Title: Summary of the world food situation and prospects to 1985
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Title: Summary of the world food situation and prospects to 1985
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Language: English
Creator: United States Department of Agriculture
Publisher: United States Government Printing Office
Place of Publication: Washington, D. C.
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SUMMARY OF

THE WORLD FOOD SITUATION AND
PROSPECTS TO 1985*





Every man, woman and child has the inalienable right to be
free from hunger and malnutrition in order to develop fully and
maintain their physical and mental facilities. Society today
already possesses sufficient resources, organizational ability, and
technology and hence the competence to achieve this objective.
Accordingly, the eradication of hunger is a common objective of
all the countries of the international community, especially of
the developed countries and others in a position to help.


This statement was part of the Universal Declaration on the Eradication
of Hunger issued at the 3rd World Food Conference, held in Rome last Novem-
ber, and attended by representatives of 130 countries. The Conference reflected
widespread anxiety about the world's ability to feed its growing population. In
1972, the world food situation had been transformed from one of food sur-
pluses and low prices to one of relative food scarcity and high prices. This
rapid reversal has raised again a wave of widespread food-population pessimism
similar to that which has swept over the world several times since Thomas
Malthus wrote his influential essay in 1798.
The Economic Research Service (ERS) agrees with the Declaration's view
that the world does have the basic resources and technology to produce enough
food to eliminate hunger. The factors that have given rise to the present wide-
spread critical shortages of food in the world are largely transitory, and given
normal weather conditions, can be corrected by intelligent and humane policies.
Major problems must be solved, however, and many of them are not self-
correcting. Among the most pressing are:
transferring food from the developed food-exporting countries to the
food-deficit developing countries (without preventing needed in-
creases in food production in these countries),
providing for emergency disaster and famine relief,
achieving an acceptable degree of stability of world food prices,
finding the proper combination of techniques and policies to bring
about a substantial improvement in food production and distribution
in developing countries.

*Based on The World Food Situation and Prospects to 1985,Economic Re-
search Service, U.S. Department of Agriculture, Foreign Agricultural Economic
Report No. 98. The complete report can be obtained by writing: The Economic
Research Service, U.S. Department of Agriculture, Washington, D.C. 20250







The poor countries that rely on imported grain and fertilizer were the
most adversely affected by the food shortages that prevailed in 1972-74. Any
serious decline in their food production or in general world crop conditions in
1975 or 1976 could have serious consequences requiring emergency measures
beyond those already adopted or now being discussed. Even in the longer run,
substantial malnutrition will probably persist among low-income groups in the
less prosperous developing countries, unless much greater efforts are made to
produce more food in those countries and distribute it more equally. Special
national and international nutritional programs will continue to be necessary
to help those most seriously threatened by food shortages.


Food Production Trends
The vulnerability of the world to the disruption in food supply in 1972-
74 was influenced by how production and consumption had developed over
the previous two decades and how governments had responded. Three trends
were especially important: the increasing gap between food production and
food needs in developing countries; sporadic but growing grain imports of the
centrally planned economies; and persistent food surpluses in some developed
countries.
From 1954 to 1973 world food production increased faster than popula-
tion-production at 2.8 percent annually and population at 2.0 percent. In
these two decades, food production on a global basis declined only once-in
1972. The 1954-73 trend rate of growth in total food production was slightly
higher in the developing countries than in the developed countries. But be-
cause of sharply different population growth rates, food production per capital
rose at an annual trend rate of only 0.4 percent in the developing countries,
compared with 1.5 percent in the developed countries. The developing coun-
tries (including Asian centrally planned economies) now account for 86 percent
of the world's annual population increase-61 million out of the 70.5 million
annual increase in 1973.
Grain production in 1972, however, dropped by 35 million tons, an
amount about equal to 1 year's average annual growth. Grain is the most im-
portant single component of the world's food supply and accounts for between
30 and 70 percent of the value of food production in all world regions. It is
the major source of food for many of the world's poorest people, supplying
60 to 75 percent of the total calories many of them consume. However, in
many developed countries, more grain is fed to livestock than is consumed
directly as grain products.
During the late 1960's and early 1970's, the developed grain-exporting
countries were restricting grain production in an effort to reduce surplus stocks.
Prices of grain and many food and farm products were at low levels. Over-
capacity in the fertilizer industry caused low prices of fertilizer during these
years. The world seemed to have plentiful, inexpensive supplies of food and
of the inputs to produce food.
The large drop in 1972 grain production, which was caused by unfavor-
able weather in the Soviet Union, India, Australia, Sahelian Africa, and South-
east Asia, was a major factor triggering the recent situation of food shortages






