midterm1.pdf - ACE 251 World Food Economy Lecture 2...

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ACE 251 World Food Economy Lecture 2 Framework August 30, 2017
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Overview I. Current Issues in the Global Food Economy II. Framework For Analysis A. Demand B. Supply III. Implications for Different Groups Reminder: any edition of WFE book is OK! Reminder: MAKE SURE YOUR I-Clicker is working! Reminder: discussion sections start next week READING FOR THIS CLASS: Foley (feeding 9 billion) FAO, SOFI pp 8-15
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I. Challenges in the World Food Economy Food Sufficiency Feeding 9 billion people and more
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Food Safety I. Challenges in the World Food Economy
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Food Safety (cont)
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Nutritional Quality The challenge is not merely providing sufficient calories. A central issue: nutrition Poor countries: widespread deficiencies in iron, zinc, iodine, vitamin A; reliance on starchy staples consequences: health problems anemia, blindness longer term: links between child nutrition and later life outcomes Rich countries: the obesity epidemic more calories do not necessarily mean better health I. Challenges in the World Food Economy
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Compounded by Livestock Revolution Climate Change Natural resource constraints Genetically Modified Organisms Preferences for Process More….. I. Challenges in the World Food Economy
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II. Framework: Demand and Supply ACE 100 stuff
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A. Demand Demand curve plots the quantity demanded at any given price, all else equal. What s in all else ? Why does it slope downward? (WTP, MU) Likely to be steep or flat for food? OPINIONS? Price Quantity D D P 1 Q 1
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Ex I-Clicker Question: Which is more like food demand? Price Quantity D D Quantity D D A) Elastic (not steep) B) Inelastic (steep)
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A. Demand If demand curve shifts out, more is demanded at any given price. Demand shift=> higher WTP (price) for fixed quantity What makes demand curve shift? Population Growth? Income Growth? Awareness->preferences Biofuels? Price Quantity D D P 1 Q 1 Q` P`
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Shifting Demand: World Population It took from the beginning of time to 1804 to get to the first billion people on earth. BUT, the population passed: 2 billion in 1927 (123 years later) 3 billion in 1960 (33 years later) 4 billion in 1974 (14 years later) 5 billion in 1987 (13 years later) 6 billion in 2000 (13 years later) 7 billion in 2011 (11 years later)
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Shifting Demand: Urbanization Urban populations growing faster than total population Urbanization implies… Changes in diet Reliance on markets for food Changes in market systems Can reinforce Income Growth
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Shifting Demand: Income Growth National Income (GDP) growing at 9% in China and India (Where 2.5 Billion people live> 1/3 of world) Even poorest regions (Sub-Saharan Africa) growing at 6%.
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Shifting Demand: Income Growth Income Growth Implies 1. Increased QUANTITY of food consumed AND 1. Changes in QUALITY of diet that often raise feed consumption (1kg cheese=7kg feed) (1kg pork = 8kg feed)
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Shifting Demand: Income Growth Other changes in preferences related income and awareness Eat Local Eat organic Eat free range poultry Eat vegan
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