World Food Day – Worry about incomes, not food production

Today is World Food Day. There are 967 million people living below the hunger line.

In one of DFID’s splendid new blogs, Howard Taylor, Head of DFID Ethiopia , emphasizes the need for greater agricultural production:

In the long-term, development assistance needs to prioritise agricultural growth and productivty, if we’re to make sure that in years to come everyone, no matter where they live, has enough to eat. In a nutshell, that’s what World Food Day is all about.

Today is a good day to remember Amartya Sen’s book Poverty and Famines, which was written partly about the the Ethiopian famine of 1972-74, and for which he was awarded the Nobel Prize.  It begins with this profound observation:

Starvation is characteristic of some people not having enough to eat. It is not the characteristic of there being not enough to eat. While the latter can be a cause of the former, it is but one of many possible causes.

This is a thought of enormous importance.  For most of the 967 million people who are hungry, the problem is NOT that there is not enough food, it is that they are too poor to buy it.

We should be cautious about pursuing a policy focused on increasing food production.  Our goal should be to increase the incomes and wealth of those who currently live in hunger and other forms of extreme poverty, so that they can exercise entitlement to the food and other things they need.  Increasing agricultural productivity is one way to improve the incomes of the rural poor, but it is not necessarily the best way, and so it may not be the way of reducing hunger.

Update: more here.

7 thoughts on “World Food Day – Worry about incomes, not food production”

  1. Is it possible to incomes of the now-poor (increase the affordability of food: wage/food-price) without raising agricultural productivity? In a closed economy, if food productivity is fixed … I can’t figure how to model prices, but what would have to happen for incomes to rise, without food prices rising to cancel out any real gains on hunger levels? You’d need to increase employment in agriculture if reducing hunger means increasing aggregate food production, which it would unless you can feed the starving by taking food out of the mouths of the rich … in a poor country! Would just a sufficiently massive increase in non-food productivity do it? My guess is it would be pretty tricky to work out a scenario in which incomes rise with respect to food prices, without productivity in the agricultural sector rising. I think you’d need some pretty stretched assumptions. It’s a lot easier with agricultural productivity rising, food prices falling, and workers moving out of agriculture. What I mean is, isn’t raising incomes and raising agricultural productivity effectively one and the same thing, in the context of economies with 60% of workers employed in agriculture? When you write: “the problem is NOT that there is not enough food, it is that they are too poor to buy it .. we should be cautious about pursuing a policy focused on increasing food production.” a lot hangs on whether you are talking about increasing food production in absolute terms, or per farm worker – when you write “increasing agricultural productivity” I think the latter, in which case I’m not sure what you’re saying makes sense – if our goal is to raise the incomes of those who currently live in hunger, then our goal must also to be raising agricultural productivity … I think.

    I may be embarrassing myself in public here with some woeful economics! This is the sort of thing I’d like to work out formally but never have done (and I haven’t read the right chapters in a development econ text book yet).

    I can’t see how being an open economy helps, although I suppose if you hold agricultural productivity constant and raise non agri-productivity in an open economy, all that happens as incomes rise is the agricultural sector shuts down and the economy imports all its food … is that a realistic prospect in most poor countries – going straight from mostly subsistence agriculture to wholly manufacturers export without increasing domestic agri productivity?

  2. Luis

    No, you are not embarrassing yourself.

    One important way that people engaged in subsistence farming can increase their incomes is by leaving farming to do something more rewarding instead – often by moving to a town or city.

    Seen through the lens of increasing their income, this is good news. Seen through the lens of increasing farming output, this may be bad news. That is why it is important to start from a sound analysis of the problem.

    You are right that if a farmer is going to stay in farming, then increasing agricultural productivity (per head) is likely to be a good way of increasing his or her income. (But this may mean moving out of producing food to producing something else – such as biofuel crops, or export crops such as coffee.) Again, the critical thing is that hunger is reduced by increasing incomes, not by increasing food production.

    Owen

  3. That’s a relief! My concern, though, is about prices, which are absent in your account – if people engaged in subsistence farming leave to do something more rewarding, what happens to food prices, in the absence of productivity gains in agriculture? Even seen through the lens of increasing income, moving to nominally higher incomes is not good news if real food prices rise. If those leaving farming go into export industries, the economy can import food, okay, but i doubt that’s viable for many poor countries. My suspicion is that “hunger is reduced by increasing incomes, not by increasing food production” is a false choice and that increasing food productivity is the path to increasing income, via falling food prices relative to wages. I think that raising agricultural productivity (as opposed to absolute agricultural production) may be necessary, in practice, to raise incomes. This does not mean farmers stay in farming, it means farmers leaving farming, and food becoming more affordable (incomes rising) because agricultural productivity has increased. Debraj Ray’s text book has a chapter on rural-urban interaction, which looks at the transfer of workers from farms to other more rewarding activities, using the Lewis model that assumes surplus labour in agriculture – that is to say, food production need not increase, but the number of farmers doing the producing falls as structural transformation occurs – that is to say, agricultural productivity increases.

