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1.1 Focus on nutrition/food security and
agricultural resources/sustainability
1.2 Prospective developments to year 2010
1.3 Factors in the growth of agriculture in
developing countries
1.4 Further pressures on agricultural resources
and the environment
1.5 Technological and other policies to minimize
trade-offs between agricultural development and the environment
1.6
Forest sector prospects
1.7 Increasing resource constraints in fisheries
1.8 Policies for agriculture and rural
development in developing countries
1.9 Emphasis on human resources development in
developing countries
1.10
Concluding remarks
1.1 Focus on nutrition/food security and agricultural resources/sustainability
This study assesses prospects for world food and agriculture to the year 2010, with special focus on the developing countries. The results present the situation as it is likely to develop and several chapters are devoted to the discussion of ways of tackling both persisting and newly emerging problems. The study covers a wide array of issues in varying degrees of detail as regards their geographic, commodity, resources, technology, and other dimensions as well as related policies. The overall framework for the assessment of prospects is provided by two related major issues in world food and agriculture:
The importance of these issues was underlined by the major international conferences of recent years: the United Nations Conference on Environment and Development (UNCED) and the FAO/WHO International Conference on Nutrition (ICN).
Food and nutrition: progress and failures in the historical period
World per caput supplies of food for direct human consumption are today some 18 percent above what they were 30 years ago. The majority of the developing countries participated in this progress and improved nutrition. However, impressive as this progress has been, it has bypassed a large number. of countries and population groups. Many countries continue to have very low per caput food supplies and have hardly made any progress. Indeed, sub-Saharan Africa is today worse off nutritionally than 30 or 20 years ago. In parallel, continuous population growth has meant that the declines in the percentage of the population chronically undernourished did not lead to commensurate declines in the absolute numbers affected. The latter have fallen only modestly and remain stubbornly high at some 800 million persons.
It is now well recognized that failure to alleviate poverty is the main reason why undernutrition persists. This realization, together with the evidence that the world as a whole faced no major constraints in increasing food production by as much as required to meet the growth of effective demand (as shown by the long-term trends for food prices not to rise in real terms, and indeed to decline on balance), contributed to focus attention on ways and means to alleviate poverty and improve the "food entitlements" of the poor, while downplaying the role of increasing per caput food supplies. However, the two aspects cannot be separated in the quest for policy responses to the problem of undernutrition. In the majority of the developing countries, increasing food production is among the principal means for combating poverty. This follows from the fact that the majority of the poor depend on agriculture for employment and incomes. So long as this dependence continues to be high, the growth of food production and of agricultural productivity in the countries with high concentrations of rural poverty will continue to be among the principal means for alleviating poverty and improving nutrition.
The role of world food markets
But global food production capabilities will continue to be important, even if the focus is on the nutrition problem in the developing countries. The fact that success in a number of countries was based on rapidly growing food imports, particularly in the 1970s following the growth of export earnings from the oil boom and easy access to external finance, underlines the role of world food markets in the nutritional developments of the developing countries. In the past, world markets were abundantly supplied by the main cereal exporters, mainly the Western developed countries. This evidence suggests that the world as a whole had sufficient production potential to respond to spurts in import demand without raising prices, apart from occasional shocks. Whether this will be so in the longer term future is another question, which is addressed later on, drawing on the analyses of this study.
In particular the historical evidence needs to be interpreted with care, because the behaviour of world food markets in the past was influenced by the agricultural support policies of major cereals exporting countries. This led to surplus production, stock accumulation, subsidized exports and depressed world market prices. In addition, environmental and resource degradation problems were less of an issue than at present in the decision to support increases in production. Policy reforms under way and in prospect would contribute to all these factors playing a less important role in the future compared with the past in increasing supplies to world markets. Already such policy changes, together with a slowdown in world demand for cereal imports, have led to a decline in recent years in cereals production of the main exporting countries. These declines are behind the fact that world per caput production of cereals is today below its peak of the mid-1980s (see below).