and high food prices. But other important developments were the large Soviet
grain purchases, very rapid economic growth around the world in 1972 and
1973 (which generated greater demand for food), reduced grain reserves, in-
flation and monetary instability, speculation in commodities, and the effects
of the energy crisis. World food production rose substantially in 1973, but
not enough to rebuild stocks. Total world production declined slightly again
in 1974, primarily because of disappointing weather in the United States,
Canada, the Soviet Union, and South Asia.
The recent increases in the prices of food, petroleum, and other commod-
ities were exceptionally large and had exceptional causes. But some adjust-
ments were necessary to reorient priorities with respect to resource use. Be-
tween 1969 and 1974, the world consumed more food than was being pro-
duced and was able to supply part of the needs by drawing down stocks.
Higher food prices are now stimulating more food production. Higher ferti-
lizer prices are stimulating expansion of the fertilizer industry. Higher grain
prices are reducing grain used for livestock feed. Higher petroleum costs are
causing a search for other energy sources and causing a different attitude to-
ward energy use.


Malnutrition and Poverty
The United Nations has estimated that about 460 million people are mal-
nourished. Malnutrition is primarily a function of poverty. Most of the world's
malnourished live in the developing countries-in the Far East and Africa. The
U.N. estimates that between one-fifth and one-third of all people living in the
Far East (excluding Communist Asia), the Near East, and Africa have an insuf-
ficient food supply, compared with only 3 percent in the developed countries.
Within households in these regions, when food shortages are especially
acute, the women and children are often the most deprived. Children's malnu-
trition is also affected by their inability to ingest sufficient food when starchy
foods are the main staple. The U.N. has estimated that one-half of the young
children in the developing countries may suffer in varying degrees from inade-
quate nutrition.
How much would it take to feed the world's malnourished? Cereals
alone could conceivably supply the calories and much of the protein needed
by the world's malnourished people. About 0.15 kilograms daily of wheat,
rice, corn, sorghum, or millet would provide 500 calories. If the estimated 460
million malnourished people in the world were each provided daily with addi-
tional grain equal to 500 calories, much of the world malnutrition would be
alleviated. On an annual basis, about 25 million tons of cereals would be
needed, an increase of only about 2 percent in average annual world cereal
production. The world could rather easily produce 2 percent more grain. The
most difficult problems are not those of increasing production of food, but of
distributing it to all those who need it.
The best long-run solution to the problem of malnutrition is to develop
programs and policies to provide farmers in the developing countries with in-
centives and assistance to raise their production, and to provide all workers
with employment opportunities to raise their incomes to enable them to pay







for adequate diets. For some developing countries, special feeding programs
for those most affected by malnutrition may be needed. Fortification of foods,
educational programs, and other means may also contribute to improved nutri-
tion.


Food Aid
Food assistance, which involves emergency relief as well as efforts to up-
grade nutritional levels in needy countries, is provided directly by individual
countries and through international organizations. The large food aid programs
of the 1960's were made possible by the build-up of surplus commodity stocks
in several developed countries.
The United States accounted for 80 percent of the $11 billion worth of
world food aid provided between 1965 and 1973. Since 1970, the food aid
programs of other developed countries have grown substantially, while the
value of U.S. assistance has leveled off. About $1.6 billion has been budgeted
for fiscal year 1975, compared with somewhat less than $1 billion last year.
Food aid is facing such policy issues as: (1) will the developed countries
provide food aid when they do not have surplus grain, (2) is food aid a disin-
centive to greater food production in recipient countries, (3) can the burden
of supplying food aid be more widely shared among exporting and importing
countries, and (4) can food aid be coordinated with stock piling for world
food security?


