- Email: [email protected]
Regional cooperation for food security in South Asia
Regional cooperation for food security in South Asia
Narayan Khadka
This article examines two interrelated issues concerning temporary and chronic food insecurities in the South Asian Association for Regional Cooperation (SAARC) countries. These are the determination of a basis for a realistic assessment of regional food requirements, and the regional action necessary to overcome chronic food insecurity. There is a prospect of overcoming temporary food insecurity through a regional food reserve, though not every member country can contribute to it at present, and it should be accompanied by bilateral and multilateral efforts to harmonize food and agricultural policies. Regarding chronic food insecurity, SAARC member countries should cooperate in harmonizing bilateral policies on poverty-related issues, as well as environmental protection. The author can Ivanhoe Avenue, 5S5, Canada.
be contacted at 886 Ottawa, Ontario K2B
‘See Government of India, lndia and Foreign Review, New Delhi, 31 August 1987, p 19.
492
The seven member countries of the South Asian Association for Regional Cooperation (SAARC) agreed to maintain jointly a regional food reserve of about 200 000 metric tons for use in emergencies at their November 1987 summit-level meeting in Kathmandu. The proposal for holding a regional food reserve was first put forward by the then Indian Prime Minister, Rajiv Gandhi, during his inaugural speech at the Third Session of the Council of Ministers of the SAARC member countries in New Delhi in June 1987. This proposal has been motivated by two complementary goals, India’s probability of emerging as a net supplier of foodgrains to the needy fellow members in the region, an expectation arising out of its growing self-reliance, and a general desire to mobilize regional efforts in meeting occasional food crises brought about by natural disasters and calamities. A regional food reserve system would also ensure and enhance regional self-reliance in food in the face of uncertainty in terms of both prices and supplies in the international trading system, and would counteract the effective use of food as a political weapon in the hands of larger surplus-producing countries. As Gandhi put it when inaugurating the Third Session, ‘where 20 years ago many of us were still dependent on food imports for survival, our remarkable achievements in agriculture have made it feasible to counter scarcities and unexpected shortages by recourse to our resources. Our national self-reliance as countries would be reinforced by a framework of regional self-reliance.” Within a year the agreement to hold a regional food reserve in the SAARC region was amply justified by a series of natural disasters that caused considerable damage in three of the member countries, Bangladesh, Nepal and India, between August and November 1988. Bangladesh was the most seriously affected country. Floods in September affected both human lives and crops (it is estimated that nearly 2 million metric tons of paddy crops were destroyed). This was followed in less than four months by a devastating cyclone which cut a swathe across Bangladesh and parts of India, causing serious damage to human lives and harvestable crops. Besides the plan to prevent natural disasters through concerted efforts, there are also strong political and economic reasons for maintaining a food security reserve for each of the member countries.
0306-9192/90/060492-l
3 @ 1990 Butterworth-Heinemann
Ltd
Regional cooperation for food security in South Asia
However, the major challenge in a regional food reserve system is posed by its implementation. It is no surprise that there are very few regional schemes for maintaining regional reserves of food. One World Bank report has rightly observed that ‘without agreement on domestic food policies, on emergency buffer stocks, and on sharing the financial burden, any regional scheme will dissolve’.2 It also maintained that ‘the most important and most difficult precondition’ for any regional food reserve scheme to succeed is that ‘the countries should have a high degree of political unity’.” Because of lack of political commitment and desire, no significant benefits have been realized by the nine members of the Southern African Development Coordination Conference (SADCC) which have considered setting up a regional food reserve system to improve their food security. The SAARC countries are facing the same problem. Moreover, the decision to set up such a regional reserve is not based on a realistic assessment of the regional food requirements and the potentials of the member countries. The managerial and economic problems regarding its implementation are additional constraints. In light of the need to achieve food security in the region on the one hand, and the complex problems associated with its achievement on the other, this paper focuses on two key issues: (a) the establishment of regional food reserves to cope with temporary food insecurity, and (b) regional action to overcome chronic food insecurity. The regional food reserve issue is analysed in terms of the degree and magnitude of instability in food consumption and production in the SAARC member countries. This provides a basis for determining regional food requirements. The second issue focuses on the domestic and regional cooperation efforts to overcome chronic food insecurity in the region. Although lack of political commitment and harmony has been one of the major hurdles in forging stronger cooperation in the region, this paper does not focus on this issue as an obstacle to regional food security, as quite a few studies have discussed in detail the existing conflicts in bilateral relations between member countries and their differences in political and security perceptions.4
Instability in food availability
‘World Bank, Poverty and Hunger Issues and Options for Food Security in Developing Countries, Washington, DC, 1986. ?bid. 4For discussion on the security perceptions of MARC member countries see Asian Survey, Vol 25, April 1985. 5Net production is derived after allowing for animal feed, husks and seed at 10% of gross production.
FOOD POLICY
December
1990
Both the need for and the desirable size of domestic and regional food reserves can be measured by examining instability in food availability for consumption. This is done by measuring fluctuations in actual food availability from the availability trend level within a certain period. The availability trend level is computed by using simple linear regression. In order to measure instability in food availability in the SAARC countries we considered fluctuations in net availability for food (calculated as net production minus or plus net import? and plus or minus change in carryover stocks as a percentage of the availability trend level for the period 197(X37). The data are drawn mainly from the United Nations Food and Agriculture Organization. However, whenever necessary and possible we have also used domestic sources for data on production, carryover stocks and trade figures. A comparison between actual availability and the trend level in net availability for food consumption in the SAARC countries for the period 197&87 indicates that all the six member countries under study (excluding the Maldives due to lack of data) have experienced some
493
Regional cooperation for food security in South Asia
a Food includes paddy, wheat, maize and millet. b This is actual availability as a percentage of trend level. Sources: Computed from FAO Production Year Book (various issues), FAO Trade Year Book (various issues), The State of Agriculture and Monthly Bulletin of Statistics (various issues) except for India and Pakistan. The FAO data were supplemented by data on food and agriculture published by the food and agriculture ministries and departments of the SAARC member countries.
Table 1. Instability in net food” availability in the SAARC region (actual as a percentage trend level), 1978-87.
of
Maximum
Minimum
Frequency of no of years below trendb 8589% 90-99% Total
Bangladesh Bhutan India Nepal Pakistan Sri Lanka
111.36 123.64 108.53 155.52 112.95 123.32
90.46 85.26 89.27 80.70 08.89 81.95
0 3 2 2 1 4
10 6 5 7 10 5
10 9 7 9 11 9
South Asia
106.24
91.36
0
8
8
degree of fluctuation. Net availability expressed as maximum and minimum percentages of availability trend level reveal the degree of instability each member country has experienced during 197CQ7. The results are shown in Table 1. The highest degrees of instability in the region were experienced by Nepal, Sri Lanka and Bhutan. The maximum level shows that actual net availability of food was in some years much higher than the availability trend level for these countries. This is rather exceptional for countries like Nepal and Bhutan because these maximum figures do not indicate any set pattern. In the case of Nepal the exceptional increase in actual level of food availability was due to unprecedented food imports in the year 1980. The volume of commercial imports to Nepal increased from 4440 metric tons to 39 080 metric tons in the same period. Even in Bhutan imports have been on the increase since the early 1980s. Fluctuations in both production and imports have caused instability in food availability for Sri Lanka. For other member countries the maximum level of food availability is not very high. However, the degree of instability and its possible negative effects on consumption are indicated by the minimum level of actual food availability below the trend level. The frequency distribution of number of years in which actual availability was below trend level shows the probability of consumption falling below the trend. The lowest percentage differences were experienced by Nepal and Sri Lanka. This shows that their consumption level can fall as low as 80% of trend. One interesting pattern in the South Asian region is that all the member countries have more or less the same level of instability in their actual net availability of food. However, a 15% fall in food availability would mean quite a significant drop in quantity for a country like India. The frequency of years (197G37) in which food availability or consumption dropped within the ranges of SO-89% and 90-99% of the trend level shows that Pakistan and Bangladesh experienced the highest probability of facing a crisis. Although they did not experience a drastic fall in their availability, these two countries experienced comparatively higher numbers of years in which food availability fell to 9G99%. For Sri Lanka the frequency of years in which availability fell to S&89% is the highest. In 18 years of observation this country experienced a fall in availability below 89% in four years. In another five years the fall was to between 90 and 99%. India had only two years of sharp fall in availability but in seven of the years under study the fall was to between 90 and 99%. It is interesting to observe that the instability in the SAARC countries as a whole is lower than in its individual member countries, since both maximum and minimum aggregate drops show a normal pattern. The countries combined have a zero chance of falling
494
FOOD POLICY
December
1990
Regionul Table 2. Instability
in food production Bangladesh
a Maldives are not included due to lack of data. b This is actual production as a percentage of production trend level. ’ This is the standard deviation of the difference between actual and trend level production. d Because of its low volume of production and the use of projected data, the standard deviation for Bhutan is very low. e This is the standard deviation of the percentage difference between actual and trend level production, ie (Y-Y )N ,100. ‘ The data on Bhutan’s food grain production as shown in the FAO source are estimated figures. Therefore we have not included them in the computation. Sources: Data were collected from the cereals production figures from various publications of the Food and Agriculture Organization in Rome and from economic surveys and periodic plans of the SAARC member countries.