The significance of agricultural resources in the food security problematique
In the quest for solutions to the problem of food security and undernutrition, concerns are often expressed about the capability of the world's agricultural resources, technology and human ingenuity to increase food supplies by as much as required to ensure to all people adequate access to food. However, the adequacy of agricultural resources to produce more food is only one part of the resources/environment/sustainability nexus having a bearing on the food problem. Agricultural resources are not only an input into food production but also the major economic asset on which depends a good part of the population in the developing countries for employment and income. Thus, even if the world's resources were adequate to underpin continued growth in food production, the solution of the food problem would still be constrained if the agricultural resources of the poor were insufficient to ensure their livelihood. From this standpoint, the relevant dimension of the perceived growing global imbalance between population and agricultural resources is not so much the need to produce more food globally for more people but rather the fact that the population dependent on agriculture for a living continues to grow.
Some developing countries have made the transition to reduced dependence on agricultural resources for their total employment and income. They include countries which have achieved medium-high levels of per caput food availabilities, even though their agricultural resources per caput (of the total population) have declined to very low levels. Some of them have come to depend increasingly on food imports. For them, the agricultural resource constraints most relevant to their food welfare are those impinging on the global capabilities of the world to produce more food. However, many developing countries are far from this transition. For these latter countries, local agricultural resource constraints will continue to be a major factor in the prospects for solving their food problem. This is because a high proportion of their population, often growing in absolute numbers, depends on these very agricultural resources. Moreover, efforts of growing numbers to make a living out of dwindling resources per caput are sometimes associated with degradation and reduction of the productive potential of these resources. In such cases, there is a high risk that a vicious circle between increasing poverty and resource degradation may be established.
However, it would be incorrect to assume that agricultural resource degradation is exclusively a poverty-related phenomenon. There is sufficient evidence of resource degradation associated with agricultural practices in areas which are certainly not poor, e.g. overuse of agrochemicals in Europe, soil erosion associated with part of grain production in North America and effluents from intensive livestock operations in many countries. Some of these effects are generated or strengthened by policies which provide incentives for unsustainable practices, e.g. support and protection policies which make profitable the excessive use of agrochemicals. Thus, devising policies to safeguard agricultural resources, reduce more general adverse environmental impacts and make progress towards sustainability requires taking account of the factors that determine behaviour vis-a-vis the resources of both the poor in the developing countries and the non-poor everywhere.
Notwithstanding the above-mentioned occurrences of increased pressures on agricultural resources generated by the actions of the non-poor, poverty reducing development remains the main hope for easing such pressures in the long term. In the first place, overall population growth slows down with development and agricultural population declines; and secondly, there is less scope for further increases in per caput food consumption when people are well fed. The pressures for increasing food production and for extracting incomes out of agricultural resources in non-sustainable ways become accordingly less intense at higher levels of development. In addition, the objective of resource conservation and environmental protection ranks higher with development in society's hierarchy of preferences, while the means to pursue this objective are also less scarce.
In this context, the question of primary interest for policy is not only how to break the vicious circle between increasing poverty and resource degradation but also how to manage the process of development in ways which minimize the trade-offs between it and the environment. Later sections in this chapter summarize, and other chapters discuss more fully, the environmental pressures likely to emerge in the next 20 years as they can be deduced from the production, resource use and technology projections of this study. They set the stage for examining the options offered by technology and other policies to respond to this challenge.
1.2 Prospective developments to year 2010
Continuing, but slower, growth in world population
Over the time horizon of the study the world population may grow to 7.2 billion (or to 7.0 billion according to the latest UN projection; UN, 1994), up from the 5.3 billion of 1990 and the 3.7 billion of only 20 years earlier: 94 percent, or 1.8 billion (1.6 billion in the latest projections) of the total increment in world population will be in the developing countries. Moreover, the regional patterns of population growth are very disparate, e.g. 3.2 percent p.a. in sub-Saharan Africa (reduced to 2.9 percent p.a. in the latest revision of the demographic projections), 1.2 percent p.a. in East Asia. These demographic trends in the developing countries, in combination with their still low levels of per caput food consumption, would require continued strong growth in their food supplies. Not all these additional needs will be expressed as effective market demand. The aggregate increase in the food supplies of the developing countries is likely to be less than required to raise average per caput supplies to levels compatible with food security for all. This is because the general development scene is likely to leave many developing countries and population groups with per caput incomes and potential for access to food not much above present levels.
