Implications of Economic Policy for Food Security : A Training Manual

Chapter 1 : Food Security: The Conceptual Framework


By the end of this chapter, participants will:

1. have an understanding of the different concepts of food security and when to apply them;

2. be aware of the links between food security and other major development issues in the world today;

3. understand the role of increasing food production in achieving food security;

4. know the major trends in the national and international food economy.

Topics/Activities (X3936E00) (117K)


FAO, World Food Summit papers on relevant issues (please see References).

FAO, Committee on World Food Security, Assessment of the Current World Food Situation and Recent Policy Developments, March 1994.

FAO, Food, Agriculture and Food Security: The Global Dimension, World Food Summit paper, 1996.

IFPRI, Improving Food Security of the Poor, sections 1-4, 1992.

S.Maxwell & M.Smith, Household Food Security: A Conceptual Review, IDS, 1992.

S.Maxwell & A.Fernando, Cash Crops in Developing Countries: The Issues, the Facts, the Policies, World Development, Vol.17, No.11, 1989.

1. Concepts of Food Security

1.1 Food security at different levels of analysis

FAO has defined the objective of food security as assuring to all human beings the physical and economic access to the basic foods they need. This implies three different aspects: availability, stability and access. This definition is clearly stated in terms of food security for each individual, and it can be argued that this is the most, indeed some would say the only, meaningful definition of food security. The definition of household food security accepted by the Committee on World Food Security refines this definition as follows: "physical and economic access to adequate food for all household members, without undue risk of losing such access". This introduces the concept of vulnerability.

Figure 1.1: Different levels of food security

Figure 1.1 (X3936E01) (16K)

However, it is sometimes useful, particularly when discussing national economic policy options, to define food security, or more usually, food insecurity, at other levels such as the national/regional level and the household level. Figure 1.1 shows the most important interactions between all three of these levels of analysis.

Food security at the national level is perhaps best described as a satisfactory balance between food demand and food supply at reasonable prices. This may seem a rather vague definition, but it is intended to indicate a situation where there have been no major upheavals in food markets in the recent past, where adequate food is available and where most of the population have access to that food. An alternative definition would be that a country is food secure when all the individuals in the country are food secure. However, this definition, robust and clear though it may be, would exclude virtually all countries in the world. It is useful to have a less extreme definition which allows us to distinguish between, say, the United States which most people would feel was quite food secure and a country like Zaire, where food security poses greater problems.

In the definition given above, changes in food security can be identified over time by rising prices. These will affect the poorest first, as they spend a higher proportion of their income on food (see Chapter 2). The absence of an imbalance between food demand and food supply does not mean that all households in the nation are food secure. It means that if they suffer from food insecurity it is because they lack entitlement to food, what economists would call effective demand. They have no way of expressing their full need for food in the marketplace.

There are countries where the overall supply of food is clearly inadequate to meet its citizens' needs, even if it were distributed entirely according to that need, rather than according to entitlement, or market demand. The analyst may wish to identify countries in this extreme situation, without in any way wishing to imply that other countries, which do not fall into this category provide food security for all its citizens.

The household level of food security is probably the most important for the analyst, insofar as the household is the basic economic unit which determines the level of consumption by the individual. In most analysis there is a presumption that income comes to the household as a whole, resource allocation decisions are made at the household level and household consumption is divided amongst its members in some relation to the needs of the individuals. As will be discussed in section 1.4, there are occasions when none of these assumptions are valid. For the most part, however, they do reflect the basis on which economic activity is organised, and the way that information is often collected. In general, throughout this manual, the basic unit of analysis will be the household. At this level, households are identified as food secure if their entitlements, or demand for food is greater than their needs, defined as the aggregation of individual requirements.

At the individual level, the definition of food security is much more straightforward. An individual is food secure if his or her food consumption is always greater than need, as defined by physiological requirement. Consumption is determined by the claim the individual has on household food resources. This may be affected by individual earnings and assets, or by the individual's position in the household. It is certainly unusual for an individual's share of household food consumption to be determined solely by need.

It is clear that food security at one level does not imply food security at a lower level of aggregation. A country which is food insecure will almost certainly contain groups of the population which are food secure, and many countries which are food secure at a national level will contain groups of the population who suffer from severe food insecurity. Food security at the household level does not imply that all members of the household are food secure. A food insecure household may equally contain food secure members.

There are different combinations of levels of food security into which one can categorise countries. A country may be in the extreme situation of having an insufficient supply of food to meet its citizens' needs, even if the food supply were divided in a "fair" (i.e. according to need) way. In this situation, there will be widespread entitlement failure, and the most appropriate policy response will be large-scale emergency relief from international donors. Mozambique was in such a position in the late 1980s.

There may be national food insecurity, in the sense that a country may be unable to grow and import enough to meet the market demand for food. Food prices will rise and an increasing number of households will become food insecure. In this situation food security problems are likely to be closely linked to macro-economic concerns and may require a revision of basic government policy.

