Chapter 4


It must be stressed that many of the countries who have undergone policy reform in the last few
decades had no choice but to make modifications in their overall approach to economic
development, as their economies were in unsustainable positions. In addition, the negative
impacts mentioned above could be temporary. If policy reform is successful, then a growing
economy could provide greater employment opportunities and food security for its citizens.
However, improvements can take time, and, to quote the famous economist Lord Keynes, "in
the long run we are all dead". The problem facing policy makers is to protect the short-run food
security of the most vulnerable while achieving the conditions for medium to long run
sustainable development.

2. The Impact of Macroeconomic Policy on Food Security: A Framework
 for Analysis

The analysis for the impact of macroeconomic policies on food security follows two
consecutive steps:

* In a first step, the effects of the various policies at the macro-level down to the factors
 determining food security at the micro-level are analysed;
* In a second step the question is raised as to how these policies affect specifically those
 population groups who are vulnerable to food insecurity.

 Food security has been defined as a situation where the food entitlements of all household
 members (or all members of the society, if we consider food security on the national level)
 are sufficient to supply the food they need for a healthy and active life (see Chapter 1 for a
 detailed discussion of the concepts of food security). Food entitlement is the result of
 availability and access, or, expressed in economic terms, of supply and demand. In order to
 be able to trace the effects of macroeconomic policies on individual and household food
 security, the relevant linkages between the macro- and the micro-spheres need to be
 detailed. Both are linked through what is called the meso-economy, composed of markets
 and infrastructure as critical elements. Economic parameter changes on the macro-level are
 passed through the meso-economy down to the micro level, where they manifest as supply
 and demand factors. Figure 4.2 presents a schematic framework of the main macro-meso-
 micro linkages with special reference to the food economy.

 The various policy spheres are listed in the upper boxes. These policies affect both markets
 and the economic and social infrastructure. The market element comprises the markets for
 labour, production inputs, food, other consumer goods and credit, and encompasses the
 quantities supplied, the quantities demanded, and the prices. Infrastructure comprises the
 institutional as well as physical infrastructure, e.g. market institutions, roads, education,
 health and other social services, including food and nutrition programmes. There exist many
 linkages between markets and infrastructure (e.g. markets and road conditions, markets and
 market institutions, social services and the labour market, food assistance programmes and
 food markets, public works programmes and the labour market, etc.). This is indicated by the
 line with arrows in both directions linking the two meso-economic elements.

 Both market and infrastructural changes affect households in many ways, by changing
 household incomes (from the various sources), asset holdings, and household aspirations.


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