Chapter 2:Major Themes in World Food and Agriculture at the Beginning of the 1990s

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2.1 The longer term historical evolution of the global population-food supply balance and food and nutrition in the developing countries
2.2 Developments in the more recent past
2.3 The developing countries: magnitude of the food problem and historical developments
2.4 Issues of agricultural resources, environment and sustainability

2.1 The longer term historical evolution of the global population-food supply balance and food and nutrition in the developing countries

As noted in the Foreword, the two issues which dominate all others in a global assessment of food and agriculture prospects are: (a) the persistence of undernutrition and food insecurity for large parts of the population of the developing countries; and (b) the increasing scarcity and degradation of agricultural and other environmental resources as they relate, directly or indirectly, to the process of meeting the food and income needs of a growing world population. This chapter is devoted to presenting the present understanding of the nature and significance of these two issues and, as far as possible, to an analysis of the historical developments that have given rise to the present situation. The intention is to give the reader an understanding of what are the real dimensions of these issues, analyse progress and failures in the historical period and identify the factors that may determine progress or failure in the future.

The evolution of the global population-food supply balance provides an appropriate background for reviewing the evolution of the food and nutrition situation in the developing countries. It must, however, be noted from the outset that examining developments at the global level, e.g. by juxtaposing the evolution of world food production and that of world population, offers few analytical insights for understanding the evolution of the food and nutrition situation in the countries and population groups subject to food insecurity. This is not to deny the fact that the global food demand-supply balance influences the incidence of undernutrition. It does so mainly through its impact on the price of food products bought and sold by the poor as well as through its influence on food aid flows. But the fact that hunger persists in the developing countries at a time when global food production has evolved to a stage when sufficient food is produced to meet the needs of every person on the planet bears witness to the multifaceted dimension of the problem in which the evolution of world per caput food production is but one of the many determining variables. Still, the issue of global balance is very alive in the minds of the public, particularly when issues of the capabilities of the earth to support the ever growing global population are considered. Such issues have recently assumed increasing importance in the context of perceived constraints to the global food production capabilities related to natural resource degradation and other environmental problems.

Concerning the evolution of the global population-food supply balance, it is noted that the last few decades witnessed unprecedented increases in world population. Only 30 years ago, world population was 3.0 billion; it was 5.5 billion in 1992. There have been ever increasing annual absolute increments in world population during this period. During 1960 65, 63 million persons were added to world population every year. The annual increment rose to 72 million in the early 1970s, to 82 million in the early 1980s and is estimated to be some 93 million at present. It may not peak until the year 2000. Thereafter, the annual increment (not total population) is projected to start declining very slowly, e.g. it will be some 85 million by 2025, by which time world population will have reached 8.5 billion. (Data are from the 1992 UN population assessment, medium projection variant (UN, 1993b). The population projections used in this study are from the 1990 UN assessment. They are shown in Chapter 3 and, in more detail, in the statistical appendix (Appendix 3).)

How has agriculture responded to these increases in world population? The global picture is shown in Figure 2.1. Production grew faster than population. Per caput production is today about 18 percent above that of 30 years ago. Food availabilities for the world as a whole are today equivalent to some 2700 kilocalories per person per day (referred to as simply calories in the rest of the text), up from 2300 calories 30 years ago. And this is counting only food consumed directly by human beings. In addition, some 640 million tonnes of cereals are fed to animals for producing the livestock products which people consume. Diversion of even one-third of such animal feed of cereals to direct human consumption could raise per caput food availabilities to some 3000 calories in a net sense, i.e. after adjusting for calorie losses due to consequent reductions in the production and consumption of livestock products. This is not to suggest that such potential diversion is a practical or even necessary proposition. But the example serves to illustrate the fact that the existing per caput food availabilities are considered sufficient for everyone on the planet to have adequate nutrition, provided they are distributed equally.

Yet such food availabilities are not distributed equally. At the one extreme, Western Europe's per caput food availabilities stand at some 3500 calories; those of North America at some 3600 calories. At the other extreme they are only 2100 calories in sub-Saharan Africa and 2200 calories in India and Bangladesh together (see Appendix 3). Thus, for a large part of the developing world, food availabilities are far from being adequate for all people to have access to sufficient food at all times, in short for their food security. So long as this situation persists, a world food problem will continue to exist, notwithstanding adequate production at the global level. The notion that the problem is not one of production but of distribution is attractive. But while this notion is correct in a numerical and static sense, it is trivial and can be misleading. For one thing it entails the notion of drastic redistribution of static world food supplies as a possible solution. For another, it relegates the need to increase production to a subsidiary role.