A country may be food secure at the national level, but have a considerable number of food insecure households. These will generally be identifiable in regional or socio-economic terms, and require sectoral or targeted policy initiatives.

In middle income and even upper income countries, malnutrition may exist in spite of national and household food security. The appropriate response here may be in terms of education or health, depending on whether the malnutrition is a result of individual food insecurity, or health problems.

It is important to identify the nature and level of food insecurity problems, as a first step in developing an appropriate strategy for enhancing food security. Although some household problems can be tackled at the national level, and some national level problems will respond to an increase in household entitlements, the interaction between the different levels of food security are critical in devising an effective response.

1.2 Chronic and transitory food insecurity

Up until now, no mention has been made of time, yet it is a very important factor in determining the nature of food security problems. It is common to draw a distinction between chronic food insecurity and transitory food insecurity. When individuals or groups of people suffer from food insecurity all of the time, then they can be said to suffer from chronic food insecurity. Transitory food insecurity occurs when households face a temporary decline in access to food. Transitory food insecurity can be further divided into temporary food insecurity and cyclical or seasonal food insecurity. Temporary food insecurity occurs when sudden and unpredictable shocks, such as drought or pest attack, affect a household's entitlements. For urban households, sudden unemployment may also be a cause of transitory food insecurity. Seasonal food insecurity occurs when there is a regular pattern of inadequate access to food. This is often linked to agricultural seasons, particularly when it is difficult for households to borrow to even out flows of food over time. Box 1.1 describes such a situation in Burkina Faso.

Box 1.1 (X3936E02) (14K)

Transitory food insecurity may lead to chronic food insecurity, depending on how severe it is and how frequently it occurs. If a household suffers two drought years in a row, and is forced to sell some of its assets to survive, then it may move from a situation of transitory food insecurity to one of chronic food insecurity.

1.3 Entitlements

The use that households can make of the resources available to them, as well as the level of those resources, depends to some extent on the nature of the environment within which they operate, and the specific forms of the institutions which regulate the relations between the various economic agents. An approach to analysing the problem which takes these different elements into account is known as analysing entitlements, developed by Amartya Sen. He defines entitlements as "the set of alternative commodity bundles that a person can command in a society using the totality of rights and opportunities that he or she faces", in other words, what a person can produce, buy or borrow, given what they own and what social and state regulations allow them to do with that. He identifies four main categories of entitlement:

    i) Trade-based entitlement, which describes what an individual can buy with the commodities and cash they own.

    ii) Production-based entitlement, which describes the right to own what one produces with one's own resources.

    iii) Own-labour entitlement, which describes the sale of one's own labour power, and the resulting trade-based entitlements.

    iv) Inheritance and transfer entitlement, which refers to the right to own what is willingly given by others as remittances, gifts or bequests, as well as transfers from the state such as social security, pensions and food distribution.

All these entitlements give an individual control over resources which they can use, within the rules and regulations laid down by society, to satisfy their needs, including the very basic need of food. This goes rather further than a purely economic analysis of prices and income, insofar as it allows for consideration of both traditional community institutions, such as communal granaries or access to common grazing land and state institutions such as feeding programmes, when analysing how people meet their food requirements.

1.4 Vulnerable groups

Until now, the level of aggregation of food security has been discussed, as has the time factor, but now the risk factors which create food insecurity must come into consideration. There are two approaches which can be taken to this. The first is to look at the characteristics of the vulnerable groups in a society. The second is to examine the sources of risk to their entitlements. Both approaches give useful insights: the first helps identify vulnerability; the second illustrates how that vulnerability may change over time. The food insecure are not confined to those who have food deficient diets at a given point in time. They include those whose access to food is insecure or vulnerable, those who are in danger of inadequate diets.

Vulnerable groups can be classified according to a number of criteria:

    i. Geographic/regional - administrative zone, urban, rural
    ii. Ecological - by climatic conditions, accessibility
    iii. Economic - occupation, level of income, formal or informal sector, size of landholding. types of crop grown, migrant labourer, female-headed household
    iv. Demographic - male, female, pregnant, lactating, pre-school children, school-aged children, elderly.

Typically, one might expect the following groups in a country to be identified as vulnerable.

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This will vary from country to country, according to the specific socio-economic conditions. Identification of these groups has to be undertaken on the basis of information on variables such as household food consumption, or level of entitlement. In most countries use of existing information may have to be supplemented by specific survey work, to reach a more precise identification of vulnerable groups.

Once vulnerable groups have been identified, the next stage is to examine the sources of risk to their food security. Table 1.1 categorises the main types of entitlement: productive capital, non-productive capital, human capital, income and claims, and outlines the major sources of risk. These can be natural risks, as from climatic shocks such as drought, or disease and pests. Risk can come from changes in state institutions and policies, removal of subsidy programmes, imposition of taxes, changes in property rights. Changes in market conditions can affect the prices that the vulnerable face, their opportunities for employment and the cost of maintaining their capital and their debts. Changes in community rights and obligations can create risk, particularly for the most vulnerable. Finally, conflict and the breakdown of the rule of law can cause chaos which tumbles many households, which were thought to be food secure, into extreme vulnerability.

