The production of more food to meet the needs of a burgeoning population has been one of the outstanding global achievements of the post-war period. It has demonstrated the extraordinary capacity of humankind to meet a collective challenge of monumental proportions. It has harnessed the power of science and technology for the most cherished of purposes preserving human lives. It has released the initiative and pride of long suppressed peoples to achieve self-sufficiency and determine their own destinies. It has finally lifted the suffocating blanket of pessimistic economic determinism that has stifled human hopes and aspirations for nearly 200 years since Thomas Malthus first set forth the thesis that human population will always outrun the growth of food production, thus ensuring the perpetual poverty of humankind. The remarkable achievements of countries such as India, which at a time when famine threatened to claim millions of lives launched a massive national programme that increased foodgrain production by three-quarters, and China, which nearly doubled food grain production over the last two decades, are outstanding testaments to the accomplishments of people in many countries. Worldwide, production increases in major cereal crops are estimated to have provided enough food for more than a billion people.
Food has become a symbol of our collective human endeavour to create a better world for all. But the victory has been partial and neither the challenge nor the opportunity which food presents have been fully addressed. It is of crucial importance not only to the poor, but also to the peace and stability of global society that we complete the task of banishing famine and hunger once and for all. Hunger anywhere threatens peace everywhere. Hunger leads to political instability, social unrest, massive migrations, rebellions, civil war, crime and violence. Prosperity, which eliminates hunger, also tends to eliminate violence. Even in war-ravaged Africa, experience shows that where food is plentiful, war is avoided. The converse is also true. Historically, war and civil strife have been the single greatest cause of famines. In addition to destroying crops and food supplies, it disrupts food distribution through the use of sieges and blockades. In the past decade, war has had a greater impact on food supplies in Africa, particularly the Sahelian region, than have the severe droughts that periodically plague the continent.
Freedom from hunger and political freedom go hand in hand. As subsistence agriculture and periodic famine were the economic foundations of monarchy and feudalism, the generation of agricultural surpluses that stimulated commercialism, and later industrialization, have formed the basis for the rise of democratic institutions. Greater freedom for individual action and ownership both stimulate and are supported by greater productivity in agriculture. Authoritarian government is frequently either the result or the cause of food shortages its use of force justified on the one hand to meet a crisis situation or necessitated on the other to restore order and initiate emergency measures. Only under democracy is government compelled to pay attention to the needs of people at the lowest levels of society. The dual pressures of a free press and electoral system have helped a free and democratic India to avoid famine for nearly 50 years, despite the recurring incidence of widespread famine in previous centuries, up to as recently as four years before the country gained independence. Even in China, which appears to be a blatant contradiction of this thesis, it was the liberalization of the agricultural sector and greater freedom given to the peasant community that were responsible for the remarkable increase in food production. For countries still at an early stage of political development, where government lacks even the force of authority to govern, the first essential steps may necessarily be toward greater centralized authority and control, a common stage in the political evolution of the nation state. But that central authority cannot release the full initiative of its farmers or tap the full potentials of agriculture without first instituting broader democratic measures. Recent events in Eastern Europe demonstrate that where states attempt to use authority as the lever for agricultural development, the achievements are likely to be limited and short-lived. The inability of the authoritarian system to produce enough food for its people was one of the major factors contributing to its downfall. Democracy is the most potent fertilizer to ensure food security at the household level.
ICPF was founded at a time when a consensus was emerging worldwide that drastic steps were needed to wipe out the hunger and famine that were ravaging parts of the developing world and afflicting to a lesser extent poorer sections of the industrial nations. Recognizing that the problem of food was inextricably intertwined with the problems of peace, political and social stability, and employment, and that no comprehensive solution to one was possible without substantial progress on the others, it was our hope and intention that this growing consensus on food could be harnessed to accelerate progress on arms control and disarmament. Ironically, events have unfolded in the reverse sequence. Rapid progress has been made during the intervening years to reduce international tensions, but little has yet been done effectively to address the food issue. Now that opportunity is before us and compels us to act, for without significant progress on abolishing hunger from the earth, our efforts at arms control and peace making may come to naught. Increasing the availability of food and jobs form essential components of a comprehensive strategy to eradicate hunger, poverty and violence from the world.
