PB #3 Balancing the Food Bill - Local vs Import-FINAL

7/30/2019 PB #3 Balancing the Food Bill - Local vs Import-FINAL

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Cheap food can only be delivered through the most cost-effective and efficient food production systems and

so the thinking associated with developing any potential FNS solution and intervention needs to be within

a big picture context.(Ian Ivey, February, 2012)Balancing the Food Bill: the self reliance and import ratio

November 2012

Note:

growing imbalancebetween imports and

local production has

placed the Caribbean

in an increasingly food

insecure state;

price volatility, climatechange and political

factors create shocks

to the food system;

in this food andnutrition security (FNS)

charged environment,

connecting trade

policy to food

production capacity

must be a top priority.

Understanding the Concepts

Food system:

- everything from farm to tableintegrated food

production, processing, distribution and

consumption that enhance environmental,

economic, social and nutritional health of a

community, country or region.

Self-reliance:

Self in this context must have a community not a

family/individual as the lowest common denominator

- the degree to which a community, country or

region meets some portion of its own food needs.

- not to be confused with self-sufficiency, which is

where all food is produced, processed, marketed

and consumed within a defined boundary. (1)

Imports:

- to bring or carry in (especially goods or materials)from an outside source/foreign country for trade or

sale.

Local farming systems

still produce foods to

satisfy traditional diets

(roots, pulses, fruits), but

in decreasing volumes.

Globalization and

international trade

policies have enabled

easier access to

imported foods, driving

the regional import bill

at over US$4 billion, and

trending upwards.

Increasing the degree

of food self-reliance

must be an important

aspect of a community

country or regions food

system.

Contents:

1 Understanding the

Concepts.

2 Connecting trade policies

to the FNS agenda

3 Growing local;

perspectives!4 Policy Intervention Critical

Control Points (PICCP).

5 Bottom line!

6 Recommended readingAn array of Fresh Every Day produce

offering at a local supermarket chain inTrinidad, Trinidad.(Diana Francis)

Injector3 in a modern hatchery whereeggs are vaccinated prior to beinghatched. Caribbean Poultry Association(Desmond Ali)

1 From Farm to Fork , http://njaes.rutgers.edu/health/farmtofork.asp


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Caribbean countries have differing capacities and hence priorities for producing food. However they

share one common fact despite their resource endowments and level of development, no one

country is, or even can be, fully self-reliant in food production. They must rely on the internationa

food market to ensure food security. The issue thus becomes one of clearly defining the self-reliant -

import ratio and then creating the policy and institutional environment to both achieve and maintain

equilibrium and stability.

Connecting trade policies to the FNS agenda

While international trade policies and trade agreements have built-in

agendas aimed at stimulating production and trade, some analysts

conclude that to some extent, they could inadvertently limit developing

countries policy space to support their domestic agriculture and food

production sector. The United States (US) Block 24 Policy under the

Clinton Administration is a stark example of how over-reliance on cheap

(subsidised) rice imports from the US can almost completely replace loca

production.

Food security, i.e., decisions on food production, supply systems, influences

on choice, utilization, accessibility and affordability, are all affected by

world-wide policies and regulatory decisions, often referred to as the

geopolicy of food. Therefore, connecting trade policy and strategy to

FNS policy and strategy will be to stimulate trade flows between countries,

especially for foods of strategic import interest, safeguard producer

incomes, especially in relation to production of sensitive FNS commodities

and enhance consumers purchasing power (Konandreas 2006(2)

).

2 Konandreas, P. 2006. Trade and Food Security: Options for Developing Countries. FAO.

The Regional Food and Nutrition Security Policy (RFNSP, 2010)is premised on achieving

the optimum degree of self reliance through a strategy of feeding, clothing and housing the

population, utilising to the greatest extent possible and feasible, indigenous raw materials,

human and natural resources. It however recognises that few households in the Caribbean

are totally self-sufficient in meeting their food requirements; most purchase some (or all) of

their basic food needs. Hence it calls on governments, international partners and other

agencies to play a critical role within a common approach to build capacity for food

production and reduce dependence and vulnerability to overseas volatile international

food markets. Emphasis was also placed on the need for policy coherence and to translate

political statements and policies related to and supportive of good health and nutrition,

food production to marketing, into firm action.

