Economic Development and Economic Development and Food Demand - PowerPoint PPT Presentation

Economic Development and Economic Development and Food Demand Changes: Food Demand Changes: Production and Management Production and Management Implications Implications Norm an Rask Norm an Rask The Ohio State University The Ohio State University Kolleen Rask Kolleen Rask College of the Holy Cross College of the Holy Cross

Objectives Objectives Document the economic Document the economic development process development process � Changes in food demand Changes in food demand � � Production adjustments Production adjustments � � Single resource Single resource- - based factor based factor � measure measure Cereal Equivalents (CE) Cereal Equivalents (CE)

Data Data � 159 countries 159 countries (97% of world (97% of world � population in 2002) population in 2002) � FAOSTAT database FAOSTAT database 1961- - 2002 2002 1961 � � World Bank World Bank 1975- - 2002 2002 1975 �

Measures and Concepts, 1 Measures and Concepts, 1 � Economic Development: Economic Development: GDP GDP PC (PPP) PC (PPP) � Gross domestic product per capita Gross domestic product per capita adjusted for purchasing power parity adjusted for purchasing power parity � Food Demand (consumption) and Food Demand (consumption) and � Production: CE Production: CE Tons of cereal equivalents per capita Tons of cereal equivalents per capita per year per year

Measures and Concepts, 2 Measures and Concepts, 2 Cereal Equivalents Cereal Equivalents a resource- - based measure based measure a resource � Crop based foods Crop based foods: caloric content relative : caloric content relative � to caloric content of an equal weight of to caloric content of an equal weight of cereals cereals � Livestock foods Livestock foods: Cereal (grain) : Cereal (grain) � equivalents of feed necessary to produce equivalents of feed necessary to produce final livestock product. final livestock product.

Table 1: Sample Cereal Equivalent (CE) Table 1: Sample Cereal Equivalent (CE) Coefficients* for Crop and Livestock Products Coefficients* for Crop and Livestock Products Crop Products Livestock Products Crop Products Livestock Products Cereals 1.00 Cereals 1.00 Beef 19.8 Beef 19.8 Fruits 0.15 Pork 8.5 Fruits 0.15 Pork 8.5 Pulses 1.08 Chicken 4.7 Pulses 1.08 Chicken 4.7 Starchy Roots 0.26 Milk 1.2 Starchy Roots 0.26 Milk 1.2 Sugar, Sweeteners 1.10 1.10 Sugar, Sweeteners Treenuts 0.83 Treenuts 0.83 Vegetable Oils 2.76 Vegetable Oils 2.76 Vegetables 0.07 Vegetables 0.07

Measures and Concepts, 3 Measures and Concepts, 3 Land Equivalent Land Equivalent Total summation (in hectares) of: Total summation (in hectares) of: arable land arable land + land in permanent crops + land in permanent crops + 1/ 3 of permanent pasture + 1/ 3 of permanent pasture = land equivalent = land equivalent

Measures and Concepts, 4 Measures and Concepts, 4 Demand (consumption) changes Demand (consumption) changes during economic development during economic development Two factors: Two factors: � Population Growth Population Growth – – familiar familiar � � Diet Upgrade Diet Upgrade – – shift to livestock shift to livestock � products; most significant and dynamic products; most significant and dynamic

World and Regional Food Demand World and Regional Food Demand Changes 1961- -2002 2002 Changes 1961 Region Total Population Diet Region Total Population Diet Growth Upgrade Growth Upgrade (percentage change in CEs) (percentage change in CEs) World 154 102 52 World 154 102 52 Developing 311 133 178 Developing 311 133 178 Developed 56 35 21 Developed 56 35 21 Africa 205 193 12 Africa 205 193 12 Asia 363 122 241 Asia 363 122 241 S. America 195 134 61 S. America 195 134 61

Per Capita Income- -Consumption Consumption Per Capita Income Relationship (diet upgrade) Relationship (diet upgrade) Income range: Income range: $500 - - $25,000 GDP $25,000 GDP PC (PPP) $500 PC (PPP) Increase in per capita resource use: Increase in per capita resource use: five to seven- - fold fold five to seven

Figure 1. Total per Capita Food Consumption as a Function of Income, (159 Countries) 1975-2002 Food Consumption in Tons of Cereal Equivalents 2.50 2.00 Food Consumption per Capita per Year 1.50 1.00 0.50 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars

Figure 2. Total per Capita Food Consumption as a Function of Income, (159 Countries) 1975-2002: Distribution of World Population by Income Groups 2002 Food Consumption in Tons of Cereal Equivalents 2.50 Food Consumption 2.00 per Capita per Year 1.50 1.00 15% World Average Consumption, 15% 2002 = 0.95 0.50 50% Percent of World Population, 2002 20% 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars

Per Capita Crop Product Per Capita Crop Product Consumption Changes Consumption Changes Income Range: $1,500 - - $25,000 $25,000 Income Range: $1,500 Total crop products – – no change no change Total crop products Cereals – – slight decrease slight decrease Cereals Rice – – decrease decrease Rice Wheat – – increase increase Wheat Sweeteners – – increase increase Sweeteners Vegetable Oils - - increase increase Vegetable Oils

Per Capita Livestock Product Per Capita Livestock Product Consumption Increases Consumption Increases Income Range: $1,500 - - $25,000 $25,000 Income Range: $1,500 Beef 4- - fold fold Dairy Dairy 8- - fold fold Beef 4 8 Pork 13- - fold fold Poultry meat 10 10- - fold fold Pork 13 Poultry meat Beef and Dairy: command the majority Beef and Dairy: command the majority of production resources, at all income and of production resources, at all income and land availability levels land availability levels

Figure 3. Per Capita Livestock Product Consumption as a Function of Income, (159 Countries) 1975-2002 Food Consumption in Tons of Cereal Equivalents 0.60 0.50 Beef per Capita per Year 0.40 Dairy 0.30 Pork 0.20 Poultry Meat 0.10 Eggs 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars

Economic Development and Economic Development and Agricultural Self- -Sufficiency Sufficiency Agricultural Self Low income Low income self- - sufficient sufficient self Middle income declining self Middle income declining self- - sufficiency sufficiency High income rising self High income rising self- - sufficiency sufficiency

Per Capita Agricultural Production and Domestic Supply as Functions of Income 2.50 Production and Domestic Supply in Tons of Cereal Equivalents per Capita per Year 2.00 Domestic Supply 1.50 1.00 0.50 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars

Per Capita Agricultural Production and Domestic Supply as Functions of Income 2.50 Production and Domestic Supply in Tons of Cereal Equivalents per Capita per Year 2.00 1.50 Domestic Production 1.00 0.50 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars

Per Capita Agricultural Production and Domestic Supply as Functions of Income 2.50 Production and Domestic Supply in Tons of Cereal Equivalents per Capita per Year 2.00 Domestic Supply Domestic Production 1.50 Rising 1.00 self-sufficiency Declining self-sufficiency 0.50 0.00 0 5000 10000 15000 20000 25000 30000 Real GDP (PPP) per Capita in 2002 US Dollars Self-sufficiency

Agricultural Self- -Sufficiency and Sufficiency and Agricultural Self Land Availability Land Availability Four levels of land equivalent availability – – Four levels of land equivalent availability hectares per capita, 2002 hectares per capita, 2002 Number of % of world Number of % of world countries population countries population < 0.15 22 10 < 0.15 22 10 0.15 – – 0.49 0.49 73 67 0.15 73 67 0.50 – – 0.99 0.99 33 16 0.50 33 16 1.00 + 24 7 1.00 + 24 7