To achieve and sustain food security through rapid economic growth, the Asian experience suggests that the agricultural sector must be linked through three elements to food security: poverty alleviation, stability of the food economy, and growth itself. The effectiveness of these links depends critically on the initial conditions at the start of the process of rapid growth. In particular, agriculture can contribute little to equity if it is based on a "bi-modal" distribution of production or to stability if it is concentrated on a single export crop subject to substantial price fluctuations. Even in these circumstances, however, agriculture can be a significant contributor to economic growth.
Because of the dominance of rice in Asian diets, the prevalence of smallholder cultivators, the large size of many Asian countries, and the instability of the world rice market, the most successful countries in achieving food security developed effective programs and policies to raise the productivity of their own rice farmers. Many of these programs were explicitly motivated by the objective of self-sufficiency in rice, especially after the world food crisis in 1974, when the "world rice market" in Bangkok disappeared for nearly half a year. When long-run costs of production are less than the costs of importing, such programs make economic sense, and the "self-sufficiency" slogan can be used effectively to mobilize political and bureaucratic support.
But self-sufficiency campaigns can do much mischief. Many countries have a deep aversion to international trade, an aversion seen since well before the Corn Laws debate in England in the early nineteenth century. Lindert (1991) has documented an "anti-trade bias" in agricultural pricing and trade policy that has deep historical roots. In the face of this clear political preference for self-sufficiency, Asian countries have had a difficult time distinguishing legitimate concerns for food security from a simple desire not to import anything that could be produced domestically, whatever the costs.
Figure 3 - Poverty Alleviation, Income Distribution, and Income Growth in Indonesia 1970-1993
|
Income |
Income |
Shares |
Per Capita Income |
Annual Growth Rate | |
|
Quintile |
1970 |
1993 |
1970 |
1993 |
1970-1993 |
|
Lowest |
6.6 |
8.7 |
$ 99 |
$ 453 |
6.1 % |
|
Second |
7.8 |
12.1 |
$ 117 |
$ 603 |
6.8 % |
|
Third |
12.6 |
15.9 |
$ 189 |
$ 795 |
5.9 % |
|
Fourth |
23.6 |
21.1 |
$ 354 |
$ 1055 |
4.5 % |
|
Highest |
49.4 |
42.3 |
$ 741 |
$ 2115 |
4.3 % |
|
Ratio of Top 20 % to Bottom 20 % |
7.5: 1 |
4.9:1 |
|
|
|
|
Average Per Capita Income |
|
|
$ 300 |
$ 1000 |
4.9 % |
Note: Income shares are based on SUSENAS data for total expenditures, and are drawn from surveys drawn in the mid-1970s and early 1990s, respectively. The per capita incomes are in 1995 U.S. dollars, and the 1995 figure is based on projections using the newly revised national income accounts.
Cumulative Distribution of Income
Even in Indonesia, which has an admirable record on stabilization of rice prices, higher productivity of rice farmers, and food security for nearly the entire population, self-sufficiency for a broad array of staple foods has become a policy objective (Timmer, 1994). An assessment of the steps needed to reach this objective concluded as follows:
If economic considerations should play a significant (but not complete) role in determining appropriate policy for rice and its contribution to Indonesia's food security, the economic arguments are even stronger for all non-rice commodities. There is simply no nutritional, political, or logistical rationale to override the long-run signals from the world market on which foods Indonesia should produce domestically and which it will be more economic to import, because these economic signals are the surest indicators of where to allocate resources for increased productivity and incomes (Timmer, 1994, p. 39).
Such openness to short-run price signals from world markets for all but the most important staple food, and for all commodities in the long run, will require more open and stable markets in the future than have existed in the past. One major attraction to developing countries of the Uruguay Round of the GATT negotiations was the promise that liberalized agricultural trade would result in more stable prices on world grain markets. However, this promise may have been premature (Greenfield, et al., 1996; Islam, 1996). The shortages that caused high grain prices in world markets in 1995 and 1996 have renewed anxieties about future food supplies, and policy-induced reductions in grain stocks seem destined to cause greater, not less, instability in grain prices. Asia, with nearly half the world's population to feed, is understandably concerned about how much to respond with new investments in domestic production and how much to rely on privately-held stocks available in international markets for supplies of basic grains.
However the balance is struck on domestic versus imported supplies, the striking improvement in food security in Asia since the mid-1960s, especially in East and Southeast Asia, is not likely to be threatened. That is the advantage of "growth-mediated" food security. From this perspective, the lesson from East and Southeast Asia for achieving and maintaining food security can be summed up in this way: a growth process stimulated by a dynamic rural economy leads to rapid poverty alleviation, which, in the context of public action to stabilize food prices, ensures food security.
This approach might not work in other settings - for example, where the staple foodgrain is traded in more stable world markets, or where land holdings are highly skewed, or where technologies are not available to raise agricultural productivity. In searching for appropriate food security strategies in these other environments, however, it is important not to misread the successful experience of East and Southeast Asia. In particular, free trade in rice and the full and immediate transmission of international price signals to domestic producers, traders, and consumers, was not an element of food security in any of the successful Asian societies. Free trade is appropriate for most goods and services, but the historical lesson from the countries of East and Southeast Asia that have emerged from hunger is that free trade in basic foodgrains overly constrains the public actions needed for governments to intervene on behalf of food security. In different circumstances, free trade might well be a fast and efficient route to food security, but the role of government in ensuring this security would be radically different than the role played by governments in Asia.
