1.1 - Supply systems linked to the history of government policy
1.2 - The transition towards liberalization and modalities of implementation
1.1.1 - Food planning and supplies
1.1.2 - Self-reliant food security and food supplies
1.1.3 - Outward-looking food security and food supplies
Famine and malnutrition have been a source of concern in every age, and relief for the victims has always been forthcoming. Yet it has only been in the first three decades of the present century that the nutrition and food sciences have come into being, bringing with them the unfolding debate on the role of government in this field.
It was back in 1937 that the International Committee on Nutrition (ICN) spelt out the need to frame national and international food policies: it asked whether it was up to governments to take responsibility for food and nutrition policy, to draft policies and apply them in a manner that would benefit crisis-stricken agriculture, by raising the consumption of what were known as ‘protective’ foodstuffs that would enable men, women and children to reach full physical and mental development while increasing resistance to many diseases.
These were very far-sighted provisions, but they were never implemented, and were only taken up again by ICN 55 years later. Over thirty years, the concepts of food security have developed and have passed through three main phases which have had concrete repercussions on the ways of feeding the people, and more generally on public food policy.
The idea of the essential role of government has been expressed most complete completely in food planning. The main idea underlying such measures is that under-nutrition and malnutrition could be reduced or eliminated through a set of technical measures, without radically challenging the division of the products of the economy and without requiring any far-reaching social reforms. Some researchers (Jonnson & Brun, 1978) attacked this view, arguing that food planning could only be effective if a more equitable distribution of the benefits of economic growth became one of the governments’ priority objects (Le Forestier, 1977).
The notion of food planning became established following the 1973/74 world food crisis, at a time of severe drought and widespread famine. USAID and FAO helped to set up food and nutrition planning systems. The focus of their concerns was food supplies. Food planning was seen as a necessary means of becoming self-reliant. The guiding principle was that each country should give priority to feeding its own people, and food dependency had to be reduced. These self-reliance policies were an emergency response to a contingent crisis which had become structural.
Food planning may be viewed as a set of sectoral policies covering the whole of the food chain, and particularly everything affecting the food supply. Hat was the time in which large government agencies or offices guaranteed agricultural production under “development projects”, collecting the produce, processing it (through turnkey industries), importing and distributing it. As we know, large development projects were very biased towards cash crops, which governments saw as a means of earning foreign exchange. Since foodcrop planning was a failure, governments organized and governed food imports or food aid. Food security in the towns did not come within these priorities because there was still little urbanization in Africa at the time, and their aim was merely to guarantee global supplies for the country as whole.
In reality, food planning basically meant agricultural planning, the idea being that food requirements would be automatically met as the result of agricultural development. The agriculture-oriented view of the food system was still given pride of place.
Food self-sufficiency can be achieved in two ways: through self-reliant development, or development with an opening-up to the international market. The former is a protectionist approach, because it aims at meeting national needs through selective imports and a policy to set prices independently of world markets. The latter is based more on the theory of comparative advantages, and has given rise to the concept of food security. It is founded on three principles:
In the ‘70s and early ‘80s, self-reliant food security was the focus of government concern. Food strategy was perceived as an ideal way of attaining a high degree of self-sufficiency by adopting an approach guaranteeing consistency, integration and synergy between actions that had hitherto been piecemeal (Bencharif, 1990).
The work of the WFC has made it possible to spell out this notion as a means of enabling a country to reach a higher level of self-sufficiency thanks to an integrated effort at raising food production, improving food consumption and eliminating hunger. It involves examining a country’s food situation to be used as the input for drafting a consistent set of measures, programmes and projects designed to achieve the government’s food targets. The implementation of a strategy involves enhancing national capacities and mobilizing supplemental external aid. A food strategy therefore translates the government’s priority for finding a practical and effective solution to its food problems. This approach places food problems at the very centre of government responsibility. It presupposes familiarity with all the elements in the food chain and the way it operates, and requires all the sectoral policies to be integrated and coordinated.
