Title Page
 Table of Contents
 Food security: The conceptual...
 Nutrition requirements and food...
 Food security: The economic and...
 Impact of policy on food secur...
 Domestic policy interventions to...
 International policy interventions...
 Annex 1: A conceptual framework...
 Annex 2: Theoretical concepts for...
 Training materials for agricultural...

Group Title: Implications of economic policy for food security
Title: Implications of economic policy for food security : a training manual
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00087044/00001
 Material Information
Title: Implications of economic policy for food security : a training manual
Physical Description: Book
Language: English
Creator: Thomson, Anne
Metz, Manfred
Publisher: Food and Agriculture Organization of the United Nations
Place of Publication: Rome
Publication Date: 1997
General Note: FAO training materials for agricultural planning, number 40
 Record Information
Bibliographic ID: UF00087044
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Table of Contents
    Title Page
        Title Page
    Table of Contents
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    Food security: The conceptual framework
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    Nutrition requirements and food consumption
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    Food security: The economic and instituional framework
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    Impact of policy on food security
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    Domestic policy interventions to improve food security
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    International policy interventions for improving food security
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    Annex 1: A conceptual framework for the analysis of policy impacts on the food economy and on food security
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    Annex 2: Theoretical concepts for the analysis of economic policies
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    Training materials for agricultural planning
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Full Text


of economic policy

for food security

A training manual

Anne Thomson
Manfred Metz

Prepared for the
Agricultural Policy Support Service
Policy Assistance Division, FAO
and the Deutsche Gesellschaft fOrTechnische
Zusammenarbeit (GTZ)

58. OQq



Rome, 1997

Table of Contents

Introduction to the Manual vii

Chapter 1 Food Security: The Conceptual Framework I

1. Concepts of Food Security 4
1.1. Food security at different levels of analysis 4
1.2. Chronic and transitory food insecurity 6
1.3. Entitlements 8
1.4. Vulnerable groups 8
1.5. Intra-household food distribution 12

2. Recent Trends in the World Food Economy 13

3. Food Security and Major Development Objectives 17
3.1. Food security, poverty and growth 17
3.2. Food security, population and environment 19

4. The Role of Increasing Food Production in Achieving 20
Food Security
4.1. Agriculture as an engine for poverty reduction 20
4.2. Food security and food self-sufficiency as separate objectives? 21
4.2.1. Food self-sufficiency as a national goal 21
4.2.2. Subsistence farming versus market integration the 24
household level arguments

Activities related to Chapter 1 27

Chapter 2 Nutrition Requirements and Food Consumption 29

1. Nutritional Requirements and Reference Nutrient Intakes 32
1.1. Introduction 32
1.2. Definitions 34
1.3. Factors affecting individual nutritional requirements 36
1.3.1. Growth 36
1.3.2. Pregnancy 37
1.3.3. Lactation 37
1.3.4. Physical activity 37
1.3.5. Body weight 37
1.3.6. Infection and rehabilitation 37

1.4. Reference Nutrient Intakes (RNI) 37
1.4.1. Reference nutrient intakes for energy 38
1.4.2. RNIs for protein 41
1.4.3. Other nutrient RNIs 42

2. Food Consumption 42
2.1. Methods of measuring food consumption 42
2.1.1. Food balance sheet (FBS) 42
2.1.2. Household food consumption surveys 44
2.1.3. Individual dietary surveys 47
2.2. Patterns of food consumption 47

3. Direct Measures of Nutritional Status 51
3.1. Anthropometric measures 51
3.2. Interpretation of nutritional indicators in food policy analysis 54

4. The Aggregate Household Food Security Index 55

5. Assessing the Nutrition Situation at Different Levels of Aggregation 56

Activities related to Chapter 2 5')

Chapter 3 Food Security: the Economic and Institutional
Framework 63

1. The Role of the Food Chain 66
1.1. Overview of agricultural commodity chains 66
1.2. Production and food entitlement 69
1.3. The marketing function 71
1.4. Household food entitlement and the food chain 73
1.5. The dynamics of the food chain 76
1.6. Seasonal variations in the operation of the food chain 76

2. The Open Economy and the Role of Food Imports and Exports 78
2.1. Historical trends 78
2.2. The competitiveness of international markets 81
2.3. International specialisation and food insecurity 82

3. The Political and Institutional Environment of the Food System 83
3.1. The institutional context 83
3.2. The role of the state 86
3.3. Food sector organizations 87

3.3.1. The private commercial sector 87
3.3.2. Co-operatives 88
3.3.3. Parastatals 88
3.3.4. Local and community organizations 89
3.3.5. Non-governmental organizations (NGOs) 89

4. The Food System under Stress 91
4.1. Chronic food insecurity 91
4.2. Seasonal and cyclical food insecurity 92
4.3. Household coping strategies under stress 95

5. Monitoring Food Security 98
5.1. The need for a food security monitoring system 98
5.2. National and global monitoring systems 99
5.3. Local and household food security monitoring 100

Activities related to Chapter 3 103

Chapter 4 Impact of Policy on Food Security 105

1. The Macroeconomy and Food Security 108
1.1. Introduction 108
1.2. Macroeconomic shocks, international economic 109
trends and food security
1.3. Macroeconomic parameters and food availability 113
1.4. Macroeconomic policy and access to food 114

2. The Impact of Macroeconomic Policy on Food Security: A Framework 115
for Analysis

3. Impact of Exchange Rate Policies 119
3.1. Introduction 119
3.2. Consequences of an overvalued exchange rate 120
3.3. Effects of a devaluation on the food economy 121
3.3.1. Main channels of impact on food supply and demand 121
3.3.2. Impact on food prices 122
3.3.3. Impact on food production and supply 124
3.3.4. Impact on factor and household income 127
3.3.5. Impact on food demand and household food 130
3.4. Impact on national and household food security 131
3.4.1. Effects on the aggregate national food situation 131
3.4.2. Impact on food security of vulnerable groups 133

4. Fiscal Policy 13,
4.1. Introduction 135
4.2. Reduction of public sector employment and wages 136
4.3. Reduction of public investments 138
4.4. Reduction of food subsidies 139
4.5. Reduction of other subsidies 142
4.6. Increase in prices/cutting of services provided by public 142
4.7. Summary of the effects on the food economy and food security 143

5. Monetary Policies 145
5.1. Main features of monetary policies under adjustment 145
5.2. Effects of tighter monetary policies 147
5.3. Impact on the food economy and food security 148

6. Trade Policy 150
6.1. Contents of trade policies 150
6.2. Effects of trade liberalisation on the food sector 151

7. Agricultural Market Reforms and Sectoral Adjustment 154
7.1. Objectives of agricultural sector, market and price policies 157
7.2. Price policy instruments 158
7.3. Other agricultural sector policies 162
7.4. Impacts on food security 163

8. Further Elements of Structural Adjustment Programmes 164
8.1. Institutional reform 164
8.2. Other sector policies and linkages to food security 166

9. Assessing the Overall Impact of Adjustment Programmes on Food 167

Activities related to Chapter 4 173

Chapter 5 Domestic Policy Interventions to Improve Food
Security 181

1. Introduction: Embodying a Food Security Dimension in Macro and 184
Sector Policies

2. Production and Supply Based Approaches 187
2.1. Increasing food production and supplies 187
2.2. Stabilising food supplies 191

2.2.1. Price stabilisation 193
2.2.2. Stocking policies 195
2.3. Food imports 197

3. Improving Access to Food 199
3.1. Access to food on national and household levels 199
3.2. Targeted asset distribution and production support 202
3.3. Public works programmes and Food-for-Work schemes 203
3.4. Targeted food subsidies 207
3.5. Direct food transfers 212

4. The Impact Paths of Policies to Improve Food Security an Overview 213

Activities related to Chapter 5 217

Chapter 6 International Policy Interventions for Improving
Food Security 221

1. Introduction 224

2. Food Aid and Food Security 225
2.1. General features 225
2.2. Programme food aid 228
2.3. Relief food aid 230
2.4. Project food aid 231
2.5. The role of food aid interventions in alleviating food insecurity 231
2.5.1. Programme food aid to mitigate market supply 232
2.5.2. Relief and project food aid to mitigate demand 233
2.5.3. Food aid to stabilise supplies and prevent temporary 234
food shortages
2.5.4. Local purchases to compensate for demand deficits 235
2.6. Evaluating and improving the efficacy of food aid 238

3. International Development Co-operation and Food Security 240
3.1. Technical assistance 240
3.2. Financial assistance 242

4. International Trade and Food Security 244
4.1. Unbalanced international trade 244
4.2. Implications of the GATT Uruguay Round agreement 246

5. Summary of the Major Results of the World Food Summit 249

Appendix to Chapter 6 253

Activities related to Chapter 6 259

Annex 1 A Conceptual Framework for the Analysis of Policy 261
Impacts on the Food Economy and on Food Security

1. Introduction 263

2. Model for analysing the food economy structure of food deficits 263

3. Impact of supply based factors 270

4. Impact of demand based factors 274

5. Impact of the food marketing system 281

6. The combined impact on the food economy and on food security 282

Annex 2 Theoretical Concepts for the Analysis of Economic Policies 287

Annex 2A The Salter-Swan Model 289

Annex 2B The Exchange Rate-Price-Market Mechanism 297

Annex 2C The Process of Money Creation and Credit Expansion 303

Annex 2D Measures of Protection 305

References 307

Introduction to the Manual

Food security, assuring to all human beings the physical and economic access to the basic
foods they need, is a broad, cross-cutting issue which has implications for a number of
Different sectors in the economy. Food security is often associated with food self-sufficiency-)
and the need to grow more food. However, in reality it has much stronger links with issues of'
poverty, employment and income generation. For low income economies, where a large
percentage of the population live in rural areas and depend on agriculture for their income,
increasing food production may be an important element in increasing food security, but only
because it increases small farmer income. In this manual, we set out a framework for
assessing food security in an economy, and develop a model for evaluating the impact of
economic policy measures, and in particular the package of policy measures often referred to
as adjustment policy, on food security in a country.

This manual has been produced as part of FAO's overall commitment to providing training
materials in food and agricultural policy analysis. In particular, FAO sees the need to improve
the capabilities of agencies dealing in both food and agricultural policy and macroeconomic
policy in understanding and allowing for the cross relationships of macro and sectoral policies
and to assess their impact on the rural population.

This manual differs from other approaches to agricultural policy analysis, in so far as it does
not primarily address such issues as policy impact on the functioning of agricultural markets,
or the trade-off between different policy goals. Here, we are interested in how policy
measures, undertaken for macro-economic objectives, affect the availability and access to
food at the individual and household level. We also examine options for improving food
security in the short-term which are consistent with longer-term macro-economic stability.

The manual is being published shortly after the World Food Summit, held in Rome at FAO
headquarters, in November 1996. It is hoped that the World Food Summit will give renewed
impetus to tackling issues of food security and that this manual will prove a useful tool in
improving understanding of a complex, multi-sectoral issue.

The manual is not addressed directly to policy makers. The material contained within it is of a
fairly technical nature and is aimed rather at policy analysts, those who have to prepare policy
briefs and background papers to inform decision makers, particularly those working in
agencies, whether governmental or non-governmental, which deal with food issues. The
manual could also be useful in sensitising economists, in finance ministries or central banks,
dealing with macro-policy issues having implications on food security. To get most benefit
from the use of the manual, some prior knowledge of economics and policy analysis is

The manual falls into two main sections. The first, containing Chapters 1 through 3, sets out
the basic framework within which food security is addressed. Chapter I discusses the major
concepts used when analysing food security, examines recent trends in the world food
economy, links food security with other major policy objectives such as poverty alleviation
and environmental protection, and discusses the connection between food security and self-

sufficiency. Chapter 2 looks at the various ways in which food consumption and nutritional
status can be measured, to give an estimate of the extent of food insecurity. This is
specifically written for an audience which has not previously been exposed to nutritional data.
Chapter 3 uses the concept of the food chain to outline the connections between the food
system and food security. Seasonal patterns in food security and changes in the food system
in response to stress are also examined, as is the structure and role of a food security
monitoring system.

Chapters 4 through 6 deal explicitly with the impact of economic policy on food security. In
Chapter 4, a model is developed to analyse the impact of changes in macro-economic policy
of the food system and food security. A number of technical annexes contain the relevant
theoretical material. The chapter traces through the impact, firstly of a devaluation and then of
other elements in an adjustment programme, on the food security of vulnerable groups. In
Chapter 5, possible domestic policy interventions to improve food security are explored.
These include demand and supply based approaches, and targeted interventions. Chapter 6
looks at international policy interventions, particularly food aid, and their potential role in
improving food security. The outcome of the World Food Summit is presented.

Each chapter contains "activities" and exercises linked to the material contained in the text.
for use in workshops and training courses.

The manual contains more material than is likely to be used at any individual course or
seminar. The authors estimate that satisfactory presentation of the full contents of the text.
along with practical sessions for the exercises, would require a period of about four weeks.
However, the material could be incorporated in training courses on topics such as food policy
analysis or the impact of structural adjustment. A course organiser would have to decide
which of the topics contained in the manual were most appropriate for the purposes of the
course, and use the manual accordingly. Many of the topics can stand alone, along with their
respective activities and exercises. In all cases, participants in the training courses should be
encouraged to read through the manual in their own time, to gain a broader perspective on the
issues contained. Additional reading material is identified at the beginning of each chapter.

In April 1996, FAO held an expert consultation in Rome on the first draft of the manual. This
was attended by FAO staff members, particularly with an interest in training, and academic
specialists in the area. The recommendations of this expert consultation provided a very
useful input into the subsequent revision of the manual. This was then field-tested in Turkey.
in October 1996, at an FAO Near East Regional Training Seminar on Food and Agricultural
Policy Analysis. This provided the authors with a first-hand opportunity to identify any
problems, particularly with the structure of the various activities. As a result of this, further
modifications were made to the text. It was clear from the field test that the exercises were
most effective when they were carried out with a specific country in mind, preferably the
country from which the participants came. This gave participants the opportunity to
operationalise the various concepts in a concrete way, and facilitated their understanding.





Chapter I

Chapter 1: Food Security: the Conceptual Framework


By the end of this chapter, participants will:

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

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

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

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

1. Concepts of Food Security 1. Identification of Vulnerable Groups

2. Recent Trends in the World Food

3. Food Security and Major Development

4. The Role of Increasing Food 2. Food Crops vs. Cash Crops: Exercise
Production in Achieving Food


FAO, World Food Summit papers on relevant issues (please see References)
FAO, Committee on World Food Security, Assessment of the Current World Food Situation
and Recent Policy Developments, March 1994.
FAO, Food, Agriculture and Food Security: The Global Dimension, World Food Summit
paper, 1996.
IFPRI, Improving Food Security of the Poor, sections 1-4, 1992.
S.Maxwell & M.Smith, Household Food Security: A Conceptual Review, IDS, 1992.
S.Maxwell & A.Fernando, Cash Crops in Developing Countries: The Issues, the Facts,
the Policies, World Development, Vol.17, No. 11, 1989.

Chapter I

1 Concepts of Food Security

1.1 Food security at different levels of analysis

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

Figure 1.1 Different levels of food security

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

Food security at the national level is perhaps best described as a satisfactory balance between
food demand and food supply at reasonable prices. This may seem a rather vague definition,
but it is intended to indicate a situation where there have been no major upheavals in food

Supply Demand NATION REGION Supply Demand
Demnd x Needs and/or
Demand < Needs

Demand > Needs HOUSEHOLD Demand < Needs


Consumption Needs I I- Consumption < Needs
0 D D

(C '-h': L', I

markets in the recent past, where adequate food is available and where most of the
population have access to that food. An alternative definition would be that a country is food
secure when all the individuals in the country are food secure. However, this definition,
robust and clear though it may be, would exclude virtually all countries in the world. It is
useful to have a less extreme definition which allows us to distinguish between, say, the
United States which most people would feel was quite food secure and a country like Zaire,
where food security poses greater problems.

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

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

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

At the individual level, the definition of food security is much more straightforward. Aln
individual is food secure if his or her food consumption is always greater than need. as
defined by physiological requirement. Consumption is determined by the claim th1eC
individual has on household food resources. This may be affected by individual earnings and j
assets, or by the individual's position in the household. It is certainly unusual for an
individual's share of household food consumption to be determined solely by need.

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

Chapter I

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

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

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

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

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

1.2 Chronic and transitory food insecurity

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

Chapter 1

Box 1.1 Seasonal food insecurity in Burkina Faso

During the drought of 1984-85, a study was undertaken to examine the seasonal incidence and
determinants of food insecurity in two regions of Burkina Faso. One village was chosen to
represent the Sahel region, with low and variable levels of rainfall. The inhabitants are
sedentary agriculturalists, but animal husbandry is very important as a way to store wealth. The
other village is in the Sudano-Sahel. Rainfall is heavier and less variable than in the Sahel and
arable farming is the main occupation. Livestock is less important, partly because the area is
much more densely populated.

The researchers identified people as food insecure when they consumed less than 2,280 kcals
per day per adult equivalent (i.e. assigning weights for the elderly children etc. according to
their needs relative to an adult), which is 80% of the WHO assessment of average calorie
requirements for a moderately active adult. Households were ranked according to their wealth,
in terms of grain stocks and animals. The year was divided into four seasons, the harvest
season, cold season, hot season and rainy season. The rainy season is the most important season
for farming activity, when the crops are planted and weeded. The following table shows the
results of their research.

Table Percentage of food-insecure adult equivalents per season

Harvest 1984 Cold Hot Rainy Harvesi
1985 1985 1985 1985

Sahel village sample
Poor 34 54 34 57 21
Middle 0 0 27 0 0
Rich 0 0 18 18 0
Sudano-Sahel village sample
Poor 75 54 52 63 20
Middle 71 62 90 84 65
Rich 31 29 20 49 0

There was a clear seasonal pattern of food insecurity in the Sahel village. This was less so in
the Sudano-Sahel village, insofar as the poor harvest in 1984 had a very negative effect.
However, the improved harvest in 1985 re-established a seasonal element. Some households
suffered from chronic food insecurity, i.e. intake was below the cut-off level in all seasons.
These households were not always amongst the poorest, as measured by wealth, but did have
significantly smaller holdings of land and livestock. Livestock were particularly important as
insurance in the Sahel village.

