Food stock and flow of income

Abdul Bayes | Published: September 03, 2018 22:15:54

Until recently, the lack of the availability of food was taken as an important indicator of famine that unleashes a reign of deprivations of not only food but also other essentials.  Historically, the face of famine was analysed from the supply side perspective. 

The extreme form of food deprivation is generally termed as famine - the last nail on the coffin of food crisis. The spectre of famine once used to haunt Bangladesh, India and China. Fortunately, however, the frequency of famine has faded gradually.

The reasons for denying Malthusian doomsday prediction are not far to seek: the advent of modern technology in agriculture, expansion of communication networks, falling population growth rate and various income generating activities carried out by government and private sector.

Orthodox views used to hold that more harvests mean less hunger; increased supply of food is an answer to the danger of famine. But the realities are much more complex. The primary cause of famine in many countries of the world - as exemplified by the 1974 famine in Bangladesh - is not shortage of food availability but inadequate purchasing power of the people. The moot question is: what kind of entitlements enable people to escape famine?

Experts are of the view that food security should not be seen from the angle of the mechanical balance of only food and population. The most important dimension is the command that a person has over certain required bundle of food - be it from own production (e.g., farmer), or buying from the market (e.g., labour and service holders). It must be remembered that, even with augmented supply in the market, people might go without food if they are unable to purchase food or face a reduced capacity to buy food from the market. There may be many reasons behind such incapacity at work: lack of income or opportunities to sell products in the market.

Similarly, a shortage of food availability in the domestic market may not always cause famine if there are opportunities for imports or shared distribution.

So entitlement matters the most. The entitlement of a household depends on a number of factors. First, it hinges on the command of the household on assets that have market value or can be exchanged in the market to purchase food (endowments). The bundle of assets could be diverse but the most important assets of human society is the labour force or labour power that generates income to buy food. This way, labour, land and other assets enable households to raise their respective entitlements. Second, the degree of access to food by a household depends on production possibility and its utilisation. More land doesn't necessarily mean more food unless backed by appropriate technologies, knowledge, efficiency that raises the production possibility frontier to increase food supply for food security. Finally, the access to food also depends on exchange conditions such as the price at which exchange of goods and services take place or it depends on the rate at which wage rises against the cost food items.

It may be mentioned here that during any economic crisis, one group of people could be hit harder than others. For example, during 1943 Bengal famine the exchange rates between food and non-food items changed radically overnight, and especially, other than wage-food price ratio, the relative price of fish and food swung sharply in favour of fish. At that time Bengali fishermen faced most hardship. Of course fish is also a kind of food but high-quality food that had to be exchanged in the market to buy cheaper low calorie food (rice) for their survival. "The equilibrium of survival is sustained by this exchange, and a sudden fall in the relative price of fish vis-à-vis rice can devastate this equilibrium."

That purchasing power is a potent factor in averting famine has been borne out from the experience of Bangladesh. The country did not face a famine despite devastating loss of crops  during 1998 flood  or more recent two consecutive floods in 2017 leading to imports of food  to the tune of 3.0 million (30 lakh) tonnes.  Poor people somehow withstood the food crises with increased wages, employment, remittances etc. Thus policymakers should always keep an eye on stock of food as well as on the flow of income.

Abdul Bayes is a former Professor of Economics at Jahangirnagar University.

Share if you like