Total cereals Growth rate, 1950-87 Growth rate, 1970-87 Maximumb Minimumb Standard deviation” (‘000 metric tons), 195&87 Standard deviation” (‘000 metric tons), 197087 Coefficient of variatior? (%), 1950-87 Coefficient of variatione (%), 197&87
2.02 1.84 114.80 82.15
cooperation
for food security
in the SAARC countries,’ Bhutan
na na 108.03 93.80
India
in South Asia
1958-87. Nepal
Pakistan
Sri Lanka
2.69 3.67 128.02 78.89
0.39 -0.70 113.83 85.10
3.01 3.45 182.98 72.16
4.31 6.48 182.06 66.38
1168.00
4.21’
8240.15
277.00
1400.00
250.81
2132.94
na
9231.63
289.00
99.00
228.92
7.78
3.83
7.55
7.63
27.58
20.16
5.78
na
6.53
7.82
6.75
13.39
Rice Standard deviation (‘000 metric tons) Coefficient of variation (%)
1199.75
5922.30
220.00
397.00
205.58
7.93
9.05
9.06
69.15
18.28
Wheat Standard deviation (‘000 metric tons) Coefficient of variation (%)
260.21
3961.22
-
1050.00
172.57
462.70
-
36.99
Maize Standard deviation (‘000 metric tons) Coefficient of variation (%)
_ _
below 90% of the trend level; however, is higher than in most of the individual
54.03 _
8.91
4.52 _
55.21
the chance of falling to 90-99% member countries.
Instability in food production In order to explain the major reasons for instability in food availability in the SAARC member countries, we calculated the degree of instability in the production of major food grains for the periods 1950-87 and 197047. The long-term series is a dependable indicator of the pattern of stability or instability in food production. It should be noted that we are measuring absolute instability by computing a simple linear trend estimate. We have not used any production functions to determine the relationships of the various input variables in food production. The main purpose is to find out to what extent each of the major food commodities caused instability in food production, and whether or not there is a relationship between the trend in the commodity(ies) selected and the aggregate variability in the total food availability in these countries. To calculate commodity fluctuations we took only two major staples for each member country, selected according to their proportion of total cereals tonnage. To measure instability in food in availability in the SAARC countries, the standard deviation of the difference between actual and trend level production, and the coefficient of variation for each major food grain and for total cereal production, was calculated (see Table 2). A breakdown of food production in terms of major staples indicates that instability in food production was usually caused in greater proportion by the commodity of secondary importance. This commodity was
FOOD POLICY
December
1990
495
Regional
cooperation
for food security
in South Asia
wheat for India and Bangladesh, maize for Nepal and Sri Lanka. As can be seen from Table 2 the coefficient of variations for wheat for Bangladesh and India was much higher than for rice, 172.57% against 7.93% and 462.70% against 9.05% respectively. The extremely high coefficient for wheat for India is due to a considerable increase in production over the past four decades. For example, wheat production went up from 5 930 000 metric tons in 1948-50 to 46 500 000 metric tons by 1987 as compared to an increase from 35 539 000 metric tons to 75 000 000 metric tons of rice during the same period. Only for Nepal is the coefficient of variation for the primary commodity, rice, slightly higher than for the secondary commodity, maize. We also tried to measure instability in production by dividing the data into two parts, one from 1950 to 1987 and the other from 1970 to 1987. Additionally, we attempted to assess the degree of instability in relation to average annual growth rates in production and imports for each member country. Pakistan and Sri Lanka experienced the highest degrees of instability in food production compared to other member countries during the period 1950-87. The higher degree of fluctuation in these two countries is indicated by the higher maximum and minimum percentages of actual level as a proportion of trend level and by the higher coefficients of variation shown in Table 2. The other member countries, Bangladesh, India and Nepal, show less fluctuation in their production, although for India the frequency distribution of percentage shortfalls in actual production over the production trend level was the highest in the region. India, Pakistan and Nepal, which were not regular importers of food during the period under study, met shortfalls in their food production through stock drawdowns, irregular commercial imports and international food aid; at times these countries were also casual exporters of food grains. Pakistan has graduated from an import-dependent country to a net exporter. For Bangladesh and Sri Lanka, the regular food importers, shortfalls in export earnings have constrained their ability to rely on commercial imports to meet production shortfalls, causing major instability in their levels of food availability. The long-term trend in the growth in production of food commodities may be associated with greater or less instability. To examine this we measured instability for the years 1970-87 using the same indices to see whether the degree of stability in production increased as a result of recent breakthroughs in agricultural production, and ceteris paribus, food production. The instability indices for this period (shown in Table 2) indicate that cereal production has been comparatively more stable than the long-term trend for Sri Lanka and Pakistan, where there has been a drop in both standard deviation and coefficient of variation. For Nepal both these indicators show no major change. For India both the standard deviation and the coefficient of variation went up in this period. The standard deviation also went up for Bangladesh, but the coefficient of variation declined marginally. Instability in food production was next assessed in relation to the average annual growth rates for five of the six SAARC member countries shown in Table 2. The higher coefficient of variation in food production for Pakistan and Sri Lanka indicates that the degree of instability is associated with higher average annual growth rates over the long term (195G37). The data for the period 1970-87 indicate that for Pakistan, Sri Lanka and India growth rates went up further. The highest
496
FOOD POLICY December
1990
Regional cooperation for food security in South Asia
growth rates were achieved by Sri Lanka (6.48%), followed by India (3.67%) and Pakistan (3.45%). As noted above, these achievements are associated with greater stability in Pakistan and Sri Lanka, but with greater instability in India. The growth rate declined for Nepal (-0.7%) and Bangladesh (1.84%), with relatively little change in the degree of instability, which was already lower than for other countries of the region. These variations, reflected in the standard deviations, coefficients of variation and average annual growth rates in food production, are to a great extent matched with changes in food imports. Except for Pakistan, whose imports increased because of regular imports of wheat and exports of rice, in other countries changes in imports matched changes in production. For example, the average annual growth rates for imports during 1970-85 for Sri Lanka and India were -0.7% and -4.06% respectively, whereas for Nepal and Bangladesh they were 16.32% and 3.52% respectively. This indicates that food production performance was a major factor causing instability in food availability in the SAARC region.
Temporary food insecurity and food reserves Since the possibility of stabilizing food supplies through intraregional trade in food and agriculture is limited at presented in the SAARC region, one effective measure to solve temporary food insecurity problems could be to set up domestic buffer stocks. These could then be supplemented by the proposed food reserve system. The growing food insecurity in some countries and the growing self-reliance in others would surely provide some form of regional insurance against shortfalls in food availability. However, the size of the reserve system and what commodities it should contain depend on the degree of instability in food availability and the commodities that are most unstable in the member countries. In the following section we discuss these issues. Reserve size
?Gee the Agreement on Establishing the SAARC Food Security Reserve, MARC Secretariat, Kathmandu (undated). 7As of January 1989 the SAARC food security reserve was 221 480 metric tons (ibid).
FOOD POLICY
December
1990
One of the most difficult issues concerning a regional food reserve system is the determination of the regional food reserve requirements. It was vaguely stated in the agreement establishing it that the SAARC Food Security Board would assess the food situation and the prospects in the region ‘including factors such as production, consumption, trade, prices, quality and stock of food grains’.6 Although the SAARC summit of 1987 agreed a food reserve of 200 000 metric tons rather arbitrarily,’ the reserve requirement in a region like South Asia depends on a number of complex factors. Firstly the size of the regional reserve should be based on the annual fluctuations in food availability rather than on chronic food shortages. Maintaining a reserve to meet chronic food gaps between requirement and availability would not be a feasible proposition either economically or politically. Secondly, any such reserve should be over and above the member countries’ domestic food reserves. Thirdly, maintenance of the regional reserve should not be expensive. There are advantages from economies of scale in holding a large food reserve, but a large reserve also entails a fiscal burden on the member countries. Fourthly, locational factors for the shipment of food to and from the reserve should also be considered in deciding the volume of the regional reserve. Lastly, there has to be a political
Regional
cooperation
for food security
in South Asia Table 3. Regional food reserve requirementa for SAARC countries (tonnes x 103). Average production
Country Bangladesh
16 679.40
Domestic reserve (10%) 1 667.94
Average shorIfallsb 1446.10
Balance deficit 221 .a4
(8.67) Bhutan a Based on 195&87 data. b Figures in parentheses indicate the percentage of shortfalls to actual production. ‘Average of the total production and hence of trend level production of these countries for the years 195&87. For Bhutan the data pertain to 1950-86. Sources: Computed from FAO Production Year Book, FAO, Rome, Italy, various issues, and economic surveys and government reports of the governments of India and Pakistan.