As shown by this study, food insecurity in Burkina Faso has a definite seasonal pattern, but this
overlaps with chronic food insecurity and can be deepened by transitional shocks.

Source: T.Reardon & P.Madton., 1989

Chapter I

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

1.3 Entitlements

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

1. Trade-based entitlement, which describes what an individual can buy with the
commodities and cash they own.
2. Production-based entitlement, which describes the right to own what one produces with
one's own resources.
3. Own-labour entitlement, which describes the sale of one's own labour power, and the
resulting trade-based entitlements.
4. Inheritance and transfer entitlement, which refers to the right to own what is willingly
given by others as remittances, gifts or bequests, as well as transfers from the state such as
social security, pensions and food distribution.

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

1.4 Vulnerable groups

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

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

1. Geographic/regional administrative zone, urban, rural

2. Ecological by climatic conditions, accessibility

3. Economic occupation, level of income, formal or informal sector, size of landholding.
types of crop grown, migrant labourer, female-headed household

4. Demographic male, female, pregnant, lactating, pre-school children, school-aged
children, elderly.

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

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

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

unskilled landless
subsistence farmers (deficit)
low income farmers (food crop)
low income farmers (cash crop)
remote area dwellers

informal sector/self employed

female-headed households

Chapter I

the rule of law can cause chaos which tumbles many households, which were thought to be
food secure, into extreme vulnerability.

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

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

Chapter 1

Table 1.1 Sources of risk to household food security

Sources of Entitlement Types of Risk

Natural State Market Community Other

Productive Capital (land, Drought contamination (e.g. Land or other asset Changes in costs of Appropriation and loss of Loss of land as a result of
machinery, tools, of water supplies) redistribution/ maintenance access to common property conflict
animals, farm buildings, Land degradation confiscation resources
trees, wells etc.) Fire

Non-productive capital Pests Compulsory procurement Price shocks (e.g. falls in Breakdown of sharing Loss of assets as a result
jewelleryy, dwellings, Animal disease Villageisation value of jewellery or mechanisms (e.g. of war
granaries, some Wealth tax livestock) communal granaries) Theft
animals cash Rapid inflation

Human capital (labour Disease epidemics (e.g. Declining public health Unemployment Breakdown of labour Forced labour
power, education, AIDS) expendimtre and/or Falling real wages reciprocity Conscription
health) Morbidity introduction of user Mobility restrictions
Mortality charges Destruction of schools and
Disability Restrictions on labour clinics during war

Income (crops, Pests Cessation of extension Commodity price falls Marketing channels
livestock, non-farm and Drought and other services, subsidies on inputs Food price shocks disrupted by war
non-agricultural activity) climatic events or price support schemes Embargoes
Tax increases

Claims (loans, gifts, social Reduction in nutrition Rises in interest rates Loan recall Communities
contacts, social security) programmes (e.g. school Changes in borrowing Breakdown of disrupted/displaced by war
supplementary feeding) capacity reciprocity

Source: Maxwell & Frankenburger, 1992

- 11 -

Chapter I

1.5 Intra-household food distribution

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

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

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

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

It has been suggested that it is more valid to focus on the conjugally organised nuclear
family, (i.e. mother, father and children) as the unit of analysis in North Africa, South
Asia and the Middle East than in the Caribbean, Latin America and Sub-Saharan Africa,
where family patterns may be more complex. In all cases, however, it is difficult to target

- 12-

Chapter 1

specific members of the family, as attempts to implement targeted feeding programmes
have shown. Food given to one member of a household, what ever the internal structure of
that household, affects the distribution of the remaining household food. All studies of
supplementary feeding schemes, whether these involve on-site feeding or take home
rations, show there to have been some leakage to other household members.

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

2. Recent Trends in the World Food Economy

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

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

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

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Chapter I

Table 1.2 Per caput food

supplies for direct human consumption, historical and

1961-63 1969-71 1979-81 1990-92 2010

Developing countries I 960 2 130 2 320 2 520 2 730
Africa, sub-Sahara 2100 2 140 2 080 2 040 2 170
N. East/ N. Africa 2200 2 380 2 840 2 960 3 120
East Asia 1 750 2 050 2 360 2 670 3 040
South Asia 2 030 2 060 2 080 2 300 2 450
Latin America/ Caribbean 2360 2510 2 270 2 740 2950
Developed countries 3 020 3 180 3 270 3 330 3 470
Former CPEs 3 130 3290 3 350 3 160 3 380
Others 2980 3 130 3 230 3 410 3 510
World 2 300 2440 2580 2 710 2860

Source: FAO, Food Agriculture and Food Security,
Food Summit, 1995.

The Global Dimension. Paper for World

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

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

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Chapter 1

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

(million tons and kg/caput, with rice milled)
Developed countries All developing countries
World Ex-CPEs Other Total Total Africa N.East/ South East Asia Latin Am.
industrialized (sub-Sah.) N.Africa Asia & Pacific & Caribb.
Actual 1969-71 1117(303) 213(642) 422(568) 635(591) 482(185) 37(135) 46(163) 116(163) 219(186) 66(235)
Actual 1979-81 1444 (325) 227 (628) 566 (700) 793 (678) 651 (199) 41(114) 58 (246) 148 (165) 317 (223) 87(245)
Actual 1989-91 1727 (327) 266 (685) 598 (692) 864 (690) 863 (214) 55 (112) 77(246) 203 (182) 431 (257) 97(222)
Projected 2010 2334(327) 306(707) 710(730) 1016(723) 1318(230) 110(125) 119(230) 292(181) 638(301) 159(267)
Net Trade
Actual 1969-71 2.2 2.3 20.2 22.5 -20.3 -2.7 -6.5 -5.5 -8.8 3.2
Actual 1979-81 2.6 -40.3 109.7 69.4 -66.8 -8.1 -23.6 -1.8 -24.9 -8.4
Actual 1989-91 3.7 -37.2 129.7 92.5 -88.8 -8.5 -38.4 -3.2 -27.4 -11.3
Projected 2010 0 5.0 157.0 162.0 -162.0 -19.0 -72.0 -10.0 -35.0 -26.0

Source: FAO, Food, Agriculture and Food Security: The Global Dimension, Technical Paper for World Food Summit, 1996.


Chapter 1

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

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

Box 1.2 China and the future global food situation

There has been much debate recently on the future of the grain economy in China. Some observers
believe that grain imports will increase rapidly over the next few decades, placing considerable strain
on world grain imports. Chinese scientists maintain that their country will remain self-sufficient.
Whatever the outcome, this will have serious implications for world agricultural trade.

China was the largest producer of cereals in the world by the early 1990s. About 20% of that
production went to animal feedstuffs. China is experiencing rapid income growth and high levels of
urbanisation, both of which increase the market demand for cereals, either directly, or indirectly
through increasing demand for meat. Does the evidence indicate that production can keep up with
this growing demand? Technology, e.g. in hybrid rice, has been the main engine of agricultural
growth in China. Investment in the research system stagnated in the 1980s and only resumed real
growth in the 1990s. This has affected the rate of growth of production.

IFPRI researchers project that food demand will increasingly switch to meat and by 2020 feedgrain
will make up 40% of total grain utilisation. By 2020, grain imports are projected to stabilise at around
43 million tons, over 10% of production levels, but not enough to swamp world grain markets.
However, if domestic supply breaks down, because of declining investment in the agricultural sector.
then China's demand for grain imports could equal the total amount of grain currently trading on
world markets.

Source: IFPRI, 2020 Brief no. 20, 1995.

- 16-

Chapter 1

Section 3 Food Security and Major Development Objectives

3.1 Food security, poverty and growth

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

The role of government in providing a institutional framework to enable the efficient
operation of markets and encourage private-sector led growth is very important, but it is
not their only role. Governments have also an important role in terms of creating a7
framework of rights and obligations which holds society together and responds to the needs
of its citizens.

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

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

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


Chapter I

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

Box 1.3 The State and Food Security in History

The state has a long history of public action to protect its subjects from starvation and
extreme want. This has not simply been for reasons of benevolence. One of the bases on
which the state has claimed the right to power has been its ability to enhance food
security for its citizens. This function has often been central to the notion of state
legitimacy, and certainly one of the primary public expectations of the state.

Several thousand years ago in Egypt, in the time of the pharaohs, the state undertook a
form of buffer stock storage, whereby grain was stored in good years and sold at
subsidized prices to the needy in years of scarcity. Grain and bread rations were
distributed to the poor in Rome and ancient Greece when war or bad harvests created
scarcity, or when there was fear of public unrest. In China, during the Manchu dynasty,
emergency relief in the form of cash or food, low price grain sales and food loans were
all employed as measures to enhance food security at times of crisis.

Public employment schemes have also been used by various governments to enhance
food security. They were introduced by Indian rulers as early as the fourth century B.C.
Relief during the potato famines of the 1840s, in both Ireland and the Highlands of
Scotland, was in the form of what would now be called food-for-work projects, where
able-bodied men participated in public works programmes for food rations. Outdoor
relief for the poor (as opposed to being admitted to workhouses) was given in return for
the provision of labour in public works. These can be seen as precursors to modern
social security systems.

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

Chapter I

3.2 Food security, population and environment

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

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

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

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

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

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

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


Chapter 1

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

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

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

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

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

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

4.1 Agriculture as an engine for poverty reduction

In a study for the World Food Summit, FAO shows that, of 93 developing countries.
classified by share of population living in rural areas, and per caput food supply (using 1990
data), no country with over 75% of its population in rural areas had a per caput food supply
greater than 22 500calories erday. All countries with over 3,000 calories per day per caput
food supply ad less t an 60% of its population in rural areas. There was a strong negative
correlation between the two variables.

Chapter 1

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

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

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

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

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

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

4.2.1 Food self-sufficiency as a national goal

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

-21 -

Chapter I

the self-sufficiency ratio (SSR), the share of domestic production in total domestic use.
excluding stock changes.

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

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

food self-sufficiency looks only at national production as the sole source of supply, while
food security takes into account commercial imports and food aid as possible sources of
commodity supply.

food self-sufficiency refers only to domestically-produced food availability at the
national level, food security brings in elements of stability of supply and access to food
by the population;

In other words, food self-sufficiency is linked to an overall perspective on development
which emphasises the need for self-reliance, an auto-centric approach, whereas food security
is consistent with a view of development which incorporates international specialisation and
comparative advantage.

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

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

- 22-

Chapter I

Box 1.4 Food Self-sufficiency versus Export Production

The debate on the choice of subsistence production versus export production as a means of improving a
country's food security is illustrated for the case of Egypt.

Given the production techniques in use in Egypt, the country is overpopulated, with less than 3 million
hectares of land for 40 million people. The area under agriculture cannot be extended, in fact some of the
existing land under cultivation is already threatened by increasing salinity and the demand for land for non-
agricultural uses is rising.
Under these circumstances, should the government try to increase the rate of food self-sufficiency when
population growth is increasing food needs by replacing export crops by cereal production?

According to the author, the output of a hectare of exported cotton allows for the import of a greater
amount of cereals than the amount which would be produced if the hectare were devoted to cereal
production. Food availability would actually be decreased by shifting land into food production.

Source: Scobie, 1981

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

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

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

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

- 23-

Chapter /

In fact, to put the argument in terms of export crops versus food crops is rather misleading.

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

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

4.2.2 Subsistence farming versus market integration the household level arguments

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

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

Desai, quoted in S. Devereux, 1993.

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


Chapter 1

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

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

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

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

Chapter 1

Box 1.5 The Impact of Commercialization of Agriculture on Food Security in Kenya

A study was undertaken in Kenya in the mid-1980s, at the request of the Kenyan government,
to look at the impact of a new sugar factory in South Nyanza, which was contracting farmers
from the surrounding area to grow and sell sugar to the factory. The study was to examine the
impact of the shift to sugarcane production on food production, income, food consumption
and child nutrition, both for the participating farmers and on the local community. In
particular, sugar farmers were compared to non-sugar farmers.

The year of the initial study coincided with a drought in Kenya. Nonetheless, the study found
that there was no significant difference in the amount of land devoted to food crops between
sugar and nonsugar farmers, and, in consequence, there was no difference in average calorie
intake (about 94% of energy needs) nor in the size of food stores maintained. Sugar farmers
cultivated more of their landholdings, partly because the main constraint on agricultural
production in that part of Kenya was labour and sugar farmers could buy in labour services for
land clearing, weeding, harvesting etc. from the sugar factory. Sugar farmers had higher
Incomes than nonsugar farmers, but child nutrition in these families had not improved, the
researchers suggest because the increase in income was not translated into an increase in
healthcare infrastructure and services, which are generally provided through the state.

As the initial year of the study was a drought year, it was repeated two years later. This
"showed the same pattern of increased income, but no improvement in child nutrition, though
increased income had led to an increase in household calorie intake. Certainly the food
security of participating households had not suffered. In addition, landless labourers were seen
to have benefited significantly, because the higher profitability of sugar production had led to
an increased demand for the labour services of the landless.

Source: E.Kennedy, 1989.

Increases in cash cropping need not affect women's income adversely, but where it does,
perhaps because women have less land to cultivate, or they are required to put some of their

FWhere food crop production is reduced, there may also be a negative effect. Income in kind,
i.e. subsistence food production is more likely to be used for family consumption than cash

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

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


Activities Chapter 1

Activities related to Chapter 1


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

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

Activity 1-1
Identification of Vulnerable Groups

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


Activities Chapter 1

Activity 1-2
Food Crop versus Export Crop Production

The country of Azania is landlocked and therefore pays rather more for its imports
and receives less for its Sports than a country which is more closely linked into the
international trade system. Many of its farmers cultivate land which is suitable for
either maize or tobacco production. Maize can be grown using local varieties, which
have very low inputs requirements, or using hybrid seed which requires fertilizer. The
physical crop budgets are as follows:

Local Maize Hybrid Maize Tobacco
Yield 800 2500 1200
Seed input 25 25 4
Fertiliser 0 255 1000

N.B. Labour is not a constraint and all labour used is family labour.

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

Local Maize Hybrid Maize Tobacco
Output 175 160 600
Seed input 175 160 300
Fertiliser 400 400 400

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

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

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

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






Chapter 2:
Nutrition Requirements and Food Consumption


By the end of this chapter, participants will have:

1. an understanding of what is meant by nutritional requirements and how they are

2. an exposure to the various methods of measuring food consumption and nutritional

3. an understanding of how these various measures can give an overall picture of the food
situation in a country.


1. Nutritional Requirements and Reference 1. Calculation of Energy Requirements
Nutrient Intakes

2. Measuring Food Consumption 2. Typical Patterns of Food Consumption

3. Direct Measures of Nutritional Status

4. The Aggregate Household Food Security

5. Assessing the Food Situation at Different 3. Measuring Food Availability
Levels of Aggregation


FA).\ World Food Summit papers on relevant issues (please see References)
FA.\. Committee on Food Security, Assessment of the Current World Food Situation and
Recent Policy Developments, 1994.
\.l'ace\ & i .R.Payne. Agricultural Development and Nutrition, Part One, Limits to
Nieasurement, I lutchinson, 1985.
R.S. (iihlonI. Principles of Nutritional Assessment, Oxford University Press, 1990
('1)( \\ I 10. I pininlo version 6.02, a software package with a module, EpiNut, to calculate
,mnthrtopmetric indicators for children, 1996.

Chapter 2

1 Nutritional Requirements and Reference Nutrient Intakes

1.1 Introduction

The objective of food security as defined by FAO is to ensure that all people at all times have
both physical and economic access to the basic food they need. This can be expressed as three
specific goals: adequacy of food supplies; stability in food supplies; and security of access to
supplies. To assess the level of food security in a country, or region, or village or for specific
households and individuals, appropriate ways of measuring these complex concepts of
adequacy, stability and access have to be found. This chapter explains the most important
ways of measuring food consumption and nutritional status, as part of assessing food security.

Any system can be measured in two ways: measurements can be made of the state of any part
of the system; or measurements can be made of flows through the system. Alternatively,
indicators can be divided into indicators of process and indicators of outcome. Figure 1
contains a representation of the food system, showing important flow indicators and
indicators of the state of the system.

The flow variables shown are size and distribution of incomes, food supply as shown by food
balance sheets, household food consumption and individual food intake. Stock or situation
variables are national food stocks, household food stocks, household conditions for food
preparation and storage, clinical signs of malnutrition and anthropometric measurements.

These variables give us different kinds of information about the food system. Some variables
describe the macroeconomy, e.g. income distribution and food supply, others relate to the
household, food stocks and food consumption, and yet others are indicators of individual
status, food intake and anthropometric measurements. Some indicators give a more direct
picture of food security in a country, whereas others are more important for analysing factors
which modify the availability and use of food.

In this chapter, emphasis is on direct indicators of food consumption and nutritional status. In
particular, food balance sheets, household food consumption, individual intake and
anthropometric measurements will be examined from the technical perspective, and also in
terms of their interpretation. As Figure 2.1 shows, the relationship between these indicators is
complex and affected by non-food factors, as well as more direct elements of the food system.

-32 -

Chapter 2

Figure 2.1 Food Systems Indicators

Notes: F denotes variables which measure flows through the system; S denotes variables which reflect conditions within
the system.
Source: A.Pacey & P.Payne, Agricultural Development and Nutrition

-33 -

Chapter 2

1.2 Definitions

Nutrients constitute the active elements of foods which are utilised in the functioning of the
body. They comprise proteins, fats, carbohydrates, vitamins, minerals and trace elements, as
well as water. Foods contain some or all of these nutrients in variable proportions.

Foods are traditionally categorised in eight groups:

- cereals (millet, sorghum, maize, wheat...)
- roots and tubers (manioc, yams, sweet potato, Irish potato..)
- sugar and honey
- fats ( butter, oil..)
- fruits and vegetables
- meat, offal, eggs and fish
milk and milk products
- legumes (nuts, lentils, beans...)

The expression nutritional requirements refers to the quantity of energy and of nutrients,
expressed on a daily basis, necessary for a given category of individuals that will allow these
individuals, when in good health, to develop and lead a normal life.

Nutritional requirements have been established on the basis of physiological studies
(metabolic balances) and field epidemiological studies. Requirements vary according to age,
sex, body weight, level of activity and physiological status (for example, pregnancy and
lactation). They are expressed in the form of averages, taking into account individual

Reference nutrient intakes (RNIs) are used as a standard to assess the adequacy of intake of
various nutrients. They are evaluated by national or international committees of experts, on
the basis of clinical, epidemiological and experimental data, for physiological requirements
for energy and other nutrients (the most recent of these recommendations are contained in the
report FAO/WHO/UNU, 1985 Energy and Protein Requirements, 1986 Requirements of
Vitamin A, Iron, Folate and B 12).