Better prospects for overall economic growth in the developing countries but with significant exceptions
In the crisis decade of the 1980s. all developing regions experienced declines in per caput incomes, with the important exception of Asia, both East and South. It is likely that these trends will be reversed in the future. The latest World Bank assessment indicates that Asia would continue to perform at fairly high rates of economic growth while the prospects are for modest recovery in both Latin America/Caribbean and the Near East/North Africa. Sub-Saharan Africa would also shift to higher economic growth rates compared with the disastrous 1980s but its per caput income would grow only slightly. These developments in the overall economy already foreshadow the prospect that some regions will continue to make progress towards food security and that others may not make much progress.
The Western developed countries are likely to continue to perform as in the past. The prospects for the ax-centrally planned economies (CPEs) of Europe are shrouded in uncertainty. Their combined GDP is thought to be at present about one-third below that of the pre-reform m period. The decline will probably bottom-out in the near future, but it may take a long time before sustained growth re-establishes per caput incomes at the pre-reform levels.
World agricultural growth will continue to slow down
The detailed assessments of this study indicate that the growth rate of world agricultural production at 1.8 percent p.a. will be lower in the period to 2010 compared with that of the past. This slowdown is largely a continuation of long-term historical trends. World production grew at 3.0 percent p.a. in the 1960s, 2.3 percent p.a. in the 1970s and 2.0 percent p.a. in 1980-92. The slowdown is not a negative outcome per se to the extent that it reflects some positive developments in the world demographic and development scenes. In the first place, and as noted above, world population growth has been on the decline. Secondly, more and more countries have been raising their per caput food consumption to levels beyond which there is limited scope for further increases. Most developed countries are in this class and they are being gradually joined by some developing countries. To put it in plain language, people who have money to buy more food do not need to do so, though they will probably continue to increase their expenditure on food to pay for the ever increasing margins of marketing, processing, packaging and the services that go with them.
The negative aspect of the slowdown has to do with the fact that it has been happening and will continue to happen while many countries and a significant part of the world population continue to have totally inadequate consumption levels and access to food, with consequent persistence of high levels of undernutrition. In short, the slowdown in world agricultural growth is also due to the fact that people who would consume more do not have sufficient incomes to demand more food and cause it to be produced. World output could expand at higher rates than envisaged in this study if effective demand were to grow faster.
There is in the preceding discussion a notional separation between demand and supply: demand expands independently of supply and causes production to respond. If the additional production is forthcoming at non-increasing prices, one cannot speak of constraints to increasing output. This description fits fairly well the situation in the more advanced countries where incomes and demand originate predominantly in sectors other than agriculture. But it applies much less to many developing countries where incomes of large parts of their population depend, directly and indirectly, on agriculture. In such situations, increasing demand and increasing production are in many respects two faces of the same coin. For if production constraints limit agricultural growth, they act as brakes on both incomes and demand as well as supply. In such situations, one can speak of production constraints limiting progress towards food security, even though such constraints may not apply at the world level.
The policy implication is that in countries with heavy dependence on agriculture, progress towards improved food security depends in major ways on making their own agriculture more productive, at least until such dependence is significantly reduced in the process of development. This self evident conclusion is not new. It is restated here in order to dispel the notion that agricultural resource constraints do not stand in the way of improving world food security just because there is probably still ample potential for increasing food production in the world as a whole. This notwithstanding, as development proceeds and poor countries reduce their dependence on agriculture for income and employment, and become more integrated into the world economy, the issue of whether there are agricultural resource constraints to making progress towards food security for all will tend to shift from the local level to the global one.
Progress in food and nutrition, but not for all
The implications of the demographic and overall development prospects, together with the assessments of this study for production, consumption and trade are that per caput food supplies for direct human consumption (as measured by the food balance sheets) in the developing countries as a whole would continue to grow, from nearly 2500 calories today to just over 2700 calories by the year 2010. It is likely that by the year 2010 the Near East/North Africa, East Asia (including China) and Latin America/Caribbean regions will be at or above the 3000 calorie mark - significant progress particularly for East Asia. South Asia may also make significant progress but it will still be in 20 years time at a middling position. But the prospects are that per caput food supplies in sub-Saharan Africa will remain at very low levels.
