we can keep growing.
00:29:40.880 --> 00:29:49.200
Even I keep arguing that South America is the only region in the world that could achieve SDG2 at this point if things change, continuing the way they are.
00:29:49.200 --> 00:29:54.480
In the case of Africa, I think there are a few countries, and I am tracking like countries which are improving slightly, no?
00:29:54.480 --> 00:29:57.039
And I see that there are countries where changes are happening.
00:29:57.039 --> 00:29:58.799
Those are Zambia, for example.
00:29:58.799 --> 00:29:59.680
It's a very good.
00:29:59.680 --> 00:30:18.079
Potential, a lot of land, a lot of water, good soil, a lot of space, problem of property rights that needs to be resolved, but a lot of space to do big scale production, mechanization, automation, and so on, similar to what happens in Brazil, similar to what happens in the US.
00:30:18.079 --> 00:30:20.720
So space is there for that type of a country.
00:30:20.720 --> 00:30:22.079
Senegal, for example.
00:30:22.079 --> 00:30:25.279
There is a new government which is very dynamic and wants to change things.
00:30:25.279 --> 00:30:27.119
What they really want to bring innovation.
00:30:27.119 --> 00:30:28.640
I also see a space there.
00:30:28.640 --> 00:30:34.559
I see a space in Ethiopia, still they need to have some changes, but they are doing the macro reform, but they are growing.
00:30:34.559 --> 00:30:49.759
They are improving technology, but still some challenges there, but some changes which are good after the Ethiopia Transformation Agency, which was a new way to create an autonomous agency, which was supported by Gates Foundation that tried to bring technology to the government, to the farmers.
00:30:49.759 --> 00:30:56.160
They brought mechanization, they brought the new wheat varieties that were more resilient, they brought irrigation, which has created an impact.
00:30:56.160 --> 00:31:00.240
They are self-sufficient in wheat, for example, right now, which they were fully import-dependent.
00:31:00.240 --> 00:31:04.799
But still they have some challenges because their macroeconomic policies have just changed.
00:31:04.799 --> 00:31:06.799
The currency issue was a big problem.
00:31:06.799 --> 00:31:08.799
Now those are starting to be reformed.
00:31:08.799 --> 00:31:09.920
So it will take some time.
00:31:09.920 --> 00:31:15.599
But I think things could work if things institutionally also keep improving.
00:31:15.599 --> 00:31:17.920
But there are countries that there is enormous potential.
00:31:17.920 --> 00:31:20.960
For example, we have a beautiful project in South Sudan.
00:31:20.960 --> 00:31:25.519
We were able, because South Sudan has the perfect climate to do rice.
00:31:25.519 --> 00:31:32.240
Okay, so we basically brought technological innovation into the production of rice.
00:31:32.240 --> 00:31:34.640
We brought improved seeds that were resistant.
00:31:34.640 --> 00:31:38.079
And we were able to deploy a thousand hectares of rice.
00:31:38.079 --> 00:31:40.880
Super successful under the hand-in-hand initiative.
00:31:40.880 --> 00:31:43.039
Now we are scaling that up to 10,000.
00:31:43.039 --> 00:31:50.400
Now, if you look at this, that means that this country can supply to many countries in Africa rice, because they consume a lot of rice.
00:31:50.400 --> 00:31:54.240
Now, there is a lot of risk there because of the potential conflicts and so on and so forth.
00:31:54.240 --> 00:31:56.640
But you can see that technology can help you to do that.
00:31:56.640 --> 00:32:03.359
And the theory is that if you create income, the probability that you will have people supporting conflict will be smaller.
00:32:03.359 --> 00:32:07.359
But that needs to happen and those types of innovations need to happen.
00:32:07.359 --> 00:32:09.920
DRC has a huge potential.
00:32:09.920 --> 00:32:12.079
But again, a lot of political instability.
00:32:12.079 --> 00:32:21.200
So I think we need to find ways to, through income-generating activities, start to remove people out of these conflict issues, no?
00:32:21.200 --> 00:32:25.920
And trying to find ways to protect these people more to be able to minimize those risks.
00:32:25.920 --> 00:32:31.920
Another area where I found it amazing is the dry corridor, the famous dry corridor in Central America.
00:32:31.920 --> 00:32:38.880
There has been so much investment, especially in the Trifino, which is the three borders of the three countries of the dry corridor.
00:32:38.880 --> 00:32:40.720
And really nothing has happened.
00:32:40.720 --> 00:32:47.039
And we say, okay, this has to change because the dry corridor should not be a dry corridor, it should be a green corridor.
00:32:47.039 --> 00:32:49.200
There is water six months of the year.
00:32:49.359 --> 00:32:49.680
Okay?
00:32:49.839 --> 00:32:51.839
There is six months that you don't have water.
00:32:51.839 --> 00:33:05.599
But you can use technology to bring special grasses for livestock varieties of livestock genetic innovations that will allow them to be able to cope those types of extreme temperatures.
00:33:05.599 --> 00:33:08.000
You can do irrigation into it.
00:33:08.000 --> 00:33:16.960
If you look at Costa Rica, for example, the innovations they are doing in the dry corridor, if we scale up that to the other parts of the dry corridor, then you have a lot of change.
00:33:16.960 --> 00:33:27.839
For the US, for example, because people are migrating because they don't have something to eat and then they move, they want to improve.
00:33:27.839 --> 00:33:30.000
So I think there is a lot of potential.
00:33:30.000 --> 00:33:31.519
Now, why is this so important?
00:33:31.519 --> 00:33:37.839
Because if I look at the world today, okay, and we know, as I said before, that we are going to have more climate chance.
00:33:38.079 --> 00:33:38.400
Okay?
