Abstract
This paper elaborates the introduction of surveillance that gave the IMF broader responsibilities with respect to oversight of its members’ policies than existed under the par value system. The IMF’s purview has been broadened under the new system but, by the same token, its members are no longer obliged to seek its concurrence in changes in exchange rates. The continuing volatility of exchange rates, and their prolonged divergence from levels that appear to be sustainable over time, have been matters of growing concern.
The primary grains—wheat, rice, and the coarse grains maize, sorghum, millet, barley, oats, and rye—are the main source of food for most of the world’s population. According to the UN Food and Agriculture Organization, half the world’s consumption of calories comes from these cereals, and among low-income countries, the share is substantially larger.
Grain consumption in the developing countries doubled between 1960 and 1980. This rate of growth was nearly twice the rate of population growth and is probably unequaled in history. Apart from growth, there were significant changes in the mix of grains consumed. As incomes rose and consumer preferences changed, rice and coarse grain consumption decreased in favor of wheat consumption (Table 1); countries that consumed primarily rice or coarse grains in 1960 were able to shift to a diet that included more wheat and meat by 1980. An increasing proportion of the grains produced was fed to livestock and poultry.
Percent of rice, wheat, and coarse grains in total grain consumption for selected developing countries and regions
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
Percent of rice, wheat, and coarse grains in total grain consumption for selected developing countries and regions
| Rice | Wheat | Coarse grains | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Country/region1 | 1960 | 1970 | 1980 | 1960 | 1970 | 1960 | 1960 | 1970 | 1980 |
| Sub-Saharan Africa | 9.7 | 10.2 | 13.2 | 6.0 | 9.0 | 11.0 | 84.3 | 80.8 | 75.8 |
| Middle East and North Africa | 5.3 | 6.0 | 5.8 | 56.2 | 58.6 | 60.3 | 38.5 | 35.4 | 33.9 |
| Latin America and Caribbean | 13.3 | 12.0 | 11.6 | 23.2 | 25.4 | 23.6 | 63.5 | 62.6 | 64.8 |
| South Asia | 51.5 | 46.7 | 47.5 | 21.4 | 25.4 | 32.1 | 27.1 | 27.9 | 20.4 |
| East Asia and Pacific | 55.0 | 50.4 | 45.1 | 17.8 | 16.6 | 23.1 | 27.2 | 33.0 | 31.8 |
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
Percent of rice, wheat, and coarse grains in total grain consumption for selected developing countries and regions
| Rice | Wheat | Coarse grains | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Country/region1 | 1960 | 1970 | 1980 | 1960 | 1970 | 1960 | 1960 | 1970 | 1980 |
| Sub-Saharan Africa | 9.7 | 10.2 | 13.2 | 6.0 | 9.0 | 11.0 | 84.3 | 80.8 | 75.8 |
| Middle East and North Africa | 5.3 | 6.0 | 5.8 | 56.2 | 58.6 | 60.3 | 38.5 | 35.4 | 33.9 |
| Latin America and Caribbean | 13.3 | 12.0 | 11.6 | 23.2 | 25.4 | 23.6 | 63.5 | 62.6 | 64.8 |
| South Asia | 51.5 | 46.7 | 47.5 | 21.4 | 25.4 | 32.1 | 27.1 | 27.9 | 20.4 |
| East Asia and Pacific | 55.0 | 50.4 | 45.1 | 17.8 | 16.6 | 23.1 | 27.2 | 33.0 | 31.8 |
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
These changes were made possible by two factors. First, the Green Revolution made available new varieties of wheat and rice that nearly doubled yields in many Asian countries. Second, there was a substantial rise in imports. Of the growth of total grain consumption in the developing countries from 1960 to 1970, net imports supplied only 4 percent, but in the decade of the 1970s, they supplied 21 percent of the consumption growth.
Trends in production
The development and spread of high-yielding wheat and rice varieties (HYVs) began in the mid-1960s. The new varieties have been most widely adopted in Asia and the Near East. By 1979, Indonesia, the Republic of Korea, Malaysia, Pakistan, the Philippines, and Sri Lanka had more than half of their rice area planted with HYV rice, which now covers approximately 40 percent of the total rice area in South and Southeast Asia. The total area planted with HYV wheat in developing countries is not known, but India, Bangladesh, and Pakistan had 70 percent, 72 percent, and 82 percent, respectively, of their wheat area planted with these varieties in 1980.
HYVs have dramatically increased yields. Pakistan, for example, increased its wheat yields by 90 percent between 1965 and 1980, compared with a declining yield trend from 1950 to 1965. India had a similar increase in wheat yields. Rice yields in Indonesia increased by 70 percent between 1965 and 1980, compared with 14 percent from 1950 to 1965. Increases in rice yields during the 1970s of more than 3 percent a year in Bangladesh, Korea, Thailand, and the Philippines were also largely attributable to the improved rice varieties.