It is increasingly recognized that people with inadequate food consumption levels are in that condition because they do not earn sufficient incomes to demand as much food as required to satisfy their needs. One should then be speaking not of food scarcity but rather scarcity of incomes or purchasing power, in short, poverty or lack of entitlements to food (See, 1987). This way of emphasizing entitlements to food rather than food supplies has come to dominate thinking in efforts to understand and explain the prevalence of undernutrition and prescribe policies to overcome it. The entitlements approach correctly de-emphasizes the role of average per caput food supplies as an indicator for a complete understanding of issues of inadequate access to food by the poor. It should not, however, detract from the fact that ever increasing food supplies will be needed for solving the food problem in the future. Moreover, the level of per caput food production in the countries with high dependence on agriculture for employment and incomes is itself a major determinant of the food entitlements of the poor (Lipton and Ravallion, 1993, p. so).

On the issue of the role of a potential redistribution of the globally adequate food supplies, it is noted that if the poor countries' incomes were to increase to levels that would put them in a position to raise their solvable food demand significantly, massive redistribution of existing supplies through the market to meet the increased demand would not be necessary, at least not at the scale suggested by present imbalances in inter-country food supplies. This is so because: (a) the increment in demand would not occur in a big spurt overnight but rather gradually over a number of years allowing time for production to respond; and (b) it is probable that much of this additional demand would be met by increases in the poor countries' own production. This latter proposition follows from the fact that, with few exceptions, a more productive agriculture in the poor countries would be an integral part of the process of increasing their incomes. The majority of the world's poor earn their living by producing food and in most poor countries employment and income earning opportunities in all sectors, not just agriculture, are closely linked to how productive agriculture is. Therefore, in most poor countries, increases in incomes that would raise demand and the increases in food supplies generated locally from a more productive agriculture go in tandem.

In conclusion, the present relative abundance of food at the global level and the apparent potential for redistribution of static world food supplies are of more theoretical than practical significance when it comes to thinking of ways and means of improving the food welfare of the poor countries. This being so, policy responses to the food problem will have to address, among other things and in priority, the issue of growth and geographical distribution of food supplies in the future. That is, if consumption in the poor countries is to be raised to "acceptable" levels, additional food must be produced in the right places. In parallel, the scope and the need for transfers of food through trade and food aid will continue to grow.

2.2 Developments in the more recent past

World agricultural growth has been slowing down. The growth rate fell from 3.0 percent p.a. in the 1960s, to 2.3 percent p.a. in the 1970s and to 2.0 percent p.a. in the latest period 1980-92. These developments have given rise to expressions of concern that production constraints are becoming more stringent and may ultimately threaten world food security. Brown (1994) signals the year 1984 as marking a turning point in world agriculture because world production of cereals in per caput terms is today lower than in the mid 1980s.2 Attempting an interpretation of these developments requires, in the first place, examination of the facts. Does the post-1984 period (i.e. the eight-year period from 1984 to 1992, the latest year of available data) represent a new experience in the historical evolution of world agricultural production in relation to population?

To answer this question, the growth rate of this latest eight-year period may be compared with the growth rates for all moving eight-year periods from 1961 to 1992. Figure 2.2(a) plots the growth rates of world agricultural production (all products) in these moving eight-year periods, in both aggregate and per caput terms; and Figure 2.2(b) does the same for cereals. It can be seen that 1984-92 is the first eight-year period in the last three decades when the growth rate of world per caput agricultural production (all products) fell to zero. In parallel, these latest eight years signal a new record in the negative growth rate of world per caput production of cereals.

It may be concluded that those who signal the mid-1980s as a turning point in world agriculture have a point. At the same time, one may or may not agree with the interpretation that these developments: (a) represent a turn for the worse; (b) reflect increasingly binding production constraints; and (c) are indicative of things to come. Points (a) and (b) are addressed below. Point (c) is the subject of Chapter 3.

A turning point for the worse?

In principle, a slowdown in world agricultural growth need not translate into a worsening of the trends towards improved food security and nutrition for the majority of world population that characterized the historical period, for two reasons:

1. The proportion of world population which is well fed is today greater than in the past. Therefore, the part of world agriculture which supplies the "well fed" segment of the world population need not continue to grow at the growth rates of the past in order to maintain their per caput food supplies at the "satisfactory" levels already achieved. It happens that this part of the population, which comprises almost all developed countries and parts of the population of the developing countries, consumes well over 50 percent of world food output.

2. In parallel, the growth of world population tends also to slow down, even that part of world population with still very low levels of nutrition.

These two factors in combination indicate that maintenance or increase of the past growth rate of world agriculture is not a necessary condition, much less a sufficient condition, for progress towards improved food security to continue to be made. Attention should really focus on developments affecting the availability of, and access to, food of the countries and population groups subject to food insecurity. The growth rate of world production is just one of the many factors bearing on this problem; but the growth rate of their own production is of primary importance. This issue is examined below.