India Nepal Pakistan Sri Lanka South Asia
124.51
12.45
98 435.78
9 843.58
3 563.95
356.40
10 080.53
1 008.05
1 393.03
139.30
130 277.22
13 027.72
3.97 (3.19) 8 268.60 (8.40) 303.65 (8.52) 1 155.23 (11.46) 171.06 (12.28) 8 168.38 (6.27)
8.48 1 574.98 52.75 -147.18 -31.76 4 859.34
commitment on the part of the comparatively better-off member countries to contribute to the costs of holding the reserves. In order to provide some approximate basis for calculating the regional food reserve requirements in the South Asian region we have adopted two criteria: 0
0
‘See Government of India, Planning Commission, The Seventh Five Year Plan (79&T-90), New Delhi, October 1985, Vol 1, p 23.
the maximum shortfall in food production compared to the trend level. This is calculated as the percentage of actual to trend level production for each year from 1950 to 1985 and by determining the maximum levels for the SAARC countries; the average shortfall in production. This is calculated as the average of the absolute difference between trend level and actual level of production for each year from 1950 to 1984, and tells us the size of the shortfalls actually experienced on average by the SAARC countries.
The first criterion gives us a basis for estimating the level of domestic reserve, which is a first priority for any country to face any probable shortfalls. The second criterion indicates whether any SAARC member country is in a position to contribute to the regional reserve over and above the average shortfall levels but below the domestic level of reserves. In other words, the regional food reserve requirement is the difference between domestic reserves and average shortfall levels, ie the difference between the first and second criteria. Time-series data for the SAARC region as a whole show that the maximum shortfall in food production lies between 90 and 99% of the trend level. On the basis of this observation we considered up to 10% of each member country’s production as the desirable amount of domestic food stock in order to meet any probable emergencies. However, the average trend in shortfalls in food production varies among countries. The regional food reserve requirement, calculated by a roundabout method, is presented in Table 3. According to FAO statistics only Bangladesh, India and Pakistan have set up carryover stocks of food grains to stabilize their food supplies. The average carryover stock for Bangladesh during the period 197&87 was 0.7 million metric tons. The comparable figures were 10.85 and 1.44 million metric tons for India and Pakistan respectively during the same period. India has given adequate consideration in its development plans to food security.’ The long-term trend in food production in the SAARC countries shows that only Pakistan and Sri Lanka experienced a shortfall below the 10% domestic level during 1950-87. As stated above, this was
FOOD POLICY December
1990
Regional cooperation for food security in South Asia
primarily due to the greater instability in their production. If judged in this framework, the total regional food reserve up until 1987 would have been about 178 940 metric tons, about 89.47% of the arbitrarily determined volume of 200 000 metric tons. Table 3 also shows that contributing the required amount to the food reserve would not have been a problem since the other member countries could have provided up to the difference between their 10% domestic level and the average variation. India alone could have contributed up to 1.6% (ie l&8.4%) of its production, which would have been far more than enough. Another method would be to contribute according to the country’s proportion of total SAARC production. This would provide equity and a sense of partnership in implementing the regional food reserve agreement.
Reserve composition The other important issue associated with the establishment of a regional food reserve is to determine its commodity composition. It was decided in the SAARC Agreement that ‘the reserve shall consist of wheat or rice or a combination thereof’.’ However, the composition of food production and food habits in the member countries shows that there could also be other commodities such as maize in the reserve system. Since the agreement has not determined the commodities that a country could contribute, we discuss this issue here. Although rice is a major staple in all the member countries except Pakistan, the significance of the second major commodity varies among countries in terms of total food production. Table 2 shows that for the period 1950-87 the share of rice in average total production was 69.15% and the shares of wheat and maize 29.97% and 0.88% respectively. Rice and wheat also accounted for fairly large shares of total cereals production: 50.28% and 21.79% respectively. The share of maize in total cereals production was just 0.69%. The average ratio can be applied to determine the ratios of regional food commodities, and it can also provide the basis for the allocation of commodities to each member country. For example, India and Bangladesh would contribute rice, Sri Lanka, Nepal and Bhutan would contribute maize, and Pakistan would contribute wheat. However, one major problem with putting these commodities in the reserve basket is that the instability in consumption of the poorer section of the populations in the SAARC region will not be thus reduced. This is mainly because these three commodities together constitute only about 72% of total food cereals production. Other commodities, for example millet and pulses, are the important protein sources for the poorer people. However, such commodities could be maintained in the domestic food reserves of member countries.
Location and prices
‘See
Agreement on Establishing the SAARC Food Security Reserve, op tit, Ref 6. “Ibid.
FOOD POLICY
December
1990
Two other important issues arise in connection with the implementation of the regional food agreement. These are where the reserve should be located, and what pricing mechanism should be followed in releasing food supplies. Article IV (3) of the Agreement states that ‘the prices, terms and conditions of payment in kind or otherwise in respect of the food grains so released shall be the subject of direct negotiations between the member countries concerned’.” However, if efforts are made to multilateralize the creation of the regional food reserve there
499
Regional cooperation for food security in South Asia
has to be a general agreement on pricing and conditions of payment. One multilateral condition could be that food commodities could only be lent which are to be repaid in kind. In an abnormal situation in which a member country was unable to repay in kind, the lowest available price in any member country of the region could be the governing price for any procurement or release of commodities. From the point of view of economic considerations, ie logistical and infrastructural facilities, the regional food reserve should be located at the port of Calcutta in India, though Article II (6) of the Agreement states that ‘the member countries undertake to provide adequate storage facilities for the food grains that they have earmarked’.” However, in times of regional tension and conflict such bilateral arrangements might not be effective. Since most of the member countries are linked either by sea or land, transshipment of commodities to and fro would be economical and feasible. India, as the largest food producer, will also be the largest contributor to the reserve and it would be economical to transport its contributions to this location. The issues discussed above deal with temporary or emergency food shortages. One of the ways to meet these is through a buffer stock system, both domestic and regional. Such a reserve would help to stabilize food consumption by restraining prices and replenshing supplies in bad years. In most of the agricultural countries such a reserve also satisfies political interests of the ruling governments. However, the problem of hunger and malnutrition would largely be untouched by such a food reserve scheme although it would help stabilize prices and thereby supplies.
Enhanced cooperation Other measures must be taken to enhance the demand or purchasing power of the ordinary people. The SAARC member countries could gain considerably in terms of combating malnutrition, poverty and hunger through some form of cooperation. Any regional cooperative effort should be preceded by this first-stage approach we discussed in the previous section. The second-stage approach to regional cooperation involves identifying possible areas of cooperation and harmonizing the member countries’ agricultural policies. Since there is very limited agreement on intraregional trade and financial, monetary and industrial cooperation, we have identified selected areas of cooperation within the existing framework of achieving food security. Besides setting up an emergency food reserve these include: 0 0 0 e
’ ’ Ibid.
500
setting up an early warning system and exchange of information; facilitating the flow of food by both limited and regulated trade and intergovernmental lending; encouraging research and extension in agricultural technology and processing; increasing agricultural productivity through cooperation in developing the most important factors of production including the protection of the environment.
In order to make the emergency food reserve effective and to help solve any major food crisis in the region, the member countries could set up an early warning system. The FAO could also help mobilize international food aid if the regional stock was not large enough to meet the shortages. Similarly, the SAARC countries could gain from exchanging
FOOD POLICY
December
1990
Regional cooperation for food security in South Asia
information on the weather, crop situation, production and total demand and supply. This would help coordinate efforts in advance. Stabilization of consumption could also be achieved by allowing a certain amount of intraregional trade. This would provide food producers with a bigger market, which raises productivity, and consumers with greater stability in availability. This would also help countries to specialize in certain commodities in the long run. Other important areas for regional cooperation include technological change and research and extension. In order to raise crop yield, which is the only viable option for most countries, greater research and extension in the field of crop diversification, crop suitability, seed testing and livestock improvement are essential. Since some of the member countries possess greater technological capabilities in these areas than others, cooperation would help weaker member countries to combat chronic food insecurity by raising productivity. As stated earlier, one major cause of both temporary and chronic food insecurity in the region is the lack of access of the majority of food producers to modern means and methods of production. In most of the countries only medium and big farmers have access to agricultural credits. There is very limited land under irrigation: except in Pakistan, which has 76% of its land under irrigation, the other member countries irrigate between 20 and 25%. In view of the vast untapped water resources on the one hand and the considerable semi-arid unirrigated areas on the other, the countries of the region would gain much by harnessing this resource. Similarly, a multinational fertilizer factory could be established with the available technological and resource capabilities of countries like India. This would increase fertilizer consumption, reduce dependence on imports and control transborder traffic especially in imported inputs. Moreover, these countries could gain by extending the size and scope of research and extension directed towards increasing productivity. l2 Another vital area of cooperation required from the both humanitarian and economic points of view is protection of the environment; for example, the growing use of fertilizers has been criticized as destructive to both health and the environment. Since this is an important issue, it needs discussion in the context of achieving food security in the region.
