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Volume 2, Issue 2/Volume 3, Issue 1, Fall 2015/Spring 2016

2016 Policy Studies Organization

Table of Contents
Editorial Introduction to the Issue___________________________________________________3

Fisheries
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish
Stocks__________________________________________________________________________5
Rebecca Hartje, Dorothee Bhler & Ulrike Grote
Developing Local Sustainable Seafood Markets: A Thai Example___________________32
Courtney Kehoe, Melissa Marschke, Wichitta Uttamamunee, Jawanit Kittitornkool & Peter
Vandergeest

Fresh Markets
Whats Old is New Again: Innovative Policies to Support Thai Fresh Markets within a
Healthy Food System________________________________________________________51
Cathy Banwell, Jane Dixon, Matthew Kelly, Sam-ang Seubsman, Wimalin Rimpeekool & Adrian
Sleigh
Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts: The Role of
Stakeholder Dialogue________________________________________________________67
Nguyen Thi Tan Loc & Paule Moustier

Food Security & Income Diversification

Constructing a Database for Food Security Assessments in Southeast Asia____________79


Ulrike Grote & Hermann Waibel
Income Diversity and Poverty Transitions: Evidence from Vietnam________________104
Van Q. Tran

Discussion Papers
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward______121
C. Peter Timmer
Food Security in an Age of Falling Commodity and Food Prices_____________________135
Stefan Tangermann
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan
Africa__________________________________________________________________153
Grard Azoulay
A Journal of the PSO in collaboration with the Royal Institute of Thailand

Editorial Board:

Ammar SIAMWALLA (Chair) Thailand Development Research Institute

Vronique ANCEY Centre de Coopration Internationale en Recherche Agronomique pour le Dveloppement (CIRAD); France

Grard AZOULAY Universit Paris Sud; France

Erol H. CAKMAK TED University; Turkey

Bernadette DIA KAMGNIA African Development Bank; Tunisia

Jane DIXON Australian National University

Rachid DOUKKALI Institut Agronomique et Vtrinaire Hassan II (IAV); Morocco

Cecilia FLORENCIO University of the Philippines

Michel GRIFFON International Association for an Ecologically Intensive Agriculture (AEI); France

Mahabub HOSSAIN BRAC; Bangladesh

LAM Peng Er National University of Singapore

Renato S. MALUF Federal Rural University of Rio de Janeiro; Brazil

B. Guy PETERS Michigan State University; USA

Prabhu PINGALI Cornell University; USA

Laurence, ROUDART Universit Libre de Bruxelles, Belgium

Stefan TANGERMANN University of Gttingen; Germany

Peter TIMMER Harvard University; USA

Guy TREBUIL Centre de Coopration Internationale en Recherche Agronomique pour le Dveloppement (CIRAD); France

Trinidad P. TRINIDAD Food and Nutrition Research Institute; the Philippines

Alberto VALDES Catholic University of Chile

Hermann WAIBEL University of Hannover; Germany

Peter WARR Australian National University

Vo Tong XUAN An Giang University; Vietnam

Kono YASUYUKI Kyoto University; Japan

Associate Editors:

HUANG Jikun Chinese Academy of Sciences; China

Guy TREBUIL Centre de Coopration Internationale en Recherche Agronomique pour le Dveloppement (CIRAD); France

Editor in Chief:

Keokam KRAISORAPHONG Chulalongkorn University; Thailand

A Journal of the PSO in collaboration with the Royal Institute of Thailand

2
World Food Policy - Volume 2, Issue 2/Volume 3, Issue 1, Fall 2015/Spring 2016

Editorial: Welcome to World Food Policy

T
his double issue of World Food Policy (WFP) brings together articles submitted
for the World Food Policy Conference, held in Bangkok during December 17-
18, 2015 in celebration of Her Royal Highness Princess Maha Chakri Sirind-
horns 60th Birthday Anniversary.

Organized under the theme Future Faces of Food and Farming: Regional Challenges,
the Conference aimed to provide a forum for in-depth discussions and perspective
sharing on key topics important to world food policy. It emphasized the crucial role
that research and knowledge exchange within and between academic and policy cir-
cles play in understanding multi-faceted challenges of food and food security, and in
providing guidance that can help us collectively, regionally and globally address
pressing policy questions related to food production and sustainability.

The articles in this issue are listed by the topics of fisheries, fresh markets, food secu-
rity and income diversification. Also included are short articles from the Conference
keynote speech as well as those from the roundtable discussions on Food Security in an
Age of Falling Commodity and Food Prices held during the Conference.

A book, Signpost of Learning, that collects His Majesty King Bhumibols experiments
and pilot projects on small-scale agriculture, food production, and sufficiency econo-
my was published by Westphalian Press of the Policy Studies Organization (PSO) for
the occasion and launched at the conference. Along with a number of presentations
by selected conference participants, the book has been made accessible at the WFP
website: http://www.ipsonet.org/publications/open-access/world-food-policy so
that valuable lessons learned from the book and the Royal Projects will contribute to
the repertoire of best practices and body of knowledge which can be applied, adapted
and extended.

The 2015 World Food Policy Conference, which has provided the contents for this
double issue was jointly organized by the Royal Society of Thailand (RST) and the Pol-
icy Studies Organization (PSO), with the financial support from the National Research
Council of Thailand (NRCT) and the National Food Institute (NFI) of Thailands Min-
istry of Industry.

doi: 10.18278/wfp.2.2.3.1.1

3
World Food Policy - Volume 2, Issue 2/Volume 3, Issue 1, Fall 2015/Spring 2016

Call for Papers

W
orld Food Policy (WFP) editors invite submission of manuscripts contribut-
ing to the Journal s Aim and Scope: to promote a multi-disciplinary forum
for generating the analysis and understanding of global trends as well as
regional and local forces shaping food and food policies around the world.

More than ever before, the world now faces paradoxes and predicaments on the prob-
lems related to food. On the one hand, we have problems of mulnutrition, hunger, and
falling prices of commodities and agricultural products. On the other hand, we also
have to deal with rising costs of obesity-related health problems, food waste, and in-
creasing corporate monopolies of seeds and medicines through patents. Several long-
term trends also contribute to future uncertainties that call for urgent international
policy collaboration and transnational adjustments at all levels to address conditions
critical to food sustainability and security: climate change, deforestation, rising world
population, aging societies, depletion of freshwater resources, to name but a few.

For further information on the journals aim and scope please consult WFP website:
http://www.ipsonet.org/publications/open-access/world-food-policy

WFP is a scholarly, peer-reviewed, multi-disciplinary journal of the Policy Studies Or-


ganization (PSO), Washington DC - a nonprofit society founded as an outgrowth of
the American Political Science Association for those in a variety of fields who were
interested in how public policy and organizational policy were being studied and dis-
cussed. Based on the concern that policies should be informed policies and that re-
search knowledge must be effectively disseminated to reach those who actually set pol-
icies, the PSO seeks to disseminate scholarship and information to serve those making
and evaluating policy.

WFPs board of editors comprises those nominated from a broad diversity of institu-
tions and countries, and are acknowledged by the Royal Society of Thailand (RST), the
journals host institution:
http://www.ipsonet.org/images/WFP/WFP_Editorial_Biographies_2015.pdf

All manuscripts should be submitted electronically as an email attachment, and ad-


dressed to the editor-in-chief at: WFP.editorial@gmail.com

For details on Manuscript Preparation and Manuscript Submission please consult


WFP Author Guidelines at:
http://www.ipsonet.org/images/WFP/Author_Guidelines_2015.pdf

4
World Food Policy - Volume 2, Issue 2/Volume 3, Issue 1, Fall 2015/Spring 2016

Food Security in Rural Cambodia and Fishing in the


Mekong in the Light of Declining Fish Stocks
Rebecca HartjeA, Dorothee BhlerA & Ulrike GroteA

Fishing in the Mekong River is of utmost importance for rural livelihoods in


parts of Cambodia. As a result of ecosystem changes, fish stocks are expected
to decline. Using data on 600 rural households collected in two waves in 2013
and 2014 in the province of Stung Treng, we assess the current situation of
food security in relation to fishing. To proxy food security, we consider energy
and protein intakes as well as Food Security Indexes. Quantitative results show
that fishing households had a more nutritious diet in the past week, are more
engaged in subsistence activities and had lower additional food expenditure.
Furthermore, fishing is effective in reducing seasonal food insecurity for
households in the lowest income quartile. In the light of declining fish stocks
these findings underscore the need for fishing households to adjust their
income earning activities to the expected changes. We call for policymakers to
account for the most fish-dependent groups of the population when designing
or adjusting development policies for the area that could potentially affect fish
stocks.

Keywords: Cambodia, Fishing, Mekong River, Nutrition, Food Security


Indicators

Introduction annually. The majority of Cambodian


fishers are engaged in small- to medium-

F
ish is without doubt the second scale fisheries which supply the largest
most important food next to rice in part of the annual catch volume (Van
Cambodia. As much as 75% to 79% Zalinge et al. 2000). Along with the
of the annual consumption of animal importance of fish, agriculture remains
protein is supplied by fish and as many the most significant source of income in
as 39% of Cambodian households have rural Cambodia. In this context fishing
at least one member engaged in fishing can be viewed as a means of diversification
(Ahmed et al. 1998; Israel et al. 2007). to reduce risk or mitigate the impact of
According to Baran (2005), Cambodia is crop failure (Baran 2005; Smith, Nguyen
the most intensive inland fishery in the Khoa, and Lorenzen 2005). Besides its
world with ~20 kg of fish per capita caught cultural importance and influence on

A
Institute for Environmental Economics and World Trade, Leibniz Universitt Hannover, Germany.
doi: 10.18278/wfp.2.2.3.1.2

5
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

peoples subjective well-being (Bush 2004; Baran and Myschowoda 2009; Orr et al.
Marschke and Berkes 2006), it plays an 2012). However, even if fish stocks were
essential role in ensuring food security in currently not declining, reduction in the
many rural households not only through near future seems to be certain (Baran
fish consumption but also through cash and Myschowoda 2008). Declining
income from selling fish. More than 50% fishing margins are already observed
of the small-scale fishers catch is sold because costs increase and output per
(Hori et al. 2006; Navy and Bhattarai fishing trip decreases (Navy and Bhattarai
2009). Fish is an ideal food to improve 2009). There is a number of reasons for
food security in developing countries the reduction of fish stocks, among them
such as Cambodia because, despite access are the construction of hydroelectric
regulations, it is easily accessible even dams in the upstream countries of the
for poor households and it has a high Mekong River, habitat loss, overfishing
density of proteins and micronutrients due to improved technology, increasing
(Kawarazuka and Bn 2010; 2011). population, and illegal fishing practices
Although the livelihood (Hortle, Lieng, and Valbo-Jorgensen
outcomes2 of many rural Cambodians 2004; Hori et al. 2006; Baran, Jantunen,
depend on small-scale capture fisheries, and Chong 2007; Navy and Bhattarai
the output from aquaculture still remains 2009). The active management of fish
low (Hortle, Lieng, and Valbo-Jorgensen resources and enforcement of fishing
2004; Hortle 2007; Navy and Bhattarai regulations is important to sustain the
2009). At the same time, aquaculture is extraordinary productivity of Cambodian
undertaken by only a limited number of fisheries (Degen and Thuok 1998).
households in the area (Bush 2004). After However, these measures may prove to
the end of political unrest in the 1990s be useless if the construction of further
Cambodias fishing output increased. dams for hydropower as well as for water
There is an academic debate whether regulation and irrigation leads to artificial
fish stocks are currently declining ( changes in water levels and barring of
Hortle, Lieng, and Valbo-Jorgensen 2004; fish-spawning grounds resulting in a
Baran, Jantunen, and Chong 2007). Most reduction of fishing output (Hortle,
current empirical evidence points at a Lieng, and Valbo-Jorgensen 2004; Ziv et
negative development of fish stocks in the al. 2012).
Mekong River, especially in important Part of the narrative of decreasing
migratory species which contribute fish stocks in the Mekong river is the
significantly to the catch in the study site fear that the decline will lead to reduced
of this article (Roberts and Baird 1995; food security (Arthur and Friend 2011).

1
The concept of livelihoods is extensive and refers to more than what is the focus of this article. We refer
to the term of livelihood to point at the importance of fishing among the wide portfolio of livelihood
activities undertaken by the rural households to earn a living. While in theory livelihood outcomes in-
clude various results of these activities for a household, we focus on food security as it is the main point
of concern in this article.

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World Food Policy

Considering the high dependency of of income, these affluent households can


livelihood outcomes on fishing, the good hence adapt to the new situation and
nutritious value of fish (Kawarazuka replace foregone income from fishing.
and Bn 2010), and the fact that Meanwhile, poorer2 fishing households
fishers often consume the fish they have may simply not have enough income and
caught (Ahmed et al. 1999; Gomna and assets to invest and adapt, leaving them
Rana 2007) it appears to be clear that exposed to the losses of fishing income.
a reduction in fish stocks will have a Furthermore, Nguyen et al. (2015) show
negative impact on households food for Cambodia that richer households
security. Still, so far the potential impact extract absolutely more natural resources
has not been quantified (Pukinskis than poorer households. Yet, the share
and Geheb 2012). Furthermore, not all of natural resource extraction in total
households will be affected in a similar income is higher in poorer households
way. While fishing for cash income and than in richer ones, making the poor
household consumption is pursued households more dependent on natural
equally across all socioeconomic resources. As a large share of the natural
groups in the lower Mekong river basin resource income in Cambodia originates
(Garaway 2005), declining fish stocks from fishing, it implies that poorer
may have different effects on individual households depend more on fishing in
households diets depending on their terms of income than more affluent ones.
socioeconomic status and the portfolio When these households depend more on
of their livelihood activities, especially if fishing income and have less resources
they are fishers. The importance of fish to adopt new income sources, their
for nutrition in the overall population food security could be more affected by
undeniable (Bezerra da Costa, Dinyz de declining fish stocks than that of better-
Melo, and Macedo Lopes 2014; Dey et al. off households.
2005), and especially fishers are expected Additionally, even though fishing
to be relatively more affected by declining takes place across all socioeconomic
fish stocks. However, this relationship has groups, fish may be overall more
also not been quantified yet. important in the diet of poorer fishing
More affluent fishing households households as they have got less access to
have got resources such as human capital, other sources of animal protein than richer
cash income, and physical assets to shift households (Kawarazuka and Bn 2010).
their income earning and subsistence Households which earn their living from
activities away from fishing when fish subsistence activities, such as agriculture
stocks decline, for example, by investing and fishing, may face greater difficulty
in irrigation systems or aquaculture in shifting to other sources of animal
(Bush 2004). By investing in new sources protein in their diets than households

2
With the term poor we do not refer to households which are absolutely poor as defined by a cut-off
point but we mean households that are less affluent than others according to the distribution of in-
comes, that is, the lowest income quartile.

7
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

which use fishing to supplement their household level is a very broad concept
income from off-farm employment and that relates to nutrition and its stability
businesses. This is because in the latter over time. Specifically, we measure
case there is a larger cash flow which can protein and caloric intakes as well as the
be quickly redistributed away from other Food Consumption Score (FCS) which
consumption to buy meat or fish whereas indicates dietary diversity and weighs
in the former households will have to food groups according to their importance
shift their agricultural portfolio to cash in terms of adequate nutrition. The FCS
crops for buying fish and meat or to more has been validated to measure household
livestock and aquaculture production food security (Wiesmann et al. 2009).
as sources of animal protein. These Furthermore, we utilize the Household
adjustments again need investments. Food Insecurity Access Scale (HFIAS),
The importance of fishing in the Coping Strategies Index (CSI) and the
Cambodia, the expected decline of reduced Coping Strategies Index (rCSI)
fish stocks in the Mekong River and its to proxy food security.
potential impact on households food Our article uses a novel panel
security depending on the socioeconomic dataset representative of the rural
status and whether they are fishers leads population of Stung Treng collected in
us to a number of questions: How much spring 2013 and 2014. We quantify the
do fishing activities actually influence the interrelations between fishing and fish
diets of fishers in comparison to non- consumption in the lower Mekong river
fishers? Is fish of greater importance basin for the first time and identify the
in the food security of poorer fishing typical economic activities of fishers. We
households than in others? What are the add to the existing literature of fish and
other typical income-earning strategies food security (Bezerra da Costa, Dinyz
of households that fish, that is, how de Melo, and Macedo Lopes 2014; Dey et
can they be characterized? We want to al. 2005; Lam et al. 2012; Ziv et al. 2012)
quantify the effects of fishing activities by exploring the importance of fish for
on fish consumption, nutrition and food different types of households, namely
security by comparing rural households fishing- and non-fishing households
engaged in small-scale fishing to in the whole sample, and the poorest
households which do not fish. By doing income quantile. With this we want to
so we can proxy for the impact of missing increase our understanding of who will
fishing income on fishing households be most affected by the predicted changes
food security. Furthermore, we test in the Mekong rivers ecosystem and
the hypothesis whether poorer fishing how wide the potential gap in nutrition
households rely most on fish in terms of could be that needs to be filled with
food security and nutrients. By analyzing activities which replace fishing income.
income-earning strategies which are Thorough comprehension of the links
typically adopted by fishing households between changes in the rivers ecosystem,
we can characterize those households the economic activities of small-scale
which will be most affected by a further fisheries and household nutrition may
decline in fish stocks. Food security at the help policymakers and development

8
World Food Policy

practitioners channel the present the procedures described in Hardeweg,


transformation of the rural economy to Klasen, and Waibel (2013) and United
better outcomes for those who are most Nations (2008). Due to attrition 11
vulnerable to these changes. Beyond households were dropped from the
the scope of the lower Mekong river sample, another 26 observations had to
basin, this knowledge may also improve be dropped as outliers.
our understanding of transformation We used two different
processes in other areas where livelihood questionnaires during the household
outcomes, especially food security, are survey: one long household questionnaire
highly dependent on small-scale fresh and a shorter village questionnaire.
water fishery such as in the floodplains The former was administered to the
of Bangladesh (Sultana and Thompson household head and the person in
2007), in Myanmar (FAO 2003), or lake charge of decisions about food eaten by
Victoria in Africa (Matsuishi et al. 2006). the household. While the household
The remainder of the article is head can be male or female, the person
structured as follows: The section Sample making decisions about food is usually
and Methodology describes the dataset a female household member. The latter
and how food security and nutrition are questionnaire was answered by the village
measured. The next section Results head or deputy village head. The main
introduces and discusses the results. The household questionnaire usually refers to
last section concludes. the period of the past twelve months and
covers basic data on individual household
Sample and methodology members, sections on all possible income
components, such as agriculture and
Data fishing, information on assets, land
and consumption. Furthermore, a

W
e collected the data in comprehensive food security section
two household surveys in measuring for example household dietary
May 2013 and 2014 in the diversity, FCS and calorie and protein
Cambodian province of Stung Treng. intake was applied using the 1-week
The original sample from 2013 contained recall method. Additionally, to capture
600 households which we identified in a periods of food insecurity across the past
two-stage sampling procedure. In the first year, other indicators such as months of
step, 30 villages were sampled from the adequate food provisioning, CSI and FCS
list of all 129 rural villages in the province for different seasons were measured with
with probabilities proportional to their a 1-year recall section.
size (PPS) measured as the number In comparison to data from other
of households. In the second step, 20 sources, our sample is representative of
households were randomly sampled the rural population of Stung Treng. As
from each villages household list. This depicted in Table B1 in Appendix B, the
procedure results in equal probability average household size is 5.22, which is
for each household in the province to close to the figure provided by the NCDD
be part of the sample and is based on (2009) for the province of Stung Treng.

9
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

The household heads are on average 45 the survey. About two thirds of the team
years old, 12% of them are female, and was from the capital Phnom Penh, the
63% of all household heads report to be rest was recruited locally in the province
literate. This is close to the figure of 65% of Stung Treng. In the following we use
literacy in the 25-60 year old population the data from both survey waves by
reported by NCDD (2009). 82% of all pooling them.
households are ethnic Khmers. Other As livelihood activities and their
important ethnic groups are Kuoy (10%), outcomes are closely connected to the
Lao (3%), and Kavet (3%). Fishing is natural cycles of the year in the rhythm
common in all ethnic groups. Most of the dry and rainy season in the area of
households are engaged in some kind Stung Treng, a households food security
of subsistence agriculture with lowland may change depending on the season.
rainfed rice being the most widespread We collected the data during the end
subsistence crop and the main staple. of the open fishing season (Navy and
Besides rice, fruits are other important Bhattarai 2009) which takes place just
subsistence crops in terms of the number before the rainy season starts and water
of households growing them; however, levels rise, that is, data on the past week
the quantity of fruits produced by each falls in this season. Food security during
household is low. Irrigation and more other seasons was captured by asking
than one rice harvest per year is extremely specifically for the situation in the past
rare. Important cash crops are cassava and years planting, pre-harvest and post-
rice. Natural resource extraction, such as harvest seasons with the main staple
fishing, hunting, collecting, or logging, is crop, lowland rainfed rice, being the crop
another common source of income, along of reference. To capture specific events
with family-run small businesses, most of food insecurity we also asked for the
of them without external employees, situation in the worst week and worst
and wage employment, for example as month in the past year, according to the
a government official or farm laborer. subjective impression of the household.
Labor migration is rare and there are
no large-scale companies which provide Measuring Food Security
employment in the province. Further
information on this dataset can be found Todays most commonly used
in Bhler et al. (2015). definition of food security was adopted
The household survey was at the World Food Summit in 1996.
administered in Khmer by a mixed- Accordingly Food security exists when
gender team of 15 enumerators. All all people, at all times, have physical,
of them had previous experience in [social]3 and economic access to sufficient
socioeconomic household surveys and safe and nutritious food that meets their
were trained during lectures, field days, dietary needs and food preferences for an
and role plays for 1 week before starting active and healthy life (FAO 1996). Based

3
The term social was added in 2002.

10
World Food Policy

on the definition, the following four of the different indicators please refer to
dimensions of food security are derived: Appendix A.
(i) availabilityrelates to the actual The FCS asks about how often
disposability of food; (ii) accessrefers certain food groups were eaten by the
to households ability to acquire food household in the past week. To construct
in sufficient quality and quantity; (iii) the score, the frequency of each food
use and utilizationcaptures behavioral, groups is weighted by a score according
health and hygiene components; and (iv) to its nutritious value and all resulting
stabilitycovers the temporal aspect of figures are summed up. The FCS
food security, that is, seasonal income or belongs to measures of dietary diversity
output fluctuations which should ideally which have been found to indicate
not affect food security. diets micronutrient adequacy (Hatly,
There is a range of indicators Torheim, and Oshaug 1998; Steyn et al.
which attempt to measure the different 2006). Evidence shows that it is a valid
dimensions of food security at the measure of the food security access
household level. However, as Maxwell, dimension (Christiaensen, Boisvert
Vaitla, and Coates (2014) point out, and Hoddinott 2000b; Wiesmann et al.
the picture changes quite substantially 2009; Maxwell, Vaitla, and Coates 2014)
depending on the respective indicator even across different cultures (Melgar-
looked at. This is why we analyze the Quinonez et al. 2006). Similar to the
FCS, the Household Food Insecurity FCS, the HFIAS measures the prevalence
Access Score (HFIAS), the (reduced) of household food insecurity in terms of
Coping Strategies Index (CSI and rCSI)4, access (Coates, Swindale, and Bilinsky
caloric intake, and protein intake in 2007). In contrast to dietary diversity
parallel to proxy food security. The FCS, measures this indicator draws on the
calorie and protein intakes measure all idea that households who experience
foods consumed by the household in food insecurity will engage in predictable
the past week, regardless whether they reactions which can be measured and
are consumed during family meals or quantified in a survey and displayed in
in between the main meals. The HFIAS a scale. In addition, the (r)CSI measures
and (r)CSI measures refer to the worst household behavior observed in times
month of the past year (according to the of food shortage and therewith captures
subjective impression of the household) coping strategies used to manage
and additionally we asked the households food shortage (Maxwell and Caldwell
to recall the food they have typically eaten 2008). While all of the indicators are
in a week in the pre-rice-harvest, post- in principle capable of shedding light
rice-harvest, rice planting season, and on the availability and access aspect
the worst week of the past 12 months. For of food security (Maxwell et al. 1999;
a detailed description of the construction Christiaensen and Boisvert 2000; Ruel

4
The CSI is a context specific indicator using a broader range of questions whereas the rCSI is based on
questions addressing behaviors found to be frequently applied across countries.

11
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

2002; Wiesmann et al. 2009; Deitchler Results


et al. 2011; Headey and Ecker 2013), the
caloric and protein intakes additionally Fishing in Stung Treng
allow to refer to the health situation within

I
the household (De Haen, Klasen, and n 2013 we recorded 372 different
Qaim 2011; Headey and Ecker 2013). The fishing activities across all 600
dimension of stability is partly captured households in the sample. Out of
by considering the FCS across different these, 295 activities were reported to take
seasons. The utilization dimension of place in the river, 45 in a stream or canal,
food security is the only one we cannot and 15 in a fish pond. The targets of these
address with these indicators. fishing activities are usually all kinds of
fish species, whether they are small or
Testing for differences in mean large. There are open (OctoberMay)
and closed (JuneSeptember) fishing
In the analysis t tests are used seasons and other access regulations,
to compare the descriptive statistics but small-scale fishing for household use
of fishers to non-fishers. Due to the is always possible. The return to fishing
high number of observations, a normal changes a lot depending on the season
distribution of all variables can be (Navy and Bhattarai 2009). About 25%
assumed. Different specifications, such as of the households in the sample report
Welchs t tests for unequal variances, lead to fish on > 180 days in the year, but for
to very similar results. most households fishing remains to be a

Figure 1: Comparison of mean annual per capita income from different sources
between fishers and non-fishers in Stung Treng, Cambodia. All values are monetary
values in terms of 2005 PPP $. Two-sided t tests for different variable means between
fishers and non-fishers, pooled sample 2013 and 2014. Significance Levels: *p<0.1,
**p<0.05, ***p<0.01

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World Food Policy

seasonal activity. Fishers who report to go Fishing and Food Security


fishing year-round have got lower average
yields per trip than seasonal fishers. The Figure 2 compares nutrition and
average total annual catch among fishing food security indicators of the whole
households is estimated to be around sample, fishers and non-fishers and tests
314 kg. Slightly more than half of this the difference between fishers and non-
amount is reported to be consumed by fishers in two-sided mean comparison
the households, the rest is sold. Only one tests. The mean caloric intake in the
of the households in our sample reports sample accounting for adult equivalents
to be engaged in aquaculture. is 2180 kcal per capita per day. Daily per
With regard to household capita protein intake is on average 78
characteristics fishing households are grams. Roughly 40% of the total daily
on average larger than non-fishing proteins and 20% of total calories come
households and they are less often headed from eating fish. Even though the FCS
by females. Fishers have got lower incomes only categorizes 10.6% of the overall
than non-fishers; however, fishing is households in our sample as food insecure
well-distributed across the whole income at thresholds adjusted for high sugar
distribution (Figure B1 in Appendix B). consumption (World Food Programme
While there are no significant differences 2008), 30% of the households consume
in the production and consumption of <1800 kcal per adult equivalent per day,
livestock, fishers have significantly lower a common threshold for undernutrition
additional annual food expenditure per (Svedberg 2002). Given that Lovon and
capita than non-fishers. More details on Mathiassen (2014) find that judgment on
these figures may be found in Appendix food security in terms of adequate food
B. consumption according to FCS cut-off
Figure 1 depicts the most points generally underestimates energy
important income sources in the sample deficiency these different findings are not
and compares the income from these surprising. The average FCS for the whole
sources between fishers and non-fishers. It sample is just >53 points. The comparison
becomes apparent that fishing households of fishers versus non-fishers in the whole
have significantly more income from sample generally shows that fishing
subsistence activities than non-fishing households take in significantly more
households because their in-kind income calories and proteins per capita per day.
from crops and hunting is higher. This The same is true for calories and proteins
finding matches the observation from from fish. This difference in nutrition
above that the additional annual food variables between fishers and non-fishers
expenditure is significantly lower for is confirmed by the significant differences
fishers than for non-fishers. Meanwhile, in the overall FCSs for the past week.
non-fishing households have significantly Table 1 depicts the make-up of
more income from business and off- the FCSs for the whole sample as well
farm employment which is mostly cash as for fishers and non-fishers. It uses
income. two-sided mean comparison tests to
assess the statistical significance of the

13
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

Figure 2: Comparison of Nutrition Indicators in the past week between whole sam-
ple, fishers and non-fishers in Stung Treng, Cambodia. Two-sided t tests were used
for different variable means between fishers and non-fishers, pooled sample 2013 and
2014. Significance Levels: *p<0.1, **p<0.05, ***p<0.01. Depicted data points are stan-
dardized around their mean. Kilocalories and Proteins are calculated as per capita in
adult equivalents

differences. Looking at the different availability of fish on the total FCS. As


components of the FCS in the whole the average weekly score of 54 points in
sample gives an idea about the relative fishing households contains ~17.5 points
importance of different foods. According from fish, the disappearance of fish from
to the average FCS across all households, the diet would let the average fishing
staples are eaten daily in nearly every household drop below the threshold to a
household. This is complemented by borderline diet7 and hence into the food
animal proteins on ~5.5 days in the week5 insecure area of the FCS. However, fish
in the average household. Out of these, also plays an important role in the make-
fish is eaten on ~4 days as can be seen up of the FCS for non-fishers. When fish
from the FCSs from total animal protein becomes rarer and hence more expensive,
and fish. The FCSs from vegetables and a reduction in animal protein intake of
fruits6 are low, which is typical of the non-fishers could be the resultdespite a
average Cambodian diet. Looking at the redistribution of food expenditures. This
make-up of the FCS also sheds light upon is because other sources of animal protein
the potential impact of changes in the may be more costly than fish is today.

5
Animal protein scores in the FCS are calculated as the number of days animal protein is eaten weighted
by 4.
6
The scores for fruit and vegetables are weighted by 2.
7
The high sugar consumption-adjusted upper threshold of borderline food consumption is set at 38.5.

14
World Food Policy

Additionally, there are significant animal sources contains proteins and


differences in some components of last important micronutrients (Kawarazuka
weeks FCS between fishers and non- and Bn 2010). This is especially
fishers. Fishers have a more diverse important in developing countries with
diet, eating vegetables and animal their otherwise mostly staple-based
proteins more often, while oil, milk, and diets. Red meat is often expensive and
sugar are consumed less often. Further inaccessible by less affluent households.
decomposing the components of animal In contrast, fish is most important
proteins in the FCS, it becomes apparent because it is easily available and small
that fishers eat fish more often while scores fish from capture fisheries are often
for meat and eggs do not significantly eaten as a whole. This means it provides
differ between fishers and non-fishers. important micronutrients and has a
These results lead to the impression that higher nutritional quality than larger
fishers have a healthier, more nutritious intensively farmed freshwater fish (Belton
diet than non-fishers because food from and Thilsted 2014).

Table 1: Two-sided t-tests for differences in different components of the FCS in fish-
ing and non-fishing households in Stung Treng, Cambodia, pooled sample 2013 and
2014

Whole Non-fishing Fishing


Variable name sample households households
Number of observations 1163 403 760
(n)
Total FCS 53.14 51.17 54.19 ***
FCS staples 14 14 14
FCS by food groups

FCS pulses 3.65 3.66 3.65


FCS vegetables 4.26 4.06 4.37 ***
FCS fruit 3.01 2.87 3.08
FCS animal 22.65 20.59 23.74 ***
FCS milk 0.79 1.05 0.65 *
FCS oil 1.81 1.89 1.77 **
FCS sugar 2.98 3.04 2.94 *
FCS fish 17.14 16.17 17.66 **
source
animal

FCS meat 3.35 2.88 3.61


FCS
from

FCS eggs 2.15 1.54 2.48 **



Significance levels: *p <0.01, **p <0.05, ***p <0.1.

15
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

Figure 3 shows how different data. All indicators show that fishers
food security indicators in the 25% face less seasonal food insecurity than
income percentile compare between non-fishers, albeit the differences are
fishers and non-fishers. It tests for statistically insignificant for the CSI and
statistical differences in one-sided mean the FCS in the post rice harvest season.
comparison tests. For the CSI, rCSI, Figure 4 compares the differences
and HFIAS lower scores indicate higher in calorie and protein intakes between
food security. In the FCS a higher score fishers and non-fishers in the whole
means higher food security. The rCSI sample and in the 25% income percentile.
and HFIAS show significantly less severe The distribution of fishing households
food insecurity in the worst month of across the lowest 25% income percentile
the past year for fishing households. The is roughly similar to that of non-fishing
FCSs for the different seasons in Figure households (Figure B1 in Appendix B).
3 show a fluctuation of food security This makes the group of fishers and non-
across the year. It is highest directly after fishers in the lowest income percentile
harvest and lowest during the planting comparable. Figure 4 shows that the
time which takes place in June and July, differences in calorie and protein intake
~12 months after we collected the between fishers and non-fishers are even

Figure 3: Comparison of Food Security Indicators in the 25% income percentile


between fishers and non-fishers in Stung Treng, Cambodia. Two-sided t tests for
different variable means between fishers and non-fishers. Sample from 2014 only as
not all indicators are available from both survey waves. Significance Levels: *p<0.1,
**p<0.05, ***p<0.01. Depicted data points are standardized around their mean; rCSI,
CSI and HFIAS refer to the worst month in the past year

16
World Food Policy

more pronounced in the 25% income 25% percentile can be explained by


percentile than in the whole sample. differences in fish consumption. This
These differences largely stem from the confirms the opinion of Kawarazuka and
fact that non-fishers in the 25% income Bn (2010; 2011) that fish is of special
percentile have considerably lower importance in poorer households.
calorie and protein intakes than in the To sum up, the findings in this
whole sample. For fishers the difference section indicate that fishing households
between the whole sample and the 25% are more engaged in subsistence activities
percentile is not as pronounced. Almost than non-fishing households and have
all of the difference in protein intake lower cash income. We further show that
between fishers and non-fishers in the fishers in the overall sample had a more
25% income percentile may be explained nutritious diet in terms of proteins and
by the difference in proteins coming calories in the past week. This finding
from fish. Meanwhile, only ~35% of the is confirmed by higher FCSs and the
difference in the calorie consumption FCS components of fishers for the last
between fishers and non-fishers in the week. For the 25% income percentile

Figure 4: Comparison of nutrition variables of fishers and non-fishers in the whole


sample and the 25% income percentile in StungTreng, Cambodia. All figures are per
capita in adult equivalents. Pooled sample 2013 and 2014

17
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

we demonstrate that fishers faced less For poorer households fishing is


seasonal food insecurity in the past year. especially important as it is associated
Furthermore, we show that fishing plays with reduced seasonal food insecurity
an even bigger role in the difference and a lower gap in proteins and calories
of nutrition between fishers and non- consumed in comparison to the whole
fishers in this income percentile than in population. Another important aspect
the whole sample. Against these findings, is that fishing households rely more on
we conclude that without subsequent subsistence activities and have less cash
adjustments of former fishers, a loss of fish income than non-fishing households.
stocks will lead to a permanent reduction In the light of these findings
in the food security of fishing households the fact that fish stocks in the Mekong
that is greater than the reduction felt river system are expected to decline is
by non-fishers. However, as fish is also alarming. This article clearly shows the
an important component in the diet of importance of fish for the overall food
non-fishing households, they will be security of fishing households in the
affected by a reduced, more expensive area. Less fish and less catch will lead to
supply of fish as well. Particularly poorer decreasing levels of protein, calorie and
households who fish will feel the negative micronutrient intake. Because fishing
effects of fish stock decline as they may households have less cash income and
face more food insecurity across the year rely more on subsistence activities, there
because their diets are most dependent will be a need to adjust agricultural
on fish. production or increase activities earning
cash income to replace the nutrients
Conclusion foregone from fishing. Furthermore,
the poorer the household the more

C
onsidering the importance of important fishing is to prevent seasonal
small-scale fishing for rural food insecurity and the greater the
livelihood outcomes in Cambodia role which fishing plays in nutrition.
and the expected decline of fish stocks in We conclude that households which
the Mekong River we asked how much go fishing are especially vulnerable to
fishing actually influences the diets of changes in the ecosystem of the river and
fishers in comparison to non-fishers, need to develop alternative sources of
whether fish is of greater importance in income as fish stocks decline.
the food security of poorer households One of these alternative
than in others, and what the other typical sources may be aquaculture. However,
income-earning strategies of fishing aquaculture is not an easy remedy. The
households are. The results from our poor, who benefit disproportionally
descriptive analysis show that fishers from small-scale fishing, have more
enjoy a more nutritious diet than non- difficulties in investing into aquaculture.
fishers. A large part of their protein Furthermore, the large species produced
intake is related to fish consumption. may not replace the diverse micronutrients
Nevertheless, fish is also an essential provided by small fish because they are
component in the diets of non-fishers. not eaten as a whole, including the bones

18
World Food Policy

(Welcomme et al. 2010). Moreover, the to hope for trickle-down effects from
impact of this new technology on the economic development in the future
rivers ecosystem needs to be carefully does not suffice (Friend and Blake
explored before encouraging investment. 2009; Arthur and Friend 2011). Before
Policies related to aquaculture should implementing new policies aiming at
critically assess the role of aquaculture transforming the rural economy for
in the context of rural livelihood future development, their impact on
strategies and poverty alleviation (Bush fishing-based livings should be carefully
2004). Another alternative source of assessed and impact mitigation strategies
income may be increased agricultural for the most vulnerable households
production. Evidence from Thailand should be discussed. Ideally, economic
(Jutagate et al. 2003), Vietnam (Bui development policy should be inclusive
and Schreinemachers 2011), India of those who are going to be negatively
(Duflo and Pande 2005), and China affected by its damage.
and Lesotho (Tilt, Braun, and He 2009) Further research needs to explore
shows that a loss in natural capital due the role of substitution of fish with
to dams can be partly compensated by regard to both income and food security.
more intense land use or an increase in Specifically, it would be interesting
household expenditures. However, these to know how households adjust their
findings are influenced by compensation livelihood activities when income from
payments that play an important role fish declines, how much of fish protein
to counteract the decrease in per capita can be substituted for by eating eggs
income. The finding that an opening of and meat, and which households can
the sluicegates of the Pak Mun Dam in successfully adapt to the new situation
Thailand led to an increase of traditional while others have difficulties in doing so.
fishing activities and income from fishing An interesting study area for this could
(Jutagate et al. 2003) hints at the fact that be Thailand where important rivers have
the local population remains to prefer been dammed already in the 1990s. To
its original source of income over the overcome a shortcoming of our article,
adaptation situation. the fact that food security is only directly
While promoting economic development observed for one point in the year while
and advancing access to electricity in measures of seasonal food insecurity
rural areas by building hydroelectric have to be assessed retrospectively,
power stations, policymakers need seasonal food security and its relation to
to take into account the widespread actual fish output in this season should
dependence of households on fish in the be observed by repeating data collection
area. These livelihoods have often been in different times of the year. In addition,
marginalized and neglected by policies to gain insights into a broader level, data
favoring economic development in the should be representative for the whole
Lower Mekong River basin in the past county or even the Mekong region.
(Sneddon and Fox 2012). Trading-off
food security for economic development,
leaving those deprived of their living

19
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

Acknowledgment Fisheries in the Mekong River Basin.


