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Annex 2: Food Security in Southeast Asia - Achievements and the Unfinished Tasks


Economic and social environment
Status of food security
Policies and strategies
Strengths and weaknesses
References
Appendix - Methodology for analyzing trends in output instability and its components

Food security is generally understood as access to adequate food to all households at all times to enable them to lead a healthy and active life. Food insecurity is associated with poverty, ignorance and stagnant economic growth. The countries of Southeast Asia have a creditable record of economic development, a significant decline in poverty and sizeable investment in human development. Yet an assessment of the extent of food security among various sections of society, particularly poor households, is important. The countries would have a basis for further improvement. Such a review would also provide lessons to other developing Asian countries in three important areas:

The first section of this report draws attention to the economic and social environment and review the growth performance of the selected countries; and the status of food security in terms of adequacy, stability, and the quality of food. The second section examines the policies and strategies pursued by these countries to achieve food security. The discussion is carried out in terms of macro policy reforms, agricultural development policies and programmes and, direct public intervention to ensure access to food by all sections of society, especially the poorer sections. The last section summarizes the discussion, draws important lessons and, highlights unfinished agenda for the future. Throughout this discussion the rural poor are kept at the center. The period covered starts from the early 80s to the mid-90s.

Economic and social environment


Growth performance

The Southeast Asian region is surrounded by Japan in the east, China in the north and India in west. It is comprised of ten states: Indonesia, Philippines, Malaysia, Thailand, Vietnam, Cambodia, Laos, Myanmar, Brunei, Singapore. The region includes some of the richest countries of Asia and some of the poorest of the world. Brunei and Singapore present one end of the spectrum; and Myanmar and Laos, the other end. In any discussion on food security, where the emphasis is on availability and access to food, countries such as Brunei and Singapore would be classified as "outliers;" these countries have relatively small population, high per capita income and an economic structure dominated by industry and trade.

Of the other countries of the region, Cambodia, Myanmar and Laos which are considered the 'poorest of the poor' require special attention. For these countries, relevant data are lacking, and so attention is focused on the remaining five: Indonesia, Malaysia, Philippines, Thailand and Vietnam.

This region falls in the tropical zone. Some parts of the selected countries are situated south of the equator, but the bulk of the land mass is north of the equator. Soils are rich, and rainfall is evenly spread. In addition, there are several flowing rivers. Thus, the region has vast potential for agricultural production. Demographic pressure on agricultural land is high even in the land surplus countries such as Malaysia and Thailand where the land frontiers have been reached.

Four major cropping systems account for the bulk of crop production in this region: (i) paddy, (ii) dry crops, (iii) plantations and, (iv) shifting cultivation. The last is losing its importance. Institutions supporting agriculture, such as credit and marketing institutions, are well developed. Agrarian structure in most of these countries is dominated by small holdings. However, some countries still have large plantations, e.g. Indonesia, Malaysia, and Philippines.

The rate of population growth in the 80s and 90s was low and declining, except in Malaysia which pursued a policy of accelerating population growth. Most of these countries have social and ethnic problems arising from relatively small but affluent minorities. With the exception of Thailand all these countries have a colonial legacy, and most, particularly Indonesia and Vietnam, fought bitter wars of Independence. Poverty and food insecurity are concentrated in the rural areas and among the small peasant sector. There is large regional inequality within the countries, partly due to geographical reasons - backward regions have poor resource base and or are more disaster-prone - and partly due to policies which were biased in favour of the urban areas, particularly the metropolitan cities.

These countries have pursued market-oriented policies since the 1970s, except Vietnam which is a late starter in this respect. The selected countries have made significant economic progress in recent years. Though the macroeconomic developments currently pose problems, Malaysia, Thailand and Indonesia are dynamic economies, and regarded as the next 'tigers'. The rate of growth in the Philippines has also picked up in recent years. Vietnam, in spite of its being the poorest in the region, has made significant progress, especially since the 1990s. With the exception of Vietnam, agriculture accounts for a small and declining share in the economies of these countries in terms of its share in GDP, employment, and international trade. In Vietnam the process has begun and is gathering momentum. The countries have invested heavily in human resource development, as reflected in their high literacy rate (80 percent or above). However, other indicators of social development, e.g., infant mortality, life expectancy, pre natal and post natal care, are not high enough for their level of economic development. There remains gender bias against women.

Growth performance

In spite of similarities among the selected countries - mainly due to geographical proximity, shared economic philosophy, and above all the motivation to emulate the experience of East Asian countries - there are important differences in the pace and pattern of economic development. These impinge on food security of their populations. Brief summaries of each country's macroeconomic development and growth experience will be useful.

Indonesia

An archipelago of over 13,000 islands, Indonesia is the largest in the region in terms of population and the fifth largest in the world. However, nearly 65 percent of its population live in Java which accounts for only about 7 percent of the land area. The growth strategy of Indonesia is to decongest Java, and to limit population growth. It has succeeded in its efforts to bring down the rate of population growth, from more than 2.3 percent per year in the early 70s to 1.6 percent in the early 90s. It has invested heavily in human resources development, with education accounting for 10 percent of the budget in 1993. Literacy rate is about 90 percent. Until the 70s, the Indonesian economy was dominated by petroleum and some agricultural products such as rubber. The country's economy faced "boom and burst" situations mainly due to fluctuations in petroleum prices, partly due to unimaginative macroeconomic policies. The results were an increased current account deficit, curtailed expenditures on infrastructure, and high rate of inflation. The situation changed since the mid-80s, with greater attention on agriculture, diversification of industrial and foreign trade pattern, greater monetary discipline and more market friendly policies. The long term rate of growth of the economy (1980-1995) is 6.5 percent; it has accelerated in the latter part of the period. The share of industry and trade in GDP has improved and that of agriculture has decreased. Inflation has been brought down to the manageable level of 6 percent (as of 1995).

The economy still has some danger spots, the most important of which is the mounting foreign debt which comprised 57 percent of the GDP (in 1994), up from 28 percent in 1984.

Malaysia

Malaysia is the richest among the countries under study, with its per capita income at US$4000. Its economy is considered middle level. Other features which distinguish Malaysia from its neighbours are its low population pressure and abundant natural resources. At the same time, the country has a more pronounced ethnic and regional differentiation, and a higher degree of income inequality.

Malaysia has sustained high rate of growth since the 70s, with a brief period of stagnation in the-mid 80s. The growth was fueled by favourable terms of trade for its principal exports (petroleum, palm oil, rubber) but also by improved productivity, particularly in rubber. Malaysia has been an open economy since the mid-70s. Exports account for a very high percentage of GDP. The pattern of growth was similar to other developing countries of the region, but the pace was more rapid. For example, the share of agriculture in GNP fell from 22 percent to 14 percent in less than a decade. There was a corresponding rise in the share of manufacturing and services, and a marked deconcentration in exports, i.e., from the dominance of traditional primary products to one in which industrial products have acquired a larger share. Within the industrial sector more sophisticated industries such automobile and electronics are becoming progressively more important.

Malaysia also spends a sizeable part of its expenditures on education, about 18-20 percent of the government budget in recent years. However, income inequality is high, in spite of the government's serious efforts to raise the income level of the relatively more disadvantaged groups, i.e. Malays. Among the weak spots in the economy are a large amount of international debt which now accounts for 37 percent of GNP, and the large dose of foreign capital investment which make the county's economy quite vulnerable.

Philippines

The Philippines is a large country, with high population density, and a population growth rate relatively higher (2.2 percent per year in 1990-94) then the SEA standard. The ratio of urban population is high. The country spends a sizeable proportion of government budget, 16 percent in 1993, on education; and literacy rate is more than 80 percent.

In the beginning of the 70s, the Philippines was one of the richest countries in Asia, next only to Japan and Malaysia, with an economic growth of around 5-6 percent per year. The economy started sliding down after that, and in 1980-85 it registered a negative growth rate of -1.88 percent per year. There has been a revival since then. In the latter half of the 90s, growth has picked up to 5 percent per year.

The major reason for the economic decline lies in faulty economic policies: current account imbalances were rising, inflation could not be curbed, and external debts reached 90 percent of GNP. There was a clear urban bias in the development expenditure, land reforms were implemented only halfheartedly. External factors, particularly the terms of trade for its exports, were also adverse. Political instability was an additional handicap.