RNIs are calculated in such a way as to ensure the best possible nutritional status (according
to the current state of knowledge) for the particular population at which the recommendations
are aimed. For all nutrients, with the exception of energy, they include a safety margin to take
account of individual variation, taking the form of the mean plus two standard deviations,
thus ensuring the levels will be adequate for 97.5% of the population. The RNI for energy is
fixed at the mean requirement, as excess energy intake can be an indication of malnutrition,
in the form of obesity.

Figure 2.2 shows the relationship between requirements and various reference values for all
nutrients with the exception of energy.

- 34 -

Chapter 2

Figure 2.2 Relationship between various reference values

Nutrient Requirements

Lower Reference
Nutrient Intake

Estimated Average

Nutrilent Intake

Source: Dietary Reference Values: A Guide, Department of Health, London 1991

The diagram shows the estimated average requirement, which is the mean of the range of
individual requirements. It is assumed that individual requirements are normally distributed
around that mean. The RNI is set at the mean plus two standard deviations, which means that
that amount of the nutrient is enough for almost every individual, even those with high needs.
Thus this minimises the chances of assessing an individual as having an adequate intake of
the nutrient when in fact they are, deficient. It also shows the lower reference nutrient
intake at the mean minus two standard deviations. This is a yardstick which is increasingly
being used as indicating an amount of the nutrient which would be enough only for a very
small amount of the population. Thus if people are normally eating less than the LNRI, they
will almost certainly be deficient in that nutrient. Because it is impossible to tell what an
individual's requirements are, with out undertaking expensive laboratory work, it is difficult
to say with any accuracy whether an individual has adequate intake of any specific nutrient if
their intake lies between the LRNI and the RNI. However, if we are looking at group data,
then the larger the group, the more likely that their intake should be at or above the EAR if
they are, in fact, adequately nourished.

-35 -

('Chapl'r 2

This gives some idea of the complexity of using measurements of nutrient intake to assess the
adequacy of diet, whether at the individual or population level. It is difficult to use intake data
to assess nutritional status.

Nutritional status is the term used to indicate the net outcome of individual food usage
(ingestion, absorption and utilisation), disease status and work demand. It is the outcome of/
previous nutrition, and indicates the presence or absence of deficiency signs, the failure of
growth or some other aspect of functional capacity. It is a rather broad, multi-faceted concept
which is difficult to measure directly. Nonetheless, certain anthropometric measurements are
generally considered reliable indicators of nutritional status, particularly for young children.
The most frequently used measurements are weight, height and arm circumference.
Measurements for an individual child are compared to reference values for the appropriate
age and gender and are used to assess the status of a population of children.

1.3 Factors affecting individual nutritional requirements

In order to survive, work and reproduce, the human being must find in his diet energy and the
necessary nutrients in adequate amounts. A balanced diet is that which provides, in the
correct proportions all the essential nutrients to the body.

Several factors influence nutritional requirements.

1.3.1 Growth

During the first five years of life, nutritional requirements, both of energy and other nutrients,
are relatively higher than for the adult. A child doubles its weight in the first six months of its
life. Table 2.1 shows child energy requirements in Kcal per Kg of body weight per day.

Table 2.1 Energy Needs of Children 0-10 years, kcal/kg bodyweight/day

Age Boys Girls
0+ 109 109
1+ 108 113
2+ 104 102
3+ 99 95
4+ 95 92
5+ 92 88
6+ 88 83
7+ 83 76
8+ 77 69
9+ 72 62

Source: FAO (1990), Human Energy Requirements

-36 -

Chapter 2

Because of their relatively high energy requirements, young children are much more
vulnerable to energy deficiencies than adults. At this period of their lives, malnutrition can
affect both physical, and eventually mental development.

1.3.2 Pregnancy

Pregnancy increases the energy requirements of the mother by about 15%. For most of the
other nutrients, requirements are also higher. If the mother is malnourished before or during
pregnancy, she may give birth to a low-birth weight baby, whose risk of premature death will
be greater.

1.3.3 Lactation

In order to produce enough milk without lowering her own body reserves, the lactating
woman must increase her energy intake by an additional 10% over and above the increase
recommended during pregnancy.

1.3.4 Physical activity

The more active an individual is, the higher his energy requirement. In rural areas,
requirements vary according to the agricultural seasons (land clearance, sowing, weeding and
harvest). In general, individuals are normally classified as engaging in light, moderate or
heavy physical activity, according to lifestyle.

1.3.5 Body weight

Along with physical activity, body weight constitutes the major item of expenditure of an
adult. In practice, body weight determines the basal metabolic rate (BMR), that is the
minimum quantity of energy necessary to support the body at rest. A method for calculating
BMR will be discussed in section 1.4.

1.3.6 Infection and Rehabilitation

Infections can increase the loss of nitrogen and of certain vitamins and minerals from the
body, and energy expenditure. This means that requirements for energy, protein and other
nutrients will be increased during infection and recovery. Appetite is often reduced during
infections. Repeated episodes of diarrhoea can lead to dehydration and severe malnutrition in
an already vulnerable child. In Africa, measles can often be a precursor of severe protein-
energy malnutrition in children.

1.4 Reference Nutrient Intakes (RNI)

As discussed above, RNIs are used to assess the adequacy of diet for both individuals, but
more importantly as far as food security is concerned, the adequacy of the supply of nutrients,
in particular energy and protein, available to the population of a country, and to which they
have access.

-37 -

Chapter 2

1.4.1 Reference Nutrient Intakes for energy

RNIs for energy reflect the average requirement for the relevant population group, to avoid
recommending energy intakes which could lead to obesity. RNIs are given by gender and by
age group, which can then be aggregated, according to the proportions of the different
categories present in the population, to give national figures.

Energy intake can be measured in calories (Kcals.) or joules (Kjs.). I Kcal. is equivalent to
4.2 Kjs. In this chapter kilocalories will be used as the unit of measurement.

The energy content of food depends on its composition. One gramme of carbohydrate
contains 4 kcal, as does one gram of protein, whereas one gram of fat contains 9 Kcal. Energy
is used by the human body for the following purposes:

To maintain body functions, breathing, circulation, temperature maintenance, while
the body is at rest. The rate at which the body uses energy while it is at complete rest
is defined as the Basal Metabolic Rate (BMR). BMR varies according to body

To sustain the chosen level of physical activity (PAL). In general, adjustment for the
PAL will vary according to gender and as to whether lifestyle involves light,
moderate or high levels of activity. In most developed countries, a PAL of 1.55 is
applicable to most people, i.e. 1.55 times the BMR. This represents a sedentary
lifestyle with desirable activity. A high level of physical activity at work and leisure
would be represented by a PAL of 1.8 for women and 2.1 for men.

To cover the energy costs of metabolising foods after meals. This is usually included
in calculations of the BMR.

A generally accepted method of calculating the estimated average requirement for energy
(EAR) was proposed by FAO in 1986, based on the recommendations of a group of experts.
This takes into account the basal metabolic rate of the individual, adjusted for body weight
and the physical level of activity as follows:


To calculate the EAR or RNI (which are the same for energy intake) for a group of the
population the analyst must know the average weight of the population under consideration,
by age group. Based on this, the appropriate BMRs can be calculated, using the formulae
(according to Schofield's equation) given in Table 2.2.

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Chapter 2

Table 2.2 Basal Metabolic Rate (BMR) for adolescents and adults (Kcal/day)

Age Range (yrs) Males Females
10-17+ 17.5W* + 651 12.2W + 746
18-29+ 15.3W + 679 14.7W + 496
30-59+ 11.6W + 879 8.7W + 829
>60 13.5W + 487 10.5W + 596
W is the average weight in Kg.

After the relevant BMRs have been calculated, then appropriate figures for the PAL should be
applied to the BMRs. This will vary according to the normal levels of physical activity
undertaken in the society concerned. Table 2.3 shows this as estimated by FAO for Africa, on
the assumption that 20% of the population is urbanised.

Table 2.3 Appropriate Physical Activity Levels for Africa

Age Range (years) Males Females
0-9+ No PAL, energy calculated according to body weight (see
Table 2.1)
10 + 1.76 1.65
11 + 1.72 1.62
12 + 1.69 1.60
13 + 1.67 1.58
14 + 1.65 1.57
15 + 1.62 1.54
16 + 1.60 1.52
17 + 1.60 1.52
18-59+ 1.82 1.67
> 60 1.51 1.56

These figures can be aggregated, and the needs of pregnant and lactating women taken into
account as shown in Table 2.4. Population figures by age group are filled in to column B,
estimates of average body weight by age group into column C, then the formulae given in
Table 2.2 can be used to calculate column D. Columns G and H can then be calculated, and
the average individual energy allowance can be derived from dividing the sum of column H

Chapter 2

Table 2.4 Calculation of total energy requirements for a Country

Population Average BMR based on PAL Energy Av. Indivuaml Total age group
thousandss) body wt weight allowance need total kcal/day energy meed a
(kg) kcal/kg (0-9+ yrs CIP) 10 .
(>10 yn DiE) (BIG)
0+ 109
1+ 108
2+ 104
3+ 99
4+ 95
5+ 92
6+ 88
7+ 83
8+ 77
9+ 72
10+ 1.76
11+ 1.72
12+ 1.69
13+ 1.67
14+ 1.65
Se 1.62
16+ 1.60
17+ 1.60
18-29+ 1.82
30-59+ 1.82
>60 1.51
0+ 109
1+ 113
2+ 102
3+ 95
4+ 92
5+ 88
6+ 83
7+ 76
8+ 69
9+ 62
10+ 1.65
11+ 1.62
12+ 1.60
13+ 1.58
14+ 1.57
15+ 1.54
16+ 1.52
17+ 1.52
18-29+ 1.67
30-59+ 1.67
>60 1.56
Extra energy allowance of pregfnat population
Population Total Total population energy allowances

Sum of Column H
Per caput allowances =
Sum of Column B

The ESN Division of FAO can provide software (DOS compatible) which allows automatic
calculation and/or adaptation of the spreadsheet shown in Table 2.4.

-40 -

A ,

Chapter 2

by the sum of column B. This figure can then be used to make comparisons at a national
level, for example in a food balance sheet, as will be discussed in section 2.1. Care has to be
take4 not to use these kinds of figures inappropriately by, for example, comparing them to j
measures taken at the population level, without taking into consideration the inequality in the
distribution of food at the inter and intra- household level.

1.4.2 RNIs for protein

Food proteins provide amino acids for the synthesis of body proteins and nitrogen for the
synthesis of many other tissue constituents. The body is in a dynamic state, with proteins being
broken down and released on a daily basis. The body needs to replace these proteins, even after
growth has stopped, and the body has reached its adult size,

Protein can be broken down into twenty amino acids, of which ten cannot be synthesised by the
human body but are necessary for growth and maintenance. These are known as essential
amino acids and they have to be provided from the regular diet. The other ten can be
synthesised by the body and therefore do not need to be ingested in the diet.

RNIs for protein have been falling over time, as understanding of the use of protein in the body
has improved. Previously recommendations were based on patterns of protein intake in healthy
populations, but now they are mainly based on nitrogen balance studies, which look at the
turnover of nitrogen, resulting-from the breakdown of protein in the body. Thus the RNI is now
based on measures of need.

The protein RNI has been set for all adults aged 19 years and over at 0.75g/kg/day. In other
words, it is set in relationship to body weight. This assumes that the protein is of high quality,
i.e. that the essential amino acid composition in the food protein is close to the human body's
need, This will be the case in a mixed diet, composed of a mixture of animal and vegetable
protein, particularly containing a reasonable proportion of milk, eggs, meat gnd fish, When a
ligh proportion of protein ingested comes from a few vegetable sources, such as sorghum,
millet or legumes, then a higher intake will be necessary to ensure an adequate intake of all the
essential amino acids. It has been suggested that for the typical African diet that the RNI should
be closer to I g/kg/day.

RNIs for children and pregnant and lactating women are higher than the standard adult figure,
to allow for growth in children, the growth of foetal and maternal tissue in pregnant women
and breast milk production in lactating women. It is recommended that pregnant women add an
additional 6g/day to the RNI for protein and that lactating women add 1 I/4day,

The intake of protein recommended will only be effective in preventing signs of protein
deficiency if the needs for energy are met. If energy needs are not met, dietary protein will be
used ps a source pf energy, rather than going towards tissue growth and repair, Thus protein
qdeqvacy should be assessed in conjunction with energy adequacy. A child cpuld be living off
a diet which was primarily of meat and milk, but could show signs of protein deficiency
because of a low level of overall energy intake.

-41 -

Chapter 2.

1.4.3 Other nutrient RNIs

Recommended nutrient intakes have also been developed for other essential nutrients such as
the major vitamins, A, the five B vitamins, C, D, E and K, plus the important dietary minerals.
These can be as important as protein and energy in ensuring a healthy and productive life for a
country's population. Deficiencies can cause blindness, anaemia and other debilitating
conditions and clearly have to be included in a broad definition of food security. However,'
many of the methods described in this chapter are not sufficiently detailed or precise to enable
a proper assessment of adequacy. Where a diet is adequate in energy, and is composed of a
reasonable variety of foods, the needs for these other nutrients will often be met. However,
nutrition surveys may show specific nutrient deficiencies, or health records may identify cause
for concern. The principles here are the same as for protein RNIs. A level of intake is identified
which should cover the needs of 97.5% of the population, without encouraging high levels of
intake which could, in some cases such as vitamin A, cause negative effects through excess

2. Food Consumption

Once the reference values for different nutrients have been identified at different levels of
aggregation, the next step is to measure actual levels of nutrient intake and assess their
adequacy. In this section various methods of measuring both the food available for human'
consumption, and more importantly the actual amounts of food consumed are discussed.

2.1 Methods of measuring food consumption

2.1.1 Food Balance Sheet (FBS)

Food balance sheets, which are collated in most countries now, show the quantities of food
commodities available for human consumption at the national level. By building up a picture ot
production, imports and exports, the FBS shows the average level of food supply in a country
over a given period of time. Table 2.5 shows a condensed FBS for Indonesia for 1976. It can be
seen that the necessary information to compile a FBS is as follows:

domestic production figures by commodity and by food group
changes in stocks over the period concerned (an addition to stocks reduces the amount
available for human consumption
imports and exports
amounts going to animal feed, seed, food and non-food manufacture and waste

Once these have been taken into account, the amount available for human consumption can be
calculated, both at an aggregate level, and at a per capital level. With the information from a
food nutrient content table, this can then be expressed in terms of nutrient value of the average
daily diet. In the example shown, values for calories and grams of protein are given. Grams of
fat, and quantities of other nutrients, such as vitamins, can also be estimated.

-42 -

Chapter 2

Table 2.5 Summary Food Balance Sheet, Indonesia, 1976 (thousands of tons)

Domestic use

Per capital consumption

Commodity Production Changes in Imports Exports Total Animal Seed Milling and Waste Total Kilograms per Kilo- Grams of
stocks domestic feed processing consumed year calories per protein per
supply day day

965 965
+22 2 675
10 23311
+184 1291 15845
163 1571
54 3 2623


52 66

239 413 12017

Rough nee
Milled rice
Rice bran
Shelled corn
Fresh corn
Starchy foods
Sweet potatoes
Sago Flour
Pulses outs,
Fats and oils

317 15


675 5.05 48 1.57

5528 116.19 1165 20.37
731 5.47 41 1.99
2452 18.34 175 4.51
299 2.24 22 0.56
1451 29.06

238 2143
422 1202 10153

8690 1431

1453 10.87
4815 36.03

42 0.40
204 1.46
9 0.03
7 0.03
262 1.92
105 0.03
203 7.06

39 0.48
10 0.66
19 1.22
4 0.26
5 0.27
15 2.76
118 0
2231 43.72
2186 39.21
45 4.51

Note: mid-year population was 133.65 million
Source: adapted from Timmer, 1983

+186 205 169 1453
178 2 14997

Chapter 2

This total can be compared with the estimates of requirements as discussed in section 1.4 to
assess overall adequacy of the food supply in the country. The FBS can also provide a useful
overview of the degree of dependency of the diet on any particular commodity or on foreign
trade. For example, in the case of Indonesia as shown, it can be calculated that under 10% of
the total availability in the country is imported. However, over 50% of calories come from
milled rice. Thus examining the health of the rice economy in this country will tell the
analyst a great deal about overall food security.

Care must be taken in the use of food balance sheets. The figures themselves can be quite
crude approximations. The information necessary about rates of wastage, processing
coefficients and nutrient content can only be estimates. It would be too costly and time
consuming to re-estimate these every year and in some countries these figures are best
described as guesstimates. They do not include any measure of domestic food waste, i.e. that
which occurs in the household. If FBSs are compiled each year, then they can give a
reasonable picture of trends in food availability.

FBSs are only as good as the data which are entered into them. Thus they will reflect
existing problems with agricultural production data and even population numbers. In
particular, subsistence production data are likely to be significantly under-represented, if
they are included at all. It is fair to say that the more developed and monetised an economy
is, the better the figures in the FBS (though this may be offset somewhat by complexity in
the food processing sector).

The FBS gives no information about food supply at the regional, local or household level, in
other words it gives no disaggregated information. It is perfectly possible for a country to
have an adequate supply of food as shown by the FBS, at the national level, and yet for there
to be regions or groups of households which have severe problems of food security. The
more unequal income or asset distribution is in a country the less useful is the FBS as a tool
for investigating food security problems. Other methods of assessing food consumption
levels must be used.

2.1.2 Household food consumption surveys

To get a better picture of the variety of food consumption levels and patterns, the best
approach may be to undertake food consumption surveys. These are usually carried out at the
household level. This allows an examination of food consumption patterns within
geographical regions, by income strata and by social class. This information allows a much
more precise formulation of food security problems and, as a result, of appropriate policy

The comprehensiveness of the information is dependent on how the survey is undertaken.
Surveys may be conducted in such a way as to allow comparisons between food
consumption patterns at different times of the year, to enable the identification of problems
of seasonal food insecurity or they may have a very narrow time frame. If there is prior
information to suggest that food security problems are concentrated in certain regions or
amongst certain social groups, then it may be decided for reasons of cost to concentrate on
those specific issues. For the most part, food consumption surveys measure consumption at

- 44 -

Chapter 2

the household, rather than individual level. Individual dietary surveys will be discussed in
the next section.