Food self-reliance,

which focuses on

maintaining a desirable

level of domestic food

production in addition

to generating the

capacity to importfrom the world market

as needed, offers an

appropriate and

practical strategy for

countries to connect

and balance FNS and

trade policypriorities.


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Growing local; perspectives!

Local food is defined as food produced and consumed within a state or that

is consumed less than 400 miles from where it was produced. (5) The RFNSP

leans heavily in favour of the local food and eat what you grow

approaches to FNS and from a regional perspective, local takes on regiona

meaning. It seeks to, among other things, keep dependence on food

imports (especially prepared/convenience foods) at the absolute minimum

with an expectation that dissemination of information on nutrition values of

local food commodities compared to those of similar imported foods and

introduction and enforcement of truth in labelling rules will sway consumers

towards eating local.

Keogh cautioned that while local food systems bring many benefits, they

can also bring additional costs which should not be overlooked, including

environmental consequences associated with an expanded carbon and

energy footprint and destruction of natural habitat due to forced changes in

land use systems to accommodate pressures to grow more locally.

Ivey also cautioned that pursuing food self-reliance comes with a number of

risks, including being a high cost producer and/or being hit by a severe

hurricane which destroys the bulk of the local food sources.(6)

5 2008 US Farm Bill6 New Thinking about the Challenges and the Best Approach for Developing FNS Solutions in the Caribbean Region, Ian Ivey,February 2012

Workers tending to crops at the Tucker Valley Mega Farm, Chaguaramas, Trinidad (2009).Source: Shaliza Hasanali

The locavore (persons

who seek to only consume

food that is grown less

than 100 miles away) or

generally, the local food

movement has had very

long history in Europe,

seems to be quickly

emerging in Australia and

is becoming a relatively

new phenomenon in the

US, accentuated by food

writers and experts.

(Will locavores destroy the planet?

by Mick Keogh, Australian Farm

Institute, undated)


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Policy Intervention Critical Control Points (PICCP):

building blocks.

To start, a practical local-import food supply ratio must be determined (based on some clear criteria and process

Once done, then the Hazard Analysis Critical Control Point (HACCP) concept can be applied to define the CCPs fo

strategic policy intervention aimed at achieving the ratio, spot the potential hazards (i.e., weaknesses and threats) i

these areas and to develop strategies to offset, counteract and/or mitigate them in order to maintain balance and

stability in the food system.

Defining the Reliance Ratio: local vs import!

This action is premised on the assumption that policy makers, business and the ordinary citizen recognised and

concede that irrespective of how much investment is made in food production, no country has had or will hav

the capacity to be fully self-reliant in its food supply.

This is the quintessential million dollar question, the answer to which must

provide the frame for implementation. Despite the difficulties which this

process will face, countries need to arrive, by consensus, at an answer or set

of answers that could yield the best possible outcomes for sustainable food

and nutrition security.

Food security should not mean we need to grow all our own food ourselves. It

will be based on the ability of a country to feed itself with the least riskat

least in the basic food area - including contracting the growing of food to

other countries if they can produce it more competitively. In fact, in delivering

its 2013 Annual Budget (Oct. 2012), the Trinidad & Tobago Government

announced a partnership initiative with Guyana, the 'Food Security Facility'

(FSF), aimed at stimulating agricultural and livestock production; reducing

dependence on foreign food imports and stimulating, regionally, the drive for

food security in CARICOM. This was in recognition of the countrys growing

shortages in suitable land for agricultural diversification to meet current and

future needs. This partnership is expected to go a long way towards the

regional target of meeting 25% of regional FNS needs by 2015.