Under the circumstances, the incidence of chronic undernutrition could decline in the three regions with the better prospects. Progress will likely be made also in South Asia, though there could still be 200 million people undernourished in the region by the year 2010. Chronic undernutrition is likely to remain rampant in sub-Saharan Africa, with 32 percent of the population (some 300 million) affected. Thus, the scourge of chronic undernutrition in terms of absolute numbers affected will tend to shift from South Asia to sub Saharan Africa. These estimates are broad orders of magnitude and relative trends rather than precise predictions of what may happen, subject to the necessary caveats (discussed in Chapter 2). They indicate that it is likely that chronic undernutrition in the developing countries as a whole will persist, perhaps at somewhat lower absolute levels, some 650 million people in the year 2010, against some 800 million people today. Therefore, there will be no respite from the need for interventions to cope with the problem, nor from that of seeking to eradicate poverty, the root cause of undernutrition.
World production of cereals to continue to grow, but not in per caput terms
In the past 20 years, per caput production of cereals for the world as a whole grew from 302 kg in 1969/71 to a peak of 342 kg in 1984/86 but then it declined to 326 kg in 1990/92. It is probable that the average may not grow further and it would still be 326 kg in 2010. This is, however, no cause for general alarm for the reasons discussed earlier in connection with the progressive slowdown in world agricultural growth. In particular, the consumption requirements for all uses in the developed countries (which have 635 kg of per caput total use of cereals and account for 46 percent of world consumption) grow only slowly and may fall in per caput terms. These countries produce collectively as much as needed for their own consumption and to meet the increase in net exports to the developing countries. They could produce more, if more were demanded. These prospects are heavily influenced by possible developments in the excepts of Europe whose total domestic use of cereals would not only stop increasing rapidly as in the past but may actually fall. This possible development has its origin in the prospect that per caput consumption of livestock products may not recover fully to the pre-reform levels, that there is significant scope for economies in the use of cereals as feed and that post-harvest losses could be reduced significantly.
The recent decline in the world per caput production of cereals has been interpreted by some as indicating a structural change for the worse in the world food trends caused by increasingly binding constraints on the side of production. However, the decline after the mid-1980s was entirely due to falls in the aggregate production of the major net cereal exporting countries. It has not been associated with rises in world market prices and was to a large measure related to policies of some major countries to control the growth of production in that period. Therefore, the decline may not be interpreted as signalling the onset of constraints on the production side which made it difficult to meet the growth of effective demand. The real problem must be seen in the too slow growth of effective demand on the part of those countries and population groups with low levels of food consumption.
The preceding discussion indicates that the world average per caput production has only limited value for measuring trends in world food security. It can also be misleading if it conveys the idea that with the world average constant, any gains in per caput production of one group of countries must be counterbalanced by declines in another group. This need not be the case. It was not so in the 1980s and it will likely not be so in the future. Per caput production is projected to increase in both the developed and the developing countries while the world average may remain at 326 kg (see Table 2.1 in Chapter 2). This paradox is due to the fact that the developing countries start with low per caput production and high population growth rates, and the developed countries are in the opposite situation.
In the event, per caput production of cereals in the developing countries is foreseen to continue growing, from the 216 kg in 1988/90 to 229 kg in 2010. This is a smaller increment than was achieved in the past: 15 kg per decade in the 1970s and the 1980s. But their per caput consumption for all uses may grow faster than production, from 235 to 254 kg, part of it for feed to support the rapidly growing livestock sector. This will require further growth of net imports from the developed countries, which may grow from the 90 million tonnes of 1988/90 to about 160 million tonnes in 2010. The implied rate of growth of the net import requirements is not particularly high judged by the historical record. It is more like that of the 1980s rather than the very rapid one of the 1970s. Financing increased food imports may be considered a normal feature of those developing countries in which both incomes and consumption, particularly of livestock products, grow and other sectors generate foreign exchange earnings. But those developing countries which cannot easily finance increased food imports from scarce foreign exchange earnings will face hardship. It is, therefore, reasonable to foresee a continued role for food aid for a long time to come. If policy reforms towards a more market-oriented international agricultural trade system were to limit the scope for food aid from surpluses, alternative measures will be required to meet the needs. In this respect, the decision included in the Final Act of the recently completed Uruguay Round of Multilateral Trade Negotiations, about measures to attenuate the effects on the food importing developing countries of an eventual rise in world market prices, creating conditions for food security stocks and continuation of food aid flows, assumes particular importance.
Modest growth in the demand for exports of cereals from the major exporting developed regions
Although the prospects for further growth of exports of cereals from the major exporting developed countries to the developing countries offer some scope for further growth of production and exports of the former, the prospects are for their net exports to the rest of the world to grow by much less. This is because the group of the ex-CPEs of Europe would probably cease to be a large net importer in the future and there is a possibility that it could turn into a modest net exporter of cereals by 2010.
