AEC9101 PERSPECTIVES IN AGRICULTURE

AND ECONOMIC DEVELOPMENT

Agricultural development problems and

challenges

PHD CLASS: SEMESTER 1 CORE COURSE

Regional PHD in Agricultural and Applied Economics (R-DAAE)

Department of Agribusiness and Natural Resource Economics

March 2022
1
 COURSE CONTENT

Hunger and malnutrition imply a

need for food but not necessarily a
demand for food, unless that need is
backed by purchasing power.

Food demand is conversely

influenced by income, prices,
population, and tastes and
preference. 2
 Food, under nutrition and nutrition
security
• Briefly explain the food situation in the
world.
• What are the different forms of hunger and
malnutrition, their magnitudes,
consequences, and how they are
measured?
• Identify principal causes of and potential
solutions to problems with hunger and
malnutrition in developing countries.
3
 Food, under nutrition and nutrition
security
• Hunger is a silent crisis in the world. Its normally
during famine that the media attention gets to
bring out the dramatic effects of hunger.
– The most extreme type of hunger is the severe
calorie and protein under-nutrition during
famine.
– More pervasive one is chronic under-
nutrition and malnutrition associated with
poverty, illness, ignorance, maldistribution of
food within the family, and seasonal
fluctuations in access to food.
4
 Famines
• Famine is marked by an acute decline in access
to food that occurs in a definable area and has a
finite duration.

– The lack of access to food usually results from

crop failure, often in successive years, due to
drought, flood, insect infestation, or war.

– Sometimes, food may actually be present in

the affected area, price is so high that only the
wealth can afford it.

5
 Famines
– Food distributions may break down so that
food cannot reach those who need it.

– Famine is the extreme on the hunger scale

because it causes loss of life and concurrent
social and economic chaos over relatively
short period of time.

– The frequency and intensity of famines has

decreased due to improved information,
transportation networks, increased food
production and reserves, and dedicated relief
organization. 6
 Chronic hunger and malnutrition

• Whereas famines are devastating, they account

for only a small fraction of hunger related deaths.
They can be well managed if the situation in the
country does not hamper relief efforts.

• Chronic hunger and malnutrition on the other

hand affect much greater number of people and
are also more difficult to combat.
– Chronic malnutrition is considered one of
the less conspicuous but more pernicious
problem, affecting people in lower income
groups. 7
 Chronic hunger and malnutrition
• Malnutrition is created by food deprivation and
inadequate food consumption. There are limited
estimates on the number of people of malnourished
people.
– Estimates of the undernourished people depends on the
kind of definition used.
– Roughly 870 millions of people suffer from chronic or
severe malnutrition associated with food deprivation.
– About 2 billion people in the world suffer from health
effects due to micro-nutrient deficiencies.
– The poorest and undernourished populations of the
world (especially in Sub-Saharan Africa) also suffer high
levels of health problems due to poverty, high mortality
rates for children under five years, and very low life
8
expectancies.
 Chronic hunger and malnutrition
• World Health Organization (WHO) estimates that almost
half-billion people suffer from protein and calorie
deficiencies and perhaps,
– An equal number of people suffer from malnutrition caused
by inadequate intake of micro-nutrients, principally iron,
vitamin A, and iodine.
– Roughly 15 percent of the world’s population suffers from
some form of malnutrition not including over-consumption.
– Malnutrition does not affect all segments of the population
equally. Pre-school children and pregnant and nursing women
are particularly vulnerable to its dangers.
– Serious malnutrition in developing countries reflects primarily
undernourishment – a shortage of food – not an imbalance
between calories and protein.

9
 Food, under nutrition and nutrition
security
• The types and consequences of hunger and
malnutrition are not well understood.
– It is difficult to measure accurately the extent of hunger
and malnutrition in the world.
– What is well known is that chronic malnutrition affect
more people than do famines.
– Malnutrition results in reduced physical and mental
activity, stunted growth, blindness, anaemia, goitre,
brain damage, mental anguish, and death.