Phnom Penh, Cambodia: WorldFish.
The authors thankfully acknowledge
the constructive comments by three Baran, Eric, and Chris Myschowoda.
anonymous reviewers of the World Food 2008. "Have Fish Catches been Declining
Policy Journal, the fruitful discussions in the Mekong River Basin." In Modern
with participants of the 2015 World Myths of the Mekong: A Critical Review
Food Policy Conference and the help by of Water and Development Concepts,
their colleagues and the field staff who Principles and Policies, eds. M. Kummu,
were involved in the data collection and M. Keskinen, and O. Varis. Helsinki:
cleaning process. Helsinki University of Technology, 5564.

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Appendix A

Construction of the Food Security


Indicators used

The Food Consumption Score =
(1)
!
The construction of the food
consumption score (FCS) is based on the
technical report on the FCS issued by
the World Food Programme (2008). For Where fg represents food group
its construction food groups are formed g and wg is its respective weight. We use
and days of consumption per food group the FCS as a constant score in our analysis
are counted at household level. The food instead of grouping households into food
groups are (weights within parentheses): security groups according to the FCS. The
main staples (2), pulses (3), vegetables (1), reason for this is that we want to focus on
fruit (1), meat, fish and eggs (4), milk (4), the general improvement of the absolute
sugar (0.5), oil (0.5), and condiments (0). nutrition situation in a household due
According to their nutritious value the to fishing which is captured by the total
quantities per food group are weighted FCS rather than wanting to judge who is
to calculate the FCS of household i as food secure and who is not according to a
follows: predefined cut-off point.

25
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

The Household Food Insecurity Access used in the survey). The adjustment of
Scale the recall period was necessary to keep
the questionnaire as short as possible
The household food insecurity access and to avoid asking similar questions
scale HFIAS is computed following twice. Furthermore, instead of asking
the methodology laid out by USAID separately for occurrence and frequency
(Coates, Swindale, and Bilinsky 2007). we combined both things in one question.
The indicator measures household food To construct the frequency-of-
insecurity access as a continuous score. occurrence we multiply the number of
Normally it has a recall period of 1 month. days reported for each question in the
It is based on a set of nine questions which worst week by four to proxy for the worst
first ask about the occurrence of food month and code these frequencies into
insecurity events (Did your family not three categories: 1rarely (02 days
have enough to eat?) and in a second step per month), 2 sometimes (310 times
about the frequency of their occurrence per month), and 3often (>10 times
(How often did you family not have per month).The result is a frequency of
enough to eat?). Adjusting the index to occurrence score for each question in
account for site specific characteristics, each household in the range of 03. These
we used nine questions and asked frequencies of occurrence scores are then
respondents to answer the questions for added up across all questions for each
the worst week in the past year (see Table household, resulting in the HFIAS for the
A1 for list of questions and exact wording household.

Table A1 HFIAS questions asked in the questionnaire

No. For the worst week between 05/13 and 04/14 please indicate the
number of days that your household experienced the following:

1 you worried that the household would not have enough food?

2 you were not able to eat the kinds of food you preferred?

3 you ate a limited variety of foods?

4 you ate some foods you really did not want to eat?

5 you ate a smaller meal than you felt you needed?

6 you ate fewer meals in a day?

7 there was not food of any kind in the household?

8 you went a whole day and night without eating?

9 you went to sleep at night hungry?


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World Food Policy

The Coping Strategies Index (CSI) and how often strategies were applied by
reduced Coping Strategies Index a household using a recall period of 1
week. Specifically we asked households
The coping strategies index (CSI) and to report the number of days they used
reduced coping strategies index (rCSI) the coping strategies in the worst week
measure household coping behavior of the past year. The questions asked
which is related to household food to the households in Stung Treng are
insecurity events (Maxwell and Caldwell displayed in Table A2. Third, based on
2008). Coping strategies are usually easier the FGD, the different coping strategies
to observe and it is less costly and time are categorized according to their severity
intensive to collect data compared to and the categories are used to weight
household food consumption levels. The the strategies. The weights used in this
CSI is created in four steps based on the calculation are based on four FGDs in
Field Manual from USAID (Maxwell villages that were part of the survey sample
and Caldwell 2008): First, the locally and are depicted in Table A3. Finally, the
relevant coping strategies are identified frequency answers for each question are
through four Focus Group Discussions multiplied by the according weight and
(FGD) in the field from a list of possible the resulting scores are added up for each
generally possible strategies. Second, household to generate the CSI.
the data collection process counts

Table A2 CSI questions as asked in the questionnaire

No. For the worst week between 05/13 and 04/14 please indicate the
number of days that your household experienced the following:

1 you were not able to eat the kinds of food you preferred?

2 you borrowed food or relied on help from a friend or relative?

3 you purchased food on credit?

4 you gathered wild food or hunted?

5 you harvested immature crops?

6 you consumed see stock held for next season?

7 you sent household members to elsewhere?

8 ... you sent household members to beg?

9 you ate a smaller mean than you felt you needed?

10 you fed working members at the expense of non-working members?

11 you ate fewer meals in a day?

12 you restricted consumption by adults in order for small children to eat?

13 you went a whole day and night without eating?


27
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

Table A3 Weights applied per question

For the worst week between 05/13 and 04/14 please indicate
No. the number of days that your household experienced the Weight
following:

1 you were not able to eat the kinds of food you preferred? 2.75

2 you borrowed food or relied on help from a friend or relative? 1

3 you purchased food on credit? 2.25

4 you gathered wild food or hunted? 2.25

5 you harvested immature crops? 3.5

6 you consumed see stock held for next season? 4

7 you sent household members to elsewhere? 3.5

8 ... you sent household members to beg? 3.5

9 you ate a smaller mean than you felt you needed? 2

10 you fed working members at the expense of non-working members? 2.5

11 you ate fewer meals in a day? 2.5

12 you restricted consumption by adults in order for small children to eat? 2.25

13 you went a whole day and night without eating? 3.5


As the CSI is site specific, the universal weights. These questions are
reduced or comparative CSI was developed based on coping behaviors found to be
to enable comparison across contexts applied across many countries. The rCSI
(Maxwell, Caldwell, and Langworthy reflects food security nearly as good as the
2008). The rCSi is based on a subset of CSI (Maxwell, Caldwell, and Langworthy
only five questions (see Table A4) and has 2008).

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World Food Policy

Table A4 rCSI questions as asked in the questionnaire and universal weights

No. For the worst week between 05/13 and 04/14 please indicate the Universal
number of days that your household experienced the following: Weight

1 you were not able to eat the kinds of food you preferred? 1

2 you borrowed food or relied on help from a friend or relative? 2

3 you ate a smaller mean than you felt you needed? 1

4 you ate fewer meals in a day? 3

5 you restricted consumption by adults in order for small children to eat? 1


Calorie and Protein Intakes per Adult


Equivalent

To calculate per capita calorie and


protein intakes we use the food items
and quantities consumed as reported by
the household for the past 7 days which
are converted using food composition
tables by the FAO (2013; 2014). These
values are then divided by the number
of adult equivalent household members
respectively. The conversion of household
members to adult equivalent members is
based on WHO (1985).

29
Food Security in Rural Cambodia and Fishing in the Mekong in the Light of Declining Fish Stocks

Appendix B

Supplementary statistics of the characteristics of fishing households

Table B1: Comparison of characteristics in the whole sample, fishing and non-fish-
ing households; Two-sided t-tests for different variable means between fishers and
non-fishers, pooled sample 2013 and 2014; Significance Levels: * p<0.1, ** p<0.05, ***
p<0.01

Whole
Variable name sample non-fishing fishing

Number of observations (n) 1163 403 760

Household size 5.22 4.83 5.43 ***

Female household head (dummy) 0.12 0.16 0.1 ***

Khmer (dummy) 0.82 0.85 0.8 **

Tropical Livestock Units (TLU) consumed


per capita 0.01 0.01 0.01

TLU sold per capita 0.1 0.1 0.11

Value of productive assets in 2005 PPP$ 2665.27 2790.44 2598.9

Annual income per capita in 2005 PPP$ 1061.77 1200.54 988.19 ***

Additional food expenditure per capita in


2005 PPP$ 175.38 265.49 127.6 ***

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World Food Policy

Figure B1: Income distribution of fishers and non-fishers in Stung Treng, Cambodia,
in the pooled sample 2013 and 2014

31
World Food Policy - Volume 2, Issue 2/Volume 3, Issue 1, Fall 2015/Spring 2016

Developing Local Sustainable Seafood Markets:


A Thai Example
Courtney KehoeA, Melissa MarschkeA, Wichitta UttamamuneeB, Jawanit
KittitornkoolB & Peter VandergeestC

Increasing awareness of degradation in ocean ecologies and fisheries has


made seafood a leading edge in the green marketing movement, with most
major buyers in the global North committing to buying seafood that has been
certified as sustainable. But what about the significant and growing Asian
markets, where seafood has become a healthy and prestigious food choice
among wealthier consumers? Is it possible to develop a market for sustainably
produced seafood among Asian consumers motivated by civil and ecological
concerns? To address these questions our research traces how a Thai Fisherfolk
Shop, located 4 hours to the south of Bangkok, has worked to develop an
alternative market for seafood caught by local, small-scale fishers. Although we
find that there is a mismatch between the volume of aquatic species that fishers
catch, the ability of the Shop to process, store, and sell seafood, and consumer
demand, our analysis suggests that it is possible to create a market for small-
scale, sustainably sourced seafood in Thailand.

Keywords: small-scale fishers, sustainable seafood, conventions theory,


consumer awareness, Asian markets

Introduction certification and ecolabeling. Under


ecolabeling schemes, retailers and food

T
he sustainable seafood movement companies seek to enhance brand value
began nearly two decades ago through an association with sustainability.
in response to failing fisheries Producers, in turn, may gain access
management and the subsequent to particular markets for sustainably
degradation of ocean ecologies and harvested seafood, often in the EU and in
fisheries (Jacquet and Pauly 2007; Konefal North America. Although the effectiveness
2013). Driven largely by nongovernmental of these mechanisms in terms of their
organizations (NGO), industry, and the ability to increase ecological sustainability
private sector, this movement sought remains unclear, ecolabeling continues
to fill a governance gap through the use to grow in prominence (Lay 2012; Ponte
of market mechanisms like third-party 2012; Hallstein and Villas-Boas 2013).

A
University of Ottawa, Canada
B
Prince of Songkla University, Thailand
C
York University, Canada
doi: 10.18278/wfp.2.2.3.1.3

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World Food Policy

Within the seafood sector, a for organic foods and related labels, with
large number of competing management consumers willing to pay high premiums
practices and standards have developed (Posri, Shankar, and Chadbunchachai
some global, some national, and others 2006; Roitner-Schobesberger et al. 2008;
targeting specific species or fishing Sangkumchaliang and Huang 2012a). The
methodswith over 30 fisheries ecolabels question is whether this interest could be
in existence (Jacquet et al. 2010; Roheim extended to sustainable seafood, as the
2009; Parkes et al. 2010). The dominant motivation for organic consumers seems
global sustainability standard for wild to be primarily about health and safety.
catch fisheries is the Marine Stewardship Our article explores the possibility
Council (MSC) (Blackmore and Norbury of expanding coverage of sustainable
2015): ~12 percent of world fisheries seafood through tapping national markets
production is currently MSC certified, and the degree to which such markets can
although this market is generally limited respond to the interests of small-scale
to species consumed in the North (Belton producers. The article traces how a Thai
and Bush 2014; Bush et al. 2013; Marine Fisherfolk Shopreferred to throughout
Stewardship Council 2014). MSC has this article as the Shoplocated 4 hours
single-handedly created sustainable fish south of Bangkok has worked to develop
as a commodity that has been brought an alternative market for seafood caught
into mainstream retail in North America by small-scale fishers. This Shop is one
and Europe (i.e., Walmart and Carrefour) of a planned network of such shops
(Ponte 2012; Vandergeest, Ponte, and Bush throughout Thailand, marketing seafood
2015). A significant portion of producers caught mainly from the Gulf of Thailand.
and consumers of lower level trophic We begin our article by analyzing the
species, however, are being excluded from type of aquatic species caught by local
such markets. fishers that the Shop procures seafood
Asia, as a region, has substantial from, before turning to an assessment of
potential in terms of marketing local how the Shop more generally procures,
sustainable seafood: 84 percent of all people processes, and sells sustainable seafood.
employed in fisheries and aquaculture live We then consider why consumers are
in Asia (over 58 million people) (Food and willing to pay premium prices for local,
Agriculture Organization 2014). As a food sustainably sourced seafood, drawing
source, fish continues to be a major source on conventions theory to aid in our
of animal protein and plays an especially analysis, and reflect upon the challenges
important role in many vulnerable rural facing fishers, the Shop, and consumers
and coastal communities (Belton and to ensure a fit between supply, demand,
Thilsted 2014). Fish also play a central and sustainability. We argue that this
role in culture and cuisine in inland case provides evidence of how a local
and coastal regions, and the continuing sustainable seafood movement can meet
rise of an urban middle class is likely to multiple demands and support a move
result in even higher levels of demand toward social-ecological sustainability in
for seafood products. Consumer surveys the fisheries.
in Thailand show a substantial market

33
Developing Local Sustainable Seafood Markets: A Thai Example

Understanding sustainable food conventions (linked to welfare and impact


movements on society or the environment) (Ponte
and Sturgeon 2014). Opinion quality is

C
onventions theory has influenced another order of worth, whereby the
various branches of agro-food views of experts or the newness of a
studies, providing analytical product are taken into account (Ponte and
guidance and theoretical insight for Sturgeon 2014). The typology presented
examining alternative food networks in conventions theory is not intended to
and the so-called quality turn in food be exhaustive, rather to enable an analysis
production and consumption (Ponte of the justifications found in the majority
2016). Building on the formative of ordinary situations (Evans 2011).
work of Boltanski and Thvenot Adopting an order of worth
(1991), conventions theory introduced approach (Ponte 2016), we attribute
sociological considerations to reconcile one or a combination of conventions
economic conventions within wider to understand the choices urban Thai
frameworks of evaluation, highlighting consumers make in purchasing local,
the plurality of forms of justification that sustainable seafood. We anticipate that
may exist for an action such as the choice a sustainable seafood movement would
of what type of seafood to purchase incorporate a mix of these conventions,
(Migliore, Schifani, and Cembalo 2015). with the sustainable aspect implying
In conventions theory, markets are some commitment to civic quality
defined or guided by a distinct set of conventions among producers,
principles and values under which goods processors, and intermediaries, and
become qualified for trade and to which consumers, along with a commitment
trade is then subsequently managed to the ecological welfare of the oceans.
(Ponte 2016). Meanwhile, because sustainability is
Six ideal-type orders of worth associated with small-scale fishers in
are identified to illustrate how these Thailand, there is likely a commitment
principles and values are used to frame to domestic quality conventions too
the justification of human interaction especially given the interest in supporting
and economic practice (Ponte and the livelihoods of local fishers and the
Sturgeon 2014) (see Table 1). Each order small-scale nature of the Shop. We return
of worth has a different justification. For to conventions theory later in the paper.
instance, market conventions refer to an In Asia, sustainability in marine
understanding that difference in price capture fisheries is an emerging area
signifies difference in quality, whereas focused primarily on domestic markets.
industrial conventions seek to legitimize This is in contrast to aquaculture
quality vis--vis establishing third-party sustainability, which has been in place for
verification schemes like certification export markets since 2000 (Vandergeest
or other branding mechanisms. These 2007). Within the Thai context, this shift
differ from domestic quality conventions in focus toward sustainability is captured
(determined through trust, history, in part by a quality turn, whereby
locality, and personal ties) or civic quality domestic consumer interest in health and

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World Food Policy

Table 1: The orders of worth

Convention Organizing Focus of justification


principle
Market Competitiveness Product units
Civic Representation Negotiation, consultation, and distributional
arrangements
Domestic Loyalty Specific assets
Opinion Reputation Public relations, media coverage, and brand
reputation
Inspired Creativity Innovation and creation
Industrial Productivity Plans, systems, controls, and forecasts

Adapted from: Boltanski and Thevenot 1991; Ponte and Sturgeon 2014

safety of food is growing (Srithamma, attempting to create a niche market for


Vithayarungruangsri, and Posayanonda local, sustainable seafood.
2005; Sangkumchaliang and Huang
2012b; Kelly et al. 2015). The interest tends Approach, study area, and
to be embedded in practices of quality
methods
assurance, traceability, geographic origin,

I
sustainable agro-ecological practices, and
n June 2014, seven fisher groups,
direct marketing schemes (Ponte 2016).
each representing fishers from a
As such, the Thai government, industry,
particular village in Prachuap Khiri
and local NGO (e.g., the Thai Sea Watch
Khan province, Thailand, came together
Association) are attempting to establish
with the help of the Thai Sea Watch
one or more national ecolabeling
Association (TSWA) NGO to set up
schemes. Given these changing attitudes,
the Shop. The purpose of the Shop was
and the challenges of social-ecological
to: (a) initiate an alternative market
sustainability in Thailands short and long
by directly supplying consumers with
haul sectors (Marschke and Vandergeest
seafood from small-scale fishers using
2016), there is an interest in supporting
nondestructive fishing gear; (b) provide
local fishers. This case seeks to better
consumers with quality seafood; and
understand the experiences of one Shop

35
Developing Local Sustainable Seafood Markets: A Thai Example

(c) set up channels for disseminating helping to sell Shop fish in the Spring and
information and educating the public Summer of 2015.
about marine conservation. Within the Key informant interview
seven small-scale fisher groups, 66 fishers questions with fishers and Shop
contributed 50,000 THB (~1500 USD1, employees centered around five themes:
or just over 22 USD each) to the start- background of involvement, knowledge
up of the Shop. The Shop also received of the Shop, operation of the Shop, supply
significant budget support from Oxfam chain management, and sustainability of
and investment from the Federation the Shop. Consumer interviews, which
of Thai Fisherfolk Association. When focused on purchasing behavior, seafood
the Shop was envisioned, stakeholders consumption, and perceptions of the
thought that seafood could be sourced Shop, were carried out in two ways: (a)
exclusively from those fishers who through random selection from the
initially contributed to the development Shops LINE accounta smart phone
of the Shop based upon the seasonality of application that allows consumers to
their product. subscribe to the Shops group, view
The methodological approach of product, and place ordersafter which,
our article is twofold: (a) case-specific participants were spoken with via video
research with fishers, Shop employees, conference call (n=5) or telephone (n=3);
and consumers and (b) an assessment of and (b) face-to-face interviews (n=4)
Shop procurement and sales practices to with consumers as they were purchasing
assess the economic viability of the Shop. Shop fish at a small urban farm in central
Data collection included conducting Bangkok. A preliminary reflection of the
interviews with consumers buying characteristics of urban consumers who
Shop seafood (n=12), key informant purchase Shop seafood suggests that
interviews with Shop staff (n=3) and with consumers are largely female, single, with
fishers (n=31), a focus group with fishers an undergraduate education, living with
(n=6), and an analysis of Shop receipts two or three people in the household.
detailing procurement of seafood and
consumer sales from June 2014 to May Results
2015 (5371 receipts). Purchasing and
sales data enabled us to gain a detailed Seafood caught by local fishers
understanding of the amount of seafood

W
purchased, processed, and sold in Year 1 hile seven small-scale fishing
of Shop operations. Two of the authors groups supply the majority
also engaged in participant observation of seafood to the Shop, key
with fishers and Shop employees, informant interviews focused on one
complimented by time in Bangkok

1
Currency is converted from Thai Baht to United States Dollar using the average exchange rate (1
THB = 0.03 USD) for the duration of the study period (June 2014October 2015).

36
World Food Policy

fishing group in the village of Khan nets with differing mesh sizes to target
Kradai. Fishers here catch an array of particular species (e.g., bottom gill nets
species annually, often in the form of of 4.5 cm mesh size are used to target
bycatc2 since most fishers target one or short-bodied mackerel compared with
more of six main species: short-bodied surface gill nets with a mesh size of 2.9 cm
mackerel, Indo-Pacific king mackerel, that target goldstripe sardinella). These
goldstripe sardinella, blue swimming species are sold daily to the middleperson
crab, splendid squid, and banana shrimp. (MP) or to the Shop when the Shop is
Catch averages per trip and per species purchasing local seafood. Since the Shop
vary greatly (5500 kg) (Table 2), with pays considerably higher prices for local
fishers using hook and lines, surface seafood than the MP (Table 2), fishers
gill nets, bottom gill nets, and trammel prefer to sell to the Shop when possible.

Table 2: Main species and price premiums in one village

Targeted fish species Seasonality Average Price Price Price


kilograms paid paid premium
a
per trip by by (Baht, %)
b
MP Shop
(Baht) (Baht)
Banana shrimp, small 300 385 85 (28.3)
Banana shrimp, medium NovJan 510 400 484 84 (21.0)
Banana shrimp, large 500 578 78 (15.6)
Blue swimming crab OctJan 510 200 301 101 (50.5)
Goldstripe sardinella SeptNov 300500 8 22 14 (275.0)
Indo-Pacific king mackerel SepNov 1030 190 209 19 (10.0)

Short-bodied mackerel JanMar, Sept 100300 40 45 5 (10.0)


Splendid squid SeptNov
Oct 1020 115 245 130 (113.0)
Source: Focus group discussion and interviews

a
The amount of species caught fluctuates throughout the year, with fishers catching higher volumes
during peak season (e.g., fishers can catch 1000 kg or more of short-bodied mackerel or goldstripe
sardinella in a single trip)
b
The price offered by a MP or the Shop also fluctuates according to supply and demand. The Shop
prices above are calculated yearly averages, whereas the price paid by the MP is based on one focus
group.

2
The type and total bycatch varies depending on gear used. According to fishers, when using trammel
nets up to 80 percent of catch per trip is comprised of non-target species such as tiger-toothed croaker,
four finger threadfin, and soft cuttlefish, whereas bycatch from hook and line (e.g., Indo-Pacific sail-
fish, barracuda, and emperor red snapper) amounts to only 1 percent of total catch per trip.

37
Developing Local Sustainable Seafood Markets: A Thai Example

Figure 1: Seafood purchased by the Shop


Source: Shop buying receipts, 20142015

Seafood purchased by the Shop fourfinger threadfin were procured both


locally and from southern provinces,
The Shops mandate is to buy local while lined silver grunt, striped sea
seafood, with 95.5 percent of the Shops catfish, queen fish, and siamese glassfish
product being sourced within Prachuap were sourced exclusively from southern
Khiri Khan province where the Shop is Thai provinces.
located. During its first year of operation, In Year 1, 59 distinct seafood
the Shop procured a total of 7,972.38 kg products were bought (i.e., whole fish,
of seafood: 7,610.67 kg from Prachuap shrimp of various sizes, some aquatic
Khiri Khan and the rest from southern species that had already been dried, salted
Thailand (236.56 kg from Nakhon Si or sweetened). As Figure 1 shows, short-
Thammarat, 99 kg from Trang, and 28.60 bodied mackerel was the most common
kg from Phattalung). Most species that species purchased (a total of 2,141 kg
the Shop sourced were local, from the when factoring both raw and processed
seven fishing groups, including banana product), although the Shop sourced
shrimp, goldstripe sardinella, short- small amounts of multiple other species
bodied mackerel, threadfin bream, to also meet consumer demand. Species
middle shrimp, and blue swimming crab. sourced from provinces in Southern
A few species such as Indo-Pacific king Thailand are an example of this, as often
mackerel, white pomfret, barracuda, and only a few kilograms of a particular type

38
World Food Policy

were sourced3. Worth highlighting, over Seafood sold to consumers by the Shop
92 percent of seafood sourced through
the Shop was done directly with fishers Most seafood is sold to retailers
rather than though a MP: this enables the or consumers in Bangkok (5071 kg),
Shop to build a relationship directly with with only small amounts of fish sold in
fishers and ensures that fishers receive a the province of origin (Prachuap) (737
price premium for their seafood. While kg) or in southern Thailand (42 kg).
the average price per kilogram of seafood Since Bangkok is only a 4-hour drive
procured was 228.88 THB (6.87 USD), away, Shop staff can pack and transport
some species proved to be costlier than fresh seafood in a timely manner, while
others. White pomfret cost 716.67 THB also selling processed seafood that stores
(21.51 USD) per kilogram, whereas for longer periods of time (e.g., dried
pickled short-bodied mackerel could be or salted fish, or fish paste). Two-thirds
bought for as little as 40 THB (1.20 USD) of Shop sales (3899 kg) take place in
per kilogram. the store4 or through selling at farmers
The Shop purchased seafood markets in Bangkok. An emerging trend,
products that had already been processed however, is online sales (1781 kg). Nearly
by fishers, their families, or community one-third of sales are done via home
members. In such instances, the Shop delivery, whereby consumers order a
paid a higher price for these seafood particular kind of seafood and the Shop
products since they required less of the then sends this directly to a consumers
Shops resources (labor in particular). home in Bangkok. Since only one of the
For example, the Shop paid 65 THB Shop employees drives a car, seafood
(1.95 USD) for sweetened short-bodied sold this way is either shipped through
mackerel compared to the 43.37 THB the post office or transported by van to
(1.29 USD) paid for unprocessed short- Bangkok where consumers can either
bodied mackerel. This seafood product pick it up at the Victory Monument
was then resold for a handsome profit transport hub or have it motorcycled
(400 THB or 12 USD). Such practices directly to their home. While the amount
help the Shop to satisfy consumer interest of seafood product sold to third-party
in an array of seafood products, from retailers in the first year of operations
buying an entire fish to buying fish that was miniscule (170 kg) in comparison,
has already been prepared in a curry. as demand from Lemon Farm (a chain
of organic supermarkets in Bangkok)
and other Thai retailers increases, this
percentage will also increase.

3
For example, only 3.10 kg of lined silver grunt, 1.20 kg of striped sea catfish, 6.50 kg of queenfish, and
5 kg siamese glassfish were bought.
4
In store sales include orders placed by consumers via telephone or the Shops Line application as well
as purchases made physically at the FisherFolk Shop.

39
Developing Local Sustainable Seafood Markets: A Thai Example

Figure 2: Top four species sold


Source: Shop buying receipts, 20142015

In Year 1, the Shops top three are processed in Shop, whereas the
revenue-generating species were Indo- other 14 are processed by fishers, their
Pacific king mackerel, large-sized families, or community members and
banana shrimp, and blue swimming then bought by the Shop. Drying, salting,
crab. These three species brought in sweetening, steaming, or creating a sauce
a total of 340,169.65 THB (10,205.09 for various species is something the Shop
USD), 313,972.23 THB (9419.17 USD) does as a way of broadening consumer
and 124,613.55 THB (3738.41 USD), choice. For example, in addition to short-
respectively. Yet, in terms of volume, bodied mackerel processed in 1 of 11
short-bodied mackerel was the most ways, dried or salted versions of banana
popular species with 1086.67 kg sold shrimp, fourfinger threadfin, goldstripe
(Figure 2). This does not even take into sardinella, mullet, threadfin bream, tiger-
account the sale of processed short- toothed croaker, and yellowstripe scad
bodied mackerel which is prepared in are also popular, as are eggs (from blue
1 of 11 ways: boiled sweetened, dried, swimming crab and white perch) and
dried-salted, salted, fried, sweetened, shrimp paste; over 300 kg of shrimp paste
steamed, without the fish head, pickled, was sold in the first year of operations.
with noodles, or with chili powder. These Shop employees believe that processing
aforementioned four species represent can increase consumer interest in local
two thirds of the main species targeted seafood, through a variety of taste options,
by fishers in the area. along with increasing the revenue earned
The Shop sells 79 distinct seafood by the Shop since processed seafood
products. Of the 42 processed seafood products are sold at a higher price.
products sold by the Shop in 2015, 29

40
World Food Policy

Figure 3: Profitability of products processed by the Shopa


a
Further details can be found in the Supplementary Data
Source: Shop buying receipts, 20142015

Drawing on a year of purchasing expect to see far more data points to the
and sales receipts, we calculated the right of the Y-axis (ideally in the upper
profitability5 of processing (relative right-hand corner): this would indicate
to total cost) for 25 of the 29 seafood that the more profitable species are being
products processed by the Shop6. Our sold in larger quantities.
analysis suggests that the processing Instead Figure 3 shows that the
of seafood may not be where the Shop Shop is selling seafood products that
should place its efforts. In Figure 3, incur loss, often times in large amounts
the concentration of data points near as is the case with short-bodied mackerel
the origin of the graph and to the left with noodle (of which 214.14 kg are
of the Y-axis indicates relatively small sold at a net loss of ~75 percent). Other
or negative profits for certain types of species that are not profitable include:
processed seafood products. Note that dried-salted splendid squid, blue
if the Shop were processing seafood in swimming crab meat, mantis shrimp
a way that boosted revenue, we would meat, dried-salted mullet, and the king

5
Profit calculations take into account the cost of raw materials (i.e., species), labor, and utilities such as
electricity and water. The calculations do not consider the additional monies spent on sugar, salt and
other ingredients necessary for processing.
6
Value added was not calculated for four seafood products (blue swimming crab eggs, Indo-Pacific
king mackerel eggs, white pomfret eggs, and Indo-Pacific king-mackerel body).

41
Developing Local Sustainable Seafood Markets: A Thai Example

mackerel burger. The loss associated with market quality conventions. Consumers
processing these seven species on the left measure market quality in terms of
of the Y-axis (86,902.51 THB or 2607.07 health and safety, particularly the
USD) outweighs the benefit derived from absence of chemicals such as formalin
those 18 species on the right of the Y-axis in the production process. Aesthetics,
(38,993 THB or 1,169.79 USD). Fried described as a demand for beautiful
short-bodied mackerel is one example of fish, and freshness also play a role,
the Shop generating significant revenue especially for those consumers who
from seafood processing, with 100.30 kg equate freshness with greater nutritional
being sold for a net profit of nearly 250 value. One consumer claimed that
percent; more time, effort, and resources product from the Shop is more clean and
should be put into creating such items. fresh than at the normal market (0088).
However, domestic quality conventions
Consumer interest in Shop seafood also matters, as one consumer indicated
products that they buy from the Shop because they
know where the product comes from
Individuals purchasing from the (007). The Shop encourages fishers to
Shop do so primarily for three reasons: travel to Bangkok on a monthly basis to
(a) health and safety; (b) environmental sell their seafood at local farmers market,
benefits; and (c) support for small-scale enabling fishers to engage in conversation
fishers. We return to conventions theory with consumers and tell of their fishing
as a way to analyze consumer choice in practices and way of life.
buying sustainable seafood (Ponte 2016). Consumers were also motivated
The categories of market, industrial, by civic quality: wanting to provide
domestic, civic, and opinion quality7 support for local, small-scale fishers
enable us to analyze socially constructed and arguing for cutting the MP out of
norms that lay behind consumer the system of seafood (005) or wanting
motives to purchase sustainable seafood to support conservation efforts (i.e.,
(Campbell and MacRae 2013). Our initial supporting responsible fishing (003)
analysis suggests that consumers support and ensuring that fishers use only big
local sustainable seafood for multiple nets and do not catch small fish (002).
reasons. This merging of social concerns with
Three quarters of interviewed environmental concerns is common,
consumers were willing to pay a premium especially within sustainable food
on locally caught seafood, motivated by movements more generally (Olson, Clay,

7
The sixth convention of inspirational quality is not drawn on (despite the rising profile of sustain-
able seafood in Asia) for it is not yet considered a significant factor influencing consumer choice for
sustainable seafood in Thailand.
8
These numbers refer to our key informant interviews, who were guaranteed confidentiality and ano-
nymity. We entered our qualitative data into the software program NVivo.