Regional cooperation for permanent food security
“Times
Temporary food insecurity could be overcome through the creation of a regional food reserve scheme. But there is also a chronic food insecurity in the region as a certain percentage of the population does not have sufficient means of production or income to maintain the minimum necessary food consumption. Chronic food insecurity is thus the consequence of (a) lack of employment opportunities, and (b) distributional inequalities. As a result of chronic food insecurity there is acute hunger, malnutrition and other health-related problems in the region. The attainment of permanent food security or the elimination of the chronic food insecurity in the region hinges on efforts at the individual country, bilateral and multilateral levels. At the individual country level each country has been trying to implement certain legal and policy measures (for example, state intervention in regulating food prices) to improve distributional inequalities in terms of both ownership of the means of production and ‘exchange entitlement’, but with very limited
of lndia, 1 October 1988.
FOOD POLICY
December
1990
501
Regional cooperation for food security in South Asia
success as the political power structure has remained static in most of these countries. Here we are concerned with the scope of regional cooperation in attaining permanent food security. Progress to date in bilateral as well as multilateral or regional cooperation in this direction has been extremely limited. The SAARC countries have set up a Working Committee for Agriculture and Livestock Development but except for organizing a few workshops and seminars there has been little useful activity. Environmental
degradation
Because of the different magnitude of food security problems associated with contentious bilateral relationships, there may not be an immediate hope of regional cooperation towards the attainment of food security in the region. However, one problem that has a regional dimension and is causing mass suffering without discrimination is the deteriorating environment in the region. For the people of South Asia, failure to protect the environment has been associated with the loss of crops and livestock, famines, droughts and the death of millions of people. The natural disasters some of the member countries have been subjected to over the last two decades and most recently in 1988 are without precedent. Although the extent of poverty and hunger is not as great as in some African countries, for example Ethiopia, where environmental degradation is the prime cause, the countries of South Asia could soon face the worst forms of poverty and hunger if the growing environmental crisis is not controlled. However, the main root cause of environmental degradation is precisely the level of poverty in these countries, which has led to exponential growth in the population of some countries in the region in recent years. As the population pressure increases, the desperate search for food and fodder forces people to go further and further up into the forest and higher up watersheds and to cultivate more and more marginal land. The widespread felling of trees in upland watersheds has caused soil erosion and flooding in some parts and desertification and droughts in others as a result of changes in weather patterns. If this process continues some member countries may face more cataclysmic inundations in the future. Hence environmental degradation in the South Asian region cannot be checked without eliminating poverty. And since food security is one important step in alleviating poverty, the member countries of the region could gain by both ensuring food security and resolving the environmental crisis. While the former problem may be country specific, the latter problem is not only regional but global. It is therefore in the long-term interest of these countries to take collective steps to tackle environmental issues. These problems are to be found basically in two major areas: the control of flooding, which has become a major and immediate threat, and the preservation of forests, which is causing the first problem. One of the worst environmental problems faced by the SAARC countries is heavy seasonal flooding, which ravages agricultural land and causes enormous suffering, especially in Bangladesh, India and Nepal. This is directly connected with the problem of food insecurity and ultimately poverty. During the monsoon season heavy glacial runoff in Nepal, Tibet, Bhutan and northern India swells several rivers and their tributaries and converges on the low-lying plain, mainly in Bangladesh,
502
FOOD POLICY
December
1990
Regional cooperation for food security in South Asia
India and Nepal, causing massive damage. One possible area of cooperation, which should primarily involve India, Nepal, Bhutan, Bangladesh and China, is to build huge dams’” to control the Himalayan headwaters of the two major rivers, the Ganges and the Brahmaputra. These would be multipurpose dams, which could each irrigate thousands of acres of dry land, generate massive hydroelectric power and control flooding in Bangladesh (which receives almost 90% of all flow), India and Nepal. Those countries which do not benefit directly through flood control could benefit from hydropower and irrigation. The construction of dams can also cause environmental damage, especially if they are built by depleting forest or land resources. But that of forest and land is not a problem in this case, since protection resources would be the two major goals. However, one major problem, apart from the standing political irritants in the SAARC member countries, is the availability of funds because such a giant project could cost billions of dollars. Given the concerted political will, commitment and cooperation of all the concerned countries, however, international support could be mobilized. But, sadly, in the present situation there is little hope for a multinational approach to such a scheme since India’s view is that water resource issues ‘are best solved in the bilateral framework’. l4 Not only does part of the problem originate in Nepal, the Tibet region of China and Bhutan, but these countries also have a substantial interest in protecting their environment. Another area of cooperation in protecting the environment and achieving food security is the preservation of forest resources. As discussed above, population pressure in search of land, fuel and fodder is the principal cause of deforestation which in turn causes flooding. Most of the SAARC member countries have some kind of programme for the protection of forest resources. However, there could be more regional cooperation in research and extension concerning forests and the protection of the environment, coordinating the demand and supply of forest and forest-based products in the region (since forest products are one of the most lucrative items of illegal transborder trade) and exploiting alternative energy sources, for instance water, for the benefit of the people of the region. Scientific and technical cooperation in exploring cheap alternative energy sources would be the most important step in forging cooperation for protecting the environment since traditional wood-based sources of energy are still dominant in most of the countries of South Asia.
Conclusions ‘%angladesh has been suggesting to India to ‘build dams and reservoirs in the Himalayas in Nepalese territory for controlling the flow of the rivers in the Gangetic plains’. See Times of India, 1 October 1988. ‘%ee Times of India, 30 September 1988. Although it would be difficult to control flooding without controlling the flow and direction of water in the Himalayan headwaters, India and Bangladesh have set up a joint task force of experts to study flood management and water flow issues in relation to the Ganges and the Brahmaputra.
FOOD POLICY
December
1990
The seven member countries of the SAARC agreed to set up a regional food reserve of some 200 000 metric tons in 1987. Although a number of issues related to the location of the reserve, the kind of grains, pricing mechanism, sharing of costs and conditions of release of the reserve are yet to be resolved given the bilateral political problems they have, such a measure addresses only one part of the crisis the region is facing. The establishment of a reserve works as an insurance against food shortages caused by emergency situations such as floods, drought, earthquakes or a sudden drop in production or rise in food prices - and these, of course, are major elements of the crisis confronting several member countries. However, the most serious problem the SAARC countries face is chronic food insecurity, where (a) the consumption of the majority of
Regional cooperation for food security in South Asia
poor families and households is below a minimally accepted standard, and (b) the consumption level suffers from downward fluctuations due either to rises in domestic prices as a result of a drop in production or to a shrinkage in the income of the vulnerable groups. Consumption levels may also fall due to rises in the international prices of food grains or to a fall in foreign exchange earnings. Whatever may be the reasons, chronic food insecurity in the South Asia region is strongly linked with poverty and hunger. Hence the eradication of poverty and hunger and the achievement of regional food security would enable the poorer section of the population to buy enough food through the generation of employment opportunities and the redistribution of income and assets. It is towards eliminating the endemic problem of chronic food shortages that regional cooperation should be primarily directed. In identifying possible areas of regional cooperation for the elimination of chronic food shortages, a two-stage approach is suggested. The first stage involves the creation of preconditions for broader harmonization of policies through institutional changes in ownership patterns, offering price incentives to enhance productivity, increasing the efficiency of the institutions and bureaucracies that deal with agricultural inputs and research, and providing a guaranteed income or employment to the landless and unemployed population together with a minimum availability of food. After introducing these domestic reforms, member countries should move to a second-stage approach. This involves reviewing tariff and non-tariff barriers to encourage intraregional trade in some of the most basic foodstuffs, harmonization of agricultural policies in respect of prices, incentives and productivity, undertaking multinational efforts to manufacture fertilizers and pesticides, and implementing joint irrigation projects by harnessing the vast water resources of the region. Another area of cooperation would be research and extension, especially in crop varietal research, productivity and seed testing. Also important is the exchange of information on weather conditions, productivity, domestic stocks, prices, etc. This would help to focus regional efforts in times of need. Another important field of cooperation directly related to food security, poverty and hunger is the protection of the environment from further degradation. This has regional and global implications, since a serious environmental crisis in one country may affect the environment of the whole region. Hence regional efforts could be mobilized for the building of dams, preservation of forests, exploration of alternative and cheaper sources of energy and coordination of the demand and supply for forests and forest products. Without improving the bilateral relations between India and its neighbouring countries, however, nothing substantial can be done in these fields. But if politics cannot lead the way in solving the most gruelling humanitarian problems of poverty, hunger and malnutrition prevailing in the region, let humanitarian issues give a lead to the politics of the region.
