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Food prices will most likely rise as a result of these op­portunities and constraints. In addition, regional and na­tional income growth, urbanization and growing global interconnectedness are expected to increase diet diversifica­tion and homogenization. Trade liberalization and greater integration of global food markets can support more reli­able food supplies and lowered food prices in real terms. But as the reference run shows this is unlikely to be achieved in the coming decades.

    With declining availability of water and land that can be profitably brought under cultivation, expansion in area will contribute very little to future production growth. The pro­jected slow growth in crop area places the burden to meet future cereal demand on crop yield growth. The key to im­proving yields under increasingly constrained conditions lies in technology to improve agricultural productivity in order to regenerate productivity growth. Biotechnology could play


an important role here. To adapt to and mitigate the various effects from climate change requires the development of new cultivars. Likewise, CO2 emissions can be reduced through new crop management practices supported by appropri­ate technologies. To achieve such breakthroughs, existing global and regional research-for-development networks for agricultural production technologies and knowledge need to work closely together so that technology and knowledge can flow to allow farmers to face the risks associated with future harvests. Information and communication technologies and traditional and local knowledge could play key roles in the regeneration of future productivity growth. As the alterna­tive policy experiments in this chapter have shown, higher, judiciously placed investments in technology, development can significantly improve outcomes for food availability and food security.


Model descriptions

A.5.1 The International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT)

IMPACT was developed in the early 1990s as a response to concerns about a lack of vision and consensus regarding the actions required to feed the world in the future, reduce poverty, and protect the natural resource base (Rosegrant et al., 1995). In 2002, the model was expanded through inclusion of a Water Simulation Model (WSM) as water was perceived as one of the major constraints to future food pro­duction and human well-being (Rosegrant et al., 2002).

A.5.1.2 Model structure and data
The current IMPACT model combines an extension of the original model with a WSM that is based on state-of-the-art global water databases (Rosegrant et al., 2002). The water module projects the evolution of availability and demand with a base year of 2000 (average of 1999-2001), taking into account the availability and variability in water re­sources, the water supply infrastructure, and irrigation and nonagricultural water demands, as well as the impact of alternative water policies and investments. Water demands are simulated as functions of year-to-year hydrologic fluc­tuations, irrigation development, growth of industrial and domestic water uses, and environmental and other flow re­quirements (committed flow). Off-stream water supply for the domestic, industrial, livestock, and irrigation sectors is determined based on water allocation priorities, treating ir-


rigation water as a residual. Environmental flows are in­cluded as constraints.
     The food module is specified as a set of 115 country or regional sub-models. Within each sub-model, supply, demand and prices for agricultural commodities are deter­mined for 32 crop, livestock, fish commodities and fishmeal, sugar and sweeteners, fruits and vegetables, and low value and high value fish. These country and regional sub-models are intersected with 126 river basins—to allow for a bet­ter representation of water supply and demand—generating results for 281 Food Producing Units (FPUs). The "food" side of IMPACT uses a system of food supply and demand elasticities incorporated into a series of linear and nonlinear equations, to approximate the underlying production and demand functions. World agricultural commodity prices are determined annually at levels that clear international mar­kets. Demand is a function of prices, income and popula­tion growth. Growth in crop production in each country is determined by crop prices and the rate of productivity growth. Future productivity growth is estimated by its com­ponent sources, including crop management research, con­ventional plant breeding, wide-crossing and hybridization breeding, and biotechnology and transgenic breeding. Other sources of growth considered include private sector agricul­tural research and development, agricultural extension and education, markets, infrastructure and irrigation. IMPACT projects the share and number of malnourished preschool children in developing countries as a function of average per capita calorie availability, the share of females with second-