All these resulted in slow growth of economy, and slow change in the sectoral composition in terms of the contribution to GNP and in terms of occupational diversification. Share of agriculture in GNP declined only marginally, from 25 percent in 1985 to 22 percent in 1995. Inflation was high and real wages declined. Income inequality continued to be high, the Gini coefficient being 0.53. As a result, the poverty ratio did not decline to any substantial extent: from 52 percent of the total number of households in 1971 to 45 percent in 1991. There was an increase in the absolute number of the poor population. Poverty is more widespread in the rural than in the urban areas. There is a distinct regional bias in the incidence of poverty; the extent of poverty is much higher among the small farmers growing rice, coconut and sugarcane.

Economic reforms have been introduced since the mid-80s, and the economy has responded well. As in the case of other SEA economies, the danger spots include the growing burden of external debt, introduction of large amounts of 'hot money' and the large concentration of imported raw materials in non-conventional exports. From the point of view of the poor, the explicit urban bias, the bias towards capital intensive industries, and the continuing hegemony of large landholders in the countryside are the unfavourable features.

Thailand

A constitutional monarchy, Thailand is the only country in the selected countries which was never colonized. Its population is largely homogeneous, and its population growth is one of the lowest in the region, slightly above 1 percent per year. The density of population is low in the context of Southeast Asia. There is relatively slow growth in urbanization, but Bangkok dominates the urban scene as well as the national economy. Thailand was traditionally identified as a food-surplus rice-exporting economy, but it does not hold true anymore as its exports are now more diversified.

Thailand had the fastest growth in the economy among the SE Asian countries during the last decade, at over 8 percent per year. It has invested heavily in infrastructure and in human capital formation. Investment in education accounts for nearly 20 percent of government expenditures. Industries had a major share in the rapid growth in the economy, with its contribution to national income and exports outstripping that of the primary sector, especially rice, which until recently was the dominant export commodity. Rapid growth in the economy has not resulted in significant occupational diversification.

Its economic development is characterized by low government interference except in the rice and sugar sectors. The government exercises tight control over the financial sector by such measures as regulation of interest rates, reserve ratios, and discount rates. It also retains a pegged exchange rate. In all other respects the economy is free. This co-existence of controlled monetary policies and liberal borrowing and investment policies portend a risk factor in the economy. As in other ASEAN countries the external debt is high and rising. High growth in the economy is also accompanied by a high level of income inequality, the Gini coefficient being 0.48. As growth rate was high and persistent for some years, it had a positive impact on the poverty situation. As a result there has been sharp decline in poverty ratio, more so in the urban areas. However, the regional concentration of poverty, mainly in the northeastern region, has not abated.

Thailand faces several major handicaps, including stagnant agriculture, slow progress in the non-farm sector in the rural areas, sharp regional differences, open and vulnerable economy, and high external debt.

Vietnam

Vietnam is a socialist country that has made a smooth transition from controlled to market-oriented economy. It is one of the poorest countries of Asia, with an estimated per capita income of US$200 per year. An equally remarkable fact is that it has made impressive gains in GNP in the last few years, especially after the mid 80s, and rate of growth of GNP is about 10 percent per year. Population growth is rather high at 2 percent per year, but it is slowing down.

With the fast rate of economic growth, some structural change inevitably takes place. This is evident in Vietnam but the change has been slow. There has been a marginal shift of workforce from agriculture, from 73 percent in 1980 to 71 percent in 1990. There is a more marked shift in the contribution of agriculture to GNP. The other major achievement of the economy is the control of inflation which has been substantially brought down from 70 percent to 15 percent. All these happened when agriculture was freed from State control to a large extent, mainly by giving farmers long term land leases; introducing macroeconomic adjustments in the economy; dismantling distorted incentive system; export orientation; liberal infusion of foreign capital; and above all, by improving productivity in agriculture.

Table 1. Basic indicators

Item

INS

MAL

PHI

THA

VIET

Population (million)

Mid-1993

187.2

19.0

64.8

58.1

71.3

Mid-1994

190.4

19.7

67.0

58.0

72.0

Area ('000 sq km)

Mid-1993

1905

330

300

513

332

Mid-1994

1905

330

300

513

332

Population growth rate (%)

1980-90

1.8

2.6

2.4

1.8

2.1

1990-94

1.6

2.4

2.2

1.6

2.1

GNP per capita ($)

1993

740

3140

850

2110

170

1994

880

3480

950

2410

200

Average annual growth

1980-83

4.2

3.5

-0.6

6.4


1985-94

6.0

5.6

1.7

8.6


Sources:

World Bank, World Development Report 1995, Table 1, p. 162-163.
World Bank, World Development Report 1996, Table 1, p. 188-189.
ILO, Yearbook of Labour Statistics, 1995.

Table 2. Structural change: Distribution of Gross Domestic Production (%)

Item

INS

MAL

PHI

THA

VIE

Agriculture

1970

45

29

30

26

-

1993

19

-

22

10

29

1994

(17)

14

22

10

28

Industry

1970

19

25

32

25

-

1993

39

-

33

39

28

1994

(41)

43

33

39

30

Services

1970

36

46

39

49

-

1993

42

-

45

51

42

1994

(42)

42

45

50

43


Table 3. Distribution of workforce (%)

Country

Year

Agriculture

Industry

Services

INS

1993

50.4

15.8

33.8

MAL

1988

30.6

22.6

46.7

PHI

1991

45.3

16.0

38.7

THA

1989

66.3

11.9

21.8

VIE

1990

71.0

-

-

Source: World Bank, World Development Report 1995, Table A2, p. 147.
Economic liberalization helped raise national income, but it did not help reduce income inequality. The Gini coefficient at 0.35 is very high for a socialist economy. Close to 51 percent of the population live under the poverty line, although the situation is relieved to an extent by overseas remittances. There is marked inequality between the northern and the southern regions. The extent of unemployment, particularly of underemployment, is very high; as with the index of social development, especially education. Adult literacy is above 80 percent. Notable achievements of the past decade include the successful management of hyper-inflation, high growth in agricultural productivity and access to social services by a large section of the population. The areas of concern are the high poverty ratio, negligible shift in occupational structure, high regional variations, emerging inequity and high exposure to foreign debt and capital.

Table 4. Macro-economic indicators.

Item

INS

MAL

PHI

THA

VIE

Average annual inflation (%)

1984-1994

8.9

3.1

10.1

5.0

102.6

Terms of trade (1987=100)

1985

145

114

99

103

-

1994

79

92

114

105

-

AID/GDP ratio (%)

1980

1.3

0.6

0.9

1.3

-

1994

1.0

0.1

1.6

0.4

5.2

Export concentration index

1984

0.50

0.28

0.30

0.18

-

1992

0.19

0.16

0.29

0.09

0.31

Debt/GNP (%)

1980

28.0

28.0

53.7

25.9

-

1994

57.4

36.9

59.7

43.1

161.3

Gini Index (1996)

31.7

48.4

40.7

46.2

35.7

Source: World Bank, World Development Report 1995.

Status of food security


Food availability
Sources of food supplies
Access to food
Quality dimension

The concept of food security implies adequate availability and stability in the supply of food and, more importantly, access to food. A qualitative dimension of nutritional adequacy is added to the simple measure of calorie intake. Availability of food is assessed at the macro level, generally at the level of the nation state, but food security has a meaning only at the household level - in fact, at the level of the individual members of the household. At the same time food availability at the national level has a limited, but important, role to play in ensuring food security among the households. The macro picture of the food supplies at the national level can indicate the nature of the food problem and define the areas for public intervention.

Food availability

Calories intake

If food adequacy is measured at 2300 kcal per person per day, all Southeast Asia except Vietnam have already reached the adequacy norms. The range is between 2203 calories per capita per day in Vietnam and 2888 calories in Malaysia (1990-1992). In all these countries calorie intake has progressively improved during last decade. A decade earlier (1980-82) three countries, Philippines, Thailand and Vietnam were falling short of the calorie adequacy norm (Table 5).

Table 5 Changing quality of food in Southeast Asian countries

Country/Food group

 

Food availability in terms of Kcal during triennium

1980-82

1990-92

Indonesia

Food, total

2510

2696

Vegetable products

2438

2590

Animal products

72

106

Cereals

1675

1775

Starchy roots

189

157

Non-cereal - non-root vegetable products

574

658

Malaysia

Food, total

2697

2817

Vegetable products

2296

2358

Animal products

401

458

Cereals

1308

1174

Starchy roots

70

75

Non-cereal - non-root vegetable products

918

1110

Philippines

Food, total

2219

2292

Vegetable products

1972

2020

Animal products

247

272

Cereals

1203

1270

Starchy roots

137

98

Non-cereal - non-root vegetable products

632

652

Thailand

Food, total

2218

2374

Vegetable products

2016

2134

Animal products

202

240

Cereals

1450

1381

Starchy roots

40

24

Non-cereal - non-root vegetable products

526

728

Vietnam

Food, total

2117

2203

Vegetable products

1990

2026

Animal products

127

177

Cereals

1534

1602

Starchy roots

247

157

Non-cereal - non-root vegetable products

209

268


Diet composition

More important than the improvement in calorie intake, there have been remarkable changes in the composition of the sources of calories. The general tendency is to have a progressively larger share of calories from animal sources compared to those from vegetable sources. Within the vegetable sources a shift from cereal to non-cereal sources, and within the foodgrains from starchy roots and tubers to superior cereals, i.e. rice and wheat, is evident. The progress in this direction was more or less common to all the selected countries, but at varying pace (Table 6).