Data on the extent of use of high-yielding maize varieties are not currently available. High-yielding maize has been common in the United States for many years. Efforts are being made to replicate the work on the spread of high-yielding wheat and rice varieties for maize in the developing countries.
Consumption and imports
Countries with the most rapid growth of grain consumption in 1960-80 include Brazil (141 percent), China (140 percent), Egypt (137 percent), Mexico (204 percent), and Thailand (106 percent). Increases in these countries’ per capita consumption were also impressive. Brazil’s per capita grain consumption rose by 48 percent, China’s by 68 percent, Egypt’s by 45 percent, Mexico’s by 78 percent, and Thailand’s by 22 percent.
The self-sufficiency ratios in Table 2 show the share of total consumption that is satisfied by domestic production. (Being based on total grains, the ratios may not indicate the situation for individual commodities.) Certain countries, notably Argentina, India, Pakistan, and Thailand, increased their production more rapidly than consumption and either reduced imports or increased exports, while other countries became more dependent on imported grain.
Total grain consumption and self-sufficiency ratios for selected developing countries and regions1
Total grain consumption is in millions of metric tons and the sell-sufficiency ratio is in parentheses. The self-sufficiency ratio was calculated as total grain production divided by total grain consumption and thus does not measure the self-sufficiency in an individual commodity.
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
Total grain consumption and self-sufficiency ratios for selected developing countries and regions1
| Region 2 | 1960 | 1970 | 1980 | ||||
|---|---|---|---|---|---|---|---|
| Sub-Saharan Africa | 25.1 | (.98) | 36.1 | (.95) | 44.8 | (.86) | |
| Nigeria | 7.8 | (.99) | 9.4 | (.95) | 11.6 | (.81) | |
| Middle East and North Africa | 38.0 | (.88) | 51.2 | (.79) | 79.6 | (.70) | |
| Egypt | 5.8 | (.86) | 9.0 | (.73) | 13.8 | (.53) | |
| Turkey | 12.5 | (1.00) | 15.7 | (.89) | 20.5 | (1.01) | |
| Latin America and Caribbean | 40.9 | (.98) | 61.5 | (1.07) | 92.5 | (1.00) | |
| Argentina | 9.3 | (1.34) | 10.1 | (2.05) | 10.4 | (2.77) | |
| Brazil | 14.8 | (.89) | 21.8 | (.91) | 35.7 | (.88) | |
| Mexico | 7.4 | (.98) | 13.1 | (.96) | 22.5 | (.78) | |
| South Asia | 94.0 | (.93) | 123.5 | (.96) | 151.3 | (.94) | |
| Bangladesh | 10.1 | (.96) | 11.6 | (.97) | 15.6 | (.96) | |
| India | 72.6 | (.95) | 95.5 | (.97) | 115.6 | (.99) | |
| Pakistan | 7.5 | (.80) | 11.8 | (.93) | 14.8 | (1.05) | |
| East Asia and Pacific | 141.2 | (.98) | 226.1 | (.97) | 329.3 | (.92) | |
| China | 103.1 | (.98) | 170.7 | (.99) | 247.8 | (.94) | |
| Indonesia | 13.7 | (.92) | 16.8 | (.95) | 26.7 | (.95) | |
| Thailand | 4.7 | (1.44) | 8.0 | (1.38) | 9.8 | (1.58) | |
Total grain consumption is in millions of metric tons and the sell-sufficiency ratio is in parentheses. The self-sufficiency ratio was calculated as total grain production divided by total grain consumption and thus does not measure the self-sufficiency in an individual commodity.