10
 Food, under nutrition and nutrition
security
• The causes of hunger are many, but virtually all
causes are related to poverty.
– Infections, diseases and parasites, poor
nutritional practices, and variability in food
supplies all contribute to the severity of
malnutrition.

11
 Food, under nutrition and nutrition
security
• Solutions to hunger and malnutrition may include:
– raising incomes;
– increasing agricultural production in developing
countries;
– food intervention programmes, and;
– improving health systems.
• Others include:
– fostering political, social, and educational
changes;
– international programmes such as food aid;
– other foreign assistance;
– opening of foreign markets, and;
12
– price stabilization.
 Food, under nutrition and nutrition
security
• Hunger is an individual problem related to the
distribution of food and income within countries.
– It is also a national and international problem
related to the geographic distribution of food,
income, and population.
– The largest number of poor and hungry live in
Asia.
– Severe hunger and poverty are found in Sub-
Saharan Africa, and parts of Latin America.

13
 Food, under nutrition and nutrition
security
• Roughly, one-seventh of the world’s population
(about one billion people) lives on less than $ 1
per day (about one-third lives on less than $ 2 per
day).
• These people primarily live in developing
countries of South Asia and Africa.

– Over the past 40 years, the world’s global

population living on less than $1 a day has
been cut by more than half.
– Nonetheless, more still needs to be done.
14
 Food, under nutrition and nutrition
security
• One of the most urgent needs in the world today is to
reduce the persistent problems of hunger and poverty
in developing countries.
– Millions of people remain ill-fed, poorly housed, under
employed, and afflicted by a variety of illnesses that
often cause preventable deaths.
– Natural resource base in many countries are being
degraded, a phenomenon that is creating serious
implications for the livelihoods of future generations.
• The question is how severe are these and many
other problems.
• What are their causes and solutions?

15
 Food, under nutrition and nutrition
security
• On a global level, sufficient food is produced to feed
everyone on earth.
– Evidence shows that the overall food situation has
improved over the years.
– The index of total world food production has grown by
more than 150 percent since 1970, while food
production has grown by about 35 percent.
• Cereals are the most important sources of food since the mid-
1960s
• Cereal production has risen by roughly 1 billion tons per year.
• An additional billion tons of production per year will be needed
by 2040 to meet the food needs of a world population
expanding in numbers and income.
• Cereal imports by developing countries will continue to grow.
16
 Food, under nutrition and nutrition
security
• The per capita calorie availability remains
below minimum nutritional standards in many
Sub-Saharan countries.
• The overall numbers and projections suggest
gradual improvement in reducing under-nutrition
in the world.
– There is still several countries, mostly in Sub-
Saharan Africa, in which per capita food
production and consumption have declined
– or have not increased enough to significantly
reduce the number of malnourished.
17
 Food, under nutrition and nutrition
security
 Household food consumption is closely related
to household income.
• This implies that the most disadvantaged are
afflicted by low and uncertain levels of income.

– The rate of growth in agricultural output for the world

as a whole has slowed since the 1980s.
– The recent use of cereals and sugar to produce bio-
fuel products has:
• created competition for these products for food;
• increased food prices, and;
• limited the rate at which the number of
18
malnourished people are gradually declining.
 Consequences of Hunger and Malnutrition
• The consequences of calorie deficiency and
malnutrition are many, and include:
– Stunted growth; reduced mental and physical activity;
muscle wasting; increased vulnerability to infections
and diseases, and; death in severe cases.

– Chronic protein malnutrition results into stunted growth.

Skin rash, edema, and change of hair colour.

– A diet relatively high in calories but low in protein can

result into Kwashiorkor, while
– A diet low in both calories and proteins results into an
illness called marasmus.
19
 Consequences of Hunger and Malnutrition
• Other consequences are:
– Reduced muscle function and worker productivity due
to deficiency of iron
– Childhood blindness due to reduced disease resistance
– Goitre and brain damage due to iodine deficiency
– Severe physical and mental distress
– Negative effect on one’s ability to work
– Limited education achievement
– Less payment for the hired labour in agricultural work
– Vicious cycle of malnutrition and poverty.

