Book Reviews
Economic Reforms and Food Security: The Impact of Trade and Technology in South Asia
Suresh Chandra Babu and Ashok Gulati (Eds)
ISBN: 1-560222-57-3 2005 Haworth Press
Paul Reithmuller
University of Queensland, QLD
This book is a collection of papers presented at a 2002 Conference cosponsored by the Indian Council for Agricultural Research, the Indian Council for International Economic Relations and the International Food Policy Research Institute. There are 21 papers in seven sections: Economic Reforms, Trade, Technology and Food Security; Trade Liberalisation and Food Security in South Asia; Technology for Food Security in South Asia; The Challenge of Water for Food Security in South Asia; Market Reforms, Diversification, and Food Security; Food Security Interventions in South Asia; and Emerging Issues. The emphasis of the book is on India, although there are separate papers on Bangladesh, Pakistan, Nepal, Bhutan and Sri Lanka.
The role played by small-scale farmers, the backbone of agriculture in South Asia, is discussed in a number of the chapters. Pinstrup-Anderson (Chapter 2) sees a threat being posed to small scale farming in South Asia through out-migration, disease and through globalisation. This latter factor is important since it makes capital available for larger sized farms but not for small-scale farms. Hazell (Chapter 8) regards the changes in national diets, due to rapid economic growth in South Asia, policy reforms and links with the agro-processing sector, as providing opportunities for farmers in South Asia, but concludes that if small farmers are to benefit from new opportunities, then 'policymakers will have to assist them rather than leaving everything to market forces alone' (p.179). While Hazell says that smallholders are typically more efficient producers of many labour-intensive livestock and horticultural products than large-scale operations, smallholders may lack efficiency in marketing their products and also suffer from poor information and access to inputs.
Infrastructure is viewed by a number of authors as having a critical part to play in the region's agriculture. Vyas (Chapter 3) points out that small marginal farmers and agricultural labourers require strong infrastructure support, research and development and enhancement of 'institutional capacity'. Vyas argues that the state needs to provide these since the private sector is not attracted to investments with long gestation periods and low returns. Joshi, Gluati, Birthal and Tewari (Chapter 12) find that markets and roads are the key determinants that have influenced farmers to diversify into high valued horticultural and livestock products. Furthermore, diversification came with little support from government. Unlike most of the chapter that cite research published elsewhere, this one by Joshi et al does not, but rather presents empirical results from econometric modelling. Raju and Gulati (Chapter 11) address one of key forms of infrastructure in India - irrigation - arguing that reduced investment in irrigation has resulted in the irrigation sector being faced with collapse, or at least operating below its potential. Reform is needed since the price of water is too low, the input supplying agencies are inefficient and the collection of irrigation charges is poor, making receipts per unit of water lower than price. Changes they suggest include making the costing of the service more transparent, linking the quality of the service to price and introducing cost saving innovations.
One of the themes of the book is food security. Hazell (Chapter 8) sees food security as primarily a food distribution issue, with the solution linked more to increasing the income of the poor rather than producing more food. Pinstrup-Andersen (Chapter 2) makes the same point: 'Food insecurity persists not because of lack of food but because the people who are food insecure are too poor to afford the food that is available and lack access to the resources to produce adequate food for themselve.' (p.43) Sharma, writing on the situation in Nepal (Chapter 18), concurs, adding that low agricultural productivity, the lack of access to quality land, and heavy dependence on agriculture (86 per cent of Nepalese cultivated some land in the mid 1990s) has exacerbated the problem of food insecurity. While about 40 per cent of Nepal's population consume less than the recommended 2250 calories per day, under nutrition and access to micronutrients is a particular problem among children. Improving agricultural productivity through deregulation of the fertilizer sector reform of institutions such as the Agricultural Inputs Corporation and the National Food Corporation, were measures that Sharma believes could bring about improvements. Shariff (Chapter 19) says that despite India now having surplus food stocks (the Food Corporation of India holds about 60 million tonnes of food grain stocks), over half the women in India and 60 per cent of children are anaemic and undernourished. This situation is due to a lack of purchasing power among poor people and inefficiency in the delivery of public food programs. The vulnerable groups in India are the slum dwellers, who constitute about 30 per cent of the urban population, people who live in forest areas, members of certain castes, and workers in industries like the cigarettes industry, the construction industry, the garment industry, and industries where demand for labour fluctuates on a daily basis. Examples of this latter group of industries include petty traders, rickshaw pullers and head loaders. Solutions mentioned by Shariff include changes to programs that target particular groups (providing food for school attendance for girls, food for work programs for women and supplementary feeding), steeped up investment in agriculture and improved storage to reduce the 10 to 12 per cent of livestock and fisheries stock that gets spoiled due to inadequate post harvest and processing facilities. Qureshi (Chapter 17) says that in Pakistan, a country where 20 per cent of the population was undernourished in 1995-97, the government sought to keep the prices of basic foods low through a publicly rationed food distribution program and more recently through open market operations. This program has been expensive, costing almost 1.5 per cent of agricultural GDP, leading Qureshi to argue that the best chance for improving food security is through programs to reduce poverty. The income situation for Sri Lanka's rural economy is severe, according to Kelegama and Babu (Chapter 14). Remittances from workers in the Middle East, from garment factories and from transfers from poverty alleviation programs play a greater role in keeping the rural economy going than do earnings from agriculture. Restrictions in the land market have created a bias in favour of rice, tariffs on agricultural inputs, and an environment not conducive to commercialised agriculture have limited the extent to which Sri Lanka's agriculture has been able to diversify and improve its productivity.