Some risks are more likely to occur than others. Much depends on the extent of climatic variation in a country, the stability of the state and of community institutions and the extent of involvement in markets, particularly those markets which have historically been subject to major fluctuations. However, the table gives a good categorisation of the wide source of risks which may push a household into food inadequacy.

The definition we are using of food security contains the three concepts of availability, access and stability. This latter can be interpreted as incorporating the ability to withstand shocks to food entitlements. The greater the degree of resilience a household has in the face of these risks, the more food secure it will be. The most food insecure households will be those facing the greatest probability of an entitlement failure with the least assets. Lipton has introduced the concept of the ultra poor, those who have to use 80% of their income to achieve less than 80% of their food requirements. In fact, households who allocate over 70% of their income to food almost certainly have little flexibility in reallocating resources to meet an entitlement shock. Household food stocks may be important in withstanding temporary shocks, as is possession of assets. However, once households are forced into selling assets to meet shocks, they are no longer following sustainable strategies. Unless the shock is a temporary one, they will sooner or later fall into food deficiency. Once they start selling productive assets, they are reducing their future food entitlements.

Table 1.1: Sources of risk to household food security

Table 1.1 (X3936E04) (3K)

1.5 Intra-household food distribution

As was discussed earlier, the household is often taken as the unit of analysis in issues of household security, yet need is identified at the level of the individual. Different physiological needs of different members of the family mean that it is neither fair nor efficient to divide the food available equally amongst the different family members. It is difficult to observe how intra-familial food distribution actually takes place. When families have a communal kitchen, it is difficult to identify the food intake of individual members accurately. Surveys have been undertaken, but they are time consuming and expensive. It is even more problematic to identify the basis, or rationale for intra-family household distribution. The evidence indicates that it varies by country, and by socio-economic group within country.

Much of the problem of in using the household as the analytical unit arises from the assumption that household members act jointly to achieve common aims and objectives. This is by no means always the case. Conflict can arise within the family on the basis of gender, age, earning capacity and other individual entitlements. The decision-making processes internal to a family may differ substantially as between, for example, a traditional rural Asian family where the male is definitely the head of the household and may have preferential access to food and other resources, and a Southern African family, effectively female-headed while the adult male is working in the mines.

There is evidence from a number of studies in different parts of Asia that the adult male's food consumption is greater relative to needs where the household faces chronic food insecurity. This can be interpreted in two ways. The decision to bias food distribution in favour of the adult male may be a conscious survival strategy, adopted by the family as a whole to ensure the income he brings in as principal bread-winner. In this case, the problem is clearly one of household food insecurity which will be improved by an overall increase in household entitlements. Alternatively, the unequal distribution may be a result of intra-familial conflict, where the adult male has greater power, based on his individual entitlements. Increasing household entitlements would not necessarily improve food security for other household members, unless this could be effectively targeted away from the adult male.

Intra-household food distribution may change in the face of shocks to entitlements. There is evidence from rural South India that food price rises will result in a greater fall in calorie intake for female members of the household. However, they also benefit more from a fall in food prices. Evidence from both Orissa in India and Sub-Saharan Africa indicate that in times of food scarcity such as famine, children get first priority, before adult men and women.

It has been suggested that it is more valid to focus on the conjugally organised nuclear family, (i.e. mother, father and children) as the unit of analysis in North Africa, South Asia and the Middle East than in the Caribbean, Latin America and Sub-Saharan Africa, where family patterns may be more complex. In all cases, however, it is difficult to target specific members of the family, as attempts to implement targeted feeding programmes have shown. Food given to one member of a household, what ever the internal structure of that household, affects the distribution of the remaining household food. All studies of supplementary feeding schemes, whether these involve on-site feeding or take home rations, show there to have been some leakage to other household members.

It is questionable how desirable it is to attempt to influence intra-familial food distribution through indirect social engineering. In most cases, increasing the level of food security of the household overall will lead to adequate diets for the individual members of the household. Programme designers and policy analysts must be aware of the complexities of intra-household food distribution, and the possible effects of changing the entitlements of one family member, particularly at the expense of others. However, this is an area where our understanding is still very incomplete.

2. Recent Trends in the World Food Economy

In the mid-1970s, the world was perceived to be in the midst of a severe food crisis. Adverse weather in South Asia , Europe, North America and the former USSR affected cereal supplies. This, combined with a change in USSR livestock policy which coincidentally increased the demand for imported cereals, led to very tight conditions in world cereal markets. The OPEC oil price rise of 1973 increased the price of energy and other inputs for the agricultural sector, such as fertiliser. This was expected to further exacerbate the world food crisis.