20
 Measuring hunger and malnutrition
• It is still difficult to measure the extent of hunger and
malnutrition in the world.
– There are disagreements on how to define adequate
caloric and protein requirements.
– Data on morbidity and mortality reflects the combined
effects of sickness and malnutrition.
• Nutritional assessments are usually attempted
through:
– Food balance sheets,
– Dietary surveys,
– Anthropometric (body measurements) surveys,
– Clinical examinations, and
– Administrative records 21
 Measuring hunger and malnutrition
• Food balance sheets place agricultural output,
stocks, and imports on the supply side, and seed
for next years’ crops, exports, animal feed, and
wastage on the demand side.
– Demand is subtracted from supply to derive an estimate
of the balance of food left for human consumption.
– The amount of food left is balanced with the FAO’s
tables of nutritional requirements to estimate the
adequacy of the diet.
– This approach provides rough estimates at best due to
difficulties in estimating agricultural production and
wastage in developing countries.
– It provides a picture of average food availability 22
 Measuring hunger and malnutrition
• Malnutrition, like poverty, is better measured if the
distribution of food intake, or other indicators are taken into
account.
– This requires information on household or individuals
– This information can be taken from dietary or expenditure surveys
and from clinical or field measurements of height, weight, body fat,
and blood tests.
– Random surveys of the children who are vulnerable to nutritional
deficiencies can provide a good picture on malnutrition Based on
food intake or anthropometry.
– Use of existing data in hospital, health services, and school records.
Unfortunately, this kind of data may be less reliable due to
inadequate representation of children in rural areas, and uneven
quality of information.
– One reason why malnutrition is misunderstood is that its
measurement is so difficult. 23
 Population growth and economic
development

How important is the population growth to

the agricultural food-poverty-population
problem?

24
 Population growth and economic
development
• Population growth and food production are closely
linked, but also changing.
– There is need to continue increasing food production,
since regardless of how successful are efforts to
control population growth, world population will not
stabilize for many years.
– Population is growing less than 1.5 percent per year in
developed countries; but 1.7 percent per year in
developing countries excluding China, and; 3 percent
or more in some Sub-Saharan African countries.
– These high growth rates place pressure on
available food supplies and on the environment in
many low-income countries.
25
 Population growth and economic
development
• Rapid urbanization is also occurring as population
continue to grow.
– In some countries such as China, population growth
has slowed down, thus allowing them to benefit from
high proportion of their populations of a working age.

– In some countries, where population growth rates has

been slow for several decades, such as Germany, the
United States, and more recently China,
• a key issue is how to meet the medical and
income needs of large and growing elderly
populations.

26
 Perspectives of agricultural policy

• How can agriculture be improved to facilitate

its role in providing food and contributing to
the overall development?

27
 Perspectives of agricultural policy
• There are few areas of the world, particularly in
parts of Latin America and Africa, where land
suited for agricultural production is not being
farmed.
• This implies that most increases in
agricultural production will have to come
from more intensive use of land currently
being farmed.

28
 Perspectives of agricultural policy
• Efforts that geared to achieving intensive use of
land will require:
• improved technologies generated through research
• improved irrigation systems,
• roads, market infrastructure, and other investments.

• Other important aspects include:

• education and incentives created through changes in
institutions such as land tenure systems,
• better input policies, credit policies, and pricing
policies.
29
 Perspectives of agricultural policy
• Globalization effects on the agricultural
development of developing countries are now
more real than ever. For instance:

• The current food and economic systems in

less-developed countries are affected by
international economic environment; the
effects are more today than they were in
years past.

30
 Perspectives of agricultural policy
• There is an increase in the instability of, and of
course, opportunities for improving the food and
economic security of developing countries. This is
mainly attributed to:

• the combined effects of such factors as:

trade, economic policies abroad and at
home, international capital flows, migration,
and oil price shocks.