There are four main types of data collection procedure used for household consumption

* the inventory method involves measuring household stocks at the beginning and end of
the survey period, plus recording all the foods brought into the household during this
period whether purchases, gifts or from home production. The usual period of time
covered is between three and seven days.

* the recall procedure is used when the interviewer uses a list of major food items in a
structured questionnaire, to help the respondent recall the amounts and prices of all foods
used in the household, again usually over three to seven days.

* the food accounts method is mostly used in industrialized countries, where households do
not generally keep large stores of food. The homemaker keeps records of the amount of
foods purchased during the period of the survey. This is most likely to be satisfactory
where there is limited use of freezers and shopping occurs three or four times a week.

* weighed records of the foods consumed in the house each day may be appropriate for
small-scale surveys. It requires the investigator to visit the home on a daily basis, and is
recommended by FAO particularly in rural areas where food is simple, home production
is important and measures are not standardised.

All of these methods have advantages and disadvantages. The inventory method and the food
accounts method require a family where at least one member is literate. This may limit the
socio-economic range over which this method is viable. With recall methods, there is a
question as to how reliable the respondent's memory is for meals prepared more than two
days previously. Weighed records of foods consumed is certainly the preferred method in
terms of accuracy, and is the only method recommended where there have been no previous
measurement of food consumption. However, this method is by far the most costly, in terms
of manpower, training and organisation. It is the method which should be included in
nutrition surveys because of the accuracy which can be achieved.


Chapter 2

Box 2.1 Reliability of Methods of Food Consumption Measurement

A number of studies have shown that estimates of food consumption figures taken from expenditure surveys show
much greater variation with income level than estimates taken from 24-hour-recall surveys. A study of 496
households in Kenya undertook both food-expenditure and 24-hour-recall surveys and the results are shown in the
table below.

Family calorie availability and calorie intake per capital, by food group and expenditure quartile

Data Source & Food Expenditure Quartile Quartile 4
Group minus Quartile

All I 2 3 4
Calorie Intake'
Maize 1130 1098 1149 1140 1130 +32
Other staples 230 185 222 248 264 +79
Meat/Fish 145 112 120 161 187 +75
Vegetables 43 39 39 48 46 +7
Fruits 21 19 16 II 37 +18
Others 293 197 292 303 381 +184
Total 1862 1651 .1839 1912 2045 +394
Calorie Availability2
Maize 926 799 878 990 1037 +238
Other Staples 134 259 374 471 540 +281
Meat/Fish 138 90 123 148 192 +102
Vegetables 50 37 44 57 63 +26
Fruits 129 100 125 125 165 +65
Others 230 155 216 251 296 +141
Total 1884 1441 1759 2043 2293 +852

Source: Bouis, Haddad & Kennedy, "Does It Matter How We Survey Demand for Food? Food Policy, 1992.
Calories computed from 24-hour-recall survey.
Calories computed from food-expenditure survey.

There is a much greater increase in calorie availability than intake as between the top and bottom deciles, and most
of this difference arises from higher estimates of staple consumption in the top quartile and lower estimates of
maize consumption in the lowest quartile. The authors suggest that high income groups underestimate the number
of meals served to non-household members and therefore food expenditures overstate family food consumption.
Low income groups underestimate the number of meals eaten outside the house and therefore food expenditures
understate family food consumption.

The differences shown are great enough to be potentially misleading if used in isolation to estimate the impact of
income increases on low-income food consumption and nutrition. Though the food expenditure data would
probably give reasonable information on the way that market demand for food would change with changing
income, the 24-hour recall data would be more appropriate to examine the relationship between nutritional status
and income. In both cases, the figures should be used with caution.

Chapter 2

Information can also be gathered from household budget surveys. These are often undertaken
for reasons other than collecting information on food consumption, for example to update
cost of living figures. The emphasis is on income and expenditure figures, rather than on
consumption. However, if information is available on prices, preferably collected in the
survey itself, inferences can be made about quantities of food coming in to the household.
How good an approximation this is to overall household food consumption depends on the
importance of purchased food in the overall diet. Box 2.1 above illustrates the differences
that can arise when different survey methods are used.

2.1.3 Individual dietary surveys

Similar methods can be used for collecting food consumption data on an individual basis.
Interview methods based on 24-hour recall, or taking a dietary history can obtain a picture of
the food consumption patterns of individuals in specific groups, and usually have a high co-
operation rate, because they tend not to be a great burden for the participant. They are limited
by the accuracy of the recall and the skills of the interviewer. Recording current food intake
can be done by weighing methods and recording methods. These can be more accurate but
can only be carried out for a short period of time and requires a high level of co-operation
from the participants.

2.2 Patterns of food consumption

As the example given in Chapter 1.2, of changing food demand in China, shows, underlying
many of the changes in trading patterns seen recently in the world are changes in the demand
for food at the national, and household level. These patterns are often systematically linked
with economic variables such as income and may be common to most countries. Figure 2.3
below was prepared from a review of food consumption patterns, as shown by Food Balance
Sheets, for countries at different levels of GNP.

At low levels of income, almost 75% of calories come from starchy staple carbohydrates
such as maize, rice, wheat and tubers. As income rises, the diet becomes more complex.
Intake of fats increases, particularly from animal products, and the proportion of calories
coming from the starchy staple falls to 30%. The proportion of calories coming from
sugars increases, but the relative protein contribution remains relatively constant, though
there is a switch from vegetable to animal sources of protein. Total protein in the diet does
increase, as the total availability of calories increases with a rise in GNP. These figures
look at national changes in food availability, but within countries too there is evidence that
people consume a more varied diet as there income rises and as they become more

This is interesting in itself, and also gives a basis on which to judge the reliability of the
results of different types of food consumption survey. However, it is not a useful way of
predicting food consumption and expenditure behaviour. People buy and consume specific
foods which contain nutrients, not the nutrients as such. Thus to explain individual food
consumption behaviour, analysis must be in terms of commodities.

Chapter 2

Figure 1.2 Percentage Distribution of Calorie Source by Level of per Caput GNP

". i e"o B *p. U-' "'. L "

C4j- -- X

S. 10 20 30 40 50 60 70 0 90
100 90 60 70 60 60 40 30 20 I" -
Percentage ol tolal clones

Source: Perisse et al., The Effect of Income on the Structure of the Diet, Nutrition Newsletter, 1969.

There have been a number of attempts to categorise food behaviour as income rises.
Engel's Law (derived from studies undertaken on in Belgian mining communities by an
applied economist called Engel) states that as income rises, the proportion of income spent
on food falls (total food expenditure may rise but it decreases in relative importance).
Analysis done recently by Lipton suggests that there are some groups of the population for
whom this may not apply. The ultra-poor, as he refers to them, spend about 80% of their
income on food, and cannot spend any more than this, because they also need to buy fuel,
clothes and other basic needs. When their income rises, they will continue to spend a
similar proportion on food until they come close to satisfying their nutritional needs. He
suggests that if household expenditure data show that 80% of a family's income is
insufficient to provide 80% of their calorie requirements, then the family should be
classified as ultra-poor with a considerable food security problem.

Figure 2.3 showed how starchy staples as a whole declined in relative importance as
income increased. This is a generally observed pattern, often referred to as Bennett's Law.
Figure 2.4 shows how complex that process can be in any given country. Data for Peru
show calories from starchy staples increasing from about 600 calories at low income levels
to just over 1100 calories at high income levels. Consumption of maize and barley fell as
income rose, potato consumption rose and stabilised and the consumption of rice and white
bread increased steadily with income. This is typical of many countries with a number of
starchy staples commonly consumed. There will be evidence of a clear hierarchy in
preference amongst the different staples.


Chapter 2

Figure 2.4

Consumption of Starchy Staples by Income Group in Peru

5--. ... ....................

400 Potatoes

Cd -%
S 300 -White Bread
0 Maize /

200 "- "

Barley .' .

100 -

0 --I I I I--
2000 4000 6000 8000 10000 12000

Annual Per Capita Income (soles)

Source: Poleman, 1983.

These kinds of patterns can be quantified for use in demand forecasting. The income
elasticity of demand for a commodity is defined as follows:

6d = *Ai
i.e. the percentage change in demand for food, divided by the percentage change in income.

The demand for a commodity will also change as its price changes. The price elasticity of
demand for a commodity is given by dividing the percentage change in demand by the
percentage change in price.




Chapter 2

These parameters can be used to predict changes in the market demand for food commodities
over time. (For greater detail, see Annex 1)

Although there are many factors which can affect the demand for a commodity over time,
particularly at national level, such as changing tastes, urbanisation and changes in a country's
internal income distribution, there are three major factors which are included in most
estimations of future demand for a commodity. These are:

the rate of growth of the population (n)
the rate of growth of real per capital income (y)
the rate of change of real prices (p)

The rate of growth of demand for a given commodity (g) is then given by the following
g = n + (tCdY + PEdP)

In other words, the rate of growth of demand for a commodity can be decomposed into the
rate of growth of population plus the rate of growth per capital demand. If real prices are
stable, then the equation simplifies to:

g = n + tEdY

Thus, if a government planner wished to know what increase would be necessary in maize
production to meet demand in five years time, he would have to know the predicted rate of
growth of the population, say 3% per annum, the rate of growth of per capital income, say
2%, and the income elasticity of demand for maize, say 0.15. Then the rate of growth of
demand for maize in one year would be

g = 3 + (0.15x2) = 3.3%

Over five years the increase in demand, using the compound growth rate, would be 17.6%.
Of course it is unlikely that the price of maize would remain constant in real terms over five
years. This could vary according to changes in world prices, in price policy and in the prices
of other food commodities which were regarded as substitutes for maize. The more complex
model could be used to assess what an appropriate price policy would be, with regard to
concerns for food security.

The same model can be used to predict the impact of price and income changes on specific
groups of the population, rather than the level of national demand. Once the impact of
population growth and income changes has identified the overall change in demand, and any
likely resulting changes in price, this can be translated into the impact on food consumption
of groups who were perceived to be particularly vulnerable to changes in market prices.

- 50 -

Chapter 2

This section has examined recent trends in the world food economy, and ways in which food
consumption in particular shows systematic patterns and variation which can be used to
predict likely changes in demand. These economic forces do not work themselves out in a
vacuum. The next section looks at the policy objectives which may determine the social, /
institutional and regulatory environment within which food security has to be achieved.

3. Direct Measures of Nutritional Status

The measurements which have been discussed so far are measurements of intake and
availability. They are useful in trying to describe the economic and social factors which lead
to food insecurity. However, to identify the most vulnerable members of society
measurements of outcome have to be employed. The most common of these are direct
measures of physical size and well-being.

3.1 Anthropometric measures

Anthropometric indicators, which are usually based on estimates of the total mass of body
tissues, such as weight or arm circumference, are commonly accepted measures of the
nutritional well-being of an individual. Unlike other measurements which have been
discussed, these can only be measured at the individual level, not at household level. They
can however be aggregated to give information about a specific population.

In one sense, they are the ultimate outcome indicators of food system of a country, but as
was shown in Figure 1 they are affected by both food and non-food elements such as illness
and parasitic disease, and have to be interpreted with care. Their significance will be
discussed in the next section.

Anthropometric measurements are most commonly taken on young children. This is for a
number of reasons. They are often seen to be amongst the most vulnerable members of
society and therefore their nutritional status is a more sensitive indicator of well-being than
that of adults. Certainly very young children who have relatively large energy requirements
for growth, show the effects of low energy intakes more clearly than adults, who may adapt
to low intakes by reducing activity levels. Until recently, there has been more information to
help the interpretation of anthropometric data in children, in terms being able to associate
low measurements with an increased risk of morbidity and death. However, there are
indicators of adult nutrition which are quite sensitive to nutritional deprivation. The
incidence of low-birth weight babies is clearly linked to maternal malnutrition. The Body
Mass Index (BMI) is increasingly used as an indicator of adult nutrition in developing
countries as well as industrialized nations. (This is described in more detail later in this

The most commonly used anthropometric indicators in children are weight-for-age, height-
for-age, weight-for-height and mid-upper arm circumference. In all cases, measurements
are taken and compared to reference standards, the mean or median values of body
dimensions in a well fed and cared for population. As with nutrient intakes, there is a certain
distribution of weights in a well-fed population for genetic reasons, and cut-off points are
determined on the basis of this distribution. Thus if a child is less than 2 standard deviations

Chapter 2

(z-score) of the mean weight-for-height of children of the same age in a well-fed population,
the chances of this being the result of their genetic make-up is very slight indeed. The child
is almost certainly malnourished. Table 2.6 is an example of the kind of standard reference
table that would be used when assessing weight-for height. The child's weight would be
measured, and then the weight of the child assessed in relationship to this. Similar tables are
available for weight-for-age and height-for-age.

Table 2.6 Weight for Height for boys between 106 and 120 cms (in Kg)

Height in cms -3S.D -2S.D -IS.D Median

106.0 12.9 14.4 15.9 17.4
106.5 13.0 14.5 16.1 17.6
107.0 13.1 14.7 16.2 17.7
107.5 13.2 14.8 16.3 17.9
108.0 13.4 14.9 16.5 18.0
108.5 13.5 15.0 16.6 18.2

109.0 13.6 15.2 16.8 18.3
109.5 13.7 15.3 16.9 18.5
110.0 13.8 15.4 17.1 18.7
110.5 14.0 15.6 17.2 18.8
111.0 14.1 15.7 17.4 19.0
111.5 14.2 15.9 17.5 19.1
112.0 14.4 16.0 17.7 19.3

Source: NCHS/CDC/WHO Reference Population, from WHO, 1983.

Table 2.7 shows some of the characteristics of commonly used anthropometric indicators for
children, with their respective cut-off points, and the terms normally used to refer to the
different categories of malnutrition. They have different degrees of ease in use. The first two
require knowledge of the child's age, which may be difficult to get accurately in some
communities. However, weight-for-age is perhaps the most commonly used indicator, and
reflects present and past history of malnutrition. Height-for-age is generally interpreted as
reflecting the effects of chronic malnutrition, leading to growth retardation or stunting.
Weight-for-height does not require knowledge of the child's age and is sensitive to recent
episodes of malnutrition which have resulted in wasting. Thus a child who has suffered
severe episodes of malnutrition in the past, but is now well-fed and healthy might be
identified as malnourished by the first two indicators but not the third. Arm circumference
measurements also reflect current episodes of malnutrition. This can be one of the cheapest
methods of measuring children, though it does, like the other methods, require proper
training of the investigators.

Chapter 2

Table 2.7 Characteristics of Commonly Used Anthropometric Indicators

Basis of measurement Reference standard Grading of status Characteristics

Weight-for-age NCHS growth standards Normal +2 to -2SD Widely used and understood. Combines effects of
(median) Moderate <-2SD past and present episodes of disease/malnutrition
Severe <-3SD

Height-for-age NCHS growth standards Normal +2 to -2SD Integrates effects over whole of life up to age of
(median) Moderate <-2SD measurements. Insensitive to acute episodes.
Severe <-3SD

Weight-for-height NCHS growth standards Normal +2 to -2SD Indicates current or recent episodes, insensitive to
Moderate <-2SD small but normal proportioned individuals
(median) Severe <-3SD

Mid-upper arm Single figure of 16.5cm Normal >13.5cm Indicates current or recent episodes. Fast, cheap,
circumference for all children between 1 Moderate 12.5-13.5cm reliable (with careful training). Good predictor of
and 5 years Severe <12.5cm mortality risk. Needs only approximate ages.

Source: WHO, Measuring Change in Nutritional Status, Guidelines for assessing the nutritional impact of supplementary feeding programmes for vulnerable groups.Geneva, 1983.
WHO, Physical Status: the use and interpretation of anthropometry. WHO Technical Report Series No. 854. Geneva, 1996.

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Chapter 2

Body Mass Index (BMI) is becoming more accepted as the best anthropometric way of
identifying changes in the wellbeing of adults. This index is calculated by dividing weight
(W), measured in kilos, by height (H), squared, measured in metres:

BMI =-

Depending on the degree of undernutrition or obesity of the subject, the BMI can take values
between 15 and 40. The following classification has been proposed:

below 16 severe chronic malnutrition
16-17.5 chronic malnutrition with wasting
17.5-18.5 chronic malnutrition, underweight
18.5-25 normal
25-30 overweight
over 30 obese

If information on adult BMIs were to be taken as a matter of course, then it would be
possible to develop a composite index of household health which included all members of
the household, rather than categorising households according to child health alone.

The choice of anthropometric indicator depends on a number of factors, including cost and
ease of collection, but also the purpose for which they will be used. Anthropometric
indicators are often used for screening children in emergencies, to establish eligibility for
relief programmes. The indicator of choice here, arm circumference or weight for height,
will be different to that appropriate for assessment of long-term food security problems at a
national level.

3.2 Interpretation of nutritional indicators in food policy analysis

There are three major problems in the use of anthropometric indicators for food policy
analysts: to determine whether the problem indicated is actually a food security problem, as
opposed to, for example, a public health problem; to determine how significant the problem
indicated by nutritional information is; and to determine what an appropriate policy response
might be.

As has been mentioned before, a nutrition survey can indicate severe nutrition problems
which do not arise from inadequate availability or access to food. Rather the problem may be
one of chronic gastro-intestinal disease, resulting from inadequate sanitation, or a problem of
a disease such as malaria interacting with mild malnutrition to result in severe nutritional
problems. One way of pinning down the problem further is to examine a combination of
nutritional and food consumption data, particularly food expenditure rather than intake, to
identify whether a problem of access to food exists. Health indicators may also clarify the
likely causes of poor nutritional status. No one data source will give a clear picture of the
sources of the problem. A picture has to be built up using whatever information exists.

- 54-

Chapter 2

There is also the question of interpreting the nutritional statistics. How serious a situation is
it if, say, a survey determines that 5% of the nation's children suffer from third degree
malnutrition? There are two ways of interpreting the information, in relationship to figures
prevailing in other countries and in terms of the trend existing in one's own country. The
World Health Organisation suggested in the 1980s that 40-45% of children in developing
countries suffered from mild or 1st degree malnutrition, 25% from 2nd degree or moderate
malnutrition and 3% from severe or third degree malnutrition. However, these numbers are
heavily weighted by relatively high levels of malnutrition in the populous Asian countries.
Should a country like Costa Rica be concerned over the existence of 0.5% severe
malnutrition in 1975? In terms of other countries in Central America this is a low figure, and
it had fallen to this level from 1.5% a decade earlier. At this level, the issue is one of social
and political priorities, as well as the economic cost of tackling a problem of this magnitude.