42
World Food Policy

and Pinto da Silva 2014). There is evidence Discussion


that some consumers are motivated by

T
opinion quality, for some interviewees he Shop was established to source
referred to the views of marine activist seafood from seven small-scale
Banjong Nasae when explaining their fisher groups in Prachuap Khiri
reasons for supporting the Shop (002, Khan province: to a large extent the Shop
003). As recipient of the 2015 Thai has been able to meet this mandate. To
Social Enterprise award, the Shop has sustain Shop sales, however, seafood
also gained public recognition for its needs to be sourced in a way that
commitment to social responsibility. One accounts for what can be caught locally
consumer learned about the Shop from and seasonally. Although the Shop
the publicity garnered by this award; sources small amounts of additional
similarly, a piece in the Bangkok Post seafood from southern Thailand to meet
written about the Shop (Karnjanatawe specific consumer demands, this practice
2015) has likely piqued the curiosity of is labor intensive and less profitable than
potential buyers. sourcing local products. Our analysis
Industrial conventions do not yet suggests that while a few consumers may
have a direct influence over consumers demand a particular type of seafood
who buy from the Shop: there is no product, different from what is being
certification scheme in place to justify targeted by local fishers, the Shop
market quality. However, in May 2016, should concentrate its effort in sourcing
it is anticipated that the Shop will release and processing local seafood. Lower
its Blue Brand standard. This tool will trophic level fish such as short-bodied
attest to the monitoring of supply chains mackerel and goldstripe sardinella can
and show consumers that the product be purchased from local fishers at a price
they are purchasing has been caught premium while sustaining the Shop (in
by small-scale fishers using verifiable terms of revenue and in supporting its
nondestructive fishing gear. The Blue mandate to go local).
Brand label will serve as a guarantee In addition to these concerns,
that the appropriate size of species is there are a few other challenges that the
caught, that producers are involved in or Shop faces, including seafood storage,
supportive of community-based coastal ecological sustainability, shifting market
resource conservation activities, and relations, and long working hours of
that the catching, preserving, processing, Shop employees. We expand on these
and packaging of Shop product is free issues below, since they are areas that the
from chemicals. Shop employees believe Shop must think through as it grows and
that this scheme will create a greater expands.
sense of legitimacy. Consumer survey
participants also believe that this new Seafood storage
label will allow seafood products to be
sold at a higher price and might attract The Shop is constrained in terms
more consumers since the label acts as a of the volume of local seafood it can
guarantee of ecological sustainability. purchase. Local fishers only sell to the

43
Developing Local Sustainable Seafood Markets: A Thai Example

Shop a few times per month; even then, larger percentage of fishers catch to be
they can only sell between 10 and 30 purchased.
percent of their daily catch. Handling In December 2016, to address these
large volumes of seafood and seafood challenges, the Shop moved operations
storage is therefore an issue for the Shop. to Khan Kradai village. Here the Shop
Since the Shop, up until this point, has had is closer to the supply of local fish and
limited storage capacity, fresh seafood is able to employ community members
has been cleaned and/or processed and to assist with the workload (individuals
then sold quickly to consumers. For can work when it is most convenient
direct sales to consumers, for example, for them and be paid accordinglythey
the Shop sources seafood species in do not need to be employed part or full
response to demand. Operating under time). There are also plans to build a
a demand-driven business model, factory to enable employees to process
the Shop determines what seafood and package products with greater
product consumers want and takes this efficiency. However, as one Shop staff
information to fishers; if fishers cannot member notes, this model will bring
fill the order due to seasonality or low new challenges including getting the
catch volume this is communicated villagers involved in the processing so
back to the consumer. When last minute that the Shop becomes a business for
requests are made, fishers have often the community (020). Nonetheless, this
already sold their catch to a MP. Thus, move may address some of the storage
there can be a mismatch between supply problems that the Shop faced in Year 1 of
and demand. its operations.
The challenge with this model
is that the quantity of the fish is Ecological sustainability
unpredictable: a fisher could catch 100
kg one day and more or less of the species Ecological sustainability is an important
the next day (013). One fisher explained component of the Shops model and is
how, one time [he] had caught 200 kg of of interest to fishers, Shop employees,
goldstripe sardinella but the Shop that day and consumers. Fishers note that the
only wanted to buy 100 kg from [him] Shop provides a nontoxic aquatic
hoping that tomorrow [he] would have product to consumers, ensures a better
another 100 kg to sell. The next day [he] environment, and in turn offers fishers a
didnt have 100 kg (013). Some fishers higher price to have a better life (013).
felt that the Shop should not source While ecological sustainability is clearly
according to consumer demand, rather valued (as per fishers comments, the
that the Shop needs to promote what civic quality conventions, and the Shops
local fishers are catching and hence what mandate), the Shop does not constantly
is in season. Being able to handle greater carry out ecological monitoring. While
volumes of seafood product through the Shop has the equipment necessary to
enhanced storage systems and more test products for chemicals for instance
focused processing (i.e., concentrating on (including the sugar, fish sauce, and salt
local main targeted species) will enable a used in processing), Shop staff only test

44
World Food Policy

products when they initially buy from a seasonality is important and it is very
fisher. After this, procurement is based hard to manage the Shop (009). Unsure
on a system of trust. participants said that they would see
Shop staff admitted that the what other fish was available and whether
NGO Thai Sea Watch Association had or not it is familiar; one participant said
promoted the use of legal gear within that she would go to buy pork or chicken
the [communities] first, before the Shop instead (008). In terms of trophic levels,
was established (019). Therefore, most half of the consumers interviewed
local fishers who are selling to the Shop claimed to take this into consideration
already engage in relatively ecologically when purchasing seafood, explaining
sound fishing practices9 and are often that they dont like to buy species at top
involved in conservation projects (e.g., of food chain (008) or prefer to eat fish
constructing artificial reefs, crab banks, of small size because of less toxin (007).
protecting seagrass beds, and not fishing One consumer even noted how if you
in the immediate nearshore). Even so, dont think about level of the food chain
fishers would appreciate further support then it is not sustainable and will not
in communicating the importance of leave [resources] for the next generation
protecting ocean ecology to consumers (004). While many consumers we
and the public more broadly. One fisher spoke with hold a surprising amount of
suggested that the Shop appoint at least knowledge on various ecological topics
one staff member to help with this such as seasonality, bioaccumulation, and
transmission of knowledge. In this sense, trophic levels, this was not the case across
fishers want the Shop [not to] act only as all Shop consumers nor is this likely the
a MP (013), rather to be an advocate for case across the general population.
ocean health too. Consumers too were
interested to learn more on the kinds Ensuring continuing seafood access
of fishand the Shop itself (003) and
to understand the seasonal schedule for By purchasing seafood directly
species. from fishers, the Shop is shifting market
Shop consumers, in some cases, relations. Fishers have long been
indicated that they consider their seafood dependent upon close relationships with
purchases in terms of seasonality and local MP. This relationship is linked
trophic levels. For instance, when asked with the quasi-credit system, whereby
if they would purchase another kind of MP provide fishers with interest free
seafood if their preferred type was not monetary loans to support fishing-
available, over half of the consumers related activities (e.g., the buying of
interviewed said that they would, since physical assets such as a fishing boat and

9
Although there is no limit to the amount of gear used per fisher (which has clear sustainability impli-
cations), fishers note that they now use larger mesh sizes than before (2 cm originally) and that none
of the fishers selling to the Shop use bottom trawls.

45
Developing Local Sustainable Seafood Markets: A Thai Example

gear) and household activities (Bailey et and packaging seafood, to marketing,


al. 2016). In exchange for these services,selling, and distributing products to
fishers are often indebted or bonded to consumers. We found the most labor
the MP, selling their product at a lower intensive aspect of running the Shop is
price, and prevented from selling their procuring and processing the seafood.
catch to another buyer. The employee responsible for this
A challenge for the Shop, as paying
described her average day as follows: (a)
a price premium is reorganizing the value offloading boats and picking through
chain, is to interrupt these longstanding fish (after dark, late into the evening);
relationships without causing strife or (b) cleaning and gutting fish to be ready
removing the MP altogether (Bailey et for morning processing (starting at 2 or
al. 2016). This is especially important as3 am); and, (c) processing and packaging
the Shop can only source small volumes the fish with other workers (throughout
of seafood product, and fishers need to the day). The late afternoon and early
maintain their relationships with MP. evening are the best time for this employee
Fishers who have kaewa Thai word to sleep: most people could not manage
that describes the debt held with a MP these hours. Other staff face a similarly
may be excluded from accessing the Shop. significant workload. The Shop manager,
For example, several fishers with kaew for instance, is in charge of finding
said they could not sell their seafood to markets, connecting with the consumer,
the Shop explaining that they must pay managing public relations, supervising
back the MP. Those fishers who could sell the work of other employees, and is now
to the Shop indicated that this is becausealso responsible for developing the Blue
they either have no debt or because the Brand label that Shop products will soon
MP they sell to knows of the Shop and be sold under.
allows them to sell a portion of their catch
Year 1 of any business venture is
to the Shop. In areas where the Shop has labor intensive, and this is reflected in
a well-established presence, selling to the
talking with Shop employees. However,
Shop may not be an issue given the small as the Shop becomes more established
amount of seafood the Shop currently and hopefully with the name recognition
can source, yet fisherMP relations will that should come with the Blue Brand
undoubtedly pose challenges as the Shop label, things will become easier. Working
expands. conditions would also be enhanced for
employees if the Shop were to emphasize
Intense working conditions of Shop local seafood and concentrate their efforts
employees on processing just a few key species. At
this point, our analysis suggests that the
Shop employees work long hours Shop does not have the labor to handle
and without overtime pay. Over the course individual consumer requests for specific
of its first year of operation, the Shop types of seafood products and for species
has employed foursometimes five not found in Prachuap Khiri Khan
women. These women are responsible for province.
everything from purchasing, processing,

46
World Food Policy

Conclusion Thailand to meet consumer demand. The


Shop would also do well to consider what

T
he Fisherfolk Shop is an example kinds of value-added products make sense
of an initiative designed to support from a time and economic perspective.
local seafood. Small-scale fishers Fishers, their families, or members of
are encouraged to fish (or continue their community could do more of this
fishing) in ecologically sustainable processing, as evidence shows that the
ways, with the Shop connecting this Shop is able to make significant revenue
seafood caught with consumers who by buying and selling these already
want to support such practices through processed seafood products. Given the
purchasing power (Olson, Clay, and Pinto large volume of unprocessed local fish
da Silva 2014). By creating an emerging the Shop sold in Year 1, and the decent
niche market, the Shop can pay small- profits that ensued, there are also clear
scale fishers a premium for their seafood, advantages to promoting this side of the
offering more than an average MP. The business. An active education campaign
Shop relies on short value chains and could help raise consumer awareness of
relatively wealthy, urban consumers in the benefits of going local.
Bangkok who are willing to pay more for What has been found with
sustainable seafood to sustain this model. organic and related foods is that branded
Consumers are found to be motivated by products in supermarkets enables
health and food safety when it comes to access to middle-class consumers who
supporting sustainable seafood, but there are willing to pay premiums (Ponte
is clearly a concern for other ethical issues 2016): our article explores if this can be
like social justice and ecological health. leveraged for sustainable seafood as well.
Among consumers purchasing from the Our insights suggest that this might be the
Shop, there is a substantial amount of case in Thailand, although time will tell.
support for such a sustainable seafood Questions to consider include assessing
initiative. whether consumer purchasing behavior
What an analysis of Year 1 of in the general public would reproduce
the Shops operations suggests is that a merging of social and environmental
there is an urban market for seafood concerns, and whether the general Thai
caught by small-scale fishers in Prachuap public is even thinking about sustainable,
Khiri Khan province. Top Shop revenue local seafood. Certainly the Shop offers a
generators include mackerel (Indo- seafood product that is in stark contrast to
Pacific king mackerel and short-bodied the labor abuse and ecological challenges
mackerel), blue swimming crab, and facing the off-shore sector (Marschke and
banana shrimpall local species. From Vandergeest 2016). The Shop initiative,
a revenue generating and labor-savings although unintended, is quite timely
perspective, the Shop could benefit in this sense. As such, there are many
greatly from concentrating its efforts reasons to be cautiously optimistic about
on processing and marketing these local this approach to creating an alternative
species rather than purchasing small market for seafood caught by small-scale
amounts of seafood from southern fishers that supports local sustainability.

47
Developing Local Sustainable Seafood Markets: A Thai Example

Acknowledgments Blackmore, Emma, and Hannah Norbury.


2015. Whats the Catch? Lessons from and
This article has been written as part of Prospects for the Marine Stewardship
the research program: New Directions Council Certification in Developing
in Environmental Governance Countries. London: International Institute
(NDEG). The authors thank fishers, for Environment and Development.
shop employees, and consumers who
generously took their time to participate Boltanski, Luc, and Thvenot, Laurent.
in this research. Thanks to Iftekharul 1991. De la Justification: Les conomies
Haque and Dr. Gordon Betcherman for de la Grandeur. Paris: Gallimard (NRF
their support in analyzing buying and Essais).
selling data. They also thank participants
at CCSEAS 2015 in Ottawa, Canada Bush, Simon R., et al. 2013. Certify
and at the WFP conference in Bangkok, Sustainable Aquaculture. Science 341
Thailand for their feedback, along with (6150): 10671068.
anonymous reviewers. The authors
gratefully acknowledge the financial Campbell, Alissa M, and Rod MacRae.
support provided by the Social Sciences 2013. Local Food Plus: The Connective
and Humanities Research Council Tissue in Local/sustainable Supply Chain
(SSHRC). Development. Local Environment 18 (5):
557566. doi:10.1080/13549839.2013.78
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World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Whats Old Is New Again: Innovative Policies to Support


Thai Fresh Markets Within a Healthy Food System
Cathy BanwellA, Jane DixonA, Matthew KellyB, Sam-ang SeubsmanC,
Wimalin RimpeekoolA & Adrian SleighB

Traditionally, Thais have bought their food from fresh markets. However,
recently multi-national supermarket chains have expanded rapidly so that
currently, Thais procure food from both modern and traditional retail formats.
If Thailand were to follow the Western pattern, supermarkets will become the
dominant food retail format.

We present a synthesis of 10 years of multidisciplinary research, examining


the contribution of food retail to the Thai nutrition and health transition, to
demonstrate that fresh markets provide access to fresh, affordable, nutritious
foods. Fresh market shoppers have healthier diets and lower chronic disease
risks than other groups.

In the South East Asia context, the protection of fresh markets constitutes a
novel intervention to protect and promote nutrition-sensitive retail. This could
be achieved through policy action nationally, with monitoring of national
and multi-national supermarket chain growth, regionally, with planning to
safeguard fresh markets urban locations, and locally, with the development of
food hubs.

Keywords: food system, nutrition-sensitive agriculture, food retail, nutrition


transition, Thailand

A
National Centre for Epidemiology & Population Health, The Research School of Population Health,
ANU College of Medicine, Biology and Environment, The Australian National University.
B
Department of Global Health, The Research School of Population Health, ANU College of Medicine,
Biology and Environment, The Australian National University.
C
School of Human Ecology, Sukhothai Thammathirat Open University.
doi: 10.18278/wfp.2.2.3.1.4

51
Whats Old Is New Again

Background being characterized by a disconnection


between producers, suppliers, and

T
hree major and interrelated shifts consumers; the dis-embedding of
in theorizing food systems have food from its place of production, and
been underway over the last two related values and identities; and the
decades. They are as follows: recognition dis-entwining of food-related spheres
that food security requires the provision of economy and life such as food, care,
of healthy as well as plentiful food; education, and leisure (Wiskerke 2009).
evidence of a nutrition transition linking The food system itself consists of
over rather than under-nutrition to multiple elements including production,
some of the top ten health burdens in processing, transport, consumption, and
much of the world (Popkin, Horton, waste management at which interventions
and Kim 2001; WHO 2014); and recent can modify or improve the amount and
acknowledgement that more attention type of food that reaches consumers. As
should be paid to the connection Ingram (2011; 2013) and others have
between agriculture and nutritional food, noted, the food system underpins food
otherwise known as nutrition-sensitive security with the latter predicated upon
agriculture (Jaenicke and Virchow 2013). the proposition that individuals and
These shifts have occurred in the context households have access to food, either
of rapid urbanization in economically through their own production or, as
transitioning regions and countries. in the case of most urban consumers,
As urbanization has increased because adequate nutrition for healthy
rapidly across the economically development and growth is accessible,
developing world a burgeoning need affordable, and acceptable through the
has arisen to recognize the vital role of market place.
food systems in supplying the appetites A conceptual gap exists between
of urban populations. Increasingly, it theories about the transition from under-
is understood that urban settings are to over-nutrition and the concept of food
intricate and not only require, but also security which was developed mainly by
encourage the development of complex those concerned with under-nutrition
food systems to provide food and (Popkin 2014). A broader concept of
nutrition security. Cities are drivers of food and nutrition security is now
the global food system because they required to address a problem developing
are where most of the population lives in even the poorest parts of the world,
and the needs of urban populations namely that of over-nutrition. While
promote demand at a sufficient scale obesity is commonly seen as a disease
and for novel products. However, urban of affluence related to overconsumption,
agglomerations have become mainly sites it is increasingly recognized that poorer
of consumption with food production populations within wealthy societies are
and other functions of the food system increasingly likely to be overweight and
remaining invisible to most consumers obese. In poorer countries, the rural and
(Dansero, Pettenati, and Toldo 2015). urban poor can be obese and remain
Indeed, the modern food system has malnourished because their diets consist

52
World Food Policy

of inexpensive foods lacking essential nutrition-sensitive requires nutrition-


micro-nutrients. A contributing factor sensitive retail formats.
is the penetration of industrial food As food systems have become
systems and their retailing arms that globalized, fresh and processed foods
have increased the affordability and from around the world are made available
availability of ultra-processed foods. and affordable in an increasing number
Rather than populations eating whole of transitioning countries. This nutrition
foods, increasing volumes of grains, outcome, a positive development in some
meats, dairy, fruit, and vegetables are countries and not in others, has been
being transformed into processed foods made possible largely due to the logistics
requiring the addition of salts, fat, and capabilities of modern retailers. Retailers
sugars to make them palatable. For do not work in isolation but amplify the
some staple foodsbreads and grains changes in what is being produced and
nutrients are being removed during processed. They do this by playing a
processing (Winson 2013). major role in product formulation and
Recognition of this trend to specifications. This is particularly so in
more accessible processed food is terms of their home brand categories,
evident in the move to understand and which can make up between 30% and
develop nutrition-sensitive agriculture 60% of supermarket processed goods.
which aims to encourage increasing Retailer-led supply chains can foster the
consumption of fresh fruits and adoption of agricultural practices which
vegetables and decrease consumption reduce the diversity of food produced on
of unhealthy ultra-processed foods individual farms and in regions: a prime
(Hawkesworth et al. 2010). Agriculture example being their demand for sweet
is only one of the domains contributing pepper (Schipmann and Qaim 2010) as
to the food supply with food retail happened in Thailand some years back.
playing another important, but under- The consequences of contracts
researched, component. Modern to expand the supply of particular
retailerssupermarket chains, fast food foods for agricultural environments
chains, and food service conglomerates are of interest in terms of the food and
operate upstream through their supply nutrition security of future generations.
chain contracts purchasing foods Elsewhere, it has been argued that
containing required marketable qualities supermarkets are part of the general trend
and downstream through shaping in agro-business toward agricultural
the accessibility, affordability, and intensification, environmental pollution,
acceptability of food. In this domain, and a reduction of agro-biodiversity
they influence consumer demand by (Wiskerke 2009). The agro-business
shaping food preferences, as well as model involves the company in food
purchasing and preparation practices, production practices through particular
and they bear the major responsibility contract-based procurement systems. In
for distributing calories and nutrients direct procurement systems, suppliers
and hence consumer health outcomes. and retailers have a modest input into
In other words, a food system that is producer practices but can influence

53
Whats Old Is New Again

cultivation methods including the although the country has stood out in
amount of agrochemicals input (Endo South East Asian for its rapid transition
2014). Under contract farming, retailers to supermarkets (Mutebi 2007; Shannon
or large suppliers exert more control 2009). Supermarkets first appeared
over the entire cultivation process (Endo in Bangkok in the 1960s and rapidly
2014). spread to other cities and rural areas
Within any food supply, priority following a well-defined pattern (Kelly et
should be given to the availability of al. 2015). This spread was facilitated by
a variety of foods, because a varied partnerships between foreign owned and
diet optimizes health and reduces Thai firms. During the financial crisis of
morbidity (Walquist, Lo, and Myers 1997, these relationships were dissolved
1989; Ogle, Hung, and Tuyet 2001). and transnational food companies,
Maintenance of the variety of food is, in mainly European in origin, proceeded to
turn, dependent on the maintenance of massively expand their operations along
biodiversity (Walquist, Lo, and Myers with Thailands own Chaoren Pokphan,
2012). This principle requires policies the market leader in this category,
which support the sustainability of the and the Siam Makkro chain (Tokrisna
bio-regional characteristics of local food 2007; USDA 2000). The supermarket
systems. In summary, it is important to expansion was accompanied by an
understand the supermarket revolution annual loss of around 25,000 small
as it cut[s] across the entire economy retailers (Hawkes 2008). New legislation
and that understand[ing] the impact of in the 2000s slowed the growth of foreign
supermarkets presents serious analytical owned supermarkets somewhat, but
and policy challenges (Timmer 2009). they nevertheless continue to spread,
For many centuries, fresh along with convenience stores (Banwell
markets have played a key role in the et al. 2013; Endo 2013). As a result, the
bio-economies of rural Thailand and number of fresh markets has declined
they continue to play a role in providing nationally, falling from 160 to 50 in the
the population with fresh produce that past decade in Bangkok alone (Sriangura
is both diverse and has been sustainable and Sakseree 2009).
up till now. Protecting fresh markets This article reports on a synthesis
and their supply chains through policy of a number of studies conducted in
initiatives can provide a mechanism for Thailand by the research team over a 10
supporting a healthy food system so that year period starting in 2005. During this
Thais continue to easily access affordable,time, the team has addressed a number
healthy, culturally acceptable foods. of research questions including: how has
food retail changed in Thailand, how are
Thailands Retail Transition fresh markets responding to the growth
in supermarkets; who is using these

T
hailands recent history different food retail formats and why, and
exemplifies these major nutrition what effect is the food retail transition
and retail transitions. Food retail having on population diets and health
has traditionally been via fresh markets, risks? In this article, we synthesize

54
World Food Policy

findings from these studies to examine rate). Using these data, respondents
the contribution of food retail, as a were categorized into modern shoppers
central element of the food system, to the (supermarkets and convenience stores),
Thai nutrition and health transition. We mainly traditional (fresh markets), and
propose that the recognition of nutrition- mixed (equal use). An additional group
sensitive agriculture demands greater of questionnaire respondents from
support from nutrition planners for two regions were selected for face-to-
nutrition-sensitive retail (fresh markets) face, in-depth interviews to flesh out
because they distribute nutrition-sensitive the quantitative information gathered.
produce. A detailed description of the research
methods and findings is provided in Kelly
Methodology et al. (2014).

T
his article draws upon on a 10 year Findings
research program that includes
ethnographic case studies of three Fresh markets and supermarkets: products,
fresh markets in the central region around consumers, and locations

A
Bangkok, two markets in Chiang Mai in
the North, one in Khon Kaen (the North s their name suggests, fresh
East), and two in Nakhon Sri Thammarat markets sell mainly fresh produce:
in the southern region. All studies by a vegetables, fruit, raw meats, and
team of Australian and Thai researchers live animals, including insects and reptiles
included observations at markets, (Dixon et al. 2007). In addition, they
informal interviews with shoppers, focus sometimes offer sweets, bakery goods,
groups discussions with stallholders, and and staples such as bags of rice, fermented
a brief face-to-face survey. A detailed and preserved products, and cooked
description of methods is provided in foods, for the plastic bag housewife to
Banwell et al. (2013). take home for the family (Yasmeen 2000).
In addition, a large cohort study Many stall holders are women with stalls
conducted in Thailand (the Thai Cohort run as family businesses. Despite some
Study (TCS)) (Sleigh et al. 2007) provided basic similarities, fresh markets may vary
a population for a smaller survey in their size, location, their infrastructure,
conducted in 2012 on food purchasing and their range of products. They provide
and consumption. A post-code defined, locally grown as well as imported fruit and
sub-sample of members from the TCS vegetables, and products that are suitable
was drawn. They were urban residents for regional cuisines and attuned to local
from the four major regions of Thailand festivals and other cultural activities
where the food retail ethnographic (Banwell et al. 2013). In addition, they
case studies were conducted. Detailed are often conveniently located in urban
questionnaires collecting data on the food centers, easily accessible on foot or on
retail environment, shopping behavior, motorcycles, and they sell food affordably
and food consumption were returned by and in small quantities suitable for daily
1,516 cohort members (45% response shoppers to carry home. They are valued

55
Whats Old Is New Again

because they offer the opportunity to in the 2012 sub-study, and their diet and
develop personalized relationships health outcomes in 2013 recorded as part
between stall holders and consumers, so of the main Thai Cohort Study. Those
that shoppers can seek reduced prices and who shopped more at supermarkets
detailed information on the provenance had higher risk of having poor diets,
of produce. measured by fast food, soft drink, instant
Supermarkets and hypermarkets foods, and deep fried food consumption
until recently have been mainly located frequency. They were also more likely to
on the outskirts of towns, and therefore consume insufficient amounts of fruit and
accessible and convenient to those vegetables and to have been diagnosed
who own cars, which is an increasing as having hyperlipidemia and ischemic
segment of the Thai population. Results heart disease. Although not statistically
from the 2012 survey, described earlier, significant, the figures point to this group
have shown that over a 10 year period being more overweight or obese and more
the proportion of the sample who had likely to have gained weight in the 2 years
access to a supermarket increased from between surveys.
47% to 85% (Kelly et al. 2014). Urban
residents, those who owned a bicycle or Discussion
motorcycle and those who received lower

T
incomes were more likely than others to his mixed methods research,
purchase fresh produce mainly at fresh conducted over a number of
markets. Supermarkets sell fresh fruit and years, confirms the importance of
vegetables that are often better quality fresh markets to the supply of local, fresh
but more expensive than fresh markets foods, and foods from near-neighbor
(Schipmann and Qaim 2011). Mainly, countries, sold at prices affordable for
though, their sales consist of less healthy, poorer segments of the Thai population.
packaged, and highly processed goods. Our data show that those who shop at
them are less likely to purchase unhealthy,
Impacts of food retail on diets and health highly processed foods and more likely
to purchase local, as well as imported,
The 2012 Thai Cohort Sub-Study vegetables and fruit. This has implications
demonstrated that those who mainly for nutrition-sensitive agriculture as
used modern retail formats, such as local fresh foods can improve nutritional
supermarkets and convenience stores, status (Ogle et al. 2001) because they are
had a higher consumption of unhealthy bio-nutritionally diverse (Ruel 2003) and
foods such as soft drinks, snack foods, they are environmentally adapted to local
processed meats, western style bakery conditions. While supermarkets may
goods, instant foods, and deep fried increase diet diversity in some settings,
foods. Those who shopped mainly at such as disadvantaged neighborhoods in
fresh markets had a higher consumption urban USA (Reardon 2011), in Thailand,
of vegetables (Kelly et al. 2014). where fresh markets remain popular,
Table 1 reveals associations supermarkets do not usually provide an
between food shopping patterns measured equally broad range of local products.

56
World Food Policy

Supermarkets can contribute precautionary principle would support


to population weight gain through the the protection of alternative sources of
sale of sugar-sweetened beverages, and fresh food, rather than allowing food
other highly processed, inexpensive purchasing to become concentrated
foods that are major vectors of sugar, by a few conglomerates which offer
fat, and salt in transitioning Asian less healthy retail environments. It is
countries (Baker and Friel 2014). Major particularly relevant in this context
food processing companies have been because, although the diets of those
shown to increase their profits by purchasing at modern retail formats are
making and selling processed rather than likely to be less healthy than those of
unprocessed foods (Stuckler and Nestle traditional food markets shoppers, poor
2012). Internationally, supermarkets are health outcomes take time to appear.
implicated in over-nutrition and micro- International research indicates
nutrient deficiencies in lower middle that the dietary and health effects of
income countries (LMIC) (Gomez the transition to supermarkets depends
and Ricketts 2013). The evidence is greatly on the pre-existing food system
mixed however, with an association and on broader social, economic, and
between supermarket shopping and political conditions, such as urbanization,
unhealthy food consumption observed sedentary working conditions, car-
in Guatamala (Asfaw 2008) but not in reliance, and increasing female
Tunisia (Tessier et al. 2008). In Indonesia, employment among others. Nevertheless,
supermarket shopping is associated the food retail system is influential;
with overweight and obesity in children the Thai population has gained weight
living in high income households but (Aekplakorn 2011) as the number of
not in adults (Umberger et al. 2014). In modern food retail outlets, including
contrast in Kenya, supermarket shopping convenience stores, has risen (Kelly et al.
was associated with unhealthier weight 2010). Thai supermarkets reached annual
in adults but reduced underweight in compound growth rates of 16% between
children and may be related to consumers 2001 and 2009 (Reardon et al. 2012), and
initial nutritional status (Qaim et al. packaged foods from modern retail have
2014). increased in sales by 65% over 15 years
The precautionary principle is (Ng and Dunford 2013).
used to invoke the prevention of harms In modern western countries
to health even when the evidence of risks supermarket growth has been linked to
is inconclusive and it has been advocated a decline in small farms, and the growth
in response to the influence of multi- of agri-business which has come to
national food companies (Stuckler and dominate food retail (Wiskerke 2009).
Nestle 2012). It can also be applied to the Thailands major supermarket chains
effects of large national and international are using many of the same strategies as
food businesses as they influence those adopted by Western supermarkets
food producer decisions and their to capture market power (Dixon and
cultivation practices. In the case of the Banwell 2015). Currently, supermarkets
food retail transition, application of the in Thailand procure fresh produce in

57
Whats Old Is New Again

two ways: from large-scale agricultural the urban centers. As noted already,
companies and from small farmers supermarkets can have a negative
(Endo 2014). However, supermarkets impact on the agricultural environment
prefer to source from larger farmers who (Wiskerke 2009) through their influence
have considerable existing assets, such as on cultivation methods and control over
education, and access to roads, water, and the cultivation process (Endo 2014).
electricity (Andersson et al. 2015) which In countries, such as China,
poses a challenge to asset-poor farmers and some South East Asian nations
(Reardon 2011). supermarkets have been viewed as tools
The welfare and health of of modernization (Reardon 2011)
small farmers in Thailand has rarely and in Vietnam as a vehicle to improve
been considered in the analysis of food safety standards (Wertheim-
the transition (Sriboonchitta and Heck, Vellema, and Spaargaren 2015).
Wiboonpoongse 2008). Some farmers However, given that fresh markets can
may be financially better off supplying play an important function in providing
under contract (Sriboonchitta and healthy, fresh, affordable, and potentially
Wiboonpoongse 2008) to large agri- more sustainable food within the food
business and supermarket chains while system, policies are required to support
others, particularly smaller, less asset- their continued existence in the face of
endowed farmers, can be economically considerable economic power residing
excluded from the economic benefits in large national and international food
associated with supermarket growth retailers. The precautionary principle
(Timmer 2009) and their financial and suggests that there is a role for policies to
food security threatened. For example, support and protect fresh markets for the
Kenyan farmers who supplied to modern benefits of consumers health and well-
food retail were better off financially than being at different levels.
those who did not, but many who entered
this channel were not able to maintain Thai national food policy toward nutrition-
the supply and dropped out after several sensitive retail
years (Andersson et al. 2015). In South
Africa, fresh markets are still the most Asian governments policy
important outlets for small farmers even responses to the supermarket revolution
though they have been largely replaced have been described in the following
by supermarket chains (McLachlan and terms: where there have been regulations
Landman 2013). Participation by small to slow growth (such as in Thailand,
farmers in supermarket supply chains Indonesia, and Malaysia) they have been
can also shift power from men to women vacillating, partially implemented, and
within households (Qaim et al. 2014). side-stepped by local interactions and
Overall, supplying to large supermarket co-opting of traditional retail, or format
chains can increase inequality among diversification, or both (Reardon et al.
farm producers leading small producers 2014). In other words, more could be
to relinquish their farms and join the done in these countries to control the
mass movement of rural poor into growth and spread of supermarkets.

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World Food Policy

Thailand has been cognizant of the success.


need for policies to encourage nutrition- A pressure on centrally located
sensitive agriculture (Tontisirin et al. 2013) fresh markets derives from population
particularly in light of the governments and transport systems growth. With
aim to reduce overweight, obesity, increasing affluence, Thai car ownership
and associated non-communicable and usage has become widespread
diseases (NCDs). Despite public health (Berecki-Gisoli et al. 2015). Fresh
campaigns, there has been little sign of markets, located in pedestrian accessible
success in preventing population weight locations, may be moved or removed
gain and growth of NCDs. Consequently, so that they do not obstruct the flow
in 2008, a National Food Committee of commuter traffic. As cities become
was established to strengthen food more car orientated, consumers will
management, efficiency, and effectiveness choose to purchase larger quantities of
across agencies to create momentum food in supermarkets with car parks on
from agriculture to food, nutrition, and the outskirts of cities, leading people to
health (Tontisirin et al. 2013). However, higher exposure to unhealthy food in
government action plans to combat them. Furthermore, if fresh markets are
overweight, obesity, and NCDs do not to remain viable they need to be easily
explicitly recognize or address the role accessible to the farmers and suppliers
of food retail in the transition to over- who deliver produce in bulk. All these
nutrition. The Thai Strategic Framework factors demand that careful planning for
for Food Management connects the location of fresh markets is required
agricultural production to health through to protect them into the future.
food and nutrition (Tontisirin et al. 2013) The Thai government in the early
using a food chain approach but again to mid-2000s placed restrictions on the
food retail is not discussed. This points growth of foreign retailers often at the
to a need for the national food policy to behest of small to middle-sized retailers
recognize and address food retail as a site and has taken other steps more recently
for intervention to safeguard Thai diets but seems to have failed to curb their
and maintain a diverse diet. spread. Government restrictions, via site
plan regulations, have limited the size of
Regional and community level planning new stores, prompting large international
retailers like Tesco to open large numbers
There is a view that urban and of smaller stores leading to vocal
regional planning could do considerably opposition from local small retailers
more to build more sustainable urban (Endo 2013). The vigorous lobbying and
food environments (Wiskerke 2009; discussion about regulations concerning
Dixon and Ballantyne-Brodie 2015). Due issues such as store size, location, and
to their historical role as the major source trading hours are testament to the
of food for urban populations Thai fresh importance of these features for the
markets are often easily accessible for overall success of food retailing formats at
consumers throughout urban centers the community level and citizen disquiet
with their location key to their continuing suggests that Thai government should

59
Whats Old Is New Again

continue to monitor and to implement directly as possible (Blay-Palmer et al.


regulations. At present, it appears that 2013). In this manifestation, food hubs
the major policy consideration in these are part of alternative food networks
discussions is the economic survival of (AFN), a growing movement that aims
small to medium-sized retailers in the to by-pass the industrialized food
face of large transnational and national system. Like western AFNs, Thai fresh
companies. The potential health effects markets have short food supply chains
of a supermarket revolution do not seem in the main and provide opportunities
to have been considered. for the operation of regard and trust
between vendors and consumers in
Food hubs the retail relationships. However, Thai
fresh markets do not draw as heavily
Food hubs have been advocated as upon ecological characteristics such
a way of integrating small producers into as organic or non-genetically modified
the supply chains of large supermarkets produce in the same way that European
by bringing the market to the farmer AFNs do (Renting, Marsden, and Banks
(Reardon, Timmer, and Minten 2012, 2003), although there are limited moves
12336) and providing them with access in this direction. In contrast to the
to financial and other services as well as AFN movement in the west, Thai fresh
collection points for fresh food close to markets have not emerged as a radical
where it is produced. In countries like movement combating an established
India, they have mainly been used to help globalizing, industrialized food system
small farmers access supermarket supply (Goodwin 2003). Instead, they represent
chains (Reardon, Timmer, and Minten a traditional food supply network that is
2012). They are a growing feature of US attempting to survive in the face of an
and Australian food systems. These forms increasingly industrialized food system.
of assistance would be useful to small In the west, food hubs are being proposed
farmers producing for fresh markets. as a tool for scaling up from farmers
In the west, food hubs have been markets although they struggle to
proposed as an alternative channel for maintain economic viability (Cleveland
making fresh produce accessible to a et al. 2014). However, in Thailand, many
population that is seeking an alternative wholesale and fresh markets already
to globalized, mass-produced food. Such operate somewhat similarly to a food hub.
alternatives often have taken the form of What is required to operate fully as a food
direct transactions between producers hub is improved economic, physical, and
and consumers. In this context, food organization structures to enable small
hubs are understood as networks and producers to continue in production
intersections of grassroots, community- outside the major supermarket supply
based organizations and individuals chains. Having viable produce supplies
that work together to build increasingly means that fresh markets can continue
socially just, economically robust, and to compete with the new supermarket
ecologically sound food systems that supply chains.
connect farmers with consumers as

60
World Food Policy

Conclusion Acknowledgments

T
hailand is taking impressive This study was part of the Thai Health-Risk
action to monitor and respond Transition research program supported by
to increasing overweight and the International Collaborative Research
obesity through the work of the newly Grants Scheme with joint grants from
formed National Food Committee the Wellcome Trust UK (GR071587MA)
(Chavasit, Kasemsup, and Tontisirin and the Australian NHMRC (268055).
2013). However, relatively little is known We thank the Thai Cohort Study team
still about the nutrition and health effects for their support without which this work
of evolving food retail environments in would not be possible.
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Tokrisna, R. 2007. Thailand's Changing Modernization Policies. Food Policy 54:


Retail Food Sector: Consequences for 95106. doi: http://dx.doi.org/10.1016/j.
Consumers, Producers, and Trade. In foodpol.2015.05.002.
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M. Ditmetharoj, J. Photi, P. Intaraluk, fs310/en/.
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Wiskerke, J. 2009. On Places Lost
Umberger, W., Xiaobo He, Nicolas Minot, and Places Regained: Reflections on
and Hery Toiba. 2014. Examining the Alternative Food Geography and
the Relationship Between the Use of Sustainable Regional Development.
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341352.
Walquist, Mark, Che Sam Lo, and Kenneth
Myers. 1989. Food Variety is Associated
with Less Macrovascular Disease in Those
with Type II Diabetes and Their Healthy
Controls. Journal of the American College
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Walquist, Mark, John McKay, Ya-


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Wertheim-Heck, Sigrid, Sietze Vellema,


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Whats Old Is New Again

Table 1: Associations of food shopping patterns with health and diet outcomes
among 1349 Thai Cohort Study sub-sample

Shopping pattern*
Fresh Mixed Supermarket
market shoppers shoppers
shoppers (N=255) (N=373)
(N=720) proportion proportion
proportion
Consumption at least weekly:
Fast foods 6.5 9.1 12.8
Soft drinks 25 32 30
Instant foods 19 19.3 24.2
Deep fried foods 73.4 74.1 75.6
Overweight or obese 48.6 49.5 49.7
High cholesterol 38.7 40.5 47.8
Ischemic heart disease 1.9 1.7 4.3
Sufficient fruit consumption** 73.8 70 66.7
Sufficient vegetable consumption** 74.9 73.3 69.4
Combined fruit and vegetable 57.6 52.1 48.1
consumption sufficient**
Mean change (kg)
Mean weight change 20122013 0.28 0.44 0.5

Figures in bold indicate that column proportions were significantly different with p<0.05, that is, there
were significant differences between shopping pattern groups for that indicator.