By the time the conference actually took place, in October 1974, the peak of the grain price crisis had already passed. By the late 1980s, the situation had changed dramatically. Global cereal stocks almost doubled between the mid-1970s and the mid-1980s. Overall cereal production has continued to grow over the past quarter century, with growth in wheat (3.8%), rice (3.0%) and maize (2.7%) easily outstripping population growth. As Table 1.2 shows overall per capita world food supply has continued to increase on average over the last thirty years, thus banishing the Malthusian nightmare for the present. The issues facing the World Food Summit of 1996 are those of household food security, poverty, and sustainability and the environment.

Closer examination of Table 1.2 shows that even the figures for broad country groupings show considerable variation in both level and trend. Although there has been substantial growth in food supplies for developing countries, most of that growth has come from East Asia and the Near East and North Africa. Figures for sub-Saharan Africa indicate that food supplies have worsened since the early 1970s. Per capita food availability figures, which will be discussed in greater detail in Chapter 2, are inadequate to ensure food security for the countries in that region. However care is necessary when making inferences based on such aggregate data. Although the figures for sub-Saharan Africa as a whole are very low, in the early 1990s, Mauritania has a per caput food supply of around 2,600 Kcal per day. The high average figures for Latin America hide a per caput food supply for Bolivia of around 2,000 Kcal.

Table 1.2: Per caput food supplies for direct human consumption, historical and projected

Table 1.2 (X3936E05) (3K)

In the developed countries too, there have been variations. The disruption of marketing and production systems, following the split up of the former USSR and the movement away from centrally planned economies in Eastern Europe reduced food supplies in the early 1990s, though overall food availability was much higher than in any of the developing country regions.

Figures for overall food supply mask changes in the way that food supply is achieved. As was mentioned earlier, countries can increase their food supply by increasing domestic production or by importing food. As will be shown in Chapter 3, the strategy adopted may well affect food security within the country, as the internal distribution channels adapt. Similarly, food security issues at the national level will change in character as and when countries become more dependent on international markets to meet their food needs.

Table 1.3: Production and trade for all cereals, 1969-71, 1979-81, 1989-91 and projections to 2010

Table 1.3 (X3936E06) (3K)

Table 1.3 gives data on total production of cereals by region, and on a per caput basis, for three time periods, plus projections to the year 2010. It also gives the net cereal trade by region for the same time periods. The table shows that the developed world and the developing world both produce roughly the same amount of cereals, but that this translates into roughly three times as much per caput in the developed world as in the developing countries. At present the developed countries, with the exception of the ex-Centrally Planned Economies, are net cereal exporters, and it is predicted that by the year 2010 the ex-CPEs will also become net exporters when taken as a whole. The net cereal imports of the developing country groups have increased over time, and this is predicted to continue.

Cereals are only part of the total picture. Where countries have a clear comparative advantage in producing non-cereal crops or livestock for export, then it may make sense to increase dependence on the world market by exporting and using foreign exchange to import cereals (this is discussed in more depth in section 4.2 of this chapter). Also in many countries, particularly in Africa, root crops may be as important as cereals ,if not more so, in providing the starchy staple base of the diet. However the tendency for developing countries to become net cereal importers is becoming more pronounced and will continue as incomes increase and along with this the demand for food. [see Box 1.2 on the situation in China]. As developing countries turn more and more to intensive methods of livestock rearing the derived demand for cereals and root crops for animal feed will increase import demands even more. This has serious implications in terms of the vulnerability to international price rises of food systems and food security in low income countries where there are significant foreign exchange constraints.

Box 1.2 (X3936E07) (3K)

3. Food Security and Major Development Objectives

3.1 Food security, poverty and growth

Over the last decade, both in the developing world and in the ex-centrally planned economies, there has been considerable pressure on governments to limit their interventions in the economy to those areas where, for reasons of market failure, or the need for some form of collective action, governments can be more efficient than the market in organising economic activity and providing goods and services. It has generally been accepted that centrally directed economies and those economies where government has taken a major role in providing goods and services have suffered from distorted incentive structures and prices which have generally not benefited the most vulnerable in society while, at the same time, these have had a negative impact on rates of economic growth.

The role of government in providing a institutional framework to enable the efficient operation of markets and encourage private-sector led growth is very important, but it is not their only role. Governments have also an important role in terms of creating a framework of rights and obligations which holds society together and responds to the needs of its citizens.

This is particularly important in the case of food security. At a fundamental level, the state is in theory, and in most countries in practice, the definer and protector of property rights. In the absence of any enforceable property rights, meeting one's food requirements becomes a question of the distribution of force, and a household's relationship to the holders of power. Markets become unworkable and the production and exchange of food declines rapidly, as has been seen in countries racked by civil war. So the state is important in providing a stable framework for production and exchange. As will be discussed in Chapter 5, the state can also take a role in providing infrastructure and reducing market failure in the agriculture sector.

