• TABLE OF CONTENTS
HIDE
 Front Cover
 Table of Contents
 Preface
 Summary of findings
 Introduction
 Meaning and limitations of food...
 Sources of data and methodolog...
 Reconciliation of net deficits...
 Root crops in relation to cereal...
 The production record, 1960-74
 Potential cereal deficits of developing...
 Deficits associated with income...
 The regional view
 Asian centrally planned econom...
 IFRI country categories
 Projection methods
 Statistical series for figures...














Title: Meeting food needs in the developing world
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Title: Meeting food needs in the developing world
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Creator: International Food Policy Research Institute.
Publisher: International Food Policy Research Institute,
Copyright Date: 1976
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Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Table of Contents
        Table of Contents
    Preface
        Page 1
    Summary of findings
        Page 2
        Page 3
        Page 4
        Page 5
    Introduction
        Page 6
        Page 7
    Meaning and limitations of food deficit projections
        Page 8
        Page 9
    Sources of data and methodology
        Page 10
        Page 11
    Reconciliation of net deficits 1985
        Page 12
    Root crops in relation to cereal deficits
        Page 13
    The production record, 1960-74
        Page 14
        Page 15
        Page 16
        Page 17
    Potential cereal deficits of developing market economies
        Page 18
        Page 19
    Deficits associated with income group categories
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
    The regional view
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
    Asian centrally planned economies
        Page 41
        Page 42
        Page 43
    IFRI country categories
        Page 44
        Page 45
        Page 46
        Page 47
    Projection methods
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
    Statistical series for figures 1-9
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
Full Text




Research Report No. 1
February 1976















MEETING FOOD NEEDS IN THE DEVELOPING WORLD:


The Location and Magnitude of the Task in the Next Decade


Avenue, N.W., Washington, D.C. 20036, U.S.A.










INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
BOARD OF TRUSTEES



Sir John Crawford
Chairman; Australia

Ralph Kirby Davidson
Vice Chairman; U.S.A.

Ojetunji Aboyade
Nigeria

David E. Bell
U.S.A.

Norman E. Borlaug
Mexico

Mohamed El-Khash
Syria

Nurul Islam
Bangladesh

Affonso Pastore
Brazil

Puey Ungphakorn
Thailand

Lucio G. Reca
Argentina

Andrew Shonfield
United Kingdom

Vijayshankar S. Vyas
India

Ruth Zagorin
Canada

Dale E. Hathaway, Director
ex officio; U.S.A.









TABLE OF CONTENTS


Preface . . . . . . . . . . .
Summary of Findings. . . . . . . . . .
Introduction . . . . . . . . . . .
Meaning and Limitations of Food Deficit Projections.
Sources of Data and Methodology. . . . . . .
Reconciliation of Net Deficits 1985, WFC(FAO) and IFPRI.
Root Crops in Relation to Cereal Deficits. . . . .
The Production Record, 1960-74 . . . . . .
Potential Cereal Deficits of Developing Market Economies
The Global View . . . . . . . ... .
Deficits Associated with Income Categories .. . ...


The Regional View. . . .
Asia . . . . . .
High Income Group. . .
India. . . . . .
Bangladesh . . . .
Pakistan . . . . .
Indonesia. . . . .
Philippines. . . . .
Thailand . . . . .
Other Asia . . . .
North Africa/Middle East .
OPEC Countries . . .
Egypt . . . . .
Turkey . . . . .
Non-OPEC High Income Group
Non-OPEC Low Income Group.
Sub-Sahara Africa. . . .
Nigeria. . . . . .
High Income Group. . .
Low Income Group . . .
Latin America. . . . .
Mexico . . . . .
Other Middle America/Caribb
Argentina. . . . .
Brazil . . . . .
Venezuela. . . . .
Ecuador. . . . .
Other Latin America. . .
Asian Centrally Planned Economi
Annex 1: IFPRI Country Categor
Annex 2: Projection Methods .
Statistical Series for Figures


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PREFACE





This report is the first research report of the International

Food Policy Research Institute. As its title indicates, it is a

partial analysis of the world food problem which attempts to

indicate precisely the location and magnitude of possible food

deficits in developing market economies.

The report bears no single author because it is a joint effort.

However, Nathan Koffsky carried most of the burden for the analysis

and writing. Diane Skellie and Pradeep Kotamraju did most of the

statistical analysis. Kenneth Bachman, Felix Nweke, M. S. Rao, and

James Gavan all contributed to the planning and development of the

analysis.

Special thanks are due to the other organizations that con-

tributed in various ways. These include the International Monetary

Fund, the World Bank, and the United States Department of Agriculture,

all of which made data available. Thanks are also due the Brookings

Institution which made its computer facilities available.

With this report, IFPRI is inaugurating a research program on

international food policy issues and the alternatives that are

available to deal with them, especially the issues of major importance

to developing countries. The aim of the IFPRI research is to help

clarify the problems and identify solutions to prevent the worsening

of what is already a serious problem in most of the developing coun-

tries.


Dale E. Hathaway
Director








Summary of Findings

1. This report is concerned with the food needs of more than
half the people on earth--those who live in developing countries
classified as developing market economies (DME), as distinct from
those in the People's Republic of China and other Asian Centrally
Planned economies. By 1985, their numbers will exceed 2.5 billion
people, of whom 2.2 billion may well be living in food deficit
countries, if production performance since 1960 is repeated in
the next decade. For most, their present situation is precarious.
It is likely to turn much more alarming, unless actions are taken
to forestall it.

2. Unless the trend of production in DME countries improves in
the future, production of cereals, the major food in most develop-
ing countries, will fall short of meeting food demand in food
deficit countries by 95-108 million tons in 1985/86 depending on
the rate of economic growth. This compares with shortfalls of
45 million tons in the food crisis year, 1974/75, and an average
of 28 million tons in the relatively good production period,
1969/71. Asia accounts for some 50 percent of the total projected
deficits, North Africa/Middle East about 20 percent, and Sub-Sahara
Africa and Latin America about 15 percent each.

3. A total cereal deficit of about 100 million tons in DME food
deficit countries could well prove conservative. It is based on
projection of the production trend of 1960/74, an average increase
of 2.5 percent a year, to 1985. During the last half of that
period, 1967-74, the rate has slowed to 1.7 percent. This is too
short a period and subject to too much variation from year to year
to serve as a reliable base for projecting the future. Nevertheless,
the pervasiveness of the slackening in production for all regions
and cereal crops (except for wheat in Asia, the most visible evi-
dence of the "Green Revolution") suggests that it may well be diffi-
cult for DME food deficit countries to maintain their longer term
production trends. In the event performance in the future reflects
the more recent trend, cereal production could fall short an
additional 100 million tons, doubling the cereal deficit to about
200 million tons. Such a large transfer of food, largely from
developed countries, could well be unmanageable physically or
financially.


Low-Income Food Deficit Countries

4. The core of the food problem is in the low income food deficit
countries (i.e., those with per capital incomes of less than $200)
where 60 percent of DME population now live and where most of the
increase in population will come. They are projected to incur
about half of the total deficit, some 42-48 million tons of cereal
by 1985. To finance imports of such magnitude would appear to be
beyond any prospect of these countries having the foreign exchange
to do so. The only feasible way for most of these countries to
meet food demand--and the least costly over the long run--is to








increase production more rapidly. It would require increasing
the production growth rate from 2 percent a year to almost 4 per-
cent. To approach this goal would require very substantial
increases in investment in resources devoted to food production
and greatly improved agricultural performance in the countries
concerned. This will not be possible without heavy transfers of
capital and technology from developed countries.

5. Nevertheless, it would be unrealistic to look for the growth
rate to move rapidly from 2 percent a year to 4 percent, consider-
ing that agricultural development is a slow and difficult process
and the inevitable lags that occur before investments begin to
produce. In the meantime, it is clear that there will be need for
food aid from the developed world, very likely in larger amounts
than heretofore, to help feed these people.

6. Unless such developments are forthcoming, the inevitable
result would be a further decline in per capital consumption, either
by higher prices or by rationing. Most countries in this category
already have average diets which fall below minimum adequate energy
levels. Even if the projected consumption levels for 1985/86 were
to be attained, they would allow for only 2-4 percent improvement
over the 1969-71 per capital levels. Further, inasmuch as projected
consumption levels generally reflect market demand, the number or
proportion of malnourished people is not likely to be reduced
unless there is major restructuring of incomes or other means of
redistributing the food supply. This group of countries contains
the bulk of the malnourished in the developing world, estimated by
FAO to total some 440 million people in 1970.

7. The principal problem countries or groups that come out of
the projections are indicated to be:


Cereal Cereal
Deficit Deficit
1974/75 Projected 1985/86
(million tons) (million tons)

India 6.7 14-17
Bangladesh 2.3 5-5
Indonesia 1.1 7-9*
Nigeria 0.3 6-7 *
Sub-Sahara 1.2 3-4*
Low Income Group

In the case of Indonesia, if the 1967-74 production
trend should prevail, the deficit would largely be
eliminated. The deficits for Indonesia, Nigeria, and
Sub-Sahara low income countries take into account the
projected supply of root crops as an alternate source
of calories.









High Income Countries

8. This group, containing 8 percent of DME population and includ-
ing the North Africa/Middle East OPEC countries, Venezuela and high
growth countries in Asia, such as Taiwan and South Korea, has the
capacity to generate foreign exchange to meet food demand by im-
ports. They now import about one-third of cereal requirements.
By 1985/86 they may be importing two-thirds of their requirements.
This group represents a large and expanding commercial market for
30-35 million tons of cereals by 1985/86.

Cereal Cereal
Deficit Deficit
1974/75 Projected 1985/86
(million tons) (million tons)

Asia High Income Group 6.7 17-20
NA/ME OPEC Group 4.8 11-11
Venezuela 1.5 2-3


Middle Income Food Deficit Countries

9. Countries in this group represent the range of circumstances
between the poor low-income countries and the high foreign exchange
earners. They contain about 20 percent of DME population. The
average production rate has been much more satisfactory, increasing
about 3 percent per year but has not kept up with demand for
cereals in which feed is of increasing importance. A rate of over
5 percent a year would be required to meet cereal market demand.
While the total deficit is projected to rise from 17 million tons
in 1974/75 to 23-25 million tons by 1985, Mexico's deficit is
likely to decrease and Egypt's although sizeable, to remain about
the same as in 1974/75. This group represents a mixture of coun-
tries, some likely able to import commercially and others requiring
some concessional food aid. While the needs of some are somewhat
less urgent than for others, there is need in most countries for
additional investment in food production.

10. Certain problem areas stand out.


Cereal Cereal
Deficit Deficit
1974/75 Projected 1985/86
(million tons) (million tons)
Sub-Sahara Higher Income Group 0.6 2
(above $200/per cap)
Mid America/Caribbean 2.9 4k-4
(other than Mexico)
Latin America 2.3 5k-5
(except Argentina, Brazil
and OPEC countries)
Egypt


S3.5


J.53









Cereal Exporting Countries

11. Only Argentina and Thailand are currently major cereal ex-
porters. If historical growth trends persist, Brazil and Pakistan,
presently in deficit, will move to an export position as well.
This group with 13 percent of DME population, has more than enough
to feed its people. Whereas, DME cereal exports have been about
10 million tons in recent years, the projection of exportable
supplies in 1985/86 is in the range of 25-30 million tons. Since
these developing countries are likely to hold to commercial sales,
their export surplus will represent a small part of the world
supply of cereals available to both developed and developing pur-
chasers.