* Shopping pattern of individuals in 2012 was based on reported frequency of shopping at various
food retail formats. Those who shopped more at traditional fresh markets were placed in the first
category, more regular supermarket shoppers in the supermarket category, and those who shopped
equally in each format were categorized as mixed shoppers.
** Using Thai Recommended Daily servings of three serves of vegetables and two serves of fruit per
day.

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World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Toward a Restricted Tolerance of Street Vending of Food


in Hanoi Districts: The Role of Stakeholder Dialogue
Nguyen Thi Tan LocA & Paule MoustierB

In Vietnam, fruit and vegetable marketing is characterized by a diversity of


distribution chains, including formal markets, street vendors, shops, and
supermarkets. The government is promoting the expansion of supermarket
distribution and plans to eliminate all informal trade on the grounds of
modernization. The article investigates how the activities of street vendors can
be successfully integrated in the city, using a stakeholder dialogue approach.
Researchers appraised the role of street vendors in food distribution and
employment and documented a successful street vending model. Stakeholder
meetings were held to discuss the integration of street vending in Dong Da District.
A key result is the demonstration and recognition by city and district officials of
the dominant role of street vending in food distribution and employment of the
poor. Workshops helped the Hanoi city and district authorities agree to tolerate
street vendors in selected areas, with the setting of jointly developed commitments.

Keywords: Street vendors, Vietnam, food distribution, stakeholder dialogue,


informal markets

Introduction 25% in 2002. Economic and demographic


changes have caused an increase in the

D
uring the past 20 years, the food demand for more diverse and better
sector in Vietnam has undergone quality produce, especially in urban areas.
major changes. The reforms The food distribution sector has adapted
implemented in the framework of the to these changes and has now taken on
doi moi, or renovation policy, have a diversity of forms. In Hanoi, a person
been reflected in spectacular economic can purchase foodstuffs from a variety
growth, particularly in cities. In 2013, of sources ranging from street vendors
the growth rate of the economy was 5%, to air-conditioned hypermarkets, with
the urbanization growth rate 3%, and the shops and fixed market stalls in between
urbanization rate 33%, contrasting with (Figui and Moustier 2009; Mergenthaler,

A
Fruit and Vegetable Research Institute, Trau Quy, Hanoi, Vietnam.
B
Centre de Coopration Internationale en Recherche Agronomique pour le Dveloppement (CI-
RAD), UMR MOISA, France.

doi: 10.18278/wfp.2.2.3.1.5

67
Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts

Weinberger, and Qaim 2009). Yet, this suffer from non-monetary deprivations
diversity is currently threatened by is much higher than the poverty rate
the governments clear promotion of (World Bank 2012; Thanh, Anh, and
modern high-volume distribution and Phuong 2013).
the planned eradication of informal trade Food distribution by itinerant
activities, including that of street vendors. vendors is well known to be a key factor
In the Vietnam context, we define street in the social inclusion of the poor, as it
vendors as persons selling from baskets, creates small-scale business activities
motorbikes, or bicycles, usually moving and has a positive impact in giving the
from one place to the other, sometimes poor access to food commodities. In
forming groups to sell on stretches of Asia, their numbers have kept increasing
pavement or in other vacant spaces. This in the last 10 years because of growing
is in line with the definition given by unemployment problems in cities, where
Bhowmik (2005). The planned fast-track in most of them it is estimated that
increase of supermarkets and elimination informal jobs outnumber formal jobs
of temporary markets and street vendors (Bhowmik, op. cit.).
is indicated in the strategy put forward by Making street vending an illegal
the Domestic Trade Department of the activity and therefore making those who
Ministry of Trade from the present until are engaged in it subject to a number
2020, on the grounds of modernizing of threats is not specific to Vietnam,
and civilizing commerce (Vietnam as many countries in Asia and Africa
Ministry of Trade 2006). Regulation 36CP have declared street vending illegal. The
on traffic order and safety (dated February banning of street vending usually results
2003) made street vending illegal, mostly from alleged traffic or health issues,
because of traffic issues. However, in often linked to modernization projects
January 2009, street vending was actually that favor large-scale and capital-
recognized by Decision 46/2009 of the intensive investments (Cross 2000).
Hanoi People Committee, but prohibited Asian governments typically have a
on 63 major streets and some 48 public policy of increasing formal employment
spaces including hospitals, squares, and and eliminating informal employment.
bus stations. A more pragmatic approach is to allow
At the same time, although semi-formality, in other words promote
Vietnam is praised for its success a self-regulating system with regulatory
in poverty alleviation, poverty and enforcement reduced to a minimum,
unemployment are still major concerns thus protecting the flexibility of street
for the government and donors. Poverty vending which is uniquely adapted to the
in Vietnam is mostly rural. In 2010, the conditions of the urban poor (Cross, op.
average poverty rate was 20%, while the cit.).
urban poverty rate was between 6% and The experience of other countries
7%. Yet, urban poverty is underestimated shows cases of successful integration
as most migrants are not registered and of street vending in urban planning
do not benefit from social services. And when street vendors are organized and
the percentage of urban residents who dialogue is maintained with authorities.

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The organization of street vendors into stakeholders are particularly influential


advocacy groups is documented as the on street vendors activities: their
first step toward legalization, albeit customers, police agents, as well as district
partial. and city officials from the department of
Success stories of integration of trade. We assumed that their perception
street vendors in Kenya (Mitullah 2003) of street vendors may be influenced:
or India (Mahadevia et al. 2013) are in (i) by the scientific knowledge that we
line with a stakeholder approach, which could provide as international and local
puts the economic agents who are affected researchers on their social and economic
by the policy decisions and actions of role; (ii) by the way the street vendors
the system at the core of the decision express their objectives and constraints;
processes (Grimble et al. 1995). The first (iii) and by the dialogue fostered among
objective of the article is to highlight the street vendors, police agents, district, and
economic and social importance of fruit city officials, as well as local customers,
and vegetable street vending in Hanoi. on ways to reconcile diverging objectives.
The second objective is to show how This perception influences their attitudes
stakeholder dialogue, based on such an and actions toward street vending (see
evaluation and organized interactions Figure 1). Hence, in this research, the
between street vendors, urban authorities, article authors (termed as we) acted
consumers, and researchers, enables a at the same time as researchers and
more harmonious integration of food facilitators.
vending in the urban frame. We made various studies of
the street vendor activity in Hanoi to
Method appraise their social and economic role.
The first one was done in 2004 and

T
he method is based on the updated in 2009 and 2013. We estimated
stakeholder approach in which the number of vegetable and fruit street
we consider street vendors as vendors in Hanoi and the volume of
entrepreneurs with objectives and goods sold by them. In 2009 and 2014, we
constraints that are influenced by also estimated the number and volumes
other stakeholders with whom they traded by other points of sale to estimate
interact. It is noteworthy that while the contribution of street vending to
stakeholder dialogue based on scientific total food distribution. We interviewed a
knowledge has been widely used in the sample of street vendors to appraise the
field of natural resource management role of street vending in their livelihood
(Reed, 2008, Grimble et al. 1995), its and the impact of the legislation on their
application to food marketing issues activities. This involved 60 street vendors
is not frequent, which highlights the in 2004 and 160 in 2013. A discussion
originality of the research paper. We paper was prepared based on the
consider it to be particularly relevant in a information generated, which provided
context of diverging interests and diverse the basis for a stakeholder workshop held
perceptions that characterize the food in 2006, chaired by the Hanoi Department
street vending sector in Vietnam. Some and Trade with the participation of a

69
Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts

Communication of Stakeholder dialogue


scientific knowledge

Knowledge of economic and social contribution; and of


objectives and constraints of each actor

Perceptions of street vending (SV)

Attitudes toward SV

Actions toward SV

Figure 1: Conceptual frame

panel of street vendors, consumers, the the competent authorities, including the
heads of departments, and technical Hanoi Department of Industry and Trade,
divisions dealing with agriculture and district and ward officials, residential
trade and included persons from market group representatives, and consumers in
management boards, public security, three wards of Dong Da District (Phuong
the Department of Health, the Womens Mai, Trung Tu, and Lang Ha). The
Union, the Peoples Committee of six meetings took place on March 8, March
different districts, as well as a panel of 14, and March 19, respectively. The
street vendors, along with the researchers objective was to discuss the results and to
involved in the study. In addition, in replicate the support from the authorities
2013, we documented one successful who helped unofficial sellers by giving
street vending model, in Kim Lien Ward them the permission to sell produce on
in Dong Da District, by interviewing 16 vacant pieces of land and along dead-
consumers and 14 street vendors at this end streets. We found the street vendors
market. themselves require support in the form of
On the basis of the gathered raising their awareness of environmental
information, we organized a stakeholder sanitation, traffic safety, food hygiene,
dialogue process at the district level. and food safety. We held three training
In 2013, after interchange with the courses for street vendors in these wards,
Hanoi Department of Industry and with the participation of local officials.
Trade, we organized three meetings The changes in street vendors behavior
bringing together street vendors and were assessed in these wards, which

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helped the local authorities see that they to consumers, compared to 58% for
had grounds to continue their support retail markets, 9% for shops, and 1% for
for street vending activities. supermarkets. Until 2009, the number
In this article, we highlight of vegetable street vendors increased
the updated data on the economic at a higher rate than that of the citys
contribution made by street vendors. population.
We also present the results achieved In 2014, we estimated that ~45%
by the stakeholder dialogue in Dong of vegetables were sold by street vendors,
Da District and discuss the benefits of 49% at retail markets, with a limited
applying a stakeholder approach to the volume being sold at stores (3%) and
issue of street vending in Hanoi. This supermarkets (3%). This suggests an
makes the article complementary to increase in the number of vendors and
our previously published work on street the volume they sell. We explain it by
vending in Hanoi (Moustier et al. 2007; the movement of vendors from official
2009; Nguyen Thi Tan Loc et al. 2013). markets to unofficial markets, especially
along the road sides near factories,
Selected results schools, or in front of someones house or
a store to avoid having to pay increasingly

W
e first present the results high fees in renovated official markets.
of our studies aimed at
quantifying the economic and The importance of street vending for the
social role of fruit and vegetables street livelihoods of the poor
vending in Hanoi. Then we describe
the successful experience in Kim Lien The importance of street
involving a street vendors temporary vendors in terms of poverty alleviation
market. This evidence served as the basis is both to the ones they serve and to
for stakeholder dialogue in Dong Da the vendors themselves. Street vending
District, which will be presented at the not only contributes to delivering fruits
end of this section. and vegetables to low- and medium-
income consumers, but also improves
The importance of street vending in urban the livelihood of urban and peri-
food distribution urban residents with limited income
opportunities. Street vendors are
Consumers surveys have shown mostly female residents of Hanoi or
that poor residents of Hanoi purchase neighboring provinces. They may once
produce mainly from street vendors due have been involved in agriculture, but
to its low price, freshness, and proximity to their fields have been reduced in size
their homes (Figui and Moustier 2009). due to urban development. They may
Street vendors source vegetables mostly still be able to grow some vegetables or
from wholesale markets (in urban areas) buy vegetables from neighbors to sell in
and partly from their own production. In order to supplement their family income.
2009, vegetable street vendors supplied With low qualifications, street vendors
32% of the total vegetable volume sold have limited options for employment

71
Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts

although they are the main income- their daily profit. Yet, street vendors,
generating workers of their family. These especially the older ones, develop a range
street vendors consider street vending of strategies to avoid paying the fines,
as a family profession. As a result, even including playing on the emotional
though street vendors face daily risks and guilt of police officers and finding the
must work hard, they have to continue weak spots in police surveillance (Turner
their street vending activity because they and Schoenberger 2011).
need the income it brings. However,
street vending is not a stable occupation: An example of successful integration of
it depends on external factors which street vending in the city
cause many difficulties for the vendors.
Recently, the authorities in some
Threats to the business of street vendors wards made efforts to help unofficial
sellers to set up temporarily on vacant
Overall, two thirds of the street land or along low-traffic dead-end
vendors interviewed had been arrested streets. The sellers manage such places
and fined at least once a month. This by themselves and do not have to pay
can happen on any street, whether street any fees. After each morning session of
vending is prohibited on it or not. When market selling, the vendors clean up the
street vending is not prohibited, they may entire market space, which is then used
be arrested for allegedly hindering traffic. as a playground in the afternoon (see Box
The amount of the fine is about twice 1).

Box 1. The example of Kim Lien market

The Kim Lien market is a model of successfully integrating street vending in


the city. It sprung from the initiative of local residents, street vendors, and ward
authorities in 2004 after a number of street vendors had been expelled from a
street slated for widening. Initially, 20 street vendors began selling produce in
this market, but the number has increased to the 70 currently. Street vendors are
aware that the local leaders have made it possible for them to sell at the market. In
acknowledgement, they feel responsible for keeping the area very clean.

The customers are mainly residents of Kim Lien ward, while a few come from
elsewhere. The proportion of elderly or retired people in this ward is quite high
and they choose to buy products in this temporary market because they do not
have to travel far. Hence, they are supportive of the street vendors.

Phuong Mai ward has a street where informal marketing takes place along the
lines of the Kim Lien market, thanks to the involvement of the head of a residential
group.

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The results of stakeholder dialogue were provided to supermarket investors


in terms of access to land, and building
We first present the rationale four modern retail markets on sites
of stakeholder dialogue in Hanoi to where the older markets previously stood
contribute solving the problems related (Geertman 2011; Hanoi Department
to street vendors. As explained in the of Trade 2010). It also resulted into the
introduction, the perceptions and continuous harassment of street vendors
attitudes of the district and city officials by the police. But this top-down approach
relative to informal food trade were has many limitations. The fees to get
initially negative and interventions access to market stalls are so prohibitively
were top-down. Our conversations high that the number of street vendors
with the officials and analysis of official decreased somewhat between 2009 and
documents (Hanoi Department of Trade 2013 and has actually increased since
2010; Vietnam Ministry of Trade 2006) (Nguyen Thi Tan Loc et al., 2013). At the
show that the informal food trade was same time, many consumers, especially
considered as a leftover of backward the less well-to-do, prefer to get their
activities, with a negative impact on supplies from vendors close to them,
traffic and food safety, and which should at low prices, rather than from distant
be made to disappear quickly and be supermarkets and markets which require
replaced by supermarkets and markets fees for parking and where food is usually
equipped with cold storage and concrete more expensive than that sold by street
buildings. The result was that facilities vendors.

Box 2. Some quotes by residents and street vendors

Mrs N.T.T., a resident of Phuong Mai ward stated: Areas where street vendors
commonly sell products are in essence small markets. They are a feature wherever
low-income consumers live. Street vendors sell produce at price levels that suit
them. However, we are concerned about the quality of vegetables sold. Therefore,
we hope that the ward authority will arrange frequent spot checks on the quality
of vegetables.

I have been retired since 1986. To ensure my familys daily subsistence, the only
income-generating activity I can do is vegetables street vending, said Mrs NTD in
Quang Trung Ward. She adds: I often purchase vegetables at the Phung Khoang
wholesale market because they are mainly from safe vegetable growing areas in
Dong Anh District. She concludes by expressing the wish that the ward will
arrange a stable area for street vendors.

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Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts

Consumers found it important purchases of vegetables based on their


to have makeshift selling points to origin (see Box 2).
meet the demand of the local residents, As for the difficulties faced by
especially elderly persons who have street vendors from the police, the
restricted mobility and financial capacity. police representatives replied that street
Consumers highlighted the advantages vendors frequently disrupt traffic by
of these points: low prices, freshness, and crossing streets just anywhere or setting
friendly relationships between sellers and up on places that obstruct traffic.
consumers. However, they are concerned The main objectives and
about produce origin (in particular, constraints of stakeholders are
they prefer vegetables that originate summarized in Table 1.
from periurban areas where production Based on the experience in Kim
conditions have been certified as safe by Lien market and Phuong Mai Ward,
Hanoi authorities) and accurate weighing participants reached a consensus on
by street vendors. If these concerns were what makes a good street vending model.
addressed, street vending would be fully First, there must be a meeting of minds
supported by the residents (see Box 2). among the residential group leaders. A
The street vendors pointed out representative of the residential group
that their activity generated employment is needed who is willing to take some
and income for themselves and their risk and build a relationship with the
families. There is no other activity Communist Party secretaries of the
that they can engage in. Hence, street residential groups and local Womens
vending contributes to employment, Union. This ensures the support of the
family stability, and social security. ward leaders. Second, there must be
Street vendors, often farmers themselves, cooperation on the part of ward leaders
say that they pay attention to the way who understand the street vendors
the vegetables are produced and make need to earn a living. In all cases, there

Table 1. Main objectives and constraints of stakeholders

Street vendors Residents Policemen

Objectives Livelihoods Cheap access to Fluid traffic


food
Trust in food
safety
Constraints High fines Little knowledge Torn between
on origin of food compassion and
duty

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World Food Policy

must also be good cooperation with the vendors participating to workshops said
residential groups where street vendors that they would like to raise awareness
operate. Crucially, in order to maintain among other street vendors about the
this model in the long term, a consensus need to comply with street vending
among the ward, district, and city leaders regulations. They also specifically asked
is needed. This is only possible when street for support to overcome problems with
vending is allowed in specific areas, such food safety. They want other vendors to
as on plots of vacant land, unoccupied be well-informed in order to reduce risks,
yards, stretches of pavement, or the like, deal with hygiene issues, identify unsafe
and is under good management, keeping vegetable and fruit produce, as well as
its impact on traffic, the environment, risks in the process of produce selection
and urban landscape to a strict minimum. and sales. There was a consensus on the
The cooperation, involvement, and necessity to sustain the successful cases of
support of the city, district, and ward integration of street vending in the wards,
leaders is crucial in order to set up local e.g., Kim Liem market, and to replicate
marketplaces for street vendors. this experience in other areas.
A valuable point noted by the
research team is that the stakeholders Conclusions
across the board must share in the effort.

T
he research we presented
People living around the demonstrates how a stakeholder
marketplace need to accept a bit of approach can help to overcome the
noise and loss of space where street hostility that authorities and consumers
vendors set up on both sides of the may feel toward street vendors. This
street. means providing a better understanding
Street vendors must maintain order, of the objectives and constraints on both
discipline, tidiness, and cleanliness.sides. The literature review shows that
Garbage collection workers should rather than trying to convert informal
cooperate to help clear up waste activities into formal activities, a more
after each market session, sharing pragmatic approach is to upgrade them
the work with the street vendors. in the context of developing economies
(Bhowmik, op. cit.).
The leaders of residential groups The research on fruit and
must be responsible for seeing that street vegetable street vending enabled the
vendors sit at their designated places and research team to demonstrate the
that cleanup is done after the market significant contribution of this activity
session. They must also look into the to the livelihoods of the poor and to food
quality of the produce sold and remind distribution. From the standpoint of the
street vendors of their obligations as authorities and consumers, street vending
needed. activities bring advantages but admittedly
Ward, district, and city leaders may be a cause of traffic obstruction and
expressed their interest in working give rise to consumer concerns over food
toward this model. Moreover, the street safety.

75
Toward a Restricted Tolerance of Street Vending of Food in Hanoi Districts

The main outcomes of the acquaintances rather than acting as actual


research and consultation are that representatives of the vendors. Further,
management staff at the ward and district support was sought from the Womens
levels as well as within the Department Union at the city and local levels, given
of Industry and Trade now have a fuller its rather direct interest in this issue. The
understanding of street vending and see general lessons can be summarized as
the importance for leaders to facilitate follows: first, this action-research shows
things to allow street vendors to operate the importance of gathering rigorous
in residential areas. This approach was qualitative and quantitative data on the
original in that local residentsthe benefits and drawbacks of the informal
customers of the street vendorswere activity under focus. Researchers are
involved in the consultation. The example also particularly helpful in documenting
of the Kim Lien market and street success stories of the inclusion of informal
vending in Phuong Mai Ward shows that activities in the city, internationally, and
groups of customers can take a sustained locally. Second, it suggests that confining
interest in promoting the activities of the scale to the ward or district may
street vendors, in tandem with the local make it easier to implement fruitful
authorities who give permission for stakeholder dialogue than taking on
vacant land to be used. Street vendors the scale of the city. This more localized
themselves commit to following traffic scale is also relevant to identify and
and food safety regulations. In this document innovative solutions to the
way, the street vending becomes semi- problems posed by street vending. Third,
formal, so to speak, which means that the having informal traders, consumers,
system of stakeholders is self-regulating. district and ward officers as well as
Regulations are enforced while flexibly researchers involved in the dialogue
and entry barriers to trading activities process led by skilled facilitators, getting
can be kept low for the benefit of less all to express their views on the issue at
affluent urban residents (Cross op. cit.). stake, reaching a measure of consensus
Some elements in our work on promoting and making commitments on solutions
stakeholder recognition and dialogue to the problems raised, are important
for a better integration of informal ingredients for success. As a follow-up, it
activities in a city can be replicated, would be necessary to regularly monitor
even though the political context is the process put in place and facilitate
quite specific. In Hanoi, it is particularly further stakeholder dialogue. From
difficult to foster collective action by a research perspective, investigating
street vendors because of the attitude of recent insights from policy and planning
local authorities who consider that any sciences, including Public Participation,
form of organization should come from would also be very valuable (Innes and
their initiative and operate under their Booher 2004; Walker, McQuarrie, and
control. So we had to invite a panel of Lee 2015).
street vendors representing a diversity of
socio-economic profiles and have them
agree to disseminate information to their

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World Food Policy

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Moustier, P., Nguyen Thi Tan Loc, Ho Challenges. Report. Hanoi: World Bank.
Thanh Son, and Hoang Bang An. 2007.
Promotion of Public-Private Dialogue
to Maintain Poor-friendly Fruit and
Vegetable Street Vending in Hanoi. Acta
Horticulturae 794: 239-247.

Nguyen, Thi Tan Loc, Paule Moustier,


Le Nhu Thinh, and Le Thi Ha. 2013.
Inclusive Urban Development? Making
Space for Street Vending in Hanoi,
Vietnam. London: IIED.

Reed, M.S. 2008. Stakeholder


Participation for Environmental
Management: A Literature Review.
Biological conservation 141 (10): 2417-
2431.

Vietnam Ministry of Trade, Department


of Domestic Market Policies. 2006.
The Strategy for Domestic Trade
Development for the Period 20102015
and Development Orientation to 2020.
Hanoi: Ministry of Trade, 30.

Turner, S., and L. Schoenberger. 2011.


Street Vendor Livelihoods and Everyday
Politics in Hanoi, Vietnam: The Seeds of
a Diverse Economy? Urban Studies, 49
(5), 1027-1044.

Walker, E.T., M. McQuarrie, and C.W.


Lee. 2015. Rising Participation and
Declining Democracy. In Democratizing

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World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Constructing a Database for Food Security Assessments


in Southeast Asia
Ulrike GroteA & Hermann WaibelA

In many Southeast Asian countries, food insecurity remains an important


problem. However, the assessment of food security is often difficult due to the
lack of adequate data. Studies undertaken by international organizations
are mostly rapid appraisal type of analyses lacking scientific rigor and depth.
Against this background there is a need to establish sound databases, which
allow for more in-depth analyses. Although the collection of data in remote
rural areas of poor countries is challenging, data quality is crucial in order to
advance research on the economics of food security. Own case studies from
Southeast Asia highlight the need to account for multidimensional facets of
food security in data collection. They highlight the need to differentiate between
monetary and nonmonetary poverty aspects and to look into diverse livelihood
activities. They also stress the importance of the time dimension due to price
increases or many other shocks and coping strategies. We suggest incorporating
food security research into long-term panel data projects such as the long-term
panel data project for Thailand and Vietnam, which we believe is unique and
valuable also for food security assessments.

Keywords: food security, case studies, database, assessment, Southeast Asia

Introduction targets aim to stimulate further action


over the coming 15 years in areas of

I
n September 2015, the United Nations critical importance for the whole planet
(UN) decided to adopt the post-2015 (UN 2015). The second of the 17 SDGs is
development agenda. It consists directed toward achieving food security
of 17 Sustainable Development Goals and improved nutrition, among others.
(SDGs) as a follow-up to the Millennium Food security remains a prevailing
Development Goals which have been problem in many developing countries,
only partly reached. The new goals and including Southeast Asia. Assessing food
insecurity is often impaired by the lack

A
Leibniz University Hannover, Germany

doi: 10.18278/wfp.2.2.3.1.6

79
Constructing a Database for Food Security Assessments in Southeast Asia

of adequate data. Studies undertaken selected Southeast Asian countries.


by international organizations with a Furthermore data requirements for food
mandate to solve the food insecurity security assessment are highlighted. The
problem are mostly rapid appraisal type last section summarizes and concludes.
of analyses which are not always in-depth
and scientifically rigorous. Because of Food Security Assessments: A
their aim to provide quick results, these Literature Review
assessment measures often focus on
availability and access to food, and give Defining food security
less emphasis on utilization of food and

T
long-term stability. Hence, there is a need he concept of food security
for research to better understand the includes manifold definitions
determinants and drivers of food security most of which are descriptive.
in order to contribute to a long-term Maxwell and Frankenberger (1992)
solution of the problem. have identified >30 definitions for food
Against this background, this security and Hoddinott (1999) claims
article promotes the notion of establishing that there are ~200 definitions of food
panel databases that allow undertaking security which are used by different
in-depth and causal analyses in food organizations around the world. The
security. We map out some requirements perhaps most accepted and most widely
for databases that can serve such purposes. cited definition of food security has been
Next to sampling issues, the choice of phrased at the World Food Summit in
regions and the questionnaire design will 1996 as a situation when all people,
be discussed. Also, the use of focus group at all times, have physical, social, and
discussions has been useful in deriving economic access to sufficient, safe, and
some further qualitative insights into nutritious food to meet their dietary
food security. needs and food preferences for an active
This article displays the and healthy life (FAO 1996). Food
shortcomings on the use of food security security has been further specified to
concepts and measures on the one hand, involve four dimensions consisting of
and sheds some light on the determinants food availability, access, utilization, and
of food security of households on the the stability of these conditions (WFP
other hand. Case studies and examples 2009a).
from selected Southeast Asian countries Food availability refers to the
are provided. actual availability of food in physical terms.
The article is structured as follows: It can be either applied at the national
following the introduction, the literature level combining domestic production,
on the status of food security assessments food stocks as well as food imports and
is reviewed. The dimensions of the food food aid, or it is measured at the regional
security concept, its measurement, or local level (WFP 2009a; 2009b; FAO
and shortcomings as well as some of 2006). Access of a household to food
its determinants are introduced. The is the most critical dimension of food
next section provides case studies from security; accordingly, it is the dimension

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World Food Policy

being most often assessed by researchers outcome indicators following Maxwell


and international organizations and and Frankenberger (1992). Process
most often used to describe food secure indicators for food availability refer to
households (Maxwell, Vaitla, and Coates measures for agricultural production,
2014; Coates 2013; FAO 2011; Wiesmann access to natural resources, institutional
et al. 2009). Economic access reflects a development, or market infrastructure,
households ability to acquire food in while those for food access relate to the
sufficient quantity and quality and can means and strategies of households to
be realized based on own production, achieve food security, such as migration,
market purchases, remittances, or barter sale of assets, or collection of wild foods.
trade. Social access, however, might be Outcome indicators include
limited due to discrimination of gender the household calorie intake which is
or minorities (WFP 2009a; 2008b; FAO generally derived from consumption
2006). This means that even though recall surveys over a predetermined
enough food might be available, some period of time and measures the amount
households might not be able to access of energy consumed over a defined
it. The utilization of food refers to the reference period. i.e., a day or week
quality and safety of food or its nutrients
(Hoddinott 1999; Jones et al. 2013).
content. It includes behavioral, health, The food consumption score (FCS)
and hygiene aspects (Carletto, Zezza, relates to food access but it considers a
and Banerjee 2013; FAO 2006). Stability qualitative and a quantitative dimension.
covers dynamic aspects such as seasonal It is calculated based on how frequently
fluctuations, shocks, and long-term a household consumed different food
developments. In this regard a distinctiongroups during the last 7 days. It has
is made between chronic and transitory been developed based on the fact that
food insecurity (Devereux 2006; Maxwell it is difficult to collect very detailed
and Smith 1992). In consequence, the data on food or calorie intake. The FCS
stability dimension of food security is thus approximates food consumption
similar to the concept of vulnerability toconsidering the diversity of diets, the
poverty (Hart 2009); Devereux (2006) has frequency of food intake, and the relative
defined vulnerability to food insecurity as
nutritional importance of food groups
the exposure and sensitivity to livelihood
(WFP 2008a). The diversity of diets relates
shocks. to the number of food groups a household
has consumed during the week. Food
Existing concepts and measures of food frequency considers the number of days
security the household has consumed certain food
groups, and the nutritional importance
In the last 20 years, numerous depends on the nutrients in terms of
measures, especially for food access, calories, macro-, and micronutrients.
have been developed (Coates 2013). We The food groups cover (i) main staples,
summarize these concepts and their (ii) pulses, (iii) vegetables, (iv) fruits, (v)
related food security indicators in Table meat and fish, (vi) milk, (vii) sugar, and
1, categorizing them into process and (viii) oil, and they are weighted and then

81
Constructing a Database for Food Security Assessments in Southeast Asia

summed up into an aggregate score. The mal- or undernourishment (Jones et


food groups with high energy content, al. 2013). The most frequently used
good quality protein, and micronutrients measures are weight for age (WFA) and
receive the highest weight of 4, and sugar height for age (HFA), both referred to
and oil the lowest of 0.5. Households children with age <5 years. If the weight
with a FCS <35 are then classified as food of a child is too low for the height, the
insecure. A score of 21 was indicated to term wasting is used. Stunted children
be the minimum. are too short for their age, indicating mal-
The household diet diversity score and undernutrition (de Haen et al. 2011).
(HDDS) is also derived from consumption Child underweight combines the two
recall surveys, but preferably for a 24 hours indicators and is defined as a low weight
recall period (Hoddinott 1999; Jones et al. for age ratio.
2013; Jones, Shrinivas, and Bezner-Kerr To sum up, the choice of
2014). It is an indicator for dietary quality indicators for assessing the food security
and captures how many food items or status is crucial. Different indicators often
food groups a household has consumed. come to very different assessments for the
It distinguishes between 11 food groups same food security situation (de Haen et
and simply sums the number of different al. 2011). Development organizations
food groups. Accordingly, the HDDS such as FAO often suggest that food
ranges between 0 and 11 for households security assessments should include
with the most diverse diet. Thresholds several indicators in order to capture the
dividing households into high- or low- multidimensional facets of food security.
diversity groups are not provided. There is currently no consensus which
Finally, the household food indicators should be given priority to and
insecurity access scale (HFIAS) (Swindale to what extent they are complements or
and Bilinski 2006) is a survey-based- substitutes (see, e.g., Maxwell, Vaitla, and
outcome indicator where respondents Coates 2014; Headey and Ecker 2013;
answer a set of nine questions that give a Coates 2013; Jones et al. 2013; Carletto,
subjective measure of a households food Zezza, and Banerjee 2013).
insecurity status. These include domains Headey and Ecker (2013) stressed
like anxiety/uncertainty about food that the accurate measurement of food
access, quality of food, and quantity of security at micro or macro levels is of
food. The set of questions identified for vital importance as policymakers and
each domain represents the experience NGOs respond to it. Carletto, Zezza, and
of food insecurity (access) under that Banerjee (2013) noted that a consensus on
domain. The questions are meant to appropriate indicators would benefit the
be universally understandable and in measurement of global food security and
principle can be adapted to different the coordination between organizations.
cultural contexts provided consistency of Consequently, more research is needed.
the concept is maintained. Such research should not be limited to
Anthropometric measures just measuring the extent of the food
are usually applied as a proxy of food security problem but should focus on the
utilization and reflect chronic or acute causes of food insecurity.

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Table 1. Overview of food security concepts and related indicators

Concept Authors Indicator(s) Strength Weakness

Process indicators

Availability Maxwell and Agricultural output a) Readily available a) Weak correlation


Frankenberger with food security
Access to natural b) Secondary
(1992)
resources statistics b) One dimensional
Market infrastructure c) Imprecise

Access Maxwell and Migration a) Evidence on a) Primary surveys


Frankenberger links to food security needed
Sale of assets
(1992)
b) Measurable in b) One-dimensional
Collection of wild
surveys
foods

Outcome indicators

Jones et al.
Access Household calorie Household recall a) Only in
(2013) intake surveys quantitative terms

Access WFP (2008a) Food consumption a) Consumption a) Only yes-no


score (FCS) surveys information
b) Well accepted
Hoddinot (1999),
Access Household diet a) Can use a) 24 h recall
Hoddinott and diversity score consumption survey surveys time
Yohannes (2002) (HDDS) data consuming,
b) Correlate with b) No thresholds
measures of food like in FCS
consumption

Access Swindale and Household food Can easily be Questions may be


insecurity access incorporated in culturally sensitive
Bilinsky (2006) scale surveys

Access and WHO (1986), Weight for age Data easily collected a) Actual
utilization in livelihood surveys measurements are
Svedberg (2011) Height for age time consuming in
Weight for height surveys
b) Do not cover
nutrients which
might be deficient

Source: own presentation

83
Constructing a Database for Food Security Assessments in Southeast Asia

Drivers of household food insecurity market, e.g., they have limited access
to credit, and (3) they are responsible
As emphasized in the literature, for maintaining the household and
the most important determinant of a childcare. On the other hand, as shown
households food security status is poverty in different settings in Africa, Asia, and
(e.g., von Braun et al. 1992; Barrett Latin America (Quisumbing et al. 1995;
2010). Ahmed et al. (2009) compared von Braun et al. 1992), female-headed
poverty and food consumption across 20 households can also be more food secure
countries and found a high correlation due to the fact that women spent more of
between living below the poverty line their income on food than men.
and consuming an insufficient amount of Other drivers of food security for
calories. The Asian Development Bank in rural households relate to the ownership
its 2014 key indicator report (ADB 2014) of land and livestock, or distance. While
has proposed the upward adjustment landowners are able to grow food for
of the poverty line by weighting food own consumption and/or sale, landless
consumption shares with the food price households depend on other often scarce
index. It was estimated that by doing so and low-paid employment opportunities
the number of poor people in Asia would and tend to be more food insecure
be ~15% higher (ADB 2014). (von Braun et al. 1992). With respect
Demographic characteristics to livestock, it is an important source
and endowment with human capital of protein and micronutrients, such as
of the household have also been found iron or vitamin A, if consumed at home,
to be important determinants of food but at the same time if sold, it provides
insecurity. For example, food insecure income and bartering power, and serves
households tend to have more members in as a buffer for food insecure times (FAO
general, but also more young children and 2011). Jones, Shrinivas, and Bezner-Kerr
older dependents who do not contribute (2014) and Sraboni et al. (2014) showed
to the households income (von Braun et that the diets of households in Malawi
al. 1992). Education helps households to and in Bangladesh benefit from a diverse
improve their skills and productivity or agricultural production, including
engage in better paying jobs, thus having a livestock. The distance to markets also
positive effect on food security as it (WFP seems to be correlated with food security
2009b; Bogale 2012). The gender of the (Ahmed et al. 2009).
household head determines households Also, nonfarm activities
food security, although the results so far determine the food security status of rural
have been ambiguous. Kassie, Ndiritu, households. They provide important
and Stage (2014) found that female- opportunities for diversifying income
headed households in Kenya are more sources, smoothing consumption, or
likely to be food insecure. Fuwa (2000) overcoming imperfections in credit
found that female-headed households markets (Ruben and van den Berg
face a triple burden: (1) they are often 2001). There is evidence on this, e.g., for
the single earners, (2) they face various Nigeria (Babatunde and Qaim 2010),
disadvantages in the labor or financial Ghana (Owusu, Abdulai, and Abdul-

84
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Rahman 2011), and Malawi (Pankomera, the context of Southeast Asia by making
Houssou, and Zeller 2009). use of some of the above-mentioned
In summary, the review of indicators. The results of the case studies
literature on the drivers of food insecurity
confirm that food security assessments
shows that information on resource are often incomplete as they do not take
endowments, asset positions, human into account the multidimensional facets
capital, and general infrastructural of food insecurity. Our case studies
conditions of households as well as highlight additional important drivers
individual characteristics must be by disaggregating some of the above-
available if one wants to better understand
mentioned causes (case studies 1 and 3)
food insecurity conditions. Hence, in and stress the importance of the time
order to design effective ex-ante strategies
dimension (case studies 2 and 4). These
and food security policies, food security insights need to be considered when
assessmentshowever sophisticated and constructing databases for food security
detailed these may beare not sufficient. assessments.
Overall, it appears that existing The four case studies all draw
datasets for food security have severe on own comprehensive survey data.
limitations as such data is mostly of a For the first two case studies, we use
short-term and cross-section nature. panel data of the DFG FOR 756 project
While detailed indicators have been on vulnerability to poverty in Thailand
developed, past data collection efforts inand Vietnam funded by the German
food security often lack other informationResearch Foundation (DFG).1 The
that can help to explain why people are data were collected among some 4,000
food insecure at present or face the risk rural households in both countries in
of food insecurity. Also, most of the 2007, 2008, and 2010. In this project, a
indicators are static and unidimensional comprehensive survey with four panel
and thus are of little value for generating
waves has been carried out in six provinces
a better understanding of the causes of of the two countries.2 The provinces
food security. were purposively selected based on
criteria such as low per capita income,
Case Studies importance of agriculture, generally risky
conditions because of remoteness, and

T
he present four case studies further poor infrastructure. In Thailand, the three
explore the role of certain drivers provinces are Nakhon Phanom, Ubon
and causes of food insecurity in Ratchathani, and Buriram; all belonging

1
The DFG FOR 756 is the name of a project of a research group which was funded by the German
Research Foundation (DFG). For further information, see www.vulnerability-Asia.de.
2
Similar panel surveys were carried out in two provinces in Cambodia and Laos.