Despite great achievements in the post-war period, we live in a world of persistent hunger amidst plenty. Presently, around 800 million people living in 46 countries are malnourished and 40,000 die every day of hunger and hunger-related diseases. Widespread famine currently threatens nine African countries, where the lives of 20 million people are at risk.
Hunger and famine are usually associated with a physical shortage of food. Yet, even where food supplies are adequate, absence of opportunities for gainful employment to generate the purchasing power needed to buy food can result in hunger. Lack of food and employment are the basis for the poverty that still afflicts one-fifth of humankind. When it comes to food there can be no justification or excuse everyone must have enough to eat, and can have enough. A world dedicated to upholding the political rights and property rights of nations and individuals cannot fail to recognize and enforce the most fundamental of all human rights the right to live.
Contrary to the fears raised in earlier centuries and revived in recent decades, today the world does possess the capacity to feed everyone, even at current levels of food production subject as it is to disincentives, quotas, restrictions and trade barriers that food surplus countries impose to curtail food production, while other nations remain in perpetual deficit. In spite of a doubling of population in the developing countries since 1960, their average food supplies have increased from 1950 calories to 2475 calories per capita per day, or from an average of 90 per cent to 107 per cent of the minimum caloric requirement. During the past 12 years alone, per capita food production in developing countries has risen by 15 per cent. Overall, the proportion of people in developing countries suffering from hunger and mal nutrition has dropped dramatically both in relative and absolute terms, from 941 million people constituting 36 per cent of the population of these nations in 1970 to 781 million constituting less than 20 per cent of the population in 1990.
Current projections indicate that the growth rate in world agricultural output will continue to exceed population growth over the next two decades. By 2010, food grain production is expected to reach four times the level in 1960. Increased production of other food crops is expected to raise per capita availability in the developing world to 2700 calories per day. Per capita meat production is expected to grow by 60 per cent and milk production by 20 per cent. During the same period, malnutrition is projected to decline to 640 million persons, constituting 11.6 per cent of the population of developing countries, a little over half the level in 1990.
Yet the achievements have not been uniform throughout the developing world. Per capita food production has actually declined in more than half of all developing countries over the past 15 years. In 18 countries with high rates of population growth, primarily in Africa, it has been deteriorating for the past three decades. While the Near East, North Africa, East Asia and Latin America/Caribbean regions are expected to achieve average food supplies of 3,000 calories per day by 2010, 200 million people will still be malnourished in South Asia and 300 million, or one-third of the population of sub-Saharan Africa, will suffer from severe food deficits. Due to rapidly expanding population, agricultural production in sub-Saharan Africa would have to grow at four per cent annually in order significantly to improve per capita availability of food. Thus far, only East Asia has sustained such high growth rates in agriculture, averaging 6.1 per cent from 1970 to 1990. This trend, if not halted and reversed, casts a renewed spell of gloom over the hopes of hundreds of millions of people to escape from hunger, and over all our hopes for peace in the twenty-first century.
The projection of future prospects based on past trends is especially questionable with regard to food. Not even some of the most prominent agricultural economists expected the gains in food production which have occurred in the past several decades. An international team of experts visiting India in 1963 projected a mere 10 per cent growth in foodgrain production by 1970, whereas growth actually achieved during this period was 50 per cent. Neither technological, nor financial nor natural resources pose insurmountable obstacles to achieving dramatically more over the next 15 years than is indicated by past trends or current projections.