The appropriate response will depend on the relative size and concentration of the nutrition
problem and whether it can be shown to be primarily a food security problem. If 40% of the
population appears to suffer from a nutrition problem which is primarily food related, then
the policy response has to be a broad one, probably affecting major macroeconomic
parameters such as price levels and the overall level of economic activity. A problem which
affects 5% of the population at a serious level may be approached from a tightly targeted
perspective. The extent and pattern of the problem, as shown by nutritional indicators, will
determine the nature of the policy response.

4. The Aggregate Household Food Security Index

In the last few years, the Committee on Food Security in FAO has been supporting efforts to
develop and index for food security that incorporates all three elements of FAO's concept of
food security, namely availability and stabilityof food supplies and access to food. The
Aggregate Household Food Security Index which has been developed combines an
indicator of per caput food availability for human consumption (Dietary energy supplies in
kilocalories) with information on the distribution of available food, and takes the following
AHFSI = 100-[H{G+(1-G)I1) + 0.5{ 1-H[G-(1-G)I']}]100

H is a head-count of the proportion of the total population undernourished;
G is a measure of the extent of the food gap of the average undernourished shortfall in
dietary energy supplies from national average requirements for dietary energy;
IP is a measure of inequality in the distribution of the individual food gaps of the
undernourished, based on the Gini coefficient;
0 is the coefficient of variation in dietary energy supplies, which gives the probability of
facing temporary food shortage.

The value of this index ranges from 100, which represents complete, risk free, food security
to 0 which would presumably represent total famine. Countries which have an AHFSI of less
than 65 are deemed to have a critical level of food security, between 65 and 75 is categorised
as low, between 75 and 85 is medium and over 85 is deemed to be a high food security level.

( iiple'r 2

These cut-off points are fairly arbitrary, but the index does give an overall measurement
which can be used to compare countries, and monitor the progress of an individual country
over time. Much, of course, depends on the accuracy of the data available and there iL;
considerable extrapolation from income statistics.

Table 2.8 shows the AHFSI for a selection of countries whose AHFSI was originally
medium or below and dropped during the period 1988-90 to 1991-93.

Table 2.8 AHFSI Values for Selected Countries
1988-1990 1991-1993
Guatemala 76.0 70.9 72.0
Congo 75.9 72.6 70.2
Cambodia 72.6 69.3 71.1
Tanzania 72.0 67.9 67.0
Haiti 67.3 26.5 28.6
Rwanda 66.3 62.4 57.0
Zambia 71.4 62.1 76.7
Afghanistan 37.6 31.2 31.4
Mozambique 41.3 34.5 34.5
Somalia 43.4 35.8 37.5

Source: FAO

There is not, as yet, a great deal of experience in the use of these indicators, and some of the
values shown in Table 2.8, for example for Haiti, would seem to indicate a considerable
variation in value. However, the AHFSI goes a long way to allowing a preliminary
identification of a country with considerable food security problems, which need a closer
analysis for policy assistance. The index is likely to prove particularly useful in assessing
requests for food and other emergency assistance.

5. Assessing the Nutrition Situation at Different Levels of Aggregation

This chapter has discussed a number of different indicators at different levels of aggregation.
They each can give useful information on different aspects of the food system and potential
food security problems, but the analyst has to be careful to interpret the results sensibly and
not to make unreasonable inferences from the data available.

Food Balance Sheet information gives a highly aggregated picture of food flows through
the system, culminating in an estimate of average calorie and protein availability at a
national level. This can be compared with estimates of average RNIs (reference nutrient
intakes) for the population to assess the adequacy of the food supply. However, although
RNIs give an estimate of the minimum food supply necessary if food were distributed

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Chapter 2

according to need, it does not give much information about the adequacy of the food supply
to meet needs under the existing income and asset distribution. In other words it does not
give information on actual access. /

Food Consumption Data taken from expenditure or budget data are a better measure of
potential access to food. However, they often are weak in their coverage of non-monetary
access to food, through social institutions and obligations or through subsistence production.
They may only cover some of the sources of food entitlement. The resulting figures have to
be compared to RNIs to assess adequacy. This may be a reasonable procedure if the food
consumption data are aggregated over the whole survey, or a significant subgroup of the
survey, but the more disaggregated the data, the more dubious a comparison with an RNI
figure based on average requirements. In other words, an individual household may consume
less food than average because it has more small children or elderly people, or the family is
genetically small in body weight, or it has lower requirements for other reasons. Equally a
household which appears to meet the average RNI for the country may be deficit because of
higher physical activity or the age composition of the household. Adjustments can be made
to take some of these factors into account, but potential error can still be high. If Lower RNIs
have been calculated (see section 1.4) then they can be used to identify with reasonable
certainty a minimum of families which are deficient in nutrient intake, but this will only
identify the worst off households. There will certainly be other deficient households which
will be above the minimum threshold but still heavily deficient.

Food Intake estimates, whether through recall or weighed intake, usually give a more
accurate estimate of actual food intake than food consumption data. However, they are
subject to the same problem of comparison with average standards or RNIs. Unless intake
figures are collected along with other socio-economic information, it can be difficult to
identify the sources of entitlement which determine the household's food intake. An
informed policy response has to be able to identify the underlying cause of any food security

Anthropometric Data give a clearer indication of problems of poor nutritional status. The
data are somewhat easier to interpret as to the existence of a problem, but do not indicate
whether nutrient or food deficiencies are the major cause. Unless the survey has been
carefully planned to assist policy formulation, there may be insufficient socio-economic data
collected along with the nutritional data to clarify the links with the food system.

Chapter 2

Box 2.2 Measuring Food Security in Mali
A study was undertaken in southern Mali, to examine a number of commonly used indicators of food security and
their relation to one another. The motive was to understand if supply indicators which might be easier to measure,
such as regional food production, are correlated with more direct measurements of household and individual food
Grain production and transactions data were collected for ninety households in the OHV (Operation Haute Vallee)
area of Mali. over the period 1985-1988. In addition, food consumption, expenditure and anthropometric data
were collected for 1988 and 1989. A household food security ranking was developed for the households, based on
a number of indicators: the number of meals eaten per day and the quality and variety of the meals. This was
correlated with a number of measures of food production and availability.
The correlations were very different between the north and south of the region. In the north, which has lower
rainfall, and is often seen as more food insecure, the household food security measure was positiyely related to the
size of market purchases. This was explained by the researchers in terms of the diversity of income sources in the
north. Households which had higher income bought more food. In the south, which had more favourable rainfall,
the main economic activity was grain farming. Here, market purchases were negatively correlated with food
security, an indication that domestic food production had been insufficient.
There was virtually no correlation between anthropometric measurements and household food security in either
the north or the south of the region. Growth stunting (low height-for-age) was much more prevalent in the south. it
is suggested because of greater incidence of malaria in that sub-region.
In conclusion, regional indicators of grain production are not good indicators for household food security, nor are
household figures for food production, in Mali. All these figures are measuring some element of the food security
picture but cannot be used in isolation to guide interventions to help the hungry.
J M.Staatz et al., Measuring Food Security in Africa: Conceptual, Empirical and Policy Issues, AJAE, 1990.
The task of food policy analyst is not an easy one when it comes to identifying relevant data
and interpreting it correctly to enable policy formation. Box 2.2 describes how one
researcher used multiple sources of food related data to clarify the food security problem in
southern Mali. His results are fairly typical of the complexity of food systems and the
difficulty in describing them with only one or two data sources.

Compiling a description of food security problems in a given country is rather like trying to
solve a jigsaw puzzle, with a number of the pieces missing, or following a map which has
become torn and illegible in places. The analyst has to use what data are available. If specific
policies are being contemplated, then there may be a need for very focused survey work to
elaborate on the appropriateness and likely impact of that policy. There will be a place for a
broad range of socio-economic data which have not been discussed in this chapter to identify
problems in availability, access and stability of food supplies for specific groups of the
population. Qualitative information can be useful as well as the quantitative sources
discussed above.

However, the analyst or decisionmaker should not become too focused on the problem of
inadequate data. Data collection can be extremely expensive, and a balance has to be struck
between spending scarce resources on collecting more information and spending those
resources on tackling problems. This is not an easy balance to strike, but it is central to
tackling food security problems successfully.





Activities Chapter 2

Activities related to Chapter 2


1. Activities 2-1, 2-2 and 2-3 proposed below should refer to a specific country case.
Depending on the available data, this could be the country where the course is held or
the country of origin of the participants.

Activity 2-1
Calculation of Energy Requirements

Participants will be asked to calculate the energy requirements for their own country using
Table 2.4. Where available and appropriate, the software program EPINUT can be used.

Activity 2-2
Typical Patterns of Food Consumption

Participants should make notes on what they regard as a typical day's food consumption for

an urban family
middle income
a rural agricultural worker's family
a rich landowner

What are the major staples consumed? How often and when do different family members eat?
What foods are people likely to increase their consumption of when their income rises? Are
these foods grown in the country or imported?

Activities ('ha/ler 2

Activity 2-3
Measuring Food Availability

Participants will be given a number of different data sets for the country being used in this
training course. These will include, as and when available:

Food Balance Sheets
recent calculations of the AHFSI
results of a regional anthropometric survey
results of a food consumption survey for the same region

Using this data, analyse the food security situation for the region and for the country.

If data are not available, the following data for Mideastia can be used.

Table 1

Consumption and Food Security Data for Mideastia, 1988-1990

Average Food Consumption. from Food Balance Sheet

Food Group 1990 1992
Kcal/Caput Kg/Caput Kcal/Caput Kg/Caput

Cereals 1440 160.4 1253 139.4
Starch roots 10 5.6 10 5.7
Sugar crops 16 20.4 22 27.1
Pulses 49 5.1 46 4.8
Oilcrops 5 0.5 5 0.6
Vegetable Oil 250 11.2 280 12.5
Vegetables 21 27.6 22 28.0
Fruits 42 31.5 39 30.4
Meat 61 12.9 64 13.7
Animal Fats 75 3.2 79 3.3
Eggs 6 1.6 6 1.6
Fish 3 1.9 4 2.4

Vegetable Products 2109 1982
Animal Products 323 334

Total 2432 2316

Average calorie
requirement 2261

AHFSI 1988 1989 1990 1991 1992 1993
(Aggregate Household
Security Index) 74.2 80.9 80.8 76.6 79.2 79.3

Activities Chapter 2

Table 2

Calorie consumption patterns by season in four districts of Mideastia


District A

District B

District C

District D

% of Households
Consuming < 1800Kcal
Per day










Activities ( /uper .2

Table 3
Sources of Calories for four districts in Mideastia

Sources of Kcalories
District Average All Grains, Wheat Rice
Intake of Including and
Kcal/day Flour Flour

Milk Meat, Fish Own
and production

District A 2792 63.0 59.0 3.1 6.4 2.1 58.2
District B 2461 66.1 63.2 2.8 5.9 2.0 5,1.3
District C 2257 70.0 9.5 60.3 9.1 1.8 50.0
District D 2189 68.5 51.4 10.4 5.0 3.1 33.1

Table 4
Nutritional Status of Pre-school children

District Wasted Stunted Low weight lor age
District A 9.9 47.8 38.1
District B 11.3 47.9 37.4
District C 9.5 48.6 48.0
District D 6.5 54.3 30.2

Table 5
Mean Body Mass Index (BMI) of adults 20 years old or more, by income group


District A

District B

District C

District D

Quintile Male Female Male Female Male Female Male Female

(lowest) 19.4
2 19.8
3 20.5
4 20.9
(highest) 21.1

19.8 18.2 18.4
20.0 18.6 19.8
20.5 20.1 20.7
21.5 20.6 21.0

21.4 21.0 21.3

19.7 20.7
20.0 21.5
20.4 22.8
20.8 22.5

19.0 20.1 21.4 23.5





Chapter 3

Chapter 3: Food Security: the Economic and Institutional


By the end of this chapter, participants will have:

1. an understanding of the role of the food chain, its impact on food availability and
accessibility, and hence food security and both household and national level;

2. examined the evolution of international food markets and their impact on national
and household food security;

3. an awareness of the importance of political and institutional factors in determining
the availability of food and of individual and household access to that food;

4. an ability to analyse the response of food systems to stress, whether economic,
political or agroclimatic in origin;

5. an understanding of the role of a food security monitoring system and the elements it
might contain.


1. The Role of the Food Chain 1. Description of Food Chain for Major Staples

2. The Open Economy and the Role of 2. Calculation of Dependency Ratios
Food Imports and Exports

3. The Political and Institutional 3. Measurement and Analysis of Inter-annual
Context of the Food System Food Production Variability

4. The Food System under Stress 4. Identification of Elements of Food Security
Monitoring System.
5. Monitoring Food Security


FAO, World Food Summit papers on relevant issues (please see References)
S. Yao et al., Comparative Advantage and Crop Diversification, FAO TCP Thailand
Training project, 1995.
A.Aroon et al., Commodity Chain Analysis: A Case of Crop Diversification in
Thailand, FAO Bangkok, 1995.
International Conference on Nutrition, Major Issues for Nutrition Strategies, Theme Paper
No. 7, Assessing, analysing and monitoring nutrition situations.
FAO, Committee on World Food Security, Approaches to Monitoring Access to Food and
Household Food Security, 1992.

Chapter 3

1 The Role of the Food Chain

1.1 Overview of agricultural commodity chains

As was discussed in Chapter 1, there are three aspects to food security at both national, and.
more particularly, household level. These are availability of food, access to food and
stability of food supply. In this chapter, these elements will be examined in detail, both as to
what determines them and what particular aspects are likely to make groups of the
population vulnerable to food insecurity.

Initially, this will be approached through examining the characteristics of the food chain in
most developing countries. The food chain is a term to describe the various transformations
a food commodity goes through from the point at which seed is planted by the farmer to the
last stage when it is acquired by the final consumer. This can be a very simple chain, where
grain is grown by the farmer, threshed and milled within the farm household and then
cooked and eaten by the family. It can also be very complicated, as when wheat is imported
from a major grain exporter such as the USA, milled into flour domestically, sold to a
commercial bakery company and then distributed through a supermarket chain. In all cases,
the nature of the food chain, the number of stages of processing and transportation through
which the commodity passes, the level of efficiency and technical sophistication and capital
intensity of the processing, and the degree of competition at different stages of the food
chain, all are important in determining the availability of the commodity, in physical terms
of amount and geographical distribution, and in economic terms of the price level.

Figure 1.1 shows the commodity chain for rice in Thailand. Here rice, which is the major
staple grown in Thailand, can be grown under different technical conditions by small or large
farmers. After harvesting, it is sold on to traders, who transport it to the mills. From the
mills, some part goes to the noodle industry, the rice bran goes to the animal feed industry
and the rest is sold either as white rice or broken rice. Then some is exported and the rest
remains for human consumption. The availability for human consumption is the outcome of
a number of different factors: the profitability of rice production as opposed to other crops,
which may not be food crops; the price realized on the export market as compared to on the
domestic market; any taxes and subsidies imposed by central and/or regional government;
and the ability of the food chain to produce a reasonable return on labour and capital
involved in the different stages of the process.

We all consume food in order to live. For this food we are dependent on a number of
different commodity chains of varying lengths, according to the complexity of our diet and
the extent to which we consume food which is locally grown or sourced from other regions
and countries. This determines food availability. For access to the food we need, we also
require income or resources which can be used to exchange for the food, in other words, we
need a food entitlement. For many households, their food entitlement results directly from
the food chain. Thus they are doubly dependent on the food chain, for both access and

Chapter .

Figure 3.1


- 67 -

Clurpler 3

In many developed countries, the number of people dependent on the food chain for their
livelihood has decreased very dramatically over the past decades. In poorer countries, the
size of the population who earn their living directly from the food chain can be very large.
Even in a country which is growing at a fast rate, such as Thailand, the growing, processing
and selling of food is one of the major areas of productive activity.

In 1990 Thailand had a population of 56 million, living in 13.7 million households. A very
high proportion of these households, if not all, would consume rice on a regular basis.
However, 173,000 of these households also produced rice commercially. Many of the other
1.9 million farms would produce some rice for own consumption. The owners and
employees of the 46,000 rice mills in the country, the traders and the retailers all add up to a
significant proportion of the population. This is only for one food crop, albeit the main one
in Thailand. If other grains, oil crops, fruits and vegetables are also included, then the
importance of the food chain as a whole can be seen for the food security and wellbeing of
the Thai population.

In this section, the links between the different elements of the food chain and household food
entitlements will be explored, how the nature of these links may change as economies
become more monetised and markets become a more important source of food and finally
how the importance of different elements in the commodity chain can vary from season to

In a formal sense, the different agents who make up the food chain, producers, transporters.
processors, wholesalers, retailers, consumers, etc., are linked by a series of physical and
financial flows. Farmers produce raw materials which then flow downstream to assemblers
etc., and eventually to consumers, either in the domestic market or in export markets.
Physical flows can be shown in a supply utilisation account. Table 3.1 shows how this
would look for the first few rows of the commodity chain shown in Figure 3.1.

Table 3.1 Supply Utilisation Account
Supply (t) Utilisation (t)
Small farmers Seed 168.0
Harvest 5598.4 Waste 168.0
Village traders 2015 0
Local traders 2127.4
Co-operative traders 1119.7
5598.4 5598.4
Large farmers Seed 424.9
Harvest 14163.9 Waste 424.9
Village traders 2832.8
Local traders 9489.8
Co-operative traders 991.5
14163.9 14163.9
Village traders Local traders 969 6
Small farmers 2015.0 Private millers 3830.1
Large farmers 2832.8 Waste 48.1
4847.8 4847.8
Local traders Private millers 12461.0
Small farmers 2127.4 Waste 125.9
Large farmers 9489.8
Local traders 969.6
12586.9 12586.9
Co-operative traders Co-operative millers 2090 0
Small farmers 1119.7 Waste 21.2
Large farmers 991.5
2111.2 2111.2

Chapter 3

This table could be extended to cover all stages in the commodity chain, and would account
for the movement of every single unit of rice in the system.