The lack of access of developing country farmers to developed country markets is raised in a number of the chapters. Pinstrup-Andersen (Chapter 2) says that developed countries account for 80 per cent of the US$360 billion in payments made to the world's farmers each year, and that many of these payments are trade distorting. Reform of these policies should enable more farmers from Shouth Asia to specialize in those crops in which they have a comparative advantage, and compete in the market, according to Hazell (Chapter 8). However, it is not altogether clear which crops or commodities these will be. Qureshi (Chapter 17) says that 'Pakistan has a comparative advantage in horticulture, and that these have increased rapidly with little support from subsidies' (p.372). However, other products exported by Pakistan, such as rice, sugar and processed hides and leather, face difficulties gaining market access. Pakistan is a net importer of agricultural products and accordingly has to juggle the interests of consumers and import competing producers with regard to market access. Qureshi says that imports are closely monitored and applied duties are adjusted in response to changing domestic supply conditions and world prices. Shariff (Chapter 19) argues that India has a comparative advantage in agricultural exports because of its near self-sufficiency in terms of inputs, low labour costs and diverse agro climatic conditions. Hoda and Gulati (Chapter 5) take the view that the removal of export subsidies by the developed countries '....would lead to a worldwide production shift to relatively more efficient economies, benefiting countries such as India' (p.131) What may be good for India is not necessarily good for its neighbours. The availability of low priced rice from India is considered by Nepal to be a threat to Nepal's farmers particularly in areas that border India, according to Shanna (Chapter 18). Sri Lanka's agricultural sector remains 'relatively protected, and as a consequence Sri Lanka is a high cost producer of rice and many subsidiary food crops' (p.324). Sharma believes cheaper food imports and plantation sector restructuring associated with Sri Lanka's V'TO commitments will spell trouble for the agricultural sector, necessitating the use of short-term assistance.
Many other issues are raised in the book. The urbanisation issue is discussed, albeit briefly, by Meinzen-Dick and Rosegrant in their contribution on Emerging Water Issues in South Asia (Chapter 10). They point out that municipal and industrial demand for water are increasing at a much faster pace than agriculture's demand for irrigation and that infrastructure development and the tapping of nonconventional sources of water such as desalination and waste water use will have roles to play in the future. The quality of the information and analysis of important issues is in some cases limited. Dorosh and Shahabuddin (Chapter 6), for example, point out that Bangladeshi data on rice imports from India between April 1998 and March 1999 differed by around 30 per cent, when compared with the data on Indian exports of rice to Bangladesh. Pinstrup-Andersen says that in South Asia the role of the state during, and after the transition to private markets, is poorly understood, while in Bhutan Babu, Dendup and Pema (Chapter 15) draw attention to the uncertainty about the impact of exchange rate changes on production, consumption and trade. In Bhutan, there is even uncertainty as to where Bhutan's comparative advantage lies.
This book provides a wealth of information and covers a lot of ground. The papers are pitched primarily at economists but they would also be valuable to those from other disciplines interested in economic development generally and the south Asian economies more specifically. A weakness of the book is that while important policy questions are raised and discussed, the reader is left to choose from the list of policy options the ones most likely to work. Authors are generally reluctant to commitment themselves to particular policies. Some of the data and policies are now a little bit out of date since the papers were prepared for a 2002 Conference, but this does not detract from the usefulness of the book.
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