31
 Perspectives of agricultural policy
• Improvements in transportation and information
systems all over the world has helped increase
international trade in agricultural products and
other products.
– The domestic agricultural policies aimed at
influencing the agricultural sector are
getting affected and altered mainly due to:
• A higher proportion of agricultural production
increasingly getting constituted by exports
and imports of farm products.

32
Perspectives of agricultural policy
• The increase in international trade which
has many implications, including:
– reduced need for national food production self-
sufficiency;
– world prices becoming more important to farmers
than was the case previously;
– improved possibilities for maintaining nations food
security at the aggregate level;
– price volatility becoming a serious problem;
– countries now working hard to be price competitive
with other countries, and
– increased need to participate in international
negotiations to alter the policy environment.
33
 Perspectives of agricultural policy
• Increasing importance of international capital (money)
markets, through which currencies flow from country to
country in response to differences in interest rates and
other factors.
– The volume of international financial transactions now
far exceeds the international flow of goods and
services. Noteworthy is that capital flows affect the
values of national currencies in foreign exchange
markets.
– The foreign exchange rate, or the value of one
country’s currency in terms of another country’s
currency, is an important determinant of the price a
nation receives for exports or pays for imports.
34
 Perspectives of agricultural policy
– Countries need to continuously reexamine
their trade and exchange rate policies in
order to:
• (i) have more control over the increasing tendencies
of speculation in financial markets that cause
desirable rapid inflows and outflows of capital and
changes in asset values and income;
• (ii) ensure sufficient flow of foreign exchange to
service debt, and;
• (iii) have sufficient rate of government spending and
availability of public services and quality of life.

35
 Perspectives of agricultural policy
• Policies undertaken to promote development often have
diverse effects on incomes of the poor.
– Some people will benefit, while some do not, and at times, income
fall for certain population groups.
– It is therefore important to consider the winners and losers in the
development process.
– Income distributions and changes in them are indicators of impact
of development policies on different groups in society.

• The best case scenario for the world over the next 30
years seems to point to a reduction in the severely
malnourished to about 400-500 million people, but for
the populations in many countries, the struggle for
food will continue.
36
 Conclusion
Food, under nutrition and nutrition security

37
 Conclusion
Population growth and economic development

38
 Conclusion
Perspectives of agricultural policy

39
 Presentations
• Agricultural development is a key catalyst for
economic development in many low- and middle-
income countries around the world.

• Agricultural development is essential not only to:

– produce enough food, but also to,
– reduce poverty,
– improve nutrition,
– promote equity, and
– support rural and food systems transformation.

40
 Presentations
• Agricultural development is a key catalyst for
economic development in many low- and middle-
income countries around the world.

• Agricultural development is essential not only to:

– produce enough food, but also to,
– reduce poverty,
– improve nutrition,
– promote equity, and
– support rural and food systems transformation.

41
 Presentations
• In each of the papers, what are the new advances in:
– theory and empirical methodologies,
– new data, and
– developments in other scientific disciplines
– new insights

42
 Presentations
• What are new range of global challenges that are creating
urgency to advance the field:
– expanding global markets,
– urbanization and rural transformation,
– natural resource degradation,
– global warming,
– rising obesity, and
– the threat of pandemics

43
 Presentations
• Agricultural development is a key catalyst for
economic development in many low- and middle-
income countries around the world.

• Agricultural development is essential not only to:

– produce enough food, but also to,
– reduce poverty,
– improve nutrition,
– promote equity, and
– support rural and food systems transformation.

44
 Presentations
• After 1950s and1960s, the main focus of agricultural
development during the following two decades was on
achieving food security and preventing hunger in
developing countries.
• These challenges spurred the Green Revolution,
characterized by the adoption of high-yielding wheat and
rice varieties, which doubled or even tripled crop yields in
a matter of 20 years. Without the Green Revolution,
millions of people would have died of hunger and
undernourishment. Policy played a critical role, creating
incentives for farmers and supporting them with
investments in irrigation, market infrastructure, and
storage facilities.
45