85
Constructing a Database for Food Security Assessments in Southeast Asia

to the northeastern part of the country with underweight children, group 2


which has a long history of poverty and are poor but do not have underweight
underdevelopment. In Vietnam, the three children, group 3 are nonpoor but they do
provinces in the panel include two, i.e. have underweight children, and the last
Ha Tinh and Thua Thien Hue that belong group are nonpoor without underweight
to the Central Highlands. These two children.
provinces also border the South China Some differences can be observed
Sea. The third province, Dak Lak is land- between the four groups, e.g. poor
locked and belongs to the Southern part households with underweight children
of the country. have lower per capita food consumption
The remaining two case although they may have the same level of
studies use data from Stung Treng, income as compared to poor households
the Northern Province in Cambodia. with no underweight children. Also, the
The comprehensive household survey former have a lower share of agricultural
conducted in 2013 aimed at measuring income and rely relatively more on food
vulnerability to poverty and food from natural resources which tend to be
insecurity of rural households. The more erratic in supply. Such difference
questionnaire and the sampling can no longer be observed for nonpoor
procedure were designed in line with households. Another difference is
the above-mentioned DFG FOR 756 migration of the childs mother. Poor
project being implemented in Thailand households with normal weighted
and Vietnam. The total sample size in children have an 8% higher share of
Stung Treng amounted to ~600 randomly mothers working outside the village. This
sampled households. is also reflected in the time that mothers
spend outside the household, i.e., mothers
Poverty and nutrition from poor households with normal
weighted children spend almost thrice the
In this case study, we analyze the time away. In nonpoor households such
relationship between poverty reduction differences are smaller. A major factor
and the nutritional status of children seems to be assets. Poor households with
using the WFA. In this case study, underweight children have only about
we explore the relationship between half the assets in value terms compared
poverty and food security. In line with with their counterfactual group. Again
the literature, we find that households this difference is smaller in absolute and
below the poverty line tend to be more relative terms for the nonpoor groups.
food insecure measured in terms of Prenatal condition of children as
under nutrition of children. However, indicated by the mothers height shows
food insecurity can still be a problem some differences in the poor household
for households above the poverty line. group while the mothers education is
In Annex 1, we present parameters considerably higher in the nonpoor
on individual, household, and village groups.
levels for four groups of households in Interestingly, no difference can
Thailand. Group 1 are poor households be observed in the food consumption

86
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expenditure shares among the four groups variables differ by poverty status. Hence,
which suggest that differences may exist nonmonetary factors are important
in the quality of food assuming positive entry points to reduce undernutrition
income elasticity for food expenditures, and, therefore, monetary poverty
i.e., as households get better off, their reduction is not a sufficient condition for
absolute expenditures on food increase. eliminating food insecurity. This finding
Also, no difference can be observed is further underlined by a prediction of
in sanitation parameters, neither on future undernutrition rates based on the
household nor village level. However, regressions. Even under the assumption
a marked difference can be observed in of high growth, income growth alone will
children who were reported sick. Also, not be able to reduce undernutrition to a
undernourished children tend to have level of low severity until the year 2030
mothers with fewer years of education. (Waibel and Hohfeld 2015).
Marked differences exist between
poor and nonpoor households, e.g., in Impact of food prices on food consumption
labor allocation, poor households are shares
more agriculturally based and nonpoor
households have a higher share of wage This second case study shows
employment and small-scale business. the impact of food prices on food
Furthermore, differences also exist consumption shares. From September
in sanitary conditions, e.g., nonpoor 2006 to June 2008, the international
households have better access to water and prices of food commodities increased
better hygienic conditions. Furthermore, dramatically, driving the food price index
poor households tend to live in remote to an unprecedented peak since 1975.
mountainous areas. However, differences Compared to 2005, the food price index
between households with underweight increased by ~80%, driven mainly by
and normal weighted children for both increasing cereal prices, which increased
income groups (poor and nonpoor) by 230%.
are small. Overall, the shares of In Figure 1, the effect of food prices
undernourished children among poor on the distributions of food consumption
households are about 1:2, whereas it is shares are shown for rural households in
about 1:5 in nonpoor households. Thailand and Vietnam using the same
Further analysis using this dataset panel data from the six provinces as
for a Tobit model for the four household described previously. The data in Figure
groups (Waibel and Hohfeld 2015) 1 show the frequency distribution of
showed that the factors that influence household food consumption shares in
nutrition outcomes, measured as 2007 and 2010, i.e., before and after the
Z-scores of the weight-for-age indicator, food price and economic crisis. The data
are poverty status and income, mothers from some 4,000 households are taken
height, mothers education, migration from the consumption module of the
status of the mother, and sanitation status household questionnaire. As shown, after
of the household. Most importantly, the economic crisis, the distributions
regression coefficients of respective shifted to the right for both countries.

87
Constructing a Database for Food Security Assessments in Southeast Asia

Figure 1: Shares in food consumption before and after food price crisis, Thailand and
Vietnam
Source: Waibel and Hohfeld (2015)

This indicates that the majority of rural While this brief case study does
households had to allocate a much higher not use any detailed or in-depth food
share of their consumption expenditures consumption indicators (as summarized
to food. The effect was stronger in in Annex Table 1), it shows that a
Vietnam where the mode shifted to consumption module is an important
~80%, whereas it increased to >60% in component of any food security database.
Thailand.
Relating these observations to the
data on poverty and consumption shows
that, in spite of a decline in poverty,
adjustments in food consumption became
necessary and, therefore, consequences
for nutrition are likely.

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Table 2. Headcount ratio with and without environmental income in terms of both
income and consumption poverty in Cambodia (2013)

Livelihood Income poverty (USD 1.25 PPP) Consumption poverty


cluster
With Without With environmental Without
environmental environmental consumption environmental
income income consumption
Estimate Std. dev Estimate Std. dev Estimate Std. dev Estimate Std. dev
(%) (%) (%) (%) (%) (%) (%) (%)

Cluster 1 39 49 55 50 38 49 52 50
Cluster 2 30 46 69 46 29 45 47 50
Cluster 3 29 45 33 47 13 34 18 38
Average 33 47 53 50 27 45 40 49

Note: definition of clusters: cluster 1: farming and low-skilled jobs; cluster 2: farming and environ-
mental extraction; cluster 3: farming and self-employment or high-skilled jobs.
Source: based on Nguyen et al. (2015)

Environmental income and household access to livelihood activities related to


food security the natural resource base is one of the
underlying causes of food insecurity.
This case study from Cambodia To identify which households might be
3

highlights the importance of the natural especially affected by environmental


resource base as an income source for degradation, 580 households were
certain livelihood activities of rural classified into 3 livelihood clusters: (1)
households. It is motivated by the fact that farming and low-skilled jobs, (2) farming
inhabitants from Stung Treng are strongly and environmental extraction, and (3)
affected by environmental degradation. farming and self-employment or high-
This is confirmed from the survey with skilled jobs (Nguyen et al. 2015).
98% of the households reporting a loss in We have calculated (1) the
forest resources, ~90% a decline in wild headcount ratio (poverty) using either
animals, and 86% depleting fish stocks USD 1.25 PPP per capita per day and
(Bhler et al. 2015a; 2015b). The unequal (2) the FCS with and without natural

3
We thank Thanh T. Nguyen, Leibniz University Hannover, for compiling this data as an add-on to
the paper from Nguyen et al. (2015).

89
Constructing a Database for Food Security Assessments in Southeast Asia

resources. Environmental income we exclude the natural resources used


derives from the extraction of natural for home consumption, the overall
resources including fishing, hunting, and headcount ratio changes from 27% to
collecting. 40%. However, in this case the headcount
In terms of income poverty, ratio would be larger for households in
excluding environmental income cluster 1 than 2. Overall, this example
would increase the headcount ratio of shows that environmental income is a
the whole sample from 33% to 53% major component of poverty reduction
(Table 2). The most affected would and food security and environmental
be the households in cluster 2 since degradation a major threat.
their livelihood activities depend more With respect to the FCS, it can be
on environmental extraction; their seen from Table 3 that natural resources
headcount ratio increases from 30% contribute quite a lot to the high values
to 69%. In contrast, households from of the FCS, e.g., in terms of fish, meat,
cluster 1 would be relatively less affected or vegetable. Again, if we exclude the
(increase from 39% to 55%). Similarly, contribution of natural resources, the
in terms of consumption poverty, if FCS decreases significantly.

Table 3: FCS with and without natural resources in Cambodia (2013)

Livelihood clusters
Whole
Food item 1 2 3 sample
Staples 13.9 13.9 14.0 14.0
Roots 0.4 0.7 0.9 0.6
Pulses 2.8 4.0 4.9 3.8
Fruits 2.6 3.5 3.2 3.1
Vegetable 5.1 5.3 5.4 5.3
Fish 22.3 23.5 22.0 22.6
Meat 5.4 6.2 8.9 6.7
Eggs 4.4 3.4 6.0 4.6
Milk 0.3 0.2 1.2 0.5
Oil 1.7 1.8 2.0 1.8
Sugar 2.9 2.8 3.0 2.9
FCS with natural resources 61.8 65.5 71.6 65.9
FCS without natural resources 46.9 41.4 61.7 49.6

Note: definition of clusters: cluster 1: farming and low-skilled jobs; cluster 2: farming and environ-
mental extraction; cluster 3: farming and self-employment or high-skilled jobs.
Source: based on Nguyen et al. (2015)

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World Food Policy

In Table 4, we classify the FCS In sum, this case study from


into three groups, namely (1) poor, Cambodia highlights (1) the importance
(2) borderline, and (3) acceptable. We of natural resources to poverty reduction
then find that the number and share of and/or food security and (2) that different
households from clusters 1 and 2 in the indicators lead to different findings.
poor and borderline food consumption
groups are very similar if natural
resources are excluded.

Table 4: Number and share (per total sample of 580 households (% in brackets)) of
households classified into three food consumption groups with and without natural
resources in Cambodia (2013)

Food consumption groups

Poor Borderline Acceptable


(FCS 21) (21<FCS 35) (FCS >35) Total
number of
households
With Without With Without With Without

Cluster 1 0 (0.0) 25 (4.3) 3 (0.5) 41 (7.1) 218 (37.6) 155 (26.7) 221 (38.1)

Cluster 2 0 (0.0) 28 (4.8) 7 (1.2) 42 (7.2) 178 (30.7) 115 (19.8) 185 (31.9)

Cluster 3 1 (0.2) 8 (1.4) 2 (0.3) 17 (2.9) 171 (29.5) 149 (25.7) 174 (30.0)

61 100
Total 1 (0.2) (10.5) 12 (2.1) (17.2) 567(97.8) 419 (72.2) 580 (100)

Note: definition of clusters: cluster 1: farming and low-skilled jobs; cluster 2: farming and environ-
mental extraction; cluster 3: farming and self-employment or high-skilled jobs.
Source: based on Nguyen et al. (2015)

91
Constructing a Database for Food Security Assessments in Southeast Asia

Shocks and coping strategies medium to high severity. Demographic


shocks including events such as birth,
This case study from Stung Treng death, illness, and accidents of household
province in Cambodia shows that shocks members also appear to play a major
influence the food security situation role. In total, households reported 246 of
and livelihood strategies of households. those shocks accounting for more than
Our household dataset which has been one third of the total shocks reported.
already described at the beginning of Notably, illnesses make up 83% of this
this section includes information on shock type. Economic shocks such
agricultural, economic, demographic, as price fluctuations and theft only
and social shocks as perceived at the account for 8% of the total shocks, but
household level over the preceding year. nevertheless their impact is perceived
Agricultural shocks such as as being very high. Social and other
floods, droughts, or storms, but also shocksdue to weddings or funerals
livestock diseases and crop failures are or in case of conflicts with neighbors or
the most common shocks in Stung Treng relativeshave been hardly reported.
(Table 5). They account for slightly more This finding is supported by the estimated
than half (54%) of all reported shocks and losses in terms of income and assets as
relate especially to drought and livestock well as extra expenditure associated with
diseases (69%). Two thirds of the the different shock types. As Figures 2a
agricultural shocks are perceived to be of and b show, the high impact of social and

Figure 2a: Average loss from shocks by category (in PPP USD)
Source: Bhler et al. (2015b)

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Figure 2b: Average loss from shocks by category (in %)


Source: Bhler et al. (2015b)

other shocks is mainly due to high extra of economic and agricultural shocks.
expenditures, especially for medical These include activities such as labor
treatments. However, since the frequency and crop diversification, reducing
of these two categories is low, the overall inputs for production, or increasing
impact of these shocks is relatively low. natural resource extraction. The most
Both the share and the average value of frequently used coping strategy to offset
extra expenditures from demographic particularly demographic shocks is to
shocks exceed the income and asset rely on borrowing or own savings. Since
losses associated with agricultural and demographic shocks are mostly related
economic shocks. Economic shocks are to health issues, it is straightforward that
associated with ~60% income loss. But in these cases, money is needed fast to
again, the frequency of economic shocks pay for medical treatment. Grants appear
is comparatively low. to only play a role in the context of
Households were also asked social shocks. Furthermore, households
about the coping strategies they employ indicate that they do not change their
after they have been affected by a food consumption habits to cope with
shock. In 57% of the cases, households any shock. Demographic coping activities
responded that they did not adopt such as migrating or sending children
any specific coping strategy (Table or adult family members to live with
5). Households use economic coping relatives and friends are also negligible
activities mainly to counteract the effect (Bhler et al. 2015b).

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Constructing a Database for Food Security Assessments in Southeast Asia

Table 5. Coping activity by shock type

Shock type
Agricultural Demographic Economic Social Others Total

Shock frequency (no.) 359 246 54 4 6 669

Share without coping (%) 71 36 65 0 50 57

Type of coping activity (%)

Economic (less inputs, etc.) 60 17 68 0 0 36


Demographic (migration) 1 1 0 0 0 1

Selling assets 10 20 5 25 33 16

Borrowing and savings 25 51 21 50 67 40

Grants 2 8 5 25 0 6
Change food consumption 2 1 0 0 0 1

Source: Bhler et al. (2015b)

In sum, the impact and frequency While comprehensive data allow us to


of different types of shocks need to be better understand the four dimensions
considered to be able to capture food of food security (availability, access,
security in an adequate and sustainable utilization, and stability), only long-
way. A shock module is an important term panel data allow us to analyze the
component in a food security database. dynamics of food security hence satisfy
Furthermore, information about the the risk dimension of food security.
coping activities help to identify entry
points to support the affected rural Essential parameters
households.
Household surveys generally try
Data Requirements for Food to attain information and knowledge on
Security Assessment socioeconomic household characteristics,
welfare measures of households including

I
n this section, we discuss components income, assets, and consumption but also
of datasets which are essential for a livelihood strategies. Hardeweg, Klasen,
better understanding of food security. and Waibel (2013) pointed out that
As visualized by the case studies presented three additional issues are most critical
in the previous section, datasets need to in household surveys when studying
be comprehensive and of longer term. vulnerability to poverty. We submit that
the same points which are important for

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understanding the future risks also hold Furthermore, some of the existing
for food insecurity. First, the definition of panels were not only of short duration,
households is essential. It has been found but also had low sample sizes, a narrow
that a wider definition is preferable in the geographic focus, or were designed for
rural context as members of the household very specific purposes and thus did
might have migrated but still feel being not allow intercountry comparisons.
part of the household and thus sending Alinovi, Mane, and Romano (2009)
remittances to support the households admit that most papers on food security
access to nutritious food over time. This are descriptive and lack panel data. They
is particularly important for targeting mostly take an ex-post view because of
social protection programs (Gdecke the multidimensionality of food security
and Waibel 2015). Furthermore, Nguyen, models. Finally, none of these surveys are
Raabe, and Grote (2015b) confirm that focused on rural conditions where the
migration is a livelihood support strategy existence of poverty and food security
for rural households. is widespread and persistent over long
Second, the incorporation of a periods of time.
module on shocks with information on Against the backdrop of the
type of shock, shock severity, timing, existing panel databases in developing
and coping strategies of households is countries, we present our long-term
considered as being essential as it allows panel project which tries to address
us to capture the dynamics of food the above-mentioned shortcomings of
security assessments. Shocks do affect other panel datasets. Our long-term
households with implications for their panel project has been designed for food
food security. Thus, climate change and security assessments as we will describe
HIV/AIDS, for example, are known to more in detail in the next subsection.
have impact on food security (Rosegrant
and Cline 2013; Badolo and Kinda 2012). Long-term panel project
Third, the time dimension is
critical, especially as shocks influence The long-term panel project builds
the stability dimension of food security. on the structure and the collaborations
But also seasons have a significant established by the Research Group DFG
effect on food security with households FOR 756 funded by the German Research
consistently worse off during monsoon Foundation. It continues and further
season as evidenced in Bangladesh advances the existing high-quality panel
(Hillbruner and Egan 2008). database from Thailand and Vietnam.
Many household panel datasets Until to date, household and village
already exist in developing and transition surveys have been carried out in three
countries (Baulch 2011). However, most selected regions in Thailand and Vietnam
of them started in the early 1990s and in 2007, 2008, 2010, and 2013, i.e., four
many of them have been discontinued panel waves. In addition, in 2010, a
so that a huge gap exists in longer term complementary migrant tracking survey
multi-purpose panel household surveys of 1,000 migrants in Ho Chi Minh City
in developing and emerging economies. and Bangkok was carried out. In 2011,

95
Constructing a Database for Food Security Assessments in Southeast Asia

all panel households in the provinces Our long-term panel project for
of Ubon Ratchathani (Thailand) and Thailand and Vietnam appears unique
Hu (Vietnam) were surveyed again and valuable in several respects (see
to capture medium-term agricultural also Klasen and Waibel 2013). First, its
effects. An extension of the panel by sampling design facilitates comparisons
another six waves (until 2023) can make of countries, regions, and provinces.
this database truly unique in terms of the Second, the sample size at provincial
length and continuity and the depth and level is larger than any of the existing
scope of the inquiries and thus allowing panels and the period spanned will be
to address many long-term development among the longest of any survey study.
questions including nutrition and food Third, the database allows comparisons
insecurity. of individual households and to some
In order to meet the objective of extent also of individuals within
conducting comprehensive food security households. It consistently includes
studies that can capture all four food migrants and, thus, covers an important
security dimensions, in principle two driver of household dynamics in
questionnaires are needed: a village and emerging market economies. Fourth, the
a comprehensive household survey. The survey instrument contains all aspects of
village questionnaire collects information the living standard measures and adds
on the village characteristics, such as comprehensive modules on shocks, risks,
its location and physical and social expectations, and subjective assessments
infrastructure, and the socioeconomic of welfare. Fifth, it has a very low attrition
and demographic profile of the village rate due to an incentive structure that
(e.g., age structure, welfare status of promotes ownership through active
households, unemployment rates, and participation of the scientists in the data
major income sources) strategies. The collection process and thus closely links
household questionnaire includes a data collection with research output.
range of modules which are shown in The long-term panel data
Table 6. Although the questionnaire has project will therefore provide unique
originally been developed for research on opportunities to advance scientific
vulnerability to poverty it can contribute research on poverty, vulnerability,
to food security studies through many and food security. The value-added
of its sections. Adding specific modules of the project emanates both from its
on in-depth food security indicators long-term nature and the richness
would be possible and has in fact been of information that allow for a good
implemented for the Cambodia and Laos tracking of households expectations
panel surveys. Also, the survey can be and actions. It will permit the analysis
complemented by selected focus group of long and medium term, dynamic, and
discussions for example to determine inter-temporal dimensions that is rarely
the Coping Strategies Index (CSI), as possible with existing datasets, including
suggested by Maxwell and Caldwell the currently existing four waves of the
(2008), and even randomized control FOR756 panel. The panel datasets can
trials related to food security. help to advance research related to food

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Table 6. Modules of household questionnaire for panel database to measure vulnera-


bility to poverty and its link to food security

Questionnaire module Variables Contribution to food


security studies

1 General survey Geographic location, household


information headship, decision making

2 Household Size, composition and Anthropometric measures


characteristics dynamics, education, health
conditions; diversity of the
household production system

3 Shocks experienced Type, timing, duration, scope, Causes of food insecurity


during past five years severity, consequence, ex post and coping strategies
and perceived risks coping measures, covariance,
for the next 5 years subjective assessment of risk
and well-being; type, frequency,
severity, consequence of
expected risks and ex ante
mitigation measures; seasonal
and permanent labor migration

4 Land, agriculture and Land size and ownership status, Food availability
natural resources land value, crop and livestock
technology and production, self-
consumption, productivity, costs,
returns, timing and extent of
natural resource extraction

5 Off-farm employment Type, contractual arrangements, Food access


including wage labor location, travel costs, job
acquisition costs, duration of
work, wage and fringe benefits

6 Non-farm self- Type, investment, costs and Food access


employment including returns
cottage industries

7 Borrowing, lending, Type, sources, contractual Food access and stability


public and other arrangements, conditions
transfers and amounts, payment frequencies
insurance

8 Household Food and non-food items, other Food access and utilization
consumption expenditures

9 Assets Purchase value depreciation Food access and coping


and service life capacity

Source: based on Hardeweg, Klasen, and Waibel (2013).

97
Constructing a Database for Food Security Assessments in Southeast Asia

security by providing long-term and long run. Generally such research must
vulnerability-specific data to empirically adopt a comprehensive approach which
test general theoretical approaches in allows identifying and analyzing the
research areas which are all entwined determinants of food security. There
with food security such as: poverty are two reasons for this. First, only
dynamics; risks and behavioral aspects in through a better understanding of the
development; demography, gender and determinants will it be possible to help
inequality; nutrition and poverty; finance to prevent food emergencies. Second,
and development; regional development; such a comprehensive approach allows
labor and migration; middle income considering the context and the interplay
trap; and climate, environment and of factors which are important.
agriculture. We further suggest that much
could be gained if food security
Summary and Conclusion research will be joined with research
on vulnerability to poverty. Hence data

G
iven the need for research to better collection on food security must be not
understand the determinants and only comprehensive but also become part
drivers of food security in order of broader livelihood and vulnerability
to contribute to a long-term solution of studies. This has been highlighted
the problem this article promotes the through our four case studies. These
notion of advancing and complementing showed that households livelihood
panel databases that allow undertaking strategies and different types of shocks
in-depth and causal analyses in food are intertwined with food security. Food
security. security assessments also need to be based
We started out from the findings on long-term panel datasets, as only these
that the literature on food security allow taking into account the dynamics
assessments has evolved rapidly, but that of food security and hereby capture the
each concept or indicator of food security risk dimension of food security.
has its own shortcomings; in addition, Against this background, we
individual measures fail to capture all presented our long-term panel data
four important dimensions of food project for Thailand and Vietnam which
security, and rather complement than we believe is unique and valuable also
substitute each other. Our case studies for food security assessments. These data
were intended to show that results of are available for the worldwide research
food security assessments can differ community dealing with socio-economic
depending on the type of indicator used. questions of development. The project,
We conclude however that for example allows: (i) comparisons of
although specific food security indicators countries, regions and provinces, (ii)
remain useful for international assures representativeness for potentially
organizations to undertake quick food insecure rural populations as its
analyses especially in situations of sample size at provincial level is larger
emergency, more rigorous research is than in any of the existing panels, (iii)
needed to achieve food security on the especially allows to capture the risk

98
World Food Policy

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Appendix 1

Comparison of children by poverty ($2 poverty line) and nutritional status (WFA), Thai-
land 20072010

(1) (2) (3) (4)


Groups Poor and Poor and Nonpoor and Nonpoor and
underweight no underweight underweight no underweight
Income
Income per capita and month (PPP
$) 22.53 22.91 165.63 185.63
Share agricultural income* 0.41 0.53 0.21 0.22
Share natural resources income* 0.09 0.07 0.04 0.03
Food Consumption per capita and
month (PPP$) 41.88 49.09 72.90 68.83
Share food of total consumption 0.60 0.62 0.63 0.60
Share households with small-scale
business 0.19 0.20 0.33 0.34
Child
Share of children sick 0.05 0.05 0.01 0.04
Share of girls 0.44 0.46 0.42 0.45
Mother
M_height (cm) 153.89 156.07 156.76 157.82
M_edu (years) 7.02 7.30 8.60 9.31
Share M_migrant 0.15 0.23 0.17 0.18
Household
HHsize 5.28 5.32 5.11 5.27
Dependency ratio 2.18 2.05 2.01 1.89
Migmonth_other 1.03 2.70 0.96 2.06
Share agricultural worker 0.59 0.62 0.52 0.49
Share wage worker 0.05 0.05 0.10 0.10
Share business worker 0.36 0.33 0.38 0.41
Share priv. toilet 0.91 0.95 0.97 0. 97
Share tapwater 0.25 0.27 0.23 0.30
Value assets per capita (PPP $) 717.04 1364.20 1648.86 2014.91
Value livestock per capita (PPP $) 195.47 179.28 201.43 241.39
Land per capita (ha) 0.67 0.57 0.73 0.76
Village
VP sanitation 75.69 75.2 80.34 77.25
Vpub Water 0.88 0.88 0.91 0.90
Distance market 17.73 19.96 18.27 16.79
Distance hospital 23.43 23.70 21.05 21.54
N 97 586 132 831

*negative crop/natural resource incomes excluded.
Source: Waibel and Hohfeld 2015.

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World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Income Diversity and Poverty Transitions: Evidence


from Vietnam
Van Q. TranA

The large share of the population in rural areas of the developing world has
been diversifying their livelihood to nonagricultural activities. However, the
amount of the literature that discusses the possible effects of the diversity on
a households well-being is still limited. This study contributes to this strand
of the literature by investigating the effects of income diversity on poverty
transitions. The analysis is based on household panel data collected in the
2000s from Vietnam and applied to a multinomial logit model. The results
show that households with better access to markets are more able to diversify
their income sources to nonagricultural activities and the diversity is helpful for
a household to escape poverty or to avoid falling into poverty.

Keywords: income diversity, poverty transitions, nonagricultural income


sources, Vietnam

JEL classification: I32, O13, P36, R11

Introduction approaches and country cases. They


have identified the characteristics of a

T
he dynamics of poverty have household, the private and public assets
been one of the central issues in a household possesses, the changes in
development economics. There macroeconomic condition such as trade
has been a great deal of theoretical studies reform, inflation, and economic crisis on
(Cappellari and Jenkins 2004; Carter the dynamics of poverty.
and Barret 2006) and empirical studies In fact, the majority of the
(McCulloch and Baulch 1999; Glewwe, poor lives in rural areas and engages
Gragnolati, and Zaman 2000; Woolard in agricultural activities. Also, the
and Klasen 2005; Justino, Litchfield, and large share of the rural population is
Pham 2008) that discuss the transitions diversifying their income sources to
into and out of poverty using different nonagricultural activities that are usually

A
University of Economics and Law, Vietnam National University

doi: 10.18278/wfp.2.2.3.1.7

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World Food Policy

of higher returns and consequently trade openness that took place during
making them better off. Studies by De the last two decades, has lifted a large
Janvry, Fafchamps, and Sadoulet (1991) share of the population out of poverty
and Kinsey, Burger, and Gunning (1998) (see Tran, Alkire, and Klasen 2015).
indicate that income diversification Nonetheless, poverty is still a central
is not only positively correlated with issue in the country as nearly 43 percent
wealth but also with an increased ability of the population still lives on less than
to cope with shocks. Diversification is $2 a day (World Bank 2013), and many
a way through which rural households people earn their living by engaging in
insure themselves against the occurrence agricultural activities. Various population
of such shocks, or, in other words, subgroups have benefited less from such
diversification reduces livelihood development; households in rural areas
vulnerability. This self-insurance can have made slower progress than those in
also be seen as a negative function of the urban areas (see GSO 2011).
availability of social insurance, provided, This study uses three waves of
for example, by the community or family. a panel surveys from 2007, 2008, and
The better access to social networks and 2010 of more than 2000 rural and peri-
institutions, the less likely a household urban households from three provinces
needs to apply self-insurance systems as in Vietnam. The drivers of poverty
the diversification of income portfolios. transitions are investigated via descriptive
In contrast, social capital can also foster statistics and empirical results from
the ability to participate in many different multinomial logit (MNL) models. The
income activities. analyses are based on the hypothesis that
This study aims to contribute to a household that diversifies its income
the literature of vulnerability to poverty sources to nonagricultural activities
by examining the relationship between a finds it easier to escape poverty than a
households diversity of income sources household that relies its income only
to nonagricultural activities and its on agricultural activities. The findings
transitions into and out of poverty. The confirm that an increase in the share
main goal is to identify which households of nonagricultural income to total
are more able to diversify income sources household income is correlated with the
and if such income diversity makes the advancement of a households well being.
household better off or prevents it from This study is organized as follows.
falling into poverty. Section 2 describes the household
This study examines these research panel data used in the analysis and
questions in the context of Vietnam, presents the estimation strategy. Section
although the approach can be applied 3 discusses the results of the MNL
to other developing countries. Vietnam models that highlight the relationship
has been one of the most successful between income diversification and
countries in the developing world in household well-being. It also discusses
terms of economic growth and poverty the robustness of the estimation results.
reduction. The rapid economic growth, Finally, Section 4 concludes with the key
together with market liberalization and messages of this paper.

105
Income Diversity and Poverty Transitions: Evidence from Vietnam

Empirical Strategy lowland, and coastal zones. The surveys


collect information on household
Data demographics, health, education,
economic activities, employment, access

T
his study is based on panel to financial markets, public transfers,
household surveys from 2007, household expenditures, and assets, and
2008, and 2010 from the particularly on shocks and risks.
provinces of H Tnh (HT), Tha Thin
Hu (TTH), and k Lk (DL) in 1.1 The Drivers of Poverty Transitions
Vietnam for the purpose of the research
project Vulnerability in Southeast Asia This study applies an MNL
being run by a consortium of German model presented in Wooldridge (2002).
universities and local research institutes Changes in household poverty statuses
(see Klasen and Waibel 2012). The survey over a period can be classified into
covers more than 2000 households located several mutually exclusive outcomes. The
in rural and peri-urban areas in these MNL model determines the probability
three provinces. The three provinces have that household i experiences one of
a diversity of agricultural and ecological the mutually exclusive outcomes j. The
conditions with mountainous, highland, probability is expressed as

j xi
e
(1) (
pij = P Yi = j = ) J k xi
for j = 0,1,2,, J ,
e
k =1

where Yi is the outcome experienced by 1, Y = 2,..., Y = J. To identify the model,


household i, k are the set of coefficients one of the j must be set to zero, and all
to be estimated, and xi includes a other sets are estimated in relation to that
households covariates and their changes. base category. For convenience, 0 is set
The model is, however, unidentified since to zero; therefore, the above probability
there is more than one solution for that function can be written as
leads to the same probabilities Y = 0, Y =

j xi
e 1
(2) ( )
pij = P Yi = j = J k xi
(
, for j = 1, 2, , J and pi 0 = P Yi = 0 = ) J k xi

1+ e 1+ e
k =1 k =1

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From the panel years of 2007, households probability of being nonpoor


2008, and 2010, poverty dynamics can in all periods, P(Y = 1) is the probability
be classified into eight categories of (1) of rising (includes categories (2a) and
being nonpoor in all periods, (2a) poor- (2b)), P(Y =2) is the probability of falling
poornonpoor, (2b) poornonpoor (includes categories (3a) and (3b)), and
nonpoor, (3a) nonpoorpoorpoor, P(Y =3) is the probability of churning
(3b) nonpoornonpoorpoor, (4a) (includes categories (4a) and (4b)), and
nonpoorpoornonpoor, (4b) poor P(Y =4) is the probability of being poor
nonpoorpoor, and (5) being poor in in all periods. Thus, the specific model
all periods. These eight categories can applied in this study when standardizing
be grouped into five mutually exclusive 0 = 0 is expressed as
outcomes: (1) J = 4 and P(Y = 0) is the

j xi
e 1
(3) pij = P(Yi = j ) = ( )
, for j = 1, 2, 3, 4 and pi 0 = P Yi = 0 = .
4 4
k xi
1+ e 1+ e k xi
k =1
k =1

The (MNL) model will estimate A marginal effect shows the


coefficients for four categories relative impact of a change in an explanatory
to the omitted category (being nonpoor variable on the probability of a household
in all periods). In order the relationship being in each of the five categories.
to make more sense, the results of To investigate the dynamics
the (MNL) model are used to predict of poverty in Vietnam, I hypothesize
marginal effects, which measure the that a households poverty transitions
conditional probabilities of a change in depend on the diversity of income
the regressors on the outcome and are sources, its characteristics, and its heads
estimated as characteristics.
The measurement of poverty
dynamics refers to equivalence scaled2
(4) pij 4
income and a Vietnam national poverty
= pij j pik k . line estimated by the Ministry of Labour,
xi k =1
Invalids and Social Affairs (MOLISA),
which was approximately $1.213 a day

1
Equivalence scaled income is calculated by dividing a households total income by its equivalence size
using OECD (1982) scale.
2
This poverty threshold is measured in purchasing power parity (PPP) price estimated in 2005.