At issue is what has been happening in the countries with food security problems and whose food security is influenced in a major way by developments in their own agriculture. Most developing countries are in this category. A slowdown in their agricultural growth rate may often be interpreted as a threat to their food security because of their (a) high economic dependence on agriculture, (b) low levels of per caput food supplies and (c) limited capacity to increase supplies through imports. In short, failure of agriculture to grow at a "sufficiently" high rate affects the prospects for food security adversely on both the demand and the supply sides (see Alexandratos, 1992, for estimates of the role of the growth rate of agricultural production in explaining inter-country differences in per caput food supplies). However, the developing countries are a very diversified lot from the standpoint of these criteria. For some of them, the growth rate of their per caput agricultural production may not be an important determinant of food security. It is necessary, therefore, to review historical developments in per caput agricultural production for different groups of developing countries.

No single criterion is entirely appropriate for classifying the different countries according to their food security vulnerability to variations in their agricultural growth rate. However, even a crude distinction is better than treating the whole of the developing countries as a homogeneous group. The share of agricultural labour force in total labour force is one such criterion (see Appendix 3). This criterion emphasizes the demand (or income) side of the food security problematique because it measures the share of the population which depends mainly on agriculture for employment and income. The data for this indicator are not very good but they have the merit that guesstimates are available for all 93 developing countries of the study.

Of the 93 countries, 31 may be classified as having relatively "low" dependence on agriculture for employment and income generation because they have less than one-third of their economically active population (EAP) in agriculture. A few countries with reportedly more than one-third of their EAP in agriculture are also included in this "low" dependence group on other criteria, mainly their relatively high per caput food supplies and low share of GDP originating in agriculture. For these 31 countries in the "low" dependence group, the hypothesis is made that their food security is comparatively less vulnerable than in other countries to variations in the growth rate of per caput agricultural production. The group has a population of 730 million or 19 percent of the population of the developing countries, average per caput food supplies of 2910 calories/day and all but five of them are in the medium-high range of this variable (2600 to 3300 calories/day).

Of the remaining 62 countries with over one-third of their EAP in agriculture, all except four have per caput food supplies under 2600 calories and the majority of them are nearer the 2000 calorie mark. The group average is 2370 calories or 2230 calories if China is excluded. Moreover, the majority of the countries in this group have comparatively low net food imports per caput and some depend heavily on agricultural exports for their balance of payments, hence for their capacity to import food. It follows that their food security depends heavily on the performance of their own agriculture from both the demand side (incomes of the bulk of their population) and the supply side (food produced or imported from agricultural export earnings).

This group of countries with "high" dependence on agriculture is still too heterogeneous as it includes countries ranging from those with nearly total dependence on agriculture (80-90 percent of economically active population and 55-60 percent of GDP, e.g. Tanzania, Burundi, Nepal, etc.) to the more typical ones of South Asia (60-70 percent of EAP, 30-35 percent of GDP), down to those atypical countries with mineral resources but still the bulk of EAP in agriculture (e.g. Congo, Gabon, perhaps Botswana, all with 60-70 percent of EAP but only 5-10 percent of GDP in agriculture). However, notwithstanding their wide heterogeneity, all these countries share to a considerable degree the characteristic that access to food of significant parts of their populations depends on the performance of their own agriculture for the reasons described above. China belongs to this group, but its large population weight, its past success in diversifying the rural economy and its higher than average per caput food supplies justify showing the data for this group with and without China. Historical developments for these groups of the developing countries are shown in Figures 2.3(a) to 2.3(d).

It is noted that: (a) for the developing countries as a whole, the growth rates of per caput agricultural production (all products) have not been generally lower in recent eight-year moving periods compared with earlier ones (Fig. 2.3(a)); (b) the same observation applies also to the two groups of countries distinguished as described above (Figures 2.3(b), 2.3(c)); and (c) for the most vulnerable group of countries (those with high dependence on agriculture, excluding China) the per caput growth rates of recent years have actually been higher than in earlier periods (Fig. 2.3(d).

In the light of this evidence, it is difficult to accept the position that developments in recent years have marked a turning point for the worse. It is more appropriate to consider that trends in recent years, just like those of the longer-term past, have been characterized by the persistence of low and totally inadequate growth rates of per caput production in the countries whose food security would profit significantly from higher production. Putting the issue in these terms goes to the heart of any analysis of the nature and significance of agricultural growth trends which must always be evaluated in relation to needs rather than in abstract. This is a theme that permeates much of the discussion in this study. It also helps explain why this study focuses predominantly on the agricultural growth prospects and food security in the developing countries.

