Beware the rural-urban divide

Despite abundant food supplies at a global level, food security in dozens of countries and hundreds of millions of households remains elusive. Peter Timmer looks at the reasons why and the recipe for putting an end to hunger.

The structural transformation of an economy from primarily rural and agriculture-based to one that is primarily urban and industrial, modern services-based has historically been the only sustainable pathway out of poverty and into a widely shared sense of food security. But such transformations have been very difficult to manage politically because they create large and visible gaps between the living standards and expectations of rural households and those of their newly wealthy urban cousins.

Economists have long thought that the best way to minimise these gaps and the political tensions they generate has been to speed up the structural transformation itself: move more people to the cities while leaving fewer farmers behind on larger farms with higher incomes.

Although this approach has had some success in Western Europe, North America and Oceania, it has clearly faced serious challenges in a rapidly developing Asia. From Japan to South Korea to Malaysia, China and Indonesia, managing the political tensions from growing gaps between the welfare of rural and urban households has uniformly meant slowing down the structural transformation through heavy protection of domestic agriculture, especially rice farmers. “Food security” in all of these societies was a rallying cry for encouraging local rice production, even if the subsequent high prices for food actually hurt the poor.

The historical experience in Western societies, where food security evolved along with higher urban incomes and increased reliance on foreign trade, has been turned on its head in Asia.

More on this: Feeding our fears: why the language of crisis affects global food security

Mitigating the rural-urban divide has turned out to be the key to maintaining political stability and rapid economic growth. This paradoxical connection stems from a failure of market-driven economic models based on free trade to cope with the powerful consequences of growing income inequalities. As incomes become more skewed, so too do the expectations, cultural values, and political orientation of those left behind. Rural America elected Donald Trump as President of the United States. Most rural households in the country are highly alienated from what is happening in more dynamic, liberal areas. This has turned out to be a poisonous political brew.

My Asia & the Pacific Policy Studies article expands on these themes in three directions. First, on a modern definition of food security that includes concerns for stability and sustainability. Second, on the complex nature of the three transformations – structural, agricultural and dietary – that simultaneously drive, and are driven by, the process of economic development. And third, the essential need for an integrated public and private response going forward – government policies interacting and compatible with a market-oriented economy. The essay ends with a plea to build capacity to do relevant food policy analysis, and communicate it effectively to policymakers, if a country’s structural transformation and pathway out of poverty are to be realised.

Modern analyses of food security list five essential components: the availability of food on farms and in markets, access to that food by all households (urban and rural), effective utilisation of the food within the household (a function of food safety, nutritional status and health), the sustainability of the food system that delivers these components, and its stability. This definition stresses the elements that individuals and households require to be food-secure, but food security is also an important objective at the national level, where political leaders can be held responsible for failures and successes in maintaining accessible supplies of staple foods at stable prices, especially in major urban markets where many consumers procure their food.

At the global level, considerable attention is focused on both short-run and long-run balances between food production and food consumption. Rising food prices suggest the production race is being lost to rapid gains in food consumption—a “Malthusian” world where population growth and higher incomes cause food demand to outstrip the resource base for food production.

Falling food prices, on the other hand, suggest that expanded agricultural land, better water control and improved technologies are generating food surpluses. In this world, access becomes the limiting factor for household food security, not availability.

More on this: Putting food and water on nine billion tables

In both worlds, food prices are a key signal about what is happening to food security. Two dimensions of food prices are important: their average level and their volatility. Price spikes and collapses can create risks and poverty for consumers and farmers even when average prices are affordable to the poor and create adequate incentives for farmers. Highly unstable food prices make most poor households, rural and urban, feel food insecure.

Despite abundant food supplies at a global level, food security in dozens of countries and hundreds of millions of households remains elusive, for two quite separate reasons. First, food supplies are allocated to consumers primarily by market forces, and many households are simply too poor to afford it (or to produce it on their own land). This is the problem of chronic hunger. Significant progress has been made since World War II in reducing the extent of chronic hunger, but the challenge of ending it remains very difficult.

Second, rapid urbanisation means that a majority of households now depend on the reliable availability of food in their local markets to be able to eat on a daily basis. Any threat to the availability of food in local markets causes obvious anxiety. Panic buying, hoarding by traders, and price spikes mean the breakdown of social trust and often lead to food riots and political instability. It is no wonder that most governments seek to ensure urban food supplies and a sense of food security for their populations.

The provision of sustainable and reliable food security is a complex task that involves careful government interventions in the context of a competitive and efficient private sector. Many countries have succeeded in this complex task, but many others have not. The challenge now is to help those countries actively seeking workable approaches to ending hunger. History has useful lessons to offer, but each country must also find its own path. For this, good data and skilled analysts are essential. Assistance with these key ingredients to ending hunger can have a very high payoff.

Read and download Peter Timmer’s article Food security, structural transformation, markets and government free in the Asia & the Pacific Policy Studies journal http://onlinelibrary.wiley.com/doi/10.1002/app5.161/full