107
Income Diversity and Poverty Transitions: Evidence from Vietnam

by 2008. Similarly, a households income estimation of the asset index via principal
is used to measure the diversity from component analysis. Among the items,
agricultural sources to nonagricultural motorbike plays an important role (with
sources. a weight of 24 percent), and then comes
Explanatory variables include television (10 percent), while the other
income diversity and household asset items are less important, each of which
levels. Income diversity is measured contributes less than 10 percent to the
by an increase in the share of income asset index (see Table A.1).
from nonagricultural activities to the The location of a household
households total income over a period. includes a dummy variable indicating
A households asset is measured by provincial location. DL is located in
household and individual characteristics the highlands with basalt soil, which
as proxies for human capital; land use and is suitable for high-value crops such as
asset index represent physical assets. Also, coffee, pepper, cashew, and rubber. The
a households location will be a proxy for population density in the province is also
the households access to markets. low, allowing households to possess more
Household characteristics are land than households in the other two
measured by a households size that provinces. In contrast, HT and TTH are
counts the number of the households in the coastal area and are frequently hit
member. The households head by storms and floods. These differences
characteristics include gender, age, make it reasonable to treat DL as a
ethnicity, and education attainment. In reference.
addition, a households physical assets
include quantitative and qualitative Income Diversity and Poverty
items. The quantitative assessment Transitions in Vietnam
concerns whether the household has: a
motorbike, a bike, a television, a radio, The Patterns of Income Diversification
a CD player, an electric fan, an electric

T
rice cooker, a fridge, and a mattress. he main income sources of many
The quality assessment includes: having households were those from
improved flooring condition, having agricultural activities. On average,
improved housing condition, having agricultural activities accounted for 40
access to improved sanitation facility, percent of a households total income;
and using improved cooking fuel.3 House this share was 50 percent in DL as many
size is also included, measured in square households there grew high-value crops
meters. These items are included in the such as coffee and pepper.

3
Reference categories: The floor is made of cement or ceramic. The main walls are made of concrete
and the roof is made of slates or concrete. The household uses flushed toilet. The household cooks
with gas or electricity.

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Agricultural activities usually agricultural activities that yielded close


included the crop production of rice, to Vietnamese Dong (VND) 10 million
coffee, pepper, and corn, peanut, by 2007, i.e., each activity yielded an
vegetable, and livestock production of average of VND 2 million per year.
cow, pig, and chicken. On average, a Over the three-year period, there was
household had slightly more than five an increase of 0.5 activities and income

Table 1 Levels and changes in income sources by population subgroups

Population Agricultural activities Nonagricultural activities


subgroups
Number of Total income (mil. Number of Total income (mil.
activities VND) activities VND)
Level Absolute Level Change Level Absolute Level Change
2007 change 2007 20072010 2007 change 2007 20072010
20072010 (%) 20072010 (%)
Total 5.2 0.5 9.6 9.2 1.0 0.1 17.9 22.1

Head has no
schooling 4.2 0.6 5.5 0.6 1.1 0.1 13.1 21.6
Head attains
primary school 4.7 0.5 6.9 47.2 1.1 0.1 17.2 -2.4
Middle school
and beyond 5.6 0.5 11.4 1.8 1.0 0.1 19.2 29.9

Ethnic minority
groups 5.4 0.4 9.2 7.6 0.9 0.1 18.7 26.0
Kinh (majority) 4.1 1.4 11.7 15.5 1.4 0.1 13.9 4.6

H Tnh 6.3 0.5 5.2 85.4 0.6 0.2 15.5 39


Tha Thin
Hu 6.0 0.6 4.9 8.9 1.3 0.1 19.7 34
k Lk 3.7 1.2 16.5 12.8 1.3 0.1 19.4 3

Notes: Agricultural activities include crops and livestock production. Nonagricultural activities in-
clude all other income-generating activities. Income values refer to price level in April 2008. mil. VND
refers to million Vietnamese Dong.
Source: Author's calculations from Vulnerability Surveys in Vietnam.

109
Income Diversity and Poverty Transitions: Evidence from Vietnam

from these activities increased by closed in the income. A Kinh household was
to 10 percent. Nonagricultural activities also more likely to diverse its income
were usually off-farm employment, self- sources to nonagricultural activities.
employment, interest from lending, Generally, the results show that
remittance, and public transfer, etc. On households with better human capital
average, a nonagricultural activity yielded usually have better access to markets.
closed to VND 18 million by 2007. Over They are, therefore, not only able to have
the three years, there was only a little more profitable crops and livestocks
increase of 0.1 activities, but income but also more able to shift their income
from this activity rose by 22 percent (see portfolio to nonagriculture sources. In
Table 1). These imply that the transition addition, households in TTH and DL
to nonagricultural activities affects have more opportunities to switch to
positively on a households income; yet, nonfarming income sources owing to the
the transition was relatively slow. better performance of the economy in
The pattern of income diversity the two provinces as compared with HT.
differed from one population subgroup Moreover, DL households particularly
to another. Households in DL had have advantages in growing high-value
less agricultural activities than their crops, such as coffee, pepper, and cashew,
counterparts in HT and TTH, but because of the weather and soil condition.
agricultural activities in the former were
of higher value. On average, a household Trends in Poverty and Inequality
in DL had only less than four agricultural
activities and earned closed to VND 17 The overall poverty headcount
million from coffee, pepper, and cashew ratio in Vietnam (as measured by
crops, while a household in TTH and HT per capita expenditure) continued to
had more than six agricultural activities decrease from closed to 16 percent in
by 2007 and earned only approximately 2006 to 14.5 percent in 2008 (GSO 2011).
VND 5 million. Nonagricultural sectors The poverty headcount ratios in the three
were not developed in HT, making provinces (as measured by equivalence
households there rely more on crops and scaled income) were lower than the ratios
livestock to generate income. (as measured by per capita expenditure)
Among 54 ethnic groups in found by Le, Nguyen, and Singh (LNS)
Vietnam, the Kinh is the majority that (2014) (see Table 2). The three provinces
accounts for nearly 86 percent of the not only made good progress in poverty
entire population. They usually live in reduction, but were also successful in
lowlands, which allows them to have keeping the equity of the development
better access to markets and public as well. The gap between the first and the
services, ergo they benefit more from fifth income quintiles increased slightly
economic growth. On average, a Kinh from 4.8 to 4.8 and 5.2 over the years,
household had less agricultural income respectively, and the Gini index also
sources and earned more from these than increased only marginally from 0.301 to
a household of ethnic minority groups 0.301 and 0.315 over the period.
did; the earlier also made a faster increase

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Table 2 Poverty headcount ratio at national poverty line by province, percent

Estimated from Vulnerability Surveys Estimated by LNS

2007 2008 2010 2006 2008

H Tnh 24.8 21.9 16.7 26 29

Tha Thin Hu 16.1 11.7 10.6 14 13

k Lk 19.0 16.4 14.4 17 22

Total 20.6 17.5 14.4 15.9 14.5

Source: Authors calculations from vulnerability surveys in Vietnam and Le, Nguyen, and Singh (LNS)
(2014).

The Patterns of Poverty Transitions Across the poor have low incomes and low asset
Groups levels so they tend to live together and
share their limited resources (see Table
Over the three-year period, the 3).
majority of households stayed nonpoor There is a tendency that young
(slightly over 62 percent) and the other and old households, headed by young
38 percent was vulnerable to poverty or old persons, are more vulnerable to
at some level. This pattern shows good poverty than middle-aged ones. They
progress in poverty reduction in which are less likely to stay nonpoor and are
a large share of the population rose up, more likely to fall into poverty, fluctuate
approximately 15 percent, and a small around the poverty line, or stay poor.
share of the population fell down at Young households are usually newly
slightly more than 9 percent. Additionally, formed ones, which mean that they also
a tenth of the population moved around have to invest in bearing and caring for
the poverty line (closed to 11 percent) children. Older households are usually
and only a small share stayed poor in all wealthier because they have experience
periods (2.3 percent) (see Table 3). in agriculture and livestock production
The changes in poverty statuses differ and have accumulated more savings
across the subgroups of the population. and assets. However, older heads are
Poverty is usually associated with a associated with having lower skills and
large-sized family and a higher burden being less healthy subsequently making
of dependency. Nonpoor households them more vulnerable to poverty, which
tend to have fewer members and a lower is confirmed by the result of a t test.
dependency ratio, 4.1 and 0.4 respectively, The education attainment of a
while those who are poor in at least one households head tends to have a negative
period have nearly five members and a relationship with the vulnerability to
higher dependency ratio of 0.5. In fact, poverty. Slightly higher than 56 percent

111
Income Diversity and Poverty Transitions: Evidence from Vietnam

Table 3 Household and head characteristics by poverty trajectory, percent

Churnin Populati
Nonpoor Rising Falling Poor
g on share

Total 62.4 15.3 9.2 10.8 2.3 100

Household size 4.1 4.9 4.2 4.7 5.1

Dependency ratio 0.4 0.5 0.5 0.5 0.6

Head is less than 36 years old 52.6 17.2 9.5 18.1 2.5 17.1

Head is 3650 years old 70.3 12.3 8.7 8.0 0.7 45.4

Head is 5165 years old 63.5 15.3 8.4 11.2 1.7 23.9

Head is 66 years and beyond 46.0 23.4 12.1 10.1 8.4 13.6

Head has no schooling 43.9 22.0 12.1 17.0 5.0 13.4

Head attains primary school 54.0 18.6 11.4 11.9 4.1 22.9

Middle school and beyond 69.2 12.8 7.8 9.1 1.1 63.8

Ethnic minority groups 51.5 19.4 10.5 15.9 2.6 15.8

Kinh (majority) 64.4 14.5 9.0 9.9 2.2 84.2

Asset index 0.54 0.39 0.42 0.38 0.24

Lowlands 65.8 13.2 8.5 10.3 2.3 48.2

Mountainous and highlands 59.1 17.4 9.9 11.3 2.3 51.8

H Tnh 58.1 17.2 9.1 11.7 4.0 38.6

Tha Thin Hu 71.2 12.7 7.2 7.4 1.5 22.2

k Lk 61.5 15.0 10.4 11.9 1.1 39.2

Notes: Population shares of the same category sum to 100.


Source: Authors calculations from Vulnerability Surveys.

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of households headed by men or women while stay-poor households are the least,
without any school are vulnerable being 0.54 and 0.24,4 respectively. In
to poverty. The share of vulnerable addition, the location of the household
households decreases to 46 percent and can be used as a proxy for public physical
31 percent across the higher education asset such as infrastructure and some
attainment of the head. In addition, regional differences. More than half of
only 10 percent of the heads who are the households are in mountainous and
from the Kinh are illiterate, while 32 highland areas where infrastructure such
percent of the other heads cannot read as roads, electricity, schools, and health
or write. Moreover, the Kinh usually live clinics are in poorer condition and, thus,
in lowlands, which enables them to have result in worse market access. Among
better access to markets and allows them the chronically poor households, the
to have a lower risk of being poor. majority of them are in the mountainous
The asset index is also believed areas in HT where infrastructure is
to be a good proxy for household wealth usually of poor conditions, the natural
(see Filmer and Pritchett 2001). It condition is hard for agricultural
differs significantly across population production, and people are usually from
subgroups; nonpoor households are ethnic minority groups who have less
again owners of higher asset levels, access to markets.

Figure 1 Changes in the patterns of income sources by poverty trajectory, percent

Source: Authors calculations from Vulnerability Surveys.


Notes: Agriculture refers to income from agricultural activities; nonagricultural refers to income from
nonagricultural activities.

4
The asset index is scaled to the range of [0,1]

113
Income Diversity and Poverty Transitions: Evidence from Vietnam

Finally, yet importantly, the negative relationship with the probability


patterns of and the changes in income of falling into poverty as well as with
sources also differ across population the probability of staying poor (see
subgroups. On average, a nonpoor Table 4). These relationships imply that
household had an income level of closed the transitions toward nonagricultural
to VND 35 million by 2007 and it rose income sources are good for the
to slightly higher than VND 40 million households well-being. Yet, not all the
by 2010. However, its income from marginal effects are of high levels of
agricultural activities stayed at almost significance because the diversity of
the same level of VND 11 million over income sources is not always successful.
the same period making a decrease in the Households in Vietnam have a
share of agricultural activities in the total tendency to have smaller sizes owing
income. Apparently, households of other to the lower birth rate, the increasing
groups had a lower income level than the migration, and the inclination of living in
nonpoor ones. By 2007, the incomes of a two generation households. Nevertheless,
rising household, a falling one, a churning poor households usually have a larger
one, and a poor one were VND 15 million, size because they have more children,
VND 15 million, VND 14 million, and less chances to migrate, and having
VND 11 million, respectively. The share of limited resources that prevent them from
income from agricultural activities to the separating into smaller households. The
total household income of household in marginal effects show that households
these groups are significantly higher than of a larger size and higher dependency
this share for nonpoor households, and ratio have a lower probability of staying
interestingly the share for the former ones nonpoor and a higher probability of being
rose over the period, which implies that poor in at least one period (see Table 4).
income from nonagricultural activities of Female-headed households are
these households increased slower than typically home to more members than
income from agricultural activities. This male-headed households, and the
was the result of the economic recession formers usually have less bread winners
in Vietnam started late 2008, causing loss than the later, which consequently makes
in job, wage cut, etc. and hence affects them have higher levels of vulnerability
negatively on remittance, and income to poverty than their counterparts. In
from off-farm employment. addition, there was no evidence of the
difference between the vulnerability to
Drivers of Poverty Transitions poverty across household sungroups
as classified by the heads age. In fact,
The marginal effects from the the poverty dynamics are determined
MLN regression show that the increase in more by the change in the households
the share of income from nonagricultural livelihood rather than the characteristics
activities to total household income has of the head (Carter and Barrett 2006),
an effect on the transitions of poverty. and findings from previous studies do
It had a positive relationship with the not show the importance of the heads
probability of rising out of poverty, age (Kedir and McKay 2005; Bhide and

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Table 4 Marginal effects from multinomial logit model

Nonpoor Rising Falling Churning Poor

Increase in the share of 0.04701 0.0651*** 0.00744 0.0102 0.0011*


nonagriculture income
20072008 (0.0295) (0.0175) (0.0167) (0.0158) (0.000820)

Increase in the share of 0.00405 0.0597*** 0.0489*** 0.00448 0.0013**


nonagriculture income
20082010 (0.0364) (0.0224) (0.0197) (0.0189) (0.000945)

Household size 0.0641*** 0.0246*** 0.0176*** 0.0203*** 0.00157**


(0.00993) (0.00610) (0.00563) (0.00542) (0.000802)

Head is male 0.0808** 0.00145 0.0418** 0.0369* 0.000644


(0.0334) (0.0176) (0.0207) (0.0191) (0.000925)

Head age 0.000367 0.000721 0.000273 0.000629 2.54e-06


(0.000771) (0.000456) (0.000425) (0.000394) (1.84e-05)

Head is from the Kinh 0.0916*** 0.0486** 0.0148 0.0249 0.00323


(2007) (0.0350) (0.0238) (0.0186) (0.0185) (0.00252)

Attains primary school 0.0517 0.0104 0.0347 0.00624 0.000336


(0.0368) (0.0199) (0.0239) (0.0161) (0.000776)
Attains middle school 0.0320 0.0149 0.00751 0.0234 0.00125
and beyond (0.0347) (0.0205) (0.0189) (0.0179) (0.00111)

Asset index 0.125*** 0.345*** 0.192*** 0.265*** 0.0135*


(0.0729) (0.0446) (0.0391) (0.0376) (0.00691)

H Tnh 0.0292 0.0100 0.0228 0.000417 0.00409


(0.0300) (0.0195) (0.0149) (0.0164) (0.00304)

Tha Thin Hu 0.0184 0.0334* 0.0270** 0.00836 0.00366


(0.0277) (0.0185) (0.0131) (0.0143) (0.00260)

Notes: Omitted categories: head is female, is from ethnic minority groups, has no schooling, k Lk,
poverty dynamics are referred to national poverty line. All control variables refer to the base year level
(2007). Nonagriculture income refers to nonagricultural income. Pseudo R2 = 0.226, Observations=
1,858. The MNL regression passes tests of IIA assumption. Standard errors in parentheses.
*** p < 0.01, ** p < 0.05, * p < 0.1.

115
Income Diversity and Poverty Transitions: Evidence from Vietnam

Mehta 2005). In addition, the education and the convenience of transportation.


attainment of the household head does Therefore, households in the province
not contribute to the differences in the have a higher probability of moving out of
probability of being in one or another poverty and a lower probability of falling
poverty trajectory. In fact, the more into poverty than their counterparts in
the head is educated, the better his/her the other two provinces (see Table 4).
access to production resources, labour,
and output markets is, and the more Robustness Check
efficient he/she is in managing household
resources. However, this type of human In order to check the robustness
capital is more likely to have a long-term of the MNL model for poverty dynamics,
effect on a households well-being rather the study applies to the transitions
than on the change in shorter period of of poverty as referred to the poverty
time. line of $2.5 a day (see Table A.2). The
As discussed earlier, the Kinh are MNL regression, the results of which
usually more able to access to market are shown in Table 4, and Table A.2
and, hence, take advantage of public pass the Hausman tests or suest tests of
service and the development process, independence of irrelevant alternatives
which allows them to have a higher (IIA), which means that assumptions
probability of being nonpoor, and lower of IIA could not be rejected; hence,
probabilities of being poor in one or estimates from MNL models are efficient.
more periods than their households of The reference model, in general, shows
ethnic minority groups (see Table 4). similar effects to those in the basic one.
Household wealth as measured However, there are differences in the size
by the asset index shows quite strong of the effects in these models compared
effects on poverty dynamics. It prevents to the basic model because poverty
households from being poor and is dynamics in the additional model refer
negatively correlated with falling into to a higher poverty line. Additionally, the
poverty, churning around poverty line, or results from Table 4 are in line with those
being poor. It is also positively correlated from previous studies. The results from
with staying nonpoor and rising out of the MNL regression in this study are,
poverty (see Table 4). These findings are therefore, realizable.
in line with the discussion of the role of
assets in the poverty transitions (Carter Conclusion
and Barrett 2006) as well as with empirical

T
findings from Bhide and Mehta (2005), his study uses panel data on
and Imai, Gaiha, and Kang (2011). households from regions in
There was little evidence of the Vietnam and a multinomial logit
difference among households in the model to estimate drivers of poverty
three provinces in the vulnerability transitions. The results show a large share
to poverty. TTH is more dynamic in of the population is vulnerable to poverty
terms of economic activities owing to where 38 percent of households have a risk
the development of the tourism sector, of being either transient or chronically

116
World Food Policy

poor. This risk varies substantially across (DFG) for supporting the household
household groups; households of a large surveys is gratefully acknowledged.
size, ethnic minority groups, and has
limited physical assets have a higher risk References
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2014-01, Griffith Business School.
Glewwe, Paul, Michele Gragnolati, and
Hassan Zaman. 2000. Who Gained McCulloch, Neil, and Bob Baulch.
from Vietnam's Boom in the 1990s?. 1999. Dishtinguishing the Chronically
Policy Research Working Paper 2275, from the Transitory Poor: Evidence
The World Bank. from Pakistan. IDS Working Paper
97. Institute of Development Studies,
Imai, Katsushi S., Raghav Gaiha, and University of Sussex.
Woojin Kang. 2011. Vulnerability
and Poverty Dynamics in Vietnam. Organisation for Economic Co-operation
Applied Economics 43: 36033618. doi: and Development (OECD). 1982. The
10.1080/00036841003670754. OECD List of Social Indicators. Paris:
Organisation for Economic Co-operation
Justino, Patricia, Julie Litchfield, and and Development.
Hung Thai Pham. 2008. Poverty
Dynamics during Trade Reform Tran, Q. Van, Sabina Alkire, and Stephan
Evidence from Rural Vietnam. Review Klasen. 2015. Static and Dynamic
of Income and Wealth 54: 166192. doi: Disparities between Monetary and
10.1111/j.1475-4991.2008.00269.x. Multidimensional Poverty Measurement:
Evidence from Vietnam. Research
Kedir, Abbi M., and Andrew McKay. on Economic Inequality 23: 249281.
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Ethiopia: Panel Data Evidence.
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doi: 10.1080/13563470500159246. 2005. Determinants of Income Mobility
and Household Poverty Dynamics in
Kinsey, B., K. Burger, and J.W. South Africa. The Journal of Development
Gunning. 1998. Coping with Drought Studies 41: 865897.
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Klasen, Stephan, and Hermann Waibel,
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Appendix

Table A.1 Components of asset index and their weights

Assets Eigenvalue Proportion


Household has a motobike 3.42 0.24
Household has a television 1.36 0.10
Household has an electric rice cooker 1.13 0.08
Household has a mattress 1.05 0.07
Household has a video player 0.96 0.07
Household cooks with electricity/gas 0.89 0.06
Household uses improved sanitation facility 0.81 0.06
Household has an electric fan 0.76 0.05
Household has a fridge 0.68 0.05
Household has improved flooring 0.64 0.05
House size 0.63 0.05
House (wall and roof) is made of improved materials 0.61 0.04
Household has radio 0.55 0.04
Household has a bike 0.52 0.04

Note: Proportions sum to one.

119
Income Diversity and Poverty Transitions: Evidence from Vietnam

Table A.2 Marginal effects from MNL for poverty dynamics as referred to $2.5

Nonpoor Rising Falling Churning Poor

Increase in the share -0.0240 0.0218 -0.0285 0.00956 0.00775


of nonagricultural
income 2007-2008 (0.0418) (0.0281) (0.0241) (0.0250) (0.00631)

Increase in the share -0.0556 0.0792** 0.0595** -0.0358 -0.0424


of nonagricultural
income 2008-2010 (0.0529) (0.0353) (0.0296) (0.0311) (0.00741)

Household size 0.0842*** -0.0393*** -0.0157** -0.0154* -0.0137***


(0.0137) (0.00933) (0.00798) (0.00846) (0.00303)

Head is male 0.0306 0.0544** -0.0440 -0.0253 -0.0158*


(0.0439) (0.0245) (0.0276) (0.0273) (0.00823)

Head age -0.00241** 0.00260*** 0.00102 -0.00136** 0.000165


(0.00116) (0.000734) (0.000644) (0.000685) (0.000152)

Head is from the Kinh 0.187*** -0.111*** -0.0146 -0.0121 -0.0492***


(2007) (0.0434) (0.0359) (0.0257) (0.0264) (0.0175)

Attains primary school 0.0319 0.00382 -0.00671 -0.0322 0.00320


(0.0520) (0.0327) (0.0274) (0.0249) (0.00649)
Attains middle school 0.124** -0.0358 -0.0148 -0.0641** -0.00954
and beyond (0.0516) (0.0338) (0.0286) (0.0309) (0.00735)

Asset index 0.509*** 0.495*** -0.355*** -0.452*** -0.150***


(0.113) (0.0719) (0.0592) (0.0617) (0.0273)

H Tnh -0.0611 0.0112 -0.0316 0.0355 0.0460***


(0.0415) (0.0296) (0.0216) (0.0270) (0.0149)

Tha Thin Hu 0.0873** -0.0173 -0.0685*** -0.0104 0.00901


(0.0378) (0.0254) (0.0190) (0.0229) (0.00741)

Notes: Omitted categories: head is female, head is from ethnic minority groups, head has no school-
ing, k Lk, poverty dynamics are referred to national poverty line. All control variables refer to the
base year level (2007). Pseudo R2 = 0.257, Observations= 1,858. The MNL regression passes tests of
IIA assumption. Standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

120
World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

The World Food Economy:


A 40 Year Perspective on the Past, and a Look Forward
C. Peter TimmerA

What has changed in the world food economy in the 40 years since 1975? The
basic answer to that question is that ending hunger has turned out to be a
very difficult task. Henry Kissinger stated in 1976, at the first World Food
Conference, that within a decade, no child will go to bed hungry. There
would be no hunger within a decade. We failed miserably in that promise
and the question then is why? This paper attempts to answer that question.

There are two basic questions: (1) What has changed, and what has remained
the same? (2) Why is ending hunger so hard? What has changed, obviously, is
an information and communications technological revolution that has radically
reduced the transactions costs of doing business. Even poor households can be
informed instantly about market prices. What has remained the same is that
resource scarcity continues as the dominant theme organizing market activities.
Making markets work for the poor is the only path out of hunger and poverty.

Keywords: Food security, markets, ICT revolution, world food economy,


ending hunger

Introduction Food Research Institute, which had been


founded in 1921. Merrill Bennett first

W
hat is the special significance taught the course, starting in the 1950s.
1

of a 40 year perspective, from After Bennetts retirement in 1960, Bruce


the vantage point of 2015? The Johnston took over the course and gave
answer is mostly personal. In 1975, I first it more of an Asian and African focus.
taught a course at Stanford University on But Bruce was on sabbatical in Kenya in
the world food economy. It was a course 1975 and I was asked if I would step in as
that had a long history at the Stanford a young faculty and teach a course on the
world food economy.

A
This is a lightly edited version of the Keynote Speech I delivered at the World Food Policy Con-
ference, December 1718, 2015 in Bangkok, Thailand. The Conference was sponsored by the Thai
Royal Society. I am the Cabot Professor of Development Studies, emeritus, Harvard University, and
Non-Resident Fellow, Center for Global Development, Washington, DC. Fuller details are available in
my book, Food Security and Scarcity: Why Ending Hunger Is So Hard (Philadelphia, PA: University of
Pennsylvania Press) 2015.
1
Bennetts well-known book, The World Food Economy (New York: Harper and Row), was published
in 1954 and was an outgrowth of teaching the course.
doi: 10.18278/wfp.2.2.3.1.8

121
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

That is the starting point of what The Quest for Food Security since
I consider my own serious deliberation, 1975
serious thinking, and serious analysis of

T
how the world food economy works and
here are two basic questions:
what goes wrong with it. Some of us in
the room are old enough to remember

that in 1975 we were just winding down
What has changed, and what has
from a very serious world food crisis. It
remained the same?
started with rice in Asia in late 1972
Why is ending hunger so hard?
and spread very quickly to maize and
wheat right around the world. And the
Let me take them in turn, starting
world food crisis corresponded also with
with some personal landmarks. First
an energy crisis, the formation of OPEC,
is a two-volume issue of Food Research
and restriction of oil supplies because
Institute Studies published in 1975 on
of the Yom Kippur war. The commodity
the Political Economy of Rice in Asia. I
boom that we witnessed in the mid-1970s
did the methodological introduction, the
really changed how people in the world
chapter on Indonesia, and the conclusions
were thinkingnot just about whether
for that volume. Professor Ammar
food was going to be availablebut the
Siamwalla did the chapter on Thailand.
linkages between energy and food going
A book titled Food Policy Analysis
forward.
that Wally Falcon and Scott Pearson and I
So, the question is what has
wrote was published in 1983.2 Amazingly
changed in those 40 years? The bottom
it is still used in courses on the world
line answer to that question will be a
food economy and on food policyeven
conclusion that ending hunger has turned
though it is >30 years old and is dated
out to be a very difficult task. Some of us
in rather serious ways. On the other
remember Henry Kissinger stating in
hand, the book laid out a framework for
1976, at the first World Food Conference,
thinking about food issues in the context
that within a decade, no child will go
of trade, macroeconomics, and household
to bed hungry. No one would have to
decision making, while integrating all
worry about having enough food on the
those components. The 1983 book was
table. There would be no hunger within
really the first time we were able to pull
a decade. We failed miserably in that
all this together for the profession.
promise and the question then is why?
In 1988, I published a chapter in the
That is my topic today.
Handbook of Development Economics on
the Agricultural Transformation.3 That

2
C. Peter Timmer, Walter P. Falcon and Scott R. Pearson, Food Policy Analysis (Baltimore, MD: Johns
Hopkins University Press for the World Bank, 1983).
3
C. Peter Timmer. The Agricultural Transformation, in Handbook of Development Economics, vol. 1,
eds. Hollis Chenery, and T.N. Srinivasan (Amsterdam, North-Holland: Elsevier, 1988), 275331.

122
World Food Policy

chapter came out of a growing sense that we agriculture and expanding output ends up
did not understand what was happening making it less important to policy and to
in terms of agricultural development, and the economy.
how agricultural productivity fed out into I come to the conclusion today,
national economies and then to the world after studying this whole historical process,
food economy. We could not understand and from being involved for over 40 years
that process without understanding in the field of agricultural development,
what happens to agriculture during with the second question I raised: Why is
modern economic growth and equally ending hunger so hard?
important, what is the role of agriculture That is our agenda after all.
in stimulating that economic growth. This Basically, what we are trying to do if we
is a two-way relationship and we have to are interested in food and agriculturewe
think about both directionsyou cant are trying to figure out a way to reduce
do just one or the other. Both of them are poverty and to end hunger. Everything
important. else is a means to that end. The world
And then in 2009, I published community just committed itself at the
a little monograph for the American Sustainable Development Goals Meeting
Enterprise Institute (AEI) called A in October 2015, at the UN in New York to
world without agriculture: The structural ending poverty and hunger in the next 15
transformation in historical perspective. yearsto do it by 2030. So, the question is
Based on my Wendt Lecture at AEI, this why didnt similar pledges over the last 40
volume looked at the endpoint of the or 50 years resulted in that outcomeand
economic growth process in terms of what are the chances of actually making
where agriculture fits in rich countries. that promise come true?
And the simple answer is there are more There happens to be a
lawyers in the United States than there book on that topic that just came out this
are farmers. There are more dry-cleaning year (2015): Food Security and Scarcity:
establishments in the United States than Why Ending Hunger Is So Hard?4
there are farm establishments. If you want
to think about the share of agriculture
in the economy as it goes to a very small
proportion, in rich countries agriculture
is <1% or 2% of both the work force and
its contribution to GDP. But in all rich
countries agriculture is more productive,
producing more output than it ever did. It
seems like a paradox, that the success of

4
C. Peter Timmer, Food Security and Hunger: Why Ending Hunger Is So Hard (Philadelphia, PA: Uni-
versity of Pennsylvania Press, 2015).

123
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

The book focuses on four main planning agency and think that
themes: government policy is irrelevant, even if the
First is the complex role of technical terms of reference are to study
markets. This is not the place to debate the the behavior of world commodity markets.
role of capitalism as a system to organize That is simply not the mindset. I was there
our economic affairs. That debate is taking for almost 2 years and then back two to
place in all rich countries, mostly because three times a year for the next 40 years. For
of the extreme inequalities in incomes better or worse, I am conditioned to think
generated by the financialization of it is important that the government do the
capitalism. My concern is both narrower right thing. That is the role of food policy
and broader. I want to focus on the role analysis, and the role of government is
of markets in the economy because we really very important in this. Markets may
may have to distinguish between the do a lot of the work but governments have
institutional framework in which these to intervene as well. But how, to do what?
markets are set (and the regulations that Third is the historical process of
market participants face) and the role that structural transformation. This has been
the markets themselves have to play. in some sense my major academic role. I
Second is the importance of was Professor at Harvard for many years,
government policies. I learned about Stanford and Cornell before that. I tried to
development when I first went to understand this whole historical process of
Indonesia, my Ph.D. still hot in my hand, structural transformationand especially
in 1970. My first appointment was as a the role of agriculture. I am a product of
junior advisor for the Harvard Advisory Alexander Gerschenkron, who lectured
Group in the National Planning Agency. I on economic backwardness in historical
had never taken a course in development. perspective. He thought agriculture was
I am an economic historian by training, part of the problem in the development
but I had analyzed commodity markets process. It was backward, it had people
for 2 years on Wall Street. I certainly had a who werent educatedyou couldnt
sense of how commodity markets workI get them into the factories to work on
used to spend my lunch break watching time. Agriculture was the problem and
the floor trading at the New York Coffee industrializationthe faster the better
and Sugar Exchange. At the time, of was the solution to modernization. His
course, Indonesia was a major commodity work focused almost entirely on the
exporter. So there was a need for some European experience. I was molded by
expertise on how world markets work for that introduction to the historical process
the things that Indonesia exported (and of thinking about the problems that come
the Indonesian government reluctantly up during the development process.
agreed, because of my inexperience in Constraints were simply opportunities
developing countries) to let me serve as for substituting other ways of solving a
a Harvard advisor on these commodities. problemnot as barriers that meant a
But I was explicitly not supposed to work constraint that prevented doing anything.
on food commodities. The European experience was seeing the
You cannot sit in a national constraint, then doing it some other way

124
World Food Policy

than the British did itthe Germans This long-term historical


will do it differently than the French did perspective is best illustrated by a
itbut its still attacking the same basic picture of the structural transformation
structural transformation. in Japan and Indonesiastarting in
The need to identify the 1880 and going to 2010a 130 years of
appropriate time horizon for analysis economic development and structural
and interventions. With all due respect to transformation and they arent done
our opening speakerto the Deputy Prime yet. Again, with all due respect, I think,
MinisterI think we all understand that it policymakers need to have this strategic
is extremely difficult to get policymakers framework in their head and in front of
and politicians to focus on anything other their analysts.
than the short-run realities that they are These four themes are not new,
coping with. Five years out is an eternity. but integrating them into a coherent
Fifty years out might as well be of zero approach to ending hunger seems to be
interestyou cant even begin to think original and is the contribution of the
about that. book. But it is the integration of these

125
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

four themes, which is really hard. It is public resources, and also at the
conceptually difficult, it is operationally same time private markets are
difficult, and we all understand that it is the main arena for nearly all the
politically difficult. Here, I wont try to decisions that matter: public policy,
speak on the realities of policymaking private markets. The food system is
in Thailand. But I can tell you that in at the core of this process in both the
Indonesia we have a very difficult time long run and short run. In the long
getting the parliament to deal with run, the food system is a key element
anything other than the extremely of the structural transformation,
short run. In the United States we dont which historically has been the only
take policy seriously any longer at all. sustainable pathway out of poverty.
The disconnect from what I would call In the short run, the food system is
reality in the US political scene is just where many of the poor make their
astonishing. So, this is going to be hard living and also face the risks of
because its going to require we get policy volatile food prices.
right. Its going to require that we do the
analysis and inform policy choices. Structural transformation has
The rich countries are lucky been the only sustainable pathway out
because they have enough resources of povertyyou have to get people from
that they can do thiskeep people very tiny farms with low productivity
from starvingeven if things are not jobs to better jobsoften in rural areas
completely right. There is plenty of slack but sometimes in the urban economy.
in the economy so that the poor need not The structural transformation changes
starvethat is just a programmatic issue the relationship of the labor force in
and it is not a policy or a development the economy between agriculture and
issue. Rich countries have largely the rest, especially in urban areas. The
managed this integration, and ended structural transformation has been the
widespread hunger, because they have only successful pathway out of poverty
abundant resources for the tasks. But for and where it has not worked we have not
poor countries, they have had to manage been able to end poverty. Being a small
hunger while they were still poor. Only a farmer is a very risky undertaking in an
few poor countries have managed to end environment of endemic poverty.
hunger while they were relatively poor,
and most of them are here in Southeast Main Message: The Wicked
Asia and China. The lessons from those Problem
success stories in this region drive the

A
analysis of the book. ustralians coined the term
wicked problem to describe
Why is ending hunger so hard? climate change, because it is so
complicated that no single individual, no
Ending hunger is hard because it single discipline, no single school, and
is a lengthy process that requires no single think tank can figure it out. Its
sustained policy attention and just much too complicatedthats what a

126
World Food Policy

wicked problem is. Now, there is a growing who will do these marketing activities sort
acceptance that food security is a wicked of automatically know that they can make
problem, it is a very complex thing to pull a little profit if they can move rice from
off. West Java to Jakarta, for example.
First of all, to solve the problem So the marketing system then
of food insecurity, markets have to do the becomes the locus for price discovery and
heavy liftingmarkets have to be the for efficient exchange of commodities.
arena where virtually every decision that Each time a transaction happens, these
matters is going to get made. There are commodities typically change hands
three things markets have to do. There they get a new owner. Increasingly, with
are engineering functions: they have to modern supply chains and supermarkets
move inputs and outputs from the farm at the end, there may be a single
through the processing sector into retail ownership pattern all the way back to
moving and transforming the product the farm. Typically, of course, farmers
in time, in place, and form. Whether the are usually not part of that process. In
Soviet Union or North Koreaany kind more traditional marketing systems, the
of socialist, planned economythey still commodities change handsthere has
have to do this. I was in China in 1975 to be an agreement on the terms of the
there was total denial by the Maoists at exchange. All of this sounds very busy.
the time that markets did anything. But There must be 10 billion or more of those
China moved its grain, its vegetables, transactions every single day. Planning
and its livestock products in time, place, agencies cant plan that. You need to
and formthey transformed them. They get the price discovery and the efficient
actually had to do all of these functions. exchange working almost automatically
Now the question is how do you do them so that governments dont have to do this,
efficiently? That was not a question that the market does it. The critical role for the
the Chinese were asking from the point market is this discovery of prices that leads
of view of an economist, they were asking to efficient exchange. And when those
from the point of view of an engineera prices are out and visibletransparent
planner in that sense. But if you do if you likethen they provide signals to
these tasks efficientlytransportation, producers and to consumers for efficient
storage, processingthe marketing sector resource allocation. If the price is high,
becomes the arena for price discovery you want farmers to be investing more in
because the different prices at each stage increasing output. You want consumers to
in the marketing chain have to match look for substitutes for ricebe it cassava
the costs of creating the value added: or corn (or eggs or pork).
milling the rice, moving from farm gate to Thats what responding to these
warehouse, or storing it from the harvest price signals is all about. And when those
season to the short season. Each of those responses are reasonably flexible you get
costs involves real economic resources efficient resource allocation. It is simply
and what we want for efficiency is the impossible to sustain poverty reduction
costs of doing those tasks gets matched by without using our resources reasonably
the price differentials so that the people efficiently. I am not a Chicago economist