00:33:38.799 --> 00:33:48.400
After the Ukraine war, if there is one major problem, outside of the deaths and the political side, but on the agricultural sector, is that Ukraine was a key exporter of wheat and some flour.
00:33:48.400 --> 00:33:49.599
Key exporter.
00:33:49.599 --> 00:33:50.799
Now it is not.
00:33:50.799 --> 00:33:51.920
It's not one of the top.
00:33:51.920 --> 00:33:54.160
It's a big exporter, but not one of the top.
00:33:54.160 --> 00:33:58.480
Now, that means that our world is less resilient than before.
00:33:58.480 --> 00:34:02.079
Because we have four or five key exporters of wheat in the world.
00:34:02.079 --> 00:34:02.720
Okay?
00:34:02.720 --> 00:34:05.680
If one of them disappears, I am less resilient.
00:34:05.680 --> 00:34:11.039
I am closer to what I was in 2007, 2008, the food crisis or 2011.
00:34:11.039 --> 00:34:22.639
Now, if in this space I have a climate shock in Brazil or a climate shock in another key wheat exporter country, then the risks that my prices will skyrocket are high.
00:34:22.639 --> 00:34:27.519
So we need big exporting countries, big producing countries, like Zambia.
00:34:27.519 --> 00:34:29.519
Convert Zambia into a big producing country.
00:34:29.519 --> 00:34:32.480
That will diversify our world portrafolio.
00:34:32.480 --> 00:34:34.159
And that's exactly what we need.
00:34:34.159 --> 00:34:35.679
And we forget this.
00:34:35.679 --> 00:34:38.159
It's not just production for subsistence.
00:34:38.159 --> 00:34:40.480
We need to have big producers in the world.
00:34:40.480 --> 00:34:45.039
The entry of the savannah in Brazil makes Brazil a key exporter in the world.
00:34:45.039 --> 00:34:46.239
It was not before.
00:34:46.239 --> 00:34:48.639
And that really improved the situation that we have.
00:34:48.639 --> 00:34:54.880
So I think we need to increase big exporters in the world, and Africa has an enormous potential.
00:34:54.880 --> 00:34:58.400
Africa is the continent that used the less fertilizer in the world.
00:34:58.400 --> 00:34:59.440
It's like less than 3%.
00:34:59.440 --> 00:35:00.159
Okay.
00:35:00.159 --> 00:35:02.960
Imagine, it's an organic continent, basically.
00:35:02.960 --> 00:35:07.199
Imagine if you increase that to 7%, which is even low.
00:35:07.199 --> 00:35:09.519
What will be the impact in terms of productivity?
00:35:09.519 --> 00:35:13.360
And if you do it properly, no, you do it sustainably in the best way.
00:35:13.360 --> 00:35:18.960
You have soil maps, you know what to use, and so on and so forth, like what Ethiopia did with their soil program.
00:35:18.960 --> 00:35:21.199
What if we do the same in Zambia?
00:35:21.199 --> 00:35:22.639
What if we do the same in Senegal?
00:35:22.639 --> 00:35:27.920
What if we do the same in Mozambique, which is also a country that has an enormous potential, or in DRC?
00:35:27.920 --> 00:35:35.599
And then you know exactly what you need to put in the soil, because the difference is what the difference between the plant and what the soil has, that's the micronutrients that you need.
00:35:35.599 --> 00:35:42.159
Normally we rep we distribute packages, which has nothing to do with what the soil needs for that specific plant.
00:35:42.159 --> 00:35:46.079
If we do it smartly, then we can get a lot of payback.
00:35:46.079 --> 00:35:48.159
And then you will see the yields and you will see the benefits.
00:35:48.159 --> 00:35:49.760
So the space I think is enormous.
00:35:49.760 --> 00:35:52.719
I am super, you know, things are not doing well.
00:35:52.719 --> 00:35:55.039
There is a lot of political uncertainty in the world.
00:35:55.039 --> 00:36:00.000
But I try to keep thinking, okay, we have to be optimistic because there is space.
00:36:00.000 --> 00:36:19.599
If we are able to coordinate investment, if we are able to create convergence, the banks forget their own identity and really think in following what the Cadap strategy is, which is a well-done strategy, and try to do these core public good investments in soils, in technology, then I think we can do a big change.
00:36:19.599 --> 00:36:24.000
But of course, it requires governments to change, it requires governments to take this over.
00:36:24.000 --> 00:36:25.679
And we have seen this can happen.
00:36:25.679 --> 00:36:29.920
As I said, in two years, Brazil move out again of the hunger map.
00:36:30.079 --> 00:36:30.320
No?
00:36:30.639 --> 00:36:32.559
Dominican Republic is taking four years.
00:36:32.559 --> 00:36:35.440
I am sure next year they will be out of the hanger map.
00:36:35.440 --> 00:36:37.760
Many countries can do it.
00:36:37.760 --> 00:36:45.199
It's just an issue of taking this political plus, doing the investment that is needed in the correct way to create the change.
00:36:47.119 --> 00:36:50.960
That's very fascinating what you what you've been saying.
00:36:50.960 --> 00:37:14.079
And I think on the on the need for exporters, and one of the nuances or intricacies of global grain prices is um despite the fact that only a very small percentage of grain is actually traded internationally, that international price um is what drives domestic prices across the globe.
00:37:14.079 --> 00:37:20.400
There's a huge disproportional impact on domestic price from that international price.
00:37:20.400 --> 00:37:30.800
And back to what you were saying about fertilizer use and actually putting the right fertilizers on the right crops, you know, that's that's knowledge that you know is very well established.
00:37:30.800 --> 00:37:47.199
We don't need new research or new anything to implement those um types of changes in many of those Africans, Zambia, um Madagascar, those, not um Mozambique, sorry, um Ethiopia, etc.
00:37:47.199 --> 00:37:50.559
Um, that's knowledge that we that we have.