Table 6. Growth rates of agricultural/food production, by item, 1980-92.

Item

INS

MAL

PHI

THA

VIE

Cereal, total

3.45

0.83

2.58

0.66

4.67

Maize

4.70

12.14

3.55

0.89

5.66

Rice

3.29

0.72

2.17

0.65

4.63

Pulses

-0.58*

-

0.56

1.23*

3.52

Roots and tubers

2.00

0.89

0.35

1.20

-0.94

Cassava

2.13

1.62


1.28

-1.67

Oilcrops, total

7.34

7.74

0.55

7.54

8.74

Vegetables

6.21

2.690




Sugar

4.82

5.14

-2.08

8.69

4.46

Meat., total

8.05

8.94

3.57

4.80

5.59

Cow milk

12.82

2.44

0.69

19.58

3.26

Hen eggs

6.11

8.31

2.23

9.85

5.68

Agricultural [email protected]

4.36

6.23

1.43

2.24

4.04

Food [email protected]

4.56

8.19

1.51

1.73

3.98

Statistically insignificant at 10% level. @ Computed from the Index Numbers of Food/Agricultural Production; Source: SOFA 1995, FAO.

Table 7. Food production, food aid and food imports, by country

Item

INS

MAL

PHI

THA

VIE

Food production per capita (%) annual growth rate (1979-93)

2.2

4.3

-1.3

0

2.2

Food aid (cereals '000t)







1979-80

831

-

95

3

184


1992-93

40

4

53

60

84

Food import/total import (%)







1980

13

12

8

5

4


1993

7

6

8

5

9

Import of food/value added in agriculture







1980

18.9

24.9

12.9

2.8

-


1993

11.4

32.0

17.4

5.1

7.7


Table 8. Trends in instability of food availability (calories). Southeast Asia (10 years moving standard deviations preceding the reference point of annual growth rates)
(in percent points)

Year

INS

MAL

PHI

THA

VIE

1981

2.82

0.78

2.31

1.51

5.90

1982

2.79

0.80

2.41

1.42

5.99

1983

2.60

0.79

3.08

1.19

6.03

1984

2.61

0.78

2.85

1.34

6.01

1985

2.57

0.80

2.86

1.29

4.23

1986

2.34

0.95

2.76

1.29

3.60

1987

2.36

0.80

2.65

1.97

3.69

1988

2.66

0.72

2.58

1.98

4.09

1989

2.57

1.11

3.04

2.37

3.55

1990

1.27

1.32

3.14

2.67

3.40

1991

1.26

1.32

4.21

2.72

3.71

1992

1.22

1.64

4.26

2.72

3.60

Computed from SOFA 1995, FAO.

Sources of food supplies

Domestic Production

The bulk of the increase in the intake of calories came from improved domestic production. In countries where domestic production was lower than the food requirements, the gap between domestic production and requirements could easily be filled by increase in the value of agricultural exports. Agriculture sector contributed directly, and in a few cases indirectly, in creating an environment for ensuring food security.

Indonesia, for example, not only achieved sufficiency level in rice, but also increased its non-rice agricultural exports. In Malaysia, though the imports of food and animal products increased, the imports were more than compensated by the improved export performance of non-food agricultural products. Similarly, in Thailand where the exports of rice slackened, there was an increase in the exports of other agricultural commodities. In less than a decade Vietnam changed from being a rice importer to an important exporter of the same commodity. It could also create exportable surplus in other agricultural commodities, e.g., fish and fish products, cocoa, vegetable oils, fruits and vegetables.

The Philippines was the exception; while its food imports increased, its exportable surplus in agricultural products was almost wiped out.

In all these countries, except in Malaysia, significant growth in domestic agricultural production was accompanied with a slowdown in population growth. As a result, per capita agricultural production - not necessarily per capita food production - increased significantly. In Indonesia, agricultural growth rate during the period 1980-1994 was 4.4 percent per annum, while population increase was at the rate of 1.8 percent per annum. Rice production received special attention; its rate of growth was 3.3 percent per year. Rate of growth of non-cereal foods, which still occupy an important place in the diet, substantially increased. Sugar registered a growth of 4.8 percent per year, and vegetable oils 7.3 percent. Growth in animal products, milk, meat and eggs, starting from a low base, was quite satisfactory.

Malaysia's agricultural production, which was a key to its growth in the earlier decades, improved during the reference period. Only the production of rice stagnated. In Thailand, agricultural production, in absolute as well as per capita terms, registered a fast growth. In Vietnam where agricultural production is more or less synonymous to food production, per capita production progressively increased, with agricultural production growing at the rate of 3.9 percent per year and population growth at 2.2 percent per annum. The Philippines was the exception in this regard, as agricultural as well as foodgrains growth, in per capita terms, was negative, at -0.74 percent per annum.

Changes in cropping patterns have an important bearing on food security. In Thailand soybean production increased in response to the increased demand for cattle feed. In all the selected countries demand for wheat increased with growing urbanization, and so also the production of wheat. There were some negative aspects of the changes in the cropping pattern. The production of pulses which is a major source of protein for the poor has declined.

Stability in food availability

Another achievement on the food security front in SEA was the inter-temporal stability in the food availability in most countries. The extent of stability is measured in terms of inter-year variations in food availability (see appendix). From the perspective of the poor households, inter-seasonal stability is more important than inter-year stability. Fragmentary evidence suggests that in most of the countries, food availability declines during the period before harvest of the principal foodgrain, i.e., rice, and improves after the rice harvest. It is reflected in the bi-monthly trends in the prevalence of underweight children, which suggest strong seasonality effect.

In terms of year-to-year stability, the overall availability of food became more stable, and supplies of both major components of food (vegetable food and livestock products) exhibited more stability. By country, there was a decline in the instability of the availability of cereals in general and rice in particular, and so with milk. The general measure of instability in availability of milk was 5.0 percent in 1984; it decreased to 3.7 percent in 1992. Instability in food availability was 2.5 percent in the early 1990s. In Malaysia instability in availability of food was low even in the 1980s, and further declined in the 1990s. However, there was more instability in foodgrains availability than in the availability of animal products. The Philippines is one country where instability in food availability was low in the early 80s, and increased in recent years (from 2.3 percent in 1981 to 4.7 percent in 1992). There was a greater instability in the availability of vegetable food than in livestock products. Instability in the latter was high but declining. In Thailand, instability in total food availability was low but increasing.

Table 9. Trends in production instability in Southeast Asia
(10 years moving standard deviation of annual output growth rates)

Item

INS

MAL

PHI

THA

VIE

1981

2.58

2.99

2.45

7.02

3.73

1982

2.96

3.22

1.96

6.56

3.75

1983

3.35

3.64

3.27

4.96

3.69

1984

3.45

3.77

2.94

4.53

3.43

1985

3.34

3.97

2.93

4.43

2.89

1986

3.04

3.98

3.28

5.55

2.51

1987

3.17

3.68

3.40

5.54

2.26

1988

3.17

3.19

3.40

4.97

2.43

1989

3.14

3.11

3.56

4.51

2.30

1990

2.85

3.17

3.73

5.03

2.13

1991

2.96

3.09

3.85

5.11

2.27

1992

2.49

3.05

3.84

5.10

2.11

1993

2.28

2.07

3.33

5.15

2.21

1994

2.59

3.34

3.30

5.34

2.20

Source: SOFA 1995, FAO
Instability in cereal availability increased in recent past. On the other hand it was high but declining in animal products. Domestic food production cannot be faulted for year to year fluctuations as instability was more due to trade. This suggests that trade policy failed to lead to stability in the availability of food. In Vietnam too, instability in the availability of food declined, mainly because of the decline in the instability in domestic food production. Decline in instability was exhibited for vegetable food as well as for animal based food and in case of the former, in cereal availability as well as in the availability of non-cereal food.