504
FOOD POLICY
December
1990
Narayan Khadka
This article examines two interrelated issues concerning temporary and chronic food insecurities in the South Asian Association for Regional Cooperation (SAARC) countries. These are the determination of a basis for a realistic assessment of regional food requirements, and the regional action necessary to overcome chronic food insecurity. There is a prospect of overcoming temporary food insecurity through a regional food reserve, though not every member country can contribute to it at present, and it should be accompanied by bilateral and multilateral efforts to harmonize food and agricultural policies. Regarding chronic food insecurity, SAARC member countries should cooperate in harmonizing bilateral policies on poverty-related issues, as well as environmental protection. The author can Ivanhoe Avenue, 5S5, Canada.
be contacted at 886 Ottawa, Ontario K2B
‘See Government of India, lndia and Foreign Review, New Delhi, 31 August 1987, p 19.
492
The seven member countries of the South Asian Association for Regional Cooperation (SAARC) agreed to maintain jointly a regional food reserve of about 200 000 metric tons for use in emergencies at their November 1987 summit-level meeting in Kathmandu. The proposal for holding a regional food reserve was first put forward by the then Indian Prime Minister, Rajiv Gandhi, during his inaugural speech at the Third Session of the Council of Ministers of the SAARC member countries in New Delhi in June 1987. This proposal has been motivated by two complementary goals, India’s probability of emerging as a net supplier of foodgrains to the needy fellow members in the region, an expectation arising out of its growing self-reliance, and a general desire to mobilize regional efforts in meeting occasional food crises brought about by natural disasters and calamities. A regional food reserve system would also ensure and enhance regional self-reliance in food in the face of uncertainty in terms of both prices and supplies in the international trading system, and would counteract the effective use of food as a political weapon in the hands of larger surplus-producing countries. As Gandhi put it when inaugurating the Third Session, ‘where 20 years ago many of us were still dependent on food imports for survival, our remarkable achievements in agriculture have made it feasible to counter scarcities and unexpected shortages by recourse to our resources. Our national self-reliance as countries would be reinforced by a framework of regional self-reliance.” Within a year the agreement to hold a regional food reserve in the SAARC region was amply justified by a series of natural disasters that caused considerable damage in three of the member countries, Bangladesh, Nepal and India, between August and November 1988. Bangladesh was the most seriously affected country. Floods in September affected both human lives and crops (it is estimated that nearly 2 million metric tons of paddy crops were destroyed). This was followed in less than four months by a devastating cyclone which cut a swathe across Bangladesh and parts of India, causing serious damage to human lives and harvestable crops. Besides the plan to prevent natural disasters through concerted efforts, there are also strong political and economic reasons for maintaining a food security reserve for each of the member countries.
0306-9192/90/060492-l
3 @ 1990 Butterworth-Heinemann
Ltd
Regional cooperation for food security in South Asia
However, the major challenge in a regional food reserve system is posed by its implementation. It is no surprise that there are very few regional schemes for maintaining regional reserves of food. One World Bank report has rightly observed that ‘without agreement on domestic food policies, on emergency buffer stocks, and on sharing the financial burden, any regional scheme will dissolve’.2 It also maintained that ‘the most important and most difficult precondition’ for any regional food reserve scheme to succeed is that ‘the countries should have a high degree of political unity’.” Because of lack of political commitment and desire, no significant benefits have been realized by the nine members of the Southern African Development Coordination Conference (SADCC) which have considered setting up a regional food reserve system to improve their food security. The SAARC countries are facing the same problem. Moreover, the decision to set up such a regional reserve is not based on a realistic assessment of the regional food requirements and the potentials of the member countries. The managerial and economic problems regarding its implementation are additional constraints. In light of the need to achieve food security in the region on the one hand, and the complex problems associated with its achievement on the other, this paper focuses on two key issues: (a) the establishment of regional food reserves to cope with temporary food insecurity, and (b) regional action to overcome chronic food insecurity. The regional food reserve issue is analysed in terms of the degree and magnitude of instability in food consumption and production in the SAARC member countries. This provides a basis for determining regional food requirements. The second issue focuses on the domestic and regional cooperation efforts to overcome chronic food insecurity in the region. Although lack of political commitment and harmony has been one of the major hurdles in forging stronger cooperation in the region, this paper does not focus on this issue as an obstacle to regional food security, as quite a few studies have discussed in detail the existing conflicts in bilateral relations between member countries and their differences in political and security perceptions.4
Instability in food availability
‘World Bank, Poverty and Hunger Issues and Options for Food Security in Developing Countries, Washington, DC, 1986. ?bid. 4For discussion on the security perceptions of MARC member countries see Asian Survey, Vol 25, April 1985. 5Net production is derived after allowing for animal feed, husks and seed at 10% of gross production.
FOOD POLICY
December
1990
Both the need for and the desirable size of domestic and regional food reserves can be measured by examining instability in food availability for consumption. This is done by measuring fluctuations in actual food availability from the availability trend level within a certain period. The availability trend level is computed by using simple linear regression. In order to measure instability in food availability in the SAARC countries we considered fluctuations in net availability for food (calculated as net production minus or plus net import? and plus or minus change in carryover stocks as a percentage of the availability trend level for the period 197(X37). The data are drawn mainly from the United Nations Food and Agriculture Organization. However, whenever necessary and possible we have also used domestic sources for data on production, carryover stocks and trade figures. A comparison between actual availability and the trend level in net availability for food consumption in the SAARC countries for the period 197&87 indicates that all the six member countries under study (excluding the Maldives due to lack of data) have experienced some
493
Regional cooperation for food security in South Asia
a Food includes paddy, wheat, maize and millet. b This is actual availability as a percentage of trend level. Sources: Computed from FAO Production Year Book (various issues), FAO Trade Year Book (various issues), The State of Agriculture and Monthly Bulletin of Statistics (various issues) except for India and Pakistan. The FAO data were supplemented by data on food and agriculture published by the food and agriculture ministries and departments of the SAARC member countries.
Table 1. Instability in net food” availability in the SAARC region (actual as a percentage trend level), 1978-87.
of
Maximum
Minimum
Frequency of no of years below trendb 8589% 90-99% Total
Bangladesh Bhutan India Nepal Pakistan Sri Lanka
111.36 123.64 108.53 155.52 112.95 123.32
90.46 85.26 89.27 80.70 08.89 81.95
0 3 2 2 1 4
10 6 5 7 10 5
10 9 7 9 11 9
South Asia
106.24
91.36
0
8
8
degree of fluctuation. Net availability expressed as maximum and minimum percentages of availability trend level reveal the degree of instability each member country has experienced during 197CQ7. The results are shown in Table 1. The highest degrees of instability in the region were experienced by Nepal, Sri Lanka and Bhutan. The maximum level shows that actual net availability of food was in some years much higher than the availability trend level for these countries. This is rather exceptional for countries like Nepal and Bhutan because these maximum figures do not indicate any set pattern. In the case of Nepal the exceptional increase in actual level of food availability was due to unprecedented food imports in the year 1980. The volume of commercial imports to Nepal increased from 4440 metric tons to 39 080 metric tons in the same period. Even in Bhutan imports have been on the increase since the early 1980s. Fluctuations in both production and imports have caused instability in food availability for Sri Lanka. For other member countries the maximum level of food availability is not very high. However, the degree of instability and its possible negative effects on consumption are indicated by the minimum level of actual food availability below the trend level. The frequency distribution of number of years in which actual availability was below trend level shows the probability of consumption falling below the trend. The lowest percentage differences were experienced by Nepal and Sri Lanka. This shows that their consumption level can fall as low as 80% of trend. One interesting pattern in the South Asian region is that all the member countries have more or less the same level of instability in their actual net availability of food. However, a 15% fall in food availability would mean quite a significant drop in quantity for a country like India. The frequency of years (197G37) in which food availability or consumption dropped within the ranges of SO-89% and 90-99% of the trend level shows that Pakistan and Bangladesh experienced the highest probability of facing a crisis. Although they did not experience a drastic fall in their availability, these two countries experienced comparatively higher numbers of years in which food availability fell to 9G99%. For Sri Lanka the frequency of years in which availability fell to S&89% is the highest. In 18 years of observation this country experienced a fall in availability below 89% in four years. In another five years the fall was to between 90 and 99%. India had only two years of sharp fall in availability but in seven of the years under study the fall was to between 90 and 99%. It is interesting to observe that the instability in the SAARC countries as a whole is lower than in its individual member countries, since both maximum and minimum aggregate drops show a normal pattern. The countries combined have a zero chance of falling
494
FOOD POLICY
December
1990
Regionul Table 2. Instability
in food production Bangladesh
a Maldives are not included due to lack of data. b This is actual production as a percentage of production trend level. ’ This is the standard deviation of the difference between actual and trend level production. d Because of its low volume of production and the use of projected data, the standard deviation for Bhutan is very low. e This is the standard deviation of the percentage difference between actual and trend level production, ie (Y-Y )N ,100. ‘ The data on Bhutan’s food grain production as shown in the FAO source are estimated figures. Therefore we have not included them in the computation. Sources: Data were collected from the cereals production figures from various publications of the Food and Agriculture Organization in Rome and from economic surveys and periodic plans of the SAARC member countries.
