Competitiveness of Global Agriculture: Policy Lessons for Food Security

204 Pages·2016·4.3 MB·English

by  Attila Jambor

Attila Jambor · Suresh Babu
Competitiveness
of Global
Agriculture
Policy Lessons for Food Security
Competitiveness of Global Agriculture
Attila Jambor (cid:129) Suresh Babu
Competitiveness of Global
Agriculture
Policy Lessons for Food Security
AttilaJambor SureshBabu
CorvinusUniversityofBudapest InternationalFoodPolicyResearchInstitute
Budapest,Hungary Washington,DC,USA
ISBN978-3-319-44874-9 ISBN978-3-319-44876-3 (eBook)
DOI10.1007/978-3-319-44876-3
LibraryofCongressControlNumber:2016956643
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Preface
Food security and competitiveness of agriculture are issues central to agricultural
and food policy-making in the twenty-first century all over the world. Although
developedanddevelopingcountriesareatdifferentstagesofcontributingtoglobal
andlocalfoodsecurityandtheircompetitivenessinagriculturevaries,oneoftheir
common and urging challenges is to feed their increasing population with finite
natural resources. The issues, constraints, and challenges relating to competitive-
nessoftheiragricultureandtheirabilitytofeedtheirpopulationandbeyondhave
not been fully studied and understood in the context of policy-making at the
nationalandgloballevels.Thisbookattemptstofillthismajorknowledgegap.
This book explores the linkages between the competiveness of agriculture
sectors and the food security of nations. It starts with definitions and evolution of
the concepts of food security and agricultural competiveness. Then it provides a
theoretical framework for the analysis of their linkages. The book reviews global
and regional food security challenges and groups countries all over the world
accordingtotheirabilitytofeedtheirpopulationsaswellastotheirincomestatus.
Thebookthenpresentsagriculturalcompetitivenessscoresatglobal,regional,and
nationallevelsandidentifiespossiblereasonsbehinddifferentcompetitiveperfor-
mancesofthenations.Finally,itgeneratespolicyrecommendationsandlessonson
howtoincreaseagriculturalcompetitivenessandfoodsecurityinthelongrun.
There are several motivations behind writing this book. First, as researchers
interested in both food security and agricultural competitiveness issues, we have
recognized a noticeable gap in the scientific literature in treating the two notions
togetherinapolicycontext.Second,asteachersofvariousagriculturalpolicy-and
food security-related courses, we have been faced with questions related to the
agriculturalcompetitivepositionsofdifferentcountriesandthefactorslyingbehind
these positions in the context of attaining food security. Third, as economic and
policy advisors, we are often confronted with the need to provide clear policy
recommendations and lessons on how to increase competitiveness of agriculture
sectorandtoreachtheassociatedgoaloffoodsecurity.Suchaneedmainlycomes
fromdevelopingcountrypolicyanddecision-makerswhentheyask,“Whatexactly
shouldIdotoincreasethecompetitivenessofagricultureandfoodsecurityofmy
v
vi Preface
country?”Thecontentsofthisbookprovideanintroductiontotheseissuesandhelp
the policy-makers to think through potential policy options in the context of
achieving improved competitiveness of their agriculture sector and increased
foodsecurityoftheirpopulations.
In writing this book, our aim was mainly to introduce the basic policy issues
facingpolicy-makersrelatedtoagriculturalcompetitivenessandfoodsecurityanda
consistentframeworktoanalyzethem.Wetreatthisbookasavolumesynthesizing
the current knowledge in the fields of food security and agricultural competitive-
ness and providing some illustrative examples and exercises to better understand
the long-term trends and the underlying factors affecting these development
outcomes.
