Chapter 5


Various of the policy measures included in Table 5.1 are common elements of structural and
sectoral adjustment programmes, such as market reforms, pricing policies and institutional
reform measures. These policies contribute to improved food security by stimulating and
stabilising food production through better services and improved market performance. (see
section 5 in Annex 1) This can either be through the removal of existing state intervention in
markets, or through the creation of an institutional framework which encourages competitive
private sector market operations.

Other measures can involve state expenditure which might seem to be at odds with an
emphasis on reducing the overall level of public expenditure. However, these measures are
primarily in areas which may have been neglected in the past, or need to be protected in the
future to ensure food security. These may be non-targeted measures, such as research,
extension and training programmes. Government expenditure is necessary and justified in
these areas, because of the high level of externalities associated with these activities. This
makes it difficult for private companies to capture the full benefits of investment in these
areas. As a result, often the level of resources allocated to these areas is less than optimal.
This does not mean that the state necessarily has to implement proposed programmes, but it
may have to be a significant source of finance.

Targeted measures, which promote the food production of specific vulnerable groups (e.g.
small-scale and semi-subsistence farmers) can be justified in terms of providing incentives
for greater future self-sufficiency and economic viability of particularly marginal groups of
the population.

State expenditure may also be necessary in the area of regulation, to provide a suitable
framework to encourage individual or collective private sector activity which will promote
food security, e.g. in the area of irrigation. In brief, although some of the measures discussed
in this section have a primarily humanitarian objective, in others, there is a specific need for
government action to develop an enabling environment for private sector activity.

In order to trace the impacts of supply side measures on food security, we can apply the
model presented in Annex 1 (see there for further explanations). In general, we can state that
any policy measure which leads to a reduction of the production cost induces a downward
shift of the production/domestic supply curve, while any measure which leads to an
expansion of food production induces a right shift of the production/domestic supply curve.

The effects are illustrated in Figures 5.2 and 5.3. The graphs also demonstrate the changes
induced in the volume of aggregate food production/supply and demand, as well as the
consequences for the structure and amount of food deficits, hence the impact on aggregate
food security.


- 189-