There might be significant changes in the market shares in these total net exports of the three major exporting OECD areas, W Europe, N America and Oceania. The policy reforms under way and in prospect, in particular in the context of the provisions of the Final Act of the Uruguay Round, would probably lead to W Europe not increasing further its net exports from the levels of the late 1980s, with all of the additional combined exports of the three groups, and perhaps some more, accruing to North America and Oceania. At least this is what is indicated by the results of most analyses concerning the possible effects of the policy reforms. These findings are, of course, subject to the many caveats attached to the assumptions and models on which these analyses are based.
Continuing strong growth in the livestock sector
The past trends for the livestock sector in developing countries to grow at a relatively high rate are set to continue, though in attenuated form. Part of the growth in their cereal imports will be for increased production and consumption of livestock products. However, the consumption of livestock products in the developing countries will still be well below that of the developed countries in per caput terms in the year 2010. These averages for the developing countries mask wide regional and country diversities, and in both South Asia and sub-Saharan Africa consumption will generally remain at very low levels. The disparities reflect those in incomes as well as production constraints. The latter are a factor in the unfavourable nutritional prospects of some countries in which livestock products, particularly milk, are a major staple food, e.g. in the pastoral societies.
The livestock sector of the developed countries may also grow, but at much slower rates compared with the past, with per caput consumption growing only for poultry meat. This would reflect the prospect that (a) in the ex-CPEs the production and per caput consumption of livestock products may take a long time to recover to near pre-reform levels after the sharp initial declines, and (b) the other developed countries have generally high levels of per caput consumption.
With the continued growth of the livestock sector in the developing countries, their use of cereals as feed will continue to grow fast and it may more than double by the year 2010 to some 340 million tonnes, about 23 percent of their total use. This increasing proportion of total cereals supplies used to feed animals in the developing countries may give rise for concern given the persistence of undernutrition. The concern would be well founded if the use of cereals for feed diverted supplies that would otherwise be available for use by the poor as direct food. This could happen but only in situations where the additional demand for feed would raise prices rather than supplies (whether from domestic production or imports) and price the poor out of the market. There are reasons to believe that this is the exception rather than the rule, as discussed in Chapter 3.
Roots, tubers, plantains: continuing importance in the total food supplies of countries in the humid tropics
Roots, tubers and plantains account for some 40 percent of total food supplies (in terms of calories) for about one-half of the population of sub-Saharan Africa, where overall food supplies are at very low levels. Other countries in both Africa and Latin America/Caribbean also depend significantly on these staples. Production could be increased, and will do, to meet future needs. However, the past trends have been for per caput consumption to decline, at least as far as it can be ascertained from imprecise statistics for this sector. The decline has reflected essentially trends towards urbanization where the high perishability and labour-intensive nature of preparation for consumption make them less preferred foods. With increasing urbanization, it can be expected that there will be further, though modest, declines in average per caput consumption. But dependence of these countries on these products for their total food supplies will continue to be high. The trend towards decline in per caput consumption may be attenuated if imported cereals were to become scarcer, which may well be the case if policy reforms in the developed countries were to raise prices and reduce supplies for concessionary sales and food aid. Likewise, further research into converting starchy roots into less perishable and more convenient food products for the urban population could contribute to attenuate these trends.
The oilcrops sector of the developing countries: continued rapid growth in prospect
In the last 20 years the oilcrops sector of the developing countries grew fast and underwent radical structural change. The oilpalm in East Asia and soybeans in
South America exhibited spectacular growth. The shares of these products and regions in total oilcrop production increased rapidly and those of the other oilcrops of the developing countries (coconuts, groundnuts, cottonseed, sesame) and of the other regions declined accordingly.
The production growth of the sector will continue to be above average compared with the rest of agriculture. Structural change will also continue, but at a much slower pace compared with the past. The expansion of the oilpalm sector will continue to be the most rapid, increasing its share to perhaps 38 percent, up from 32 percent at present and only 16 percent 20 years ago. Soybean production in South America will also continue to grow rapidly, but nothing like the 12-fold increase of the last 20 years, when growth had started from a very low base. The continuation of fairly high growth rates of the oilcrops sector reflects the rapid increase in consumption of the developing countries for both vegetable oils for food and oilseed proteins in support of their rapidly growing livestock sectors. They would also increase further their exports of oils and to a lesser extent those of oilmeals to the rest of the world.
