By Terry Roe, Agapi Somwaru, and Xinshen Diao

Geography, international trade and institutions are often cited as reasons for the disparity in income among nations. This paper reviews these arguments and focuses on the interdependence between institutional reform and foreign trade. Countries must export to import, and integrating an economy into world markets induces institutional change, which facilitates increased rates of economic growth.

It is shown that agricultural policies in advanced countries are a barrier to agricultural exports from developing countries. If these barriers, as the literature suggests, are also barriers to institutional reform in poor countries, then the typically measured gains in trade reform by advanced countries are greatly underestimated, i.e., one (size) does not fit all. An analysis of growth in factor productivity linked to institutional reform in sub-Saharan Africa is show to increase transition and long-run growth substantially.

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By James Simpson and Ou Li

China, with one-fifth of the world’s population and rapidly rising incomes, is a country which has naturally been open to speculation about its ability to feed itself over the next several decades. Population will grow from 1.26 billion in 2000 to 1.40 billion in 2015 and 1.45 billion in 2030. Simultaneously, per capita income growth will lead to greater demand for meat, thus resulting in larger feed requirements for animals.

The objective of the research reported on in this paper was to determine the extent to which technically China will be able to maintain its current level of being essentially self-sufficient in animal feedstuffs and animal products.

This paper is divided into six main parts; overall results, model and methods, animal feedstuffs requirements projections, feedstuffs availabilities and crop projections, problems and prospects, and conclusions. The method used is to calculate all requirements and availabilities on the basis of metabolizable energy (ME) and crude protein (CP).

The conclusion is that technically China can basically maintain its current level of essentially being self-sufficient in animal products, and that it can meet its feedstuffs requirements with little or no additional imports. It can be expected that there will be years in which imports will likely be needed and other years in which there will be surpluses due to climatic problems and other factors.

A spreadsheet computer program based on protein and energy requirements and availabilities for animals served as the basis for the projections. The program is very large, with more than 5,000 lines of spreadsheet program, 800 variables and more than 2,200 parameters. No attempt was made to balance requirements and availabilities. Rather, best judgments of the authors and those of experts on China in each field were used. The small absolute size of the difference between requirements and availabilities is gratifying, and attests to the robustness of the model. More important is that the differences in the projection years are reasonable. There will be rapid growth in meat consumption, which could lead to possible need for either feedstuffs or meat imports by 2015. However, the projection for 2030 is that availabilities will be 5 percent larger than requirements. These results include conservative changes in technical parameters of animal and crop production, but assume that imports and exports continue at base year current levels. A component for fish was added which reveals that while energy requirements can be met even with fish added, larger protein feed imports than at present will be required.

A discussion about human population, technological change on the animal and fish side and on crop production is included. The situation of China as a rapidly developing country is provided. Storage and other losses are evaluated, as are issues such as water, research and development of agricultural technologies, and adoption of technology in agriculture.

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By Christopher Delgado, Mark Rosegrant, and Siet Meyer

Population growth, urbanization, and income growth in developing countries are fueling a “Livestock Revolution” in which demand for food of animal origin is skyrocketing, with profound implications for human health, livelihoods, and the environment. Over the past three decades, developing countries have begun to catch up with livestock product consumption levels in the developed world, but average per capita consumption is still one-third that of the developed countries. The future is explored with IFPRI’s IMPACT global food model, which includes data for 36 country groups and 22 commodities.

The model’s baseline scenario projects that consumption of meat and milk in developing countries will each grow 2.9% per year between 1996/98 and 2020, dwarfing developed country growth rates. By 2020, developing countries will produce 63% of the world’s meat and 50% of the world’s milk. The increase in livestock production will cause annual feed consumption of cereals to rise by 265 million metric tons by 2020. While some are concerned that such large increases will raise cereal prices substantially over time, real prices of feed commodities are projected to remain stable through 2020 because of adjustments in production patterns and yield improvements.

By and large, most livestock products will be produced where they are consumed. However, net meat and milk imports into developing countries from developed countries will increase from 0.76 million mt and 20.01 million mt in the late 1990’s to 5.71 million mt and 33.70 million mt, respectively, in 2020. Most of the trade flows equilibrating livestock demand with supply will occur in the feed cereals market. Developing countries will increase their net annual cereal imports for all purposes by 98 million mt, for a total of 200 million mt, about half of which is for feed.

Livestock benefit the poor by alleviating the micronutrient deficiencies prevalent in developing countries and by directly alleviating poverty. The rural poor tend to get a higher share of their income from livestock than better-off rural people. But market displacement by rapid industrialization of production, abetted by widespread subsidies for large-scale credit and land use, could harm this major mechanism of income and asset generation for the poor.

The environmental effects of the Livestock Revolution are also worrisome. The large concentrations of animals in peri-urban areas needed to meet growing urban meat and milk demand have led to the degradation of grazing areas and pollution. Policies have encouraged resource degradation and pollution by shielding both producers and consumers from the true costs of environmental degradation.

Policy can do little to alter the widespread increase in demand for livestock products in developing countries. Policy can, however, help make the form the Livestock Revolution takes as beneficial as possible to the poor. Small-scale producers must be linked vertically with processors and marketers of perishable products. Policy can help by remedying distortions that promote artificial economies of scale, such as subsidies to large-scale credit and grazing. Regulatory mechanisms for dealing with the health and environmental problems arising from livestock production also need to be developed in tandem with appropriate technologies for pollution control.

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