The idea that hunger cannot be conquered because we are running out of land to support rapidly burgeoning populations is contradicted by the facts. Globally, there is no correlation between population density and hunger. China, with only half as much arable land per capita as India, produces 13 per cent more foodgrains per capita. Taiwan and South Korea have only half the farmland per capita of Bangladesh, yet they produce 40 per cent more food per capita. Tiny Netherlands, with the highest population density in the world, produces more than sufficient food to feed itself and remain a large net food exporter. Currently 11 per cent of the worlds land surface is used for agricultural crops, just 4 per cent more than in 1960. A comprehensive theoretical study of soils, climate, vegetation and topography conducted in 19753 indicated that both land and water utilized for agriculture could be doubled, if necessary, and that the earth could support 36 times the 1975 level (18 times the 1990 level) of cereal production using the same share of cultivated land. There would be severe practical obstacles to such a vast expansion of croplands, but these findings suggest that physical limitations to food production are not the primary constraints. A more commonly accepted estimate indicates that the worlds land and water used for agriculture could more than double.
Agricultures Dual Role
Achieving food security necessitates increasing food production and employment opportunities. Agriculture plays a dual role in the abolition of hunger it produces the food and it can also produce a great many of the jobs needed by households to buy food in developing countries. Since agriculture is the worlds single largest employer, raising production and productivity in this sector can immediately place additional purchasing power in the hands of the rural poor, who will in turn utilize the additional income for purchasing more food, clothing and other basic consumer goods that will create more jobs and higher incomes for countless others. The increased agricultural produce becomes raw material for a wide range of agro-based industries and services that stimulate formation of new enterprises, and create downstream jobs as well as products for further processing, domestic sale or export. This is the rationale behind the Prosperity 2000 strategy for India, which forms a viable model for many other countries to emulate.
Promoting job creation in agriculture appears at first glance to contradict the global trend of the past hundred years, in which employment in this sector has declined steadily from historic highs of more than 70 per cent in the industrial nations to the point where, today, only 2 per cent of the workforce in the UK, 3 per cent in the USA and 4 per cent in Germany are directly engaged in farm operations, although a much larger percentage of the workforce in these countries work in businesses and industries linked to agriculture. Nevertheless, this strategy follows a natural course of development that has occurred in many countries which now have a relatively small portion of their workforce in agriculture. Agricultural surpluses and rising farm incomes are preconditions and stimuli to economic growth and industrialization. For most developing countries with the vast majority of people still residing in rural areas, the most cost-effective and practical strategy to generate more jobs and raise personal incomes is through agriculture. Today, more than 1.1 billion people in developing countries, constituting 58 per cent of the economically active population, work in agriculture. The decline in proportion of the workforce in this sector must necessarily be gradual. An employment strategy which generates a large number of new jobs in the non-farm rural sector could contribute substantially to diversification of rural employment opportunities.
A similar strategy has proved highly effective as an engine for growth in a number of East Asian countries, which employed crop-intensive and labour-intensive technologies to achieve increasing levels of employment and productivity in agriculture. Empirical evidence from these countries confirms that wherever agriculture becomes prosperous, labour becomes scarce. Between 1952 and 1968, land reform in Taiwan increased the number of cultivators five-fold, leading to dramatic increases in output and productivity, a shift from foodgrains to higher value-added fruit and vegetable crops, and the creation of more than 100,000 jobs in post-harvest and processing activities. These changes in employment led to enhanced rural incomes and purchasing power, growing domes tic demand for goods and services, including manufactured goods, and further job growth. Land reform in South Korea during the early 1950s increased the number of owner cultivators from 50 per cent to 90 per cent and led to a 4.7 per cent annual growth in labour productivity per hectare over a 15-year period. Then, as agricultural technology improved and industrialization gained momentum, the proportion of South Koreas workforce engaged in agriculture fell from 55 per cent to under 16 per cent over the following three decades. Thailand, which has had the fastest growth of the East Asian economies in recent years and still employs 70 per cent of its workforce in agriculture, has also attained high rates of production and employment in the rural sector through diversification in agriculture from traditional cultivation of rice and rubber to high-value crops and agro-based industries.