Access to food

As noted above, the general availability of food has improved in all countries of the region. Further, supply of food has become more stable over the years. These are positive factors to enhance food security of the people, The critical factor, however, is household access to the required quantity and quality of food. However, there are no reliable time series data on the food intake by different groups of people to assess whether the households are becoming more or less food secure over the reference period (with the exception of the SUSENAS in Indonesia). In the absence of such data, this report uses data on poverty as a proxy for food insecurity. One limitation of using poverty figures in a discussion of food insecurity is that we assume that:

Poverty is generally measured in terms of intake of the stipulated calories per person per day, or a certain level of purchasing power to enable access to stipulated food intake. This uni-dimensional depiction of poverty glosses over a whole variety of deprivations that impinge on food security. However, in the absence of relevant data, poverty figures are used as a broad approximation of the general status of food insecurity in the selected countries.

Table 10. Percentage of the population below the poverty line

Country/Year

Rural

Urban

Total

Indonesia

1976

40.4

38.8

40.1

1990

14.1

16.8

15.2

Malaysia

1973

-

-

37.0

1987

-

-

15.0

1995

-

-

10.0

Philippines

1971

57.7

40.6

52.2

1991

50.7

36.7

44.6

Thailand

1975/76

35.6

17.6

31.7

1990

21.4

10.1

18.2

1995*

-

-

13.0

Vietnam

1992/93

57.0

25.0

51.0

* Estimates.
Sources: Various country studies published in Asian Development Review, Vols. 10 and 12 (1992 and 1994); Pernia (1996); World Bank (1996b) and IEU (1995).
The proportion of poor households, and presumably food insecure households, in the total households has declined in the selected countries. In some cases, e.g., Indonesia and Malaysia, the decline was very rapid; in Thailand moderate; and in the Philippines and Vietnam, slow (Table 10).

This broad picture of poverty conceals many specific and relevant details. The poverty figures given above depict the headcount ratios - i.e. they divide the population into two groups, the poor and the non-poor. It does not reflect the intensity of poverty. It is suggested that in some countries, e.g. Indonesia, there is a bunching around the poverty line. In other words, though a household may be defined as 'non-poor' it continues to be vulnerable. Moreover, the headcount ratios are not strictly comparable since the poverty norms applied are not the same. While interpreting the figures on poverty in an analysis of food security, these limitations of aggregate data have to be kept in view.

However, in spite of the limitations, the data do reflect certain trends. Apart from the general decline in the proportion of the poor households, other common features could be highlighted. In the countries under review, the proportion of the poor households in the rural areas is higher compared to those in urban areas. Without exception there is also a concentration of the poor in the backward regions, in which a large number of households are "trapped'' in the poverty net. The farmers in low-value subsistence, agriculture (e.g., in Malaysia) and low educated rural youth (as those in the Philippines) are particularly poverty prone. In all the countries of the region intra-household inequity in food consumption is high, i.e., there is a manifest bias against women. In other words, decline in poverty has not been translated in terms of food security for a large number of people, men and women.

Quality dimension

As noted earlier, in every country of the region food availability in terms of calories improved quite satisfactorily. Few face serious problems of protein-calorie malnutrition. The same cannot be said about the quality of food intake. Deficits in the consumption of the micro nutrients such as calcium, thiamine, and riboflavin are manifested in the occurrence of nutrition-related diseases, the common ones being goiter, beri beri anaemia, are common. Some simple measures, e.g., fortification of the food items, e.g., salt, sugar, wheat flour, etc, can substantially improve the situation.

Table 11. Indicators of nutritional status.

Life expec.

Country

 

Underweight

Wasting

Stunting

Under 5 mortality (per '000 births)

1995

Mod. and severe

Severe

Mod. and severe

Mod. and severe

1995

64

INS

35

-

-

-

50

71

MAL

23

1

-

-

11

67

PHI

30

5

8

33

40

69

THA

14

-

6

22

27

66

VIE

45

11

12

47

34

Source: UNICEF, 1997.
Malnutrition is prevalent in a larger measure among the poor. Among these groups children as well as pregnant and lactating mothers suffer malnutrition to a greater extent. In Indonesia, for example, on per capita basis the rural poor consume 30-40 percent less calories and get half the protein consumed by the well-off. The incidence of malnutrition is quite serious among children, as reflected in high under-five infant mortality rate. A large number of the children are underweight in the selected countries. The proportion varies from 23 percent in Malaysia to 45 percent in Vietnam. Within the countries there are strong differences among different regions. The northern region of Thailand with its heavy tribal population is an example. A welcome feature has been a reduction in the proportion of underweight children in recent years in all these countries. This is particularly so in the case of severely under weight children, i.e., in the proportion of 'stunting' or 'wasting' children.

Policies and strategies


Macro policy reforms
Agricultural and rural development policies
Strategies for agricultural development
Rural development
Public interventions for poverty alleviation

Macro policy reforms

Under certain conditions, a fast growing economy has a 'trickle-down' effect and the poor are also likely to benefit from growth. The experience of various countries suggest that the 'trickle-down' effect becomes more pronounced, if:

Even with such favourable conditions some safety nets have to be provided to protect the poor in the transitional period, and especially the most vulnerable sections for a sustained period.

The countries under review did fulfill to a larger or smaller extent these conditions. Rate of growth in GDP ranged between 6 and 8 percent over a decade. They had reasonably good infrastructure, and invested in the human capital i.e. in education and health. However, the strategy followed (characterized by over-expansion of money supply, over-exposure to foreign indebtedness and growing budgetary deficits) made these economies susceptible to periodic recession or hyper-inflation. Sometimes such imbalances were caused by external shocks such as oil price rise for the oil importing countries or severe fall in the commodity prices in the commodity exporting countries.

The situation becomes worse from the perspective of the poor during the instability phase or recession when markets cannot be relied upon to give correct signals for resource allocation. The poor suffer the consequences of such distortions more seriously. Even during the 'normal' periods the poor need safety nets and support to enable them to adjust to new circumstances. In the countries selected for this review, such interventions were not devised; as a result the poor had to bear a disproportionate cost of adjustment. While this was the general experience, the individual countries differed in their handling of the poverty and food security issues. In the following paragraphs we will briefly review the developments in this regard in the selected countries (key macroeconomic indicators are shown in Table 4).

Indonesia

Indonesia is a resource rich country, but went through several crises, before a semblance of stability was reached in the mid 80s. It passed through high inflation in the 1960s, payment crisis in the midst of an oil boom in 1975, Dutch disease and devaluation in 1978 and recession in oil market in 1980. These crises were a result of an underdeveloped money market, low tax base, recourse to the soft option of monetary growth and large oil income. Falling terms of trade of the conventional exports exacerbated the problems of the economy. During the last decade several measures were taken to correct the situation. Prominent were a series of financial sector reforms, realigning the value of currency and greater discipline on money supply. These were complemented with investment in infrastructure and in human capital formation, and greater emphasis on non-oil exports. As a result, the country experienced high and more or less sustained growth, and single-digit inflation for nearly a decade. However, uncontrolled money supply and large and rapidly increasing foreign debt were already becoming threats to an otherwise dynamic economy.

How did the poor fare during this phase of growth? It is difficult to single out the effects of economic reforms on the poor because of several factors acting simultaneously, further compounded by the lack of relevant measurements and information. However, on a priori grounds, it seems that the pace of development and the pattern of public expenditure helped the poor. The biggest advantage was from the containment of inflation. Diversification of industries helped create more jobs in the urban areas. This was facilitated by a more realistic exchange rate.

On the negative side were an infusion of capital intensive technology both in industry and agriculture, and the non-availability of capital which starved small holdings and the traditional crafts. One manifestation of this development was the growing landlessness.

Malaysia

Malaysia has followed the path of liberalization since 1973 when the currency was made convertible on the current as well as capital accounts. However, controls on interest rate and credit allocation were retained, and reserve ratios were kept high. In 1978 interest rates were freed, administrative guidance was reduced and the money market was strengthened. In 1991, further liberalization was introduced. As a result of these measures high and sustained growth was achieved. The liberal economic policies were combined with high rate of domestic savings, stable currency, low inflation and a manageable debt service ratio. Apart from macroeconomic reforms Malaysia had the advantage of favourable terms of trade for its two large exports, rubber and palm oil. The country also opted for the introduction of productive technology in these commodities to maintain its market leadership. However, in recent years two ominous signs were already noticeable, a high current account deficit, and high level of foreign borrowing.

