Food Security and Economic Analysis
The Asian Approach to Food Security
That rich countries have little to fear from hunger is a simple consequence of Engel's Law; consumers have a substantial buffer of nonfood expenditures to rely on, even if food prices rise sharply. In a market economy, the rich do not starve. Wars, riots, hurricanes, and floods, for example, can disrupt the smooth functioning of markets, and all in their wake can perish. But rich societies usually have the means to prevent or alleviate such catastrophes, social or natural. Food security in such societies is simply part of a broader net of social securities.
Without the buffer of Engel's Law, consumers in poor countries are exposed to routine hunger and vulnerability to shocks that set off famines (Anderson and Roumasset, 1996). And yet, several poor countries have used public action to improve their food security.1 The typical approach reduces the numbers of the population facing daily hunger by raising the incomes of the poor, while simultaneously managing the food economy in ways that minimize the shocks that might trigger a famine. These countries, some of them quite poor, have managed the same "escape from hunger" that Fogel documents for Europe.
1 Defining food security is an exercise in itself, especially when both macro and micro dimensions are included in the definition In a recent review, Simon Maxwell (1996) listed 32 (!) different definitions of the term used by various authors between 1975 and 1991 Each definition is sensible in some context The goal of this essay is to understand the economic context in which food security is no longer a personal or a policy concern Almost any definition that is intuitively plausible will do for that purpose.
The main premise of this essay is that an early escape from hunger is not primarily the result of private decisions in response to free-market forces. Improved food security stems directly from a set of government policies that integrates the food economy into a development strategy that seeks rapid economic growth with improved income distribution (Timmer, et al., 1983). With such policies, countries in East and Southeast Asia offer evidence that poor countries can escape from hunger in two decades or less - that is, in the space of a single generation. Although two decades may seem an eternity to the hungry and those vulnerable to famine, it is roughly the same as the time between the first World Food Summit Conference in 1974 and the second one in 1996. Despite much well-meaning rhetoric at the earlier summit, including Henry Kissinger's pledge that no child would go to bed hungry by 1985, the failure to place food security in a framework of rural-oriented economic growth, in combination with policies to stabilize domestic food economies, meant that two decades have been wasted in many countries.
The focus here is on food security as an objective of national policy. The emphasis is on food security at the "macro" level. At that level, policymakers have an opportunity to create the aggregate conditions in which households at the "micro" level can gain access to food on a reliable basis through self-motivated interactions with local markets and home resources. The perspective taken is, thus, primarily an economic one.
Surprisingly, however, recent literature on food systems and economic development makes such an economic assessment of food security a difficult task. Three bodies of literature are potentially relevant to an analysis of how countries can escape from hunger and provide food security for their citizens, and yet none addresses the topic directly.
First, there is a substantial literature on the achievement of rapid economic growth (World Bank, 1993; Lucas, 1988; Barro and Sala-i-Martin, 1994; Taylor, 1996). Export orientation and openness to trade tend to be the dominant policy issues in this literature. In none of this literature is food security even mentioned, and agriculture receives only passing notice. Both omissions are surprising in view of the historical links between agriculture and economic growth and the fact that no country has sustained rapid economic growth without first achieving food security at the macro level (Timmer, 1996b);
Second, agriculture is treated in the literature on rapid poverty alleviation through rural-oriented economic growth (Timmer, 1991, 1995, 1996a; Birdsall, Ross, and Sabot, 1995; Ravallion and Datt, 1996; Lipton, 1977; Mellor, 1976). But even though the agricultural sector and the rural economy are the focus of this literature, no connections are made to price stability or other dimensions of food security, and trade issues are largely ignored.
Third, there is a growing literature on stabilization of domestic food economies and the contribution of stability to economic growth (Bigman, 1985; Chisholm, 1982; Sarris, 1982; Newbery and Stiglitz, 1981; Morduch, 1995; Timmer, 1989, 1996c; Dawe, 1996; Ramey and Ramey, 1995). But the stabilization literature is badly bifurcated into micro-based analyses of decision-maker response to risk (both consumers and producers) and macro-based assessments of the impact of instability, usually measured by rates of inflation, on economic growth. Virtually no analysis has been done to connect these two topics, which is surprising in view of the macroeconomic significance of the food sector in most developing countries. A further connection links food security to political stability, which is increasingly important as a factor influencing investment, including foreign direct investments and portfolio investments in these countries.