Economic Potential of Increasing Demand for Food and Agricultural Products
There are powerful social forces active in the world today that can stimulate significantly greater growth in both food demand and food production. Liberalization of world trade, especially trade in agricultural products; emphasis on aggressive strategies to expand employment opportunities in developing and developed countries; advances in technology for agricultural production, food processing and dissemination of information; rising levels of education, which spur rising expectations; and the energizing impact of democratization all these factors can substantially raise growth rates in supply and demand for food above those currently projected for the next two decades. Current projections, made at a time when Eastern Europe was in the depth of its transition crisis, would also prove too conservative if demand were to recover more rapidly in some of these countries. Already Russias cocoa imports have risen to four times the level in 1991.
The gap between the availability of food in industrial nations and in developing countries remains large. Food supplies per capita for all developing countries, measured in terms of total calories available, are only 72 per cent of the levels in the industrial countries. The availability of protein for consumption is 40 per cent lower in developing countries than in industrial nations. Viewed from another perspective, this gap represents a huge potential for the growth of agriculture, and through it for more rapid industrialization and job creation in developing countries, with rising exports from industrial nations. Rising incomes are accompanied by a diversification in diet which generates greater demand for wheat, meat and dairy products, fish, vegetables, fruits and processed foods. Projections for the year 2010 anticipate a 60 per cent increase in cereal consumption in developing countries, a 52 per cent increase in meat consumption, and a 69 per cent increase in milk consumption. Meat consumption in China has tripled since 1978 and is expected to more than double again over the next two decades. Sugar consumption in developing countries is currently less than half the average of industrial nations. In India, sugar consumption is projected to rise from 13 kg to more than 25 kg, generating a demand for a 100 per cent increase in sugar cane production, the establishment of 300 to 400 new sugar mills in the country and the creation of 3 to 4 million new jobs in this industry alone. Worldwide, raising the average level of sugar consumption in developing countries could generate tens of millions of additional jobs in agriculture, industry and services.
Viewing the future demand for food from this perspective reveals a tremendous opportunity. Vast sections of humanity now aspire to the higher quantity, wider variety and greater nutritional content of food once consumed only by the wealthy. An effort to raise nutritional standards in the developing countries nearer to the levels prevalent among industrial countries will not only eradicate hunger, but also dramatically spur economic growth, employment, and purchasing power among the rural poor, stimulating growth of production and jobs in industry and services, as well as increasing exports and imports. Raising the entire world population to the level of the prosperous nations would require a 72 per cent increase in total world food production, measured in terms of calories. In order to meet the peoples nutritional requirements for fruit and vegetables, Indias production of these crops needs to double within the next decade. Achieving that high level will generate more than six million new jobs in the country.
Broadening the scope to include other agricultural products, particularly textiles, the potential for accelerating global economic growth by an agriculture-led strategy is even greater. Cotton is a crop with a very high income and employment multiplier effect. Per capita cotton consumption in poorer developing countries such as India is less than half the level in China and less than a third the level in industrial nations.
Measures of the gap between the prevailing levels of nutrition in developing countries and the levels achieved in the West reveal a huge potential for increasing demand for agricultural production, which can serve as an engine to drive the growth of the world economy. Extrapolation from ICPFs studies of the employment potential of expanding agricultural production in India suggests that more than one billion jobs can be created worldwide through a strategy that focuses on raising agricultural productivity as an engine for improving diets, employment and industrialization.
Challenges in Agriculture
The ratio of growth of foodgrain production to population growth has entered into a period of decline over the past decade increasing at just one per cent per year compared to three per cent during the previous two decades. There is a similar trend for other staple crops and meat. For fish, there has actually been a net decline of seven per cent in per capita world production. To a large extent, this slowdown is the result of slower growth in demand, especially in industrial countries, under lining the fact that food security is predominantly an economic problem rather than a technological one. But the decline in the growth of global agricultural productivity over the past decade is also attributable to a variety of political, economic and environmental factors.