Corresponding financial flows take place upstream, from final consumer all the way through
to primary producer. These financial and physical flows determine the distribution of income
in the chain, and the overall wealth created by the activities of the chain, in terms of value.
added to the economy as a whole. At each stage, the following identity holds:

Revenues = Cost of purchased inputs + Value added

In turn, value added can be divided as follows:

Value added = Return to factors + Taxes/subsidies + Profits/losses

Thus value added shows the income or entitlement accruing to wage labour, owners of
capital and entrepreneurs, at different stages in the food chain, plus the net amount available
to government to fund its various programmes and policies.

Commodity chain analysis is a useful tool to show how entitlements arise out of the
operation of the food chain, and how changing prices, in particular changing world prices,
affect flows within the chain, and thus income and entitlements. It is one way of developing
a framework for analysing both availability of food and access to that food.

1.2 Production and food entitlements

' Domestic food production is the most important quantitative component in national food
security for almost all countries, with the exception of city states such as Singapore and
Hong Kong. Domestic food production, particularly of staple food crops in non-pastoral
societies, as well as comprising much of the food available in the country, also forms the
basis of food entitlement for much of the farming community, in terms of direct
consumption of production. The surplus is sold on through the commodity chain to provide
additional income for the farming community, which in turn pays for agricultural labour.
The marketed surplus becomes available for distribution to non-farming members of rural
communities and the urban population. As with other stages in the food chain, the food
production sector gives rise to a physical flow of food and receives financial flows ultimately
from consumers. What determines the size of these flows?

The physical level of food production is determined, at the national level, by factors such as
area planted to food crops, soil fertility and climate, technology available and use of inputs
such as high quality seed, fertilizer, labour and mechanical equipment. Some of these factors
are given, and outwith the control of individual or government, such as climate. Others are
to some extent under the control of individual farmers, but the farmer's decision is made in
response to the structure of price and non-price incentives he or she faces, which are, in turn,
determined by government policy decisions. For example, how much improved seed a
farmer plants will depend on the price of the seed, the availability of the seed, the price and
availability of any complementary inputs such as fertilizer and pesticides, and the expected
price in the market for the final commodity.

- 69 -

L hapler j

Financial profit, as determined by the financial flows moving upstream in the food chain,
can play an important part in the farmer's decision as to what commodities to plant, whether
to plant food crops or non-food export crops. It is not the only factor, however. Many
farmers are quite risk-averse. They perceive themselves to be operating in an uncertain
environment, in both physical and economic terms. Given the varying climatic conditions in
their country, some crops are more variable in yield and susceptible to drought or flooding
than others and will be less attractive. In economic terms, some crops may face fluctuating
prices on world markets, or may face a higher probability of government intervention in
domestic markets. When this is the case, farmers may retreat into producing primarily for
subsistence, thus reducing their dependence on the market, but also the flow of food
commodities onto the market.

The decision to plant a food commodity is not made in isolation, but in relation to the returns
to be made from planting other food or non-food crops. Government can influence this by
maintaining the price of food commodities relative to other crops. Attempts to boost food
production should not be based solely on raising the price of food crops, however. A proper
analysis has to be undertaken as to the knock-on effects of doing this, in terms of labour and
input availability. Box 3.1 shows how emphasis on price policy alone can backfire.

Box 3.1 Farm Households in Malaysia

In general, it is assumed that if the price of a commodity such as rice increases, while other
commodity prices stay unchanged, the output of that crop will rise, at least by a small amount.
However, farm households have to make decisions about how to allocate their resources among
different possible uses, only one of which is the production of the staple food crop. They can hire
labour in and out, which will affect the level of activity on the farm. Also labour can be used on non-
agricultural domestic activity. Finally, even if there is an increase in output of the staple crop. this
does not necessarily result in an increase in rice marketed and passed on through the commodity

A study in the Muda River Valley in Malaysia looked at both the household and the market response
on rice production and marketed surplus of rice of an increase in the market price of rice. When the
response of the average farm household was examined in isolation, then for a 10% increase in the
price of rice, output of rice increased by 6% and marketed rice increased by almost 7%. Farm
households reduced their own input into rice production by 6% but the demand for hired labour
increased by 16%. However, when the impact of this rice price increase was allowed to work through
the market as a whole, total rice output actually fell slightly. This was because the demand for hired
labour rose so much in response to the output price rise that rural wages went up by 13%, thus
significantly increasing the cost of production and reducing profitability of market production. On
farm consumption of rice rose by 3% but marketed rice fell by 1%.

Adapted from: Barnum and Squire, A Model of an Agricultural Household, World Bank, 1979.

The impact of prices is, nonetheless, crucial. A recent study in Thailand, using a technique
called the Policy Analysis Matrix (PAM), examined the relative profitability of rice and
soybean in a number of different regions of the country (Yao, 1995.). The Thai government
has been putting resources such as subsidized credit and increased extension into
encouraging diversification from rice into soybean. However, the PAM analysis showed that

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soybean would not give the farmer a profit in many regions, and that from the government's
point of view, there would be an efficiency loss from moving into soybean. Government
intervention to encourage or discourage food production has to be based on careful and
regionally specific analysis of the various costs and benefits, both to the farmer and to the
economy as a whole.

When analyzing the food system of a country, and how national and household food security
has developed over time, it is important to remember that food production is not just a
component of food availability, but that the process of food production provides the basis for
economic access to food, not just for farmers, but also for farm labour, who are dependent on
this process for their income. As the following sub-section examines, it is also the starting
point for the marketing chain which delivers food to rural and urban consumers.

1.3 The marketing function

Marketing systems have three broad functions: a logistical function; an informational
function and a distributional function. These are critical in determining how well the overall /
commodity chain operates, and in particular for food commodities, how effectively the
marketing system contributes towards maintaining food security.

The logistical function can, itself, be subdivided into three aspects: transformation over
space, transformation over time and processing. Transformation over space is another way
of saying that marketing systems transport food from point A where the food is in surplus,
and as a result the price of the food commodity is low, to point B where the food commodity
is scarce and the price relatively high. In the absence of inter-spatial arbitrage, surplus
production areas will experience both lower prices, and possibly greater price variation
between the pre-harvest and post-harvest periods than will be experienced in deficit areas.
State marketing institutions can also be responsible for transporting food from A to B. In
this case, very often the transportation is simply a result of planning decisions, rather than in
response to price movements. Private sector commodity transport is usually triggered off by
changes in price signals. Generally, this is the basis on which food moves from food surplus
rural areas to urban areas or food deficit rural areas. A difference between international food
prices and expected domestic prices is also the basis on which private sector importers make
the decision to import food from abroad. In surplus years, price differentials between
domestic and international prices may also encourage private sector export, which in turn
should lead to an increase in the economic return to farmers and earning of foreign currency
for the national economy.

Transformation over time, or storing a commodity on both an intra-annual and inter-annual
basis, is the second logistic function. In most countries, harvesting of a specific crop takes
place over a relatively short period, but the commodity is consumed throughout the year.
Farmers can store the crop on farm and release it slowly into the market. However, often
they need the money they get from the sale of the crop to pay off debts incurred in the
production process. They will sell the harvest to a trader, who in turn may sell it on to a
wholesaler who has storage facilities and can release the commodity gradually onto the
market. When farmers sell most of their harvest in the immediate post-harvest period, the
market price falls in response to the temporary surplus. A trader who has the capital to buy

Chapter 3

up stocks in the post-harvest period is recompensed for the use of his or her capital and
storage facilities by being able to sell the commodity at a profit when the market is tighter.
In the same way, traders can store from one year to the next. However, this has a much more
speculative element as it is difficult always to predict what will happen in the next year's
harvest. As a result, for food grains, inter-annual storage is often carried out primarily by
government. For certain food commodities, such as fruit and vegetables, it may be very
expensive to store for more than a few weeks, and these commodities are traded primarily on
a seasonal basis.

Processing is the third logistic function which a marketing system undertakes. This can
cover anything from the milling of grain to the canning of fruits and vegetables. Processing
can be a very major part of the value of the final product, as it is in many Western countries.
for example for pre-prepared meals, or it can be negligible, as with many fresh fruits.

Organizations involved in the logistics side of marketing can perform any or all of these
logistical functions. In addition, they can provide finance for trade and also finance upstream
production. The diversity of organisational form can be immense, even within a single
region in a country. As countries become more developed, the importance of the marketing
stages of the food chain increases. Processing moves outside the home and becomes larger
scale. In general terms, the higher a country's income, the more important processing is as
part of the value added of the food sector. It can also be an important employer. In Malaysia.
after two decades of high growth, food processing now employs over 15% of all industrial
workers. Similar patterns have developed in other South East Asian economies. Although the
percentage of the population deriving their food entitlements directly from agricultural
production may be declining over time, the numbers indirectly dependent on agricultural
production for employment will tend to increase.

As for all stages in the food chain, each organisation involved in processing has to generate
positive financial value added on a year to year basis, to pay the wages of those involved, to
give a normal return to any capital committed to the marketing function and to give profits to
the owner of the enterprise. The efficiency of the various enterprises, and the degree of
competition with respect to the various functions in the marketing process, and at the
producer and consumer level, will determine the number of enterprises involved in
processing, transport etc., and the distribution of income from their activities.

On the information side, markets are the channel for the price signals which harmonise
supply and demand. If they do not function properly then information may not reach the
appropriate agents. If traders do not know that prices in one region are rising because maize,
say, is scarce, then they will not transport maize to sell on the markets in that region. and
regional food security will be endangered. If farmers do not know that the price of maize is
rising nationally, because traders are managing to secure all the increase in consumer prices
for themselves, as increased profit, then they will not plant more grain to meet the rising
Demand. In some countries where state institutions regulate the market and undertake most
of the functions of the marketing system, these price changes may not be observed. The
marketing agency has then to develop some other type of information, such as increases in
the size of customer queues, or in unsold stocks of grain, to give them information about the
relative demand and supply of the commodity.

Chapter 3

Finally, markets and the prices that arise from their operation are the basis for the
distribution of the benefits from production and exchange as between producer, trader,
processor and consumer. This distributional role is one of the main reasons governments
become involved in marketing systems. The state may try to protect the consumer's
economic access to food by regulating the price of food at various points in the marketing
system. However, if this discourages private traders from operating in certain markets, for
example in remote areas, food commodities may not be available at all, unless the state
undertakes to provide them. Box 3.2 gives an example of the importance of undertaking
disaggregated analysis of the distribution of costs and benefits from proposed policy
initiatives, as these may not be obvious.

Box 3.2 The Distribution of Benefits from Marketing in Thailand

An analysis of the distribution of benefits from diversifying from rice production into soybean production
in Thailand was undertaken using Commodity Chain Analysis. This is a technique which analyses the
inputs and outputs at every stage of the marketing chain to assess the level of commodity flows, the
amount of resources used at each stage in the commodity chain, and the returns to those resources.

At first glance it appeared that diversification into soybean production increased the overall value added in
the agricultural sector. However, closer examination showed that the increase in benefits accrued entirely
to the soybean processors and traders, while farmers were actually worse off than before. From a food
security perspective, this was a retrograde step as farmers were, in general, poorer than soybean processors.
It was also contrary to the government's underlying objective in encouraging diversification into soybean,
which was to increase rural incomes and discourage rural-urban migration.

Source: Aroon, 1995.

In summary, an effective marketing system is an important institution in terms of ensuring
availability of food in different regions of a country, at different times of the year, and with
the degree of processing that the customer requires. It also should provide the information to
ensure that there is some stability of supply on a year to year basis. Finally, it is important in
ensuring economic access to the population, both in terms of providing income for certain
groups of the population and in terms of the level of the final consumer price.

Although input markets did not appear explicitly in the example of a commodity chain
shown in Figure 3.1, these are also important in terms of providing appropriate quantities
and varieties of seed, fertilizer and pesticides at the relevant time of year to enable farmers to
respond to the price signals that the marketing system sends them. The prices at which the
marketing system can supply inputs to farmers (and other agents such as processors and
transporters, who also use non-food purchased inputs in their activities) will determine the
use and productivity of the various productive processes.

1.4 Household food entitlement and the food chain

For simplicity's sake, actors in the commodity chain are often referred to as producers,
traders, consumers, etc., as though they only had one function. In fact, all individual actors
are consumers (though organizations such as transnational corporations are not consumers

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Chapter 3

per se, their employees are), and many consume on the basis of what could be referred to as
multiple entitlements. For example, a farm household may have a production-based
entitlement, from the food it produces itself. This could be in the form of millet and maize.
Some of the millet could be sold for brewing to provide income, and hence a trade-based
entitlement, used to purchase meat and vegetables. One member of the family could work
on a neiglbouring farm, and another could engage in small-scale food trading, resulting in
own-labour entitlements, part of which could be used to purchase more grain. All these
entitlements result directly from food commodity chains, and could be supplemented further
by entitlements, such as remittances from extended family members working in urban areas,
which are not an output of the food system.

As Table 3.2 shows, in all major regions of the world, the population is becoming more
urbanised. Only in Europe is the rural population actually declining, but in South America
the rural population is static. Equally, in all regions, the agricultural population is growing
at a slower rate than the rural population, and in Europe and South America, the rural
population is declining. This means that, in relative terms, fewer people are growing their
own food, and are increasingly dependent on some kind of commodity chain for their food
security. More and more people in rural areas earn their living outside of agriculture, so the
marketing system is required to distribute an increasing amount of food not just from rural
areas to the towns and cities, but also to distribute commodities within rural areas. In some
countries, more and more the marketing system has to move imported food from the ports or
land points of entry into the countryside.

Table 3.2 1993 Population and Rate of Population Growth, 1961-1993


Region Total Urban Rural Population Agricultural
Population Population Sector Population

Africa 702 235 467 413
(2.8) (4.7) (2.2) (2.0)
America, North 442 320 127 55
& Central (1.5) (1.8) (0.7) (0.1)
America, South 310 238 71 68
(2.3) (3.5) (0.0) (-0.1)

Asia 3,292 1,083 2,210 1.834
(2.1) (3.5) (1.6) (1.2)

Europe 505 376 129 38
(0.5) (1.0) (-0.7) (-3.3)

Oceania 28 20 8 4
(1.7) (1.8) (1.4) (0.5)

Source: FAO, Agrostat.

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Chapter 3

Commodity chains and marketing systems become more developed and more complex as
economies become richer. Production and distribution systems become more specialised,
consumer demand becomes more differentiated and more demands are put on the integrating
functions of the marketing system. This can lead to the rather simplistic assumption that, in -
a monetised market economy, the rich are more integrated into and dependent on the market,
whereas poorer, less secure households continue their day-to-day existence isolated from
and marginal to the market system.

In fact, in many countries the evidence indicates the very opposite. Even in rural areas,
poorer households tend to be more dependent, in relative terms, on markets, in particular
food markets, than rich households. A study in Kenya showed that smallholders buy at least
50% of their fnnd frnm the market (quoted in Ateng, in Gittinger, 1983). All income groups
bought at least one third of their food from the market, and this rose to over 60% in the
lowest income group. The larger the size of smallholding, the greater the proportion of food
that was provided by own production. This is not always the case. In very poor countries,
such as Malawi, surveys have shown that the poorest rural households live outside the
market economy and depend on social exchange and barter to meet their food needs,
especially in poor harvest years. This is because of their total lack of purchasing power and
assets, in a context where markets, in particular labour markets, are poorly articulated.
However, this is the exception rather than the norm.

The stereotype of the small peasant subsistence farmer who is virtually self-sufficient no
longer applies, if it ever did, to most poor rural households. This subsistence farmer was
assumed to have control over his environment, with the exception of the climate, and could,
by careful storage, protect himself against all but the worst of droughts. In reality most small
farmers face the risks of changing market prices for food, labour and production inputs.
Food is not the only commodity which has become increasingly monetised. Land markets
have developed in many countries, and credit is much more widespread. All these
developments increase the risk facing farmers. They can lose their land and become landless
labourers as a result of involvement in credit markets. However, it also offers the
opportunity for spreading risk, by growing multiple commodities, employing some family
labour outside of the farm and giving access to improved seed and inputs. For many rural
households, where population pressure has reduced the amount of land available for farming,
there is no option but to employ a multiple livelihood strategy. In rural areas, that is likely to
involve family members at different stages in the food chain; producing, labouring on other
farms, milling, trading and processing.

The development of complex food chains undoubtedly improves national food security in an
economy, as it increases the integration between different regions, and, if the commodity
chain is efficient, should allow for a lower cost food supply as regions specialise in the
commodities where they have a productive advantage. This does increase regional
interdependence, and can lead to shortages in times of stress in poorer regions where there is
less effective demand to pull in food when prices rise in the rest of the country. Equally for
individual households who are fully integrated into the market economy, if the food chain
operates well, then it offers the possibility of improved economic opportunities and greater
food security. However, as will be discussed in section 4, when markets, for whatever

Chapter 3

reason, come under pressure, then poor households will tend to be at a disadvantage
compared to those with greater buying power, or exchange entitlements.

1.5 The dynamics of the food chain

The presentation of the food chain and its marketing functions so far has been rather static in
nature. However, the food chain does more than just provide price information and short
term access to and availability of food. The prices arising from the operation of the chain
affect resource allocation in the longer term. Thus the articulation of the food chain and its
efficiency at signalling information provides the dynamic of the agricultural system in terms
of its contribution to economic growth. Prices signal comparative advantage which leads to
specialisation in production. Specialisation and the resulting commercialization induce
intensification in production. Intensification in turn leads to economies of scale in
commodity production which reduces costs and, depending on relative market power, will
result in some combination of reduced prices for consumers, increased returns to factors of
production and increased prices. This again increases comparative advantage and the
virtuous circle continues.

Over time, increased specialisation, technical change and changing world prices will all
affect the allocation of resources both within the agriculture sector and as between
agriculture and other sectors of the economy. This will, in turn, change the relative
importance of production based entitlements and trade based entitlements in the economy,
and will change the focus of policy relating to food security, as development and growti1
occurs, away from a heavy emphasis on food production as a major vehicle for improving
food security towards a broader jproach, including food processing, other agro-industrial
activities and gltimatelyall forms of employment-enhancing economic growth. .