00:37:50.559 --> 00:37:55.199
So there are ways forward in in that space.
00:37:55.199 --> 00:37:58.880
What do you think is is holding that up?
00:37:59.519 --> 00:38:10.960
Yeah, look, it's it's very interesting because you're in the Ukraine war, you know, one of the major problems was the lack of nitrogen, no, because the gas didn't flow to Europe and Europe was a key producer of nitrogen fertilizer.
00:38:10.960 --> 00:38:16.320
Uh and there was also the problem of potash, no, uh, from Belarus and so on.
00:38:16.320 --> 00:38:19.440
Um, so the price of fertilizers multiplied times four.
00:38:19.440 --> 00:38:26.000
In that point in time, I don't know if you recall, there were some people saying that this will create a huge food crisis in Africa.
00:38:26.000 --> 00:38:27.599
And they were completely wrong.
00:38:27.599 --> 00:38:30.320
Nothing happened, basically, because they are organic.
00:38:30.320 --> 00:38:33.199
Now, but it was also a great opportunity, no?
00:38:33.199 --> 00:38:33.840
Uh why?
00:38:33.840 --> 00:38:36.880
Because fertilizer companies made a lot of money in those days.
00:38:36.880 --> 00:38:44.000
Their prices weren't times four, and there was scarcity, so people were willing to pay the plus four times four.
00:38:44.000 --> 00:38:50.559
And one of the positions we did with the with David Navarro in that time, which still was alive, sadly, he passed away.
00:38:50.559 --> 00:38:55.679
And we have this high-level commission by the Secretary General, we met with the fertilizer companies, no?
00:38:55.679 --> 00:39:00.320
And our argument to them is, guys, you have to invest that money because this is not returns that you were expecting.
00:39:00.320 --> 00:39:05.679
These were completely abnormal returns that nobody was expecting because nobody expected the war in Ukraine.
00:39:05.679 --> 00:39:07.599
So we truly invest this.
00:39:07.599 --> 00:39:11.119
And they were investing the money in soil maps in Africa.
00:39:11.119 --> 00:39:15.440
But the problem was that most of the soil maps were for their own companies, no?
00:39:15.440 --> 00:39:22.639
And our position was why we a place like FAO, we can create the standards that we need to have in soil maps.
00:39:22.639 --> 00:39:24.480
And then this becomes a public good.
00:39:24.480 --> 00:39:28.480
You also do what you do for your company, but we create a global public good with common standards.
00:39:28.480 --> 00:39:31.280
We progress a lot, but we couldn't get into the final agreement.
00:39:31.280 --> 00:39:34.000
But I hope soon we will be able to get to an agreement.
00:39:34.000 --> 00:39:36.800
But those are important things because soil maps are expensive.
00:39:36.800 --> 00:39:38.320
Still, they are not so cheap.
00:39:38.320 --> 00:39:43.519
And we are talking of top layer soil maps, we're not talking of Calicata, which is the deep soil map.
00:39:43.519 --> 00:39:58.320
Uh but we are, we have, as a result of that, we came up into a project the FAO is doing now soil maps in like eight or nine countries that we are going to deliver, and the ideas to deliver them with an app so the farmer can enter what they produce, the coordinates, and then it will give them what will be the blending that they need.
00:39:58.320 --> 00:40:00.400
And then you have to have the blending company also.
00:40:00.400 --> 00:40:15.280
But the other challenging thing was that um I always keep arguing when I was in the World Bank and I work uh in the board, uh, I was pushing a lot the creation of the Dangote plant of fertilizer in Nigeria.
00:40:15.280 --> 00:40:17.840
And IFCD the investment.
00:40:17.840 --> 00:40:21.119
Uh, and before leaving the board, I went to Nigeria to see the plant.
00:40:21.119 --> 00:40:23.599
And it was impressive, state-of-the-art technology.
00:40:23.599 --> 00:40:25.119
But then I did one mistake.
00:40:25.119 --> 00:40:28.000
I asked them, okay, where is this fertilizer going?
00:40:28.000 --> 00:40:31.519
And 90% was going to Latin America.
00:40:31.519 --> 00:40:33.360
Why?
00:40:33.360 --> 00:40:38.000
Because it's a company and Latin America, South America was able to pay.
00:40:38.000 --> 00:40:40.079
Africa had a lot of problems.
00:40:40.079 --> 00:40:54.320
So I keep saying during this Ukraine war period is let's resolve the problem of why the Dangote plant and the other three plans that Nigeria has is selling everything to South America and then it's not selling to Africa.
00:40:54.320 --> 00:41:02.480
And this is linked to infrastructure, is linked to debt stress, so they cannot pay, and it's linked also to trade barriers.
00:41:02.480 --> 00:41:06.960
So those are the things that we need to do, like a value chain analysis to resolve.
00:41:06.960 --> 00:41:10.880
But I can be honest, I didn't got one cent to do the study.
00:41:10.880 --> 00:41:23.199
Everybody was talking of taking fertilizers in boats to distribute in giving subsidies, but no country gave me one cent to do the study of why these bottlenecks were there.
00:41:23.199 --> 00:41:28.480
So again, then you get a little bit depressed because you say, Okay, I am telling something that I know is true.
00:41:28.480 --> 00:41:30.800
They are producing a lot of nitrogen.
00:41:30.800 --> 00:41:32.239
We need nitrogen.
00:41:32.239 --> 00:41:40.000
They can sell, but we need to understand why it's not flying, why it's not going there, why it's going to other continents, which is very far away.
00:41:40.000 --> 00:41:48.559
So it's better for them to send it miles, thousands of miles away to South America than to sell it a few kilometers away to the neighborhood countries.
00:41:48.559 --> 00:41:53.599
Okay, so so again, there's those inconsistencies that sometimes you don't know.