After the Second World War, developing countries that had suffered from recurring famine in early periods struggled to increase food production as an urgent national priority to keep up with surging population growth and spiralling demand for food. Indias Green Revolution was spurred by the imminent threat of severe famine in the mid-1960s. China was compelled to produce more food by the loss of perhaps as many as 30 or 40 million lives to famine in the late 1950s. But the very motive which stimulated these achievements moderated them as well. For while these governments took concerted steps to meet the minimum needs of the population for food, they tended to overlook the equally great potential to utilize agriculture as an engine for economic growth and job creation. Once minimum food needs were met, attention was diverted to other sectors of the economy. Politically, the elimination of the famine threat arising from food shortages is one of the reasons for slower growth in agricultural productivity in recent years. This has resulted in a marked decline in investment by developing countries in government-sponsored agricultural research and rural techno-infrastructure. This tendency has been compounded by the false notion that in order to achieve economic growth, new jobs must be created in industry and services.
The resurgence of faith in the free market and liberalized trade has placed developing countries under increasing pressure from donors and international financial institutions to abandon special types of economic assistance to the agricultural sector in the form of subsidies for supply of critical inputs such as fertilizer and seeds and price supports for marketable crops. This pressure has recently been aggravated by the impact of structural adjustment programmes that usually involve drastic reduction in government subsidies. In Ghana, for instance, the cost of fertilizer as a percentage of total cultivation cost has risen ten-fold in recent years. The impact of macro-economic reforms on agriculture has been most severe in the countries of Eastern and Central Europe, where production in this sector has fallen drastically over the past few years.
Slower growth in productivity can be attributed to a slowdown in the development of improved hybrid varieties, shortages of quality seeds and fertilizers, and the absence of techno-infrastructure facilities needed for storage and processing, expansion of markets, transport and distribution.
A number of factors are posing serious obstacles to productivity growth and threaten even current levels of production. Of the poor, 80 per cent in Latin America, 60 per cent in Asia and 50 per cent in Africa live on marginal land of low productivity and high susceptibility to environmental degradation. Raising productivity on these lands can be extremely difficult. Quality farmlands are being lost at an astonishing rate to diversion for non-farm uses, desertification, deforestation, soil erosion, and the depletion and pollution of water resources. These factors have resulted in the degradation of nearly one billion hectares worldwide since the Second World War. In addition, climatic changes resulting from the increased emission of carbon dioxide into the atmosphere are expected to exert additional negative impact over the long term, the extent of which is difficult to assess.
Opportunities in Agriculture
Rapid and sustained expansion of food and agricultural production cannot be achieved without concerted efforts to address these factors. At the same time there are a number of positive factors that offer opportunities to increase productivity significantly in the near to middle term.
Closing the productivity gap
A survey comparing the levels of productivity for major crops between countries reveals a wide disparity between proven technological potentials and actual field results for every crop. Cereal yields in Western Europe and North America average 4.5 tons per hectare, compared to three tons in Asia, 2.3 tons in Eastern Europe and the former Soviet Union, two tons in Latin America and slightly more than one ton in Africa. The Food and Agriculture Organization (FAO) projects a 40 per cent increase in wheat yields in 92 developing countries, excluding China, by 2010. In rice, countries with widely differing climatic conditions, such as Australia, Korea, Egypt, Spain, Japan and Italy, achieve average yields nearly double the world average and two to three times the yields achieved in countries such as India, Malaysia, the Philippines and Thailand. Total rice yields in 92 developing countries are expected to rise to 37 per cent by 2010. Maize yields in Greece, Chile, Austria, Italy and Germany average more than double the world average, and five to six times the averages achieved in large maize-producing countries such as India. Even comparing areas under irrigated maize, average yields range from 1.5 to 8.4 tons per hectare. New varieties of maize are under development that yield 30 per cent more grain in a drought season than conventional varieties. They could be especially effective in lowland tropics, including much of Africa. Potato yields in Belgium and the Netherlands are roughly three times the world average. This productivity gap between what is routinely achieved by different countries represents a vast immediate potential for improving yields that does not require significant additional investment of time or money in R & D. The world already possesses the knowledge, technology and organizational capacities to raise considerably average world yields in major crops.
