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FOOD SECURITY C oncepts, Basic Facts, and Measurement Issues

FOOD SECURITY C oncepts, Basic Facts, and Measurement Issues. June 26 to July 7, 2006 Dhaka, Bangladesh. Rao 2a: Analytics 1: Food Availability and Food Deficits.

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FOOD SECURITY C oncepts, Basic Facts, and Measurement Issues

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  1. FOOD SECURITYConcepts, Basic Facts,and Measurement Issues June 26 to July 7, 2006 Dhaka, Bangladesh

  2. Rao 2a: Analytics 1: Food Availability and Food Deficits Learning: Based on the concepts of the basics of the aggregative models and of the different types of food deficit, trainees will develop facility with graphical representations in the analysis of any given real-life situation.

  3. Brief Contents • three analytical approaches relating to availability, access and nutrition • an aggregative model of the basics: requirements, demand and supply • three types of deficit: production deficit, supply deficit, demand deficit • market imbalances versus food deficits • graphical representation of the basics and of deficits

  4. Analytic Approaches • Food Availability Approach • Aggregate Level • Key Concepts: Production, Supply, and types of Food Deficit • Food Access Approach • (Mainly) Individual or HH Level • Key Concepts: Economic and Social Access, Effective demands or Entitlements • Food Utilization Approach • (Mainly) Individual or HH Level • Concepts: Nutrition, Health, and valued or functional Outcomes

  5. Factors DeterminingFood Availability • the volume and stability of food production (whether subsistence or market oriented) • available food stocks (farm-level, commercial, government stocks) • food imports (commercial and concessional).

  6. Factors Determining Access to Food • For the market-dependent: the purchasing power, or level of real income • At HH Level: wage levels, employment, prices, etc. • At National Level: availability of F/E for food imports • For subsistence producers: productive assets available & non market transfers • [At National Level: resource endowments & food aid respectively)

  7. Factors DeterminingUtilisation of Food • Basic (physical) Factors • Dietary intake • Body metabolism • Complementary (socio-environmental) Factors • Water, sanitation and food safety • Health care, disease prevention and control • Education and awareness of food-nutrition factors • Food culture and food norms

  8. An Aggregative Modelof Food Deficits • To analyze FS of a country (both at point in time and changes over time) we use the following REQUIREMENTS--DEMAND--SUPPLY graphs

  9. Fig. 2.1: Closed Economy Case(w/ neither food imports nor exports) • Basic model of aggregate food situation in closed economy Note: real economies will be neither completely closed nor completely open

  10. Fig. 2.2: Open Economy w/ Imports • Basic model of aggregate food situation in open economy Note: real economies will be neither completely closed nor completely open

  11. 5 Basic Elements of the Model • 1. Production Curve • shows the volume of aggregate food production at varying market prices of food • food production includes subsistence production as well as production for sale on the market

  12. 5 Basic Elements of the Model • 2. Supply Curve • shows total food supplies at varying market prices; incorporates food production (see previous), modified by stock changes and food imports/exports. • For a closed economy with NO stock changes, Supply Curve = Production Curve • For open economy, this is so only until domestic price reaches world price level

  13. 5 Basic Elements of the Model • 3. Demand Curve • shows total food demand (effective market demand plus home consumption from subsistence output) • Why negative slope? Real income effects. • 4. Food Requirements • approximately given by calorie or staple food requirements on the basis of food balance sheets • IMP. NOTE: more unequal is food distribution, higher will be requirements

  14. 5 Basic Elements of the Model • 5. Market Prices • major factor determining food production, supply and demand. • In closed economy, regulated OR competitive OR quasi-competitive • In a free, open economy: price is world-market determined (CIF or FOB)

  15. Food Deficits • The following types of food deficits can arise: • in PRODUCTION • in SUPPLY • in DEMAND • MARKET IMBALANCES (deficit or surplus)

  16. Types of Food Deficit (defined)

  17. Types of Food Deficit (graphs) 2.3a: Areas of production deficits (& supply deficits in a closed economy)

  18. Types of Food Deficit (graphs) 2.3b: Area of supply deficits in an open economy

  19. Types of Food Deficit (graphs) 2.3c: Area of demand deficits

  20. Types of Food Deficit (graphs) 2.3d: Areas of market imbalances (surpluses & deficits) in a closed economy

  21. Market Imbalances • Market imbalances (deficits or surpluses) • ←→ market price differs from equilibrium price • [set below (market supply deficit) or above (market demand deficit) "market-clearing" P] • Question: Is this statement true? If the market price is fixed below equilibrium price … food demand would rise, so demand deficit would diminish. However, food supplies from domestic production as well as food imports (in the open economy case) would go down. • Market imbalances either require Government Regulation or Market Collusion.

  22. Table 2.1: Types of Food Deficits * Prices set apart from equilibrium prices lead to an overall change of the deficit structure, see above.

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