People's Republic of China

12. At the historical production growth rate of 3.4 percent a
year in comparison with population growth of 1.5 percent a year,
China appears to have the capacity to become a major cereal exporter
in the 1980's if that should be its governmental policy decision.
However, the more likely route would be toward improving the diet
of its people and meeting the deficits of other Asian Centrally
Planned economies. For these latter, production is falling sig-
nificantly behind population growth.









INTRODUCTION



This report builds on the finding of the United Nation's World
Food Conference of November, 1974 that the precarious food situation
in many developing countries threatens to become much more difficult
during the next decade. The Developing Market Economies (DME),
excluding the Asian Centrally Planned Group, containing more than
half of the people on earth, are generally characterized by high popu-
lation growth rates which show little tendency to slacken, and lagging
food production which has become more pronounced in recent years. The
result has been a widening food gap in DME countries which has required
greatly increased imports from developed countries in order to feed
their people. Even with larger imports (including substantial food
aid), one in four of their population is underfed and their numbers
are increasing.

Nor have these disturbing trends been significantly altered by
good harvests this year in large parts of Asia, a reflection of
extremely favorable weather and growing conditions. While the food
crisis of the 1974/75 crop-year brought on by poor crops has been
alleviated to some extent, import needs of food deficit countries
remain much higher than at the beginning of the 1970's. The under-
lying trends remain.

A better balance to the food/people equation in the next decade
depends almost entirely on increasing the availability of food by
accelerating production in DME countries and/or increasing food
transfers from developed countries. The time interval precludes the
possibility of significantly altering the population factor. At best,
programs to limit population growth could have only very marginal
effects on the numbers likely to be present in the mid-1980's. This
should not minimize the overwhelming importance of slowing the rate
of population growth as soon as possible. Otherwise, the task of
feeding people beyond the next decade could well turn unmanageable.

The purpose of this report is to put concrete dimensions on the
food problem as reflected in cereals, the major staple in most of the
developing world; the potential shortfalls that loom ahead if things
go on as they have, the geography and magnitude of such shortfalls
among DME countries, and the relative economic circumstances of
those countries with potential food deficits. For these reasons,
potential cereal needs and potential cereal deficits, which have been
considered in a global context for all DME countries combined by the
World Food Conference, have been disaggregated into 23 categories of
countries or groups of countries with similar attributes. By so doing,
the process of planning to avert the occurrence of potential food
shortages can be facilitated.

In the World Food Conference document, Assessment of the World
Food Situation, Present and Future,l/ the Food and Agriculture Organi-
zation of the United Nations (FAO) projected for all DME countries


1/ United Nations World Food Conference, Rome, Italy, 5-16 November,
1974, E/CONF 65/3.








combined a potential net cereal deficit of 85 million tons by 1985
compared with an average of 16 million tons in 1969-71. These are
global figures for DME countries wherein the surpluses generated by
exporting countries, such as Argentina and Thailand, are deducted
from deficits in other countries.

While the potential net deficit of 85 million tons is impor-
tant from the viewpoint of achieving a global balance in cereals
vis-a-vis the rest of the world, food strategy for the individual
country evolves from its own deficit position. Further, export
surpluses of exporting developing countries may not be available to
importing developing countries. For example, Thai maize is largely
exported to Japan for livestock feed purposes. Nor are exports of
developing countries likely to be available except on commercial
terms. Thus, it is important to consider the situation of food
deficit countries as distinct from exporting countries and the
different circumstances among food deficit countries. Some, that
can afford to do so, will likely purchase a substantial part of
their food requirements rather than expand domestic production at
very high cost. This may well be the case for OPEC countries in
North Africa/Middle East where the agricultural resource base is
limited and investment is likely to be used more efficiently in
other activities. On the other hand, poor countries with large
food deficits, such as in South Asia and Sub-Sahara Africa, have
little alternative except to try for self-sufficiency by improving
output. Otherwise, they must look to large and continuing food
aid transfers.

This report takes into account the possible continued retarda-
tion of economic growth in much of the developing world stemming from
restructuring of oil prices. This has impacted most severely on low-
income non-oil exporting countries. Accordingly, consumption (demand)
has been projected under high and low income growth assumptions, the
former assuming that historical income trends will be resumed and the
latter reflecting significantly slower growth.









Meaning and Limitations of Food Deficit Projections

Deficits (or surpluses) as used in this report and in the FAO
projection represent the difference between projections of cereal
production based on the historical trend and projections of demand
arising from increasing population and per capital income growth
assumptions. Therefore, the deficits (or surpluses) reflect pro-
jected food demand relative to production, if past production trends
continue in the future.

Even under existing circumstances, some countries will likely
do better than in the past as improved technology takes hold and some
will do worse as the land base is exhausted without compensating
improvements in other factors of production. These tend to be off-
setting in the process of aggregation, but may miss the mark for
individual countries. Nevertheless, the historical record provides
some statistical basis for assessing the needs for added investment
in food production, the requirements of factors such as irrigation,
fertilizers, etc., and the improvement in agricultural performance
which could lead to attaining specific food targets.

The deficits that come out of such projections indicate the
extent of the adjustments faced by the countries concerned; whether
deficits will be met by increased production,by commercial imports
if affordable or concessionary food aid if not, and/or by reduction
of per capital consumption, in many cases at levels already unsatis-
factory, either by higher prices or by rationing.

Even if the projected demand for cereals which is largely a
reflection of market demand is fulfilled, many people will still be
below an adequate food intake as a result of low incomes and inade-
quate food distribution systems.

According to the World Food Conference Assessment document,
some 440 million people in DME countries were underfed in 1970. Of
the number, 70 percent were in the Far East, 15 percent in Africa,
eight percent in Latin America, and seven percent in the Near East.
These figures give some appreciation of the additional problem
involved in providing all the people with an adequate diet; a task
which goes beyond meeting the food demands projected in this report.
However, the state of knowledge is quite unsatisfactory as to the
nutritional standards that are appropriate considering demographic
and other pertinent factors, the numbers falling below standards
and the extent of deficiencies. Such information, which would re-
quire major research, would be needed in order to measure the addi-
tional food supply required to assure all of a minimum adequate diet.

It should be noted that the incidence of malnutrition is heavy
among the large populations of India and Bangladesh. To eliminate
this problem would greatly enlarge the projected cereal deficits for
these countries as shown in this report, especially since population
will be almost 50 percent higher by 1985 than in 1970 and a signifi-
cant proportion of the added population will be poor.







9
Finally, it should be emphasized that the agricultural data
base for developing countries from which production and consump-
tion are projected is far from adequate to deal with a matter of
such urgency and importance as the food problem. It should be of
high priority to improve the basic statistics so that planning to
meet this contingency can be more effective.









Sources of Data and Methodology *

The basic data used in IFPRI projections were as follows:
Cereal production, consumption, and trade by country for crop-
years 1960/61-1974/75, the time period available from U.S.D.A.
Human consumption and feed use are shown separately insofar as
such data were available. FAO data, the basis for the WFC pro-
jections, are on a calendar year, and were available only for
production. Hence the choice was made to use the more complete
data of the U.S.D.A.

Population projections used are those of the U.N. medium--
medium-variant obtained from the World Bank Computer Center. This
is the same variant as used in the WFC document but with some
subsequent minor revisions.

Income growth rates were derived from World Bank materials.
The high income growth assumption for Non-OPEC countries is gen-
erally the growth rate of GNP per capital 1965-73. Income growth
rates for OPEC countries were adjusted upward to reflect sharply
increased oil revenues since 1973. The average increase projected
for developing market economies came to 3.0 percent per year per
capital compounded to 1985, compared with 3.5 percent assumed in
the WFC projection. This assumes that the effect of high oil prices,
which has interrupted the growth in per capital income in developing
Non-OPEC countries, is gradually overcome and the historical trend
is resumed.

The low income growth assumption was derived from analysis of
potential continued ill effects of the oil situation on Non-OPEC
developing countries, including also the unfavorable effect on their
exports resulting from a slower rate of economic expansion in indus-
trial countries. Under this circumstance, the average increase pro-
jected in per capital GNP is 1.7 percent a year compounded.

Income elasticities for cereals by countries were largely
derived from the FAO study, Agricultural Commodity Projections, 1970-
1980,!2 adjusted for high and low income growth assumptions. In some
cases, elasticities were modified, downward for countries anticipated
to expand economies rapidly and upward for those with negative elas-
ticities where consumption was clearly outrunning population growth.

Conventional methods of projection were employed. That is,
cereal production was projected to 1985/86 from the historical trend
of the past 15 years (FAO projected the trend from a 1969-71 base).
As is customary in studies of this nature, the demand projections are
based on historical price patterns and relationships. Human consump-
tion was projected from the trend value for 1974/75 on the basis of
population growth and the alternative assumptions of growth rates of
per capital income X income elasticities for cereals. Feed use for
countries for which data are available was projected from trend for
the full historical period for Non-OPEC countries and for 1971-74
for OPEC countries to give weight to their recent circumstance.

* See Annex 2 for detailed description of data and methods.
2/ Volume II, FAO, Rome, 1971.







11
However, the trend rates for growth in feed use were subject to a
constraint related to the projected income growth rates. Feed use
was not calculated separately for countries with less than $200
GNP per capital since such use is generally negligible and data are
usually unavailable.









Reconciliation of Net Deficits 1985, WFC (FAO) and IFPRI

Despite differences noted above in basic source data, base
periods and income growth assumptions, the total net cereal deficits
projected by both studies are actually very close. This is largely
due to the major role of population growth in determining projected
levels of consumption.

To reconcile the two projections, the following major adjust-
ments are in order:

1. FAO data on rice are in terms of paddy whereas the
IFPRI data are in milled rice equivalents, roughly
two-thirds of paddy weight.

2. FAO projected to the calendar year 1985 whereas
IFPRI projections are for the crop-year 1985/86,
approximately 6 months later in time. IFPRI
projections indicate that deficits will be increas-
ing about five million tons a year by 1985.

3. IFPRI includes pulses in food grains in India, as
is the practice of the Indian government. Inas-
much as the trend of production of pulses has not
kept pace with population and income growth, the
India deficit would be larger under the IFPRI pro-
jection than in the WFC/FAO projections.

4. The deficit for the Republic of China (Taiwan) is
included under IFPRI among Asian developing market
economies whereas FAO includes it as part of the
People's Republic of China in category Asian
Centrally Planned Economies.


WFC/FAO net cereal deficit 85 million tons
Adj. to milled rice -13 million tons
TOTAL 72 million tons


IFPRI net cereal deficit 82.6 million tons
Adj. to calendar year 2.5 million tons
Adj. for India pulses 1.0 million tons
Adj. for Taiwan 6.5 million tons
TOTAL 72.6 million tons


A margin so small is negligible, considering that the deficit
itself is a residual of two large numbers and thus subject to wide
variations.








Root Crops in Relation to Cereal Deficits

In a number of countries, root crops make up an important
part of the diet and are a competitive source of calories with
cereals. In a band of countries across the center of Africa
stretching along the west coast from Guinea on the north to Angola
on the south, and eastward through Zaire and Tanzania, cassava,
yams, and sweet potatoes provide about as much calories as cereals.
In Latin America, a band from Brazil to the west coast, cassava,
potatoes, and plantain provide half as much calories as cereals. In
Indonesia, cassava provides one-third as much../ Thus, future trends
related to root crops affect cereal requirements.

Wide discrepancies are apparent between the production estimates
of root crops of FAO and those published by U.S.D.A. The latter, ex-
pressed in terms of wheat equivalent in calories, have been used in
this report partly to be consistent with the data on cereals, but also
because otherwise a significant reduction in per capital calorie intake
is implied in some countries which would seem to be contrary to other
indications.