00:41:53.599 --> 00:41:56.480
And you think, okay, I am in the forest gang world, no?
00:41:56.480 --> 00:41:59.280
We have some evidence, but it's not working.
00:41:59.280 --> 00:42:01.039
And that's where I get very frustrated.
00:42:01.039 --> 00:42:01.920
And I keep insisting.
00:42:01.920 --> 00:42:04.719
I hope one of these days I will be able to get some resources.
00:42:04.719 --> 00:42:06.159
If not, we will do it by default.
00:42:06.159 --> 00:42:08.239
But but there is a lot of work to be done.
00:42:08.239 --> 00:42:10.960
And that's linked also to the Africa Free Trade Agreement, no?
00:42:10.960 --> 00:42:12.159
A huge potential.
00:42:12.159 --> 00:42:21.280
But if we don't resolve the food safety standards, doing like a Pan-African food safety agency, it won't be tariffs, it will be NTVs, non-tariff barriers.
00:42:21.280 --> 00:42:25.440
Okay, so we keep saying we need to build this, we need to build this.
00:42:25.440 --> 00:42:36.400
The the African Union has agreed, but still we don't have the food safety standards across the region, even within the RECs, that will allow us to really implement the African Free Trade Agreement.
00:42:36.400 --> 00:42:44.719
So there is a lot of problems sometimes in making aligning donors and interest to what really needs to be done.
00:42:44.719 --> 00:42:47.440
And that's, I think, is one of the biggest challenges that we have.
00:42:47.440 --> 00:42:55.599
Sometimes it's not that we don't have the money, of course, we more money will be better, but sometimes is that the money that we have is not for what we need.
00:42:55.599 --> 00:42:57.360
And that's a challenge.
00:42:58.480 --> 00:43:42.559
The the value chain analysis is a is a fascinating um thing to bring up because it's you know, there's so many there's so many things that you know, you mentioned infrastructure or transport infrastructure, you mentioned um potential trade, tariffs or non-tariff trade barriers, um, there's financing, there's there's there's many things that it could be, but until you actually understand and have done the work to understand what is is stopping um that trade growing, and and there's a lot of local poly local politics or tribal politics or or those kind of nuances or governance issues that will also fit into that.
00:43:42.559 --> 00:43:56.239
Until you actually understand that side of things, it um it makes it very hard to know where to start and where to to invest that money to get the the biggest um impact.
00:43:57.119 --> 00:44:08.000
Yeah, and you know, I am very proud of a program that we have here, and sorry I mentioned it, I I don't want to make advertisements, but look, we started four years ago what we call the Hunningham Initiative.
00:44:08.000 --> 00:44:12.239
Okay, and the Hunningham Initiative was exactly trying to respond to that issue.
00:44:12.239 --> 00:44:17.199
So, what it was doing is looking to a country, looking at territorial approaches.
00:44:17.199 --> 00:44:20.400
We have a methodology to identify what we call the green areas, no?
00:44:20.400 --> 00:44:34.000
Areas where agriculture, where agriculture can be crops, livestock, forestry, aquaculture, fishery, whatever FAO for agriculture for FAO is all these sectors, has a huge potential, but today you are not achieving that potential.
00:44:34.000 --> 00:44:42.239
What this means is that today you are poor, you are in $1.5 per PPP per day, but the potential that you have in that location could put you in $7.
00:44:42.880 --> 00:44:43.119
Okay?
00:44:43.599 --> 00:44:44.800
So really you can make a difference.
00:44:44.800 --> 00:44:46.559
But there are bottlenecks, there are problems, no?
00:44:46.559 --> 00:44:52.239
So then what we do is when we talk with the governments, the governments say, okay, I want to work in these two green areas of my country.
00:44:52.239 --> 00:44:54.639
Then we send teams to see, okay, what is the problem?
00:44:54.639 --> 00:44:57.840
Why are these farmers not getting to that level of potential?
00:44:57.840 --> 00:44:59.519
Because we know they have the potential.
00:44:59.519 --> 00:45:01.280
This is realized potential.
00:45:01.280 --> 00:45:05.840
And then we identify the bottlenecks, and then we do investment plans around those bottlenecks.
00:45:05.840 --> 00:45:10.320
And those investment plans, then we sell it to the banks and to the private sector.
00:45:10.320 --> 00:45:12.000
So we do what we call matchmaking.
00:45:12.000 --> 00:45:18.960
We bring them in an investment forum and we present, the ministers present their investment plans based on all these methodologies.
00:45:18.960 --> 00:45:31.199
The investment plans are done by our investment center, which is the one that does the loans to the bank, the profiles of the loans to the banks and so on, to the World Bank, to IDB, to CABE, to the European Investment Bank.
00:45:31.199 --> 00:45:34.239
And we attract these investors.
00:45:34.239 --> 00:45:44.480
And this year, for example, we innovate in trying to bring together the private sector, the IFCs of the world, which is to the risk, and the technology of the information we have with the government.
00:45:44.480 --> 00:45:52.719
And what we are seeing is that finally, after four years or now about two years, we are starting to get investment flowing.
00:45:52.719 --> 00:45:58.639
Investment from private companies, like the South Sudan project that I told you was funded by the African Development Bank.
00:45:58.639 --> 00:45:59.920
It was a hand-in-hand project.
00:45:59.920 --> 00:46:04.960
In Dominican Republic, we have a project in the border with Haiti, for example, and Dominican Republic.
00:46:04.960 --> 00:46:12.320
In Peru, we have a project on potatoes, Andean potatoes, which every year the farmers used to harvest at the same time, the price used to fall.
00:46:12.320 --> 00:46:16.719
Now we link them to a company, they have a new technology, they are exporting the potatoes.
00:46:16.719 --> 00:46:17.920
Very successful.