  4. Luis,

    I think there are some critical points you may be missing, or underestimating.

    1) We don’t live in a closed economy, or rather, we do live in a closed economy, and that economy is called the global economy. Sometimes the single country closed economy model hurts rather than helps in thinking about economics.

    2) In his reply, Owen mentioned crops for export, such as coffee. There are other crops that aren’t food, such as tobacco, cotton, timber (which by the way helps with erosion, and some varieties only take a few years to harvest), coca or opium poppies. Not that I am suggesting that NGO’s or governments deliberately engage in promoting the latter two. If the soil and climate is suitable, then it is actually logical to stop growing food and grow those instead. Although crop rotation may (or may not) mean sometimes planting something else for a season every now and then.

    3)There are other foods to export that can raise far more money in a global market than whatever substinance food poor farmers may be growing. Fruits and vegetables come readily to mind. With the money earned, farmers can buy the cheap grains from elsewhere which presumably have climates/soils/productivity better suited for maize, wheat, potatoes or whatever these farmers want/need to eat. And have plenty of money left over to buy other much needed things besides food.

    4) Therefore, with exports in mind, instead of concentrating on raising agricultural productivity, perhaps (only perhaps), governments may find that building a wide ranging and reliable road system, or an efficient port system, or encouraging outsiders (i.e. middlemen, or the horror) to start crop insurance of some form for locals) may aid farmers radically more than, for example, subsidizing fertilizer for productivity purposes.

    5) The alternatives to agricultural productivity (narrowly defined as growing more of the same with the same labor or land) listed above don’t need to be either/or. You can do both. However it is worth noting that more profitably raising pineapples or cotton instead of grain *is* broadly defined as agricultural productivity.

    Just some thoughts. It is not all about farm vs city work as you seem to be framing things mentally.

    P.S. By the way, things like improved roads and ports not only aid farmers for both export and import, but they aid everyone else too. Dual use improvements that aren’t easily (if at all) created by the private sector in a poor country are probably where government should be spending scarce aid dollars, and education about how to grow more profitable crops is perhaps best left to NGO’s, while it is also important to realize that much maligned for-profit “middlemen” are essential for things like finding export markets for such fruits, vegetables, cotton etc., as well as things like insurance or transport.

  5. happyjuggler,

    Thanks – I agree with lots of that. You are right that the export of non-foods and import of foods is one way in which it might be possible to raise incomes in poor countries, without raising domestic agricultural productivity, without food price inflation leaving people just as vulnerable to hunger as before. I did mention this open economy possibility in my comments, although I think for various reasons this story is not very feasible for many developing countries. And while I agree closed economy models can be misleading, open economy models can be too – the food sector in many developing countries often has an important ‘closed’ (local production and consumption) aspect, and in an economy with a high percentage of agricultural workers, if your answer to how to raise incomes and reduce hunger without raising agricultural productivity is that you envisage those agricultural workers moving into export industries and food imports replacing lost domestic output … well I think that would be quite difficult to achieve (you’d need a very efficient market or very clever planners to manage that transition painlessly). And, if your strategy for feeding people in a poor country is non-food exports and a reliance on food imports, I think that’s pretty risky (think loss of domestic food production capacity, followed by a terms of trade shock) and without imports, you are back to the necessity of raising domestic agricultural productivity if you are to avoid food price inflation.

    Yes you are right that it’s not just about farm v city, and moving farm workers out of food production into cash crops of course comes under the open econ, export led route, and thus still requires food imports to take the place of domestic agricultural productivity growth, if food price increases are to be avoided. Otherwise, moving people into tobacco or cotton without shifting to a reliance on food imports, is still going to see food prices rise in the absence of productivity improvements. And yes you’re quite right that achieving agricultural productivity increases is as much about transport infrastructure, market organisation (wholesalers) and education as it is about fertilizer … but that’s quite consistent with my argument: thinking about prices tells us that if you want to raise incomes and reduce hunger, you need to raise agricultural productivity. With the exception of the export non-food, import food story.

  6. This is a really interesting debate, and I think it’s right that there’s too much focus on food production, and not on the route causes of poverty. But I would suggest a different title – “worry about hunger, not food production.” Increased food production and / or increased incomes are both potentially important outputs. But the real problem is hunger – and that’s what we should all worry about.

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