Total cereals Growth rate, 1950-87 Growth rate, 1970-87 Maximumb Minimumb Standard deviation” (‘000 metric tons), 195&87 Standard deviation” (‘000 metric tons), 197087 Coefficient of variatior? (%), 1950-87 Coefficient of variatione (%), 197&87
2.02 1.84 114.80 82.15
cooperation
for food security
in the SAARC countries,’ Bhutan
na na 108.03 93.80
India
in South Asia
1958-87. Nepal
Pakistan
Sri Lanka
2.69 3.67 128.02 78.89
0.39 -0.70 113.83 85.10
3.01 3.45 182.98 72.16
4.31 6.48 182.06 66.38
1168.00
4.21’
8240.15
277.00
1400.00
250.81
2132.94
na
9231.63
289.00
99.00
228.92
7.78
3.83
7.55
7.63
27.58
20.16
5.78
na
6.53
7.82
6.75
13.39
Rice Standard deviation (‘000 metric tons) Coefficient of variation (%)
1199.75
5922.30
220.00
397.00
205.58
7.93
9.05
9.06
69.15
18.28
Wheat Standard deviation (‘000 metric tons) Coefficient of variation (%)
260.21
3961.22
-
1050.00
172.57
462.70
-
36.99
Maize Standard deviation (‘000 metric tons) Coefficient of variation (%)
_ _
below 90% of the trend level; however, is higher than in most of the individual
54.03 _
8.91
4.52 _
55.21
the chance of falling to 90-99% member countries.
Instability in food production In order to explain the major reasons for instability in food availability in the SAARC member countries, we calculated the degree of instability in the production of major food grains for the periods 1950-87 and 197047. The long-term series is a dependable indicator of the pattern of stability or instability in food production. It should be noted that we are measuring absolute instability by computing a simple linear trend estimate. We have not used any production functions to determine the relationships of the various input variables in food production. The main purpose is to find out to what extent each of the major food commodities caused instability in food production, and whether or not there is a relationship between the trend in the commodity(ies) selected and the aggregate variability in the total food availability in these countries. To calculate commodity fluctuations we took only two major staples for each member country, selected according to their proportion of total cereals tonnage. To measure instability in food in availability in the SAARC countries, the standard deviation of the difference between actual and trend level production, and the coefficient of variation for each major food grain and for total cereal production, was calculated (see Table 2). A breakdown of food production in terms of major staples indicates that instability in food production was usually caused in greater proportion by the commodity of secondary importance. This commodity was
FOOD POLICY
December
1990
495
Regional
cooperation
for food security
in South Asia
wheat for India and Bangladesh, maize for Nepal and Sri Lanka. As can be seen from Table 2 the coefficient of variations for wheat for Bangladesh and India was much higher than for rice, 172.57% against 7.93% and 462.70% against 9.05% respectively. The extremely high coefficient for wheat for India is due to a considerable increase in production over the past four decades. For example, wheat production went up from 5 930 000 metric tons in 1948-50 to 46 500 000 metric tons by 1987 as compared to an increase from 35 539 000 metric tons to 75 000 000 metric tons of rice during the same period. Only for Nepal is the coefficient of variation for the primary commodity, rice, slightly higher than for the secondary commodity, maize. We also tried to measure instability in production by dividing the data into two parts, one from 1950 to 1987 and the other from 1970 to 1987. Additionally, we attempted to assess the degree of instability in relation to average annual growth rates in production and imports for each member country. Pakistan and Sri Lanka experienced the highest degrees of instability in food production compared to other member countries during the period 1950-87. The higher degree of fluctuation in these two countries is indicated by the higher maximum and minimum percentages of actual level as a proportion of trend level and by the higher coefficients of variation shown in Table 2. The other member countries, Bangladesh, India and Nepal, show less fluctuation in their production, although for India the frequency distribution of percentage shortfalls in actual production over the production trend level was the highest in the region. India, Pakistan and Nepal, which were not regular importers of food during the period under study, met shortfalls in their food production through stock drawdowns, irregular commercial imports and international food aid; at times these countries were also casual exporters of food grains. Pakistan has graduated from an import-dependent country to a net exporter. For Bangladesh and Sri Lanka, the regular food importers, shortfalls in export earnings have constrained their ability to rely on commercial imports to meet production shortfalls, causing major instability in their levels of food availability. The long-term trend in the growth in production of food commodities may be associated with greater or less instability. To examine this we measured instability for the years 1970-87 using the same indices to see whether the degree of stability in production increased as a result of recent breakthroughs in agricultural production, and ceteris paribus, food production. The instability indices for this period (shown in Table 2) indicate that cereal production has been comparatively more stable than the long-term trend for Sri Lanka and Pakistan, where there has been a drop in both standard deviation and coefficient of variation. For Nepal both these indicators show no major change. For India both the standard deviation and the coefficient of variation went up in this period. The standard deviation also went up for Bangladesh, but the coefficient of variation declined marginally. Instability in food production was next assessed in relation to the average annual growth rates for five of the six SAARC member countries shown in Table 2. The higher coefficient of variation in food production for Pakistan and Sri Lanka indicates that the degree of instability is associated with higher average annual growth rates over the long term (195G37). The data for the period 1970-87 indicate that for Pakistan, Sri Lanka and India growth rates went up further. The highest
496
FOOD POLICY December
1990
Regional cooperation for food security in South Asia
growth rates were achieved by Sri Lanka (6.48%), followed by India (3.67%) and Pakistan (3.45%). As noted above, these achievements are associated with greater stability in Pakistan and Sri Lanka, but with greater instability in India. The growth rate declined for Nepal (-0.7%) and Bangladesh (1.84%), with relatively little change in the degree of instability, which was already lower than for other countries of the region. These variations, reflected in the standard deviations, coefficients of variation and average annual growth rates in food production, are to a great extent matched with changes in food imports. Except for Pakistan, whose imports increased because of regular imports of wheat and exports of rice, in other countries changes in imports matched changes in production. For example, the average annual growth rates for imports during 1970-85 for Sri Lanka and India were -0.7% and -4.06% respectively, whereas for Nepal and Bangladesh they were 16.32% and 3.52% respectively. This indicates that food production performance was a major factor causing instability in food availability in the SAARC region.
Temporary food insecurity and food reserves Since the possibility of stabilizing food supplies through intraregional trade in food and agriculture is limited at presented in the SAARC region, one effective measure to solve temporary food insecurity problems could be to set up domestic buffer stocks. These could then be supplemented by the proposed food reserve system. The growing food insecurity in some countries and the growing self-reliance in others would surely provide some form of regional insurance against shortfalls in food availability. However, the size of the reserve system and what commodities it should contain depend on the degree of instability in food availability and the commodities that are most unstable in the member countries. In the following section we discuss these issues. Reserve size
?Gee the Agreement on Establishing the SAARC Food Security Reserve, MARC Secretariat, Kathmandu (undated). 7As of January 1989 the SAARC food security reserve was 221 480 metric tons (ibid).
FOOD POLICY
December
1990
One of the most difficult issues concerning a regional food reserve system is the determination of the regional food reserve requirements. It was vaguely stated in the agreement establishing it that the SAARC Food Security Board would assess the food situation and the prospects in the region ‘including factors such as production, consumption, trade, prices, quality and stock of food grains’.6 Although the SAARC summit of 1987 agreed a food reserve of 200 000 metric tons rather arbitrarily,’ the reserve requirement in a region like South Asia depends on a number of complex factors. Firstly the size of the regional reserve should be based on the annual fluctuations in food availability rather than on chronic food shortages. Maintaining a reserve to meet chronic food gaps between requirement and availability would not be a feasible proposition either economically or politically. Secondly, any such reserve should be over and above the member countries’ domestic food reserves. Thirdly, maintenance of the regional reserve should not be expensive. There are advantages from economies of scale in holding a large food reserve, but a large reserve also entails a fiscal burden on the member countries. Fourthly, locational factors for the shipment of food to and from the reserve should also be considered in deciding the volume of the regional reserve. Lastly, there has to be a political
Regional
cooperation
for food security
in South Asia Table 3. Regional food reserve requirementa for SAARC countries (tonnes x 103). Average production
Country Bangladesh
16 679.40
Domestic reserve (10%) 1 667.94
Average shorIfallsb 1446.10
Balance deficit 221 .a4
(8.67) Bhutan a Based on 195&87 data. b Figures in parentheses indicate the percentage of shortfalls to actual production. ‘Average of the total production and hence of trend level production of these countries for the years 195&87. For Bhutan the data pertain to 1950-86. Sources: Computed from FAO Production Year Book, FAO, Rome, Italy, various issues, and economic surveys and government reports of the governments of India and Pakistan.