00:46:17.920 --> 00:46:23.920
Farmers are getting instead of 0.5 cents per kilo, now they're getting three soles per kilo, which is close to a dollar.
00:46:23.920 --> 00:46:25.280
Very stable.
00:46:25.280 --> 00:46:28.159
We have several in Africa.
00:46:28.159 --> 00:46:29.760
So it's starting to grow.
00:46:29.760 --> 00:46:36.719
And we see that the IFCs and the private sector are interested because we de-risk them also with information.
00:46:36.719 --> 00:46:41.119
But the the benefit the real success of it is that we are targeting the problem.
00:46:41.119 --> 00:46:43.599
We are not just targeting a generic solution.
00:46:43.599 --> 00:46:51.360
No, we are really looking at what is the real problem here and how we can resolve that problem because then these investments become very profitable.
00:46:51.360 --> 00:46:53.440
Today we are in 80 countries.
00:46:53.440 --> 00:46:56.239
We started with a few, now we are in 80.
00:46:56.239 --> 00:46:57.920
And I hope it will keep growing.
00:46:57.920 --> 00:47:01.039
Many of the banks are now using our way to do things.
00:47:01.039 --> 00:47:16.559
But I think, again, not to advertise a fail, but I think those types of fine-tuning of the actions that you need to do with significant evidence and being precise on what you what the interventions need to do are the ones that pay back.
00:47:16.559 --> 00:47:18.239
It's like targeting social protection.
00:47:18.239 --> 00:47:20.719
I can throw a social protection program in a country.
00:47:20.719 --> 00:47:22.800
If I don't target properly, I'm throwing the money out.
00:47:22.800 --> 00:47:24.400
It happened in my country.
00:47:24.400 --> 00:47:27.840
During the time of COVID-19, my country had a lot of money.
00:47:27.840 --> 00:47:31.440
They had a social protection program in place, very well targeted.
00:47:31.440 --> 00:47:33.840
But COVID-19 affected different people.
00:47:33.840 --> 00:47:40.480
They affected all the informal economy in the urban areas, which were not poor in that moment in time.
00:47:40.480 --> 00:47:44.159
They had income, a lot of income, so they were non-poor.
00:47:44.159 --> 00:47:52.800
But when the country was closed, the economy was closed, these people didn't know what to do, and they lost all their working capital.
00:47:52.800 --> 00:47:56.719
And we scaled up social protection, but we didn't target those people.
00:47:56.719 --> 00:47:59.280
So we lost all the money basically.
00:47:59.280 --> 00:48:11.599
Those people became poor, and if you look at the Peru and the evolution of poverty, there was a huge spike during COVID-19 when we had a lot of money to distribute, but we were not targeting really the ones.
00:48:11.599 --> 00:48:18.159
So again, that's exactly what we're trying to do with agriculture and investments in agriculture.
00:48:19.840 --> 00:48:30.559
I really love hearing about the interactions or the interrelationship between social protection and you know food security and the agricultural side of things.
00:48:30.559 --> 00:48:38.800
I think it's uh an area that doesn't get uh anywhere near as much attention as it probably deserves.
00:48:38.800 --> 00:48:52.559
And going back to um the food price inflation and um that we were talking about before, uh, you know, that's something that's you know, it's a hot um political topic, you know, in in some of the world's, you know, in G7 countries.
00:48:52.559 --> 00:48:55.760
Here in the US, it's a big, you know, cost of living is a big thing.
00:48:55.760 --> 00:49:01.280
In the U, the UK Um is it leads the news many, many times a week.
00:49:01.280 --> 00:49:07.760
So I think I think that goes back to also to the global north, global south side of things.
00:49:07.760 --> 00:49:18.159
And um you know, growing up in in the global north, you you kind of thought that a lot of these problems were were you know back pre-second world war.
00:49:18.159 --> 00:49:21.519
That was something that was solved, tick, we didn't need to worry about that.
00:49:21.519 --> 00:49:25.440
But it seems to have resurged in in many of those places that thought they were safe.
00:49:25.440 --> 00:49:31.280
Is there complacency in parts of the world that we don't, you know, we're not going to be afflicted by this?
00:49:32.320 --> 00:49:38.719
No, I I think the pro the difference is and and is that those countries have more capacity of absorption.
00:49:38.719 --> 00:49:49.760
So if a cyclone cyclone hits a state of the US and it hits at the same time an state in Nigeria, the US will be able to recover very fast.
00:49:49.760 --> 00:49:52.480
Nigeria will take a lot of time.
00:49:52.480 --> 00:50:00.079
And that capacity of absorption that has been built over time is what gives them some complacency.
00:50:00.079 --> 00:50:03.199
But again, there are thresholds, no?
00:50:03.199 --> 00:50:19.440
All our technology and all even in OECD countries, the technology that we have in place for this capacity of absorption could be not necessarily be ready for the potential tipping points that we will have.
00:50:19.440 --> 00:50:22.079
And that's where the complacency will go out.
00:50:22.719 --> 00:50:22.880
No?
00:50:23.199 --> 00:50:24.639
So I think we need to be careful.
00:50:24.639 --> 00:50:33.280
And and I keep saying, you know, FAO can help any of our 194 members, honestly, because all of them need some help.
00:50:33.280 --> 00:50:36.000
Of course, some of them can pay for it, which is great.
00:50:36.000 --> 00:50:39.440
We help free the ones that cannot pay for it.
00:50:39.440 --> 00:50:43.280
But the evidence and the information that we have is super important.
00:50:43.280 --> 00:50:46.000
For example, a very simple example, logistics, no?
00:50:46.000 --> 00:50:52.239
You know, when the river in the US gets lower level, which has happened, you have a problem of mobility of food.
00:50:52.880 --> 00:50:53.199
No?