World Food Security and Grain Stocks
Between 1969/70 and 1973/74, world grain stocks declined rapidly -by
more than 80 million tons-with additional draw down in 1974/75. When
grain reserves are low, grain prices fluctuate widely in response to changes in
output. Experience demonstrates that it is impossible for the world or any
country to produce each year exactly the right amount of food; that is, those
amounts which would result in stable prices that are both economically justi-
fiable and politically acceptable. The problems of surplus farm production-
products which cannot be sold at acceptable prices-are familiar, having been
widespread during the last two decades. The problems of general shortages
have come to the fore in the last 2 years, and they are more frightening.
The large grain stocks of the past resulted from policies which induced
surpluses in the countries which held them. The surpluses provided large
amounts of food aid and permitted relative stability in world grain prices, but
they were a burden on taxpayers in countries holding the stocks, and led to
policies to slow down the growth of grain production in developed countries
after 1967. The surpluses also contributed indirectly to the developing coun-
tries' growing dependence on grain imports by permitting them to postpone
needed agricultural development programs. Low grain prices and plentiful
supplies also contributed to the reliance of the planned economies on im-
ported grains in years of bad harvests. In the developed countries, low grain
prices in the last half of the 1960's encouraged the reduction of food grain
production and the feeding of more grain to livestock.






World food security can be looked at in both a short-run and a long-run
sense. In the short-run, food stocks can supplement short crops. In the long-
run food security can only be assured by improving the ability of the world to
feed itself. Grain reserves can be used for famine relief, or for grain market
stabilization, or both. Food reserves to provide short-term emergency famine
relief would involve relatively small amounts of grain, perhaps around 10 mil-
lion tons. Such a reserve would be relatively inexpensive and would have
limited influence on world prices. A grain reserve which provided greater
amounts of protection against large fluctuations in grain supplies and prices
would be more costly and would be subject to controversy over who should
pay for it, how it would be used, and who would'make decisions about its use.
However, in view of the uncertain nature of world food supplies, it would seem
to be wise social policy to ensure against major shortages, and to be prepared
to pay reasonable cost to maintain moderate stocks or reserve capacity or to
absorb some surpluses if they should result.


The Future
Even though there are likely to be times and places of critical food short-
ages over the next decade or so, it is possible for world food production to
keep slightly ahead of population growth. ERS has made four alternative pro-
jections to 1985 of world production, demand, and trade of grain. They all
indicate that productive capacity in world grain production would permit con-
tinued improvement in per capital consumption of food. The principal differ-
ences between the alternative demand projections rest on assumptions about
possible economic growth rates around the world. Supply response for three
of the alternatives is based on an analysis of land use and availability and the
impact of technology and input use on yields. It was assumed that major ex-
porters will adjust supply rather than permit either the continuation of
unusually high prices and low stock levels, or the appearance of sizable sur-
pluses. These three projections suggest a doubling or tripling of the develop-
ing countries' deficit by 1985, compared with the 1969-71 base period level
of about 24 million tons. The developing countries could not afford such
imports except by increasing their export earnings to improbably high levels,
by diverting foreign exchange needed for high priority development projects,
or by obtaining considerably more foreign assistance than has been available in
recent years.
If an ever-increasing transfer of grain from the developed to the develop-
ing countries is not feasible or desirable, what can be done to reverse the trend
and narrow the food gap? The only way to do this, while at the same time
maintaining growth in per capital consumption, is for the developing countries
to increase their agricultural productivity. The fourth alternative projection
explores this by examining the effects on yields in developing countries of
increasing fertilizer use by 1-1/2 to 2 percent per year above the 1960-72 trend
growth. Also implied is increased use of other inputs such as irrigation, pesti-
cides, and hybrid seed. Under this alternative, the grain deficit in the develop-
ing countries would remain at about the 1969-71 level.