Slower growth in the other main agricultural exports of the developing countries
There are well-known reasons why the generally unfavourable trends in the net exports of the major export commodities of the developing countries to the rest of the world may continue. For sugar, the reason is mostly the probable continuation of support and protection policies, market access restrictions and subsidized exports of major developed countries. Then, the ex-CPEs are likely to be much smaller net importers in the future. Therefore, net exports to the developed countries will likely continue to fall. But the developing exporting countries are likely to continue to expand exports because there are growing markets in the net importing developing countries, which increased their net imports nearly four-fold in the last 20 years.
Unlike sugar and some other major export commodities, coffee and cocoa are produced only in the developing countries and consumed mostly in the Western developed countries, where per caput consumption levels are already generally high. Therefore, efforts by developing countries to increase supplies in competition with each other translate into small increases in the volume of exports and large declines in prices. For the longer term, there is scope for the situation to improve given the low consumption levels prevailing in the ex-CPEs and the developing countries themselves. But little of this scope may materialize in the form of increased consumption and imports in the next 20 years. Therefore, growth in net exports of about 25 percent, and somewhat higher in production, is a likely outcome. For tea, there are somewhat better prospects for production growth, though not for exports, because a good proportion of production is consumed in the developing countries themselves and per caput consumption will continue to increase. Finally, exports of bananas have better prospects than those of the tropical beverages since there is still scope for per caput consumption to increase in the developed countries.
In general, for the commodities produced only or mainly in developing countries competing with each other and consumed mostly in developed countries with nearly saturated consumption levels, the prospects for export earnings will continue to be dominated by movements in prices rather than volumes. The very long run remedy to declining prices may be found in the growth of consumption in yet unsaturated markets (ex-CPEs and developing countries themselves) and ultimately in the general development of the producing countries themselves. The latter factor is important because it will create alternative income-earning opportunities and put a floor to how low the returns to labour in these commodity sectors may fall before supply contracts and prices recover.
Finally, the prospects for some agricultural raw materials traditionally exported from the developing countries offer limited scope for growth in net export earnings, though for different, and not always negative, reasons. Thus, net exports of tobacco to the developed countries may not grow at all because their consumption is on the decline while it is on a rapid growth path in the developing countries themselves. For cotton, the developing countries have recently turned from being net exporters to become net importers and will further increase their net imports in the future. This is, on the whole, a positive development because it reflects their growing and increasingly export-oriented textiles industry. These trends could become even more pronounced if restrictions to textile exports become less stringent or are abolished. Similar considerations apply to the hides and skins sector and the associated expansion of exports of leather goods. Finally, natural rubber exports to the developed countries would continue to grow, but also here the developing countries will gradually increase their share in world consumption and may, by the year 2010, account for over one-half of the world total, compared with less than one quarter 20 years ago. Much of the expansion of consumption will be in East Asia.
The developing countries likely to turn from net agricultural exporters to net importers
The prospective developments presented above for the major commodity sectors indicate that the net imports of the developing countries of the agricultural commodities for which they are or may become net importers will be growing faster than their net exports of their major export commodities. These trends in import and export volumes point firmly in the direction of the developing countries' combined agricultural trade account switching from surplus to deficit. The movement in this direction has been evident for some time in the historical period. The positive net balance of trade on agricultural account shrank rapidly in the 1970s when food imports from the developed countries exploded. Although the trend was somewhat reversed in the 1980s the overall surplus was only $5.0 billion in 1988/90 compared with $17.5 billion in 1969/71 (both at 1988/90 prices).
The prospect that the developing countries may turn into net agricultural importers does not by itself say much about the welfare implications of this turnaround. It is certain that it will have a negative impact on the welfare of those countries which will continue to depend heavily on slowly growing agricultural exports to finance their food and other imports. There are many low-income countries in this situation and they include those which depend heavily on agricultural export commodities with limited growth prospects. However, for other countries these prospects are part and parcel of the development process. These are the countries whose increased imports or reduced exports of agricultural raw materials are more than compensated by growing exports of the related manufactures; and those in which the increased food imports reflect their growing incomes and food consumption and which are financed from export earnings of other sectors.