00:50:53.599 --> 00:50:56.559
The same with what happened in the Panama Channel, no?
00:50:56.559 --> 00:50:59.920
When it was drier, big problem, congestion.
00:50:59.920 --> 00:51:04.719
When there was the problem of the Black Sea and the problem of the Red Sea, again.
00:51:04.719 --> 00:51:07.679
So even think of the logistical part, no?
00:51:07.679 --> 00:51:12.559
How complex it could become if you block and you choke certain nodes.
00:51:12.559 --> 00:51:19.039
It will be complex for Europe, it will be complex for the north part of the world because food won't be able to move.
00:51:19.039 --> 00:51:24.320
Okay, and that was the beautiful within the ugliness of the COVID-19.
00:51:24.320 --> 00:51:28.639
No, if you remember at the beginning of COVID-19, prices were starting to spike.
00:51:28.639 --> 00:51:30.239
And we had enough food in the world.
00:51:30.239 --> 00:51:32.400
There was no reason for it to spike.
00:51:32.400 --> 00:51:37.679
The reason why it spiked is because people were focusing only on health.
00:51:37.679 --> 00:51:42.000
And they forgot to put the standards in the ports for food to keep moving.
00:51:42.000 --> 00:51:46.320
And that's where FAO came with this lemma there is no health without food.
00:51:46.320 --> 00:51:51.679
Okay, and then when food starts to move, the prices fall because there was enough food in the world.
00:51:51.679 --> 00:51:56.639
So so we shouldn't be so uh thinking that it won't affect us.
00:51:56.639 --> 00:52:00.239
The world is too interconnected today, and it could affect us.
00:52:00.239 --> 00:52:06.159
We saw it in COVID-19, we forget too quickly how bad it was and how dangerous it was.
00:52:06.159 --> 00:52:09.920
Okay, this could happen tomorrow, and in another issue related to food.
00:52:09.920 --> 00:52:16.719
Look, uh a new pest that could evolve because of climate could affect big production in the world.
00:52:17.280 --> 00:52:26.320
So on the pest side of things, there'll be pests that that not necessarily aren't new but are new to certain regions or locations.
00:52:26.320 --> 00:52:28.800
Um so they don't have the because of the changes in temperature.
00:52:28.880 --> 00:52:30.960
They can migrate, but they also can mutate.
00:52:30.960 --> 00:52:34.639
You know, uh and that could create a bigger problem.
00:52:34.639 --> 00:52:43.440
So I think we need to be very careful and invest a lot in this early warning system in transbondary diseases uh uh monitoring.
00:52:43.440 --> 00:52:48.639
We know there is a high risk for these things to happen.
00:52:48.639 --> 00:52:50.480
High risk today.
00:52:50.480 --> 00:52:57.599
And if we start dropping investment in transponder diseases, for example, we are assuming a huge risk.
00:52:57.599 --> 00:53:00.000
And that is what is happening today.
00:53:00.000 --> 00:53:04.159
A lot of the investment in transponderary diseases has lowered enormously.
00:53:04.159 --> 00:53:10.400
Okay, so you know, borders are lines, things can fly.
00:53:10.400 --> 00:53:12.639
So so I think we need to be very careful.
00:53:12.639 --> 00:53:19.440
Uh, it's not to afraid people, but I think the more prepared we are, the more resilient we will be.
00:53:19.440 --> 00:53:21.039
Maybe we'll need something.
00:53:21.039 --> 00:53:22.880
That's the difference between risk and uncertainty.
00:53:22.880 --> 00:53:25.920
No, risk I can predict, I can model, I can ensure.
00:53:25.920 --> 00:53:27.119
Uncertainty I cannot.
00:53:27.119 --> 00:53:28.480
Nobody expected COVID-19.
00:53:28.480 --> 00:53:30.800
Okay, nobody expected the war in Ukraine.
00:53:30.800 --> 00:53:32.000
Those were uncertain issues.
00:53:32.000 --> 00:53:34.960
But now that we know that it could happen, they no longer are uncertain issues.
00:53:34.960 --> 00:53:36.800
We need to be prepared for those type of things.
00:53:38.320 --> 00:53:42.559
You've mentioned the need for technology a number of times.
00:53:42.559 --> 00:53:45.679
And this is possibly a little more of a personal question.
00:53:45.679 --> 00:53:55.679
Um, is there any particular innovation or technology that you've seen coming through the pipeline that you find particularly exciting or impactful?
00:53:56.400 --> 00:53:59.119
No, look, everybody will tell you immediately artificial intelligence.
00:53:59.119 --> 00:54:01.360
That's the keyword of the world right now.
00:54:01.360 --> 00:54:05.519
And I think, no, I think that there is a package of technologies that we need to bring together.
00:54:05.519 --> 00:54:07.199
Artificial intelligence is one of those.
00:54:07.199 --> 00:54:09.360
Yes, it's true that it's moving very fast.
00:54:09.360 --> 00:54:12.800
But for me, artificial intelligence has a component which is intelligence.
00:54:12.800 --> 00:54:15.519
And it's still intelligence is in the human beings.
00:54:15.519 --> 00:54:18.239
The machines still cannot do what the human beings can do.
00:54:18.239 --> 00:54:23.440
It will be useful if we are able to bring the intelligence of human beings into it and then it can keep learning.
00:54:23.440 --> 00:54:30.239
But for that, like places like FAO, we are not here to create new models of artificial intelligence.
00:54:30.239 --> 00:54:36.719
We are here to learn how to ride that horse, which is a wild horse, and how we can feed that horse so that it can run properly.
00:54:36.719 --> 00:54:38.400
That's our job, no.
00:54:38.400 --> 00:54:43.679
And people need to understand when I hear my partners, my UN agents say, Oh, I am doing this innovation and this.
00:54:43.679 --> 00:54:44.800
Don't waste your time.