The projections suggest a very substantial increase in food production by
both the developed and developing countries. What will it take to achieve such
increases, and is it really possible?
The availability of land and the raw materials for agricultural inputs-the
underlying major determinants of the world's ability to produce more food-
need not be an impediment to future increases in production. At least twice
as much land is estimated to be available in the world for food production as
is presently being used. Latin America and Africa have the greatest opportuni-
ties for land expansion. While bringing this land into production would in-
volve costs, these costs generally would not be excessive.
However, most of the potential growth in food production would come
from higher yields and other increases in productivity. The technology and
inputs (such as fertilizer) to greatly expand production either exist or can be
developed in both the rich and the poor countries. Substantial increases in
production capacities for fertilizers are now planned in many countries, and
the long-run prospects for fertilizer supplies at reasonable prices appear to be
good. The oil-producing Mideast countries could substantially increase their
fertilizer production because of their access to low-cost inputs. Their trans-
portation costs in moving fertilizer to the rest of Asia would also be less than
from other low-cost producing areas. In this way they could make a major
contribution to assisting the poorer developing countries.
The basic imbalances in world food production and consumption which
produced surpluses in developed countries, growing imports in developing
countries, and malnutrition among some groups remain uncorrected. Correc-
tion of these imbalances will require serious reevaluation of agricultural, food,
and trade policies in many parts of the world. Far greater attention will need
to be given to stimulating food production in some developing and planned
economy countries, to encouraging a more viable basis for world agricultural
trade, and to establishing a broader based system of world food security.
Among the major impediments to increasing food production in both
the developing and the planned economies are policies designed to maintain
low food prices to consumers. These policies have dampened the farmers'
incentives to produce food in some of the countries and have been partly
responsible for their large grain imports.
It will obviously not be a simple matter to relax the longstanding domes-
tic farm price policies around the world. The supported prices of the developed
countries have grown out of a long history of political accommodation to
domestic farm and consumer interests. Those of the planned economies have
been central to their developmental philosophy. For the developing countries,
the problem is especially difficult since the implication is that basic food
prices would have to rise somewhat above the levels of the past. But the rise
in food prices implied for the developing countries would be relatively small,
and in many cases prices would be considerably lower than at present. Since
more than half the population of most of these countries is made up of farmers,
the improvement in incomes would be widely distributed.
Substantial increases in production in developing countries would require:
(a) incentive prices; (b) expanded government programs to provide the foreign
exchange and farm credit necessary to increase the use of inputs; (c) research
into development and adaptation of new varieties to diverse local situations;






(d) investment, including new irrigation and improved water management; and
(e) institutional support for research, extension, and improved supply and dis-
tribution of inputs. The simplistic goal of food self-sufficiency for each coun-
try is not feasible. While there is clearly a need to produce much more food in
many developing countries, the stimulation of food production without ade-
quate attention to costs would reduce the general development of these coun-
tries and would conflict with the building of a more viable agricultural trade
system which is necessary if the world is to be fed adequately, efficiently, and
at the lowest cost.
Many views of the world food situation focus on immutable forces or
circumstances (such as the limited surface of the earth, changed climatic pat-
terns, or the fixed nature of consumption patterns) which are thought to be
beyond the control of people. The ERS analysis indicates, however, that much
of what has happened in the development of the world food situation can be
traced to government policies and basic human conditions (such as income
distribution and poverty), and suggests that governmental and individual
choices will continue to be critical in the future.
One of the World Food Conference resolutions, on "Objectives and
Strategies of Food Production," draws upon Secretary Kissinger's opening
remarks at the Conference and states that:

All governments should accept the removal of the scourge
of hunger and malnutrition ... as the objectives of the interna-
tional community as a whole, and accept the goal that within a
decade no child will go to bed hungry, that no family will fear
for its next day's bread, and that no human being's future and
capacities will be stunted by malnutrition.

Solving the problems in a decade would be a most remarkable achieve-
ment. But the world food situation can be changed to the extent that govern-
ments and individuals see needs for change and are willing to modify those
policies and conditions that influence food production and consumption.





















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