Under the assumptions that the production trend of the past
decade will continue and that per capital consumption of root crops in
1969-71 will, on average, remain the same (i.e., zero income elas-
ticity), rough calculations have been made as to the increase or reduc-
tion that would be involved in the cereal deficit in 1985/86. The
assumption implies that increases in per capital income will be re-
flected more in demand for cereals with their higher energy and pro-
tein content rather than for root crops. Thus, in countries where
production of root crops is not keeping up with population growth,
the cereal deficit is increased and where production of root crops
is rising faster, the deficit is decreased.


Sub-Sahara Africa
Nigeria 1.1 million tons decrease in cereal deficit
Other Low Income Countries 0.4 million tons decrease in cereal deficit
High Income Countries 0.5 million tons decrease in cereal deficit

Latin America
Brazil 2.0 million tons increase in cereal surplus
Ecuador 0.1 million tons decrease in cereal deficit
Other Latin America 0.2 million tons increase in cereal deficit

Asia
Indonesia 0.9 million tons increase in cereal deficit

In total, this would not effect the total gross deficit. The
surplus in Brazil would be reflected in larger exports of cereals.
The cereal deficit for Nigeria would be reduced by more than a million
tons, whereas that for Indonesia would be increased by almost the same
amount.


3/ Based on country data in Food Balance Sheets, 1964-66, FAO, Rome, 1971.







The Production Record, 1960-74

Projections of cereal production are extensions of trend cal-
culated from the historical experience 1960-74. This is the conven-
tional procedure, the same as that followed in the FAO projections.
However, there remains some question as to whether the advent of the
"green revolution" occasioned an upward shift in trend of cereal
production in the more recent period.

A comparison of the trend rates for 1960-74 and for the last
half of that period, 1967-74 (table 1), suggests this is not the case.
For DME countries combined, the longer-term trend of 2.50 percent per
year is reduced to 1.69 percent in the more recent period. Reductions
occur in all regions and in 18 of the 23 IFPRI country/country groups.
While the production trends for 1967-74 cover too short a period and
are subject to too much variation from intermittent bad weather to be
considered valid for statistical projection, the pervasiveness of the
recent experience suggests that many countries may have considerable
difficulty in maintaining long-term production trend growth rates in
the future, unless actions are taken to spur production.

The possibility that the cereal production trend is slowing in
most of the developing world is a matter which requires close atten-
tion and study.

The production performance of the individual grains in major
regions is shown in table 2. In Asia, wheat production has shown
strong growth, the most visible evidence of the "green revolution."
Nevertheless, growth rates for rice and other small grains, which are
by far more important in production and consumption, are lagging con-
siderably behind population increases. This is particularly the case
in India and Bangladesh. Furthermore, all cereals, except wheat in
Asia, show slower growth rates in 1967-74 than in 1960-74. If the
1967-74 production rate were to prevail, cereal production in DME
countries would be almost 100 million tons smaller than at the 1960-
74 rate, and the projected cereal deficit would be doubled, i.e.,
about200 million tons.

In the North Africa/Middle East region, performance of wheat
and rice during 1960-74 has been creditable but production of coarse
grains, which accounts for 40 percent of regional cereal production,
lags.

In Sub-Saharan Africa, both millets and coarse grains, which are
the dominant cereals, show production rates much below population
growth.

In Latin America, production of coarse grains (maize), the major
staple, has increasedquite rapidly, as has rice, but wheat production
has not.

For all DME countries combined, the 1960-74 production growth
rates for rice, millets and coarse grains which together account for
some three-fourths of DME cereal production, fail to come up to the
population growth rate projected for the next decade.




TABLE 1
GROWTH RATES: POPULATION AND CEREAL PRODUCTION
(Percent Per Annum Compounded)


15


Cereal Production
population
Country/Region op197585 Required to
S195- 1967-74 1960-74* Meet Deficit
by 1985/86**

Asia High Income 2.31 .99 2.20 11.31

Asia Low Income:
India 2.46 1.96 2.59 3.32
Bangladesh 2.88 .41 1.21 4.47
Pakistan 3.26 4.92 5.47 3.91***
Indonesia 2.56 4.11 2.74 5.78
Philippines 3.17 3.07 3.63 5.38
Thailand 3.20 3.69 3.71 .65***
Other Asia 2.30 .97 1.23 2.60
Total Asia Low Income 2.63 2.01 2.4 3.54

TOTAL ASIA 2.61 1.95 2.42 4.16

N.Africa/Mid.East OPEC 3.28 -.98 2.00 7.91

N.Africa/Mid.East Non-OPEC:
Egypt 2.31 1.92 2.54 5.68
Turkey 2.63 -.69 1.62 2.70
N.Africa/Mid.East High Inc. 3.10 6.69 4.17 6.37
N.Africa/Mid.East Low Inc. 2.99 .76 1.43 3.89
Total N.Af./Mid.East
Non-OPEC 2.77 1.46 2.23 4.36

TOTAL N.AFRICA/MID. EAST 2.93 .90 2.18 5.26

Nigeria 2.99 .58 -0.09 6.82
Sub-Sahara High Income 2.76 1.86 2.76 4.46
Sub-Sahara Low Income 2.82 -.33 1.85 3.56
TOTAL SUB-SAHARA 2.8 .32 1.51 4.55

Mexico 3.41 .53 4.32 5.25
Other Mid.American/Caribbean 2.65 2.32 2.69 9.43
Argentina 1.21 2.67 3.28 .98***
Brazil 2.82 3.15 3.94 3.71***
Venezuela 2.93 -2.85 3.20 16.52
Ecuador 3.17 -4.43 .69 11.31
Other Latin America 2.70 2.03 1.87 6.64
TOTAL LATIN AMERICA 2.79 2.23 3.48 3.57


TOTAL DEVELOPING MKT. ECON. 2.71 1.69 2.50 4.25


Used for projecting production to 1985/86.
** Rate required from 1974 trend value of production to
high consumption.
*** Exporting country in 1985/86.


meet 1985/86












TABLE 2



Production Growth Rates for Cereals,
Developing Market Economies, by Regions
(percent per annum)


1960/74
Region -CoarseI All
Rice Wheat Grains Millets Cereals
Asia 1.98 6.89 1.47 1.65 2.42
(1.70) (8.23) (-0. 19) (-1.17) (1.95)

North Africa/ 3. 36 2.82 1.23 0.28 2. 18
Middle East (-0.93) (1.97) (-0.08) (-5. 38) (0.90)

Sub-Sahara Africa 3.49 3.57 1.50 0.78 1.54
(1. 53) (0.99) (0.64) (-0.73) (0.32)

Latin America 3. 30 1.28 4. 17 1 3.49
(2. 30) (0.80) (2.60) (2. 23)

TOTAL DME 2.20 4. 12 2.50 1.21 2.50
S____(1.67) (4. 26) (1. 11) (-0.93) (1.69)
*Figures in parenthesis are rates for 1967/74


Distribution of Cereal Production,
(Percentage)


1974/75


Coarse All
Region Rice Wheat Millets
Grains Cereals

Asia 59 18 18 5 100

N.Afr/Mid East 6 53 40 1 100

Sub-Sahara Afr. 10 3 56 31 100

Latin America 12 19 69 100


TOTAL DME


36


100


22








The series of charts in this report shows the considerable
variability of production in relation to its trend, usually a
result of weather factors.

As can be seen from the regional experience (figures 5-9),
cereal production during 1967-71 was generally above trend whereas
production in 1972-74 was mostly below.

The relative position of production, which was also reflected
in consumption to a considerable extent, in recent years is sum-
marized in table 3.


Table 3
Deviations in Cereal Production in Relation to Trend
1969-71, 1974/75, and Prel. 1975/76
(million tons)

Region 1969-71 1974/75 Prel. 1975/76
Asia + 7.6 7.5 + 7.0
North Africa/Middle East + 0.4 0.8 0.1
Sub-Sahara Africa + 1.3 0.8 + 0.2
Latin America + 1.8 6.0 2.5
TOTAL +11.2 -15.1 + 4.


The crop-year 1975/76 was a very good year in terms of weather
and growing conditions in Asia, notably in India, Bangladesh, and
Indonesia. Production in Asia was almost 4 percent above trend. On
the other hand, Latin America was almost 3 percent below trend. Total
production in all DME countries, which was 3.7 percent above trend in
1969-71 and 4.5 percent below trend in 1974/75, appears to be only 1.3
percent above trend based on preliminary figures for 1975/76. Some
magnitudes of possible deviations from trend in relation to the 1985
projection are indicated in the following section.








Potential Cereal Deficits of DME Countries 1985/86
The Global View

Taking all IFPRI Countries/Country Groups together, the pro-
jections yield the following deficits:

Table 4

DME Countries: Gross and Net Cereal Deficits
(million tons)


Actual Projected 1985/86
Average Actual
1969-71 1974/75 High Income Low Income

Gross deficit 28.2 44.8 108.3 94.5
(food deficit
countries only)

Net deficit 16.7 33.4 82.6 65.5
(deficits-surpluses)


In 1970, the DME group contained 1.7 billion persons, of whom
1.5 billion were in food-deficit countries. By 1985, projected
population would be 2.5 billion, of whom 2.2 billion would be in
food deficit countries.

As shown in figure 1, these figures point in the direction of
a persistent widening gap between prospective food demand and food
production, if the past production trend is repeated.

On a gross basis, the combined deficit of food-short countries
by 1985/86 would run 2-2 times larger than in 1974/75, which was
characterized by poor crops, and 3-4 times larger than the average
of 1969-71, when grain harvests and grain consumption were generally
quite favorable and above trend.

For food-deficit countries, the projections for 1985/86 yield
an increase in production from 1969-71 of only about half of the
increase in consumption. Of the projected increase in high income
consumption, 80 percent comes from population growth, 12 percent
reflected the additional demand from the low income growth assump-
tion, and 8 percent from the added impetus to demand from high
income growth assumptions. It should also be noted that projected
production by 1985 would fall some 70 million tons short of provid-
ing the 1969-71 average level of per capital consumption for the
larger population by 1985. In that earlier period, a majority of DME
countries had average consumption levels deficient in calories.

Some IFPRI country groups which are treated en bloc include some grain exporters.
Thus, the figures of gross deficit are somewhat understated. The adjustment to
exclude all exporting countries would increase the deficit by about 1.3 million
tons in 1969-71, 1.4 million tons in 1974/75, and 1.4 million tons under the high
income assumption and 1.5 million tons under the low income assumption in 1985/86.





FIGURE 1
ALL FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION, 1960-75,
AND PROJECTED 1985


Population

1970 Est. 1,486.8 million
1985 Proj. 2,202.6 million


4 High Income Growth Cons.
: Low Income Growth Cons.


Cap. Cons.


Production Trend


Consumption


Actual


Projected


1975/76
* See Annex 1 for countries included


I








Deficits Associated with Income Group Categories


Classifying the countries projected to be food-deficit in
1985 according to income groups provides some insight as to the
burden of potential food deficits and the capacity of those countries
to cope with them.


Table 5
Gross Cereal Deficits by Income Groups
(million tons)

Projected Increase from
1985/86 1969-71

High Low High Low
Country 1969-71 1974/75 Income Income Income Income
Categories Ave. Ave. Growth Growth Growth Growth

Low Income 5.4* 12.6* 48.0 41.9 42.6 36.5

Middle Income 10.9 17.1 25.2 22.9 14.6 12.0

High Income 9.3 13.0 34.8 29.7 25.5 20.4

TOTAL 25.6* 42.7* 108.3 94.5 82.7 68.9

Does not include deficits for Pakistan and Brazil which are pro-
jected to become exporters by 1985.