127
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

that insists that this all works perfectly. Defining Food Security: 3 Pillars
But we have to make these markets and 2 Platforms
work pretty well because we need those

I
billions of transactions done every day think of food policy as having three
automatically and theyve got to point the basic pillarscolumns if you like
economy in the right direction instead of and those pillars sit on one base and
the wrong direction. also have a top, so there are two platforms.
Once markets are working pretty The pillars now are well received in the
well, governments have to do the right food security literature and debates
things and they have to stop doing the availability, access, and utilization.
wrong things. The problem is of course: You cannot have food security
Whats right? Whats wrong? If I had unless the food is available. So, availability
really been trained in Chicago (instead of is one of the pillars, perhaps even the first
Harvard), I might have been able to give a pillar. It depends on food production,
fairly simple answer to thatmarkets work plus imports, minus exportsobviously
perfectly all the time. But I wasnt. Whats there can also be changes from losses and
right and whats wrong varies by country, storagebut the basic point is important.
by stages of development, it changes over Please understand that the availability
timeand it requires continuous policy pillar is not just food production. Trade
analysisand it requires pretty significant is an important component for almost
flexibility on the part of policymakers. every country in the world in being able to
We have heard about knowledge-based achieve food security. Its very important
learning in the policy process. Thats that we keep that trade option. But it is also
exactly what we have to have. Because, as true that the earth as a planet is closed. We
circumstances change policies will have to cant trade with the moon or with Mars.
change and you have to know whats going So in a global sense, production really
on in order to bring informed analysis to does determine availability. In the very
the debate. short run we can worry about how large
The bottom line, unfortunately, food reserves are. But over the longer
is that the political economy of this is runproduction is criticalyou cannot
really tricky. That is because we need consume the food unless you produce it.
policymakers to understand whats going The second pillar is access to
on in the markets and when things food. It took quite a whileit took really
are going bad for income distribution, until the food crisis in the 1970s for the
economic growth, and stabilityall of profession to really understand that food
which the market doesnt really care security is anything more than production
about, but citizens do. When those market and reserves. There was plenty of food
outcomes are not working on behalf of the in the world. The 1983 book Food Policy
welfare of citizens, governments need to Analysis starts out by doing the caloric
do the right thing and not the wrong conversion of the major grains and root
thing. The analytics of determining what tubers, the protein cropsit didnt even
to do are difficult, but the political economy look at meatjust the calorie and protein
of doing it is really, really difficult. conversions, added them up, divided by

128
World Food Policy

the worlds populationand there was of food out there. If we are going to solve
~30% surplus in terms of any meaningful the problem of food insecurity we are going
requirements of humans for nutrient to have to figure out ways for households
intake. Obviously then, access is at least who do not have that access to get it. That
as important in determining who is can be through public action, it can be by
food secure and who is not as aggregate getting them a good job and it can be just a
availability. straightforward food distribution scheme
Amartya Sen would call this an from the World Food Program. There are
entitlement mechanism. Indeed, I think a lot of ways you can think about it, but
this whole access issue sets up a dichotomy making sure that poor households have
between a Malthusian view of the world, access to food is critical and certainly

where population is going to grow so fast the recent experience (the last 50 years)
against a fixed resource base that famine has been that we have enough on the
would be the mechanism by which we availability side and access is the really
keep our population under control versus serious constraint in solving this problem.
a Sen-ian view of the world: there is plenty

Pillars
Availability: food production + imports exports
Access: produce or buy (and Malthus vs Sen)
Utilization: sanitation, health, nutrition
Platforms
Stability: both access and availability
Sustainability
Agro-ecological
Incomes of the poor

Those three pillars sit on two dont destroy the food that is necessary to
platforms, one on top and the other go into the market. But stability of access
on the bottom. Increasingly now the is equally important because things can
international community that deals with happen in terms of income or, if you
food security understands that stability of like,entitlement mechanisms of poor
this whole food security system is critical. households so that even when the food is
It doesnt work for poor households to have in the market, if they lose their job or they
access to food over the average of a year lose their ability to access what food there
or 5 years if there are spikes and shortages is, then theyre simply not food secure.
because you pretty much need food every The other platform is the
day or on a regular basis. And so stability is sustainability of this system, an issue of
a real issue. Most of the profession focuses increasing urgency. Again, there are two
on the stability at the availability side, dimensions that we should think about:
making sure that droughts and typhoons (1) sustainability, as usually thought of as

129
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

an ecological concernmaking sure that and (2) the composition and size of the
we dont mine our agricultural resources, household. With these data, we do the
our soils and our water, in a way that in 10 appropriate adjustments and try to figure
years theyre gone and you cant continue out whats going on for the individuals
to produce. But we also need to think in the household. But this is where
about (2) sustaining the incomes of the we measure food insecurity, its at the
poor and the poor often rely heavily on household level.
exactly those resources. So, this is going I think of this as the micro level. A
to be a tricky debate going forward. lot of the food security community stops
at that point and says lets make sure we
Three Levels of Food Security know whats going on at the household
levelsee how the trends are changing

W
ith that complicated definition and understand the characteristics of the
in place, we need to understand households that have enough food and the
that there are three different characteristics of the ones that do not have
levels of food security, each with its own enough food, end of story, and deal with
unique (but overlapping) issues. the problem at that level. The difficulty
We measure food security at with that is there is a food security issue
the household level. Ideally, we would that shows up at the national level
always be measuring food security at what I would call the macro side of food
the individual level because it is the securityand it happens to be the food
individuals that matter. But the data security level that policymakers worry
are often not available for individuals. about. They worry about whether urban
Instead, usually what we have is: (1) how markets have adequate food supplies at
much food is available in the household reasonably stable pricesstable food

Three levels of food security

Household level (micro: degree of undernourishment)


National level (macro: reflected in urban markets as stable prices
for staple foodstuffs)
Global level (international market prices and the race between
growth in demand and supply)
Policy issues different from level to level

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World Food Policy

prices for the key food stuffsimagine reserves at a global level). At the national
rice in the major cities of Asia. level, if youre running low on rice stocks
Food security for policymakers is in Indonesia you can come to Thailand
actually a pretty clear concept: knowing and get some rice. But globally if were
that those urban markets have adequate running out of rice, reserves all around
supplies and the prices are reasonably the world in different countries have been
stable. Why? Because urban households exhausted and there is no place to go.
do not have the option of growing So we have to maintain the production
their own food. They have to go to the capability at a global level that ensures
market and even though they may be the supplies we will need at the national
reasonably wealthy, if the market supplies level, which then would go down to the
disappearif suddenly there is a scare household level.
as there was in 2007 and 2008if rice That global level is important.
suddenly disappears from the shelves in The difficulty, of course, is there is no real
the marketyouve got a really serious mechanism for ensuring global supplies.
problem on your hand, even if there is The Food and Agriculture Organization
enough rice out there. We even had a food (FAO) may think that this is their job
scare in California in 2008, people started but they dont control any budgets in
going to the major supermarkets and agricultural ministries in any country.
buying the rice off the shelf because they These are decisions that have to be made
were afraid there wasnt going to be rice at national levels. They can be helped
next week or the week after that and they by the research from the International
wanted to be sure they got it. Whats the Rice Research Institute (IRRI) and other
surest thing that will happen if everybody research centers. There are global public
panics? There will not be any rice on the goods that are out there, trade agreements
shelves. Its just guaranteed by human with the World Trade Organization
nature. (WTO)all of these things can help. But
I think it is entirely appropriate in fact, these key decisions will have to be
for policymakers at the national level to made at the national level. They need to
take this issue really seriously. That is be informed by whats happening globally
partly because history has made it very and thats the task.
clear the if you cant keep rice in the The bottom line here is clear:
market at stable prices you will not be the policy issues are really different from one
government going forward, whether its level to the other and a good food policy
elected or whether its military. You cant analyst needs to understand the different
keep the trust of the people and without policy issues at each levelbut then
the trust of the people you simply cannot how are they connected? How do we get
governits just as simple as that. from whats going on in the world food
Beyond the micro and macro economy to the macro and micro levels?
levels of food security is a third level: How do we get down to national level
the global level. As I said earlier, we food security policy debates and then how
cant import or export at a global level do we deliver and make sure households
(although in principle we could hold food have access to the food that they need?

131
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

What has driven changes in food security automobiles, television sets, but also
over the past three decades? demands for improved diets. A dietary
transition comes with this rapid economic
There are three big topics that we growth that includes more meat, seafood,
need to discuss.5 First is the changing and high-quality fruits and vegetables.
global environment, in which national This dietary transition also comes with
food systems are set. The global economy significant health consequences.
is more connected, more competitive, The ICT revolution. Modern
and more driven by the economies of information and communications
emerging nations. Second is the return technology is important at both household
of food price volatility. Between 1982 and and international levels. The ability to
2002, food prices kept falling. They were communicate almost instantly transforms
very stable and it looked like you could how efficiently markets can operate
just forget about food price volatility and because markets operate on information.
scarcity as the driver of any problems. You The faster they can get the information
may have access issues, but you dont have the more efficient they will be. It doesnt
to worry about volatility and supplies. have to be in billions of a second the way
Now, food price volatility is back. The the US stock market operates, but the
third topic, which has been on my fast transmission of information, and its
intellectual horizon for many years but accessibility to all market participants, is
which now has entered the policy debate very important.
in a serious manner, is the growth in Global financial integration.
income inequality within very important Global financial markets have become
countries and across countries.6 interested in the emerging economies,
There are many dimensions to the and this interest is not necessarily all for
changing global environment, and they the good. Yes, having access to cheaper
can be mentioned only briefly here: sources of capital so you can build
Rapid economic growth, expensive infrastructure is fine. But if the
especially in Asia. Because of its funds are hot money and the country is
speed and the number of households building a road with it, there is a mismatch
involved, Asias economic growth has in the time horizon that gets really scary
led to the emergence of hundreds of when the money suddenly flows out.
millions of households into the middle Then you cant meet your bills, you have
class, with new demandsdemands for to depreciate your domestic currency,

5
Even though there was little time to do so in the lecture itself. The topics of food price volatility and
impact of income inequality have been treated elsewhere and were not discussed at length in the
lecture.
6
As an example of that early interest, see, for example, Growth, Inequality and Poverty Alleviation:
Implications for Development Assistance (with M. K. Gugerty). CAER II Discussion Paper (Cam-
bridge, MA: Harvard Institute for International Development, November 1999).

132
World Food Policy

and suddenly youve got a macro crisis on as price levels. But high energy prices
your hands. That financial volatility is not for well over a decade, especially from
how you get investors in these countries 2000 to 2014, was a game changer for
to take the long view they need in order agriculture. When energy prices are
to make these long-term investments in high, it makes economic sense in the
infrastructure, factories, and equipment. marketplace to convert food commodities
The changing nature of economic into liquid fuel: gasoline and diesel fuel.
growth. Starting in the 1990s, China and Corn from the American mid-west can
a number of other poor countries began be run through an ethanol plant and that
a several-decade long spurt of economic ethanol fuels an automobile. If we use the
growth that changed the nature of demand entire corn crop in the United States to
for basic commodities: metals, coal, and make ethanol, it would provide ~15% of
petroleum. The former chairman of the our liquid fuel demand for the automobile
Federal Reserve Board, Alan Greenspan, fleet in the United States. Of relevance to
commented in the mid-1990s, about the the world food economy, Latin America
weightless economic growth that we particularly responded very vigorously to
saw in advanced countries. It didnt use these opportunities in terms of producing
any natural resources. It was all based sugar-based ethanol, and by producing
on new knowledge of the sort produced more corn and soybeans for export as
in Silicon Valley. Although it needs a bit feed for the livestock needed for the
of electricity, basically economic growth dietary transition. But high energy prices
was not resource intensive in the rich mean high food prices because bio-fuels
world. But when economic growth in the link food commodities to energy markets
world was being driven by China, India, and that turned out to be very scary. We
Brazil, Indonesia, and other countries have some breathing space now. But we
that needed roads, buildings, railways, need to stop the mandates on bio-fuels,
harbors, airports, cars, and trucksthat and I would like to see taxes on bio-fuels
takes cement, copper, iron, and steel made from food commodities (rather
it takes real commodities and it takes than the subsidies that exist in many
energy to fuel that whole expansion. So, countries). Here is a clear case where the
economic growth is no longer weightless market is not getting it right. Were going
and the emergence of India and China to need reforms and sensible tax policy.
as significant drivers of global economic Climate change. There is not
growth has changed the nature of world time for a serious discussion of the
commodity markets. It has taken the impact of climate change on the world
whole financial community some time to food economy, but sharply increased
get that all sorted out. instability in weather seems to be
High energy prices. Actually, the comingwith more droughts and worse
issue is high but volatile energy prices, flooding, often in the same locations in
because oil is US$37 per barrel instead of the same year. This instability will affect
US$137, and the commodity bust being agricultural productivityespecially in
experienced late in 2015 emphasize the areas that need productivity growth the
importance of price volatility as well most: Sub-Saharan Africa in particular.

133
The World Food Economy: A 40 Year Perspective on the Past, and a Look Forward

Fortunately, my thoughts on how to cope


with climate change appeared in the
inaugural issue of World Food Policy, so I
can end with that reference.7

7
Peter Timmer, Coping with Climate Change: A Food Policy Approach, World Food Policy (Inaugu-
ral Issue) 1 (1) (Spring 2014): 5671.

134
World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Food Security in an Age of Falling Commodity and


Food Prices
Stefan TangermannA
International prices of food and agricultural commodities had reached an
extremely high level in 2007-08 and subsequent years, but have more recently
embarked on a declining trend. It is, though, not certain that they will reach the
lower levels again that prevailed before the price peak. It appears conceivable
that international markets have experienced a structural shift towards a longer-
term higher price level. While there is no certainty that prices will remain at
such a higher level it appears that the international community should at least
be prepared for such an outcome. High international food prices can undermine
global food security as developing countries overall, and low-income countries
in particular, are net importers of food and agricultural products. Their net
imports keep growing, above all those of cereals. In many developing countries,
even rural households are net buyers of food. An increase in food prices reduces
welfare and impacts negatively on food security in net importing countries and
among net-buying households. As far as policy implications are concerned, this
means that high-price policies, implemented through import tariffs and domestic
measures, cannot be recommended for developing countries. The international
community needs to invest more in agricultural development and food security
in developing countries. We must not repeat he experience of the mid-1970s,
when the promises to do more for agricultural development after a similar
period of food price peaks were soon forgotten after prices declined again.

Keywords: International food prices; global trends on food markets; net imports
of food in developing countries; welfare implications of changing food prices;
policies to improve food security

I
n recent years, international markets rice, reached a peak in 2008, far above the
for commodities and food have gone real prices that had prevailed in the last
through exciting if not worrying price 20 years or so. In a number of developing
swings. The well-known secular decline countries food security was severely
of prices in real (i.e., inflation corrected) threatened or actually undermined.
terms and a period of several years of price Several governments around the world
depression were suddenly interrupted by a responded in panic and adopted measures,
dramatic increase of prices in 2007. Food both domestically and at the border, aimed
prices, in particular those of cereals and at keeping food prices under control. The

A
Professor Emeritus, Department of Agricultural Economics and Rural Development, University of
Gttingen, Gttingen, Germany. Paper presented at the World Food Policy Conference, 1718 De-
cember 2015, Bangkok.
doi: 10.18278/wfp.2.2.3.1.9

135
Food Security in an Age of Falling Commodity and Food Prices

international community was deeply Bangkok World Food Policy Conference


concerned about global food security in December 2015 on which this article is
and the worlds capacity to feed a growing based.
population. Several high-level meetings When discussing this theme,
were held, all the way up to the ranks of three specific questions would appear
heads of state and government, to consider to be particularly relevant. (1) Is the
programs that could improve the state of price decline experienced in the recent
affairs. And indeed, all sorts of promises past likely to continue? (2) What are the
were made to assist countries in need, to implications for world food security?
calm down the situation on international (3) How should policies, both domestic
food markets and to foster the productivity and international, respond? The article is
of world agriculture.1 structured along the lines of these three
After their 2008 peak, food prices questions. The focus will be on prices
on international markets as well as prices of food and agricultural commodity
of other commodities declined again prices, while other commodities will be
for some time, though by far not to the mentioned only in passing. Given the
much lower levels that had prevailed limited time available for the presentation,
before 2007. But then prices began to the treatment of the theme dealt with here
rise again, and for a number of years is necessarily somewhat selective if not
they fluctuated around rather high levels, eclectic.
with an extraordinary degree of volatility.
Beginning in 2014, though, commodity Is the Current Price Decline Likely
and food prices embarked on a declining to Continue?
trend that appears to continue, if not to

O
accelerate, until these days. While the ne of the most frequently cited
precarious situation of food consumers sources of information on
was a major matter of concern in the years international market prices for
following 2007, the fate of farmers around food and agricultural commodities is the
the world has come into sharp focus as Food and Agriculture Organization (FAO)
agricultural commodity prices appear to of the United Nations. A frequently used
be ever declining. Yet, as many farmers, FAO graph showing price developments
in particular in developing countries, are is reproduced in Figure 1. A quick view
also poor food consumers, the pressure at the lines in this graph may suggest that
that declining farm product prices impose prices of major food commodities have
on farm incomes may also have negative declined dramatically in recent months. A
implications for their food security. This naive observer might get the impression
complex web of relationships between that they are in free fall, possibly even
changing market trends and food security approaching zero. It is, though, important
was the theme of the presentation to the

1
For a discussion of the factors that had triggered the price spikes on international food markets as
well as an analysis of domestic and international policy responses that could potentially cure the re-
sulting problems for world food security, see Tangermann (2011) and the literature referenced there.

136
World Food Policy

to take a close look at the definition of development we should take a look at the
the vertical axis: it does not start at zero.
longer term evolution of prices as shown
Graphs constructed that way provide an in Figure 2, based on the same type of
exaggerated impression of the rates of FAO data. Against the view that prices
change of the variables shown in the lines.are on a declining trendand possibly
Moreover, the FAO graph reproduced declining without any floorlonger term
here covers only a relatively short period.perspective shows that even though food
prices are currently on the decline, they
are still higher than they used to be before
the period when the price explosion
took place. This is true even if prices are
corrected for inflation, as was done for the
data shown in Figure 2.
Taking an even longer time period
into consideration we must remember
that around 40 years ago, i.e., in the mid-
1970s, the world also experienced an
extraordinary peak of food prices. At that
time governments and the international
community were equally concerned about
world food security and its future, and new
Figure 1: FAO Information on Food policies for agricultural development and
Commodity Prices new institutions were established, some of
Source: Reproduced from FAO (2015) which have survived until today. But after
that price peak in 19741975 prices came
In order to gain a more telling down again and continued along their
impression of the market situation and its secular decline in real terms.

Figure 2: Evolution of Prices for Cereals and Food Since 1990


Source: Based on data available at FAO (2015)

137
Food Security in an Age of Falling Commodity and Food Prices

There are, though, reasons to of the factors determining supply and


argue that the price spike we have seen demand. In well-done projections, these
more recently in 2007 and subsequent assumptions are explicitly specified and
years was of a different nature than what reported in a transparent way.
happened in the mid-1970s, even though One institution that has already
some of the factors that have triggered for quite some time generated projections
the dramatically rising prices in both for world markets for agricultural
periods may have been the same. In the and food commodities is the OECD
1970s, when the price crisis subsided (Organisation for Economic Co-operation
prices essentially returned to their longer and Development). Since a number of
term declining trend in real terms. This years the OECD has been joined in this
time, however, it appears that even though work by the FAO, contributing specific
we observe a strong price decline at the knowledge of the market and policy
moment, international market prices for situation in developing countries. Let us
food and agricultural commodities may for a moment consider the development
not really return to the lower levels that of the international price of wheat in real
prevailed before 2007. Of course, this is terms as projected by OECD and FAO.
a statement about what might happen The wheat price data presented in Figure 3
in the future and nobody knows with first of all remind us of the enormous price
any certainty what will actually happen peak experienced in the mid-1970s. They
in the future. Yet, there are institutions also show the depressed though fluctuating
that generate price projections, and such price level on international wheat markets
projections can provide an impression prevailing in the years before the 2007
of where markets may go in the years 2008 price peak, as well as the much
to come, under all sorts of assumptions higher price level observed after 2007.
regarding the most likely development The wheat price projected by OECD and

Figure 3: World Market Price for Wheat in Real Terms


Source: Authors calculations based on OECD/FAO (2015)

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World Food Policy

FAO in their 2015 Outlook, produced at a trend implicit in the second sub-period is
time when commodity prices had already on a significantly higher level than that of
embarked on their recent much noticed the earlier period.
decline, implies a gradual downward In the international market for
movement (in real terms) from their high rice, some factors driving prices are similar
post-2007 level. Yet, for the 10 year future to those working in the wheat market, but
period covered wheat prices are projected there are also differences. In particular,
to remain still significantly above their there was an extraordinary price peak on
pre-2007 level.2 the rice market as well in 2008, but the
If, contrary to developments in the forces behind that specific price situation
1970s, prices for wheat (and other food for rice had little in common with those
commodities) should after the more recent behind the price spike on the international
peak indeed not return to their pre-2007 market for wheat.3 Whatever the market
level then some sort of a structural change situation for rice in recent years may have
appears to have occurred in the mid- been, the future evolution of the rice price
2000s. To provide a graphic impression as projected by OECD/FAO is such that,
of the magnitude of that structural shift, like in the case of wheat, it is not expected
the author of this article calculated simple to fall back to the low level prevailing
time trends (logarithmic) for the two sub- before the 2008 price crisis (see Figure 4).
periods of 19722006 and 20072024, As a matter of fact, the projection even
the latter one including the OECD/FAO implies a slight increase of the rice price in
projection. As shown in Figure 3, the real terms.

Figure 4: World Market Price for Rice in Real Terms


Source: Authors calculations based on OECDFAO (2015)

2
The central price projections of OECD/FAO do not include random factors such as weather-caused
yield variations. They do, therefore, not exhibit price fluctuations. In reality, prices will of course fluc-
tuate around their longer term trend.
3
For an analysis of the rice price crisis in 2008 see various chapters in Dawe (2010).

139
Food Security in an Age of Falling Commodity and Food Prices

Figure 5: Percentage Change of Real Prices in 20152024 (Average) Relative to Two


Alternative Base Periods
Source: Authors calculations based on OECDFAO (2015)

The broader picture across a larger before the price boom had occurred (the
set of agricultural commodities included red bars in Figure 5).
in the OECD/FAO Outlook indicates What are the major factors that
that for the average of the 10 year period may explain why we appear to have
covered in the market projections, i.e., experienced an upward structural shift in
20152024, nearly all commodities are agricultural and food commodity prices,
expected to be at a higher price level in real as indicated by such price projections?
terms then where they stood on average This is not the place for an extensive
in the years 19922006, i.e., the 15 year treatment of that complex issue. Only
period before the price explosion (see the three points will be mentioned.4
blue bars in Figure 5). And if we take the 7 First, agriculture and the food
year period immediately before the price economy are large users of energy and
boom of 2007 as the base, relative to that hence closely linked to price developments
period prices in real terms are expected on energy markets. Rapidly rising oil
for most agricultural commodities to be prices are therefore believed to have been
~20%30% above the level that we knew one of the factors behind mounting prices

4
For a much more detailed analysis and discussion, see the annual publications of the OECD/FAO
Outlook.

140
World Food Policy

of agricultural commodities in 2007 and 6). A share in the order of magnitude of


subsequent years,5 and the more recent 12%13% of world output of these two
dramatic decline of oil prices is most likely commodities is now taken away from the
also one of the reasons why agricultural food market and channeled into a different
commodity prices are now declining. market, i.e., for energy production. Some
Many observers, though, consider the of that is happening because of market
current low level of oil prices to be a developments. But the largest part of
transitory phenomenon and expect oil itand OECD has analyzed that very
prices to attain a much higher level again in carefullyis a result of government
the future. The 2015 OECD/FAO Outlook policies in the form of mandates,
also expects oil prices to rise again in production subsidies, use subsidies,
the future, and this is one of the factors quotas, and other equivalent measures.
explaining the relatively high expected This means that this totally new factor
level of future prices for agricultural and behind the development of world markets
food commodities. for agricultural commodities is largely
But there are also two more specific policy driven. Within a ~10 year period a
agricultural elements in this price picture. very large amount of additional demand
One is the fact that, beginning in the early that did not exist in the past has entered the
2000s, a rapidly increasing share of global market for agricultural products and has
output of agricultural commodities is being certainly driven up prices.6 It is probably
used to produce biofuels, in particular no exaggeration to call this a structural
coarse grains and vegetable oils (Figure shift of market conditions in world

Figure 6: Share of Use for Biofuel Production in Global Output of Selected Agricul-
tural Commodities
Source: Authors calculations based on OECDFAO (2015)

5
See Tangermann (2011) and the literature referenced there.
6
For an early analysis of the economic implications of biofuel support policies, including consequenc-
es for agricultural commodity markets, see OECD (2008).

141
Food Security in an Age of Falling Commodity and Food Prices

Figure 7: Compound Annual Growth Rates in World Yields per Hectare


Source: Reproduced from Interagency Report to the Mexican G20 Presidency (2012)

agriculture. This part of global demand unfortunately it is not occurring for the
for agricultural commodities is expected time being, and there are also no strong
to remain with us largely irrespective signs that it is immediately around the
of what happens to commodity prices. corner. If we combine the decline in yield
At the Paris meeting on climate change growth worldwide with additional demand
in the second week of December 2015, from the biofuel sector and a high growth
many governments have declared that rate of demand for food from emerging
they are determined, for good or not so economiesChina being one of them
good reasons, to continue to promote the then of course we should not be surprised
use of agricultural commodities for the to find that we have reached a higher price
production of biofuels. plateau for agricultural commodities.
Finally, there is another specific The interim conclusion is that
agricultural factor behind higher prices on while prices of agricultural and food
agricultural and food commodity markets, commodities are declining at the moment,
equally worrying as the expansion of we should not exaggerate the importance
biofuel and unfortunately occurring at the of that decline. There is no doubt that
same time. It is the fact that yield growth prices are actually declining since a
for major cereals and grains has declined number of months, but they are doing so
in the last two decades or so (see Figure from the extremely high level they had
7). The world has had a green revolution in attained in the years following 2007. There
the past, but it is lacking one in our days. are good reasons to believe that they will
We certainly want to have one againbut not fall below the level of what we have had

142
World Food Policy

in the past, with the possible exception ofOf course, readers who expect a different
some temporary downward fluctuations. market outlook can simply reverse
There is a good probability that in the the whole argument by replacing high
medium term future prices may actually prices by low or declining prices, and the
remain above the level experienced implications for food security would then
before the 20072008 price spike. Thus, be the opposite of what will be suggested
the assessment of the market situation here.
depends on ones perspective. If it is short
Fundamentally the argument is
term, say the most recent 2 years or so, then
pretty simple. High prices are certainly
prices are certainly declining. If one has a
good for food producers, while they are
somewhat longer time horizon, comparing a problem for food consumers. How
the medium-term outlook with what the a country overall is affected and how
world was used to before prices suddenly individual households fare depends on
peaked in 2007 and subsequent years, whether they are net producers or net
then one has good reasons to identify an consumers. The most important question
increase in the plateau of agricultural andto be asked, therefore, is whether the
food commodity prices. countries or households concerned
produce as much food as they consume
Implications for Food Security and possibly even more, or whether they
need to buy food in order to maintain

A
gainst the background of what was their consumption.
stated earlier about the market What are the facts regarding that
outlook, the implications for food net trade status? First of all, for those
security will be discussed here in terms countries where food security is potentially
of the consequences of high food prices. or actually a serious problem, i.e., the least

Figure 8: Net Exports of Agricultural Products from Least Developed Countries


Source: FAOSTAT (2015)

143
Food Security in an Age of Falling Commodity and Food Prices

developed countries, the situation is rather importers is particularly true for the low-
clear. If we take these countries as a group income developing countries. Among the
and look at the most important staple high-income developing countries, 100%
food, namely cereals, then we can see that of them are net food importers. If we take
the least developed countries as a group all developing countries together, 80% of
are a large net importer of cereals, and them are now net food importers, and
what is more their net imports of cereals that share is growing.
are growing rapidly (see Figure 8). Obviously, this overall situation
As a matter of fact, the least does not apply to all individual countries.
developed countries are net importers Thailand is a net exporter of cereals,
not only of cereals, but as a group they are rice, and even of agricultural products
also net importers of rice. Moreover, least overall (Figure 10). Thus, there are major
developed countries as a group are net exceptions among developing countries.
importers for the whole set of agricultural But for the group of developing countries
products taken together, obviously to be overall it remains true that they are
expressed not in physical but in monetary net food importers. The implications
terms. regarding the interplay between food
If we look at individual countries, prices on international markets and food
then the picture is obviously more diverse. security are obvious. For developing
If the first half of the 1980s is compared countries as a group, high food prices are
with the second half of the 2000s, then we a problem rather than a solution. That is
find that a growing share of developing not the case, though, for Thailand: a food
countries in all income groups are net exporting country of course is happy to
food importers (Figure 9). That trend see high food prices.
toward a growing proportion of net food When we move to the level of

Figure 9: Number of Net Food Importer Countries as Percentage of Number of De-


veloping Countries in Respective Income Group
Source: OECD (2013a; 2013b) based on Matthews (2012).

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World Food Policy

Figure 10: Thailands Net Exports of Agricultural Products


Source: FAOSTAT (2015)

Figure 11: Shares of Net Buyers and Net Sellers of Staple Food in All Households of
Respective Group, Selected Countries
Source: Filipski and Covarrubias (2012).

145
Food Security in an Age of Falling Commodity and Food Prices

individual households, the situation in urban gardening and similar activities.


only a few selected individual countries Thus, even if many rural households
can be presented here (Figure 11, based are obviously net sellers of food, among
on findings in Filipski and Covarrubias the countries in the particular group
2012). What is shown in this figure are shown here their share among all rural
the shares of urban respectively rural households is less than the share of rural
households that are a net buyers or a net net buyers, the only exception among the
sellers of staple food. We can see that in countries covered here being Vietnam.
most developing countries among those What does all that mean? If food
shown here there is a good share of urban prices increase, how does that affect the
households that are net buyers. welfare of individual households? This
What may be more surprising, is shown, for the same set of selected
though, is the finding that even among developing countries in Figure 12. Five
rural households there is a large share income quintiles are distinguished in this
of net buyers. Where this is the case, the analysis. To the left, the blue bar represents
resources available to these households do the impact on the poorest people in the
not allow them to produce as much food respective country. When food prices
as the family needs. So these households rise by 20%, their welfare declines by a
have to go out to the market. The data rate in the order of magnitude of 4%6%.
used in the analysis cited here includes not Rising food prices also depress welfare
only grain but also staple food overall, and among households with higher incomes,
hence also covers the output generated in though the rate of welfare loss tends

Figure 12: Welfare Impact of a 20% Increase in Price of Staple Food for Alternative
Income Quintiles
Source: Filipski and Covarrubias (2012)

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World Food Policy

to be the smaller the higher the level of the same time make it more difficult for
income, largely due to Engels law and the consumers to have access to food appears
resulting lower share of income spent on to be discounted in the process of political
food among richer households. Among decision making. Given that in many
the countries included here, Vietnam is developing countries (and in the group of
again the only exception: an increase of developing countries overall), the volume
food prices is welfare improving for all of food consumption is larger than that
income quintiles in Vietnam. of food production, and hence that high
The conclusion from all this is prices do more harm than good, there
that high food prices tend to hurt most should be more awareness of the negative
developing countries and most individual implication of high-price policies.
households in that part of the world.7 However, there are indications
that the level of support provided
How Should Policies Respond? to farmers in developing countries,
including support through price raising

G
iven that high food prices cause policies, is on the rise. The measure
harm to consumers, and the more used in the OECD to quantify the level
so the lower the family income is, of support provided by governments is
it is not a good idea for developing country the producer support estimate (PSE).
governments to engage in policies, be it In its percentage version, this indicator
domestically or at the border, that support expresses the share of total farm revenue
prices of agricultural products at a higher that comes from government policies as
level than the market would generate. opposed to markets. As can be seen in
While this statement sounds nearly Figure 13, in the rich countries, i.e., in the
trivial, governments of several developing OECD area, this was at the level of around
countries have a tendency to disregard 30%35% in the mid-1990s and declined
it, placing more weight on the impact to ~20% more recently.
of prices on agricultural producers. In If we set against that a number
many cases this appears to be the case of selected emerging economies we
based on the notion that higher prices can see that the level of support they
(and subsidies, be it on inputs or output) are providing to their agriculture has
provide incentives for farmers to expand increased quite a bit in recent years and a
output, raising the availability of food on good part of that is indeed price support.
the market. The fact that high prices at Among the overall group of countries
covered in this analysis, the share of farm

7
This conclusion is obviously derived from a purely static argument. In a dynamic analysis, rising
food prices can trigger income growth among food producers and rural workers. Where this results
in a shift from net food buyer to net food producer status, rising food prices can have positive welfare
implications for the households concerned. However, it will take some time for this effect to domi-
nate. For a more extensive discussion and references to relevant literature, se Filipski and Covarrubias
(2012).

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Food Security in an Age of Falling Commodity and Food Prices

Figure 13: Government Support to Agricultural Producers in the OECD Area and
Selected Emerging Economies
Source: OECD (2013a; 2013b)
Note: The seven emerging economies covered in the OECD analysis are Brazil, China, Indonesia,
Kazakhstan, Russian Federation, South Africa, and Ukraine.

Average of 20022007 2012

Figure 14: Shares of Country Groups in Aggregate Producer Support of All 47 Countries
Covered in the OECD's Analysis of Farm Support
Source: Authors calculations based on PSE database of OECD (2013a; 2013b)

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support provided in emerging economies i.e., supporting extension, education,


has increased significantly over the last infrastructure, research, technology
~10 years (see Figure 14). In other words, development, etc. It is not a matter of
governments in the emerging economies should one or should one not provide
covered here, and most likely also in other support to agriculture development. It is
developing countries, engage in farm a matter of the most effective and efficient
policies, including price raising measures way of doing so.
that are not really in the interest of food More in passing, we should also
security of their people. stress that in the WTO there should
From there we can progress to be more talk about disciplining export
one eclectic comment on the agricultural restrictions. A number of countries
negotiations of the World Trade had embargoed exports in the 2007
Organization (WTO) Doha Round. 2008 period, and that has very much
One of the issues debated there, very contributed to panic in the market place
much pushed by a group of developing and among government and, hence, to
countries known as the G33, with India driving prices up.
being particularly interested in this issue Finally, as far as policies are
is whether developing countries should be concerned, more needs to be done to
allowed to provide price support to those support agricultural development and
domestic farmers from which they buy food security in developing countries.
staple food, to be put that into storage for Consider the long-term evolution of
food security reasons. For the time being, the share of total Official Development
WTO rules on domestic farm support Assistance (ODA) that is channeled
under the Agreement on Agriculture into agriculture, shown in Figure 15.
impose constraints on the extent to which We can see that this share had increased
this is allowed. India has run into problems considerably after the world food crisis of
with that constraint. From an economic the mid-1970s. At the time everybody was
point of view, providing farm support convinced that the world needed to engage
in the context of public stockholding in a serious effort in order to make the
for food security purposes is not at all a world more food secure. But when prices
convincing proposition. Storage policies calmed down again, governments simply
may be very helpful to be prepared for forgot about their good resolutions, and
an emergency situation, but when a assistance to agricultural development
government intends to stockpile food as a share of overall ODA fell back to the
it is not at all necessary to provide price same low level at which it stood before
support to domestic producers. Food can that food crisis erupted.
simply be bought into stockpiles at market How does that compare to
prices, and that is exactly what economic experience with the more recent world
reasoning would advise governments to food crisis of 20072008 and subsequent
do. Speaking more generally, it should years? In Figure 15, we can see a marginal
be noted that producer price support increase of ODA to agriculture after, and
is far less efficient than improving the possibly in response to, that recent price
enabling environment for agriculture, crisis. Yet, that increase is minimal and it

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Food Security in an Age of Falling Commodity and Food Prices

Figure 15: Share of Assistance to Agriculture, Forestry, and Fisheries in Total Official
Development Assistance, 19672013
Source: OECD (2015)

appears to be fading away already. That establishing some sort of a link between
is a very sad story. When prices peaked what governments in the better-off
in 20072008 there were great words of countries do for their farmers and what
promises on the side of policy makers in the international community does for
the G8, the G20, and in other places. But agricultural development in the poorer
the actual statistics regarding assistance countries.8 The approach proposed is
to agriculture in developing countries are that as a first step one measures the level
far less convincing. of support provided to farmers in the
Can one think of an approach industrialized and emerging countries,
that would provide more reliable i.e., in the richer part of the world. Any
assistance to agricultural development? measure of support to agriculture in these
In an initiative in the framework of richer countries could be used, e.g., the
the International Centre for Trade and one that is being discussed in the Doha
Sustainable Development and the World Round negotiations of the WTO, i.e.,
Economic Forum we have come up the Overall Trade Distorting Support
with one suggestion which is somewhat (OTDS). And as a second step of the
original. It is a new instrument that proposal the countries in the richer part of
could be agreed at the international level, the world would provide their assistance

8
For more detail on this proposal and for a more general discussion of where international policies for
agriculture should go in the years to come, see Tangermann (2016).