Ivey suggests that any FNS policy and associated implementation strategy

needs to provide a way of minimizing the risks for citizens at the least cost

and, in most situations, the best option is likely to be a combination of global,

regional, and local options. Among the considerations that need to guide this

localimport food ratio should be a combination of:

achieving the least risk and most cost advantageous balance betweenfood grown within a country and sourced externally.

achieving the greatest level of long-term supply and price stability. paying a small premium to ensure security is achieved.

Unless FNS policies and initiatives are developed within a long-term overarching goal, i.e., achieving a specified

percentage of self-sufficiency in food in a country/region and complementing that with a secure and least-risk

outsourced long-term contracted network of supply for the balance, then there is no context within which the

FNS policy/initiative is being framed and implemented. (Ivey 2012)

Reliance builds resilience!

One of several shade hous

introduced by the Guyane

Government to help locfarmers adapt to clima

change and by extensio

to ensure year-roun

production of a wide rang

of high value vegetable

such as, lettuce, cabbage

tomatoes, cucumbe

peppers and celery, som

of which were previou

being importe

(Ravena Gildharie, 201


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Some Critical Control Points:

Self (growing local) Reliance!

The connections between the Caribbean and the rest of the world economically, socially, environmentally

politically- and in all other aspects of human development, have never been as direct, diverse, instant and

strong. This inter-dependence also makes the Caribbean vulnerable, an outcome that is driving regional policy

makers towards greater resilience, including food self-reliance (as in community, country, region).

Flexible food self-reliance policies

Konandreas (2006) confirms food self-reliance which does not rule out

imports as a component of food security as a good option for balancing

domestic food production with imports from world markets, as needed.

Flexible food self-reliance policies build-in most likely, worst case and

optimistic cases. Such policies offer clear guidelines on the expected

scenarios and what would be the most appropriate response towards

well-defined and integrated FNS and development objective(s).

Self-reliance policies should target production of foods in which thecountries/region have some comparative advantage with its current

production practices, prices and technology. Although domestic

production of some of these foods may not be competitive with imports,

strategic decisions need to be made to support production of a cost-

effective minimum quantity of a few selected crops for the food system.

There are options to provide such specialized support from farm to fork

through Green Box policies. These seek to alleviate production and

marketing bottlenecks, enhance agricultural services and develop social

and human capital in the food system. Under Special and Differential

Treatment, CARICOM countries have access to production support

policies, i.e., generally available investment subsidies, agricultural input

subsidies and support to producers to encourage diversification.

Establish flexible production policies for key short-term crops that allowcountries to switch to imports when world prices are lower than domestic

costs and resume local production when imports become either more

costly or scarce.

Increasing the degree of food self-reliance built on flexible production-

import policies must be an important aspect of a community, country or

regions food system. However, if not properly monitored and managed,

there is the distinct possibility that local production could either not

resume seamlessly, or would resume at a much reduced capacity.

Building intelligence and early-warning systems are therefore essential to

complement flexible policies. Constant monitoring of prices and policies

on international markets for the foods of strategic interest to the self-

reliance policy and mechanisms to trigger a resumption of local

production will be critical for effective policy management.

Policy Lessons from Bangladesh

Until the early 1990s, the

Bangladesh Government

pursued food security using self-

sufficiency policy (growing within

the country its food needs).

In 1993 the policy changed to

one of self-reliance (importing

food from the world market when

prices are cheaper than growing

it at home, so as to release landfor other uses for which

Bangladesh has a comparative

advantage).

The self-reliance strategy worked

well: the private sector was able

to import food to make up for the

losses in local rice production

following natural disasters (e.g.,

following the disastrous floods, in

1998 and 2004), and when local

rice prices exceeded the import

price (e.g., from India). Rice is

now imported, mainly by the

private sector.

The strategy broke down during

the 2007-08global food price crisis

when India and other rice

exporters imposed export

restrictions and/or bans.

Bangladesh found it difficult to

import the food it needed and

domestic food prices rose rapidly

as traders, farmers andconsumers, anticipating higher

prices, stored rice. This led to

increased food insecurity and

higher levels of poverty,

especially for the poorest and

most vulnerable.