Low income countries are those with per capital incomes of less
than $200 in 1972.1 As shown in Annex 1, Table 1, these include the
South Asian countries, Indonesia, a few in North Africa/Middle East,
Nigeria, and a large number of Sub-Saharan countries. They encompass
close to 60 percent of the total population in DME countries. In most,
agriculture is the dominant sector of the economy, but food production
is particularly subject to weather and other uncertainties and does not
keep pace with food needs. Being poor and underfed, the income elas-
ticity for cereals is high but income growth is relatively slow, Inas-
much as the oil price situation has affected the oil importing countries
most severely, economic growth may well lag further in the decade ahead
dampening demand for food, with the consequence that any improvement in
diets is likely to be little, if at all. More than half of the total
increase in deficit from 1969-71 to 1985/86 accrues to this group of
countries. In the event of their failure to compensate with increased
production, this group would have difficulty in importing supplies
commercially and would need to look to a large measure of food aid.
Further, as shown in figure 2, large variations in production do occur
in these countries2/ Taking the largest percentage deviations from
trend that occurred during 1960-74, production in 1985 could range from
plus 16 million tons to minus 24 million tons relative to trend, affect-
ing consumption and/or deficit accordingly.

/ Based on data in World Bank Atlas, Washington, 1974.
SNote the differences in scale charted for the var ous income categories
and regions in making visual comparisons among them.






FIGURE 2
LOW INCOME FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION, 1960-75,
AND PROJECTED 1985


Population

1970 Est. 1,012.2 million
1985 Proj. 1,479.3 million










Consumption


Production


Projected


1960/61 1965/66 1970/71


1975/76
* See Annex 1 for countries included


High Income Growth Cons.
,-
/* Low Income Growth Cons.
* At 1969-71 Per Cap. Cons.









Production Trend


























1985/86


I t115- I








Most countries in this group had average diets in 1970 sig-
nificantly deficient in energy (calories) and quite likely they
contained the large part of the underfed population in the develop-
ing world. Even if consumption of cereals attained projected levels
in 1985, per capital consumption of cereals would be improved only by
two percent under the low income assumption and by 4 percent under
the high assumption.

At the other extreme is the high income group (high capacity
to earn foreign exchange) which includes the North Africa/Middle East
OPEC nations, Venezuela, and the high economic growth countries of
Asia, such as Taiwan, South Korea, Malaysia, Singapore, and Hong Kong.
Together, they contain some 8 percent of the population in DME coun-
tries. Most have limited agricultural resources domestically to meet
rapidly rising demand for cereals, including feed grains. The impetus
to economic growth comes largely from the non-agricultural sector.
About 30 percent of the total increase in deficit projected occurs in
this group. Their needs would likely be reflected in commercial
imports since they have ability to generate foreign exchange. Con-
sidering the largest deviations in production from trend since 1960,
production in 1985 could range from trend by plus 3 million tons to
minus 21 million tons, most likely reflected in compensating adjust-
ments in imports.

At projected consumption levels for 1985, per capital consump-
tion of cereals would be increased by 29 percent under the low income
assumption and 41 percent under the high. Most of it would reflect
increased use for feed. (See figure 3.)

In between in characteristics is the middle income group which
encompasses the rest of the food deficit countries, the Philippines,
Egypt, Turkey, most non-OPEC countries of North Africa/Middle East, the
better-off Sub-Saharan countries and the Latin American deficit coun-
tries. Some 20 percent of DME population fall in this group which
would account for about 18 percent of the increase in cereal deficit.
Some may well represent commercial import markets; others may need
some measure of food aid to overcome potential deficits. Again, varia-
tions in production could bring a range in 1985 production from plus 6
million tons to minus 9 million tons.

At projected consumption levels for the middle income group,
average per capital consumption would rise 5 percent under the low
income situation and 8 percent under the high assumption. (See figure 4.)

A significant point is that a substantial part of the total
deficit, perhaps 40 50 percent, can be, and likely should be, met
through regular commercial dealings which draw on supplies from export-
ing countries.

In this connection, the surpluses of developing export coun-
tries--Argentina, Thailand, and probably Pakistan and Brazil, which
are expected to become exporters within the next 10 years--are pro-
jected to increase to about 26 29 million tons, roughly one-fourth







FIGURE 3
HIGH INCOME FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION, 1960-75,
AND PROJECTED 1985


Population

1970 Est. 135.6 million
1985 Proj. 205.2 million


60






50




40


30
E 40






30






20


4..
000


i High Income Growth Cons.
4.

* Low Income Growth Cons.








--At 1969-71 Per Cap. Cons.










Production Trend


Projected-


* See Annex 1 for countries included


Consumption


!


/1
6/0






FIGURE 4
MIDDLE INCOME FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION, 1960-75,
AND PROJECTED 1985


Population

1970 Est. 339.0 million
1985 Proj. 518.1 million


High Income Growth Cons.
Low Income Growth Cons.

-- At 1969-71 Per Cap. Cons.



Production Trend


Consumption


Production


Projected -


* See Annex 1 for countries included





FIGURE 5
CEREAL EXPORTING DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION, 1960-75,
AND PROJECTED 1985





120-


Production Trend
Population /,i //

100- 1970 Est. 218.2 million ///
1985 Proj. 333.5 million

/// /////////// / / /


/ ////////////////// High Income Growth Cons.
80- /////// / / ///////////// Low Income Growth Cons.
S 0 .///////// Surplus '//////A .- *--*-- At 1969-71 Per Cap. Cons.
Pout ////////// P / / /
-- /////////////////// >
S /////////////I//









40- ////// /Consumption



rouct Actual // /Projected

20 /////////
1960/61 1965/66 1970/71 1975/76 1985/86
See Annex 2 for countries included
See Annex 2 for countries included








of the combined deficit. Variations in production for 1985 could
bring a range of plus 10 million tons to minus 6 million tons,
probably reflected in changes in export volume. It is likely that
the bulk of export supplies in these countries would be available
only on commercial terms. Some 13 percent of DME population lives
in these countries. (See figure 5.)

The real core of the food deficit problem is in the projected
deficits of the low income deficit group, where needs, which more
than doubled between 1969-71 and 1974/75, may increase further by
three or four fold in the next decade.

The cost of filling deficits by imports in 1985 by the low
income group would appear to be beyond their prospective foreign
exchange earnings. In this circumstance, a massive increase in food
aid would be required just to maintain per capital consumption at
recent unsatisfactory levels. The better alternative, and probably
much less costly, would be to help these countries improve their own
production to meet their food needs. But this, too, would be a large
order. It would require raising their cereal production performance
from the long-term average of 2.0 percent a year to almost 4 percent
during the next decade. Realistically food production in these coun-
tries is not likely to increase rapidly enough in the next decade to
meet their growing demands, much less overcome the serious nutritional
deficiencies of large portions of their populations. Even with pro-
duction increasing more rapidly than in the past, there would likely
be a continuing need for food transfers, though possibly on a dimin-
ishing scale.


The Regional View

Table 6 summarizes the regional impact of cereal deficits.
While gross deficits increase in all regions, there is a significant
shift in relative positions. Asia accounts for about 50 percent of
the total projected for 1985/86 compared with 40 percent in recent
times. Sub-Sahara Africa's share increases from 5 to 15 percent.
Latin America's share declines by half, from 28 to 14 percent, while
that of North Africa/Middle East goes from 27 to 23 percent.

Considering the availability of supplies from exporting coun-
tries in the region, Latin America alone is projected to be self-
sufficient and possibly in a net export position, largely as a result
of Argentina's traditional surplus.

For Asia, as a region, to meet its food needs from regional
production by 1985, the production growth rate, which has lagged
behind population growth, would need to rise from 2.4 percent annually
to 4.2 percent. The increase required may be even greater if the 2.0
percent average increase recorded in 1967-74 continues.

For North Africa/Middle East, production also has lagged behind
population, and would require an increase from 2.2 percent a year to








TABLE 6


REGIONAL CEREAL DEFICITS
(million tons)


Gross Deficitl/

Region Actual Projected 1985/86
Ave. Actual
1969-71 1974/75 High Income Low Income


Asia 11.5 18.3 54.8 46.3

North Africa/Middle
East 7.9 12.0 22.5 21.4

Sub-Sahara Africa 1.5 2.1 14.9 13.7

Latin America 7.3 12.4 16.1 13.2


TOTAL 28.2 44.8 108.3 94.5



Net Deficit2/

Region Actual Projected 1985/86
Ave. Actual
1969-71 1974/75 High Income Low Income


Asia 8.3 15.1 45.9 36.8

North Africa/Middle
East 7.9 12.0 22.5 21.4

Sub-Sahara Africa 1.5 2.1 14.9 13.7

Latin America (1.0) 4.2 (0.7) (6.4)


TOTAL 16.7 33.4 82.6 65.5



Note: Parenthesis indicates surplus.
1/ Sum of food deficit countries.
2/ Gross deficits minus surpluses of exporting countries in the region.





28


5.3 percent. Again, the more recent growth rate shows a drastic
drop to 0.9 percent.

Sub-Sahara Africa's production record of 1.5 percent per
year would need to rise to 4.5 percent. The more recent per-
formance has shown only 0.3 percent rise per year.

Latin America, considering the region as a whole, with a
high growth rate of 3.5 percent, significantly above population
growth, would not need to accelerate production, unless the drop
to 2.2 percent recorded for 1967-74 continues.







Asia
(See figure 6 and table 7A)

High Income Group: These countries are consistently high foreign
exchange earners and increasingly urban in character.They presently
import about 40 percent of their cereal consumption, which rises
rapidly especially for feed. By 1985 commercial imports may well
account for 55 60 percent of consumption, rising from less than
six million tons average in 1969-71 to the range of 17 20 million
tons according to low and high income growth assumptions. Taiwan
and South Korea would account for 75 80 percent of the total
cereal deficit.

India: With over half of the people in Asia DME countries, India
could incur a deficit of 14 17 million tons by 1985 if historical
production trends prevail in the future. Even if India should be
able to bring in 17 million tons, it would barely suffice to make
cereal availability per capital equal to that of 1969-71 which was
a relatively favorable production period. At that time, moreover,
average per capital calorie intake was significantly below minimum
adequate standards, with India accounting for perhaps half of the
underfed in all DME countries. Their numbers of underfed would
likely increase substantially by 1985 even if the deficit is met.

For India to meet the deficit by its own production would
require accelerating its rate from 2.6 percent (1960-74 average)
to 3.3 percent (see table 1). This may be even more difficult
since the more recent rate (1967-74) indicates some slackening.

Bangladesh: The position of Bangladesh is even more difficult
than India's, with again a large part of the population ill-fed.
The trend of production (1960-74) increases at 1.2 percent per year,
whereas the rate of population growth to 1985 increases 2.9 percent.
Production increases have been negligible (0.4 percent) in the
1967-74 period. For Bangladesh to meet its deficit from internal
production would require a rate of 4.5 percent a year which hardly
seems a likely achievement on a sustained basis even under the
best of circumstances. The potential deficit by 1985 of 5-5
million tons, even if met, would still leave an increasing number
with inadequate calorie intake.

Pakistan: While this country has been an importer for some years,
it is projected to become an exporter of 3-4 million tons by 1985.
Its historical production rate (5.5 percent annually) substantially
exceeds its relatively high population growth. Even though produc-
tion increases have slowed in the recent periods, they are still
close to 5 percent.