India Nepal Pakistan Sri Lanka South Asia
124.51
12.45
98 435.78
9 843.58
3 563.95
356.40
10 080.53
1 008.05
1 393.03
139.30
130 277.22
13 027.72
3.97 (3.19) 8 268.60 (8.40) 303.65 (8.52) 1 155.23 (11.46) 171.06 (12.28) 8 168.38 (6.27)
8.48 1 574.98 52.75 -147.18 -31.76 4 859.34
commitment on the part of the comparatively better-off member countries to contribute to the costs of holding the reserves. In order to provide some approximate basis for calculating the regional food reserve requirements in the South Asian region we have adopted two criteria: 0
0
‘See Government of India, Planning Commission, The Seventh Five Year Plan (79&T-90), New Delhi, October 1985, Vol 1, p 23.
the maximum shortfall in food production compared to the trend level. This is calculated as the percentage of actual to trend level production for each year from 1950 to 1985 and by determining the maximum levels for the SAARC countries; the average shortfall in production. This is calculated as the average of the absolute difference between trend level and actual level of production for each year from 1950 to 1984, and tells us the size of the shortfalls actually experienced on average by the SAARC countries.
The first criterion gives us a basis for estimating the level of domestic reserve, which is a first priority for any country to face any probable shortfalls. The second criterion indicates whether any SAARC member country is in a position to contribute to the regional reserve over and above the average shortfall levels but below the domestic level of reserves. In other words, the regional food reserve requirement is the difference between domestic reserves and average shortfall levels, ie the difference between the first and second criteria. Time-series data for the SAARC region as a whole show that the maximum shortfall in food production lies between 90 and 99% of the trend level. On the basis of this observation we considered up to 10% of each member country’s production as the desirable amount of domestic food stock in order to meet any probable emergencies. However, the average trend in shortfalls in food production varies among countries. The regional food reserve requirement, calculated by a roundabout method, is presented in Table 3. According to FAO statistics only Bangladesh, India and Pakistan have set up carryover stocks of food grains to stabilize their food supplies. The average carryover stock for Bangladesh during the period 197&87 was 0.7 million metric tons. The comparable figures were 10.85 and 1.44 million metric tons for India and Pakistan respectively during the same period. India has given adequate consideration in its development plans to food security.’ The long-term trend in food production in the SAARC countries shows that only Pakistan and Sri Lanka experienced a shortfall below the 10% domestic level during 1950-87. As stated above, this was
FOOD POLICY December
1990
Regional cooperation for food security in South Asia
primarily due to the greater instability in their production. If judged in this framework, the total regional food reserve up until 1987 would have been about 178 940 metric tons, about 89.47% of the arbitrarily determined volume of 200 000 metric tons. Table 3 also shows that contributing the required amount to the food reserve would not have been a problem since the other member countries could have provided up to the difference between their 10% domestic level and the average variation. India alone could have contributed up to 1.6% (ie l&8.4%) of its production, which would have been far more than enough. Another method would be to contribute according to the country’s proportion of total SAARC production. This would provide equity and a sense of partnership in implementing the regional food reserve agreement.
Reserve composition The other important issue associated with the establishment of a regional food reserve is to determine its commodity composition. It was decided in the SAARC Agreement that ‘the reserve shall consist of wheat or rice or a combination thereof’.’ However, the composition of food production and food habits in the member countries shows that there could also be other commodities such as maize in the reserve system. Since the agreement has not determined the commodities that a country could contribute, we discuss this issue here. Although rice is a major staple in all the member countries except Pakistan, the significance of the second major commodity varies among countries in terms of total food production. Table 2 shows that for the period 1950-87 the share of rice in average total production was 69.15% and the shares of wheat and maize 29.97% and 0.88% respectively. Rice and wheat also accounted for fairly large shares of total cereals production: 50.28% and 21.79% respectively. The share of maize in total cereals production was just 0.69%. The average ratio can be applied to determine the ratios of regional food commodities, and it can also provide the basis for the allocation of commodities to each member country. For example, India and Bangladesh would contribute rice, Sri Lanka, Nepal and Bhutan would contribute maize, and Pakistan would contribute wheat. However, one major problem with putting these commodities in the reserve basket is that the instability in consumption of the poorer section of the populations in the SAARC region will not be thus reduced. This is mainly because these three commodities together constitute only about 72% of total food cereals production. Other commodities, for example millet and pulses, are the important protein sources for the poorer people. However, such commodities could be maintained in the domestic food reserves of member countries.
Location and prices
‘See
Agreement on Establishing the SAARC Food Security Reserve, op tit, Ref 6. “Ibid.
FOOD POLICY
December
1990
Two other important issues arise in connection with the implementation of the regional food agreement. These are where the reserve should be located, and what pricing mechanism should be followed in releasing food supplies. Article IV (3) of the Agreement states that ‘the prices, terms and conditions of payment in kind or otherwise in respect of the food grains so released shall be the subject of direct negotiations between the member countries concerned’.” However, if efforts are made to multilateralize the creation of the regional food reserve there
499
Regional cooperation for food security in South Asia
has to be a general agreement on pricing and conditions of payment. One multilateral condition could be that food commodities could only be lent which are to be repaid in kind. In an abnormal situation in which a member country was unable to repay in kind, the lowest available price in any member country of the region could be the governing price for any procurement or release of commodities. From the point of view of economic considerations, ie logistical and infrastructural facilities, the regional food reserve should be located at the port of Calcutta in India, though Article II (6) of the Agreement states that ‘the member countries undertake to provide adequate storage facilities for the food grains that they have earmarked’.” However, in times of regional tension and conflict such bilateral arrangements might not be effective. Since most of the member countries are linked either by sea or land, transshipment of commodities to and fro would be economical and feasible. India, as the largest food producer, will also be the largest contributor to the reserve and it would be economical to transport its contributions to this location. The issues discussed above deal with temporary or emergency food shortages. One of the ways to meet these is through a buffer stock system, both domestic and regional. Such a reserve would help to stabilize food consumption by restraining prices and replenshing supplies in bad years. In most of the agricultural countries such a reserve also satisfies political interests of the ruling governments. However, the problem of hunger and malnutrition would largely be untouched by such a food reserve scheme although it would help stabilize prices and thereby supplies.
Enhanced cooperation Other measures must be taken to enhance the demand or purchasing power of the ordinary people. The SAARC member countries could gain considerably in terms of combating malnutrition, poverty and hunger through some form of cooperation. Any regional cooperative effort should be preceded by this first-stage approach we discussed in the previous section. The second-stage approach to regional cooperation involves identifying possible areas of cooperation and harmonizing the member countries’ agricultural policies. Since there is very limited agreement on intraregional trade and financial, monetary and industrial cooperation, we have identified selected areas of cooperation within the existing framework of achieving food security. Besides setting up an emergency food reserve these include: 0 0 0 e
’ ’ Ibid.
500
setting up an early warning system and exchange of information; facilitating the flow of food by both limited and regulated trade and intergovernmental lending; encouraging research and extension in agricultural technology and processing; increasing agricultural productivity through cooperation in developing the most important factors of production including the protection of the environment.
In order to make the emergency food reserve effective and to help solve any major food crisis in the region, the member countries could set up an early warning system. The FAO could also help mobilize international food aid if the regional stock was not large enough to meet the shortages. Similarly, the SAARC countries could gain from exchanging
FOOD POLICY
December
1990
Regional cooperation for food security in South Asia
information on the weather, crop situation, production and total demand and supply. This would help coordinate efforts in advance. Stabilization of consumption could also be achieved by allowing a certain amount of intraregional trade. This would provide food producers with a bigger market, which raises productivity, and consumers with greater stability in availability. This would also help countries to specialize in certain commodities in the long run. Other important areas for regional cooperation include technological change and research and extension. In order to raise crop yield, which is the only viable option for most countries, greater research and extension in the field of crop diversification, crop suitability, seed testing and livestock improvement are essential. Since some of the member countries possess greater technological capabilities in these areas than others, cooperation would help weaker member countries to combat chronic food insecurity by raising productivity. As stated earlier, one major cause of both temporary and chronic food insecurity in the region is the lack of access of the majority of food producers to modern means and methods of production. In most of the countries only medium and big farmers have access to agricultural credits. There is very limited land under irrigation: except in Pakistan, which has 76% of its land under irrigation, the other member countries irrigate between 20 and 25%. In view of the vast untapped water resources on the one hand and the considerable semi-arid unirrigated areas on the other, the countries of the region would gain much by harnessing this resource. Similarly, a multinational fertilizer factory could be established with the available technological and resource capabilities of countries like India. This would increase fertilizer consumption, reduce dependence on imports and control transborder traffic especially in imported inputs. Moreover, these countries could gain by extending the size and scope of research and extension directed towards increasing productivity. l2 Another vital area of cooperation required from the both humanitarian and economic points of view is protection of the environment; for example, the growing use of fertilizers has been criticized as destructive to both health and the environment. Since this is an important issue, it needs discussion in the context of achieving food security in the region.