00:54:44.800 --> 00:54:47.440
The private sector is already 20 times farther than you.
00:54:47.440 --> 00:54:52.159
They are paying salaries of $10 million a month or $1 million a month.
00:54:52.159 --> 00:54:53.920
You will never be able to get there.
00:54:53.920 --> 00:54:58.320
But on the contrary, you can use them and find how to ride that horse.
00:54:58.320 --> 00:55:01.280
But yes, that technology is one of them.
00:55:01.280 --> 00:55:04.320
The problem is that it's not necessarily inclusive.
00:55:04.320 --> 00:55:14.559
It will discriminate a lot and it will increase inequalities because of the typical issues, no, accessibility, uh, literacy, understanding of it, and the content.
00:55:14.559 --> 00:55:23.599
It's not for the regular, but then there is other technologies like gene editing, which also have a huge potential, especially for varieties and so on.
00:55:23.599 --> 00:55:28.400
There is a lot of innovation on water use and water technologies, designalization of water.
00:55:28.400 --> 00:55:30.400
I think we need to look at the package.
00:55:30.400 --> 00:55:34.320
We cannot look only at one of them and think that's the solution to the to the problem.
00:55:34.320 --> 00:55:36.480
I think that would be a big mistake.
00:55:37.840 --> 00:55:41.840
Where do you see education coming into this?
00:55:41.840 --> 00:56:06.159
You know, whilst that's generally much more of a UNICEF type of a mandate than an FAO um priority, for you know, some of those more vulnerable people that we've discussed, or many of those more vulnerable people, their education levels are uh you know much more limited than than um you know the OSD countries.
00:56:06.159 --> 00:56:08.719
So how do you see that fitting into the picture?
00:56:09.119 --> 00:56:15.440
No, look, uh education is central and human capital building is central, especially for the youth and the new generations.
00:56:15.440 --> 00:56:16.880
What is the challenge?
00:56:16.880 --> 00:56:22.320
No, and I can give you uh a story of a project that I built when I was uh in another place before.
00:56:22.320 --> 00:56:23.840
It was called Happy Faces.
00:56:23.840 --> 00:56:25.280
What happened to me?
00:56:25.280 --> 00:56:34.239
I was working in the field, I was working in coffee areas in the hill, and I start to see how migrant workers for coffee harvesting will move their families in a school year.
00:56:34.239 --> 00:56:40.400
So their kids didn't have basically any right to education because they were in the hill, they didn't have access to the city.
00:56:40.400 --> 00:56:52.159
I saw the same thing in other countries, so I said, okay, but what I can give to these kids so that they can stay in the school and they can make their own decisions in certain ways, because the parents are making the decisions for the welfare of the household, but they are affecting their future.
00:56:52.159 --> 00:57:00.239
So then I started a program, this Happy Faces program, which started with the idea, okay, what if I make give information to kids to make the decision?
00:57:00.239 --> 00:57:02.239
And the easy way to do it was digital.
00:57:02.239 --> 00:57:10.320
I built a computer lab in a very rural area, which took three hours for kids to go to school walking and three hours to come back.
00:57:10.320 --> 00:57:17.360
They were anemic in Peru, it was Jacanora in Cajamarca, in the north part.
00:57:17.360 --> 00:57:22.400
And we basically pulled the internet from the municipality because all the municipalities in Peru have access to the internet.
00:57:22.400 --> 00:57:24.239
It was free, we just put to antennas and so on.
00:57:24.239 --> 00:57:25.039
So we built the lab.
00:57:25.039 --> 00:57:26.960
It cost me $3,000 to build the lab.
00:57:26.960 --> 00:57:29.679
20 computers, and we did a randomized crap.
00:57:29.679 --> 00:57:31.679
Basically, we gave information to the kids.
00:57:31.679 --> 00:57:35.360
There was the placebo, which was various teeth, and there was the treatment.
00:57:35.360 --> 00:57:42.960
And the treatment was to tell the kids how a pill of iron will make them uh better in terms of their education results.
00:57:42.960 --> 00:57:43.519
Okay.
00:57:43.519 --> 00:57:45.920
Now the problem was who will give the message.
00:57:45.920 --> 00:57:52.639
So we tried three types of messengers: the the nurse, the official of the government, and the soccer player.
00:57:52.639 --> 00:57:56.239
Because we did a survey and the kids love soccer and they ladies too.
00:57:56.239 --> 00:57:59.519
I thought that they were going to go for volleyball, but no, they like soccer players.
00:57:59.519 --> 00:58:02.480
So we found a very famous soccer player in Peru, Solano.
00:58:02.480 --> 00:58:03.599
He did the video for free.
00:58:03.599 --> 00:58:04.880
The message was the same.
00:58:04.880 --> 00:58:12.400
Okay, when we played the videos in the schools, to be able to get the pill, they have to go to a specific room in a health center close to the school.
00:58:12.400 --> 00:58:15.920
But it was a room that they have to go and knock the door.
00:58:15.920 --> 00:58:20.960
Of course, we did IRB and all these things to know to comply with the rules.
00:58:20.960 --> 00:58:31.280
And then we found that after the first week, we have a line of kids going to take the pill of the ones that we send the soccer player message, which was the same message.
00:58:31.280 --> 00:58:38.880
So that told me, and of course, the kids improve in their in their education records, they they they reduce anemia, it worked very well.
00:58:38.880 --> 00:58:44.000
It was uh a very nice, uh beautiful experiment in forest schools in Jakarta.
00:58:44.000 --> 00:58:55.360
Then I said, okay, if I can, if the kids are really using this technology, no, and getting the message and acting, why don't you use this to impact uh solutions to the agricultural sector?
00:58:55.360 --> 00:58:59.760
So I went and sent all the kids plots because they work in their plots.
