trading their goods and services. In addition, personalized systems of exchange are also limited
in geographic dispersion. Thus, a personalized system increases vulnerability to local natural
disasters such as disease and drought.

 How do farmers shift from subsistence-oriented production to specialized production? The
 answer to this question largely relates to risk-management of food at the household level. To
 undergo this shift, fundamental to the structural transformation of the economy, requires lowering
 the risk inherent in market exchange. This means that policy makers must work with markets and
 various exchange possibilities to make them more efficient and reliable. For example, only to the\ /
Extent that there is an assured food market will farmers commit themselves to cash crops and other
forms of income generating commercial-oriented production. The weaker the food market, the
less likely that specialization will occur. /

1.2.4 The Role of Government in Food Security

 In addition to markets, government also plays an appropriate role in assuring food security.
 The view is often expressed that government should stay out of the direct selling and buying of
 commodities and concern itself with traditional public goods, e.g., building roads or establishing
 rules to govern contracts. While this idea may be true to a certain extent, the more fundamental
 issue is how to establish an effective governance system in the country that can not only build
 roads, but maintain them, not only govern contracts, but establish the optimal set of rules for
 regulating and facilitating markets and contracts. Effective governance systems are needed to
 identify and then put into effect collective action to solve problems in the food system that are
 beyond the scope of individual private action. Market forces alone will not guarantee increasing
 productivity and ultimate food security. Not only does one have to get the prices right, one also
 has to get the rules right. Getting the rules right occurs through a political process within a
 society in which costs and benefits are allocated. Government has to play a pro-active role in this
 process.

 In addition, it needs to be noted that private firms do not like competitive markets. The
 principal strategy of most enterprises is to distort the market in their favor to gain a monopolistic
 surplus. Paradoxically, it is the public sector that can be the best friend of the market.
 Maintaining a level playing field in the marketplace is a central role of the state.

 Finally, it needs to be recognized that even in the best of economic conditions some people
 will still not be able to take care of themselves and their family. For those who are unable to
 achieve a minimum flow of resources and benefits from the market or to compete in a level
 playing field, there is a role for government or non-governmental organization (NGO)
 intervention.