Source: Kumar Deb, et al, May

2009.


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Import (world market) Reliance

Trade matters for food security. The average person in CARICOM spends US$180

each year on only food imports.(7 ) The largest annual per capita spending on

imports was on beverages, spirits, vinegar (US$32.62); cereals milling products

(US$23.81); and dairy, eggs and honey (US$19.82).

Increasingly, trade and trade policies do not only influence the availability of food

at the global level, but also production and food imports, including food aid, at the

national level.( 8 ) Konandreas (2006) was clear on the strategic importance of

imports in the food system. Hence, trade policy and strategy should be closely

connected to FNS policy and strategy in order to stimulate trade flows on important

food imports, i.e., those food products that are critical to FNS.

Caribbean countries have traditionally used trade policy, such as lowering or

removal of import duties, to make food imports more affordable. In fact, the most

recent action taken in this regard was in Trinidad where on 15 November, the

Government made approximately 7,000 food items have been made VAT- free.

The Government maintained that several items on the list were included in aneffort to lower food prices and curb food-price inflation and to alleviate the

suffering of the most vulnerable.(9 ) A quick glance at the list would reveal a

number of food items of extra-regional origin, such as, pancake mixes, soya

products, French fries, salad dressings, etc., and several that would not necessarily

be counted as basic food items.

"More than 70% of goods on grocery shelves are imported and these will

be zero-rated, so there should be significant relief. The items on the list

were those deemed by the Ministry as goods that would ordinarily be

found in a typical household basket. The VAT-free measure was not

necessarily meant to remain in perpetuity but the intention was to build

domestic food security, and then when the local food production sector

had reached that comfortable mass then the system would be re-

evaluated.

Trinidad and Tobago Trade Minister,

Vasant Bharath, (October 2012)

In a region of small-island developing states with already substantial trade deficits

and where only US$0.46 is earned from food exports for every US$1 spent on foodimports(10),heavy reliance on food imports is not a sustainable option.

7 Ibid.8 Regional Food Security and Trade Policy in Southeast Asia: The Role of ASEAN Alexander C.Chandra and Lucky A. LontohJune 2010, Policy Brief, Trade Knowledge Network.9 Government press releases10 UN Comtrade data on the ratio of Food exports to Food imports (2008-2010). Food i tems consideredwere (HS 96): 2,3,4,504,7,8,1902,1904,1905,20,9,1901,1903,21,22,23,10,11.

Some Items in the Trinidad an

Tobago Governments VAT-fre

Food Initiative

Cereals (only cornflakeswas 0-rated at present)

Pancake mixes Pancake syrups Jams Tea Creamers Flavoured milk drinks Drink mixes Juices (only citrus juices are

0-rated)

Snacks Cakes Custard powder Canned vegetables Pasta sauces Soups/soup mixes Corned mutton Luncheon meats Canned salmon Viennas (non-chicken) Batter/breadcrumbs Pholourie mix Flavoured rice Cake mixes/frosting Almond essence (vanilla

essence is 0-rated)

Canned fruit Fruit cocktail Soya chunks/minced Soya drinks Instant oatmeal Sweeteners Mayonnaise Barbecue sauce Pepper sauce Seasonings Coconut milk powder Massala Salad dressing Olives/capers Relish/dill/pickles Hot chow French fries Frozen potato Hamburger patties Sausages/bacon Processed meats Hams Smoked chicken Smoked turkey Hot dogs Bologna Frozen foods Ice cream Yogurt Desserts


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The Minister rightly noted that the market will determine actionpeople are the ones who can choose where

and what to buy. But we will provide the information to the market to help influence informed decisions."

Given the general conclusions that the average CARICOM consumer has a preference for extra-regional food

imports, use of such policy measures must be also seek to encourage consumption of food imports that are

nutrition dense, while discouraging over-consumption of empty calories. However, it has been observed that

even where food prices are lowered across the board, a relatively high proportion of spending still goes

towards the unhealthier food items items which seem to benefit more from the initiative to lower food prices

as a FNS priority. Policies should therefore also recognise the importance in knowledge-enhancing aspects of

consumer empowerment that contribute to appropriate use of current as well as added purchasing power.