Emphasizing cultivation practices
The phenomenal increases in productivity achieved over the past three decades through the development of improved and hybrid varieties of seeds have over shadowed and distracted attention from the equally great potential of raising yields through improvements in methods of cultivation. This is especially true since much of the slowdown in productivity growth is attributable to depletion of soil and water resources, which can be partially rectified or offset by improved practices. Growing environmental concerns in the West have generated pressure for reducing fertilizer consumption in developing countries, when in most instances fertilizer application levels are lower than those in Western Europe by a factor of five or ten times. Increased, rather than reduced, use of chemical fertilizers will be essential to the expansion of agriculture in these countries and can considerably increase crop yields. Total fertilizer consumption by developing countries is expected to double by 2010. Furthermore, replacing macro-nutrients lost during intensive cultivation does not compensate for the depletion of more than a dozen micro-nutrients that also determine the quantity and quality of crops. Even in such agriculturally diverse countries as the United States and India, it has been demonstrated that better management of micro-nutrients can raise productivity substantially in some intensively cultivated areas by as much as 50 to 100 per cent or more in a wide variety of crops without significant changes in the structure or method of cultivation. Greater attention is needed to conserving and applying organic sources of manure and raising nitrogen-fixing crops, as well as to the use of bio-fertilizers. Unlike the creation of new irrigated lands, the application of such environmentally sustainable field practices is neither very costly nor technology-intensive, and can be widely propagated through improvements in agricultural training and extension.
Over the next six years, the agreements reached during the Uruguay Round of GATT negotiations are expected to reduce the tariffs levied by the industrial nations on agricultural products by 37 per cent and on tropical food exports by 43 per cent. Developing countries will cut agricultural tariffs by an average of 24 per cent. In addition, North American and Western European countries have agreed to cut agricultural subsidies by one-third. Together these cuts are expected to result in a 20 per cent rise in exports of agricultural and processed foods by 2005. The share of developing countries in this increase has been estimated at $20 billion to $60 billion annually. Increased trade can act as a strong stimulus to the growth of agricultural, agro-industrial and rural employment, provided that these countries respond dynamically to the opportunity by raising productivity and strengthening rural infrastructure for storage, processing and distribution. However, rising demand within developing countries themselves will limit overall growth of exports, and increasing exports will push up domestic food prices, unless much greater priority is given to matching production with opportunities for home and external trade.
Increased private investment
The modernization of the farm sector greatly needs the investment, technology, professional management and marketing expertise which private firms can bring. Wherever land reforms have resulted in the division of farms into small parcels, farmers need to be supported by well-organized services, particularly for post-harvest handling, provided either by companies or co-operatives. Economic liberalization offers expanded opportunities for private enterprise to work with small producers in a wide range of agro-industries to combine the social benefits of small holdings with the economies and marketing expertise of corporate management. The contract system of agricultural production introduced in backward regions of Thailand has enabled small farmers to work closely with private businesses to produce labour-intensive, value-added crops, with technology, training and marketing provided by the companies, resulting in a rapid rise of farm incomes and job opportunities. Developing countries possess significant advantages in terms of climate, year-round production and low labour costs that are conducive to foreign investment. With private capital flows on the rise, there is an opportunity for developing countries to upgrade technology and obtain direct access to foreign markets by providing a conducive atmosphere for foreign investments and collaborations in agri-business ventures, such as hybrid seed production, flowers, processed fruit and vegetables, fresh and salt water aquaculture, and sericulture.
Shift from commodity-based to resource-based planning
The responsibility of governments to achieve dramatic increases in foodgrain production to keep pace with population growth naturally led to a commodity-based approach to agricultural development in many developing countries. Governments projected demand, set production targets for specific crops, and instituted programmes to help farmers produce the food needed to meet the minimum needs of the population. But once shortages are eliminated, the focus on specific commodities becomes a barrier to further agricultural development, because it retards diversification into more profitable commercial crops. Contrary to free market theory, farmers in many countries have tended to continue production of traditional crops, even when prices have fallen in response to increased supplies.