Historically, as shown in Box 1.3, the state has also intervened to ensure certain minimum levels of food security, often primarily in its own interest, to ensure political stability. State intervention will depend not only on political ideology and concerns of government, but also on the government's capacity to intervene. It is not uncommon in poor countries for government to make a significant impact on entitlements in urban areas, but to have very little effect in rural areas because of inability to implement programmes or administer regulations in more remote areas.

Food insecurity is almost inevitably a result of poverty. If individuals and households have sufficient resources, then they should be able, under normal circumstances, to have access to sufficient food for their needs. In situations of war and famine, people's entitlements can change in value very rapidly, so that it is difficult to assess wealth, or even what wealth means. However, in reasonably stable economies, poverty and food security can be seen as different perspectives on the same underlying problem. This perception underlies a shift that has taken place in some studies from a concentration on food security to discussion of livelihood security. Focusing on food security does have the advantage of emphasising the dominance of the food and agriculture sector in the lives of poor, particularly in rural areas.

It also gives a framework for an overview of the many food-mediated interventions and programmes which are implemented to address the issues of poverty. It should not be forgotten, however, when reading this manual, that broader initiatives to tackle poverty should also alleviate food insecurity.

Box 1.3 (X3936E08) (3K)

In the past, a somewhat artificial dichotomy has been set up by some analysts, between pursuing efficiency and improving equity. It is now widely accepted that economic growth is a necessary condition for a sustainable solution to poverty and food insecurity. Growth will raise incomes and welfare of the poor, thus increasing their access to food, while reducing their vulnerability to economic stress. At the same time, it will also provide governments with the means to implement poverty-oriented programmes and resource transfers which could enable the poor to participate in the growth process. In the 1970s, the redistribution with growth approach argued that transfers of income and assets to the poor would allow the disadvantaged to become a source of growth themselves, and could even lead to a higher overall growth rate of the economy than would be achieved with a more unequal income distribution. This is probably rather more radical than would be generally accepted nowadays, but most analysts would agree that the poor are potentially the most important market in many developing countries and as such it is important that they are included in the growth process. There is more debate as to whether active resource transfers to the poor are the best way to spend limited resources.

3.2 Food security, population and environment

At current rates of population growth, the population of the world is growing by approximately one billion people per decade. One of the major problems facing the global society is how to produce adequate food for these numbers without causing environmental degradation. The population size for the next decade or so will probably be only marginally affected by fertility decisions made now, but these will be critical for future decades.

The population is growing fastest where people are poorest. For poor people high fertility may be a reasonable and logical choice. Labour is their main asset and children are valued for their hands rather than their heads. Yet for countries and regions as a whole, high population growth can be an important factor in immiserisation. In Africa, for example, although there was positive growth in income and food production over the 1980s, this was surpassed by higher population growth rates. As a result per capita growth rates were negative.

The more quickly countries enter into the demographic transition (movement from a situation of high birth rates and high death rates to low birth rates and low death rates), the more population growth will slow down. Increasingly the evidence is that two factors are very significant in speeding a country's progress through the demographic transition. One is the overall prosperity of the country, and in particular the prosperity of the poorest in the country. As food security increases, and poverty decreases, fertility rates decline. This is to a large extent because of the decrease in uncertainty facing poor families. The infant mortality rate declines, so children are more likely to survive. As households become better off, they become more interested in adding to the quality of human capital, rather than simply increasing numbers. Education for their children becomes affordable.

The second element concerns the position of women in society. As women become more educated and have more power within the household, then fertility rates fall. Women's options increase and they are no longer valued primarily for their fertility.

Thus for countries concerned about containing population growth, it is important to ensure that economic growth occurs in such a way as to increase food security for the poorest and ensure access to education for women and children.

Reducing population growth rates is also important for environmental concerns. Population growth leads to decreasing per capita availability of fixed resources, such as land, and to a lesser extent water. Although technical change can increase productivity of these resources, this technical change, in particular the use of chemical fertilisers and pesticides can in itself cause environmental problems.

In the next two decades, land degradation is projected to cause major environmental problems in South East Asia and Latin America, to threaten food supplies from irrigated areas in South and South East Asia, and to threaten the food security of the poor, particularly in South and West Asia and Africa. It is technically feasible to rehabilitate most degrade land, but poverty, lack of technology, low land values and inadequate policy restrict farmers' ability to do so.

It is often assumed that lack of food security and poverty are major causes of environmental degradation. Undoubtedly these are factors in the expansion of agricultural land into forest areas, in deforestation in search of fuel and in soil erosion because of cultivation of unsuitable land for cropping. In many cases it is food insecure families who cause this degradation in their quest for a way of meeting their food needs. It is argued that the poor have short time horizons and cannot afford to invest in soil conservation programmes. Certainly, if these families could meet their basic needs in other ways, they would most likely prefer to do so. There is little evidence that the poor are unaware of the impact they have on their environment.