The links between the agricultural sector and other sectors in the economy are important in
this context and are often underestimated. Recently, attempts have been made to quantify the
importance of output in the agricultural sector for income, and therefore livelihood, in the
f non-agricultural sectors of the economy. In Kenya, it has been estimated that an increase in
agricultural output of 10% will generate an additional increase in non-agricultural income of
almost 5%. This arises primarily from increased output in trading and processing
enterprises. These results are another way of illustrating the importance of food and
agricultural commodity chains in the level of economic activity in many developing

1.6 Seasonal variations in the operation of the food chain

The importance of different elements of the food chain will vary from season to season, as
the production cycle varies. Food cultivation itself is a very seasonal activity, with differing
labour requirements at different times of the year. Ground clearance, planting, weeding and
harvesting all make different demands on the farm household and leave varying amounts of
family labour available for off-farm activity, which might or might not be food-related.

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Chapter 3

Marketing too can be seasonal. Some food commodities are difficult to store and will only
be available for short periods of time after the harvest. Others are available all year round,
because they can be stored fairly readily. Depending on the grain, storage may be more
appropriate in a milled or unmilled state. For grains which are stored unmilled, then milling
will be a regular activity throughout the year. If the grain is normally stored in the milled
form, milling will be concentrated in the post-harvest period.

Flows of grain can vary throughout the year, both in quantity and even in direction. In
Indonesia, a combination of lower storage costs in urban areas, plus flows of imported grain,
which come in through large urban ports can result in the situation shown in Figure 3.2.

In the immediate post-harvest period, a, rice is flowing from the rural areas to the urban area,
and the urban price is higher than the rural price, by the amount of the marketing margin.
Prices are beginning their seasonal rise. At time b, when the rice price equals p, imports of
rice become competitive with dmesti rice in the urban areas, and rice stops flowing from
the rural as into the urban areas. However, rural prices continue to rise, until, at time c,
they start to exceed urban prices. When rural prices exceed urban prices by the rural-urban
marketing margin, then mported rice starts to flow from urban areas to rural areas. As rice
starts to come in from the next season's harvest, at time f, rural prices start to fall until at
time g, the harvest is fully in, prices have reached their seasonal low and the process starts

The same phenomenon could result if the government operated a buffer-stock policy,
releasing rice onto the urban market at price p.

The price changes involved in these switches in direction of grain flows will affect the food
entitlements of different groups of the population in different ways. Those who earn their
income outside of the food chain will only be affected by the food price rises, but those who
are actively involved in trading may find that, at certain times of the season, their income
goes down, as rice no longer flows from rural to urban areas. Rice is usually imported
milled, and this may reduce income earning opportunities for food processors and millers at
certain times of the year. Seasonal variations in food security are not simply linked to
seasonality in production, but to the changes in quantities flowing through different links in
the food chain, and the resulting opportunities to earn income.

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Chapter 3

Figure 3.2 Seasonal Rural-Urban Price Differentials

Source: C.P.Timmer et al., 1983.

2 The Open Economy and the Role of Food Imports and Exports

Much of the discussion above has been in the context primarily of the domestic economy.
Yet most countries are involved in the importation and export of food commodities. Indeed.
as can be seen from Table 3.1, over a third of Africa's cereal consumption is from imported
grain. This means that, in the same way that households and regions become interdependent
when they become integrated into the domestic food chain, so countries become more
interdependent with one another when they specialise in order to benefit from international

2.1 Historical trends

Historically, international food markets were quite slow to develop. The cost of
transportation and the difficulty of preserving many foods meant that there was little
international trade in foods prior to the middle of the nineteenth century. Before then, trade
was concentrated on high value cash crops which were difficult to grow in temperate
climates. Spices had been traded since the middle ages. By the early 1800s, sugar was being
grown in the West Indies for export and the slaves working in the sugar plantations were
being fed on imported foods such as wheatflour and salt fish.

Chapter 3

By the late nineteenth century, certain patterns in the flows of international trade were
becoming established, which still linger on today. The colonising powers of Western Europe
were developing markets for their industrial exports in third world countries, which were
paid for through the export of cash crops such as coffee, tea, rubber and palm oil. Many of
the Western European countries had reduced their tariffs on imported grain, following the
lead of Britain, who had repealed the Corn Laws in 1846, to enable cheap imports of grain
from North America and later Australia. Thus at the turn of the century, Europe was
exporting primarily industrial goods to pay for imports of grain and livestock from the New
World and cash crops from Africa and Asia. This pattern was to change during the
Depression of the 1920s and 1930s as all the developed countries became more protectionist,
and the USA became more industrialized and reduced its imports of manufactures from
Europe. Overall trade levels fell dramatically, and many of the colonies were badly affected
by plummeting world prices. This period marks the institution of marketing boards in
countries like South Africa and the then Rhodesia, to support farmers who were badly hit by
the world recession.

Since World War II, exports of cash crops are still the major source of foreign exchange for
many developing countries, but many African countries are now importing food crops direct
from Europe and the USA, as well as manufactured goods. Some Asian countries now
export manufactured goods as well as cash crops and import food crops. North America is
responsible for about 80% of cereal exports. Cereals make up about 40% in value of the
developing countries' total food imports, a change from the 1930s when all the major
developing regions, Africa, Asia and Latin America, were self-sufficient in cereals.

Cereal imports have grown to all continents, except Europe, in the last three decades. The
average annual rate of growth of cereal imports in the world as a whole was 3.8%, roughly
the same as for total food imports. The extent to which cereals are traded across
international borders varies by category. Overall, about 12% of cereal production was traded
in 1993. However, this varied from 4% for rice, through 13% for maize to a high of 22% for
wheat. For comparison, 99% of coffee production was traded in 1993.

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Box 3.3 The Benefits of Increased Trade between Neighbouring Countries

In a study for IFPRI, Ulrich Koester estimated hypothetical import and export parity prices for major crops
for selected countries in southern Africa, on the assumption that all trade occurred with major markets
outside of the region. The import parity price is the world purchase price plus the cost of transport to the
region and the export parity is the same world purchase price minus the cost of transport to deliver the grain
on the world market. Some of the results are shown in the table below.

Import and export parity prices for maize and wheat in selected locations ($/ton)

Maize Wheat
Location Import Export Import Export
Parity Parity Price Parity Price Parity
Price Price

Maun, Botswana 270 39 277 46

Lichinga, Mozambique 256 53 263 60

Tabora, Tanzania 220 89 227 96

Lusaka, Zambia 254 55 261 62

Harare, Zimbabwe 214 95 221 102

The major divergence between the two prices is a result of the very high transport costs from southern Africa
to the major international commodity markets. These prices indicate that it is very unlikely that these
countries will export grains to the major international markets, say in the USA and that imports are unlikely
except in extreme emergencies. This means that these countries are effectively cut off from major world
markets. However. conversely there should be large potential gains from expanding intra-regional trade with
neihbourin countries. These links have been hindered in the past by poor transport links, partly because
colonial transport systems tended to be linked to the colonising country, and partly because of disruption of
transport routes by war and civil unrest. Investment in regional transport could stimulate trade in the region
and potentially improve food security by allowing countries to import grain at lower cost from neighboring
countries with surpluses.

The nineteenth century patterns, of Europe and North America exporting commodities which
are consumed domestically, and developing countries exporting commodities for which there
is a minuscule home market, still holds with relatively few exceptions, and those mainly
among the fast developing countries of East Asia. Developing countries still trade primarily
( with the developed world, rather than amongst themselves, in spite of the advantages that
could arise from greater regional trading in food commodities as Box 3.3 examines. It is
argued that this kind of specialisation in production, leading to greater integration into world
markets, can increase national wealth. In the next sub-section, this argument will be

Chapter '

2.2 The competitiveness of international markets

The argument for greater integration into world markets has always been based on the
classical doctrine of free trade and comparative advantage. This can be summarised as

follows: if a nation consumes both commodities A and B, which it can also produce, then
concentrating its production on the commodity which it can produce with greater relative
efficiency, say A, and trading that for B on the world market, it can increase its overall
consumption of A and B combined.

Leaving aside for the moment the question as to whether developed countries produce and
trade according to their comparative advantage, it is interesting to examine what determines
comparative advantage. Some part of this, in agricultural products in particular, is
determined by climate and soil type, but much of it is the result of decades of investment in
production methods, research into seed varieties and development of appropriate
infrastructure. It has been argued that this has tied some countries into producing
agricultural commodities which have poor long-term prospects in slow-growing markets.
Might these countries be better advised to stop following 'comparative advantage', decide to
try to produce manufactures, initially for the domestic market but with a view to long-term
exports, and move away from cash crop production back to food production? In thirty years
time, the country could have developed a comparative advantage in manufacturing.

For many developing countries, however, the immediate choice facing them is between
increasing their production of cash crops to earn foreign exchange for manufactured imports
and probably increased food imports as well, or to encourage increased self-sufficiency in
food, possibly through increasing protection to domestic farmers. What has been the nature \
of the international fotd markets within which context they have to make the choice? /

(It would be difficult to describe the markets as free and competitive. Most industrialized
countries have been heavily protective of their domestic farmers, particularly those)
reducing food crops. Over the past few decades, there has been slow growth in domestic/
food markets in developed countries. Low elasticities of demand for basic grains has meant
that domestic markets were potentially quite unstable. In addition, farming in the
industrialized countries had become a high technology area, with quite low unit profits. As a
result, farmers were driven to produce on a larger and larger scale, to earn an adequate return
on their capital. Farmers have historically had considerable political influence in many
Developed countries, and over the past few decades, the major agricultural exporting nations C
)of the West have been tryingincreasingly inventive ways of providing protection to farmers
at as low a cost as possible, including concessional sales of surplus production, set aside
schemes and use of sanitary and phytosanitary regulations to protect home markets.

Many of these programmes, which are discussed in more detail in Chapter 6, stabilised the
country's domestic food prices, but at the cost of destabilising international market prices,
because surplus production was forced into exports, both commercial and concessional.
International food prices were also depressed, which was good for consumers in developing
countries but, in many cases had a disincentive effect on producers Isolated efforts were
made to offset this negative impact, notably the EEC-ACP Lome agreements, which

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provided preferential access to European markets for certain developing countries.
However, the underlying factors affecting international food markets were untouched until
the Uruguay round of GATT, which was finally signed in December 1993. This was the first
GATT round to include trade in agricultural commodities to any extent and is also discussed
in Chapter 6.

It could be argued that the degree of protection of international food markets is only
marginally relevant to the issue of whether or not to become more closely integrated into
world agriculture markets. If this means, as it will for most developing countries,
specialising to a greater extent in cash crop production, are there any particular
considerations from the perspective of food security which weigh for or against this?

2.3 International specialisation and food insecurity

A good case can be made that international specialisation may actually improve food
security in a country. It spreads risk and sources of income, so that in the event of a
domestic food crop failure, the export earnings from cash crops can be used to pay for food
imports. A country which is integrated into international markets will also have developed
good transport infrastructure which will allow easier access to imported commodities.
Countries which have little outside trade often have high transport costs, which indicates
long delivery lead times, congested ports and low-volume carrying capacity. These are not
consistent with food security in times of crisis when fast imports may be necessary. Insofar
as greater external trade implies greater national prosperity, then this in turn indicates
improved economic access to food.

However, this all assumes that international markets are not inherently more risky than
domestic markets. In fact, international prices can be highly unstable yet countries have
somehow to decide what strategy'they should be following over a period of years. A country
cannot switch between export orientation and a self-sufficiency approach from year to year.
International prices are difficult to predict, and usually it is difficult to do more than
calculate past trends on which to base the decision. Most international commodity markets
are outwith the control of any individual country. Past efforts for groups of countries to
operate commodity agreements to stabilise prices have been, for the most part, abject
failures. Most developing countries end up both buying and selling in unpredictable

Some grain markets are notoriously thin, such as the market for rice. Such a small
proportion of world rice production is traded that variations in domestic production, or
indeed demand, can result in very high relative movements in international supply and
demand. Other markets, such as the wheat market, are rather more robust, but are
dominated by a few major suppliers. This can lead to dependence on one supplier, which
has caused difficulties when political issues have influenced trading agreements.

The decision to follow an export oriented strategy may benefit a country overall, but there
may be significant changes in the distribution of benefits from trade internally within the
country. There will be changes in the quantities of food moving through the marketing
system, and changes in the direction of flow. Domestic food processors and traders may

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well be adversely affected. Equally there will be changes in the commodity chain for
exports. If export production is concentrated among larger farms and if export processing is
carried out by larger companies than are involved in domestic food processing, then national
income could rise, but the food security of the poorest could fall. However, export
production could also create more employment opportunities for landless labourers and have
the opposite effect on household food security.

There is one very important way in which international markets differ from domestic
markets. If a national economy becomes heavily monetised and, for some reason, one
section of the population suffers a dramatic and sudden failure of entitlements, say because
of a localised drought, then there is a national government which can step in and take action
to restore some form of food entitlement for that group. If a country suffers some major
entitlement failure, for example because of a complete failure of the coffee crop, there is no
international institution to step in and restore the country's entitlements. There have been
various attempts to provide some form of insurance, such as the EC's STABEX fund, but
these are partial and not always reliable.

None of the issues outlined above, as to why increasing export orientation and international
market integration may create problems for a country's food security are sufficient reasons in
themselves to justify withdrawal from international markets. The discussion has simply
indicated possible dangers and areas of concern to which attention must be paid when
contemplating greater international specialisation and openness to trade.

3 The Political and Institutional Environment of the Food System

3.1 The institutional context

Much of the discussion in this chapter has centred on market relationships, how people use
their resources to produce food, and how the overall food supply moves through market
channels to become available to those who have income to purchase it. In most countries
nowadays, markets are undeniably the dominant institution. Markets, however, do not
operate in a vacuum. As recent experience of liberalisation has shown, particularly in the
former communist countries of the Eastern bloc, there are a number of underlying
institutions necessary for the effective operation of the market system. The market as an
institution concentrates on the process of exchange of rights, rights to property, to labour and
to commodities. One of the first requirements for effective market operation is that there
should be a system of well defined property rights, plus a system for enforcing them.

Information is also important if markets are to function effectively. Buyers and sellers must
be able to identify one another, and have access to information as to the prices at which other
agents are transacting. For markets to be competitive, there have to be many buyers and
sellers. When markets are only emerging, it can be difficult to avoid domination by a few
wealthy and risk-taking agents. Once a few agents have developed a monopoly position in a
market, they often have sufficient power to block entry to that market by other agents.
Buyers are then forced to pay monopoly prices if they wish to undertake transactions. This
is frequently a problem in small localised credit markets.

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( 'hapilc .%

Chapter 3

However, markets are only one type of institution which governs economic activity in a
country. Other institutional arrangements can be important in governing economic activity
as it relates to food security. (The term institution, or institutional arrangement is used to
indicate the various rules and regulations which determine what is acceptable in custom, or
legal, the "rules of the game".) Governments may intervene to prevent certain kinds of
exchanges, or to enable others, because of some notion of over-riding human rights. For
example, in some countries, it is illegal for a household to indenture their children,
regardless of how hungry they are. In many developed countries, the state provides certain
minimum benefits to the eligible poor because it is felt unacceptable that a wealthy country
should not protect its citizens from dying from hunger in the street. Not all activity takes
place in response to financial rewards and incentives. In many countries, particularly in rural
areas, people join together to undertake activities either which will benefit them all
collectively, or because it is seen as culturally or morally important that these activities are

Governments are particularly likely to intervene in food markets in various ways, to improve
food security for poorer sections of the population. This is often justified in terms of the
need to provide a safety net in society or for the sake of common humanity. In many cases it
also appears that the popularity and even the legitimacy of the government is based on its
ability to deliver stable supplies of cheap food to the population, of the cities in particular.

It is not uncommon for countries to overrule large sections of the food market in times of
crisis in national security. During World War II, the British government instituted a system
of rationing for almost all the basic food commodities, and made it illegal to trade these
commodities outwith the rationing system. This was to ensure equal access of all the
population, regardless of wealth, to the limited quantities of food available. For similar
reasons, Cuba's population were subject to a food rationing system during the 1970s and
1980s. Up until the late 1970s, most of the Sri Lankan population were entitled to a weekly
rice ration.

These are perhaps extreme examples, but many countries have developed less
comprehensive programmes which improve the access of the poor to food, whether for moral
or political reasons. In some countries this has taken the form of subsidising the basic
foodstuff. The price of bread in Egypt was almost constant for a long period in the 1960s
and 1970s. In other countries the poor are entitled to participate in specific targeted
programmes, such as the food stamp programme in the USA. In yet other countries, the
social safety net is not specifically linked to food commodities, but some kind of income
support increases the food entitlements of the poor. Any assessment of food security has to
include these state institutions in addition to those of the market.

A third type of institution which is often overlooked is that related to.collective action. This
term includes those activities where members of a community organise themselves to
undertake economic activity, or organise the delivery of a service, or manage a communal
resource. These can be of particular importance in societies which are not fully integrated
into the monetary economy, or where traditional customs are still an important element of
daily life. However, collective activity can also play an important role in modem societies.
Many voluntary organizations and community based organizations in Western societies rely

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Chapter 3

on collective action and can play an important role in the provision of services. Indeed,
collective action is an important element in the governing of water resources in some
districts in southern California.

Collective action is important in many countries in areas of water management and
irrigation. Building of dams can be undertaken communally in a very organised way, such
as in China, where collective activity was one way to mobilise the large amounts of labour
necessary to build large scale dams, but can also be much more informal, as in many semi-
arid African countries, where local communities build dams and shallow wells to catch as
much water as possible in the short rainy season. Irrigation systems may be collectively
managed with local committees to allocate access to water to ensure equity and sustainability
in the use of water.

Collective management is also important in the development and use of common property
resources, most often common grazing but also fishing rights in lakes, rivers and even local
sea-fishing. What many of these systems have in common is the need for careful
management so that land does not become degraded or rivers become over-fished. A market
solution would be possible, where grazing or fishing rights were sold out to individuals, as
happens in countries where grazing rights and fishing rights are individually owned.
However, here the property is held communally and either because there are customary rules
and regulations for land use, or because it is felt less likely to exclude poorer members of the
community, access is based on non-market principles such as individuals having the right to
graze so many cattle per year, or catch so many fish per year.

Where communities lack certain services or where it is felt that existing service providers are
exploiting a monopoly position, they may form cooperatives to provide these at an
affordable price. Although co-operatives often develop an important financial and market
element, very often they start out based on non-profit principles with a strong collective
input from the community. Many institutions are complex mixtures of market and non-
market elements. Often collective activity has a strong element of self-interest, but may
represent a way of mobilising resources, in particular labour power, when financial resources
are lacking.