There is still a need for government to educate and encourage farmers to adopt resource-based planning, oriented to national and international market potentials and based on principles of economics, employment and ecology. Resource-based planning examines how the available land and water resources can best be utilized to achieve maximum and sustainable economic return to the farmer, which is only rarely the priority of governments in developing countries that tend to focus on production targets for specific commodities. This shift can lead to diversification into commercial crops, such as fruit and vegetables, that generate significant increases in on-farm employment and incomes and act as a stimulus to downstream agro-industries.
From minimum needs to maximum potentials
The factors which have perpetuated commodity-based planning in agriculture have also fostered an emphasis on minimum targets, rather than maximum goals. Often government has perceived that its responsibility was to ensure sufficient food to prevent famine, not maximum output and profitability. Government machinery has proved effective in forcing through radical measures to disseminate new technology, seed and production methods in the face of crisis, but it usually lacks the driving impetus to work for the highest benefit of individual farmers. The shift needed is for planners to study the potentials of the agricultural sector to serve as an engine for job creation and higher incomes, and as a stimulus to industrialization and exports, and then to formulate national goals to maximize exploitation of these potentials.
Integration of agriculture, marketing and processing
Conscious efforts can be made to foster the natural linkage between agricultural and industrial development by placing emphasis on crops that have the greatest potential for stimulating the growth of agro-industries, services and exports. Filling in the missing links in the chain of processing and distribution, such as pre-cooling for fruit and vegetables, can enable small farmers to produce for national and export markets; it also results in higher at-farm prices and creates alternative forms of rural employment.
Empowerment of women
The vast majority of women living in rural areas are engaged in agriculture. Therefore, upgrading productivity, skills and incomes in this sector is the single most effective means of improving the livelihood of women in developing countries. Skill development programmes in areas such as hybrid seed production, floriculture, inland aquaculture, vegetables and poultry can be particularly beneficial. Promotion of micro-level credit institutions and savings programmes can generate capital for the establishment by women of small rural enterprises.
Special Status of Agriculture
The obvious limitations of government-directed agricultural development, coupled with the resurgent popularity of free-market policies following the collapse of communism in Eastern Europe and the successful completion of the GATT negotiations, raise fundamental issues about the status of agriculture and the role of government in this sector. Advocates of private enterprise contrast the failures of Eastern European agriculture with the achievements of the industrial nations as ample evidence of the free markets superior capacity to achieve high levels of agricultural productivity. Recently, international and bilateral financial institutions have promoted the market as the most effective instrument for managing agriculture throughout the world.
This view leaves two questions unanswered. First, if the market is so effective, why is it that every major capitalist economy utilizes such a vast array of subsidies, incentives, controls, production quotas and fixed pricing mechanisms to govern production and trade in agricultural products? Even after GATT, protection for this sector by industrial nations will remain high. Second, granted that the market works effectively for mature capitalist societies with high levels of technology, education, productivity, living standards and food surpluses, and relatively small portions of the workforce dependent on agriculture, is the same necessarily true for countries at an earlier stage of development, in which (1) a majority of the workforce is dependent on agriculture for sustenance, (2) levels of education, productivity and incomes are low, and (3) any increase in food prices can have a devastating impact on food consumption levels in the country? The answers to these questions are relevant both to the countries presently making the transition from centrally planned to market economies in Eastern Europe and to poorer developing countries striving to achieve food security.
Nations accord special status to their agricultural sector for several reasons. Continuous supplies of food are absolutely essential to the welfare of the population. Food prices are extremely sensitive to changes in the supply of foodstuffs. Even a small increase or decrease in supply can lead to a very wide fluctuation in prices. A bumper harvest can depress prices to the point of bankrupting large numbers of farmers. A poor harvest can send food prices soaring beyond the purchasing power of large numbers of people. Buffer stocks, subsidies and incentives are used to protect agriculture from sharp price fluctuations. Al though the principles of free trade argue that countries should produce only those items in which they possess a competitive advantage and procure the rest from overseas, few nations are willing to entrust their food supply entirely or even substantially to foreign parties. For decades Japan maintained trade barriers to keep the price of rice at more than six times the international level in order to protect and preserve domestic rice producers; the US government exports subsidized wheat; and the European Community sells subsidized milk powder and butter internationally at prices up to one-third below the domestic level.