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World Food Policy

to agricultural development in the poorer discipline policies that contributed


countries meeting agreed quantifiable to price depression. In other words,
criteria, in an agreed proportion to what the international trade regime was
these richer countries do for their domestic traditionally focused on limiting farm
farmers. Just to suggest an idea of relevant support so as to act against depressed
orders of magnitude, if one were to take food prices. There is no reason to discard
no >1% of what governments do for that orientation altogether. However, to be
farmers in rich countries and channel that on the safe side the WTO should also do
amount into agricultural development in more to guard against high food prices.
the poorer countries, that would increase One of the options available and worthy
current ODA to agriculture by ~20%. of a negotiating effort is a more effective
Thus, a small proportion of government and operational discipline on export
support to farmers in the richer countries restrictions.
could do a lot to improve the prospects for The international community
agricultural development in the poorer should certainly also do more to improve
countries. And as this approach would food security in developing countries.
not raise food prices in the recipient One option in that regard is to establish
developing countries, it would also not do a link between the benefits governments
any harm to poor consumers. This concrete in rich countries provide to their domestic
element of financial solidarity between farmers on the one hand, and what they
richer and poorer countries could do a lot do on the other hand for agricultural
to improve food security and agricultural development and food security in the
development in countries. poorer countries.
As far as domestic policies in
Conclusions developing countries are concerned, there
is reason to reconsider the price support

T
here are good reasons to believe policies pursued by many governments
that the new normal on markets through both border measures and
for agricultural and food products domestic instruments. Quite apart from
may be a higher level of food prices than efficiency considerations, which also
the world was used to before the price speak against such price support policies,
peak in 20072008 and subsequent years. in most developing countries these
Of course this is not a certain outcome, policies do more harm to food consumers
but one that appears to have a significant than they provide benefits to farmers. And
probability. However, nobody knows with where price support comes in the guise
any certainty what is going to happen to of improving food security, e.g., through
markets in the years to come. Given that public stockholding for food security
uncertainty the international trade regime purposes, one should be particularly
should be prepared for both high and low skeptical. There are much more effective
food prices. and efficient ways of improving food
In the past, the WTO and security and at the same time fostering
its predecessor, the GATT, focused agricultural development.
on depressed prices and tried to

151
Food Security in an Age of Falling Commodity and Food Prices

References OECD. 2015. Query Wizard for


International Development Statistics.
Dawe, D., ed. 2010. The Rice Crisis http://stats.oecd.org/qwids/... (visited on
Markets, Policies and Food Security. November 24, 2015).
London, Washington, DC: FAO and
Earthscan. OECD/FAO. 2015. OECD-FAO Agri-
cultural Outlook 2015-2024. Paris: OECD.
FAO. 2015. FAO Food Price Index.
http://www.fao.org/worldfoodsituation/ Tangermann, S. 2011. Policy Solutions to
foodpricesindex/en/ (visited on Novem- Agricultural Market Volatility: A Synthesis.
ber 24, 2015). ICTSD Programme on Agricultural Trade
and Sustainable Development, Issue Paper
FAOSTAT. 2015. Data download facility. No. 33. Geneva: International Centre
http://faostat3.fao.org/download/T/TP/E for Trade and Sustainable Development.
(visited on November 2, 2015). http://ictsd.org/i/publications/108969/.

Filipski, M., and K. Covarrubias. 2012. Tangermann, S. 2016. Agriculture and Food
Distributional Impacts of Commodity Security: New Challenges and Options for
Prices in Developing Countries. In International Policy. E15 Expert Group on
Agriculture, Trade and Food Security
Agricultural Policies for Poverty Reduction,
ed. J. Brooks. Paris: OECD. Policy Options Paper. E15Initiative.
Geneva: International Centre for Trade
Interagency Report to the Mexican G20 and Sustainable Development (ICTSD)
Presidency. 2012. Sustainable Agricultural and World Economic Forum.
Productivity Growth and Bridging the Gap
for Small Family Farms. Paris: OECD.

Matthews, A. 2012. Agricultural Trade


and Food Security. Background paper
prepared for OECD. Dublin: Trinity
College.

OECD. 2008. Biofuel Support Policies


An Economic Assessment. Paris: OECD.

OECD. 2013a. Agricultural Policy


Monitoring and Evaluation 2013: OECD
Countries and Emerging Economies. Paris:
OECD.

OECD. 2013b. Global Food Security:


Challenges for the Food and Agricultural
System. Paris: OECD.

152
World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Food Security In an Age of Falling Commodity and


Food Prices: The Case of Sub-Saharan Africa
Grard AzoulayA

Within a context characterized by a simultaneous occurrence of a global


equilibrium of the world food balance and the persistence of a high percentage
of the worlds population that does not adequately meet its nutritional needs,
this article intends to concentrate on the impacts of falling food prices on food
security focusing on Sub-Saharan Africa (SSA). SSA is not the region that
accounts for the most important number of people suffering from hunger, but is
a region that experiences the highest prevalence of hunger.

The article considers the driving forces of the rising/falling prices of food and
commodities. It analyzes the impact of falling food prices on the food security
situation in SSA, and discusses the main constraints of food policies and
strategies in SSA.

Keywords: Food, prices, food security, policies, Sub-Saharan Africa

Introduction These 795 million people are


unable to produce or to buy what is

T
he strong growth of world food needed to live. Those who are hungry are
production during the past 50 years not predominantly consumers who do
did not bring to an end the diverse not have enough money to buy their food.
manifestations of hunger. We can observe They are mainly producers of agricultural
a simultaneous occurrence of a global products: 75% live in rural areas and
equilibrium of the world food balance among them, 90% are poor peasants and
and the persistence of a high percentage farm workers; the remaining 25% are
of the worlds population that does not sentenced to the exodus by poverty, poor
adequately meet its nutritional needs: 795 peasants who live in the city, in shanty
million people fail to adequately satisfy towns or camps. This rural migration
their nutritional needs, 1.3 billion people represents ~50 to 60 million people per
live on <1 dollar a day, and suffer from year. Hunger is not only a consequence
nutritional deficiencies in micronutrients of poverty, but also one of its causes,
and macronutrients. undermining the productive potential of
individuals (Azoulay, 2006).

A
Universit Paris Sud.
doi: 10.18278/wfp.2.2.3.1.10

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Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

Within this overall context, this The Driving Forces of the Rising/
article attempts to concentrate on the Falling Prices of Food and
impacts of falling prices of food and
Commodities
commodities on food security focusing
on Sub-Saharan Africa (SSA). SSA is not
The Food Price Trend
the region that accounts for the most

D
important number of people suffering
uring several decades world food
from hunger, but the region which knows
prices used to be depressed by the
the highest prevalence of hunger.
dumping of surpluses by western
The article is divided into three
nations. But after 2005, and specifically
parts: in the first part, the driving forces
in 2008, food prices globally rose to
of the rising/falling prices of food and
unprecedented levels. Prices increased
commodities are considered. In the
again in mid-2011, exceeding 2008 levels
second part, the impacts of falling food
and remaining relatively high through
prices on the food security situation in
2011.
SSA are examined. Finally, the main
There was a strong belief that the
constraints of food policies and strategies
world had entered a new era of not just
in SSA are discussed.1
high but also rising and volatile food
prices, in contrast to previous decades
characterized by low prices.

Figure 1: Food Price Index in Nominal and Real Terms: 19612016


Source: FAO Food Price Index: http://www.fao.org/worldfoodsituation/foodpricesindex/en/

1
This article was presented and discussed in a round table at the International Conference on World
Food Policy: Future Faces of Food and Farming; Regional Challenges; Bangkok 1718 December
2015, organized by The Royal Society of Thailand.

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Figure 2: Commodity Food Price Index Monthly PriceIndex Number


Apr 2011Mar 2016: 53.070 (27.59%)
Source: http://www.indexmundi.com/commodities/?commodity=food-price-index&months=60

Figure 3: Food Price Trend and Rice Trend

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Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

But, prices of food commodities The Driving Forces of the Decline of Food
have started to decline since the beginning and Commodity Prices
of 2011 and they have suddenly fallen
steeply since May 2014. The nominal FAO This decline of food prices is
Food Price Index (FPI) (FAO b, 2016) has similar to the decline of the prices of
fallen, almost uninterruptedly, between commodities. The index underwent
March 2014 and the beginning of 2016. statistically significant changes both
For instance, the FPI lost ~50 points (a in trend and volatility: a period of
quarter of its value) between 2014 and higher volatility between 2006 and 2011
2015 and recently slumped to a 6 year low coincides with an upward trend, followed
of 149,3 points in January 2016. by a downward trend and lower volatility
A statistically significant upward starting in 2011.
shift in trend is as remarkable from August In the most recent period (April
2006 to January 2011 as a downward shift 2011 to October 2015), the commodity
from January 2011 to the present. As the price index decreased from 208 to 100
following graph indicates, the FPI as well with a sharp decline from summer 2014.
as the rice price index decreased sharply Going back to the driving forces that
since 2011 (rice being a major cereal in explained the 2008 sudden escalation of
the diet of a large part of SSA population, food prices, it seems useful to examine
especially in urban areas which include which of these driving forces have lost
>50% of population). all pertinence and reversed drastically
As the FAO indicates, since during the last two years and subsequently,
2008, the cereal indices have exhibited explore the opposite forces that could
progressively lower volatility after explain the down trend in the last period.
each successive change point and price Then it could be of interest to assess the
behavior has reverted to that before prospective impact of some remaining
the 2008 episode, in which prices were forces still pertinent today, if any.
widely regarded as falling and with lower Conjectural and structural driving
volatility. Rice is the only commodity forces could explain the 2008 price surge
showing a comparable change in trend. In (Azoulay 2012). Several conjectural
terms of variability, both grains and rice forces occurs: a reduced production due
exhibit behavior similar to the FPI, but to climatic change (floods in Australia
with an additional change point during and Argentina, dry weather drought and
the period of elevated volatility. fires in Russia, and jellies threatening
The fall in the FPI is the result crops in Europe and North America); the
of sharp declines in the prices of rice, levels of historically low stocks (19.4% in
grains, sugar, and vegetable oils, but not 2007/2008); the higher cost of energy and
all foodstuffs have followed these trends. transport (the Reuters-CRB energy index
According to the FAO, agricultural having tripled since 2003); an increased
commodities are going through a period production of bio fuels (100 million tons
of lower and less volatile prices. of cereals, 4.7% of the global production
of cereals were used in 20072008, a
large diversion of agricultural land to

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Figure 4 : Commodity Price Index20002016


Source: International Monetary FundIMF Primary Commodity Prices

produce biofuels: ethanol from maize largely ruined in SSA countries under
and synthetic diesel from vegetable oils); structural adjustment. Investment has
some trade policies (export reduction been affected by the reduction of public
in some countries aiming to reduce the spending and subsidies to the agricultural
impact of prices on vulnerable groups); sector); and the urban bias and the
the speculative money involved in so-called archaism of the agricultural
commodities markets (the amount of sector (Lipton 1977). Agriculture has
speculative funds invested in agricultural been traditionally regarded as an archaic
commodity futures markets increased sector, often mistreated by Governments
from $5 billion in 2000 to 175 billion in of developing countries. That was the case
2007). for the economic policies implemented in
Beside these conjectural driving SSA, implying low urban consumer price
forces, some underlying structural and taxation of domestic agricultural
ones played a major long-term role: production prices detrimental to small
the changing consumption patterns in producers.
some major emerging countries (during Have these conjectural and
more than a decade, China, Brazil, and structural driving forces reversed
India40% of the world population drastically, that could then explain this
experienced a strong growth which recent decline? Since 2008, some of
implies the development of a middle these forces reversed and contributed
class which tends to adopt a different to explain the decline, but some forces
diet including more meat and dairy still remain operative. The main cause
products); the decline of investment in of the decline was primarily the fact that
agriculture (agricultural investment was supplies were higher than expected. In

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Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

20142015, the world cereal supply was The Correlation between Food and Oil
estimated to be 20% more than demand. Prices
The world stock-to-use ratio was 25.2%
in 20142015. Abundant supplies keep In the past 18 months, fossil fuel
international prices under pressure. prices have seen a decline by more than
Supplies and stocks of the major grains half. During the last 25 years, agricultural
are still very strong (25.2% versus 19.4% commodity prices were interconnected
in 2007/2008), even if estimates for 2015 with energy prices. This interconnection
2016 indicate a tiny decrease of world derives from both demand and supply
cereal production (FAO 2016). The cost sides. Mainly the growing mechanization
of energy has reached minimal value (see of agriculture has increased the influence
below figure 5). Trade policies based on of energy prices on production costs, and
export reduction are no more applied in hence, output prices. Falling oil prices are
some countries. likely to have subdued the competitive
But some driving forces of the demand for biofuels and, consequently,
2008 situation did not reverse at all: the derived demand for agricultural
the increased production of bio fuels; feedstocks, which, in turn, reduced their
(the speculative money involved in own prices (maize and sugar, and to
commodities markets; and the structural some extent wheat, used as feedstocks for
changing consumption patterns in some biofuel production).
major emerging countries; all these The correlation between the
factors are still contributing to push the two series, especially since 2007, is very
food prices up. pronounced mainly because of increased
influence of energy prices on production

Figure 5: Correlation between oil and food prices

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World Food Policy

costs, and hence, on output prices by States dollar (USD) against major
the growing mechanization of world currencies (reaching a 13 year high in
agriculture. September 2015) is significant because
Oil was $25 a barrel in 2003 but international commodity prices have
soared to almost $148 in 2008. In July typically had an inverse relationship
2014, the price of Brent crude has been with the value of the USD. When the
~$110 a barrel. But this has now fallen to USD strengthens against other major
$40 a barrel at January 2016. currencies (euro and yen), commodity
prices typically fall. On the other hand,
What about Macroeconomic Factors? when the value of the USD weakens
against other major currencies, the prices
Macroeconomic factors play an of commodities increase. This relationship
important role in impacting the falling / is largely a result of commodities being
rising trend of food commodities prices. priced in USD and of international
According to the FAO, extreme buyers being required to purchase them
price volatility has been extremely rare with USD. When the value of the dollar
in agricultural markets, but the global rises, buyers have less purchasing power
food system is becoming increasingly and so demand typically weakens and
vulnerable to it and susceptible to symmetrically.
episodes of extreme volatility, as markets The correlation between
are increasingly integrated in the world commodity prices and interest rates is
economy. Extreme price volatility in an additional macroeconomic factor.
global agricultural markets means rising There is a negative correlation between
and more frequent threats to world food falling real interest rates and commodity
security. prices. In the 1970s, in 20022004, and
Volatility connotes two principal 20072008 falling real interest rates were
concepts: variability and uncertainty; the accompanied by rising real commodity
former describing overall movement and prices. In a situation of large liquidity,
the latter referring to movement that is the money flows also into commodities,
unpredictable. However, the efficiency and so bids their prices up and thus that
of the price system begins to break down prices fall when interest rates rise (Frankel
when price movements are increasingly 2014). According to Frankel, high
uncertain and subject to extreme swings interest rates strengthen the domestic
over an extended period of time. currency, thereby reducing the price of
Furthermore, despite of a rise in internationally traded commodities in
liquidity, inflation is very low and even domestic terms (even if the price has not
negative in a few developed countries. fallen in foreign currency terms).
Real commodity prices are falling. Increased vulnerability is being
The most common explanation is the triggered by an apparent increase in
global economic slowdown, which has extreme weather events; a greater reliance
diminished demand for energy, minerals, on international trade to meet food needs
and agricultural products. at the expense of stock holding; a growing
The appreciation of the United demand for food commodities from other

159
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

sectors, especially energy; and a faster Falling Food Prices and Food
transmission of macroeconomic factors Security in SSA
onto commodity markets, including
exchange rate volatility and monetary The Food Security Situation
policy shifts, such as changing interest

I
rate regimes. n SSA, fewer than one in four (or
Furthermore, financial firms are 23.2% of the population) are likely to
progressively investing in commodity be undernourished in 20142016.
derivatives as a portfolio hedge because This is the highest prevalence
returns in the commodity sector seem and the second in absolute terms, as the
uncorrelated with returns to other assets. region has ~220 million people suffering
Evidence suggests that trading in futures from hunger in 20142016. In fact, the
markets may have amplified volatility in number of undernourished people has
the short term. increased by 44 million between 1990
1992 and 20142016, despite the decline
in the prevalence of undernourishment,
which reveals the strength of the growth
rate of the population (2.7% per year).

Figure 6: Undernourishment around the world,


Source: FAO; State of Food Insecurity 2015

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World Food Policy

Figure 7: The food Security Situation in SSA


Source: Global Food Security Index 2014

SSA received the lowest regional Although SSA has experienced


score in the 2015 Global Food Security high economic growth rates over the past
Index 2014 (GFSI), with an overall score 5 years, poverty has not been reduced
almost 20 points below that of Asia & drastically. SSA has accounted for 8 of
Pacific. It also scores the lowest in each the worlds 20 fastest-growing economies
of the components of the food security over the past 5 years (20092013).
concept (access=affordability, availability, According to the World Bank, economic
and quality and safety categories). growth in SSA will reach in 2015, 3.7%
instead of 4.6% shown in 2014, which is
Hunger, Poverty, and Growth the lowest growth since 2009. Still, 42.7%
of the population live under the poverty
According to FAO, 18 SSA headcount ratio at $1.90 a day in 2012
countries have met the target 1c of the (56.8% in 1990) that means an estimated
Millennium Development Goals of 50% of the population continues to live
2000, with the objective of reducing on <US$1.25 (weighted at PPP rates) per
the prevalence of hunger by 50%, and 4 day.
others are close to reach it. However, improvements in the
Among these 18 countries, 7 structures that impact food security,
have also achieved the more ambitious rather than income improvements, are
objective of the World Food Summit of driving positive changes in SSA. The
1996 with the objective of reducing by a high economic growth rates that SSA has
half the number of people suffering from experienced in recent years have resulted
hunger (Angola, Cameroon, Djibouti, in increased investment in the structures
Gabon, Ghana, Mali and Sao Tome, and that are necessary to ensure food security.
Principe) and 2 others (South Africa and Major improvements have occurred in
Togo) are close to doing so. the presence of food safety-net programs,

161
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

the existence of crop storage facilities, the on whether households are net buyers
percentage of food loss, and the existence of food. At the same time, lower prices
of nutritional standards. also diminish producers returns. At the
Despite high economic growth country level, low international food
rate, the numbers of poor people did not prices would also benefit those countries
decrease in SSA, even if some components that rely to a large extent on imported
of the Human Development Index food products, as long as their currencies
(UNDP 2015) and the index itself have do not decrease as to annihilate the gains
known a modest improvement (0.518 in from low prices.
2014 versus 0.499 in 2010). Consumers may benefit from the
In this context, the impact of fallen low prices of imported food in particular
food prices on food security is equivocal. when these prices result from developed
countries farm subsidies. But this
The Uncertain Impacts of Fallen Food situation is largely hazardous as the recent
Prices on Food Security price surge demonstrates, while at the
same time small farmers face enormous
In low-income SSA countries, difficulties in trying to expand production
the urban poor are net food consumers, in response to higher prices.
while small farmers are, generally, net Falling prices may impact
sellers. Rising prices hurt consumers by on farmers profitability, reducing
reducing their purchasing power but investments, and increasing unsustainable
benefit producers by increasing their agricultural practices. Low returns could
profits. Rising food prices for basic staple reduce incentives for larger investment
food is not beneficial for Africas poor in agriculture (rural infrastructure, credit
who consume more food than what they availability, input services, research, and
can produce, particularly poor families extension). As it was explained earlier,
living in cities that spend the majority of underinvestment in agriculture has been
their income on basic foodstuffs. Rising considered as one of the main structural
food prices are also having important causes for the sharp price increases of
macroeconomic impacts on many 20072008.
African countries since more food is being Finally, lower food prices have
imported from the world market leading intensively contributed to reduce (or even
to worsening balances of trade (only 5% partially destroy) domestic agricultural
of Africas imports of cereals come from activities. SSA experimented shrinkage of
other African countries). some agricultural sectors due to imports
Lower food prices relative to surges generated by low subsidized imports
incomes benefit to food security, by prices: the case of European products (for
making food acquisition more affordable instance European poultry). Founded
especially to poor consumers. Food on a list of infant industry argument,
purchases typically account for a a domestic development process in
significant share of overall household agriculture in SSA is extremely difficult
income of the poor in SSA. Overall to implement under the competition of
benefits would, however, be depending largely subsidized imported products.

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World Food Policy

Constraints on Food Policies and to 9.7 billion in 2050 and 11.2 billion by
Strategies in SSA: Some Prospects 2100. Ten years ago, world population
was growing by 1.24% per year. Today, the
Population Prospects growth rate is 1.18% per year that leads to
an additional 83 million people annually.

T
he world population is projected During 20152050, half of the
to increase by >1 billion people population growth is expected to be
within the next 15 years, reaching concentrated in 9 countries: India, Nigeria,
8.5 billion in 2030, and to increase further Pakistan, Democratic Republic of the

Population (millions)
Major area 2015 2030 2050 2100
World . 7 349 8 501 9 725 11 213
Africa . 1 186 1 679 2 478 4 387
Asia 4 393 4 923 5 267 4 889
Europe 738 734 707 646
Latin America and the Caribbean .. 634 721 784 721
Northern America .. 358 396 433 500
Oceania .. 39 47 57 71

Figure 8: Population of the World and Major Areas according to the Medium-Variant
Projection
Source: United Nations, Department of Economic and Social Affairs. Population Division (2015).
World Population Prospects: The 2015 Revision. New York: United Nations.

Figure 9: Sub-Saharan Africa: total population

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Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

Congo, Ethiopia, Republic of Tanzania, to meet the food demand gap is likely
United States of America, Indonesia, and unreachable.
Uganda.
The median-variant projection The Food Demand Gap
put the ASS population to 2 billion in
2050 and 4 billion in 2100. From 2000 According to the 2014 Global
to 2030, SSA population shall more than Agricultural Productivity Report, 15%
double (i.e., the most rapid growth rate of of total SSA demand can be met by
population in the world). maintaining the current total factor
In SSA, fertility rates are among productivity (TFP)2 growth rate.
the highest in the world. Women currently Demand for food will continue
average 5.2 children, escalating to 7.6 to increase, it is projected to double by
in Niger, compared to averages of 1.6 in 2020, and consumers will be increasingly
Europe, and 1.9 in North America. In located in Africas rapidly growing cities.
West Africa, a region where malnutrition In SSA, the average annual growth in
remains a challenge, fertility rates have food demand is projected to be 2.83%
declined modestly in the past 60 years, per year from 2000 to 2030, primarily
from 6.3 to 5.7 children per mother and due to population increase. Urbanization
in central Africa, a region including some is accelerating (the share of the worlds
of the poorest African nations, fertility people living in urban areas will increase
rates have increased from 5.99 to 6.17 from 54% to 66% by 2050). More people
since 1950. The pressure on governments in cities will be increasingly diverse their
to deliver basic services as education, diets. Diet diversification and access
health care, and, most importantly jobs is to high-quality protein are increasing
increasing. rapidly in less developing countries. For
This huge population growth example, SSA experienced the largest
could be seen as an opportunity, as score increase in dietary intake of quality
African countries also had the worlds protein (+7.1).3
fastest economic growth rates. But more By 2050, the worlds middle class
convincingly, an alternative approach is expected to grow from 50% to 70% of
considers that in this region where food the population, with most change taking
security will remain an extremely severe place in developing countries. According
challenge, an equivalent level of growth of to the African Development Bank,4
agricultural productivity must be reached Africa attend the emergence of a middle
to sustain this population growth. Such a class, actually estimated, one third of the
level of agricultural productivity growth African population (313 million34.3%)

2
TFP is the ratio of agricultural outputs (gross crop and livestock output) to inputs (land, labor, fertil-
izer, machinery, and livestock).
3
Global FS Index 2015.
4
BAD, April 2011.

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World Food Policy

Figure 10: Food Demand Compared to Agricultural Output in SSA, 20002030

against 111 million (26.2% of the growth rate, the increase of the number of
population) in 1980. The middle class is poor despite the increase of an emerging
composed by those who spend between middle class, unless SSA accelerates
$2 and $20 per day (which is a very large productivity growth rates and succeeds
and imprecise definition). in alleviate its structural constraints.
Increased demand for livestock,
poultry, and fish is the largest driver in the Considerable Resources and Agricultural
world food economy and is expected to Structural Constraints in SSA
double by 2050, with 70% of the increase
coming from developing countries. As SSA experiences an abundance of
grains and oilseeds are a major part of agricultural resources (land and water)
animal diets and, accordingly, demand and has a huge potential to produce
for them will also grow substantially. food staples, but these resources are
Income growth is leading to largely unexploited because of structural
dietary changes and rapid increases in the constraints. Farming is largely done
amounts of processed and perishable foods under rainfed conditions. Levels of
consumed. Households own production irrigation are very low and make it
will likely account for decreasing shares vulnerable to the changing climate.
of household consumption. Natural water supplies are abundant but
The current food demand gap is evenly distributed. SSA has not been able
significant, and will become much greater to intensify its agricultural production
taking in account the SSA population through irrigation and improved water

165
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

management. Less than a quarter of the total and income source for more than two thirds
land area of SSA suitable for rainfed crop of SSA active workers, especially women, the
production is so used. FAO has estimated young, and the poor. More than 70% of the
that the potential additional land area poor reside in rural areas, and most depend
available for cultivation amounts to more on agriculture for food production. In SSA,
than 700 million ha5. 13 major farming systems were identified
SSA also experiences a large variety with the 5 largest systems, including maize
of agro-ecological environments, farming mixed or highland perennial systems,
systems, and large number of staples. This supporting 65% of Africas rural population
substantial potential to produce food staples (Garrity, Dixon, & Boffa 2012).
remains unexploited because of the same Most farming in SSA is highly
structural constraints. fragmented and has a very low labor
Despite this rich agricultural productivity due to little use of
potential, the continent increasingly mechanization, fertilizer, pesticides,
imports from outside of the region to irrigation, and also due to very limited
satisfy demand (almost $68 billion in 2014 public support (for instance, measured by
on $1486 billion world exports). Many of ESP), which undermines agricultural output
SSA least developed countries have become and makes the region a net food importer.
increasingly dependent on imported food Less than 4% of cropland is irrigated,
in recent decades. This dependency may not compared with 35% to 40% in much of
be a serious issue, as long as other export Asia. Farmers apply <8 kg per hectare of
sectors can be developed to generate revenue inorganic fertilizer nutrients (nitrogen,
to pay for food imports. But in many cases, phosphorus, and potash) compared with
this has not been achieved. >150 kg per hectare in much of Asia. As
According to FAO, in SSA, the a result, yields of both cereals and tuber
imports bill of food products in some crops are low in comparison to the rest of
countries is very high related to the gross the world (Tittonell and Giller 2013). For
domestic product (GDP). During periods instance, a yield gap analysis of cassava in
of rising commodity prices, these countries the East African Highlands found a gap of
spent on average up to 5% or 6% of their 12.2 t ha, 59% of which was attributed to
GDP to import food. For Sierra Leone, fertilizers, 28% to genetic differences, and
the proportion was even 22% to 24% of its 12% to planting method (Fermont et al.
GDP to commercial food imports. During 2009).
the 2000s, agricultural exports from Africa Increased production resulted
increased fourfold, but imports rose 2.5 rather from agricultural area expansion
times faster, widening the agricultural trade often at the expense of the natural resource
deficit. base. Agricultural productivity in SSA has
SSA is facing structural constraints. suffered from decades of policy neglect,
Smallholder agriculture is the predominant years of underinvestment, and extractive
form of farm organization. Small farming practices. Agricultural infrastructure is
systems is the most important employment very weak as the public commitment to

5
Only 10% of the Guinea Savannah, covering an estimated 600 million hectares, is farmed.

166
World Food Policy

agricultural research and development that enhanced productivity needs to


was inefficient. Weak market institutions, be consistent with the maintenance of
ineffective crop storage facilities, high other ecosystem services and enhanced
percentage of food loss, fragile logistics resilience to shocks.
services and distribution channels, Increasing productivity in a
fragile input and output market access, sustainable way for small farming systems
lack of adequate credit system to small in SSA will require new technologies that
farmers, lack of training, and use of news are appropriate and adaptable for African
cultural methods and technologies are smallholder farmers and pastoralists and
frequent failures of agricultural policies. suitable for local agro-environmental
Agricultural and food security policies conditions at different scales (region,
are extremely weak and not consistent village, and farm). The heterogeneity of
in the long term. The situation results smallholder farming systems suggests that
from inefficient and fragile institutions, processes for sustainable intensification
weakened government, and public will need to be flexible and adapted to
institutions effectiveness, sometimes local agro-ecological and socioeconomic
political instability, corruption, or conditions. Wealthier farmers can move
conflicts. into the process with investments into
knowledge acquisition (Pretty 2011).
Potential for Greater Productivity: A For poorer households, more incentive
Critical Issue structures would be required, provided
that such household can move out of the
Intensification of agricultural poverty trap.
production is essential in the more In any case, enhanced productivity
densely populated areas in order to feed requires access to agro-inputs, profitable
the rapidly growing and urbanizing output markets, and access to credit,
population in SSA. rural infrastructure, marketing,
To remediate the current processing and storage organization,
situation, an African Green Revolution reduction of post-harvest losses, and
is sometimes proposed (Otsuka proper access to agricultural knowledge,
and Larson 2012). But sustainable services, and information. Government
intensification of small farming systems investments and policy frameworks will
is probably the most accurate element of be crucial, including facilitating private
agricultural policy in SSA. This process is sector engagement. In this case, policy
generally based on three basic elements: regulations, incentives, and coherent
(1) production of more food, feed, fuel, intervention strategies across national,
and/or fiber per unit of land, labor, and/or regional, community, and farm scales
capital used; (2) preservation of ecosystem appear essential.
services, including those governed by Doubling agricultural output to
healthy soils; and (3) resilience to shocks meet demand and alleviate hunger will
and stresses, including climate change increase pressure on already-stressed
(Pretty 2014). Sustainable intensification resources, requiring greater efficiency in
of small farming systems recognizes agriculture and food systems. Sustainable

167
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

expansion of land for agriculture will agricultural expenditures increased by


require careful selection, land use 7.7% for Africa as a whole in 20032008
management practices, and conservation but decreased by 1.34% in 20082013
approaches to prevent desertification and in the aftermath of the 20072008 food
rainforest destruction. and financial crises (due to the fall of
The recent re-engagement of governments fiscal revenues and overall
governments in the agricultural sector expenditures). Africas share of public
is improving the socio-organizational agricultural expenditures in total public
conditions in many African countries expenditures globally decreased from
(Benin 2011). Government investments 3.7% in 20032008 to 3.1% in 20082013,
in agriculture and infrastructure begun falling short of the CAADP 10% target.
in the wake of the food price shocks of A long-term comprehensive
20072008 and have also been crucial to agricultural and food security strategy is
improving food security. still crucial including: production policies
The Comprehensive Africa (infrastructures, irrigation, inputs, credit,
Agriculture Development Program production structures, etc.), internal trade
(CAADP), a continent wide framework (storage facilities, transportation, credit,
for accelerating agricultural development market structure, market information
was initiated 10 years ago with a major system, etc.), and consumption policies
objective: 10% of public expenditures (income, health and nutrition, early
dedicated to agriculture (Conference of warning system, etc.) and more basically,
Ministers of Agriculture of the African sound trade and price policies.
Union. 2003). Following this policy, public

Figure 11: Public agriculture expenditure share in total public expenditure

168
World Food Policy

Regional Integration Attempts and Their A Common External Tariff


Limits (CET) is a basic feature of the Customs
Union as a form of economic integration.
Regional integration has been This trade policy instrument is usually
a longstanding objective of the African implemented when a less advanced
Union (for instance the 1980 Lagos plan). grouping is aimed at protecting its own
Multiple integration organizations exist, industry and agriculture sectors from a
but SSA experienced low levels of intra- more developed country or grouping.
regional trade resulting from physical In this case, consumers will lose because
and institutional barriers which are a they have to pay higher prices for imports
limit to agricultural production and food from the rest of the world but allow
security. domestic producers to develop as an
FAO estimates that African cereal infant industry (List).
imports in 2008 were US$15.2 billion, The Common External Tariff in
just 5% of all grain imported from UEMOA is based on 4 rates from 0%
regional sources (probably a little more to 20%. In ECOWAS, a 5 rate has been
underestimates taking in account intra- recently added at 35%. The CET structure
regional informal trade). The volume of adopted by the UEMOA countries is not
extra-regional food staple imports shows really protective of domestic enterprises
how regional integration in the food as it offers less nominal protection to the
staple market can achieve food security. intermediate and finished consumers
According to Rakotoarisoa, goods in West Africa (for instance, Nigeria
Lafrate and Paschali 2011, the increase bound tariff for agricultural products are
in food imports since the mid-1970s at 150% at WTO, while applied tariff are
has been particularly striking for basic only 33.6%, but Senegal bound tariff are
foodstuffs such as dairy products, edible 29.8%, and worse position is for Ivory
oils and fats, meat and meat products, Coast bound tariff 14.9%).
sugar and especially cereals, implying Economists see prices as
that food import has been increasingly contributing to the functioning and
important in ensuring food security. stability of food markets. But unlike other
The idea of a protected regional markets, food prices affect one of the most
market has been discussed a long time fundamental human rights: the Right to
ago (Acts of the Mindelo Conference, Food. The right to food stipulates that
1-6 December 1986) in the context of each human being has the right to access
the Permanent Interstate Committee for to means to produce food or to have the
Drought Control in the Sahel. Increased income required to buy sufficient food.
regional trade has the potential to Falling food prices, if it leads
expand the size of Africas market for to rising food imports in the poorest
food staples, boost agricultural growth in countries generate dislocation of small-
surplus zones, and mitigate shortages in scale farmers production which suffer of
deficit ones. In addition, regional trade in competition from large-scale producers
food staples can also help moderate price of developed countries, who are not only
volatility in African food staple markets. infinitely more productive but also heavily

169
Food Security In an Age of Falling Commodity and Food Prices: The Case of Sub-Saharan Africa

subsidized. This competition generates FAO. 2016a. Cereal Supply and Demand
more poverty, losses of jobs, and regional Brief, 05/05/2016. Available at: http://www.
and international migrations. fao.org/worldfoodsituation/csdb/en/.
Ensuring food security and
reducing hunger and poverty requires FAO. 2016b. Food Price Index, 05/05/2016.
resolute and comprehensive strategies and Available at: http://www.fao.org/world
policies consistent with the right to food. foodsituation/foodpricesindex/en/.

Rakotoarisoa M. A., M. Lafrate, and M.


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