In conclusion, the slowdown in world production growth after the mid-1980s did not generally reflect developments in the countries whose food security is vulnerable to falls in the growth rate of their own production. As discussed below, the slowdown reflected mainly production adjustments in the main cereal exporting countries in response to stagnant export demand and the need to control the growth of stocks. The flexibility of the main exporting countries to respond to changes in world market conditions, by increasing as well as reducing supplies, will remain an important factor in world food security. In the past they have generally demonstrated such flexibility and tended to absorb shocks in world food markets through, among other things, the responsiveness of feed use of cereals to world price changes in several major exporting countries and by having policies which incidentally led them to hold stocks which were higher than they would otherwise have been. Such flexibility may be affected in the future by the policy reforms under way or planned. For example, a reduction in production-related agricultural support could lead to permanent reductions in stocks or diversion of cereals land to other quasi permanent uses, e.g. forest crops. By contrast, changes in policies to make domestic prices more sensitive to changes in world prices could increase the responsiveness of domestic markets in some of the main exporting countries. Environmental restrictions may also play a role, e.g. quasi-permanent withdrawal of land for conservation purposes or limits on the use of agrochemicals. Finally, the policy reforms which reduce support to agriculture may also create an unfavorable environment for support to publicly funded agricultural research to increase yields in the developed exporting countries (see O'Brien, 1994). This may also limit the positive

Table 2.1 Per caput production of cereals (with rice in milled form), three-year averages and projections countries

*Production data and projections revised to account for the changes in the data of the former USSR following the shift in its data from bunker to clean weight.

"Population data and projections from the 1992 Assessment (UN, 1993b). These revised data are not used in the analyses for this study. For this reason the projected per caput numbers are somewhat different from those shown in Chapter 3. spill-over effects of agricultural innovation on productivity in the developing countries.

A final point may be made before concluding this discussion. This has to do with the need to avoid reading too much into the world averages when they are in per caput terms. An illustration is given in Table 2.1. World per caput production of cereals did not increase between the three-year averages 1979/81 and 1990/92. Yet it increased in both the developed and the developing countries. This paradox is due to the widely differing per caput production and relative population shares in the two groups in the initial year and their different growth rates of population. Apparently, from this standpoint, the world should not be viewed as a zero-sum game situation where, if the world average remains flat, gains of one group must imply losses for the other. This is a rather important aspect of the issues considered here because the projections in Chapter 3 (anticipated here in Table 2.1) show that world per caput production of cereals is likely to remain flat, yet it would increase in both the developed and the developing countries.

Has the world production environment become more difficult for agricultural growth?

No straightforward answer can be given to this question from the mere observation of decelerating world agricultural growth. No doubt, there is fragmentary evidence that land and water resources are subject to degradation, in addition to their declining in per caput terms following population growth, and that the momentum of yield growth is coming increasingly under strain. However, the evolution of production potential has to be evaluated in relation to needs for more agricultural output. To the extent that the needs are expressed as effective demand, a tightening of production constraints in relation to the evolution of demand would have signalled its presence by rising prices. There is no evidence that this phenomenon has occurred, at least not in terms of world market prices which have tended to decline in the 1980s rather than rise. Therefore, a prima facie case can be made that the slowdown must be interpreted in terms of a host of factors rather than solely, or even predominantly, as resulting from a change in the fundamentals on the production side, the latter to be viewed always in relation to the growth of effective demand.

In support of this position, it is noted that the slowdown in the production growth rate of cereals originated predominantly in the major net cereals exporting countries (USA, Canada, the EC, Australia, Argentina, Thailand) which accounted for 36 percent of world production in the mid-1980s. Their production was 602 million tonnes in 1990/92 (824 kg per caput), down from 621 million tonnes in 1984/86 (888 kg per caput). In contrast, production in the rest of the world rose over the same period from 1040 million tonnes to 1153 million tonnes and per caput production remained largely unchanged. Some of the major exporting countries had to resort on several occasions during this period to supply management measures and reduction of incentives to producers in order to rein in the growth of production. It is therefore difficult to interpret the decline in their production as indicative of the onset of production "fatigue". It is more likely that the sluggish growth of export demand for their output dominated the picture.

If the above interpretation is correct, it provides an additional reason for focusing attention less on changes in world production, particularly if they reflect the ups and downs in the main exporting countries, and more on the reasons why effective demand, including import demand, is not growing faster in the countries and population groups with severe food security problems. Examination of the food security problematique from this standpoint will help bring into focus the role of production constraints at the local level, which indeed play a fundamental role in the perpetuation of food insecurity in many low-income and agriculture-dependent countries. For, as noted earlier, it is in these countries that production growth determines not only the growth of food supplies but also, and to a significant degree, that of incomes and demand.

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