Consumers must then be able to afford to purchase this food, secure in the knowledge that it is safe and nutritious. Achieving food security within the constraints of a complex economic system is challenging because both poor consumers and small farmers must be effective participants in this system.
Although the task of achieving food security is challenging, it can be understood in the context of the long-run dynamic evolution of food systems, especially the rice-based systems of Asia. The emphasis is on both ‘long run’ and on ‘dynamic’, because the Asian food economy has deep cultural roots and thus historical continuity and accompanying resistance to change. At the same time, Asian food systems are changing extremely rapidly, driven by economic growth and technological innovation. An analytical lens with an historical perspective is needed to understand this combination of continuity and change, and the structural transformation of an economy during the process of modern economic growth provides that lens.
The patterns of structural transformation that accompany long-term economic growth have been remarkably uniform across more than two centuries of modern growth: rising productivity in the agricultural sector stimulates overall economic growth, and this reduces agriculture’s relative contribution to GDP, and the proportion of the labour force that works in the sector. In turn, this leads to a commensurate rise in the share of modern urban and industrial service activities. The migration of rural workers to urban settings allows this transformation to take place. It is closely associated with a demographic transition characterised by rapidly falling mortality rates, slowly falling fertility rates and a subsequent period of rapid population growth which offers a ‘demographic bonus’ when dependency rates drop to low levels.
The basic cause and effect of the structural transformation is an increase in the productivity of agricultural labour, which can take place in three ways. The first is through an agricultural revolution, which happens when new technology makes it possible to increase output for a given amount of labour. The second and related pattern of structural transformation is the classic Lewis model of development, which allows agricultural workers to migrate to other occupations without lowering total farm output, so that the output is shared among fewer rural people. The Lewis model of development is often related to an industrial revolution. The third and last way of raising labour productivity in agriculture is through higher prices for agricultural output, or a price revolution. Over the past two centuries real agricultural prices have declined, but the high prices experienced since 2007 may mean a reversal of that historical trend, with an accompanying slow-down in the rate of poverty reduction.
There are almost always stresses on the poor during periods of structural transformation. Even when absolute poverty is falling, as it typically does during rapid economic growth, the distribution of income — especially between rural and urban areas — usually worsens, challenging policy makers to take corrective action. These corrective actions can take the form of agricultural protection and widespread subsidies to farmers. The net result is higher food prices, and these often worsen urban and rural poverty because most of the poor must purchase their food in markets. A dynamic rural economy stimulated by genuine growth in productivity has favoured the poor in all circumstances. In contrast, a rural economy with farm profits stimulated by protection tends to hurt the poor in both the short and long run because many are left in pockets of poverty.
Much has changed in Asian food systems over the past half century. In the first place, there was a broad political mandate in Asia to feed both urban and rural populations — a mandate not seen as clearly in much of Africa. Food security has become politically important in recent decades.
A technological revolution in rice and wheat farming was coupled with reasonably good policies to support efficient input and output marketing by a competitive private sector, and public investments in rural infrastructure to make this mandate (largely) possible. Investments in irrigation and drainage were critically important for crop productivity and had a stabilising effect on yields of rice and wheat. Rapid, inclusive economic growth resulting from the technological revolution gave most Asian households access to the food in their fields and markets.
The structural transformation caused by — and resulting from — economic growth has also changed Asia is other ways, for instance by changing the role of rice in the economy. Asia is now a richer, more urban, and better-connected region, both within each country and across borders, and it is much better fed.
The changing role of rice in Asia’s food security is both a driver and a result of the structural transformation going on in Asia’s dynamic economies. Rice is increasingly the food of the poor — even middle-income households are rapidly diversifying their diets. This has significant implications for poverty if countries use high rice prices as a mechanism to guarantee ‘macro’ food security, which is often equated with stable rice prices in key urban markets, and a high level of self-sufficiency in rice, both of which are easier if rice importing countries maintain high rice prices. But a high price strategy puts ‘macro’ food security at odds with ‘micro’ food security, that is, access by poor households to adequate food, and thus is in contrast to a productivity strategy, where both work together.
The share of rice in caloric or energy intake is falling rapidly. Asia now reduces its rice consumption when incomes increase (which is why rice consumption is increasingly concentrated among the poor — they still cannot afford to diversify their diets away from rice). Also, rapid rural-to-urban migration lowers per capita rice consumption quite sharply, both because energy requirements are lower in urban occupations, and because urban food markets offer a wider diversity of choices. Not surprisingly, better-connected food systems mean that rural households can be less self-sufficient in food production and consumption, especially of rice.
At the peak of the Green Revolution in the early 1970s people in Asia obtained an average of 40 per cent of their calories from rice, but that share is now below 30 per cent and falling. Consumers in Asia now get about 70 per cent of their calories from other commodities, including animal products, fruits and vegetables, and wheat products. On average, they spend only about 10 per cent of their food budget on rice (although the figure is roughly double that for the poor). In other words, 90 per cent of food expenditures in current-day Asia are for non-rice commodities and for the value added to those commodities beyond the farm. Modern supply chains add that value at the same time that they coordinate the transactions, investments and technologies that generate it. This modernising food marketing system influences food security in Asia in direct and indirect ways. Following the changing patterns of rice consumption, the share of rice in agricultural output and in the overall economy is also falling rapidly.
The big question for the future of Asia’s food security is about the role of smallholder farmers. How can policy makers learn what works for small farmers? How can farmers get their output to demanding consumers more efficiently? And how can this be accomplished on an economy-wide scale? Historically, only market processes have been scalable, but these market processes do not necessarily care whether small farmers survive or poor people get enough to eat. ‘Scalability’ is the Holy Grail of development assistance, which has struggled to successfully move from bureaucratically driven local projects to institutionally driven programs, and from there to market-driven policies with economy-wide impact.
Meeting these new challenges demands a high degree of knowledge. Food security requires an analytical and empirical understanding of what is happening to the food economy in both the short run and the long run, at both the micro and macro levels, and translating that understanding into effective policy action. Good food policy analysis does not guarantee that good policies will be designed and implemented, but it is virtually impossible to implement such policies without good analysis.
C. Peter Timmer is Thomas D. Cabot Emeritus Professor of Development Studies at Harvard University, and Adjunct Professor at the Crawford School of Public Policy, Australian National University.
This article appeared in the most recent edition of the East Asia Forum Quarterly,‘Energy, Resources and Food’.