Self-reliant food strategies require multi-sectoral planning in order to achieve the political objective of food self-sufficiency. Governments cannot avoid confronting intense sectoralization of the economy, and in practice any strategy demands delicate forms of arbitration, as well as substantial resources to identify the food situation as clearly as possible and the bottlenecks in the food chain. This is certainly a very attractive scheme of things as far as the theory is concerned, but it has been a failure in practice because of conflicts of interest and the lack of peripheral policies.
It was during the course of these periods of self-reliant development that food policies became most widespread. Governments made a powerful political gesture by introducing food subsidies, which guaranteed them a degree of social peace. In addition to the advantage of meeting the food requirements, such a policy makes it unnecessary to implement specific economic policies. Directing aiding commodities and adopting an autonomous pricing system makes it possible to control, and even conceal, economic inflation. It also makes it possible for the people to retain a certain purchasing power, making an incomes and social protection policy less costly. The obvious drawback is that this creates a bias towards the town dwellers, to the detriment of the rural people. With government more concerned to maintain subsidies for urban consumers than to guarantee self-sufficiency, which demands a much greater effort, public investment in agriculture was therefore diverted and governments imported cheaper food to meet their growing urban population. Structural food aid was widely used to provide cheaper food.
This phase in food strategy reflected a downstream and no longer an upstream approach to the food chain. One might think that introducing food subsidies was out of a concern for fairness and equity. But it was nothing of the sort. For the principle was not to establish a more equitable distribution of available food but simply to ensure that the urban population could feed itself at a moderate price. Since no kind of product or disadvantaged population targeting was planned, the result was that the subsidies pooled the deflationary effects with the benefits of supporting consumers. These policies, which were not viewed as targeted aid but as long-term policies, created an artificial economy that required very strict management. It to a combination that was ineffective (from the point of view of the agrifood sector), unfair and costly.
Economic difficulties coupled with the establishment of the benefits of free trade policies very quickly threw the food policies into disarray.
Parting company with the WFC, the World Bank and the International Monetary Fund (IMF) rejected toying with self-reliant development, and developed different concepts. In 1981 the Berg Report stated that food self-sufficiency was not a scientific, but a political and ideological concept. It was based on nationalism, and not on the economic lesson that the law of comparative advantages is the best guide in the area of food as in every other area of economic activity.
In the first half of the ‘80s, the free trade policies being advocated by the World Bank and the IMF were incorporated into Structural Adjustment Plans (SAPs). Food, which had been a priority before, was gradually watered down in the economic reforms whose main objective was to establish major macroeconomic equilibria by cutting expenditure and maximizing government revenues.
Under this approach, food security was treated as a global problem. The experts were convinced that combining economic growth with a healthy trade balance, balance of payments, and balanced state budget eventually generated a certain degree of prosperity. According to this thinking, specific actions to enhance food security are no longer necessary (Chenery, et al, 1977). According to this orthodoxy, all the subsidies to producers and consumers which, taken together, bear down heavily on the state budget and completely falsify prices, must be abolished.
The shifting of self-reliant self-sufficiency strategies towards free market strategies can be put down to three causes (Padilla, 1995):
Because they were unable to solve these economic difficulties, countries were forced into accepting the IMF’s free-market plans in order to qualify for international aid, negotiate the rescheduling of their debt and be granted any new loans. The relinquishment of self-sufficiency strategies can be explained more by economic constraints and social power relations rather than by any reasoned strategic choice.
The food situation of a given population and its economic health status are very closely linked, and one might think that by acting on the structural variables of the global economy governing the food economy it might be possible to eschew the implementation of specific food security policies. But economies and societies are the result of interactions between the parties that comprise them and the external forces that influence them. Expecting these forms of interdependence to lead to development and to food security is a pipe-dream. There is no such thing as an “invisible hand”, but juxtaposed interests which rarely converge. Compensatory policies are all the more justified as the structural measures to balance the economy impoverish the people. Even though economists agree that this “mis-development” is only a passing phase, the repercussions of short-term and medium-term food insecurity on human development are sufficient to justify compensatory measures for the least favoured.
