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IFPRI Abstract: Food in the Third World: Past trends and projections to 2000
Leonardo Paulino
Since the 1960s, technological advances in agriculture have substantially contributed to growth in crop production in the third world, particularly Asia. Despite this, food demand has continued to outpace supply, and trade has grown as imports rise to meet domestic production short-falls. In Food in the Third World: Past Trends and Projections to 2000, Research Report no. 52, Leonardo Paulino examines the trends in trade, production, and consumption of the basic food staples (cereals, roots and tubers, pulses, groundnuts, and bananas and plantains) in 105 developing countries. Using these trends, Paulino discusses the size, geographical composition, and dynamics of the third world's food problems.
Trends in food trade indicate that the third world continues to increase food imports rapidly in order to meet domestic requirements. Net imports of basic food staples expanded from an average of 12 million metric tonnes a year in 19661970 to 38 million tonnes a year in 1976-80. Significant changes in the food trade of developing regions occurred between these periods: both sub-Saharan Africa and Latin America turned from being net food exporters to being net food importers; the net imports of North Africa and the Middle East rose by more than 350 per cent; and net imports in Asia increased by only 15 per cent.
Sub-Saharan Africa faced slow production growth and expanding consumption due to population increases, while North Africa and the Middle East experienced rapid income increases, which stimulated rapid consumption growth rates that could not be matched by increased production. The slowdown of net food imports in Asia (excluding China) suggests that the region may become a net food exporter.
PROJECTIONS BY REGION
A trend scenario of the food situation in the year 2000, based on data from 1961-1980 for production and 19661980 for consumption, projects a third world production shortfall in basic food staples of about 70 million tonnes (76 million tonnes excluding China). This gap represents about 5 per cent of the Third World's projected demand for basic food staples in 2000 and is one-third larger than the food deficit of developing countries in 1980.
North Africa/Middle East is projected to have the largest net food deficit—60 million tonnes—followed by sub-Saharan Africa with a gap of 50 million tonnes. In Latin America, where projected expansion in demand is nearly matched by projected growth in production, the gap will be about 10 million tonnes. In contrast, Asia is projected to have a considerable net surplus of 50 million tonnes, which will largely come from East and South-East Asia. China, whose food output projections are based on a slower three-decade trend, has a projected surplus of basic food staples in 2000 of 7 million tonnes.
Thus a total of about 185 million tonnes of basic food staples will be needed to fill the deficits projected for the food-short third world countries in 2000; about 60 per cent of this gross deficit is projected to be matched by potential surpluses of the more productive developing countries. (These projections assume that developing countries will maintain past food production and income trends and limited rates of growth in basic staples used as animal feed. If current economic adjustments in developing countries were to accelerate growth, and the limitations on livestock output growth and feed use were reduced, the third world food gap could be larger than these projections.)
PROJECTIONS RELATED TO INCOME
Categorizing developing countries on the basis of their 1980 GNP per capita, the 20 countries in the lowest income group, with per capita incomes of less than US$250, are projected to face a production shortfall of nearly 10 million tonnes of the basic food staples in 2000. Half of these countries are in Africa. Countries in the US$250-499 category are projected to have a food surplus by the end of the century. Sizeable deficits two to three times greater than in 1980 are projected for the countries with per capita incomes of US$500 or more.
When grouped by income growth rates, some 27 third world countries that had average rates of increase in GNP per capita of less than 1 per cent a year during 1961-1980 have a projected aggregate production shortfall of almost 30 million tonnes or three times their total 1980 food deficit. These countries will have difficulty financing food imports from their own resources. Countries with GNP per capita growth rates of 1 to 3 per cent a year would be the only group with a projected food surplus by the end of the century. Countries with growth rates of more than 3 per cent are projected to face significant output shortfalls, especially those with GNP per capita growth rates of 5 per cent or more.
PRODUCTION TRENDS
The growth of production of basic food staples in the third world during 1961-1980 averaged 3.1 per cent a year (2.6 per cent excluding China). (Changes in the domestic economy that raised the abnormally low food production in China during the early 1960s resulted in a rapid 4.1 per cent annual rate of increase of food output between 1961 and 1980, which is probably unsustainable.) Growth of food output was particularly rapid in Mexico and Central America and in East and South-East Asia, where average annual growth rates exceeded 3 per cent during the two decades. Food production growth was slowest in West Africa—less than 1 per cent per year—compared to an average yearly increase in population of 3 per cent.