Safety Netsthe buffer zone!

At the national level safety nets should be provided in the short to medium-term while adjustments are made

for food security priorities and international trade variability. These can be financed through the avenues

previously outlined. Preferably, safety nets should exist in the form of providing access to funding for household

and urban food-production systems (e.g. backyard farming, grow-box, micro-farming).

These both improve consumption patterns that support healthy eating and reduce the financial strain on thegovernment in promoting local agriculture and food security. Also, given consumer expenditure in these areas

new avenues for entrepreneurship and business development will be created. Care must be given in the

approach so as to not eliminate incentives for existing small-medium scale producers who largely rely on

retail/household markets. In that regards, their production should be realigned with production options that

cannot be readily met in a household setting (e.g. fruits, root crops, novelty foods, high value agricultura

products). The homeless and other marginalised groups should be incorporated in food-for-work or communa

production systems.

Small scale food production in St. Kitts (Emontine Thompson) and St. Vincent (Lennox Lampkin)

(Photos: IICA St. Kitts and Lennox Lampkin)


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Recommended Readings:

B.C.s Food Self-Reliance Can B.C.s Farmers Feed Our Growing Population? B.C.

2006. Ministry of Agriculture and Lands

www.agf.gov.bc.ca/resmgmt/Food_Self_Reliance/BCFoodSelfReliance_Report.

pdf

Konandreas, P. 2006. Trade and Food Security: Options for Developing Countries.

FAO.Kumar Deb. u., M. Hossain and S. Jones, May 2009.Rethinking Food Security

Strategy: Self-sufficiency or Self-reliance, published by Published by UK

Department for International Development (DFID)

www.bracresearch.org/publications/monograph_dfid3.pdf

Thomson, A., and Metz, M. 1998. Implications of Economic Policy for Food Security:

A Training Manual. Food and Agriculture Organisation. FAO.

www.fao.org/docrep/004/x3936e/X3936E00.htm>

von Braun et al. 2008. High Food Prices: The What, Who, and How of Proposed

Policy Actions.

www.ifpri.org/sites/default/files/publications/foodpricespolicyaction.pdf

Ng, F. And Aksoy, A. 2008. Food Price Increases and Net Food Importing Countries:

Lessons from the Recent Past. http://onlinelibrary.wiley.com/doi/10.1111/j.1574-

0862.2008.00350.x/full

Walker, A. 2009. Integrating into the Global Economy. Trade Negotiations Insights.

Vol 7. No. 10. December 2008/January 2009.

World Bank. 2008. Agriculture and Poverty Reduction.

Balancing the Food System: the self reliance and import ratio

Bottom Line

Food prices will continue to rise. Countries will resort to export bans as supplies of basic

commodities become tight. But not all countries can secure food from farm to fork using

only local resources. No Caribbean country can achieve full self-reliance in most of its

needs in the six recommended food groups.

FNS policies will therefore need to be balanced, flexible, integrated and resilient! Sourcing

some food needs on world markets - imports will have to factor into FNS policies for a

stable and balanced food system.

Agriculture and trade policies must also be complementary, providing the space for self-

reliance policies to build local capacity for food production in selected products deemed

strategic to their food systems.

Research/

Content:

Brent TheophilleJeanelle Clarke

Editor: Diana Francis

The views and opinions

expressed herein, errors and

omissions are those of the authorand not necessarily those of

Inter-American Institute for

Cooperation on Agriculture

(IICA), the Technical Centre for

Agriculture and Rural

Cooperation (CTA) or the

Caribbean Regional Agricultural

Policy Network (CaRAPN) an

IICA-CTA initiative in the

Caribbean.

E-copy available on:

www.pn4ad.org

PB #3 Balancing the Food Bill - Local vs Import-FINAL

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