1.2.1 -The Maghreb case: Maintaining a strict centrally-planned framework with profitability obligations
1.2.2 - The case of Latin America: The coexistence of two sub-systems
1.2.3 - The case of Sub-Saharan Africa: The development of a peri-urban zone and the rise of the informal sector
Economic liberalization and the way of implementing it are highly topical issues because the liberalization is taking place at a time of great challenges to the developing countries. One of the main challenges is feeding the cities. Within the group of the economically less developed countries, there is a contrast between Latin America which is already globally urbanized at the same level as North America (72% of the population were town dwellers in 1990) and Africa and Asia which are still predominantly rural, but over the next 30 years are expected to undergo an urban explosion. In Africa, at present urbanization level of one-third of the population is expected to reach 60% by 2025, according to UN sources. This will obviously have considerable repercussions on the food systems.
A number of recent surveys have analysed food security (IFPRI, 1995) and have posed one vital question: can world agriculture feed the world, in view of the urban concentrations which are continuing to grow all the time, raising serious food supply problems, in terms of quantity, distribution, quality, and cheaply into the bargain? Faced with this challenge, economic liberalization makes the organization of food systems problematic. Let us now see how the economically less-developed regions are gearing themselves to this new situation (Rastoin, 1996).
North Africa is an interesting example of the structuring of urban food systems. The three Maghreb countries all follow a Mediterranean diet based largely on wheat (the highest consumption of cereals in the world, at around 200 kilos per person per year) but because of the poor local production potential and its unpredictability massive cereals imports are required. In view of the social significance of bread and semolina (there were popular uprisings as a result of sharp increases in the prices of these products in the ‘80s), the governments of all three countries adopted strong intervention policies to guarantee a degree of stability for the prices of these commodities to shield them against the effects of variations on the international market.
An extreme case of an attempt to regulate this market is Algeria (Bencharif, 1996). The price of bread and semolina is set by the government at a very low level compared with the average purchasing power of the people and in comparison with other food products. This has led to wastage and misuse of the products. These political choices were taken in the framework of the highly centrally planned economy which existed in Algeria until 1990. The channels were organized around government-monopolized agro-industrial enterprises based on imported raw materials. Furthermore, to support local agricultural production and industries the purchase price of local farm products was subsidized and wages were supervised and controlled, with the result that very few people worked in agriculture and wages were minimal.
This is one case that shows the great difficulties caused by economic liberalization, because it is highly skewed. Constraints are both cultural and regulatory. The law on corporate autonomy dates back several years in both Algeria and Tunisia, but the mentalities of both the company managers and the civil servants responsible for supervision, and even the bankers, develop very slowly. Rigidities have been created by many years of government management and bailouts. Furthermore, the government only partially and very gradually honours its commitments to liberalize food prices, for fear of triggering off new popular uprisings. The processing and distribution companies are then faced with an impossible task: to apply the rules of company profitability in a free market, competitive system, while at the same time performing the function of guaranteeing food security to the people which was previously done by the government. This impossible situation is forcing many companies into bankruptcy: in Tunisia, only about 10% of the 4,000 companies in the food chain will manage to survive and apply the adjustment rules required to be incorporated into the liberalized market at both the domestic and the international level.
However they must adapt quickly from the point of view of urban supplies, in view of the pressure by urban consumers and the international financial organizations. The consumers are demanding a wider range of products, with quality guarantees, effective distribution and, of course, affordable prices. The IMF and the World Bank are pushing for the rapid liberalization of the agrifood channels. After rooting out the non-viable enterprises, there should emerge a hybrid model of distribution companies involving powerful international groups which are able to meet the needs of a wealthy population and proximity trade in all the neighbourhoods. The main problem is still the question of developing legislation that will allow genuine competition and not replace a government monopoly with a private enterprise monopoly, which would be even worse, because in order to be viable private companies must be profitable and they do not receive government subsidies.