Rice, maize, and wheat accounted for more than four-fifths of the 300-million-tonne increase in third world food staple production between the early 1960s and the late 1970s. Thirty-five per cent of this increase was attributed to rice, 25 per cent to wheat, and 20 per cent to maize. Wheat and maize production growth rates exceeded 4 per cent a year, while rice production grew at a slower rate. During this period, cereals' share in the total output of basic food staples was 83 per cent, an increase of 3 percentage points.
During the two decades about three-fourths of the increase in production (excluding China) may be attributed to improved yields of major food crops, and about one-fourth to area expansion. Crop yields played the dominant role in food production increases in Asia and North Africa/Middle East but area expansion accounted for the larger share of the increases in sub-Saharan Africa and Latin America.
Ten-year output trends indicate that the growth of food production in developing countries as a whole slowed from the 1960s to the 1970s. The rate of output growth rose in Asia (excluding China) and North Africa/Middle East but decelerated considerably in sub-Saharan Africa and, especially, Latin America. The role of crop yields in the growth of food production improved significantly between the two decades among ail developing regions except Asia, where its relative contribution to increases in output remained unchanged.
CONSUMPTION TRENDS
Domestic utilization of major food crops in third world countries expanded at an average annual rate of 3.3 per cent 13.0 per cent, excluding China) between 1966 and 1980. About 70 per cent of total consumption was used directly for food, 15 per cent went to animal feed, and 15 per cent to other non-food uses and allowances for waste. Because most of the consumption of basic food staples is accounted for by direct use as food and the income elasticity of demand for these commodities is low, population increases have been the principal determinant of food consumption growth in developing countries.
Food consumption grew fastest in North Africa/Middle East—at almost 4 per cent annually—and slowest in sub-Saharan Africa—slightly more than 2 per cent a year. The use of basic food staples for animal feed increased rapidly in North Africa/Middle East and Latin America, where the proportion of feed use in total consumption in the late 1970s reached about one-fourth and two fifths respectively.
SOME POLICY CONSIDERATIONS
The projections of this study assume a continuation of historical trends in the food production of third world countries. Past output trends, which reflect the rapid production increases generated by the "green revolution" technologies of the 1960s, will need to be maintained if the projected food gap in 2000 is not to widen. With the declining role of area expansion in the growth of third world output, future increments in food production may have to depend much more on the spread of agricultural technology and further improvements in technology in areas where crop yields have been the primary source of production increases. Complementary investments for agricultural credit, extension, and research will be required to achieve these projected increments in food output.
On the demand side, these food projections also assume a continuation of the 1966-1980 trends of per capita income in developing countries. Increases of income in the rapidly growing economies are held to a maximum of 6 per cent a year in the projections, a constraint equivalent to a slowdown of nearly 20 per cent of the 1966-1980 per capita income growth rate of these countries as a group. Using a slightly slower 1961-1980 income trend results in a decrease of projected demand for basic food staples of only 7 million tonnes. A more drastic slowdown of the income trend of 25 per cent reduces demand projections by almost 50 million tonnes. Changes in the world after the reference period, especially the global economic recession of the early 1980s and the large decline in energy prices, would probably depress these income trends. This would reduce projected food demand and, if the projections of food output remain unchanged, result in a smaller food gap in 2000. However, the close relationship between food output and income in third world countries makes it difficult to indicate the actual change in the projected food gap.
Income-induced consumption growth may be a more dynamic element of the third world food situation in the coming decades. Trends in the use of basic food staples for animal feed suggest that a part of the consumption patterns of developing countries with rapid increases in income has been a move to better quality food, particularly livestock and poultry products. The demand projections in this study assume unchanged technical co-efficients in the conversion of feed to livestock products. Alternative projections of feed use in 2000, based on trends in animal feed consumption, increase the projected demand for basic food staples by 40 million tonnes and increase the gap between domestic production and consumption by about 60 per cent. This would tend to offset the effect on projected food demand of the deceleration in income growth mentioned earlier.
Assuming the availability of supply in world markets, a major concern is the ability of the poor food-short countries to pay the costs of imports. This would include about a fifth of developing countries, many of them in Africa, whose aggregate projected shortfall would amount to about 17 per cent of the third world total. As in the past, food aid can be expected to play a critical role here but the larger portion of the food gap in these countries would need to be filled through increased production or commercial trade.
The report can be obtained from the International Food Policy Research Institute (IFPRI), 1776 Massachusetts Avenue N.W., Washington, DC 20036, USA.