Indonesia: As a recipient of oil revenues, Indonesia's economy
might well be expected to grow more rapidly. With a high income
elasticity for cereals, demand for cereals is expected to increase
very substantially. Compared with its historical production rate,
the deficit would increase from 1.3 million tons in 1969-71 to
6-8 million tons by 1985. To meet this from internal production






FIGURE 6
ASIA: FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION 1960-75,
AND PROJECTED 1985


High Income Growth Cons.
Low Income Growth Cons.


Population

1970 Est. 891.6 million
1985 Proj. 1292.8 million


Cons.


Production Trend


Consumption


Production


Projected -


1985/86


* See Annex 1 for countries included





TABLE 7-A
ASIA DEVELOPING MARKET ECONOMIES:
CEREAL PRODUCTION, CONSUMPTION, AND SURPLUS/DEFICIT
(million tons)

Actual 1969-71 Ave. Actual 1974/75
Country/Group Prod. Cons. S/D Prod. Cons. S/D


Asia High Income Group 9.6 15.4 -5.8 9.9 16.7 -6.7

Asia Low Income Group:
India* 101.7 104.0 -2.2 97.8 104.5 -6.7
Bangladesh 11.1 11.8 -0.7 11.5 13.8 -2.3
Pakistan 10.5 11.3 -0.8 11.6 11.9 -0.3
Indonesia 15.6 16.9 -1.3 18.6 19.7 -1.2
Philippines 5.4 6.1 -0.7 5.9 6.7 -0.8
Thailand 11.0 7.9 +3.2 12.3 9.1 +3.2
Other Asia 9.3 9.3 0.0 9.5 9.9 -0.3
Total Asia Low Income Group 164.8 167.3 (-5.7) 167.3 175.6 (-11.6)
(+3.2) (+3.2)
-2.5 -8.3


TOTAL ASIA 174.4 182.7 (-11.5) 177.2 192.3 (-18.3)
(+3.2) (+3.2)
-8.3 -15.1


Projected 1985/86
Cons. S/D
Country/Group P t
Prod. At At
High Low 1969-71 High Low 1969-71
Growth Growth per cap Growth Growth per cap


Asia High Income Group 13.1 33.5 29.9 21.8 -20.4 -16.8 -8.7

Asia Low Income Group:
India* 133.5 150.3 147.8 149.8 -16.8 -14.2 -16.3
Bangladesh 13.1 18.6 18.4 17.2 -5.5 -5.3 -4.1
Pakistan 22.3 18.6 18.4 18.2 +3.7 +3.9 +4.1
Indonesia 23.3 31.9 30.0 24.8 -8.6 -6.7 -1.5
Philippines 8.7 10.5 10.3 9.9 -1.8 -1.5 -1.1
Thailand 18.4 13.1 12.8 12.7 +5.3 +5.6 +5.7
Other Asia 10.9 12.6 12.5 13.2 -1.7 -1.7 -2.3
Total Asia Low Income Grp. 230.2 255.7 250.2 245.8 (-34.4) (-29.4) (-25.4)
(+9.0) (+9.4) (+9.8)
-25.5 -20.0 -15.6


TOTAL ASIA 243.3 289.1 280.1 267.6 (-54.8) (-46.2) (-34.1)
(+9.0) (+9.4) (+9.8)
-45.9 -36.8 -24.3


Note: Parentheses sum deficits and surpluses separately.


without parentheses.
* India includes pulses.


Net deficit or surplus shown


Totals may not add due to rounding.








would require an increased rate of production to 5.8 percent per
year compared with the historical rate of 2.7 percent. It might
be almost a million tons larger reflecting some lag in cassava
production which provides one-third as much calories as cereals
in the diet. On the other hand, the recent production trend of
cereals has risen to 4.1 percent which, if carried forward, would
largely eliminate the deficit.

Philippines: Domestic production of cereals has been about 12 per-
cent short of consumption in recent periods. As a percentage, this
is expected to narrow to about 8 percent by 1985, but the deficit
will increase in amount from 1.2 1.3 million tons to 1.5 1.8
million, largely a reflection of demand for feed. In order to meet
cereal demand from domestic production, the historical increase of
3.6 percent per year would need to be raised to 5.4 percent. Again,
the recent rate (1967-74) has been somewhat reduced.

Thailand: A traditional exporter of rice and maize, with a fairly
high production growth rate of 3.7 percent a year, which has also
been well-maintained in recent years, Thai exports are projected to
increase from some 3.2 million tons to 5.3 5.6 million tons annually
by 1985.

Other Asia: This group was roughly in balance in 1969-71 as a result
of surpluses in Burma and Nepal compensating for a deficit in Sri
Lanka. By 1985, all three countries are projected to be in deficit
by about 1.7 million tons. To meet this internally would require an
increase in rate of production from 1.2 to 2.6 percent a year.



North Africa/Middle East
(see figure 7 and table 7-B)

OPEC: This regional group consists of commercial importers who
presently produce about two-thirds of their cereal consumption. Pro-
duction during 1960-74 grew at the annual rate of 2.0 percent; during
the 1967-74 period, it declined on average by 1.0 percent a year. With
high food demand, the food deficit (imports) is projected to increase
from 2.6 million tons in 1969-71, 4.8 million tons in 1974/75 to about
11 million tons in 1985. This would bring an appreciable increase in
per capital consumption.

Egypt: This country is a consistent importer. In 1969-71 imports
accounted for one-fourth of cereal consumption and in 1974/75 about
one-third. The historical production growth rate of 2.5 percent would
hold the deficit within this range, about 3 million tons. Egypt also
has shown some slowing in production in recent years. To meet food
demand internally would require an annual increase of 5.7 percent.

Turkey: A slow rate of production growth (1.6 percent), which in
recent years has turned negative, is bringing increasing import re-
quirements. The cereal deficit by 1985 would rise to about 2 million





FIGURE 7
NO. AFRICA/MIDEAST: FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION 1960-75,
AND PROJECTED 1985


Population

1970 Est. 199.0 million
1985 Proj. 305.0 million


Consumption


High Income Growth Cons.
Low Income Growth Cons.
*--At 1969-71 Per Cap. Cons.






Production Trend


Production


1975/76 1985/86
* See Annex 1 for countries included


1960/61






TABLE 7-B
NORTH AFRICA/MIDDLE EAST: GRAIN PRODUCTION,
CONSUMPTION, SURPLUS/DEFICIT
(million tons)

Actual 1969-71 Ave. Actual 1974/75
Country/Group
Prod. Cons. S/D Prod. Cons. S/D

N.Afr./Mid. East OPEC 9.7 12.2 -2.6 10.0 14.8 -4.8


N.Afr./Mid. East Non-OPEC:
Egypt 6.5 8.5 -2.0 7.1 10.6 -3.5
Turkey 15.2 15.6 -0.4 13.9 15.0 -1.1
Other High Income Grp. 5.9 8.3 -2.4 8.9 10.8 -2.0
Other Low Income Grp. 6.3 6.7 -0.4 6.6 7.2 -0.6
Total N.Afr./Mid.
East Non-OPEC 33.9 39.2 -5.3 36.5 43.7 -7.2


TOTAL N.AFR./MID. EAST 43.6 51.4 -7.9 46.5 58.5 -12.0

Projected 1985/86

Cons. S/D
Country/Group Prod. At At
High Low 1969 High Low
1969-71 1969-71
Growth Growth Growth Growth
per cap per cap

N.Afr./Mid.East OPEC 13.2 24.5 23.9 19.7 -11.4 -10.7 -6.5


N.Afr./Mid.East-
Non-OPEC:
Egypt 9.7 13.4 13.3 12.1 -3.6 -3.6 -2.4
Turkey 18.3 20.5 20.3 22.9 -2.2 -2.0 -4.6
Other High Inc.Grp. 11.7 14.6 14.4 13.0 -2.9 -2.7 -1.3
Other Low Inc.Grp. 7.8 10.2 10.1 10.4 -2.4 -2.3 -2.6
Total N.Afr./Mid.-
East Non-OPEC 47.5 58.7 58.1 58.4 -11.2 -10.6 -10.9


TOTAL N.AFR./MID.EAST 60.7 83.2 82.0 78.0 -22.5 -21.4 -17.4


Note: Totals may not add due to rounding.








tons compared with one million in 1974/75 and an average of less
than million tons in 1969-71.

Non-OPEC High Income: Excluding OPEC countries, these include the
band of North Africa along the Mediterranean from Lebanon to Morocco.
Most are consistent cereal importers, but occasionally some export.
They have a high production growth rate (4.2 percent) which would
yield a deficit of somewhat less than 3 million tons by 1985 compared
with 2 million tons in 1969-71. However, the more recent production
of 6.7 percent (1969-74), if maintained, could well make them self-
sufficient as a group. The major deficit countries projected for
1985 are Lebanon and Syria.

Non-OPEC Low Income: The production growth rate of 1.4 percent is
substantially below population growth. In recent years (1967-74) it
has fallen by a half. The deficit is projected from about million
tons in recent years to approach 21 million tons by 1985. It would
require production increases of almost 4 percent annually to meet
the deficit. Afghanistan and Sudan are the major countries involved.



Sub-Sahara Africa
(see figure 8 and table 7-C)

Nigeria: The production record for cereals is slightly negative for
1960-74 (slightly positive for 1967-74). With relatively high income
growth from oil revenues, a high income elasticity, and population
growing at 3 percent a year, a large deficit of 7 8 million tons
of cereals is projected for 1985 compared with less than million in
recent years.

However, production of cassava and yams, which is a preferred
food (and calorie substitute) in much of Nigeria increases somewhat
faster than population and thus reduces the cereal deficit in 1985
by the equivalent of about one million tons. It may well be easier,
particularly over the short-run,to increase production of root crops
faster than cereals in order to meet food demand. However, sincethese
root crops require much larger bulk to provide calories than do
cereals, and are low in protein, demand may shift toward cereals, as
has occurred in other countries. A cereal production growth rate of
almost 7 percent annually would be required to meet food needs pro-
jected for 1985.

Sub-Sahara High Income: These countries, with per capital incomes
over $200, are mostly in West Africa and, in many cases, are oriented
toward plantation export crops. Cereal production increases about
2.8 percent a year (1.9 percent in 1967-74), a rate which will increase
the deficit of less than one million tons in 1969-71 to about 2 million
tons by 1985. A rate of 4.5 percent annually would be required to meet
the cereal deficit. Taking root crops into account would reduce the
deficit by million tons. Senegal, Ivory Coast and Cameroon would
likely account for a major part of the deficit. Depending on the terms






FIGURE 8
SUB-SAHARA AFRICA: FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION 1960-75
AND PROJECTED 1985


70 -






60


-Projected


I


1965/66


I i l I I I
1970/71 1975/76
See Annex 1 for countries included


1
1985/86


Population

1970 Est. 234.7 million
1985 Proj. 355.2 million

High Income Growth Cons.
41 Low Income Growth Cons.
"00 1At 1969-71 Per Cap. Cons.