Not surprisingly, food security strategies in Asia have been little influenced by this economic literature. The lack of influence stems from at least two factors. First, the dominance of rice in the diets of most Asians, coupled to the extreme price instability in the world market for rice, forced all Asian countries to buffer their domestic rice price from the world price. This clear violation of the border price paradigm and the accompanying restrictions on openness to trade seem to have escaped many advocates of the East Asian miracle, who see the region's rapid growth as evidence in support of free trade (World Bank, 1993).
Second, most Asian governments have paid little attention to formal efforts to define food security as a prelude to government interventions that would be seen as their approach to "food security." Instead, the food security strategies of most countries in East and Southeast Asia have had two basic components, neither of which is specifically linked to any of the standard definitions of food security used by international agencies. The United States position paper for the 1996 World Food Conference, for example, uses one version of these standard definitions:
Food security exists when all people at all times have physical and economic access to sufficient food to meet their dietary needs for a productive and healthy life. Food security has three dimensions:AVAILABILITY of sufficient quantities of food of appropriate quality, supplied through domestic production or imports;ACCESS by households and individuals to adequate resources to acquire appropriate foods for a nutritious diet; and
UTILIZATION of food through adequate diet, water, sanitation, and health care.
(United States Department of Agriculture (USDA), 1996)
This definition is obviously an ideal that no country could hope to reach in fact. By contrast, the Asian countries that have been most successful at providing food security to their citizens have based their strategies on two elements of their domestic food system over which they have some degree of policy control: income growth and food prices.
The rate and distribution of economic growth are primarily matters of macroeconomic and trade policy (once asset distributions are given as an initial condition). Although there is continued controversy over what role Asian governments played in stimulating growth and channelling its distribution, there is no disagreement that high rates of savings and investment, coupled to high and sustained levels of capital productivity, in combination with massive investments in human capital, explain most of the rapid growth (World Bank, 1993). Therefore, growth that reached the poor was one component of the food security strategy.
In the second element of the strategy, Asian governments sought to stabilize food prices, in general, and rice prices, in particular. Engel's Law ensures that success in generating rapid economic growth that includes the poor is the long-run solution to food security. In the language of Dreze and Sen (1989), such economic growth provides "growth-mediated security." In the meantime, stabilization of food prices in Asia ensured that short-run fluctuations and shocks did not make the poor even more vulnerable to inadequate food intake than their low incomes required.
Economists are highly dubious that such stability is economically feasible or desirable It is not a key element of the "support-led security measures outlined by Dreze and Sen (1989) In a recent review of food security and the stochastic aspects of poverty, Anderson and Roumasset (1996) essentially dismiss efforts to stabilize food prices using government interventions:
Given the high costs of national price stabilization schemes (Newbery and Stiglitz, 1979, 1981, Behrman 1984, Williams and Wright, 1991) and their effectiveness in stabilizing prices in rural areas, alternative policies decreasing local price instability need to be considered The most cost-effective method for increasing price stability probably is to remove destabilizing government distortions Government efforts to nationalize grain markets and to regulate prices across both space and time have the effect of eliminating the private marketing and storage sector Rather than replacing private marketing, government efforts should be aimed at enhancing private markets through improving transportation, enforcing standards and measures in grain transactions, and implementing small-scale storage technology (Anderson and Roumasset, 1996).
Although this condemnation of national price stabilization schemes might well be appropriate for much of the developing world, it badly misinterprets both the design and implementation of interventions to stabilize rice prices in East and Southeast Asia (Timmer, 1993, 1996c)
For food security in this region, the stabilization of domestic rice prices was in fact feasible in the context of an expanding role for an efficient private marketing sector The resulting stability was not an impediment, but was probably conducive to economic growth In addition, the stabilization scheme and economic growth had to work in tandem to achieve food security as quickly as possible
Both elements of the Asian strategic approach to food security-rapid economic growth and food price stability-address the "macro" dimensions of food security, not the micro' dimensions found at and within the household Governments can do many things to improve food security at the household and individual level, and most countries in East and Southeast Asia have programs to do so Rural education accessible to females and the poor, family planning and child-care clinics in rural areas, nutrition education, and extension specialists helping to improve home gardens are just a few of the possibilities Most of the literature on food security deals with approaches at this level, but problems of definition, measurement, project design, and management vastly complicate strategies that rely on household interventions (D Maxwell, 1996)
The complications, in turn, sharply limit the number of households that can be reached with a micro approach Without dismissing the potential effectiveness of these approaches to enhance food security in particular circumstances, it is still important to realize the scale of the problem Hundreds of millions of people still do not have food security in Asia (although the number is shrinking rapidly in East and Southeast Asia), and programs directed at households will not bring it Only food security at the macro level can provide the appropriate facilitative environment for households to ensure their own food security That is the East Asian miracle
