IV. APPLICATIONS AND USES FOR FOOD BALANCE SHEETS DATA

1. STANDARDIZATION OF FOOD BALANCE SHEETS

The utilization of all the information which was assembled for the construction of a food balance sheet often ends up in a rather long list of food commodities. This is certainly very useful in order to select the appropriate food composition factors which are required for expressing per caput food supplies in terms of energy, protein and fat content. On the other hand, this detailed presentation no longer has the advantage of showing a comprehensive picture of a country's food supply. This dilemma can be solved by standardizing the detailed food balance sheet. Standardization can be achieved by showing only primary commodities, i.e. processed commodities are converted into their originating primary commodity equivalent. Because the statistical information for processed commodities is mostly limited to trade, the commodity list can be confined to primary commodities - except for sugar, oils, fats and alcoholic beverages. Whenever possible, trade in processed commodities is expressed in the originating/parent commodity equivalent. This procedure greatly facilitates the analysis of food balance sheets with no loss of pertinent information. This is the sort of tool that planners and economists concerned with the preparation of development plans in the food and agriculture sector need.

The section that follows describes the various steps to be taken in the standardization process.

Illustration I shows the information referring to cereals and milk in a detailed food balance sheet.

Illustration II shows the first step: bringing processed products back to their originating commodities, i.e. flour to cereals, skim milk to cow milk. For this purpose, calories and nutrients from processed products are simply added to the calorie and nutrient values of the primary commodity.

The "input" to the processed commodity - Wheat, hard (1064); Wheat, soft (708); Other cereals (1259) and Skim milk (150)- is subtracted from the quantities shown under "Manufacture for food". This should eliminate the data under the latter. If more than one processed product results from the originating commodity, then each input is subtracted. In the case of by-products, just one subtraction is necessary cancelling all processing inputs.

The data of other entries concerning the processed products with the exception of "food" (i.e. in this example trade, feed, waste) are added to the equation of the originating commodity after multiplication by the reciprocal of the extraction rate.

Wheat, hard:

Wheat, soft:

Other cereals:

Cow milk:

The "food" data of the original/parent commodity is now recalculated using the new values of its equation. One equation for the primary commodity now replaces the two former equations. The above procedure involves one subtraction, some multiplications and final additions.

In Illustration III a further reduction of the number of equations in the standardization process can be achieved by aggregating the equations for commodities of similar nutritive values, such as wheat and other cereals into cereals, and cow, goat and sheep milk into milk, etc. This procedure requires simply adding the equations of the commodities concerned which reduces a very long list of commodities to a workable size for input into econometric models.

Illustration IV. While there are practically no difficulties in standardizing the equations for individual commodities or groups of commodities of similar nutritive values (Illustrations II and III) some conceptual problems arise in calculating the aggregate equation for the whole food balance sheet. Such an aggregate is a useful tool for many types of analysis. It enables the calculation of ratios, such as the ratio of production to total supply or imports to total supply, which are helpful in assessing self-sufficiency or import-dependence. The calculation of shares of the different components over total utilization allows the assessment of trends of domestic utilization versus exports, for example.

The first problem in calculating the aggregate equation concerns the elimination of intermediate consumption and double-counting, particularly when there exist processed commodities originating from the same parent commodity (e.g. skim milk and butter) which belong by their very nature to different food groups, e.g. skim milk to the food group "Milk" and butter to the food group "Oils and fats". The appropriate procedure has already been described and need not be repeated here (see Illustration II). The second problem is related to the selection of the unit to be used for the conversion of the elements of the various commodities into homogeneous values. These can be monetary values or nutritive values. In the first case, prices are used as conversion factors, in the second, the nutrient content per weight.

In the example below, caloric factors are used to convert the standardized equations of wheat, other cereals, cow milk and goat and sheep milk into homogeneous values which can then be added in order to obtain the aggregate of these commodities.

After having standardized the equations of the various commodities (see Illustration III) the number of calories for the newly-defined commodities are divided by the new "food" quantities in order to arrive at an endogenous calorie conversion factor. Needless to say, in the unstandardized detailed food balance sheet (Illustration I) these factors came from an external food composition table. Each element in the equation can now be converted into calories. The calculations for the various commodities are illustrated below.

The sums of each column (production, trade, feed, seed, manufacture, waste and food) represent the caloric value (in terms of kilocalories/caput/day) of the respective elements of all the commodities shown in Illustration I.