00:58:59.760 --> 00:59:10.079
We identified the problems they have, and then we brought videos to them on low-cost solutions, very easy to do, like for full army worm and so on, medium cost and high cost.
00:59:10.079 --> 00:59:13.519
And then we track if the kid was going to teach the parent.
00:59:13.519 --> 00:59:21.519
And we found is that because through surveys, we found that the kids were basically transferring the messages we were transferring to the parents through these videos.
00:59:21.519 --> 00:59:24.400
And that what told me is okay, what is the kid really doing?
00:59:24.400 --> 00:59:27.920
Because the same messages were coming through extensionists, but the parents were not using it.
00:59:27.920 --> 00:59:32.559
But the messages from their kids that came from the school, the parents were learning from it, and they were.
00:59:32.559 --> 00:59:38.159
So my conclusion there was the kids could be a bridge to the problem of literacy.
00:59:38.159 --> 00:59:43.840
Because in agriculture, we have very old aging population that not necessarily knows how to read and write.
00:59:43.840 --> 00:59:46.880
But clearly, these kids know how to handle a cellular phone.
00:59:46.880 --> 00:59:50.400
And you know, cellular phones are everywhere, no matter how poor you are.
00:59:50.400 --> 00:59:56.639
And they were able to transfer this message to the kids, so they become a bridge to move forward the solution of these kids.
00:59:56.639 --> 00:59:59.840
So that's how I think we need to find solutions to resolve.
00:59:59.840 --> 01:00:04.960
This problem of the bottlenecks that we have in terms of technology access and in terms of the human capital.
01:00:04.960 --> 01:00:10.320
But for sure, my other lesson was that these kids had a lot of potential.
01:00:10.320 --> 01:00:14.880
Of course, they were the average, but they were brilliant kids that didn't have opportunities.
01:00:14.880 --> 01:00:26.880
And just the fact that a girl that goes to a rural school is basically removed from the school by their parents when they get their period tells you a lot on how you are basically reducing an opportunity for these types of girls.
01:00:26.880 --> 01:00:34.079
If you are able to do that and improve the quality of education in schools, my God, these kids will have choices in life.
01:00:34.079 --> 01:00:35.599
If not, you are cutting their choices.
01:00:35.599 --> 01:00:39.199
And in a continent like Africa, that most of the population is youth now.
01:00:39.199 --> 01:00:45.760
If we don't invest in human capital in those continents, in that continent, we won't be able to move.
01:00:45.760 --> 01:00:47.280
And we will have a lot of problems.
01:00:47.280 --> 01:00:48.559
So I think it's central.
01:00:48.559 --> 01:00:54.559
So if you tell me what are the two sectors that I will invest, I will invest in education and I will invest in agri-food systems.
01:00:54.559 --> 01:00:56.480
Because health will come related to it.
01:00:56.480 --> 01:00:58.079
We will have better quality diets.
01:00:58.079 --> 01:01:04.639
But clearly the returns to human capital in a continent which is mostly young will be essential.
01:01:04.639 --> 01:01:07.920
And the technology that we have today requires human capital.
01:01:07.920 --> 01:01:09.920
And we need to find ways to accelerate that.
01:01:09.920 --> 01:01:14.800
And that will help us to work with the aging population that didn't have those opportunities.
01:01:15.599 --> 01:01:28.639
And it shouldn't be forgotten, I don't think that, or I certainly don't think it should be forgotten, that the best way of having a better educated future generation is to have better educated mothers.
01:01:28.639 --> 01:01:36.559
And the only way you're ever going to get better educated mothers is by having more girls going to school and finishing school or going on to better education.
01:01:36.559 --> 01:01:45.119
So that that girls' education, and and tragically, in in so many parts of the world, when things get tough, girls' education is the first one to be cut.
01:01:45.119 --> 01:01:48.320
But in some ways, it possibly should be the other way around.
01:01:48.559 --> 01:01:50.079
And you saw it in COVID-19, no?
01:01:50.079 --> 01:01:54.239
The girls were impacted a lot more than the so we know we have the evidence, no?
01:01:54.239 --> 01:01:56.320
Let's find solutions to that problem.
01:01:56.320 --> 01:02:02.320
And let's change a little bit these cultural stigmas which are breaking the huge opportunity of these girls.
01:02:03.920 --> 01:02:07.119
Maxim, thank you very much for joining me today.
01:02:07.119 --> 01:02:12.159
And before we go, is there anything you'd like to add that we haven't already discussed?
01:02:12.639 --> 01:02:16.480
No, look, the only thing I will say is that uh it's the time for Africa.
01:02:16.480 --> 01:02:20.159
They need to start doing the things the correct way.
01:02:20.159 --> 01:02:23.360
They need to implement the Carap strategy.
01:02:23.360 --> 01:02:30.880
It needs to uh assure that the financial institutions respond to their needs and not to the needs of the financial institutions.
01:02:30.880 --> 01:02:33.199
And they are the ones that can enforce that.
01:02:33.199 --> 01:02:39.760
And I hope we can start seeing better numbers for this continent in the future.
01:02:39.760 --> 01:02:42.960
And I hope the continents which are doing well keep going well.
01:02:42.960 --> 01:02:51.840
But I think it's central that we accelerate this process because having um by 2030 500 million people in chronic and nourishment doesn't make any sense.
01:02:51.840 --> 01:02:56.639
In a world where we are even wasting 30%, losing and wasting 30% of the food.
01:02:58.719 --> 01:03:00.800
Maximo, thank you very, very much.
01:03:01.119 --> 01:03:01.920
No, a pleasure.
01:03:01.920 --> 01:03:03.519
Very nice talking to you.
01:03:04.000 --> 01:03:06.000
Thank you for listening to the AshCloud.
01:03:06.000 --> 01:03:19.920
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