How did these developments help the poor? While a rapid and sustained growth did help the poor, there were some negative factors also. On the social policy side the country encouraged faster population growth, especially among the Malays who constitute the majority of the poor. Industrialization was capital- and skill-intensive. Agriculture also became more capital-intensive. The poor Malay farmers were trapped in the poverty net. The country did not have small-scale rural industries, which are part of the rural scene even in a developed country like Japan. Overall poverty was reduced substantially, but those who could not be absorbed by urban industries or large plantations were left with few options to cross the poverty line.

Philippines

Until the middle 80s macroeconomic indicators reflected a highly unsatisfactory performance of the Philippine's economy. Current account imbalances reached 5-6 percent of GNP, external debt amounted to 90 percent of GNP, debt service ratio reached 25-30 percent of the government revenue. The country's problems were compounded with a fall in the export price, as well as demand, for its main exports. In the absence of free exchange rate policy the currency remained overvalued, thus exacerbating the economic troubles. These came to a head in 1985 with a serious foreign exchange crisis. In that year liberalization measures were introduced. The emphasis was on reducing fiscal deficit. The government succeeded in achieving this objective to a large extent. But in that process growth in GNP slowed down, and trade deficit increased. The government persisted with the policy of reforms. There are now some signs of recovery.

On the impact of the reforms on poverty, Philippines shared the experience of its neighbours. The trend of concentrating industrialization in Manila and its environment continued, and capital output ratio increased restraining growth in employment. The country registered the highest rate of growth in population and consequently in labour force among SEA countries. The result was a very slow decline in poverty, especially in the rural areas. The resource poor regions, among them Cagayan Valley, Eastern Visayas, and Northern Mindanao were particularly hard hit. The price policies for agricultural inputs and outputs did not help the matter. The country's land reform policy did not prove an effective instrument to ensure growth and equity in the countryside.

Thailand

During the early and mid 1970s Thailand followed policies of State control in vital sectors of economy, particularly in the financial sector. Interest rate, discount rates and the reserve ratios were controlled; and exchange rates pegged. Heavy influx of foreign funds since the late 1970s, allowed for a less restrained money market. Since 1984 exchange rates were made more flexible, and interest rates freed. The economy was also helped by the fall in oil prices. The country followed prudent fiscal and monetary policies, and invested heavily in infrastructure and in human capital. Inflation rate was less than 5 percent in recent years. Population growth was the lowest in SE Asia. The country was poised for and did attain a growth rate of 8 percent per annum during the past several years.

However, there were some dark clouds on the horizon. As in other countries of the region, the current account imbalance was rising. Foreign debts were increasing rapidly. On the hindsight it becomes clear that foreign capital was not invested wisely. Free convertibility in both current and capital account proved premature, as it encouraged large scale speculative activities. Agriculture was stagnating. The growth was triggered by heavy capital-intensive urban industries. Prospects for the rural sector, and especially in the backward, resource-poor regions did not improve. Their plight became worse with the fall in the commodity prices, especially rubber, which hit the poor southern region. Unlike Malaysia, Thailand did not invest in raising productivity in agriculture. Urban wages rose to the level which took away some competitive edge from Thailand. Mobility of the rural workforce was hindered because of the high skill requirement of the sophisticated industries. The saving grace was the rural non-farm sector which absorbed surplus labour from agriculture to some extent, and halted rapid urbanization. In terms of macro policies, the poor benefited from the rapid growth, to the extent that it trickled down to the countryside. But stagnant agriculture and the factors hindering labour mobility from the backward regions and stagnant sectors went against the poor. The low rate of inflation was, of course, to the advantage of the poor.

Vietnam

The country has a short history of economic reforms. The reform process started in the mid 1980s, and was taken up seriously in 1989 when land rights were given to the cultivators. Since then reforms have been introduced in other sectors of the economy, but it has wisely been at a slow pace. Reason for the slow pace of reforms is mainly to avoid the type of disruption which a similar process caused in other transitional economies where institutions were not prepared to accommodate reforms. Vietnam is only gradually building these institutions in credit, trade and pricing, among others.

The initial response to the reforms has been a high level of production accompanied with a high level of inequality. For a socialist economy, the Gini coefficient for income distribution at 0.35 is unusual (compared to 0.31 in Indonesia). Among the weak spots in the economy, apart from the weak or non-existent institutions necessary for a market oriented economy, is the high amount of foreign debts contracted in a short period of time. So far the country has no serious current account problem. But the pace at which foreign investment and foreign capital are coming, domestic absorptive capacity could become a problem.

Vietnam started with an economy devastated by war. But it also started with some advantages. It is an oil surplus country, and its population is highly literate and disciplined. As far as the impact of the reforms is concerned, Vietnam's initial experience is similar to that of other SE Asian countries. Overall poverty ratio has declined, but the contribution of remittances from overseas has also been significant. As with other countries, Vietnam could not solve its problem of sharp regional inequalities. But unlike several other countries of the region, it has paid sufficient attention to agriculture. It has also emphasized infrastructure creation. A major pro poor achievement has been a sharp reduction in inflation, from 70 percent in 1990-91 to 15 percent in 1994-95. Constraining inflation to such as extent has helped the poor.

Agricultural and rural development policies

Southeast Asia, except Thailand, had been dependent on food imports until about the late 70s through the early 80s. By the mid-80s most of these countries were self-sufficient, and some were producing exportable food surpluses. Apart from policies to augment production, several price policy and market intervention measures were instituted from time to time to stabilize prices and ensure consumers a stable food supply, particularly of the main staple, rice. Policies to promote nutrition education and awareness were also pursued. However, unlike in some parts of South Asia, an institutionalized system of dual pricing, food stamps or public distribution of cheap food to the poor, was largely non-existent (Tyagi and Vyas 1992).

The principal instruments used for ensuring food security included measures to strengthen supply (both by boosting domestic production and beefing up supplies through imports); a range of input subsidies to keep costs low; and output price controls to enable the consumers (mainly urban consumers) to obtain food at a reasonable price. Economic policies and market mechanisms were favoured, rather than administrative interventions, for targeting food supplies to the poor, except in rare instances. Another major policy objective was the stabilization of rice prices. The measures of stabilization were important in the face of high fluctuations in the international rice prices. The world prices of rice widely fluctuated during the 70s and 80s; the coefficient of variation was 39 percent. In contrast, the coefficient of variation was 19 percent in Indonesia, 25 percent in Philippines, and 13 percent in Thailand during the same period. These indicate that the price stabilization policies pursued by the countries of SE Asia were largely successful, as shown below.

Indonesia protected its agriculture, particularly paddy, by instituting input subsidies (typically on fertilizers, modern varieties of seeds, insecticides and pesticides). A National Logistics Agency (BULOG) was set up to provide a ready market for paddy (to avoid distress sales) and to set a "floor" price to be paid to the farmers. Since 1970, the BULOG has been pursuing an active policy of guaranteeing minimum support price. The programme is executed through the village level cooperatives (KUD). The stocks acquired through KUDs are stored by BULOG and are used as buffer to meet the shortages as well as for the open market operations to regulate prices.

The rate of protection of rice prices (i.e., the difference between the domestic and border prices) in the 80s, instituted mainly through the mechanism of price support, was 19 percent; and was 9 percent in the 90s. Thus, as incomes rose and a reasonable rate of growth in agricultural production was established, the focus shifted to international competitiveness. From the standpoint of the net food buyers, especially the poor, the positive relationship between cost reduction policies (improvements in yield, input subsidies etc.) and fall in the relative prices of paddy helped ensure better access to food (Anderson and Pangestu, 1995).

Malaysia also followed a policy of strengthening the economy of the small paddy producers who constitute the poorest section of the society. Unlike some of the countries in Southeast Asia and South Asia, Malaysia did not favour cheap food policy for the poor, but aimed at improving yields. This was in keeping with the poverty profile of the population, as poverty was concentrated mainly among the small paddy growers.

The Government arranged to buy paddy from small growers to provide a support price besides a ready market. In the early 80s the subsidy element in the paddy support prices was as high as US$40-50 per tonne. This was reduced in the later years. It is estimated that by the late 80s the effective protection rate for paddy was 26 percent (Jenkins and Kwok-kong Lai 1991). Earlier, or prior to the 80s, the stocks were held by the government to provide strategic support against shortages. In more recent years their main function has been to stabilize prices for the producers.

In the Philippines, the Government had time and again intervened in the agricultural markets and fixed prices, primarily to minimize the adverse impact, i.e., "the price shocks", on consumers and producers. However, except in special cases there was no 'targeting' of the poor for food distribution. For example, under the Samar Area Development Program (SADP) food aid was given, for a while, in the depressed municipalities. Similarly, under the Special Development Assistance Program (SDAP) food aid was provided in the areas affected by insurgency.