Deficit Production Trend


Consumption





Production


50-
0




40 -







30
30-


20


1960/61


I I R





TABLE 7-C

SUB-SAHARA AFRICA: GRAIN PRODUCTION
CONSUMPTION, SURPLUS/DEFICIT
(million tons)

COUNTRY/GROUP Actual 1969/71 Ave. Actual 1974/75
Prod. Cons. S/D Prod. Cons. S/D


Sub-Sahara Africa:
Nigeria
Other High
Income
Other Low
Income





Total Sub-Sahara


8.4

6.6

18.6


8.7

7.4

18.9


-0.8

-0.3


33.5 35.01 -1.5


8.0

7.5

18.2


33.7


8.4

8.1

19.4


35.8


-0.3

-0.6

-1.2


-2.1


Projected 1985/86

Cons. S/D
COUNTRY/GROUP
Prod. At At
Prod. High Low 1969/71 High Low 1969/71
Growth Growth r c Growth Growth per cap
per cap per cap


Sub-Sahara Africa:
Nigeria 7.5 15.5 15.1 13.4 -8.1 -7.6 -6.0
Other High
Income 10.0 12.0 11.9 11.1 -2.0 -2.0 -1.1
Other Low
Income 24.0 28.8 28.1 28.5 -4.8 -4.1 -4.5




Total Sub-Sahara 41.4 56.3 55.1 53.0 -14.9 -13.7 -11.6


Note: Totals may not add due to rounding.








of trade for their exports, these countries could well be commercial
importers.

Sub-Sahara Low Income: This large group of countries with less than
$200 income per capital is mostly located in Central and East Africa.
The production growth rate of 1.9 percent runs substantially below
population growth. During 1967-74 it was slightly negative. The
cereal deficit is projected to rise from less than half a million
tons in 1969-71 and over one million in 1974/75 to 4 5 million tons
by 1985. Even if the deficit is met, per capital consumption will
hardly be improved over 1969-71 levels. To meet the deficit internally
a production growth rate of 3.6 percent a year would be required. Again
increasing production of root crops would reduce the cereal deficit by
about million tons. Tanzania and Ethiopia would likely incur the
largest deficits in this group.



Latin America
(see figure 9 and table 7-D)

Mexico: The historical production growth rate has been among the
highest in developing countries, 4.3 percent a year. Yet, with one
of the highest population rates, 3.4 percent, and increasing demand,
particularly for livestock feed, generated by income growth, Mexico
is projected to continue to run a deficit of 1 2 million tons in
1985. To come to a cereal balance, the production rate would need
to be raised to 5.2 percent. Again, this may be difficult to reach
considering that more recently production has barely increased.

Other Mid-America/Caribbean: All the major countries in this group
are cereal importers. In total, in recent years they have brought
in about 45 percent of their consumption. With a production growth
rate of 2.7 percent (roughly the same as population), the cereal
deficit is projected to rise from 2 3 million tons to 4 4
million tons. This would be equivalent to almost half of their food
needs in 1985. To make up the deficit internally would require a
production rate of almost 9 percent a year. The largest deficit
would likely be incurred by Cuba.

Argentina: A large exporter of cereals, with production growth of
3.3 percent and population growth of only 1.2 percent, the exporta-
ble surplus is projected to double from about 8 million tons to 16
million tons by 1985.

Brazil: While Brazil has imported about 1.5 million tons of cereals
in recent times, it is projected to export 1 3 million tons by
1985. It could export perhaps 2 million tons more if its increasing
supply of root crops, which provide half as much calories in the diet
as cereals, should substitute for cereal consumption internally. The
historical production growth rate of 3.9 percent shows some reduction
in the more recent period.





FIGURE 9
LATIN AMERICA: FOOD DEFICIT DEVELOPING MARKET ECONOMIES*
CEREALS: PRODUCTION AND CONSUMPTION 1960-75,
AND PROJECTED 1985





60-



SHigh Income Growth Cons.
Population ,
S Low Income Growth Cons.
50 1970 Est. 161.5 million
1985 Proj. 249.6 million

A t 1969-71 Per Cap. Cons.



40
Deficit Production Trend





S30






20 .- Production






10
w~x


* See Annex 1 for countries included






TABLE 7-D


LATIN AMERICA: GRAIN PRODUCTION,
CONSUMPTION, SURPLUS/DEFICIT
(million tons)

COUNTRY/GROUP ctual 1969/71 Ave. Actual 1974/75
COUNTRY/GROUProd S/D Prod. Cons. /D
Prod. Cqns. S/D Prod. Cons. S/D


Latin America:
Mexico
Other Middle
Amer./Carib.
Argentina
Brazil
Venezuela
Ecuador
Other Lat.Amer


Total Lat. Amer.


13.0

3.1
19.3
21.0
0.8
0.5
6.5


64.1


13.1

5.5
11.1
22.7
1.8
0.6
8.5


63.2


-0.1

-2.4
+8.2
-1.7
-0.9
-0.1
-2.0


12.3

3.2
19.4
22.6
0.8
0.3
7.1


15.9

6.1
11.5
24.1
2.3
0.6
9.4


4 1 1


(-7.3)
(+8.3)
+1.0


65.7


69.9


-3.6

-2.9
+7.8
-1.5
-1.5
-0.3
-2.3


(-12.4)
( +8.1)
-4.2


Projected 1985/86

Cons. S/D
COUNTRY/GROUP
Prod. At At
Prod. High Low 1969/71 High Low 1969/71
Growth Growth per cap Growth Growth pr cap
per cap per cap


Latin America:
Mexico 23.7 25.8 24.4 21.5 -2.2 -0.8 +2.1
Other Middle
Amer./Carib. 4.5 8.9 8.7 8.2 -4.4 -4.2 -3.7
Argentina 31.7 16.1 15.6 13.4 +15.7 +16.1 +18.3
Brazil 36.3 35.1 32.9 34.6 +1.1 +3.4 +1.7
Venezuela 1.2 4.3 3.3 2.7 -3.1 -2.1 -1.5
Ecuador 0.5 1.3 1.1 0.9 -0.8 -0.7 -0.4
Other Lat.Amer. 8.4 14.1 13.8 12.5 -5.6 -5.4 -4.0


(-16.1) (-13.2) ( -9.7)
Total Lat. Amer. 106.2 105.5 99.9 93.8 (+16.8) (+19.5) (+22.1)
+0.7 +6.4 +12.4


Note: Parentheses sum deficits and surpluses
or surplus shown without parenthesis.
to rounding.


separately. Net deficit
Totals may not add due








Venezuela: This country depends on commercial imports for its
major source of cereals. By 1985, imports could well account for
three-fourths of its consumption. An oil-exporting high-income
country, Venezuela's demand for livestock feed is rising rapidly.
Production growth rates of its relatively small cereal base are
3.2 percent for the 1960-74 period and -2.8 percent for 1967-74.

Ecuador: Also an oil-exporting country, but with relatively lower
income levels, Ecuador is likely to depend more on imports than
domestic production for its cereal supply. A very low historical
production growth rate (0.7 percent) leads to a deficit of about
3/4 million tons by 1985. The trend of production during 1967-74
was sharply negative.

Other Latin America: With a production growth rate of 1.9 percent
a year, (slightly higher in 1967-74), which is considerably lower
than population growth, the deficit for this group is projected to
rise from 2 2 million tons to about 5 million tons. Most of it
will likely be incurred in Chile, Peru and Colombia. The overall
effect of taking root crop into account would make for only a minor
reduction in the cereal deficit.



Asian Centrally Planned Economies
(see table 7-E)

Projections for the Peoples Republic of China and other coun-
tries in this group have not been made. China's historical produc-
tion rate of 3.4 percent per year (2.4 percent in 1967-74) and
population growth of 1.5 percent suggest a shift from recent deficits
to a substantial surplus. However, essentially it is assumed that
the direction of policy will be toward self-sufficiency within the
group. This may have some validity, since China, according to FAO
data, would need to increase per capital consumption of food by 10
percent over 1969-71 levels in order to attain an average adequate
energy intake level. Further it would be logical to go considerably
beyond that in improving diets. Additionally, the deficit position
of other centrally planned countries is projected to widen as a
reflection of a production trend of 1.5 percent a year compared with
population growth of 2.4 percent a year.

Nevertheless, if the historical growth rate should prevail, it
would not be out of the question for China to assume a major grain
exporter role if that should be their policy decision. If the more
recent growth rate continues, China's flexibility to adopt such a
course would be quite limited.





TABLE 7-E

TOTAL DEVELOPING COUNTRIES: GRAIN PRODUCTION,
CONSUMPTION, AND SURPLUS/DEFICIT
(million tons)

COUNTRY/GROUP Actual 1969-71 Ave. Actual 1974/75
COUNTRY/GROUP
Prod. Cons. S/D Prod. Cons. S/D



Developing Market (-28.2) (-44.8)
Economies 315.6 332.4 (+11.5) 323.0 356.5 (+11.4)
-16.7 -33.4


Asian Centrally
Planned Econ's.

China, Peoples
Republic of
Other Centr'ly
Planned Asia


135.1

11.1


138.2

12.7


-3.1

-1.6


150.2

11.5


154.6

12.7


-4.4

-1.2


Projected 1985/86

Cons. S/D
COUNTRY/GROUP
Prod. At At
rod High Low 1969-7 High Low 1969-71
Growth Growth Growth Growth per cap
per ca per cap



Developing Market (-108.3) (-94.5) (-72.9
Economies 451.6 534.2 517.1 492.5 (+25.7) (+29.0) (+31.9
-82.6 -65.5 -40.9


Asian Centrally
Planned Econ's.

China, Peoples
Republic of 220.4 173.8 +46.6
Other Centr'ly
Planned Asia 13.0 18.1 -5.1




Note: Parentheses sum deficits and surpluses separately. The net
deficit or surplus shown without parenthesis. Totals may not
add due to rounding.









* * *





This report is the first step toward bringing deeper under-
standing of the food problem in the developing world. Some serious
questions emerge from the analyses, questions that have no answers
now but need to be pursued.

First, there is need to determine whether the slowdown in
production of cereals noted for the 1967-74 period represents in
fact a significant change in trend or is largely a temporary aberra-
tion due to weather. If the former, the task ahead is even more
difficult than the figures portray.

Second, there is the question of how to come to grips with
the problem of the large mass of malnourished people. It is clear
that meeting food demand which arises from economic growth will do
little in most low income countries to alleviate their condition.

Finally is the question of the appropriate strategies, poli-
cies and programs by which food and nutrition needs can be met most
effectively. The historical trend of production is an insecure base
to project the future. What is needed is an inventory of resources
and policies and some measure of their effectiveness. From this,
it is possible to come to some judgement as to the additional re-
sources, changes in policies and in performance, which would be
required to meet production goals.









Annex 1


IFPRI COUNTRY CATEGORIES


A. DEVELOPED EXPORTERS

1. United States
2. Canada
3. South Africa
4. Australia



B. DEVELOPED IMPORTERS


Japan
U. S. S. R.
Other Importers:
Austria
Finland
Greece
Iceland
Israel
Malta


4. East Europe:
Albania
Bulgaria
Czechoslovakia
East Germany

5. EEC: Euro-Six:
Belgium
France
Germany


Norway
Portugal
Spain
Sweden
Switzerland
(New Zealand)


Hungary
Poland
Romania
Yugoslavia


Italy
Luxembourg
Netherlands


EEC: Euro-Three:
Denmark
Ireland
United Kingdom



C. DEVELOPING COUNTRIES WITH FOREIGN EXCHANGE


1. Asia Group:
Brunei
Hong Kong
Malaysia


Singapore
South Korea
Taiwan


2. North Africa Middle East OPEC:
Iran Algeria
Iraq Libya
Bahrain Oman
United Arab Emirates


Saudi Arabia
Kuwait
Qatar


Macao









Annex 1

(IFPRI Country Categories cont'd.)

D. DEVELOPING COUNTRIES WITH FOREIGN EXCHANGE CONSTRAINTS
(Countries asterisked are oil exporters which are likely to
improve reserve positions.)


