3. Food security prospects for most food-insecure countries

Introduction

This section focuses on the prospects for food insecure countries, in the context of medium term projections, and is intended to motivate further analysis of the role of commodity markets and commodity policies in the problem of food insecurity. It does this by examining some implications of the medium term projection for those countries which were identified in the FAO publication "The state of food insecurity in the world 2002" as having 35 percent or more of their populations undernourished.^[3] It must be stressed that the existing projection framework for these countries is currently not adequate for a full review. While the country coverage of the projection is mostly complete for most food commodities, it is less so for non-food commodities; while coverage for commodity consumption is reasonably complete, it less so for commodity production. Moreover, the modelling framework does not allow the comprehensive analysis to consider the implications of policy developments at the national level on the vulnerable groups in these countries. However, an examination of the prospects for these countries will help foster discussion and further study of the role of policies and markets in the food security problem.

Market developments

Commodity market developments obviously play a significant role in the food security situation of these most food insecure countries. It is not only that agriculture’s share of total GDP averages about 30 percent, or that consistently over 70 percent of the populations of these countries are involved in agriculture. But with average per capita GDP at about one US$ per day, resources expended on food are high relative to income, and for many of these countries, most calorie and protein intake is by definition low, and depends on relatively few products. Furthermore, these food insecure countries are growingly dependent on food imports, as production has not kept pace with increasing demand, with high population growth at about 2.7 per cent. Food aid in recent years has been about 3 percent of total calorie intake, and while this may be low, it may critically affect key segments of the population. Finally, earnings from agricultural exports for these food insecure countries are not diversified but concentrated among two or three bulk commodities including tropical beverages, tobacco, fruit and vegetables, and agricultural raw materials. Against this background, and depending on each country’s openness and sensitivity to international markets, commodity and commodity policy developments, both domestically and globally may critically impact the food security situation of these countries.

Slow economic growth

In terms of the medium term prospects for the most food insecure countries, several factors indicate that there may be only limited improvement in their situations. Economic projections for these countries are mixed, with per capita GDP projected to be stagnant in some countries, or to show only moderate gains in others. In no case do the macroeconomic projections anticipate "high" rates of economic growth during the period. As noted in the Part II, market conditions for most of the bulk raw commodities are expected to remain weak over much of the period to 2010. Market prospects for tropical beverages and for agricultural raw materials, which form the basis of agricultural exports for these countries are characterised by relatively weak prices with high competition from other developing countries. The prospects for growth in export earnings appear limited.

Food availability

The composition of food consumption is estimated to remain unchanged and continue to depend on a relatively few number of traditional food commodities (Chart 8). In terms of domestic food availability for these countries, the production - utilisation deficit in cereals is projected to widen. The gap is expected to increase to 17 percent from 11 percent on average in 1998 - 2000. This results from higher domestic demand, stimulated by strong population growth and modest per capita income growth, and slowly growing domestic production. As a consequence, for the aggregate of basic food commodities, these countries are projected to increase their net-import spending. The share of net import in total cereal consumption is projected to increase from 15.2 percent in 1999* to 18.6 percent in 2010 and in the case of total meat from 2.4 to 10.7 percent. This, in itself, does not necessarily have negative food security implications. But it does point to higher reliance on external markets for food requirements, and the unease which is often expressed with such a situation, particular with potentially price-volatile markets and a high percentage of income spent on food.

Chart 8. Most food insecure countries: composition of diet in terms of calorie intake by selected commodity groups (1998/2000 average)

Food consumption

Growth in per capita calorie consumption (Table 1.6 and Chart 9) is projected to remain slow. It is important to underline that projection figures are averages; distributional changes are perhaps as critical as average changes in average consumption. However, the projections show marginal improvement in the outlook for these countries, with average daily per capita calorie intake increasing by 5 percent by 2010, to just 2027 calories. This improvement is mostly due to projected growth in consumption of roots and tubers, fruit and vegetables. Changes in national income play an important role, and elasticities of demand for purchased foods with respect to income in these countries are high. For many, however, local production also plays a major role in nutritional prospects, particularly for crops such as roots and tubers, fruit and vegetables where trade activity is more limited.

Chart 9. Most food insecure countries: actual consumption and projected demand by selected commodity groups

Higher income growth scenario

To evaluate the importance of increased national income to the improvement of food security in these countries, a higher income growth scenario was explored using an extended World Food Model.^[4] Increasing GDP growth by a further 1 percent each year over the baseline, under the assumption that the additional income was generated outside agriculture (agricultural production was not adjusted), increased average calorie intake by 5.3 percent to 2 134 kcal/day by 2010. Income-induced increases in food consumption of traded foodstuffs - cereals, meat, oil and milk - explain about half of this improvement. International market prices were unaffected by the increase in demand by these countries, given their relatively small proportion of world markets. It appears therefore that while higher income growth is obviously a key to increasing nutritional intake and nourishment, it will take much higher growth to significantly improve the nutritional situation in the short to medium term. A successful approach to addressing the food security issue must also consider the role of targeted anti-hunger programmes, such as development assistance that generates greater local production/productivity of key food crops, or food aid in meeting the needs of the most food insecure.^[5]

Table 1.6. Consumption profile and projections for most food insecure countries

In the higher income scenario the yearly GDP growth is assumed 1 percent higher than that of the baseline. Source: FAOSTAT database and projections. Food aid data relates to 1999.