In its 2017 edition of “The State of Food Security and Nutrition in the World”, the Food and Agriculture Organisation of the United Nations cited “there is more than enough food produced in the world to feed everyone”.
The fact of the matter is that food production was never the problem, but access to it is. This is why the same report goes on to identify that “815 million people go hungry”. So, if food production is not the problem, then why can’t global access to food be improved?
Access to food is considered a key pillar of food security. Therefore, when individuals go hungry or even get a set number of calories that do not necessarily contain adequate nutrition, they are considered food insecure. As a result, ensuring access to food is what matters most to countries, and is what drives either their production of food or their import of it to secure that access.
Ensuring access to food is the topic of today’s article, discussing why countries opt for production versus imports of food.
For countries, imports are susceptible to fluctuations in commodity prices, which move upwards when there are droughts, for instance. Before 2011, droughts occurred in Russia and Australia, both being among the Top 10 producers of wheat worldwide.
There was hence a drop in the supply of wheat worldwide. The immediate effect was higher prices that transmitted into higher domestic prices for countries importing it, as well as prices of end products such as bread. Think Egypt.
Commodity prices tend to also move in tandem with oil prices, like what happened in 2008. The case here is less direct, and here’s why. Just like shale oil production is encouraged when oil prices go up, so is the production of biofuel.
As a result, maize production is shifted from feeding populations and livestock to producing biofuel, resulting in a global shortage and thus higher price. And again, higher international commodity prices trickle down into higher domestic prices.
As any or both of the above take place, food imports become more expensive for countries with large populations, straining their budgets and creating pressure to remove subsidies, if any exist, or to find alternatives. One long-term alternative is for countries to adopt self-sufficiency policies and produce their own food needs, ensuring access to it at all times. But does it always work?
Generally speaking, such an alternative is rarely efficient, where production of different commodities depends on the inputs for each, affected by factors such as water supply and climate. Countries, however, attempt to produce food even when conditions are not favourable, and when populations aren’t large enough to justify shifting resources from other sectors of the economy to agriculture.
While higher production levels were attained over the decades because of overall improvements in agricultural practices, higher production levels in the future will require countries to give up inefficient production and focus on what they can best produce. Such an argument was made by Robert Torrens as early as 1829 in his “An Essay on the External Corn Trade”, arguing for the UK’s drive away from agricultural production and exports, and towards specialisation in manufacturing and focus on trade generally.
While it is understandable that countries fear negative ramifications of over-dependence on food imports to ensure access to food, it must be also acknowledged that food self-sufficiency policies, especially for relatively smaller populations, could end up costing countries more than they would have paid for years of food imports.
The problem is though that this only becomes factual after years of inefficient food production. A counter argument would be that resources could be better allocated to more productive sectors of the economy, and that high export income from those could pay for food imports.
The last though that I want to leave you with: Why do food-insecure countries export food commodities?
— The writer is a UAE based economist.