2. IMPORT DEPENDENCY RATIO (IDR)

In the course of analysing the food situation of a country, an important aspect is to know how much of the available domestic food supply has been imported and how much comes from the country's own production. The IDR answers this question. It is defined as

            Imports

                    IDR = ____________________________________ x 100

                production + imports - exports

The complement of this ratio to 100 would represent that part of the domestic food supply that has been produced in the country itself. There is, however, a caveat to be kept in mind: these ratios hold only if imports are mainly used for domestic utilization and are not re-exported.

Based on the figures contained in Illustration III above, the IDR for wheat, other cereals, cow milk, total cereals and total milk would be calculated as follows:

Wheat:

                 456

IDR = ____________________________________ x 100 = 21.05%

        1710 + 456 - 0

Other cereals:

44

                    IDR = ____________________________________ x 100 = 1.79%

        2 500 + 44 - 80

Cow milk:

13

                    IDR = ____________________________________ x 100 = 3.15%

            400 + 13 - 0

Total cereals:

500

                    IDR = ____________________________________ x 100 = 10.80%

    4 210 + 500 - 80

Total milk:

13

                    IDR = ____________________________________ x 100 = 2.87%

    440 + 13 - 0

Based on these calculations, it can be concluded that around 80% of the domestic supply of wheat, 98% of other cereals, 97% of cow milk, 89% of all cereals and 97% of all milk come from domestic production.

Using the figures shown in Illustration IV, the IDR for the aggregate of cereals and milk, including processed products derived therefrom, would be:

                283.2

                    IDR = __________________________________ x 100 = 10.98%

                        2339.0 + 283.2 - 42.2

indicating that almost 90% of the domestic supply of this aggregate was produced in the country.

3. SELF-SUFFICIENCY RATIO (SSR)

The self-sufficiency ratio expresses the magnitude of production in relation to domestic utilization. It is defined as:

    Production

        SSR = ________________________________ x 100

        Production + imports - exports

Again, as in the case of the IDR, the SSR can be calculated for individual commodities, groups of commodities of similar nutritional values and, after appropriate conversion of the commodity equations, also for the aggregate of all commodities.

Using the figures shown in Illustrations III and IV, the self-sufficiency ratio would be determined as follows.

Wheat:

1710

SSR = _____________________________ x 100 = 78.95%

            1710 + 456 - 0

Other cereals:

2 500

SSR = ________________________________ x 100 = 101.46%

            2 500 + 44 - 80

Cow milk:

400

SSR = _______________________________ x 100 = 96.85%

400 + 13 - 0

Total cereals:

4 210

SSR = _______________________________ x 100 = 90.93%

        4 210 + 500 - 80

Total milk:

440

SSR = ______________________________ x 100 = 97.13%

            440 + 13 - 0

Based on the figures shown in Illustration IV, the SSR for the aggregate of cereals and milk, including processed products derived therefrom, would be:

                2 339.0

                SSR = ______________________________ x 100 = 90.66

    2 339.0 + 283.2 - 42.2

indicating that around 90% of the country's supply of cereals and milk originates from the country's own production.

In the context of food security, the SSR is often taken to indicate the extent to which a country relies on its own production resources, i.e. the higher the ratio the greater the self-sufficiency. While the SSR can be the appropriate tool when assessing the supply situation for individual commodities, a certain degree of caution should be observed when looking at the overall food situation. In the case, however, where a large part of a country's production of one commodity, e.g. other cereals, is exported, the SSR may be very high but the country may still have to rely heavily on imports of food commodities to feed the population. This is easily demonstrated by increasing in Illustration I both production and export figures of the commodity "other cereals" by 1000 MT. The elements for production and exports in the equation for "total cereals and milk" in Illustration IV would change to 2869.2 and 569.2, respectively. The SSR and IDR would then change as follows:

2 866.0

SSR = ________________________________ x 100 = 111.09%

2 866.0 + 283.2 - 569.2

283.2

IDR = ________________________________ x 100 = 10.98%

2 866.0 + 283.2 - 569.2

It follows that, in spite of a very high self-sufficiency rate, the country imports about 11% of its supply of the aggregate "Cereals and Milk" with only about 90% of its domestic supply coming from the country's own production.

