Self-sufficiency is an expensive myth... and that’s an understatement.
Regardless of that, though, self-sufficiency has gone through all sorts of cycles and phases, making it to the top of policymakers’ agendas at times, and at the bottom at others. Self-sufficiency on its own cannot be explained as a standalone term.
In fact, and for those who are into economics, which post COVID-19 seems to apply to almost everyone, self-sufficiency can only be balanced out by international trade, conditioned upon diversifying import sources and vice versa. While self-sufficiency is applicable to anything that a country can produce, the focus here will be on food security.
And the importance of striking a balance between self-sufficiency and reliance on international trade, mainly by imports, to satisfy levels of consumption that are in excess of domestic production. Historically, and compared to other sectors, self-sufficiency has been specifically associated with a country’s energy requirements as well as its food security.
When it comes to food security, and agriculture with it, self-sufficiency has been pursued by developed, developing, and emerging countries, with mixed results to show for it based on the level of subsidies and protection of domestic production. This is subject to each country’s financial resources, and the ability to produce each country’s staple commodities that self-sufficiency targets.
So, what does it mean to be self-sufficient? And can it be achieved?
An issue with the maths
The United Nations’ Food and Agriculture Organisation (FAO) uses a Self-Sufficiency Ratio (SSR), to measure it. By dividing a country’s production of a food commodity by its production added to its imports and exports of the same, the resulting percentage is how self-sufficient a country is in that food commodity.
Interestingly, the division of production by the sum of production and imports is supposed to reflect consumption in a country. Yet, the formula by no means accounts for a country’s population, which can significantly impact consumption and undermine self-sufficiency. Neither does it look into how purchasing power can hinder an equal distribution of food across a country.
On the latter, such a factor has been at the core of almost every famine in the 20th century, even when other factors were also at play. The Bengal famine of the 1940s, for instance, was exacerbated through the hoarding of food necessities by food traders. The Ethiopian famine of the early 1980s witnessed an exodus of food commodities from regions that produced those to regions that could pay for the higher prices demanded by food traders.
This does not, by extension, eliminate the possible connection between a fall in food production, for whatever reason, and a resulting famine. It does, nevertheless, support the case to keep trading routes open for deliveries of food from producing countries to importing countries. In other words, facilitating international trade in food is key to global food security.
Downsides to self-sufficiency
Self-sufficient or not, keeping trade routes open for food importers to have access was essential in not having a food crisis on the back of COVID-19. Even for self-sufficient countries, being able to import food made up for shortfalls in production because of COVID-19-related reasons, such as sickness and the closure of food processing plants.
Ironically, however, what safeguarded access to food in these times is also what has reignited countries’ interest in self-sufficiency for food commodities that rank the highest amongst their imports. If self-sufficiency turns into a global trend, it will eventually lead to a food crisis that would make the disruption caused by COVID-19 seem trivial.
Not only that, but self-sufficiency is costly, more so for countries that are not naturally advantaged in food production. While modern agricultural and irrigation methods have made production of fruits and vegetables feasible, it still does not allow for the production of some of the world’s main food necessities, such as rice and wheat, in a cost-efficient manner.
For countries that succeeded in cultivating these commodities despite being naturally disadvantaged in them, achieving such a feat has come at the cost of high subsidies that could have been better directed towards more productive sectors.
Implications for trade
More importantly, as more countries seek self-sufficiency with subsidies and other forms of agricultural support to skew production balance in their favour, the more trade becomes unimportant in a non-crisis setting. With time, this will erode the principle of comparative advantage in food production along with the basis upon which international trade must be built, in turn further distorting international food trade patterns shaped over past centuries.
In other words, seeking self-sufficiency by many countries, with disregard to comparative advantage, will dampen future prospects of proper specialisation in food production.
In conclusion, COVID-19 has heightened both the importance of international trade and the need for self-sufficiency. Self-sufficiency, even for countries that are naturally endowed with comparative advantages in food production, is expensive even if realised.
Its measurement, via FAO’s SSR, provides an initial understanding of what it means for a country to be self-sufficient in a food commodity. The SSR, nonetheless, does not guarantee sufficient food quantities for larger populations, nor equal access to it. This raises questions about how accurate is SSR in capturing a country’s self-sufficiency, especially as countries rely on improvements in it to measure the success of their self-sufficiency policies.
Such self-sufficiency comes at the expense of a more balanced approach towards international trade and access to food through food imports, which when pursued at a wide scale can be detrimental to global food security.
The last thought that I want to leave you with: Self-sufficiency at what cost?
- Abdulnasser Alshaali is a UAE based economist.