Rao 1b stability of fs; emerging challenges


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Rao 1b stability of fs; emerging challenges

  1. 1. FOOD SECURITY Concepts, Basic Facts,and Measurement Issues June 26 to July 7, 2006 Dhaka, Bangladesh
  2. 2. Rao 1b: Stability of FS; Emerging Challenges to FS• Learning: An understanding of stability as a constant aspect of each of the dimensions of FS, of vulnerability and typical vulnerable groups, and of demand. Familiarity with principal global challenges to FS from a FAO perspective.
  3. 3. Brief Contents• stability of FS: chronic vs transitory, temporary vs seasonal• vulnerability and resilience; sources of risk; typical vulnerable groups• the value of FS• consumption patterns and demand determinants• emerging challenges to FS (based on FAO, Towards 2015/2030)
  4. 4. Stability of Food Security• "STABILITY" of FS incorporates ability to withstand shocks = RESILIENCE• Lipton has introduced the concept of the ultra poor, those who have to use 80% of their income to achieve less than 80% of their food requirements. In fact, households who allocate over 70% of their income to food almost certainly have little flexibility in reallocating resources to meet an entitlement shock.
  5. 5. Vulnerability and Resilience• Must distinguish chronic (all the time) FIS VS. transitory (unpredictable or periodic) FIS• Transitory FIS further divided: temporary (sudden shocks e.g., drought, unemployment) seasonal (predictable e.g., lean agricultural season)• Risk Factors – Characteristics of Vulnerable Groups – Variability of Entitlements
  6. 6. Vulnerable Groups• Can be classified according to:• Geographic - administrative zone, urban, rural• Ecological - by climatic conditions, accessibility• Economic - occupation, level of income, formal or informal sector, landholding, types of crop grown, migrant worker, female-headed household• Demographic - male, female, pregnant, lactating, pre-school and school-aged children, elderly.
  7. 7. Typical Vulnerable Groups• RURAL unskilled landless subsistence farmers (deficit) low-income farmers (food crop) low-income farmers (cash crop) pastoralists remote area dwellers• URBAN informal sector/self-employed unemployed/migrants• GENERAL female-headed households
  8. 8. Table 1.1: Sources of Risks to Household Food Security Sources of Entitlement Types of Risk Natural State Market Community OtherProductive Capital (land,machinery, tools, animals, farmbuildings, trees, wells etc.)Non-productive capital(jewellery, dwellings, granaries,some animals , cash savings)Human capital (labour power,education, health)Income (crops, livestock, non-farm and non-agriculturalactivity)Claims (loans, gifts, socialcontacts, social security)
  9. 9. The Value of Food Security (1): Productive Consumption, Consumptive ProductionThat which is produced through consumption [productive consumption  CAPABILITY]is that which produces consumption [consumptive production  PRODUCTION]Production of material goods is consumption of capability [LABOR] + material inputs [NATURE]Consumption of material goods is production of capability [LABOR]
  10. 10. The Value of Food Security (2): The Consumption-Effort Link
  11. 11. Food Consumption PatternsFigure 1.3 Percentage Distribution of Calorie Source by Level of per Caput GNP
  12. 12. Food Consumption Patterns• ENGELS LAW – Food, clothing, shelter, etc. – Agriculture, industry, services – “Wagner’s Law”: Rising share of government• Changes in tastes vs. laws of consumption
  13. 13. Figure 1.4: Consumption of Starchy Staples by Income Group in Peru
  14. 14. Observed Demand Patterns and DEMAND FORECASTING• Income and Price Elasticities of Demand INCOME elasticity: εD, y = (ΔD/D) ÷ (Δy/y) PRICE elasticity: εD, p = (ΔD/D) ÷ (Δp/p)• Three major factors in forecasting demand: – the rate of growth of the population (n) – the rate of growth of real per cap income (gy) – the rate of change of real prices (gp)
  15. 15. A Formula and an Example gF = n + εD,yg y + εD,pgpExample:gF = 0.015 + 0.3(0.065) – 0.2(0.1) = 1.45%
  16. 16. Trends Through the Last Century• Till mid-70s, world in chronic food crisis• By mid-70s, however, peak of crisis behind• By mid-80s, global cereal stocks almost doubled• Long-run production growth easily outstripped population growth• But regional variations were highly significant
  17. 17. FAO Towards 2015/2030 (2003) &OECD-FAO Outlook 2008-17 (2008)• Production slowdown due to fall in demand growth, from 2.2% (1970-2000) to projected 1.5% (2000-30)• Feedstock demand from growing bio-energy sector will be the most dynamic element in coming decades• Rising share of luxury foods is another major source that will reduce resources available for the staples• Finding that food demand leads food supply together with stubborn persistence of hunger and under- nutrition well into this century underscores crucial point that food needs go unmet because they fail to materialize as effective market demand
  18. 18. Meeting Demand VS Meeting RequirementsMain Finding: ...world agricultural production can grow inline with demand, provided that the necessary national andinternational policies to promote agriculture are put in placeBut the issue is not whether the world can balanceDemand=Supply but whether it can balanceRequirements=AvailabilityThat is the central challenge (or GOAL) of FoodSecurity.
  19. 19. Real Food Price Trends• Most troubling forecast is expected rise in trend of global real food prices through 2017: 18% for wheat, 32% for coarse grains, 8% for rice, 37% for oilseeds, 55% for vegetable oils• Both directly (from rising prices of the crops that serve as fuel inputs)• And indirectly (rising prices of food crops that lose land & other resources to the fuel crops, including the important instance of livestock products from higher animal feed costs)
  20. 20. Effects on FS & Food Dependence• Sharply rising real food prices will rapidly raise share of undernourished above the current 40%• Since average HH expenditures on food in low-income countries exceed 50% of income, MDG-1 (eradicate extreme poverty and hunger) must fail• Among the ultra poor (about one billion) who spend 60-80% on food, this could spell disaster• Projected rise in import dependence will mean hardships from world price volatility, foreign exchange constraints, political vulnerability to export embargos and economic vulnerability from export restraints that may be invoked in times of crisis.