These explanations have been given to show that the self-sufficiency rate (as defined above) cannot be the complement to 100 of the import dependency rate, or vice-versa.

4. ANALYSIS OF THE PATTERN OF PER CAPUT FOOD SUPPLY

Food balance sheets contain the basic information which is useful in analyzing a country's food supply situation. The section below provides a few examples regarding the analysis of the pattern of per caput food supplies for the world.

Table 1 shows the daily per caput food supply by product group in terms of calories, protein and fat over the 30-year period 1961 to 1995. The figures in Table 2 are based on Table 1 and show the percent contribution of the various product groups to the daily per caput food supplies. Table 3 shows the trends and changes of the pattern of the per caput food supplies. Table 4 shows the annual per caput supply of the various product groups in terms of kilograms together with their indices.

In reviewing the tables, it becomes clear that over the 30-year period the daily per caput food supply increased steadily. By the mid-nineties the energy supply was about 20 percent and the protein supply 16 percent higher than at the beginning of the sixties. The fat content of the diet rose by almost 50 percent over this period.

Examining the share of vegetable and animal products in total food supply, it can be observed that their contribution remained fairly stable: for energy at a ratio of 5 to 1, and for protein at 2 to 1. In the case of fat, however, some noteworthy shifts can be observed during the period under observation. While the share of vegetable fat in the total fat supply increased steadily, the contribution of animal fat dropped.

Cereals evidently are the major source of energy and protein. They alone contribute about half of the supply of both energy and protein. Since the beginning of the sixties, the daily per caput supply of energy rose by about 20 percent and that of protein by about 15 percent. It is interesting to note the important role of cereals as a source of fat in the diet, which is often not fully recognized. Almost 10 percent of per caput fat supplies are derived from cereals.

Starchy roots play a minor role in the world's diet, contributing about 5 percent to the energy and 3 percent to the protein supply. Their consumption has dropped by more than a quarter during the period under observation.

Sugar, syrups and honey are mainly a source of energy, and in recent years provided around 9 percent of the total calorie supply. Consumption of these products increased steadily from the early sixties and in 1995 was in terms of quantity a quarter higher than at the beginning of the period under observation.

Pulses, tree nuts and oilcrops are an important source of protein. In recent years, they contribute 9 percent to the overall protein supply, 7 percent to the supply of fat and less than 5 percent of the total energy supply. However, a considerable shift took place regarding the consumption pattern: while per caput food supplies of pulses decreased by one third, supplies of tree nuts and oilcrops increased by more than a quarter in quantitative terms.

Vegetable oils and animal fats are the major sources of fat. Nevertheless, they contribute less than half of the total per caput fat supply, indicating the considerable amount of invisible fat from other product groups in the diet. The considerable shift that took place from animal fats to fats of vegetable origin during the last decades is worth noting.

Vegetables and fruits are usually considered as sources of minerals and vitamins. It should, however, not be overlooked that they also provide energy, protein and small amounts of fat. About 5 percent of calories and protein are derived from these product groups. At the world level they contribute to twice as many calories as eggs and fish together. Their contribution to the protein supply is as large as that of fish and twice that of eggs, and their contribution to the fat supply is as large as that of fish.

Meat consumption increased considerably over the period of observation and was in 1995 about 60 percent higher than in the early sixties. In recent years meat contributes 7 percent of calories, 17 percent of protein and 22 percent of fat.

Eggs are important mainly as a source of protein and fat. They contribute around 3 percent of the total protein, and fat supply is around 3 percent. Their annual per caput supply increased steadily during the period of observation and in 1995 is 60 percent higher than at the beginning of the period under observation.

Milk is, after meat, with around 10 percent, the second largest source of animal protein. It is also important for its fat and calorie content: around 10 percent of fat and 4 percent of calories are derived from milk.

Fish is important mainly as a source of protein. While it contributes almost 6 percent to the overall protein supply, only 1 percent of the calorie supply is derived from fish. However, it is worth noting that its consumption in terms of quantity has almost doubled since the early sixties.

TABLE 1 - WORLD DAILY PER CAPUT FOOD SUPPLY

TABLE 2 - WORLD DAILY PER CAPUT FOOD SUPPLY

TABLE 3 - WORLD DAILY PER CAPUT FOOD SUPPLY

TABLE 4 - WORLD YEARLY PER CAPUT FOOD SUPPLY