The Sunday Times Economic Analysis

A serious concern facing these countries is whether trade liberalisation would affect their food security. The immediate concerns may not seem justified, but the long term impact of liberalisation has to be considered seriously.

Self-sufficiency in food is an objective of Sri Lanka's policy. Like Sri Lanka, other South Asian countries too have been concerned about food security, which has often been interpreted as attaining self-sufficiency.

Although South Asian countries are neighbours their characteristics are widely different. From a huge country like India with a population of over 1 billion to the islands in the Maldives that are not only small, but with different resource endowments imply different concerns, strategies and policies.

Yet, when it comes to food security, the South Asian region as a group (excluding Maldives) exhibits several similarities, in terms of food security indicators. Nearly a third or more of their populations is insecure in terms food, malnourished and below the poverty line.

It is not that these countries lack enough food stocks at the national level, but it is their inability to access the food due to low incomes that poses a problem. The root cause of the problem is the poverty of the individual countries.

All South Asian countries are poor and have historically recorded only modest growth rates, especially when compared with the growth performance of some of the East Asian countries.

According to World Bank classification, all these countries are low income countries with the sole exception of Sri Lanka, which is a middle-income country. Once again with the exception of Sri Lanka, international trade has been relatively insignificant and they have been insignificant players in global trade.

The South Asian region as a whole, accounts for less than one percent of the share of world trade. Nevertheless, Sri Lanka has a trade dependency ratio of around 70 percent and is vulnerable to developments in international prices both in terms of exports and imports.

International developments are making a difference and these countries are fearful of a new vulnerability to trade and an erosion of their food security situation. Traditionally food scarcity has often been depicted in the past in terms of the hungry millions, the decade of the 1970s was a period of extraordinary change.

The advent of the Green Revolution hybrid technologies, transformed these countries into more or less self-sufficient countries and the larger ones--India and Pakistan into food grain exporters.

By the 1990s, India had not only become self sufficient in cereals but had turned into a net-exporter. Pakistan has also become a net exporter since the beginning of this century. These countries have had large stocks of grains. In 2002 the stock of food grains in India rose to 80 million metric tons. It is now in the region of 15 million metric tons and is the only country in the region that is a net exporter of food. However, having achieved national level food sufficiency or food security either by domestic production or imports, household level food insecurity for a sizable chunk of the population continues to haunt these countries.

This issue has been discussed many times. What we focus on today are some of the most recent developments that could have an important bearing on national food security or the availability of food in the country rather than the issue of accessibility to food by people.

For several decades since independence, there was a high degree of commonality in the economic policies pursued in the region. Central planning, played a dominant role for the public sector controls on private enterprise and the functioning of markets and inward looking trade policies being the common elements in the policies up to the 1970s.

Sri Lanka was the first country in the subcontinent to liberalise the economy in 1977.

Starting from a similar policy base, overtime the countries have divulged in their policy landscape. By the 1990s South Asian countries, moved from their closed economic policy stances to more liberalised economic regimes.

All countries in the region have witnessed economic reforms, including reforms in international trade. However, the timing, scope, extent and speed of reforms have varied across them. The outcome of these reform measures within each country has also been quite varied. Now they face new challenges, as the WTO is moving towards the greater liberalisation of trade in agricultural products.

A serious concern facing these countries is whether trade liberalisation would affect their food security. The immediate concerns may not seem justified, but the long-term impact of liberalisation has to be considered seriously.

One issue is whether trade liberalisation would lead these countries to be more dependent on imports for their food needs. While the situation at the national level is satisfactory for most of these countries at present, if they are to be self sufficient in the future, considerable increases in food production would be needed.

The population in the region is increasing by about 2 percent per year. This means that food supplies would require an increase of about 25 percent in the next decade. Dependency on imports could reduce their national capacities to produce food, especially grains. On the other hand, these countries too have constraints of land and water availability that restrict their capacity to increase production.

This is the rationale for trade liberalisation, as higher value added exports of goods and services could serve food security issues both at the national and household levels much better.

Then there is the looming problem of rising oil prices that may reduce the capacity of these countries to import food as large proportions of their export incomes would have to be spent on oil imports.

These issues also point to a need for a new wave of scientific research that would increase yields and production in these countries. The use of genetically modified seeds comes to mind with all the serious concerns, their adoption could also raise.

The issue of trade liberalisation and food security is indeed a complex one that requires to be gone into carefully and scientifically. What applies to South Asia, applies to Sri Lanka to a greater degree, owing to the small resource base in the country and its inevitable trade dependency.

The moot question is whether our scientists, economists and policy makers are thinking on these issues or letting events overtake us?