1. Asia Market Economies:
a. India
b. Bangladesh
c. Pakistan
*d. Indonesia


Philippines
Thailand
Other Asia: Bhutan, Nepal,
Sri Lanka, Burma, Pacific
Islands, Papua-New Guinea,
Sikkim, Maldive Islands


2. Centrally Planned Asia:
a. People's Republic of China
b. Other Centrally Planned Asia: Mongolia, Khmer,
Laos, S. Vietnam, N. Vietnam, N. Korea


3. North
a.
b.
c.


Africa-Middle East (Non-OPEC):
Egypt
Turkey
Remaining Countries (from Afghanistan to Morocco):
(1) High Income ($200 +):
Jordan
Lebanon
Morocco
Syria
Tunisia
Cyprus
(2) Low Income (less than $200):
Sudan
Yemen (Sana)
Yemen (Aden)
Afghanistan


4. Sub-Sahara Africa
*a. Nigeria
b. Remaining Sub-Sahara:
(1) High Income ($200 +):
Mozambique
Rhodesia
Zambia
*Angola
Cameroon
Congo
*Gabon
Ghana
Equatorial Guinea
Ivory Coast
Liberia


Mauritius
Reunion
Senegal
Spanish Sahara
French Terr. Afaro
& Issas
Guinea-Bissau
Cape Verde Isles
Ceuta & Melilla
Sao Toma & Principe
Seychelles Isl.









Annex 1


(IFPRI Country Categories cont'd.)


(2) Low Income (less than
Kenya
Malagasy Republic
Malawi
Tanzania
Uganda
Burundi
Central Africa Rep.
Chad
Dahomey
Ethiopia
Gambia
Guinea


5. Latin
a.
b.
c.
*d.
*e.
f.


$200):
Mall
Mauritania
Niger
Rwanda
Sierra Leone
Somalia
Togo
Upper Volta
Zaire
Lesotho
Comoro Islands


America:
Argentina
Mexico
Brazil
Venezuela
Ecuador
Other Middle America and Caribbean:
Bahamas Guatemala Panama
Bermuda Haiti *Trinidad & Tobago
Costa Rica Honduras Other Caribbean
Cuba Br. Honduras Isles (Marti-
Dominican Rep. Jamaica nique, etc.)
El Salvador Nicaragua


6. Remaining Latin America:
Bolivia French Guiana
Chile Guyana
Colombia Paraguay


Peru
Surinam
Uruguay





ANNEX 1

TABLE 1
POPULATION IN IFPRI CATEGORIES
BY INCOME GROUPS, 1970 EST. AND 1985 PROJECTED
1970 Est. 1985 Proj.
Income Group (millions) (millions)


Low Income-Food Deficit
(under $200 per capital :

India
Bangladesh
Indonesia
Other Asia
NA/ME Non-OPEC Low Income
Nigeria
Sub-Sahara Low Income
Total Low Income

Middle Income-Food Deficit
($200+ per capital :

Philippines
Egypt
Turkey
NA/ME Non-OPEC High Income
Sub-Sahara High Income
Mexico
Other MA/Carib.
Ecuador
Other Latin America
Total Middle Income

High Income-Food Deficit
(high foreign exchange capacity):


549.8
68.3
121.0
52.1
34.6
55.8
130.6
1,012.2


38.2
33.7
35.7
32.3
48.3
51.1
37.0
6.1
56.6
339.0


Asia Group High Income
NA/ME OPEC
Venezuela
Total High Income


Total DME-Food Deficit


Grain Exporters:

Pakistan
Thailand
Argentina
Brazil
Total Exporters

TOTAL DME


62.2
62.7
10.7
135.6

1,486.8


61.4
36.3
23.9
96.6
218.2

1,705.0


Source: United Nations Projection for 1985 is
medium variant 1974.


87.8
100.8
16.6
205.2

2,202.6


98.9
58.7
28.8
147.1
333.5


2,536.1

U.N. medium-


792.4
99.4
177.7
73.7
53.4
85.7
197.0
1,479.3


61.8
47.7
52.4
50.7
72.5
84.2
54.6
9.8
84.4
518.1









ANNEX 2


PROJECTION METHODS



1. Projections of the demand for cereals during the 1975-85
period were based upon assumptions with respect to growth rates
in population, growth rates in real per capital GDP, estimates of
income elasticities in cereal consumption, and trends in the use
of cereals for feed. They also assume historical patterns of
price relationships are not altered significantly. Centrally
planned Asian countries were excluded from the analysis. It was
assumed that these countries would follow a policy of self-
sufficiency more or less. The principal assumptions and the re-
lated methodology used in estimating demand growth rates in the
developing market economies are briefly summarized below.

2. The 1974 UN medium--medium-variant population projection was
selected for use in the study. The projected mid-year population
for study countries and country groupings at 5-year intervals from
1970 to 1990 were made available from the IBRD computer program.
Compound rates of growth for each of the 5-year periods were used
to derive year-end estimates for 1970, -75, -80, and -85. These
rates of growth were also used to estimate population for the
intervening years in the 1975-85 period. Population estimates
for 1970 and projections for 1985 are shown by IFPRI categories
in Annex 1, Table 1.

3. The basic sources for projecting growth rates of real GDP
per capital for developing countries and country groupings were
(1) the 1965-73 rates as derived from IBRD estimates of total
real GDP and population, and (2) IBRD estimates of projected oil
revenues in 1980 to OPEC countries and the net effect of continued
high oil prices on economic growth, 1976-80, in Non-OPEC develop-
ing countries, treating low-income countries as a group (less
than $200 GDP per capital in 1972) and middle/higher-income coun-
tries as a group ($200 per capital and above).

High- and low-income growths were assumed. These are shown
in Table 1.

For Non-OPEC countries, the high-income assumption was
generally the growth rate of GDP per capital as derived from the
IBRD estimates noted in (1) above. The low-income assumption for
NON-OPEC countries was that taken from the IBRD analysis (2) above
which, under conditions of low import demand by OECD countries,
would yield 0.5 percent annual growth rate in GDP per capital for
the low-income country group and 1.8 percent annual rate for the
middle/high-income country group. However, in those instances
where the 1965-73 growth rate fell below the projected low-income
growth rate, the rate for the high-income assumption was adjusted
upward to exceed the low rate by 0.5%.









For most OPEC countries, the high-income growth rate was
assumed to be 10 percent. For Indonesia, Nigeria, Venezuela, and
Ecuador 7 percent was assumed because at their level of devel-
opment, progress is likely to be slower. Oil revenues for OPEC
countries as a whole are estimated to increase by 25 percent
annually from 1973-80. The low-growth for OPEC countries was
assumed to be the historical rate 1965-73.

A special adjustment was made for the low-growth situation
for the Asia high-income group -- Hong Kong, Singapore, Taiwan,
South Korea, Malaysia -- to a rate approximately one-fourth below
the high-growth situation. This is the percentage reduction involved
in the Bank report for middle/higher-income countries under the
alternatives of high and low economic growth for OECD countries
to which the economic activities for the Asia group are linked.

In some countries, agriculture is the dominant sector of the
economy, accounting for about half of the GNP. The question may
be raised as to whether the historical production trend which is
projected for cereals is consistent with the assumptions as to
economic growth which enter into the demand projections. For the
high-income growth assumption this is not a matter of concern
since that assumption is generally based also on the historical
trend of GNP. But it has some bearing in relation to the low-
income growth assumption as to whether such assumption could be
fulfilled without a reduction in the growth rate of cereal pro-
duction and thus bring a somewhat wider food deficit than pro-
jected.

Since the low-income growth assumption is linked to disrup-
tions stemming from the oil situation, it would appear reasonable
to assume that the effect would be borne more in the non-agricul-
tural sector than in the agricultural sector. Even in the case
of India where cereal production accounts for most of agricultural
production, and agriculture in turn accounts for about 45 percent
of total GNP, the reduction required in the non-agricultural sector
rate to accommodate the low income growth assumption would be at
most from 4.6 percent a year to 3.4 percent. Such a slowing of
the non-agricultural sector would reduce opportunities for employ-
ment outside of agriculture, but conversely would increase man-
power in agriculture. Thus, a lower economic growth rate need not
significantly affect production in the agricultural sector.

4. The income elasticities (Table 2) used in the study were
based on FAO estimates contained in the publication Agricultural
Commodity Projections 1970-80, Volume 2, Food and Agriculture
Organization, Rome, 1971. For the low growth Non-OPEC countries
FAO projection of elasticities in reference period 1970-75 was
generally used, for higher growth Non-OPEC countries the reference
period was 1970-80, and for the OPEC countries the FAO projection
reference period for 1975-80 was used in view of the accelerated
rates of economic growth projected for these countries. Adjust-
ments for high and low income assumptions were introduced. The









derived estimates of elasticities, however, were subject to the
general assumption that for the study countries and regions the
cereal income elasticities for human consumption would not be
negative during the projection period. Thus, whereas FAO pro-
jected slight negative elasticities for Argentina and Turkey,
zero elasticities were used in this study. Mexico and Thailand
were adjusted from slight negative to slight positive elasticities.
In both countries grain consumption has been increasing faster
than population. Unpublished analyses made by the USDA of cereal
income elasticities were also consulted in finalizing the income
elasticities. The elasticities are assumed to prevail throughout
the projected period.

The U.S. Department of Agriculture consumption data used in
this study does not attempt to estimate post-harvest cereal
losses and amounts of cereals used for seed. Instead, these data
are included in the consumption estimates, and it is, therefore,
implicitly assumed that rate of growth in these uses would be the
same as the projected rate of growth in human consumption.

5. The cereal supply/utilization data provided by the Depart-
ment of Agriculture include estimates of grain used for feed for
a limited number of major developing countries. These data were
used in making projections of grain used for feed for countries
and regions where data were available and trends in the use of
grain for feed were presumed to differ significantly from trends
in human or total consumption. In particular it was assumed that
the total consumption and feed consumption trends would not
differ significantly in all Non-OPEC countries with less than
$200 GDP per capital in 1972 and feed consumption was not calculated
separately for these countries. For the remaining countries and
groups of countries projections were made of the grain used for
feed on the basis of historical trends in the rate of growth in
grain used for feed subject to a maximum constraint that the rate
of growth would not exceed the rate of growth in population plus
the rate of growth in GDP per capital X 2. Inasmuch as the histori-
cal trend in GDP was adopted for most countries as the high income
growth assumption and the historical trend in feed use was related
thereto, the latter was used to determine feed use under the high
income growth assumption. For the low income growth assumption,
the rate of growth in feed use was adjusted downward according to
the reduced growth in GDP per capital. For Non-OPEC countries the
1960/61-1974/75 period was used for calculating the compound rate
of growth trend. For OPEC countries the 1971/72-1974/75 period
was used.

In countries where projections were not made of the grain
used for feed, total consumption was projected on the basis of
the growth rates in population, and growth rates in GDP per
capital X the estimated cereal income elasticities. Also, in all
countries no separate projections of feed use of rice and minor
grains were made since no estimates were available of the amount
of these commodities that were used for feed. They were included
in the projections of total consumption.




51



6. Projections of cereal production for the 1975-85 period were
made on the assumption that historical rates of growth would con-
tinue. The 1960/61-1974/75 compound rates of growth in production
for these study countries and regions were computed from USDA
annual crop-year cereal production estimates. These rates of
growth were then extrapolated for the 1975-85 period from the 1974
trend estimate of production. Production growth rates were also
computed for 1967/68-1974/75.


(See following Note for mathematical
formulation of projection methodology.)









