The Malthusian specter of global food shortages has recently been resurrected. Since March 1995 grain prices have been soaring. Rice, wheat and maize are in short supply. World grain stocks are at their lowest level in decades. Since 1990, world grain output has stagnated while humanity continues to grow by 90 million additional consumers a year. Lester Brown of the Worldwatch Institute in Washington, D.C. has again taken the lead in painting doomsday scenarios. He urges the conversion of tobacco plantations to food production, wartime-style home gardening and a tax on livestock products. Others are following his lead with gloomy predictions. Are we entering a new era of high food prices and shortages? How will the developing world be affected?
World food problems, similar to climate issues, are excellent subjects for prolific writers. A lot can be easily said and supported with statistics and projections which make interesting reading. Two schools of thought, the doomsday sayers and the heralds of plenty, have happily coexisted for many years by contradicting each other. Now, after years of a grain glut prevailing in the world markets during which the heralds of plenty seemed to have the upper hand, the doomsdayers are again making the big waves.
The optimists are countering the pessimists' renewed onslaught by saying that the present shortage situation prevailing in the world grain markets is but a temporary phenomenon, caused by a series of poor harvests and some agricultural adjustment problems in major consumer countries, such as the states of the former Soviet Union and China. Chicago grain futures are declining, they say, considering this a good indication that the market expects next year's harvests to be sufficient. Indeed, the UN Food and Agriculture Organization (FAO) is forecasting a bumper world rice crop for 1995/96.
A consistent 10 percent grain price increase would trigger a 20 percent production increase, says optimist Dennis Avery, Director of the Indianapolis-based Hudson Institute. Huge past grain stocks had piled up because of price supports in Europe and North America, Avery says, not for food security reasons. Also, there is now less need for large global grain stocks, according to Donald L. Winkelmann, Chairman of the CGIAR's Technical Advisory Committee, because improved transport capacity allows faster shipment of grain to regions threatened by shortages.
The short to medium term expectations are being used to highlight long-term aspects. FAO, the International Food Policy Research Institute and the Worldwatch Institute are among those who publicized long-range projections which arrive, not surprisingly, at different conclusions.
How fragile the data base of these projections could be was recently illustrated by an exchange of views in the media between Lester Brown--who presented his views on the future food import requirements of China--and China's agriculture minister Liu Jiang, together with Chinese Academy of Sciences member Hu Angang. The officials presented data on China's agriculture that is at variance not only to Lester Brown's figures but also to land data published until recently by FAO.
One argument offered was that China's farmland at 120 million hectares is about one fifth larger than the officially recorded figures (FAO 1993: 93 mill. ha) and will shrink to 113 million hectares by 2050 when its size is expected to stabilize. The official Chinese view is that China with its 1.1 percent growth rate of population will have no difficulty in increasing its grain yields at the same or a higher rate. Also, it is said that China's diet will for a long time remain plant food based and not change to a Western pattern of high fat, protein and calorie content, implying that there will be little need for feedgrain. Because of the huge size of China's population, data shifts of this magnitude tend to massively influence the overall analysis for developing countries.
The pessimists like to argue that the world's grain harvests have stagnated since 1990, and that yields have ceased to rise. A glance at current FAO data shows indeed that world grain output rose only 0.1 percent between 1990 and 1994. The area harvested declined 0.6 percent a year which means average yields increased a mere 0.7 percent a year. However, 1990 was a bumper crop year and therefore serves as a useful base year if you wish to paint a stagnation scenario. Taking 1988 as the base year shows that world grain production rose 1.4 percent annually to 1994. A reduction of 0.4 percent per year in area harvested indicates that average world grain yields rose 1.8 percent--a rather positive result.
Similar pitfalls seem to exist in relation to the interpretation of crop data for developing countries. Recent articles in the media, for instance, spoke of stagnating developing country grain yields. The official FAOstat database, however, gives an annual rate of grain production increase in developing countries of 1.9 percent between 1988 and 1994. Adding to this the slight reduction in area harvested of 0.1 percent per year reported for the same period results in an average developing country grain yield increase of 2.0 percent per year. Other base years provide yield growth averages between 1.6 and 2.0 percent. The population of developing countries grew 2.0 percent annually between 1988 and 1994.
The current growth rate of grain yields--no matter how it is calculated--would not suffice to feed the population of the developing world at rising per capita incomes. However, most grains are economically inferior goods in the sense that, from a certain level of income upwards, direct human consumption declines with income. Engel's law, as it was called after the 19th century economist who discovered it, seems to offer at first sight an elegant solution to the world food problem. In reality, however, the contrary is the case.
The negative income elasticity of grain demand typical for upper income brackets is but the reverse of a positive income elasticity of demand for superior foods. Even if we believe the Chinese assumption that their 1.2 billion population will continue to cherish a frugal (and healthy) plant-based diet, it is evident that rising incomes would lead to increasing demand for superior quality plant foods such as vegetables, fruit and sweets. In other countries, richer Western-style diets would also drive up demand for animal feed and oil crops.
Producing more profitable crops and animal products for consumers with higher purchasing power will, on the other hand, boost farmers' incomes and savings potential, permitting capital and human investments in the farm economy and rural infrastructure, as well as the adoption of improved technologies and farm management practices.
This, however, is still largely a scenario of the future. For more than a generation to come developing country demand for foodgrain and other staples will continue to rise, as all long-range projections indicate. Both doomsday sayers and heralds of plenty therefore appear to be in agreement on one aspect of the debate: that vigorous agricultural research in and for developing countries will continue to be needed to ensure long-term sustainable food security.