The debate over the legitimate role of government in protection of the agricultural economy is partially a question of timing. Market institutions and competitive strengths are normally built up over decades. Advanced nations with highly mechanized and efficient agricultural sectors are in a much better position to withstand the impact of foreign competition than countries at an earlier stage of development. Countries suffering from food deficits and those in the midst of radical economic reforms are ill-advised to make a sudden, wholesale shift to market mechanisms to stimulate growth of this sector.
ICPF strongly favours a movement towards the liberalization of world trade in agricultural products because it can be of immense benefit to job creation, industrialization, and economic growth in developing countries, and thereby act as a driving force for growth and employment generation in the industrial world as well. The liberalization of domestic policies for this sector is also needed in developing countries where government controls and populist policies have often retarded growth of agriculture. However, the timing and extent of these measures should be dictated by the relative strengths and needs of each particular country, not by strict adherence to any economic doctrine.
Role of Government
Agricultural subsidies and protection are subsets of a larger issue the role of government in agricultural development. The experience of the past four decades strongly supports the view that government can play a vital role in stimulating agriculture up to the stage where the rural economy demonstrates the dynamism needed to take off on its own. Although the Green Revolution has been widely heralded as an achievement of modern technology, the hybrid seeds and chemical-based cultivation practices that formed the technological basis for the breakthrough in foodgrain production constitute only one part of a comprehensive, integrated development strategy in which government played a central and crucial role. This strategy included massive, country-wide demonstration programmes to introduce farmers to new technology, the establishment of new public sector agencies for rapid multiplication and distribution of seeds, assured markets and guaranteed floor prices for foodgrains to eliminate fear that higher production would result in crashing prices, construction of additional storage capacity to house the increased production, import or manufacture of fertilizers, and, most importantly, for transport, distribution and marketing of surplus grains in food deficit areas. Few developing countries perhaps few countries at any stage of development could have marshalled resources on such a massive scale and instituted such widespread changes so rapidly without heavy reliance on the government for both planning and execution. In the majority of developing countries, government is still the most organized and efficient agency and the only one capable of such significant initiative. In formulating strategies, it is essential to take fully into account both the stages and steps of the development process. At this stage in their development, it is highly unlikely that food-deficit African nations can make rapid progress toward food self-sufficiency without strong government support and investment to improve technology, training, techno-infrastructure and trade.
Once the rural sector begins to exhibit its own dynamism, as in the majority of developing countries, there is strong justification for a shift in the role of government from that of prime mover, planner and controller of development to that of catalyst and pioneer. Government agencies can tap the potentials of agriculture, identifying new commercial opportunities, educating farmers, demonstrating new potentials, assisting in the transfer and dissemination of new technology, and promoting the establishment of effective organizations preferably privately or co-operatively owned by farmers or at least with their participation to process, distribute and market what is produced.
Coping with the environmental problems to preserve the ecological foundations essential for sustainable agriculture is an area in which government has special responsibilities and must play a leading role on an ongoing basis. Regulating the diversion of prime farm land for non-farm uses, expansion of irrigation capacity, control of groundwater exploitation, major programmes for reforestation and to prevent or reverse desertification, and regulation of pesticide use can only be effectively planned, monitored and regulated by governments.
In this and previous chapters, we have tried to present an integrated perspective of the political, economic and technological factors that need to be taken into account in formulating a comprehensive approach to the issues of peace, food and employment. In an effort to illustrate the potential efficacy of this approach in a country representing nearly 25 per cent of the worlds poor, ICPF conducted an in-depth country level study in India to evolve a strategy for stimulating massive increases in job growth and food production (see box pp. 12224).