It should be noted that Samar is an island along the Pacific, which is prone to tidal waves and typhoons. The island repeatedly faces natural devastation due to the lack of investment in protective measures. The SDAP is not a regular development program for the alleviation of poverty; it is a special aid programme with a time frame, under which programme food and basic amenities were provided in the poor semi-urban areas (called municipalities in the Philippines). Thus, its focus was on the poor areas rather than low income groups. SDAP was launched in the poor southern islands, where majority of inhabitants were Muslims (in contrast to the dominant Christian population in the rest of the country), and who were threatening to break away from the Republic. Thus, it was also an 'area specific' programme. Both these schemes i.e., the SADP and SDAP, were small, ad-hoc, projects and were not meant to be part of ongoing anti-poverty programmes.

The domestic price of rice in the Philippines through the 70s and 80s were generally ruled below the border prices, with input subsidies (on fertilizers, credit and other inputs), and 'stock and release' strategies of the Government. The income effect of such interventions in favour of the poor was estimated at 5.48 percent; for low-middle income groups 3.83 percent; for the upper-middle income groups 2.75 percent; and for the rich 1.36 percent (Ponciano and Power 1991). Price protection was reduced in the 90s with progressive removal of trade barriers.

In the 70s under Martial Law, the Government retained exclusive rights to import wheat, soybeans and other edible items. The Food Terminal Inc. was established with the responsibility for processing, storing and marketing food items. It was given the responsibility for selling low priced basic food in urban areas through its own outlets. This arrangement for cheap food combined with measures to increase food production (which in turn occurred as an outcome of superior rice technologies, including the use of high yielding varieties, and subsidized inputs) was expected to provide cheap food to the vulnerable sections. However, budgetary constraints, inefficient implementation and poor harvests over prolonged periods did not allow this programme to succeed. The programme was formally ended in the late 80s by the Aquino Government, during which period export taxes on such commercial crops as sugarcane and soybean were also abolished.

As in several other developing countries, a set of inconsistent (if not contradictory) policies were pursued in the Philippines; these aimed at simultaneously protecting urban consumers, agricultural producers and the food industry. The difficulties were compounded by the absence of sustainable agricultural growth on the one hand and increased market distortions on the other.

Thailand has traditionally been a rice exporter. The Government's concern all along had been to protect the urban (i.e., Bangkok) consumers against excessive rise in food prices due to rice exports. In 1960, a Rice Reserve Commission was set up to establish buffer stocks through open market purchases. Rice was released from these stocks in the market at controlled prices as and when necessary. A consumption subsidy (or the difference between the export price and what the Bangkok consumers paid) to the extent of 10 percent was offered in the 1960s. The subsidy to the consumers rose to 25-30 percent in the 70s with rise in the international prices of rice. The reserve requirements for exporters were also raised. At one point, in the late 70s, the Government distributed rice at a controlled price. The poor, however, did not benefit much as they did not have the required identification papers. The rich who cornered the bulk of the supplies sold back the cheap food in the open markets. The scheme was soon abandoned.

By the early 80s the world prices of rice began to fall and the Rice Reserve Commission eased its activities. With increased number of competing rice exporters (e.g., Indonesia, India, Pakistan) emerging in the mid and the late 80s, the Thai authorities saw no threat to local rice supplies and consequent rise in price because of exports. By 1990, operations of the Rice Reserve Commission ceased (Siamwalla and Setboonsarng, 1991).

Currently the general tendency in the region is to ensure food supplies to all at prices close to the international or border prices. Public interventions are restricted to some special circumstances (such as emergency measures in parts of the Philippines).

Strategies for agricultural development

As most of the poverty was concentrated in rural areas, and agriculture was the main occupation of the rural workforce, agricultural development was given high priority in the poverty alleviation programme. Until the introduction of the New Economic Policy, self-sufficiency in food was an important objective of the development strategy. Both these factors acted as a spur to improve productivity in agriculture. In recent years the urgency attached to agricultural growth, and particularly to cereal growth has diminished. Malaysia, for example, directs its efforts on poverty alleviation in the rural areas to high value added agriculture. As paddy production did not meet this criterion, the small farmers were encouraged to grow rubber, with infrastructure support provided by the State. In more recent years, as the economy of scale in rubber plantation was established, small farmers were encouraged to grow oil palm. In Thailand a more concerted move was made to encourage non-farm activities in the rural areas. In the other three countries the emphasis continues to be on improving productivity in cereals production.

The Philippines was the first country in the region to start with paddy-based "Green Revolution". There were reservations in some quarters on the equity aspect of this strategy. However, the strong linkages generated by the additional cereal production benefited the rural economy in general, and its impact on poverty was strong. With an increase in the area under multiple cropping made possible with short maturing high yielding varieties, technology had a favourable impact on employment. However, internal migration to high productivity areas from low productivity areas exacerbated the regional inequity.

Indonesia also took the route of intensification of its cereal economy. With the earlier programme of Bimas, a beginning was made, but the impact was marginal, especially on the small farmers. Later programmes such as Inmas had a wider coverage. Vietnam also followed the strategy of raising land productivity, strengthening non-agricultural linkages and expanding the industrial and tertiary sector.

The intensification programme was facilitated with emphasis on irrigation, especially in Thailand and to some extent in the Philippines and Vietnam. The expansion of irrigation also contributed to stability in crop production. As the land frontiers became narrowed, the scope for intensification had to be expanded in countries such as Thailand and Malaysia. Unfortunately, the efforts on agricultural development in general, and expansion of irrigation in particular, are slackening in all these countries.

Rural development

All the countries under review have backward regions, for which comprehensive development programmes have been launched. Integrated rural development programmes in Malaysia and Philippines described below are typical.

Malaysia

In Malaysia poverty is concentrated in areas dominated by small farmers and fishermen. So long as abundant land was available, the basic strategy was to clear new lands and settle people. However, as the land frontiers became narrowed, emphasis shifted to more comprehensive regional rural development projects. By the mid 90s there were about two dozen such projects, covering 0.5 million households. Major components of these development projects included agricultural development, land development, land consolidation, provision of support services, assistance to small farmers, rural industrialization, provision of social amenities and community services, food and nutrition programmes, and village infrastructure development. Public investment in these projects progressively increased. Yet these projects could not make a major dent on poverty in the backward regions. This was partly due to administrative inefficiency and partly the heavy subsidy elements that made these projects unsustainable.

Philippines

In the Philippines similar projects were launched in the backward regions, such as Samar. These were comprehensive area development projects, with practically all the components cited above. Their impact on the poverty alleviation was also as limited as those in Malaysia. Several common difficulties were witnessed, such as complicated administration, lack of decentralization, absence of beneficiary participation, and complex project designs. The major lacuna was the lack of integration with the macro policy reforms.

Public interventions for poverty alleviation

Access to land

None of the countries under review except the Philippines had opted for a redistributive type of land reforms (Vietnam is a special case). Where land was relatively abundant, the major emphasis was on settling the poor households on newly reclaimed lands. The transmigration programme of Indonesia is better known among such programmes, with about 4-5 million people transmigrated from crowded Java to outer islands. This was the major programme of land redistribution in favour of the poor. Apart from land the beneficiaries were provided with developed house sites. It is estimated that migration has relieved Java of the necessity for creating 1-1.5 million jobs, assuming a labour participation rate of 30 percent. Almost all the migrants were landless or near landless.

A similar strategy of providing viable landholdings was practiced in Malaysia. However, as the land frontiers are receding in this country the allotment of land is no longer an obvious solution. In all settlement schemes, there are problems of wrong selection, tension between various groups, especially if the new settlements are already inhabited. The other problem which surfaces once the settlement becomes effective is the concealed tenancy and rent seeking. The most important issue is the mounting costs of resettlement as it moves into less favourable sites.

Thailand had no redistributive land reforms. The main land-related problem was one of land titling. Due to an absence of such titles, the farmers especially the small farmers, faced difficulties in land as well as credit markets. There was also a problem of tenancy in the newly settled land. In spite of the vast uncultivated land the issue of near landlessness was a real issue, especially in the north and northeast regions.