Regional cooperation for permanent food security
“Times
Temporary food insecurity could be overcome through the creation of a regional food reserve scheme. But there is also a chronic food insecurity in the region as a certain percentage of the population does not have sufficient means of production or income to maintain the minimum necessary food consumption. Chronic food insecurity is thus the consequence of (a) lack of employment opportunities, and (b) distributional inequalities. As a result of chronic food insecurity there is acute hunger, malnutrition and other health-related problems in the region. The attainment of permanent food security or the elimination of the chronic food insecurity in the region hinges on efforts at the individual country, bilateral and multilateral levels. At the individual country level each country has been trying to implement certain legal and policy measures (for example, state intervention in regulating food prices) to improve distributional inequalities in terms of both ownership of the means of production and ‘exchange entitlement’, but with very limited
of lndia, 1 October 1988.
FOOD POLICY
December
1990
501
Regional cooperation for food security in South Asia
success as the political power structure has remained static in most of these countries. Here we are concerned with the scope of regional cooperation in attaining permanent food security. Progress to date in bilateral as well as multilateral or regional cooperation in this direction has been extremely limited. The SAARC countries have set up a Working Committee for Agriculture and Livestock Development but except for organizing a few workshops and seminars there has been little useful activity. Environmental
degradation
Because of the different magnitude of food security problems associated with contentious bilateral relationships, there may not be an immediate hope of regional cooperation towards the attainment of food security in the region. However, one problem that has a regional dimension and is causing mass suffering without discrimination is the deteriorating environment in the region. For the people of South Asia, failure to protect the environment has been associated with the loss of crops and livestock, famines, droughts and the death of millions of people. The natural disasters some of the member countries have been subjected to over the last two decades and most recently in 1988 are without precedent. Although the extent of poverty and hunger is not as great as in some African countries, for example Ethiopia, where environmental degradation is the prime cause, the countries of South Asia could soon face the worst forms of poverty and hunger if the growing environmental crisis is not controlled. However, the main root cause of environmental degradation is precisely the level of poverty in these countries, which has led to exponential growth in the population of some countries in the region in recent years. As the population pressure increases, the desperate search for food and fodder forces people to go further and further up into the forest and higher up watersheds and to cultivate more and more marginal land. The widespread felling of trees in upland watersheds has caused soil erosion and flooding in some parts and desertification and droughts in others as a result of changes in weather patterns. If this process continues some member countries may face more cataclysmic inundations in the future. Hence environmental degradation in the South Asian region cannot be checked without eliminating poverty. And since food security is one important step in alleviating poverty, the member countries of the region could gain by both ensuring food security and resolving the environmental crisis. While the former problem may be country specific, the latter problem is not only regional but global. It is therefore in the long-term interest of these countries to take collective steps to tackle environmental issues. These problems are to be found basically in two major areas: the control of flooding, which has become a major and immediate threat, and the preservation of forests, which is causing the first problem. One of the worst environmental problems faced by the SAARC countries is heavy seasonal flooding, which ravages agricultural land and causes enormous suffering, especially in Bangladesh, India and Nepal. This is directly connected with the problem of food insecurity and ultimately poverty. During the monsoon season heavy glacial runoff in Nepal, Tibet, Bhutan and northern India swells several rivers and their tributaries and converges on the low-lying plain, mainly in Bangladesh,
502
FOOD POLICY
December
1990
Regional cooperation for food security in South Asia
India and Nepal, causing massive damage. One possible area of cooperation, which should primarily involve India, Nepal, Bhutan, Bangladesh and China, is to build huge dams’” to control the Himalayan headwaters of the two major rivers, the Ganges and the Brahmaputra. These would be multipurpose dams, which could each irrigate thousands of acres of dry land, generate massive hydroelectric power and control flooding in Bangladesh (which receives almost 90% of all flow), India and Nepal. Those countries which do not benefit directly through flood control could benefit from hydropower and irrigation. The construction of dams can also cause environmental damage, especially if they are built by depleting forest or land resources. But that of forest and land is not a problem in this case, since protection resources would be the two major goals. However, one major problem, apart from the standing political irritants in the SAARC member countries, is the availability of funds because such a giant project could cost billions of dollars. Given the concerted political will, commitment and cooperation of all the concerned countries, however, international support could be mobilized. But, sadly, in the present situation there is little hope for a multinational approach to such a scheme since India’s view is that water resource issues ‘are best solved in the bilateral framework’. l4 Not only does part of the problem originate in Nepal, the Tibet region of China and Bhutan, but these countries also have a substantial interest in protecting their environment. Another area of cooperation in protecting the environment and achieving food security is the preservation of forest resources. As discussed above, population pressure in search of land, fuel and fodder is the principal cause of deforestation which in turn causes flooding. Most of the SAARC member countries have some kind of programme for the protection of forest resources. However, there could be more regional cooperation in research and extension concerning forests and the protection of the environment, coordinating the demand and supply of forest and forest-based products in the region (since forest products are one of the most lucrative items of illegal transborder trade) and exploiting alternative energy sources, for instance water, for the benefit of the people of the region. Scientific and technical cooperation in exploring cheap alternative energy sources would be the most important step in forging cooperation for protecting the environment since traditional wood-based sources of energy are still dominant in most of the countries of South Asia.
Conclusions ‘%angladesh has been suggesting to India to ‘build dams and reservoirs in the Himalayas in Nepalese territory for controlling the flow of the rivers in the Gangetic plains’. See Times of India, 1 October 1988. ‘%ee Times of India, 30 September 1988. Although it would be difficult to control flooding without controlling the flow and direction of water in the Himalayan headwaters, India and Bangladesh have set up a joint task force of experts to study flood management and water flow issues in relation to the Ganges and the Brahmaputra.
FOOD POLICY
December
1990
The seven member countries of the SAARC agreed to set up a regional food reserve of some 200 000 metric tons in 1987. Although a number of issues related to the location of the reserve, the kind of grains, pricing mechanism, sharing of costs and conditions of release of the reserve are yet to be resolved given the bilateral political problems they have, such a measure addresses only one part of the crisis the region is facing. The establishment of a reserve works as an insurance against food shortages caused by emergency situations such as floods, drought, earthquakes or a sudden drop in production or rise in food prices - and these, of course, are major elements of the crisis confronting several member countries. However, the most serious problem the SAARC countries face is chronic food insecurity, where (a) the consumption of the majority of
Regional cooperation for food security in South Asia
poor families and households is below a minimally accepted standard, and (b) the consumption level suffers from downward fluctuations due either to rises in domestic prices as a result of a drop in production or to a shrinkage in the income of the vulnerable groups. Consumption levels may also fall due to rises in the international prices of food grains or to a fall in foreign exchange earnings. Whatever may be the reasons, chronic food insecurity in the South Asia region is strongly linked with poverty and hunger. Hence the eradication of poverty and hunger and the achievement of regional food security would enable the poorer section of the population to buy enough food through the generation of employment opportunities and the redistribution of income and assets. It is towards eliminating the endemic problem of chronic food shortages that regional cooperation should be primarily directed. In identifying possible areas of regional cooperation for the elimination of chronic food shortages, a two-stage approach is suggested. The first stage involves the creation of preconditions for broader harmonization of policies through institutional changes in ownership patterns, offering price incentives to enhance productivity, increasing the efficiency of the institutions and bureaucracies that deal with agricultural inputs and research, and providing a guaranteed income or employment to the landless and unemployed population together with a minimum availability of food. After introducing these domestic reforms, member countries should move to a second-stage approach. This involves reviewing tariff and non-tariff barriers to encourage intraregional trade in some of the most basic foodstuffs, harmonization of agricultural policies in respect of prices, incentives and productivity, undertaking multinational efforts to manufacture fertilizers and pesticides, and implementing joint irrigation projects by harnessing the vast water resources of the region. Another area of cooperation would be research and extension, especially in crop varietal research, productivity and seed testing. Also important is the exchange of information on weather conditions, productivity, domestic stocks, prices, etc. This would help to focus regional efforts in times of need. Another important field of cooperation directly related to food security, poverty and hunger is the protection of the environment from further degradation. This has regional and global implications, since a serious environmental crisis in one country may affect the environment of the whole region. Hence regional efforts could be mobilized for the building of dams, preservation of forests, exploration of alternative and cheaper sources of energy and coordination of the demand and supply for forests and forest products. Without improving the bilateral relations between India and its neighbouring countries, however, nothing substantial can be done in these fields. But if politics cannot lead the way in solving the most gruelling humanitarian problems of poverty, hunger and malnutrition prevailing in the region, let humanitarian issues give a lead to the politics of the region.
504
FOOD POLICY
December
1990