However, there are other factors involved. There is the issue of ownership of the resources involved. Often cultivation of virgin land is extended (or, in the case of fishing, stocks exhausted) by the rich who are not acting to secure their food but to feed the developed world, from the expansion of commercial agriculture, livestock rearing and fishing. Issues of chemical run-off and pollution, of conflict over water use, are more prevalent in developed economies.

Often the market system does not value resources properly. Farmers hesitate to invest in land, because they have no way to recover that investment in the market place, or they have no way to enforce their property rights. Institutional structures may be inadequate.

There are hopeful examples of projects which appear to have been successful. In a highly densely populated area of Kenya, against the received wisdom, farmers were successfully encouraged to interplant their crops with new economically profitable trees, thus reducing future soil erosion. There have been successful reforestation schemes in areas of India. Much depends on the institutional structure and the involvement of local communities. Technologies have to have a positive return to participants' time.

In the long run, there is no conflict between the preservation of land and water resources and food security. Without adequate land and water, there is no food security. In the short run, there may be real conflict for poor families. Research must continue into developing conservation technologies which are attractive to resource-poor households and identifying and modifying institutional barriers to environmental protection.

4. The Role of Increasing Food Production in Achieving Food Security

4.1 Agriculture as an engine for poverty reduction

In a study for the World Food Summit, FAO shows that, of 93 developing countries, classified by share of population living in rural areas, and per caput food supply (using 1990 data), no country with over 75% of its population in rural areas had a per caput food supply greater than 2,500 Kcal per day. All countries with over 3,000 Kcal per day per caput food supply had less than 60% of its population in rural areas. There was a strong negative correlation between the two variables.

Yet food production is often a path out of poverty for many poor families, indeed often the only route available. In most low-income developing countries, agriculture is the most important economic sector. Poverty is predominantly a rural phenomenon and agriculture is the main source of income and entitlement for rural families. Production processes in agriculture are heavily labour intensive, and labour is one asset many rural families have in abundance (though female-headed rural households often lack even this asset).

Growth in agriculture is often the keystone for overall economic growth in these economies. Other sectors are so dominated by agriculture that poor agricultural performance drags down the rest of the economy. At the same time, growth in agriculture often leads to increased employment opportunities for the rural landless and resource-poor farmers. There are strong links with the rural non-farm sector. For example, in the 1990s in Malawi, the restrictions on smallholder production of burley tobacco have been lifted. Although less than 10% of smallholders currently produce tobacco, the additional income they have earned from this has boosted demand for rural services and consumer goods, such as processed food, agricultural implements etc. and had considerable multiplier effects in the local economy.

The future for many poor rural households has to lie within the agricultural sector, because the sheer numbers involved make it unlikely that any other sector can absorb them in the short or medium term.

Increases in agricultural growth often result in increases in food production, because of the importance of food production to risk-averse, semi-subsistence farmers. Where this happens, there is obviously a direct improvement in food security for these households. However, buoyant growth in the rural sector can indirectly improve food security for all rural dwellers, and not just farmers, as a result of increased integration into the market system and improved linkages with the rest of the economy. This should make local food markets more robust and reliable, and thus increase access to food for net food purchasers, while allowing farmers to specialise in production at lower risk.

While it is important to acknowledge the role of agriculture in economic growth, and the need for adequate investment in the agriculture sector, this is not the same as promoting a food self-sufficiency policy. The next section discusses the debate on food self-sufficiency versus specialisation in agriculture from a food security perspective.

4.2 Food security and food self-sufficiency as separate objectives?

4.2.1 Food self-sufficiency as a national goal

The concept of food self-sufficiency is generally taken to mean the extent to which a country can satisfy its food needs from its own domestic production. It is sometimes thought that the best way to increase a country's food security level is to increase its level of self-sufficiency, and this idea has a certain intuitive appeal. It may seem that a country has more control over its food supply if it is not dependent on international markets, where food imports may come from countries which could be politically hostile. Also, there is a perception that developing countries may be exploited on international markets. Self-sufficiency is usually measured by the self-sufficiency ratio (SSR), the share of domestic production in total domestic use, excluding stock changes.

Self-sufficiency in food as a development objective constitutes one of the main points of the strategy adopted by the African countries in the Lagos Plan of Action in 1980, though this has never been fully implemented. A number of African countries have, however, declared food self-sufficiency as a priority objective in their national plans.

The concepts of food self-sufficiency and food security differ on two fundamental points:

  • food self-sufficiency looks only at national production as the sole source of supply, while food security takes into account commercial imports and food aid as possible sources of commodity supply;
  • food self-sufficiency refers only to domestically-produced food availability at the national level, food security brings in elements of stability of supply and access to food by the population.
In other words, food self-sufficiency is linked to an overall perspective on development which emphasises the need for self-reliance, an auto-centric approach, whereas food security is consistent with a view of development which incorporates international specialisation and comparative advantage.