In the Philippines land reform has been part of political agenda since the 30s. It regained importance in the 70s and the 80s. Poverty in the Philippines is intimately related to the access to land, land productivity and tenurial relations. The inequality in landholdings is high. Tenancy is increasing, and there is a high proportion of landless tenants and agricultural labourers. The components of land reform comprised regulation of tenancy, establishment of homestead farms, purchase of land from the large landlords for distribution among the smaller farmers, and redistribution of private lands to tenants. Critical studies of Philippine land reform suggest that the reforms did not achieve their main objective of poverty alleviation in the countryside, mainly because of inefficient implementation, lack of political will and corruption. Also, the unrealistic targets and legal and budgetary problems compounded the difficulties. The high exemption limits on privately held lands and unwieldy process of distribution of government land also contributed to the lack of success of land reform. In sum, land reform did not contribute to the reduction in poverty and access to minimum basic needs in a measurable way.

Vietnam which started with a socialist structure introduced in the 80s a phase of decollectivization which covered the northern and southern parts. Decollectivization led to regional inequalities particularly in the south; in the north the land distribution was more equitable. The inequalities were exacerbated in areas where a larger number of households receiving overseas remittances could invest in land. The major unresolved problem was that of the uncertainty in the ownership rights. This has been corrected by the land law of 1988 (revised in 1993) which provided for a lease of 20 years, with other accompanying rights.

Along with access to land the countries also strengthened institutions to provide cheap credit to modernise agriculture and provide the rural non-farm sector with livelihood opportunities.. The Indonesian experience is particularly noteworthy in this respect. The village cooperative societies, KUD, disbursed credit for small investment activities and provided working capital loans. This and other credit schemes covered close to 75 percent of the farming households. Available accounts indicate that the loans are productively used. The programme could have been more successful but for the centralization of decision-making.

The credit programme in Thailand had only limited success mainly because of unclear titles to the land. A programme assisted paddy growers by providing short term credit in order to stabilize seasonal fluctuations in rice price. The wealthy farmers took advantage of this programme. Similar results were shown for the concessional loan schemes that mainly benefited rice millers and traders.

Employment programme

Three of the five countries under review (namely Indonesia, the Philippines and Thailand) launched employment programmes for the poor. The objectives were to provide gainful employment to the rural poor in infrastructure building with labour intensive technology. The more successful among these were the programmes in Indonesia, which launched in 1969-70 a programme known as Inpres Kabupaten to build small scale infrastructure with labour intensive technology. Total employment created in the 80s was about 32-40 million days per year. Another special programme aimed at providing employment in the slack season, and generated about 40-50 million persondays each year. A programme mobilizing voluntary work was also established with the same objective. Although the employment linkages with other sectors were not very strong, these programmes had a positive impact on poverty alleviation as well as food production.

In the Philippines a major programme on community employment and development (CEDP) was started with the additional provision of involving NGOs in government projects. However, it could not fulfill its target of providing employment for 1.2 million workers due to lack of resources. The programme was also hampered by inappropriate schemes, and corruption. However, the benefits were mainly reaped by unemployed and underemployed youths. A more comprehensive poverty alleviation programme was launched in 1990.

Thailand's rural job creation programme was started in the late 70s. It was mainly aimed at providing jobs in the slack season on infrastructure projects. After the initial years, the earlier enthusiasm fell off and in the 80s the programme lost much of its effectiveness. By that time more capital-intensive projects which required skilled manpower, thereby excluding a large number of the poor, were launched.

Public distribution of foodgrains

In one form or another, the selected countries have organized public distribution of foodgrains. Thailand and Vietnam made arrangements for subsidizing foodgrains for all those who wished to take advantage of the offer. In Malaysia an administered price regime was introduced with highly subsidized rice distribution, the subsidy element amounting to nearly 40 percent. Meanwhile, the Philippines has targeted subsidized food in selected areas through special development assistance programmes.

The impact of food subsidy on the poor is difficult to assess as the degree of subsidization has undergone frequent changes; also, because the intended beneficiaries of the programmes were not defined in an unambiguous way.

Strengths and weaknesses


Macro policies
Agricultural development
Public programmes for poverty alleviation

On the three measures of food security - availability, stability and access to food - and on the quality dimensions, three countries (Indonesia, Malaysia and Thailand) had made substantial progress by the 70s. Further progress both qualitatively and quantitatively was made in the 80s. At the aggregate level, the availability of calories was close to or surpassed the nutritionally advised norm of 2300 calories per person per day. Inter-temporal instability in the availability of food was significantly reduced both for foodgrains and livestock products. As indicated by the data on poverty, the proportion of the population that could not afford adequate quantities of food significantly declined. A larger proportion of the households had access to adequate food. Improvement in the quality of food intake also improved, though not to the desirable extent. How these countries managed to achieve these levels, which were the weak points, and what changes in the policies and strategies are indicated, are examined in this concluding section.

The success achieved by these countries in ensuring food security to a progressively large section of their population was not fortuitous. There were some initial advantages, e.g. relatively large areas of 'empty' and cultivable land. Deceleration in the rate of growth of population was also a contributing factor. A highly literate population was another. Some of these countries had natural resources such as oil which made the task of development relatively easy. Yet there were policy and programme initiatives which exerted a substantial difference in the measure of success in ensuring food security. We will recapitulate our discussion of these initiatives in three areas - macroeconomic policies, agricultural development policies and strategies, and public intervention for poverty alleviation - to draw lessons from the experience of the countries under review.

Macro policies

A high rate of economic growth exceeding the rate of growth in population, was the engine to assist the poorer households to come out of the poverty trap. The development policies were market friendly and the growth was mainly export led. Some other elements of the growth strategy helped the poor. One was the continued investment in the improvement of infrastructure. Also, investments in building human capital and in health and education, accounted for a large share in the government expenditure. A significant contributory factor for the well-being of the poor was the containment of inflation.

Even with these qualifications, the higher rate of growth only provided necessary conditions for poverty alleviation and food security, but these were not sufficient. In order to enable the poor to respond to the opportunities offered by economic growth, they should have assets which are interpreted in the broad sense as productive capital, skills and stamina. It is expected that in the environment of satisfactory growth, institutions will help the poor to acquire such assets. However, in societies characterized by gross inequalities economic institutions bypass the marginalized sections, in which case direct State intervention is fully justified.

The SEA countries reviewed in this report provide object lessons in linking economic growth to food security. The most important lesson is in the area of the composition of growth. In the initial phase of the period under review, i.e. in the 80s, these countries gave sufficient attention to agricultural development, more precisely on raising the productivity of rice. This enabled them to generate surplus which could facilitate industrial growth. In other words, the structural change was based on the foundation of a productive agriculture. Occupational diversification was triggered by the 'pull' of the non-agricultural sectors rather than the 'push' from a stagnant agriculture. This review indicates that the countries started diverting their attention from agriculture too soon, and as a result poverty continued to be embedded in low productive agriculture in backward regions.

Similarly, from the point of view of ensuring entitlement to food it is important that employment remains as one of the basic objectives of the growth. Inter-sectoral linkages in the initial phase of development are not strong enough to compensate the loss of employment in traditional economic activities with corresponding increase in the employment in the more dynamic but capital- and skill-intensive modern sectors. As the experience of the selected countries has shown, the prospect of 'jobless growth' is real, against which there should be adequate safeguards. An urban-based, capital-intensive industrialization can aggravate the problem of transitional poverty, and in fact can contribute to the swelling of the numbers of chronically poor.

Containing inflation is an important step in ensuring food security. The countries in SEA were largely successful in achieving this objective. The biggest threat to price stability, however, is posed by the imbalanced government budgets. Meeting this gap by indiscriminate domestic or foreign borrowings only adds to vulnerability, for which the countries and particularly their poorer sections are not prepared.

Other lessons in the macroeconomic management are in the areas of pace and sequencing of the reforms. The desirable objectives in moving towards approximating domestic prices to the border prices are to allow free convertibility on the current and capital account, realign the exchange rates to the real purchasing power of the currency, and encourage foreign capital investment. Problems arise when such moves are made without proper safeguards or clearly defined policy objectives, as the SEA countries are now learning at a great cost. The incidence of consequent 'adjustments' is disproportionately heavy on the poor and vulnerable sections of the population.

Agricultural development

The SEA countries could attain significant progress in ensuring food security to a large section of the poor mainly because of the proper supply management. The availability of food was assured initially by augmenting domestic supply of rice, largely by yield-augmenting measures. Propagation of HYVs, subsidized input supplies, and investment in irrigation were the main planks of this strategy. As many cultivators were small farmers, success hinged on the capacity of the institutions, including Government machinery, to reach the multitude of these farmers. Some countries such as Indonesia were fairly successful in this objective. Others, particularly the Philippines, lagged behind. In the latter part of the period under review, emphasis shifted from food self sufficiency to self-reliance, in other words on improving the capacity to import food by augmenting exports. In this phase, agriculture likewise played an important role. Practically in every country of the region, agricultural trade resulted in a positive balance.