In Latin America, urbanization is much older than in other continents. Ever since the 18th century this region has been the most urbanized on the planet. The supply systems have already adapted and are characterized by production areas which are often distant from the place of consumption. Transport, storage and the intermediary circuits (wholesale markets, retail markets) are well developed and complex. The large size of the towns makes it necessary for substantial volumes of products to be delivered, appropriately timed and with suitable of storage and transport methods. This has resulted in the creation of two systems:
In the latter system, agriculture has adapted to this form of blanket coverage. Distribution through large stores is very common in the main cities. Unlike the economically-developed countries, small shops do not necessarily charge higher prices than large stores (Rello, in Douzant-Rosenfeld & Grandjean, 1995). Conversely, the wholesale networks are monopolies, which strongly condition the upstream prices of commodities.
Another peculiarity of Latin America is the importance of the urban middle classes who are the most dynamic in changing their food consumption patterns. Moving away from the traditional maize/dry vegetable diet they are now demanding more fresh fruit and vegetables, which requires traditional family farms to be reconverted to produce these commodities.
Linck (in Douzant-Rosenfeld & Grandjean, 1995) has analysed this development very clearly, taking the case of Mexico. The “Central de Abasto” is probably the most important wholesale fresh product market in the world with 16,000 tonnes of fruit and vegetables sold each day. Twelve specialized production areas, separated by large distances from each other in order to ensure that the produce can be staggered according to the seasons, supply this market. These areas specialize in the products and commodities in demand by the urban populations, often at the expense of local varieties which are less suitable for long distribution circuits.
One of the problems of organizing these channels is the acute concentration of wholesalers who dominate the whole fresh produce system, putting pressure on the upstream prices, namely, on the producers. They are in a powerful situation to fix the benchmark prices and protect their income by erecting entry barriers. Europe’s experience shows that in these cases it is only a large concentration in the distribution chain that can break the obstacles created by the wholesalers (Rastoin, 1996). The recorded increase in consumption nevertheless shows that the system is able to respond to intense urbanization.
In Latin America, forms of government assistance have been much less intense and lasting than in North Africa. Food policies in the strict sense of the term (food coupons, subsidized goods, cut-price stores, etc.) have always targeted the poor districts or on the disadvantaged sections of the population. There is no generalized intervention here of the kind one finds in North Africa. Moreover, the adjustment to a liberal form of trade has taken place more rapidly.
In Africa, the situation differs completely from Latin America. The WALTPS Study (in Cour, 1994) shows that the response of local agriculture to the soaring urban demand has been positive, but it was delayed due to the inertia in the consumption patterns and the production systems. The main reason for this success has to do with the proximity of agriculture to the urban demand: the creation of a green belt on the outskirts of the large urban centres. Communication and information on the demand side are thereby facilitated. The towns play a locomotive role for agriculture. The theory of outward-looking agricultural development has been amply confirmed here. Local agriculture has not suffered from international competition as a result of liberalization, in view of the comparative rigidity of the food consumption patterns in the towns. The level of food dependence of West African countries is still quite low: 10 to 15% of available food in 1985/1990. A commodity-based study (Leplaideur & Moustier, 1996) has revealed complementarity between the intra- and the peri-urban specialized products and the village systems with mixed food crops and vegetable. The main constraints that have been identified have to do with land tenure (the precarious state of land possession) or logistics (the inadequacy of transport and storage facilities) and technology (access to more profitable innovations). The authors also note a decline in the number of large processing units and more small local facilities, which are more accessible to small traders but result in lower product quality. These are less expensive and are more appropriate to a population whose purchasing power has been eroded as a result of structural adjustment and the devaluation of the CFA franc.