ANNEX 2

NOTE ON METHODOLOGY

Production:
Production of foodgrains was projected to 1985/86 according to a
logarithmic time trend fitted by ordinary least squares, i.e.,
Fitted y = a0 + alt + e
Predicted yt= ao + a1t
where y = logarithm of production
Yt = estimated value of the logarithm of production
in year t.
al = estimated growth rate of production
e = random error component.
The growth rate of production al was estimated for two different
base periods, 1960-74 and 1967-74.

Consumption:
Per capital human consumption was projected as:
ct = c74 + gzt
where ct = predicted value of the logarithm of per capital
consumption in year t
'4 = logarithm of the estimated value of consumption
per capital in the year 1974.
g = assumed rate of growth of per capital income
z = assumed income elasticity
t = year (i.e. current year 1974)
Per capital consumption in 1974 was taken as the fitted trend value
from the logarithmic time trend of total human consumption estimated
for the period 1960-1974, i.e.
Fitted C = b0 + b1t + e
Estimated Cy4 = b0 + bl(t=74)
c74 = C74 P74

where C = logarithm of total consumption
c = logarithm of per capital consumption
bI = estimated growth rate of consumption

P74 = logarithm of population in 1974








ANNEX 2

TABLE 1

ASSUMPTIONS OF GDP PER CAPITAL GROWTH RATES
FOR PROJECTING DEMAND FOR CEREALS
IN DEVELOPING COUNTRIES


High Low


Asia Group with Foreign Exchange
Taiwan, South Korea, etc. 7.3% 5.5%


North Africa-Middle East (OPEC)
Algeria, Iran, Saudi, etc. 10.0% 6.5%

Developing Exporters
Thailand 5.0% 1.8%
Argentina 2.4% 1.8%


Developing Food Deficit (low income)
India 1.2% 0.5%
Bangladesh 1.0% / 0.5%
Pakistan 1.2% 0.5%
Philippines 2.9% 1.8%
Indonesia 7.0% 4.3%
Other Asia 1.0% 0.5%


North Africa-Middle East (Non-OPEC)
Egypt 1.0% / 0.5%
Turkey 4.8% 1.8%
Other Non-OPEC High Income 2.6% 1.8%
Other Non-OPEC Low Income 1.0% / 0.5%


Sub-Sahara Africa
Nigeria 7.0% 5.9%
Other Sub-Sahara High Income 2.04% 1.8%
Other Sub-Sahara Low Income 1.6% 0.5%


Latin America
Mexico 2.9% 1.8%
Other Middle America/Caribbean 3.4% 1.8%
Brazil 6.0% 1.8%
Venezuela 7.0% 1.3%/
Ecuador 7.0% 3.4%
Rest of Latin America 2.3% / 1.8%


1/ Adjusted upward as noted in Paragraph 3 of text.








ANNEX 2


TABLE 2


ESTIMATED CEREAL INCOME ELASTICITIES

1970-1985 STUDY COUNTRY/REGIONAL CATEGORIES



ESTIMATED CEREAL
COUNTRY/REGIONAL CATEGORIES INCOME ELASTICITY

Low-Growth High-Growth
Assumption Assumption

A. Developing Countries
with Foreign Exchange:

Asia Group .050 .045
NA/ME OPEC .080 .078
Venezuela .190 .154



B. Developing Exporters:

Argentina .000 .000
Thailand .050 .049



C. Developing Countries with
Foreign Exchange Constraints:

India .450 .442
Pakistan .230 .228
Bangladesh .450 .444
Indonesia .420 .396
Philippines .180 .176
Other Asia .120 .119
Turkey .000 .000
Egypt .160 .159
NA/ME Non-OPEC Low Income .430 .425
NA/ME Non-OPEC High Income .170 .169
Nigeria .500 .486
Sub-Sahara Low Income .410 .399
Sub-Sahara High Income .280 .279
Mexico .100 .094
Other Middle America .210 .205
Brazil .100 .094
Ecuador .420 .379
Other Latin America .230 .227






























STATISTICAL SERIES:


DATA FOR FIGURES 1 9








DATA FOR FIGURE 1

ALL FOOD DEFICIT DME COUNTRIES:
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985
(million tons)


YeCereal Prod. Cereal Prod. Cereal
Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


197.8

197.7

208.8

213.7

218.8

209.0

207.4

231.0

243.7

248.2

257.5

255.8

251.9

257.8

257.1

280.7


196.6

200.8

205.2

209.6

214.2

218.8

223.3

228.5

233.5

238.7

244.0

249.4

255.0

260.7

266.5

273.0


1985-86 projected


214.0

216.9

223.4

232.0

238.8

231.6

234.3

253.8

260.8

272.7

281.6

284.0

286.9

298.2

300.2

314.2

At 69-71
per cap
Hih Low cons.
T513 437.4 413.7


342.9








DATA FOR FIGURE 2

LOW INCOME-FOOD DEFICIT DME
CEREAL PRODUCTION, TREND, AND
1960-75 AND PROJECTED

(million tons)

Cereal Prod. Cereal Prod
Actual Trend Est.


137.1

139.0

142.9

144.1

149.8

136.7

134.2

153.5

161.0

168.0

175.0

170.0

166.4

175.9

170.2

189.0


134.6

137.2

139.9

142.6

145.3

148.2

151.0

154.0

157.0

160.0

163.2

166.4

169.6

173.0

176.4

179.9


1985-86 projected


COUNTRIES:
CONSUMPTION
1985


Year


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


220.1


Cereal
Cons. Actual


144.3

145.4

147.1

153.0

159.3

147.4

148.4

161.4

165.1

175.0

178.6

175.6

175.8

187.4

182.9

196.1

At 69-71
per cap
Hih Low cons.
268 26-2.0 257.4








DATA FOR FIGURE 3

HIGH INCOME-FOOD DEFICIT DME COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Cereal Prod. Cereal Prod. Cereal
Year Actual Trend Est. Cons. Actual
Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


15.9

15.6

17.3

16.8

16.8

18.0

18.0

19.5

21.7

21.1

20.7

18.6

22.3

19.4

20.7

21.7


16.1

16.4

16.8

17.1

17.5

17.9

18.3

18.7

19.1

19.5

19.9

20.3

20.8

21.2

21.7

22.1


20.0

19.9

21.6

21.2

21.1

22.1

23.3

25.1

27.7

28.3

29.7

30.3

33.3

31.9

34.0

34.9


1980-85 projected


At 69-71
per cap
Low cons.
57.1 44.2


FHi hn
2 3


27.4








DATA FOR FIGURE 4

MIDDLE INCOME-FOOD DEFICIT DME COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Year Cereal Prod. Cereal Prod. Cereal
Actual Trend Est. Cons. Actual

1960-61 44.8 45.9 49.7

61-62 43.2 47.2 51.6

62-63 48.7 48.5 54.6

63-64 52.8 49.9 57.8

64-65 52.2 51.3 58.4

65-66 54.3 52.8 62.2

66-67 55.2 54.0 62.6

67-68 57.9 55.9 67.3

68-69 61.0 57.5 68.1

69-70 59.0 59.2 69.4

70-71 61.8 60.9 73.3

71-72 67.1 62.7 78.0

72-73 63.3 64.6 77.8

73-74 62.4 66.5 78.9

74-75 66.2 68.4 83.3

75-76 70.0 70.6 85.2
At 69-71
per cap
High Low cons.
1985-86 projected 95.4 120.9 118.3 112.1








DATA FOR FIGURE 5

DME CEREAL EXPORTING COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)

Year Cereal Prod. Cereal Prod. Cereal
Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


1985-86 projected


38.5

41.4

41.6

47.4

52.4

49.3

51.2

51.9

54.4

62.8

63.9

58.7

63.3

70.0

66.0

70.1


40.5

42.1

43.7

45.5

47.3

49.2

51.1

53.2

55.3

57.5

59.8

62.2

64.7

67.3

70.1

72.9


36.3

36.9

37.0

38.4

40.6

42.1

44.2

44.5

46.5

52.2

51.8

54.8

55.9

57.9
56.6

58.4
At 69-71
per cap
Hih Low cons.
2.9 79.7 78.9


108.7








DATA FOR FIGURE 6

ASIA FOOD DEFICIT COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Cereal Prod. Cereal Prod. Cereal
Year Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


121.2

122.4

124.7

125.8

132.1

118.8

118.6

134.9

143.9

148.7

156.4

153.4

146.9

160.1

153.3

170.6


117.5

120.0

122.6

125.3

128.0

130.8

133.6

136.5

139.5

142.5

145.6

148.8

152.0

155.3

158.7

162.2


1985-86 projected


130.3

131.1

132.2

137.9

143.9

132.0

135.2

146.5

152.8

160.5

165.3

164.9

165.0

177.2

171.6

183.9


High Low
257.4 248.9


At 69-71
per cap
cons.
236.7


202.6








DATA FOR FIGURE 7

NA/ME-FOOD DEFICIT COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Cereal Prod. Cereal Prod. Cereal
Year Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


34.9

32.3

38.8

40.6

36.8

37.9

36.4

41.9

45.5

43.6

42.2

44.9

49.7

41.9

46.5

48.3


34.8

35.6

36.3

37.1

37.9

38.7

39.6

40.4

41.3

42.2

43.2

44.1

45.1

46.1

47.1

48.2


1980-86 projected


38.6

39.1
42.2

43.1

41.3

43.3

42.9

48.7

49.2

49.7

51.1

53.4

56.0

54.4

58.5

59.7
At 69-71
per cap
Hi h Low cons.
83.2 T2.1 78.1


60.7








DATA FOR FIGURE 8

SUB SAHARA AFRICA: FOOD DEFICIT COUNTRIES:
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Year Cereal Prod. Cereal Prod. Cereal
Actual Trend Est. Cons. Actual


1960-61

61-62

62-63

63-64

64-65

65-66

66-67

67-68

68-69

69-70

70-71

71-72

72-73

73-74

74-75

75-76


26.2

27.1

28.6

29.4

30.3

30.9

30.8

32.1

31.2

34.1

33.7

32.8

33.2

31.4

33.7

35.3


27.7

28.2

28.6

29.0

29.5

29.9

30.4

30.8

31.3

31.8

32.3

32.8

33.4

33.9

34.5

35.0


1985-86 projected


27.0

27.8

29.2

30.4

31.1

32.2

31.4

32.4

31.8

35.2

35.6

34.3

34.6

33.6

35.8

36.7
At 69-71
per cap
Hi h Low cons.
5 .3 55.1 53.0


41.4








DATA FOR FIGURE 9

LATIN AMERICA FOOD DEFICIT COUNTRIES
CEREAL PRODUCTION, TREND, AND CONSUMPTION
1960-75 AND PROJECTED 1985

(million tons)


Cereal Prod. Cereal Prod. Cereal
Year Actual Trend Est. Cons. Actual


1960-61 15.6 16.5 18.1

61-62 15.9 17.1 18.9

62-63 16.6 17.6 19.8

63-64 17.8 18.2 20.7

64-65 19.7 18.8 22.5

65-66 21.3 19.4 24.2

66-67 21.6 19.8 24.8

67-68 22.0 20.7 26.0

68-69 23.1 21.4 27.0

69-70 21.8 22.1 27.2

70-71 25.2 22.9 29.6

71-72 24.7 23.7 31.4

72-73 22.1 24.5 31.4

73-74 24.4 25.3 33.0

74-75 23.7 26.2 34.3

75-76 26.5 27.1 35.9
At 69-71
per cap
High Low cons.
1985-86 projected 38.2 54.3 51.4 5.8


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