Thebookisaimedatabroadaudienceofpolicy-makers,policyadvisors,social
scientists, policy analysts, students, and general readers interested in the field of
foodsecurity,agriculturalcompetitiveness,andtrade.Althoughthereasoningand
argumentsarebasedoneconomicprinciples,thebooktriestobenontechnicalfor
general readers without requiring extensive training in economics. Some topics
discussedinthebookareessentiallyandunavoidablycomplex,butwehavetriedto
present them in a manner that interested readers will find their way to understand
them. We hope those colleagues working on and interested in food security,
competitiveness, and trade issues find the book a useful source of information
andreferenceinthefuture.
In writing the book, we are extremely grateful to the useful comments and
suggestionsofthetworeviewers,Csaba CsakiandUlrichKoester.Theircontinu-
oushelpinspiredustodigdeeperintothespecificissuesandtopics.Wehavealso
found the comments of colleagues in both of our institutions, especially Will
Martin, at an IFPRI seminar, and Eugenio D´ıaz Bonilla, useful in finalizing the
contentsofthisbook.TheeditorialstaffofSpringerhasprovidedfullsupportand
excellentguidanceinputtingthisissuetogether.Ifanyerrorsordeficienciesremain
inthevolume,theyaresolelyours.Lastbutnotleast,weareextremelygratefulfor
ourfamiliesinprovidingthesupportforwritingthisbook.
Budapest,Hungary A.Jambor
Washington,DC,USA S.C.Babu
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 FoodSecurityandGlobalAgri-FoodTrade. . . . . . . . . . . . . . . . . . 7
2.1 ConceptofFoodSecurity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 TheStateofGlobalFoodSecurity. . . . . . . . . . . . . . . . . . . . . . . 8
2.3 TheRoleofTradeinProvidingFoodSecurity. . . . . . . . . . . . . . 11
2.4 FoodSecurityandSupport. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.5 TradePolicyandFoodSecurity. . . . . . . . .. . . . . . . . . . . . . .. . 18
2.6 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Appendix2.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3 Competitiveness:Definitions,Theoriesand
Measurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1 DefinitionsofCompetitiveness. . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 TheoriesonCompetitiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.2.1 MicroLevelTheories. . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.2.2 MacroLevelTheories. . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.3 CompetitivenessMeasurement. . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3.1 MicroLevelMeasures. . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3.2 MacroLevelMeasures. . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.4 ConceptualFramework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4 WhoFeedstheWorld?:GlobalAgriculturalTrade
Patterns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.1 Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.2 BasicPatternsofGlobalAgriculturalTrade. . . . . . . . . . . . . . . . 48
4.3 GlobalAgriculturalandFoodTradebyCountry
andProduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
vii
viii Contents
4.4 WhoFeedstheWorld?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.4.1 RichNetFoodNetExporters. . . . . . . . . . . . . . . . . . . . . 61
4.4.2 EmergingNetFoodExporters. . . . . . . . . . . . . . . . . . . . 63
4.4.3 Self-SufficientCountries. . . . . . . . . . . . . . . . . . . . . . . . 63
4.4.4 RichNetFoodImporters. . . . . . . . . . . . . . . . . . . . . . . . 65
4.4.5 LowIncomeNetFoodImporters. . . . . . . . . . . . . . . . . . 66
4.5 ReasonsBehindtheChangingGlobalFood
System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 66
4.6 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Appendices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Appendix4.1:ListofCountriesBasedonTheirAgri-Food
TradeandIncomePositions. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Appendix4.2:ProductGroupsRelatedtoAgricultureandFood
attheHarmonisedSystematTwoDigitLevel. . . . . . . . . . . . . . 72
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5 RegionalChallengesinEnsuringFoodSecurity. . . . . . . . . . . . . . . 75
5.1 FoodSecurityDimensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.2 FoodAvailability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.3 FoodAccess. . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . 78
5.4 FoodUtilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5.5 FoodStability.. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . 86
5.6 FoodSecuritybyNetFoodTradeandIncome
Positions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5.7 GlobalFoodSecurity:TheRoadAhead. . . . . . . . . . . . . . . . . . . 94
