Appendix to Chapter 6


_:, *.. ...Appendit ChapAtr 6 ..,


Use of the Conceptual Framework for the Analysis of Food Policy Issues:
 Two Country Examples

To illustrate the concepts presented in the latter parts of the manual (Chapters 4 to 6 and
Annex 1), the methodology is applied to analyse the food situation and the role of food aid in
the two country examples Ethiopia and Cape Verde.

Example 1: Analysis of the food situation and food policy issues in
Ethiopia

Ethiopia is generally perceived as a country with a large structural food deficit, understood as
a shortfall of domestic food production/supplies against total aggregate food requirements, as
calculated, for example, on the basis of food balance sheets. For the analysis of the food
situation in Ethiopia, the ex-ante estimates of a FAO/WFP Food Supply Assessment Mission
for 1994 are used (see Table A6-1) and compared with the actual data on food imports
(commercial imports and food aid supplies) in 1994. Figure A6-1 depicts the approximate
situation in 1994.

Figure A6-1: Model of a the Composite Structural Deficit in Ethiopia

price requirements



 effective production
 demand /domestic
 supply


 R-A: overall structural deficit
 B-A: market supply deficit
 R-B: effective demand deficit

 mp --------------------- -- -- ----

 _ _-_ volume
 A.. B R


 The discrepancies between the estimated ex-ante food import requirements and the actual
 supplies are evaluated, and the effects on the cereal market can be traced, by using
 comparative price data as an indicator of a market surplus/deficit situation. Market prices are
 the most (and, probably, the only) appropriate indicator of market supply deficits and the
 effects of food aid monetisation. After the devaluation of the Ethiopian currency in 1992 and


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