|Disaster Economics (Department of Humanitarian Affairs/United Nations Disaster Relief Office - United Nations Development Programme , 1994, 56 p.)|
|PART 2 - Alternative disaster scenarios|
Food security disasters have occurred in several countries, particularly in Africa, but also now in selected CES countries. The achievement of national food security requires that people have access to sufficient quantities of food, when they need it and at a price they can afford. In attempting to achieve national food security, three principal conditions (established by FAO) need to be satisfied:
1. The global supply of foodstuffs (domestic production plus imports) should be adequate to meet national demand.
2. Fluctuations in seasonal food supply should be minimized, and reflected in relatively stable seasonal food prices.
3. The population should have access to food supplies, either through adequate real income or, if this is insufficient, through targeted feeding programs.
LRCS/Liliane de Toledo; UNDRO News, Nov./Dec. 1984
In many countries, these three conditions for achieving food security are not satisfied at the national level, because a price and trade regime has not been established which ensures available food supplies are adequate to meet national demand.
An overall food balance is not achieved, either when domestic production is inadequate, or there is insufficient foreign exchange with which to buy commercial food imports. As relief food aid cannot be sustained in the long term, supplies available through this source will not provide a permanent solution. In food-insecure countries, prices fluctuate seasonally, because of private sector hoarding. Also, local income levels are frequently inadequate to purchase available food supplies at prevailing food prices.
However, even in countries where the three food security conditions are satisfied at national level, nutritional problems might still exist at the microeconomic, household level especially among the most vulnerable groups i.e. pregnant and lactating women, as well as children under 5 years of age. In this situation, in addition to poverty, nutritional problems may exist because of inadequate knowledge of good nutrition and weaning practices. Nutrition related problems also occur in areas isolated from principal marketing routes. Geographic isolation limits trade, and reduces the opportunity for income generation and regional exchange of products, including fruit and vegetables, with which to diversify and improve diets.
Government must consider alternative means of intervening in the food system, covering production, harvesting, storage, processing, transportation, wholesaling and retailing. In order to make a full assessment of the alternatives which are available, including trade-offs, government must systematically undertake the following procedures:
1. Analyze the country's physical resource base, in order to assess production possibilities for food and other export crops.
2. Prepare domestic resource cost calculations to show the comparative advantage between growing food or export crops and other production technologies.
3. Use both sets of information, as well as estimates of population growth, to determine production and productivity targets for food and export crops, as well as to set commercial and concessional food import targets.
4. Prepare farm budgets for different crops and technologies to identify the price at which it is profitable for the farmer to produce and invest.
5. Prepare a cost structure analysis of the food system including production, storage, marketing, processing, and distribution for alternative food crops, particularly in those areas of the country where food security is weakest, and where cross-border trading is most important.
6. Define government's ultimate objectives for food security, as well as its strategic policy objectives for increasing domestic food production, stabilizing food flows and increasing food access.
Having followed this procedure, government can then evaluate alternative investments, policy instruments and regulatory measures to determine their expected impact on government's food security objectives.
Alternatives to be reviewed during this process could focus on:
· Does government wish to follow a policy of self-reliance or self-sufficiency (see definition number six on page 24)?
· If government opts for self-reliance, can it compete on world markets with other exporters who already have established markets in developed countries?
· Is large scale food production more efficient financially and economically than smallholder production?
· In order to achieve food security, what balance of stock holding internationally, nationally and locally is most cost effective?
· What is a feasible target date by which to eliminate all food aid?
Having reviewed questions such as these, and taken a view on which is its preferred option, government can then formulate an investment program, identify project ideas, and confirm their local currency and foreign exchange requirements. Government can then discuss the proposed investment program with potential multilateral and bilateral donors, as well as NGOs.
Q. Identify a recent situation that you are familiar with where there was a problem of food security. What actions did the government take? What were the economic consequences of the actions?