5.8 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
6 TheCompetitivenessofGlobalAgriculture. . . . . . . . . . . . . . . . . . 99
6.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
6.2 EmpiricalEvidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
6.3 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
6.4 CompetitivenessofGlobalAgriculture–Country
Level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.5 CompetitivenessofGlobalAgriculture–Product
Level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.6 StabilityofAgriculturalCompetitiveness. . . . . . . . . . . . . . . . . . 119
6.7 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Appendix6.1:MeansofBalassaIndicesforGlobalAgricultural
andFoodTradebyCountry,1991–2014. . . . . . . . . . . . . . . . . . . . . . 123
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
7 UnderstandingtheFactorsBehindAgricultural
Competitiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
7.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
7.2 ReviewofEmpiricalEvidence. . . . . . . . . . . . . . . . . . . . . . . . . 132
Contents ix
7.3 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
7.4 DeterminantsofGlobalAgriculturalCompetitiveness–
Top10Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
7.5 DeterminantsofGlobalAgriculturalCompetitiveness–
EconometricModels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
7.6 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
8 StrategiesforIncreasingCompetitivenessof
Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.2 IdentifyingFactorsBehindCompetitiveness. . . . . . .. . . . . . . .. 152
8.3 FactorsBehindAgriculturalCompetitiveness. . . . . . . . . . . . . . . 155
8.4 StrategiestoImproveAgriculturalCompetitiveness. . . . . . . . . . 160
8.5 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
9 PolicyLessonsforAttainingFoodSecurityThroughIncreased
CompetitivenessinAgriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
9.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
9.2 FoodSecurityandAgriculturalCompetitiveness. . . . . . . . . . . . 174
9.3 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Appendices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Appendix9.1ComponentsoftheGlobalFoodSecurity
Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Appendix9.2VisualRepresentationoftheGlobalFood
SecurityIndexScores. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
10 ConclusionsandImplicationsforFutureResearch. . . . . . . . . . . . . 191
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
About the Authors
Dr. Attila Jambor is associate professor in the Department of Agricultural Eco-
nomicsandRuralDevelopmentattheCorvinusUniversityofBudapest,Hungary.
Holding a PhD in economics, his major research interests are agricultural policy
and agri-food trade analysis. He was a postdoctoral research fellow in Newcastle
University(UK)for10monthsandajuniorconsultanttotheEuropeanParliament
on the future of rural development in the CAP post-2013 and to the FAO on the
diversity of effects of EU membership on agriculture in Central and Eastern
Europe.HewasajuniorprofessionaltotheWorldBankincreatingtheagricultural
andruraldevelopmentstrategyofMoldovaandRomania.Hehasreceivednumer-
ous awards for teaching and research excellence in Hungary. His current field of
research is the competitiveness of global agriculture and its implications for food
security.
Dr.SureshBabu isaseniorresearchfellowandtheheadofcapacitystrengthen-
ing at the International Food Policy Research Institute (IFPRI), Washington,
D.C.BeforejoiningtheIFPRIin1992asaresearchfellow,Dr.Babuwasaresearch
economistattheDivisionofNutritionalSciences,CornellUniversity,Ithaca,New
York. His research covers a range of developmental and policy issues including
food security, nutrition economics and policy, economics of soil fertility, famine
prevention, market integration, migration, pesticide pollution, groundwater deple-
tion, and gender bias in development. He has published more than 18 books and
monographs and 80 peer-reviewed journal papers. He is or has been a visiting or
honorary professor of Indira Gandhi National Open University, India; American
University,Washington,D.C.;theUniversityofKwazulu-Natal,SouthAfrica;and
Zhejiang University, China. He currently serves or has served on the editorial
boards of the following journals; Food Security, Food and Nutrition Bulletin,
Agricultural Economics Research Review, African Journal of Agricultural and
Resource Economics, African Journal of Management, and African Journal of
Food, Agriculture, Nutrition and Development. He received his MS and PhD in
economicsfromIowaStateUniversity,Ames,Iowa.
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