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
Total grain consumption and self-sufficiency ratios for selected developing countries and regions1
| Region 2 | 1960 | 1970 | 1980 | ||||
|---|---|---|---|---|---|---|---|
| Sub-Saharan Africa | 25.1 | (.98) | 36.1 | (.95) | 44.8 | (.86) | |
| Nigeria | 7.8 | (.99) | 9.4 | (.95) | 11.6 | (.81) | |
| Middle East and North Africa | 38.0 | (.88) | 51.2 | (.79) | 79.6 | (.70) | |
| Egypt | 5.8 | (.86) | 9.0 | (.73) | 13.8 | (.53) | |
| Turkey | 12.5 | (1.00) | 15.7 | (.89) | 20.5 | (1.01) | |
| Latin America and Caribbean | 40.9 | (.98) | 61.5 | (1.07) | 92.5 | (1.00) | |
| Argentina | 9.3 | (1.34) | 10.1 | (2.05) | 10.4 | (2.77) | |
| Brazil | 14.8 | (.89) | 21.8 | (.91) | 35.7 | (.88) | |
| Mexico | 7.4 | (.98) | 13.1 | (.96) | 22.5 | (.78) | |
| South Asia | 94.0 | (.93) | 123.5 | (.96) | 151.3 | (.94) | |
| Bangladesh | 10.1 | (.96) | 11.6 | (.97) | 15.6 | (.96) | |
| India | 72.6 | (.95) | 95.5 | (.97) | 115.6 | (.99) | |
| Pakistan | 7.5 | (.80) | 11.8 | (.93) | 14.8 | (1.05) | |
| East Asia and Pacific | 141.2 | (.98) | 226.1 | (.97) | 329.3 | (.92) | |
| China | 103.1 | (.98) | 170.7 | (.99) | 247.8 | (.94) | |
| Indonesia | 13.7 | (.92) | 16.8 | (.95) | 26.7 | (.95) | |
| Thailand | 4.7 | (1.44) | 8.0 | (1.38) | 9.8 | (1.58) | |
Total grain consumption is in millions of metric tons and the sell-sufficiency ratio is in parentheses. The self-sufficiency ratio was calculated as total grain production divided by total grain consumption and thus does not measure the self-sufficiency in an individual commodity.
Regional definitions correspond to those in the World Bank’s World Development Report 1984.
Net imports of grains by all developing countries rose rapidly in 1960-80, more than tripling during the 1970s. Much of the rise in imports is explained by changes in consumer tastes made possible by rapid increases in per capita income and, particularly, in developing countries’ earnings of foreign exchange. Producer incentives were also often inadequate, thus increasing the need for imports. Countries such as Indonesia, Nigeria, and Thailand, which produced only rice and coarse grains, substantially altered their consumption patterns and increased their wheat imports to sustain the change. In Nigeria, wheat consumption increased from one percent of total grain consumption in 1960 to 12.3 percent in 1980. Less dramatic but similar changes occurred in other countries.
Mexico is a country that has significantly increased grain imports. In 1980, it imported 22 percent of its grain consumption compared with only 4 percent in 1970 and 2 percent in 1960. Per capita grain consumption grew by roughly the same amount in the 1960s as in the 1970s. But the growth during the 1960s came almost totally from production increases, allowing per capita imports to decline, while the growth of the 1970s came almost totally from imports, which rose dramatically in per capita terms, mainly in response to growth in incomes. By 1980, grain imports were costing Mexico more than a billion dollars, worsening an already deteriorating balance of payments.
Food aid was an important source of grain imports for many developing countries during the 1950s and 1960s. In 1970–71, aid shipments of grain by all donor countries totaled 12.4 million tons, but by 1980–81, they had decreased to 8.9 million tons as commercial imports increased.
What of the future?
Though the rapid growth in agricultural output in the US played an important role, the huge grain imports of the 1970s were largely made possible by fast growth of export earnings and income. Export earnings from manufactures have grown rapidly for some countries, but most developing countries still depend heavily on primary commodities, which now yield much lower foreign exchange earnings, in per capita terms, than in the boom years of the early 1970s. And, with the severe worldwide recession of 1981-83, citizens of many developing countries have less purchasing power than they did in the late 1970s. Argentina, for example, saw a peak in per capita income in 1979, Brazil in 1980, and Mexico in 1981. Nigeria’s real per capita income peaked as far back as 1974.
Current debt-servicing obligations cast doubt over the ability of many developing countries to sustain large commercial food imports, and it seems unlikely that the large food aid programs of the 1950s and early 1960s will return. Surpluses mount among the major contributors, including the United States, the European Community, Japan, and Canada, but, at most, developing countries can expect food aid in times of domestic production shortfalls and not to supplement normal production.
In the great majority of developing countries, grain consumption prospects depend heavily on domestic agriculture. In several large developing countries in which grain is a very important part of diets, production has already reached, or will soon reach, the point where no further yield increases can be expected from shifting to known high-yielding wheat and rice varieties. Instead, farmers will need to rely on increased fertilizer and chemical use, improved production techniques, and genetic improvements in the high-yielding varieties already adopted. Historically, these sources have not raised yields nearly as dramatically as a shift to high-yielding varieties, and they probably cannot be expected to do so in the future. However, their adoption will be enhanced in many instances through governments moving toward market-oriented prices. For the longer term, genetic engineering offers the prospect of new, higher-yielding varieties and improved resistance to diseases and pests. But in the interim, the rate of growth in aggregate food consumption in the developing countries could be slowed considerably.
Donald O. Mitchell