The debate on this topic between economic theorists has been fierce, but from a pragmatic point of view, much depends on the situation of the specific country concerned. No one would suggest that Singapore or Hong Kong should take food self-sufficiency as a priority objective. On the other hand, it has been recognised by the World Bank, amongst others, that India has considerably reduced its food insecurity through developing its domestic food production. Cereal production increased from 90 million tonnes in 1970 to 130 million in 1985. To import this much additional grain would have cost $10,000 million per year. The World Bank concludes, "It is difficult to imagine developments that could have contributed as much to food security as those which have led to this rapid expansion of production."

Those who believe that countries should develop international specialisation both within agriculture and as between agriculture and other sectors of the economy argue that failure to take advantage of comparative advantage means that the country will not fully exploit its productive potential. Box 1.4 argues that Egypt would be better off shifting resources out of wheat production.

Box 1.4 (X3936E09) (3K)

Those who believe self-sufficiency is more beneficial argue that comparative advantage in export crops such as tea or rubber is not inherent in a country's physical resources, but a result of historical investment in certain industries often by colonising powers who wanted raw materials for their own industries or consumption. They argue that this has locked some countries into producing commodities which face declining terms of trade on inherently unstable international markets. Far from increasing their food security, these countries have declining and wildly fluctuating export earnings, thus making it difficult to plan imports and develop medium-term sectoral or national development plans.

It is a matter for empirical investigation whether or not the prices for specific non-food agricultural commodities have been declining relative to cereal prices. In some cases this is the case, but not in others. Again, some commodity markets have been quite unstable in recent years and this has caused difficulties for some countries. However, there is no evidence that in general instability in export earnings by itself hinders growth if the average level of GNP is higher than it would be in the absence of such specialisation.

A more significant argument for greater emphasis on food self-sufficiency can be made when a country's main food staple is not traded internationally in great amounts, resulting in a thin market. This is the case for white maize, and possibly for rice. When this happens an increase in demand from more than one major importer can push prices up and create difficulties for all importers.

The problems of dependence on one crop are also put forward as a reason for emphasising food self-sufficiency. This is a valid argument against dependence on one major export crop, which tends to be a characteristic of very poor countries. Richer countries tend to have greater diversity of commodities, so that a country like Brazil will export other commodities, such as soy beans, even though coffee is its major export earner. This is an argument for export diversification as much as concentration on food production. In fact, to put the argument in terms of export crops versus food crops is rather misleading.

The evidence is that often food crops and export crops flourish or decline together. Government policies towards the agriculture sector as a whole are more important than incentives towards one type of production rather than another. If export agriculture flourishes, the chances are food production does as well, and vice versa. However, it is sometimes the case that infrastructure and research favour export crops. Governments could take a greater lead in encouraging and providing these services to food crop farmers.

Valid concerns about food security being damaged as a result of dependence on food imports do exist. This is particularly the case where countries have access to world markets on distorted price terms, for example through an overvalued exchange rate or because of the ready availability of concessional food aid imports. Governments may be tempted to ignore the domestic agricultural sector, and if policy discriminates against food production, then this can reduce the entitlements of those who make a living from the production and distribution of food. If imported food does not reach the rural areas, because marketing channels are not adequately developed, then the price of domestically produced food may rise and affect access to food, for the rural poor in particular. The issues are about how the benefits from agricultural production are distributed and the efficiency of the marketing system. Taking this into account it is reasonable to suggest that in low income countries, where marketing systems are not well developed, food security may well be best served by encouraging greater food production.

4.2.2 Subsistence farming versus market integration - the household level arguments

Similar arguments, about the risks of commercialisation and market dependence are often made at the level of the farm household. It is argued that food insecurity is increased when the poor become more dependent on markets for their food. One eminent economist argues that:

    the farther away from direct food cultivation a group is, i.e. the more markets it has to go through to convert endowments into actual consumption, the more liable to starvation it is. Thus, cattlemen of Sahel and Ethiopia, the fishermen of Bengal or tradesmen suffer more than agricultural labourers who suffer more than sharecroppers and peasant cultivators... Contrary to market intermediation bringing smooth and beneficient outcomes, it is those who do not have to go through a purchase or sale to convert their income into consumption who are least vulnerable to a decline in real grain wage. The direct producer of grain, either as landowner or sharecropper and the worker who receives a grain wage are safer than he who receives money rent or money wage.

    Desai, quoted in S. Devereux, 1993.

This is an argument about the nature of markets in many countries, and also about the risk attached to different kinds of entitlement, especially for the very poor. Markets are seen to be volatile, vulnerable to hoarding and speculation which will result in exaggerated price rises when harvests are bad. In this context, the risks of depending on markets for food, especially in times of scarcity, are assumed to be worse than the risks of crop failure.

There is plenty of evidence that markets can break down in times of famine, leading to great food insecurity for those who depend on them. However, in areas where markets have not developed to any great extent, crop failure can also have devastating effects. The very poor are always vulnerable to shocks, whether in terms of crop failure or price rises. People who have land to farm, a production entitlement to food, are often not amongst the very poorest in society, who are frequently the landless who have no choice but to depend on the market, or on charity for food.