Thus, in medium to large countries with a large proportion of the workforce in agriculture, augmenting domestic production of agricultural products, and in most of the cases the production of staple foodgrain, is a pre-condition for ensuring food security for a large section of population in the rural areas and directly or indirectly dependent on agriculture for their livelihood. Another noteworthy feature of agricultural development in these countries was an emphasis on raising productivity. A clear indication of improving productivity and competitiveness is provided by progressive fall in the effective protection rates, and growing equivalence of the domestic prices to border prices. This, again, is a lesson worth underlining.

With proper handling of production and trade policies, these countries could ensure stability in food availability. In most of the countries the index of year to year instability declined over the period under review. These countries were not as successful in ensuring a minimum support price to their agricultural producers to protect them from market-induced uncertainty. This was mainly due to institutional failures. Policies were in place but these could not be administered properly. The same is true about inter-seasonal fluctuation in prices which were sharper than warranted even for agricultural commodities which are basically seasonal products. Various schemes of price stabilization incurred heavy losses and had to be terminated. An interesting programme was implemented in some countries, mainly in Malaysia and to some extent in Thailand, to encourage small farmers to adopt high-value agriculture, e.g., a shift from rice to rubber or oil palm. What makes this experiment notable is the infrastructure support in terms of processing and marketing facilities provided to the small farmers. In the absence of such support small farmers generally opt for self provisioning rather than enter the market for the sale of small quantities of non-food crops, and later for the purchase of small quantities of food for their consumption.

Public programmes for poverty alleviation

The selected countries relied more on the trickle-down effect of growth and market mechanisms to alleviate poverty and ensure food security. For reasons stated above, market mechanisms have to be supplemented with direct public interventions in favour of the poor if the initial conditions are too unfavourable. Not many serious attempts had been made in this direction. Some countries tried to implement poverty alleviation programmes, in the nature of (a) comprehensive rural development, (b) land reform, and (c) employment. These programmes were briefly reviewed earlier, and recapitulated below.

Rural development programme

Each country is characterized by grossly uneven regional development. In part, such regional inequities are due to natural handicaps faced by the regions - e.g., most are disaster-prone - but the development policies pursued by the countries have played their role. The development strategies and policies had urban bias in favour of the metropolitan cities. Some attempts had been made to restore the balance by more focussed regional development programmes. Generally, these were comprehensive, all-inclusive initiatives. Though these were identified as Integrated Development Programmes, a large number of schemes were of the 'Christmas tree' type. Apart from the lack of focus, two pre-conditions of the success were generally absent, i.e., decentralized administration, and people's participation. The complex nature of the design of the projects and non-viable funding arrangements made them unsustainable. The conditions of the poor hardly improved. While the emphasis on all round development of the targeted population is welcome, there are not many examples in this region or elsewhere to demonstrate that such integration is possible under the umbrella of a single programme.

Access to land

As poverty is mainly concentrated in the rural areas, and farming is the principal source of livelihood of the rural poor, equitable access to land has a natural appeal. Redistributive type of land reforms (which were attempted in all countries of South Asia, with sparse success) were hardly taken seriously in any country, with the exception of Philippines (Vietnam is a special case). Even in the Philippines the record is not very satisfactory. For the redistributive land reforms to succeed, the political will of the policy makers and strong organization of the beneficiaries are pre-conditions. Both conditions were absent in these countries.

In relatively land abundant countries the easier option of settling the poor on reclaimed land was adopted. The countries succeeded in giving access to land to a very large number of rural poor, especially in Indonesia and Malaysia. However with the land frontier closing, settlements had to be organized on environmentally unsuitable land. Costs also started escalating. There were usual, though not insurmountable, problems of new settlements - inappropriate selection of settlers, underdeveloped infrastructure, inter-group tensions, etc. In any event, this is not an important option for poverty alleviation in the selected countries except perhaps Indonesia.

An aspect of land reform which is quite important in Thailand, but which has also relevance in some other countries of the region, is to provide proper land titles to the cultivators. Such titles not only impart security to the cultivators; they facilitate credit and other transactions. Even in the overcrowded countries of South Asia, proper registration of the tenants (as in West Bengal state of India) had a material impact on their economy.

Employment programmes

Not every poor household has the resource base or entrepreneurial skills to eke out a living from his small holding or any other household enterprise. The number of assetless poor is increasing in some selected countries. For such households, employment in public works is the main source of income and ensuring entitlement to food and basic necessities. Even otherwise "employed" poor households in the rural areas have to face unemployment in the slack seasons. Employment generation as a part of poverty alleviation programme has a strong case. At least three of the five countries, Indonesia, Philippines and, Thailand had organized employment programmes in the rural areas to engage the unemployed in the public works, mainly of the infra structure nature.

Wherever these programmes were taken seriously, they benefited the poor rural households. However, enthusiasm for rural public works waned as more capital-intensive works were proposed to make the investment sustainable. Difficulties in mobilizing labour and administering small spatially disbursed works, also came in the way. It is quite clear that poverty alleviation programmes, particularly rural works programmes can be sustained if participation of the beneficiaries is active. Also, experience in these countries and other developing countries suggest that these works can be made more sustainable, with lasting impact on the economy of the poor households in the rural areas if the strengthening their small and fragile production base is considered legitimate under these programmes. On-farm work needs to be included in the list of the eligible activities under the employment programme.

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Appendix - Methodology for analyzing trends in output instability and its components

Since production is equal to area multiplied by yield, taking the first derivative with respect to time of the logarithm to the base "e" of production, the percentage increase or decrease in the output of a crop from its previous year's level, can be approximately expressed as the total of the corresponding increases or decreases in its area and yield, i.e.,

Got = Gat + G yt.
Where Got, Gat and Gyt are the annual growth rates in output, area and yield of the crop in year t. Clearly, over a time period of specified length T, the year-to-year changes in production and in its two constituent components will not remain constant, unless their respective paths precisely follow a long linear function of time over the period. Also, since each of the components can record a positive or negative change, production may not record any change from one year to the next even with significant changes in the two components.

Moreover, as the total log-change between the two end points of a period is the sum of the intervening one-year log changes simple averaging of the annual growth rate as of a component may not provide a reliable summary measure of its growth rate over the entire period, unless the annual output growth rates provide a measure of the degree of instability in production over the specified period.

Moreover, decomposition of the variability in annual output growth rates may help to identify the sources of change in instability in production over different periods. The variability in annual output growth rates over a specified period of length T can be decomposed as

V (Go) = V (Ga) + V (Gy) + 2 Cov (Ga, Gy)
Note that changes in the annual output growth rate derive from the corresponding changes in technology, price and weather factors, and also from changes in the magnitudes of their response coefficients.

Changes in the variability of annual output growth rates, i.e. the trend in output instability over the sub-periods of a period under investigation, are thus influenced not only by the corresponding changes in the variabilities in the levels of technology, price and weather factors, but also by changes in their respective response coefficients.

It may be noted that the instability measure suggested here may as well exhibit a trend-like movement over a period, if the growth rate over the corresponding period records a trend-like movement. That is, the instability may be overestimated if there is a rising trend in growth rate over the given period and it may be underestimated if there is a deceleration in growth rate. One convenient way to eliminate this bias would be to measure the variability in annual growth rates from the corresponding growth rate estimated over the period, and use the following relation for decomposing instability in output:

E (Got - Go*)2 = E (Gat - Ga*)2 + E (Gyt - Gy*)2 + 2 Cov [(Gat - Ga*) (Gyt - Gy*)]
Where G*a, G*y and G*o are the growth rates in area, yield and output estimated over the sub-period, and G*o = G*a + G*y.

Fig. 1. Trends in production variability: Indonesia

Fig. 2. Fluctuations in availability: Indonesia

Fig. 3. Changing quality of food in Indonesia

Fig. 4. Trends in production variability: Malaysia

Fig. 5. Fluctuations in availability: Malaysia

Fig. 6. Changing quality of food in Malaysia

Fig. 7. Trends in production variability: Philippines

Fig. 8. Fluctuations in availability: Philippines

Fig. 9. Changing quality of food in Philippines

Fig. 10. Trends in production variability: Thailand

Fig. 11. Fluctuations in availability: Thailand

Fig. 12. Changing quality of food in Thailand

Fig. 13. Trends in production variability: Vietnam

Fig. 14. Fluctuations in availability: Vietnam

Fig. 15. Changing quality of food in Vietnam


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