There is a final sphere of activity, which some analysts call the moral economy, which is
composed of a series of customary rights and obligations which link different groups of the
population together, and may be particularly important in times of food stress. For example,
in northern Namibia, women and children had the right to go to the kraal of the traditional
chief during times of famine, when food had run out. He kept the communal food stores and
had an obligation to feed any of his dependent subjects who came to his enclosure. Similar
obligations have been noted in other parts of the world. Box 3.4 discusses the various types
of relationships which used to be typical in parts of Bengal in India.


Chapter 3

Box 3.4 The Moral Economy in Bengal, India

In Bengal there are three types of relationship relevant to the Indian peasant. The loosest of these is the hat
or market relationship, such as fishing and agricultural labour. A stronger link is the nagat, which
describes a relationship such as share-cropping, where there are not long-term relationships and the parties
may not be closely identified with each other. The strongest relationship of all, outside direct family ties,
is the dhara, which represents an enduring bond, which may have come down through several generations,
between a landowner and his various client households, such as priests, barbers and washermen. In times
of stress, it is the dhara relationship which may enhance the food entitlement of client families with this
kind of link to a landowning family.

Source:from Greenough, Indian Famines and Peasant Victims, Modern Asian Studies, 1980

It is important to keep these other types of food entitlement in mind when assessing the
nature of food security problems in a society. For the most vulnerable, non-market
institutions may be critical in determining survival, particularly in times of crisis. They can
mitigate the effects of the market on those who have little purchase or labour power. They
can also make a considerable difference in the way the benefits from the food chain are
distributed. Unfortunately, in many countries emergent markets are reducing the incidence
and effectiveness of non-market mechanisms, as societies become more monetised and
1 communal rights are increasingly privatised by the rich and affluent.

Non-market institutions are not just important in the local and national economy, but also in
the international sphere. The GATT negotiations discussed in section 2 above are a major
example of the recognition of the need for collective action to improve trade regulations.
Any individual country may stand to lose by removing trade barriers unilaterally, but if
enough countries do this at the same time, then they can, in theory, all benefit. Equally
conferences such as those on the law of the sea, and the Rio conference on the environment
are acknowledgement of the need for collective institutions to supplement the operation of
the market.

3.2 The role of the state

In one sense the state has a privileged position in the institutional framework, in the sense
that it has the power to change institutions, i.e. the rules of the game. Most countries have
some form of constitutional division between the judiciary and the executive, but this is not a
perfect division and there is usually some way for the executive to modify the legal structure
within which the judiciary operates.

In the 1990s, the power of the nation state is rather more limited than in previous centuries
because of the role of international finance. Many countries, particularly in the developing
world, rely on access to overseas capital, both private and public sector, to finance their
development programmes and their recurrent expenditure requirements. Thus they are
constrained to follow policies and develop institutions which make them creditworthy in the
eyes of either private capital or foreign aid donors.

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Chapter 3

There is, at present, very much a consensus that the appropriate role for government is to
facilitate the operation of the market economy and encourage the development of the private
sector. Thus, instead of the interventionist policies which many states operated in the past,
whether their economies were centrally planned or mixed economies, the role of the state is
now seen to be much more limited. The state should institute a legal framework which
facilitates the exchange of property rights and set up a regulatory framework such as
recognized weights and measures which increases the transparency of exchange.

In addition, where there are clear market failures, such as in the provision of public goods. it
may be appropriate for the state to provide these directly, or to finance their provision by
appropriate private sector organizations. This is particularly important for the provision of
market facilitating infrastructure, such as roads. In agriculture, there is a case for the state to
Ifanre. research into improved seed and technology, particularly for food crnps where a
private firm might have difficulty recovering its costs. The state may also have a role in
providing social goods, such as education and health services, though this must not be done
in a way which endangers the fiscal probity of the economy.

This more restricted view of the state arises, to some extent, from an acknowledgement that,
far from being a benign but fundamentally neutral institution whose main purpose is to
further the wellbeing of its citizens, the state is an organisation like any other, with its own
objectives and internal incentive structures. The political economy analysis of the last two
decades emphasises the tendency for agents of the state to pervert the operation of markets,
by investing their time in rent-seeking activities to improve their own welfare at the expense
of the efficiency of the economic system as a whole. It is thus seen as important to curb the
ability of state employees and decision-makers to undermine productive economic activity,
and restore the discipline of the market place.

Thus the prime role of the state is seen as setting up a legal framework which stipulates the
rights and obligations of both individuals and the wide range of organizations which operate
within an economy, including government ministries and the various public sector bodies
which carry out policies and projects on behalf of government.

3.3 Food sector organizations

It is impossible to make a comprehensive list of the wide range of organizations which play a
significant role in the food economy. However, the following give some idea of the variety
and characteristics of some of the major players.

3.3.1 The private commercial sector

The significant role of the private commercial sector in the food chain and in achieving food
security has become evident throughout the discussion of the food chain. Under adjustment,
with market liberalisation and privatization constituting key elements of most economic
reform programmes, its role will be further strengthened. This is true for all stages of the
food chain, from production up to the retailing level, specifically to all types of marketing
functions involved in the food system, such as:

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Chapter 3

* Input supply,
* Procurement,
* Transport,
* Storage (including the management of food buffer and food security stocks).
* Wholesaling,
* Retailing.

Although, in the past, policy interventions in food marketing have often inhibited the private
commercial sector from effectively and successfully fulfilling its functions, careful and
sequential approaches may be required, in order to ensure that the private sector has a chance
to grow into its new and wider role. If market liberalisation and privatization are introduced
in an abrupt and radical manner, there is the risk that the old system breaks down before a
new and functioning system is established, with severe implications for food security.

The size and structure of private sector operations can vary from small female dominated
village level processing, to the vast scale of operations of transnational companies running
vertically integrated operations from plantation production through processing to retail sales,
covering a number of countries. All share the need for a stable and predictable economic
environment to enable appropriate forward planning.

3.3.2 Co-operatives

The basis of most farmer co-operatives is to achieve economies of scale in transport and
other services, and to raise the bargaining power of farmers over the price and other
conditions of sale of their produce and of farm inputs. This is particularly attractive where
markets are poorly developed and farmers have poor and unreliable links with the national

Co-operatives are normally run by their members and do not set out to be profit-making
organizations. Unfortunately many of them have proved to be loss-making. It may be
difficult to find the necessary management skills in rural areas to ensure effective operation.
Training needs may be high. In some countries co-operatives have been particularly
vulnerable to co-option by the political system. Overall, the co-operative movement has had
very mixed fortunes over the last three decades in many developing countries. Where
education levels are high and institutional support is well developed, then co-operatives have
been successful in improving the economic situation of their members and creating greater
security for them. Where institutions are poorly developed and members' supervisory
abilities are weak, then co-operatives have been very susceptible to mismanagement and
even corruption.

3.3.3 Parastatals

With the changing role of the state, the number of major parastatal organizations has fallen
significantly. In the 1960s, many countries had large government-run marketing
organizations which were an important arm of government policy. They allowed government
to directly influence prices by trading either as monopolies or along side other enterprises.
Their objectives varied according to policy. In some cases, the main objective was to

Chapter 3

stabilise prices. In others, it was to ensure that profits from export crops remained in the
country and did not accrue to transnational corporations (though frequently these profits
went into government coffers rather than into the pockets of producers). Economies of scale
in marketing were a major justification for setting up these large operations.

As the tide turned against state intervention in markets, so parastatals fell from favour. They
were seen as too political in their function, many of them were inefficient and made massive
losses and their presence in the market distorted incentives for private sector operation. Over
the past decade, considerable attention has been focused on how to privatise the operation of
parastatals in such a way as to encourage private sector activities, while protecting
consumers and producers from transitory disruptions.

3.3.4 Local and community organizations

Households are usually embedded in local communities which play a highly important role
in ensuring social security of their community members, specifically in rural areas. These
local communities provide social security in many respects, including food security. This can
occur at various levels from spontaneous actions of neighbourhood support if a family or a
member of the community suffers destitution up to different forms of community based
social security institutions.

The principal advantage of community structures is their close relation to the community
members. The community is best aware of its members suffering destitution and able to
respond spontaneously. These capacities can and should be used in implementing targeted
policy interventions to improve food security in various ways:

* Identification of the people in need for food assistance,
* Determination of the type and volume of assistance needed,
* Distribution to the beneficiaries (e.g. through community fair price shops, community
kitchens, schools, health centres).

Communities can also take an important role in organising agricultural activity, such as the
management of local irrigation schemes, the digging of shallow wells and the management
of village seed banks. In some countries, community credit schemes are also important.
Again, the great advantage of these community operations is the extent to which they can
develop to meet local needs. The transactions costs of policing programmes are much lower,
because there is greater knowledge of participants. Also it can be possible to mobilise
resources at a local level because people see clearly the benefits to themselves if projects go
ahead, whereas there is less immediacy with projects organised and operated from the
national level.

3.3.5 Non-governmental organizations (NGOs)

NGOs offer a potential vehicle for supporting or complementing public sector measures in
achieving food security objectives. They have an especially important role in countries with
weak infrastructure and low administrative capacities. Due to their presence in the field and
their decentralised approaches, NGOs may play a particularly effective role in providing


targeted assistance to vulnerable groups. This refers, in principle, to international as well a-
local NGOs, depending on their objectives, experience, and scope of activities.

The important role that NGOs can play in supporting and complementing government efforts
to alleviate poverty and to improve food security derives from the following factors: (World
Bank, 1990):

* Their ability to reach poor communities and remote areas that have few basic resources
or infrastructure and where government services are limited or ineffective;
* Their lobbying function for the poor and underprivileged;
* Their ability to promote local participation in the design and implementation of public
programmes by building self-confidence and strengthening the organisational capability
among low-income groups;
* Their usually low cost of operation due to using simple low cost technologies.
streamlined services and low operational budgets;
* Their innovativeness and adaptability in identifying local needs, building upon existing
resources and transferring appropriate technologies developed elsewhere.

In spite of such striking advantages there are, however, also certain limitations of NGO
approaches which should be given due consideration when a stronger NGO involvement is

* There is a limited replicability of many NGO sponsored activities as they are often small
and localised. In attempting to scale up their operations with support from the public
sector, some NGOs may lose their innovative quality and may become top-down. non-
participatory and dependent on further external government support.
* NGO activities may have a limited self-sustainability as they are often conceived as
being primarily relief-oriented rather than developmental.
* Limited managerial and technical capacities of many NGOs;
* Lack of a broad programming strategy for a region or a sector and poor co-ordination of
NGOs at different levels;
* Controversial political or religious orientation of some NGOs.

With due attention to these issues, NGO activities should be encouraged and utilised to
advantage in programmes aimed at poverty alleviation and improving food security of
vulnerable groups. An additional valuable feature of an explicit NGO involvement is their
potential to attract (additional) external assistance in support of such programmes.

Chapter 3

4 The Food System under Stress

In this section, three types of food insecurity will be examined in terms of how they can be
identified, and how governments and households develop appropriate policies and coping
strategies. The first sub-section looks at chronic food insecurity, where countries, regions or
households have insufficient food to meet their needs on a year to year basis. The second
category examined is transitory food insecurity of a seasonal or cyclical nature, where food
insecurity appears at regular and broadly predictable times of the year, or on a year to year
basis. Finally we examine temporary food insecurity resulting from shocks such as such as
drought, flooding or pest attacks.

These types of food insecurity are not completely separable, either in terms of definition or
in terms of impact. It may be difficult to distinguish between an extremely bad year of a
cyclical pattern of food insecurity and a shock. The impact of a food shock will be more
severe in an area already suffering from chronic food deficits. On the other hand, a country
which suffers from significant seasonal or cyclical food insecurity may have mechanisms in
place which allow it to respond more readily to a one-off food shock. However, for purposes
of analysis it is useful to examine the different categories separately.

4.1 Chronic food insecurity

Individuals, households, regions and countries who suffer from chronic food insecurity have
inadequate access to food on a day to day basis, regardless of the season or time of year. It is
difficult to identify those suffering from chronic food insecurity simply by looking at
indicators of market operation. Chronic food insecurity does not often manifest itself in
terms of price rises, because the most common cause is lack of resources translatable into
food purchasing power.

Where market mechanisms are impeded or displaced by state intervention then there can,
under some circumstances, be indicators of chronic food insecurity. When movement
controls hinder the transport of grains from surplus to deficit regions, then food insecurity
can manifest itself in food prices in the deficit region which are consistently higher than in
the rest of the country by more than the appropriate transport costs. In a country where
rationing is the chosen mechanism for food distribution, persistently long queues for basic
food staples can indicate chronic food insecurity. However, care must be taken in
interpreting these signs, so as not to confuse food insecurity with excess demand for
underpriced commodities.

National and regional food balance sheets can give some evidence as to the availability of
food, and the adequacy of that food supply relative to the specific population. However, this
does not give any indication as to economic and physical access to the food supply. A food
balance sheet may show adequate food supply, but distribution may be very uneven.
Chronic food insecurity, at whatever level, must be identified in context with evidence of
low calorie intake at the household level, preferably supported with physical evidence of
malnutrition. The various techniques discussed in Chapter 2 for measuring food
consumption and malnutrition are all relevant in this context.

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Chapter 3

The concept of food insecurity should also include the notion of vulnerability. Where
households' access to food is adequate at the margin, but they have very few assets as a
cushion against any food shock, then they should be considered chronically food insecure.
This is difficult to measure at any degree of aggregation, and this broader concept can
probably only be applied effectively at a micro-level.

Chronic food insecurity is almost always closely associated with poverty, and responses to
the problem will usually require an injection of external resources. At a household and
regional level, this could mean the introduction of targeted programmes, as will be discussed
in Chapter 5. When a whole country appears to be food insecure, this can be seen as a
reflection of the country's economic assets relative to its population, the distribution of those
assets amongst the population or the overall governance of the economy. It is unduly
pessimistic to assume that a poor asset base dooms a cntrto food insecurity. Japan. one
of the world's most successful economies has a poor natural resource base, but has developed
largely on the basis of its skilled labour force. The problem is more likely to stem from poor
policy, both in the food sector and more generally, sometimes compounded by civil war. In
these cases, a successful attack on chronic food insecurity may require a change in both
political priorities and overall economic policy.

4.2 Seasonal and cyclical food insecurity

Seasonal food insecurity is the outcome of regular patterns usually in weather related
activity. The most obvious is the crop production cycle, which affects levels of output.
market prices for the output and agricultural employment opportunities. However, there are
other aspects of economic activity which may have a strong seasonal element. Employment
in the tourist industry and in crop and livestock processing may have a strong seasonal
element. In countries with marked rainy seasons, construction work can have a strong
seasonal component. All these factors can result in seasonal food insecurity as the source and
size of food entitlements vary over the year.

Seasonal variations in income, production and food prices need not cause problems of food
insecurity, if individuals and households have the ability to even out the incoming flows by
storing or saving on an intra-annual basis. These variations are not usually seen as problems
for a region or a country as a whole, but for the poorer individuals within the country. The
underlying problem may be one of inadequate entitlement for the year as a whole, in other
words hbronic foon inecurity manifesting itself as seasonal food insecurity. Often in
agricultural households, this may be compounded by problems of indebtedness. It is not
uncommon for agricultural households to build up debts during the growing season which
have to be repaid immediately after harvest, when output prices are at their lowest. In some
countries in south Asia. the problem is compounded by the interlinking of credit and output
markets. The farmer borrows from a merchant and is required to pay back in grain valued at
the merchant's prices. Again, the underlying problem is one of poverty, manifesting itself in
insufficient resources to see the household through the year.

Seasonal food insecurity can be identified by measuring food consumption at different
periods of the year. Seasonal variation in malnutrition can also occur, but these are often the

Chapter 3

result of seasonal variation in the incidence of diseases such as malaria and respiratory
infections, which can also result in fluctuations in body weight.

There are a number of approaches which can be taken to alleviate the problem of food
insecurity. At the household level, they include encouragement of better storage, crop
diversification to stagger harvest periods and mixed farming. Governments can provide
support to develop off-season sources of employment and non-farm activities. Price
stabilisation boards and buffer stocks can be effective in reducing seasonal price variation,
though often at considerable cost. Provision of alternative sources of credit can help break
the cycle of indebtedness.

Cyclical patterns of food insecurity can.be defined as the result of year to year variations in
the level of output, specifically in the agricultural sector and usually climatically induced. It
is frequently difficult to identify what is normal annual variation in rainfall or temperature,
and therefore distinguish between cyclical food insecurity and transitory food insecurity
resulting from a shock, such as drought or flood. There has been considerable work done in
recent years on how to define drought, or abnormally low rainfall. One way of doing this is
to use the concept of dependable rain, the annual rainfall which may be 'reasonably' expected
to be exceeded in a given year. A common interpretation of 'reasonable' is the rainfall to be
expected in four years out of five. Clearly this has to be defined in relation to a country's
past history. The definition of a drought, which could be when rainfall is lower than that
expected in nineteen out of twenty years would be quite different for a semi-arid country
such as Namibia, compared to a country like Thailand.

There is no question that most countries experience considerable year on year variation in
output of agricultural products, both food and cash crops. Figure 3.3 shows the levels of'
crop production over an eleven year period for Kenya.

All the crops included in the graph show considerable variation on a year to year basis. This
could cause considerable cyclical food insecurity to farmers who grow food crops, such as
maize, wheat and beans, which they will consume in part and sell the surplus. In some years
they may grow insufficient for their own consumption. In others they may have insufficient
surplus to sell to meet their other food needs. Cash crop farmers too can suffer from cyclical
food insecurity, though their food entitlement will also be affected by the price the crop
makes in the international market. For example, in 1984, tea production was slightly lower
than in the previous year, but export earnings from tea reached record heights because of the
level of world prices.

It is difficult to tell just by looking at Figure 3.3 which commodity has the greatest inter-
annual variation. Both maize and beans appear to have high variation, but theabsute
amounts being produced are very different. One way to compare variability is to compute
the coefficient nf variation (CV) for each time series. This is the standard deviation divided
by the mean output. This shows that beans have the highest CV, at 28.5, coffee has the
lowest at 15.2 and the CV for maize is relatively low. at 17.5.

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