Increased market integration can offer possibilities of greater income, increasing entitlement and greater food security. It also offers greater risk. Perhaps the greatest risk is that of borrowing in order to purchase inputs, or food in situations of extreme need, and losing ownership of assets, including land, if crops fail. If markets function well, this may be a risk worth taking. However, in many rural towns and villages, markets are highly monopolistic, often with output and credit markets interlinked to the detriment of the borrower. When the process of integration into imperfect markets leads to increasing landlessness, then it is detrimental to food security. However, subsistence farmers will always have cash requirements, for medicine, for children's schooling, for clothing. It may be impossible to increase food security and livelihood beyond a certain very low level, without increased specialisation and market integration. In the long run, government has to take action to improve the way markets function, and to stop powerful local interests manipulating markets for their own ends.

The International Food Policy Research Institute in Washington D.C. has undertaken a number of studies on the effect of the introduction of cash crops on food security. Box 1.5 discusses the results they found for sugar production in Kenya. These results are similar to those found in other studies in the Philippines and in the Gambia. There was little evidence of nutritional status being adversely affected by commercialisation, though in most cases the smallholders diversified their farming rather than switched totally away from food production. The nutritional implications and improvements which they discovered were often quite small and overshadowed by health and sanitation constraints. Food security could be improved by increasing employment opportunities, but this was very crop specific. Many cash crops are, however, quite labour intensive. Most of the negative impacts found were associated with changes in asset ownership, particularly land.

There is clear evidence of changes in intra-familial income distribution in a number of countries with increasing commercialization of agricultural production. Often the income from cash crop production is seen as falling under male control. This can have an important influence in the way that income is spent. For example, in West Africa, men and women tend to have different spheres of economic activity. They control different types of income and are responsible for different types of expenditure. Women are more likely to be responsible for food expenditures, and to spend extra income on increasing food consumption. Men tend to be responsible for big purchases, expenditure on the house and school fees. This could explain why increasing incomes through cash crop production has not apparently led to major increases on food consumption.

Box 1.5 (X3936E10) (3K)

Increases in cash cropping need not affect women's income adversely, but where it does, perhaps because women have less land to cultivate, or they are required to put some of their labour into cash cropping, family consumption and nutrition may be adversely affected. Where food crop production is reduced, there may also be a negative effect. Income in kind, i.e. subsistence food production is more likely to be used for family consumption than cash income.

The agriculture sectors of most countries are already highly integrated into the exchange economy. True subsistence production is rare except in some of the poorest and least developed regions of the world. This means that in many countries the food security of the most vulnerable is often heavily dependent on the effective functioning of markets. This is at variance with the stylised picture often presented of small farmers. It is important that policy makers are aware of the vulnerability of the poorest to breakdowns in food market operation and the risks they face when moving towards greater market integration.

There is often a good case for encouraging greater domestic production of food at a national level, particularly for poorer food deficit countries. It may be the most direct way of increasing the entitlements of the poor. However, to put self-sufficiency, as a matter of principle, above broader issues of food security, at both the household and national level, could lead to loss of entitlements which the poor can least afford.

Activities related to Chapter 1


1. Activity 1 proposed below should refer to a specific country case. Depending on the available data, this could be the country where the course is held or the country of origin of the participants.

2. Depending on the circumstances of the manual being used, activity 2 could be run on computers or using calculators. Data for the country used in activity 1 could be substituted.

Activity 1: Identification of vulnerable groups

Participants should identify at least four (more if appropriate and you have time) major population groups in the relevant countries that are food insecure. Give details of their geographical location, major sources of food entitlement and the approximate number in each group.

Activity 2: Food crop versus export crop production

The fictional country of Azania is landlocked and therefore pays rather more for its imports and receives less for its imports than a country that is more closely linked into the international trade system. Many of its farmers cultivate land which is suitable for either maize or tobacco production. Maize can be grown using local varieties, which have very low inputs requirements, or using hybrid seeds which require fertiliser. At present the country imports maize in almost all years and can sell all the tobacco it produces. The physical crop budgets are as follows:

(X3936E11) (3K)

The cif prices that are paid at the border are as follows:

(X3936E12) (3K)

At present the country imports maize in almost all years. It can sell all the tobacco it produces.

Which crops should the government encourage to make most efficient use of the country's agriculture resources? Would taking food security considerations into account change your recommendation?

Are there any additional factors that the farmer should take into consideration when deciding on cropping pattern?

[You may wish to know that Azania suffers periodic droughts. The yield of tobacco varies much less in a poor rainfall year than does either local or hybrid maize. Hybrid maize suffers very badly in poor rainfall years. The international prices of both tobacco and maize have shown significant variation over the past few years, of up to 40% from one year to the next. However, insofar as there are any price trends, that for tobacco seems to be going down, whereas the price of maize shows upwards movements.]