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Time to compile food balance

Analysis Materials 25 December 2009 12:33 (UTC +04:00)

At the current stage of socio-economic development of the world community, it is still very important to ensure reliable supply of world foods. Food always makes up necessary part of the fund of vital means, and the deficit for one or another reason is rightly perceived as a disaster requiring prompt action.

Increase in the number of population and growing demand for water due to the development of world economy, extensive use of water and land resources in developing countries gradually lead to global water deficit and food crisis. The situation is complicated due to the fact that despite the deficit and the cost of oil, people started to use agricultural products, particularly grain to produce fuel. With a market system, it is difficult to stop such use of food products through administrative measures. According to the data provided by the World Bank, in 2050 the total population of the planet increased by approximately 80 million during the year and now comprises 6.6 billion people. But Population Reference Bureau research organization predicts that in 2010 world population will reach almost 7 billion people.  

Number of population and grain production in the world

Years

Population

Grain

Number, mln people.

Growth during 10 years

Production, mln t

Growth during 10 years

mln people

%

млн. чел

%

1950

2565

631

1960

3050

485

19

849

216

34

1970

3721

671

22

1103

256

30

1980

4477

756

20

1442

339

31

1990

5320

843

21

1688

246

17

2000

6241

921

15

1846

158

9

It should be noted that over recent years, high rates of economic growth has been recorded in many developing countries. This is the main factor of changes in demand in the global food system. The rapid increase in the welfare of people in low-income countries increases the food demand.

And the situation in food markets in the world is rapidly changing under the influence of the increasing number of people and their incomes, climate change, high energy prices, globalization and urbanization. In addition, the influence of the private sector, especially retail trade is increasing. Deterioration of food supply, price rise for agricultural commodities, change in the character of linkages between producers and consumers seriously affect the poor people in terms of food insecurity.

Another powerful factor influencing the change in the global food balance is the migration of rural citizens to the cities, which leads to changes in consumer spending and preferences. It is expected that over the next three decades, 61 percent of the world's population will live in cities.

Acceleration of the urbanization processes in the country was caused by a sharp increase in the number of urban population and accordingly by an equal expansion of demand for food grains. Urbanization is pushing not only the growing food demand, but also a qualitative change in the ration of population. It begins to bring a demand for many products, which traditionally have not been produced or have been produced in insufficient quantities in those or other developing countries. The contradictions are intensifying between the standard of living affected by the influence of urbanization and the inability to provide it only at the expense of local resources. Supplying food becomes more dependent on international exchange.  

All these factors force the countries to think and take appropriate security measures. For example, on 20 November 2009, Azerbaijan's Cabinet of Ministers approved the Rules for compiling food balance. In the international practice, there are norms of food security, indicating how a country must ensure its food security.

For Azerbaijan, as a country preparing to join the World Trade Organization (WTO), it is particularly important to control food balance in the country. As known, according to the standards adopted by the WTO, if country's own level of food supply (at the expense of domestic production) is more than 75 percent, it is considered that the food security in the country is positive. If the level of domestic food supply is at least 75 percent, but more than 50 percent, it is considered a dangerous level, which should cause concern. Further, in cases when domestic production does not cover 50 percent of domestic needs, it is considered that country's food security is under serious threat.

The food balance in the developed countries of the world is already compiled on separate products, exactly the need of population, domestic production, income from external sources, as well as prediction of these indicators. In fact, the country's dependence on imports of a product indicates the level of country's dependence on food balance. According to the data as of the end of the last year, the highest coefficient of food supply in the world was recorded in Australia, where the figure reaches 237 percent. This shows that the country produces food in 2.37 times more than needed. Australia is followed by Canada (214 percent), United States (124 percent), Germany (95 percent), Britain (75 percent). As of the end of last year, the food security situation in Japan is much more difficult (50 percent). Therefore, in parallel with the preparation of food balance, the government annually allocates funds to promote food security.

Analysis of the socio-economic and historical origins of the strong geographical differentiation in the supply of the world's population with food leads to the conclusion that the similar difficulties of food supply have significant opposite effect on public life. Particularly it consists of governments' effort to consolidate their influence on the food business sector and strengthen their centralizing role.

In Azerbaijan, this may lead to particularly vigorous efforts to revive the bureaucracy in management of the economy and to create additional barriers in the ways of establishment of a true market.

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