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Beneath the Surface

Market Orientation and Food Security

by Abdul Bayes
***"Market integration is good for the food security of the poor provided it leads to diversification of livelihood structure. But if it occurs at the expense of the households' subsistence basis, it can have a deleterious consequence for food security."***
A host of developing countries are currently undergoing market reforms under the aegis of Structural Adjustment Programme. One of the principal aims of such a move is to open up the economy — both internally and externally — providing incentives to farmers to shift towards cash crops and away from subsistence crops. Structural adjustment pro-Kammes tend to strengthen ese Incentives by ensuring production for export more profitable in relation to production for domestic market. Needless to mention that macro tendencies are being reinforced by concomitant micro level interventions such as credit for the poor which seemingly encourage poor households to take up self-employed activities in the off-farm sector and thus inducing them to spare less time on suosistence production However. in the wake of these policies and In the event of growing urbanisation, it is likely that agriculture would gradually turn from subsistence to increasingly diversified and commercialised farming
The perennial concern that could show up Is that, given such a shift from subsistence to commercial farming, what would be its Impact on households'. especially the poorest, food security. Dr Siddlqur Rahman Osmani of the University of Ulster (UK) attempted to examine the relationship between market orientation and food security based on a quick survey on some of the households of India and Nepal. Before placing his observed empirical relationships. Dr Osmani highlighted some of the apriori reasonings pertaining to the premises
On. the positive side ( i.e. market orientation and enhanced food security), the following arguments are said to hold good : a) household Income would Increase and food security Improve, pari passu higher rates of returns on land and labour In a regime of market
oriented activities; b) even if land and labour inputs shift away from food crops, food production might not decline since benefits of improved technology, Inputs and infrastructure — used in cash crops — "can rub-off into the production of food crops as well so that total food production may not decline"'; c) even if food production falls from level, increased export earnings from cash crops should enable a country to maintain its food availability; and d) so long there is a partial shift, market orientation would contribute towards diversification of livelihood "and thereby improve a household's ability to cope with lean times and occasional crises."
However, that a market oriented approach could Jeopardize households' food security is premised on the following notions : a) producers of cash crops might gain but landless and near landless people — catering to the food needs from the market — might stand to lose from reduced availability and consequent higher prices; b) Increased export earnings is a necessary condition for increased food availability but that does not ensure the sufficient condition I.e. purchasing power Besides, the beneficiaries could spend the export earnings on the Import of income-elastic luxurious commodities rather than on Income-inelastic food Items; c) a shift from subsistence to cash crops could challenge the control of women on household income. (This could happen when women are involved more on subsistence crop and men are involved more on cash crops as In many African countries); and d) a shift towards market oriented economy could expose households more to exogenous shocks to food security in the presence of uncertainties in the
market
On an empirical plane, Dr Osmani measured food security in two ways . I) change In the level of food consumption, and ii) changes In the ability to cope with lean seasons The respondents were asked by the researcher for how many months in a normal year do they have enough cereals to feed their family reasonably well.
The answer was presumed to indicate the current level of food security. For a comparison, they were also asked to state
the status five years ago and the reported change was taken as an indication of change in the level of food security. Finally. the change in coping ability was captured by the response as to whether households' ability to cope with lean seasons has gone up or down or remained unchanged.
On the other hand, market integration was measured from both consumption and production side through response to two questions : I) In the preceding five years what had happened to the share of self-provisions (own vs market purchase) of cereals in total consumption, and ii) what had happened to the share of self-provisioning in food consumption — both cereals ano noncereals (Enpassant. a reduced self-provisioning meant more market dependence)
On a simple bivariate basis. Dr Osmani observed a negative
relationship with market dependence for food About three quarters of households — less market dependent in the five years preceding the survey — reported an Improvement in the level of food consumption — as opposed to 46 per cent of more dependent recording an improvement. Correspondingly, one quarter of increasingly market dependent households reported decline in food consumption compared to 18 per cent of Increasingly less dependent households. The relationship is clear : reduced market
dependence implies increased food consumption and vice
It could also be observed that greater dependence on the market does not appear to enhance household's ability to cope with fluctuations In access to food. "Among the households whose market dependence had gone down in the preceding five years as many as 82 per cent reported Improved ability to cope with lean months, whereas amongst the households whose market dependence had gone up 52 per cent did so." Rather, 43 per cent of market dependents reported their inability to cope with lean month compared to 11 per cent of non-de-Gndents Thus there seems to positive correlation between reduced market dependency and Increased ability to cope with and a negative correlation otherwise.
Conclusively then mere
market dependence would threaten food security and less would ensure more. But it would be erroneous to conclude that market orientation necessarily goes to kill food security since tne negative relationship might have sprang from exogenous factors e.g. If households become more market dependent having been thrown out of endowments of land, labour and livestock — essential ingredients of a subsistence livelihood. This is in fact a cause of endowment loss rather than of market orientation as such. Such a notion calls for a look at the episodes from the point of view of structure of production and circumstance tnat propel market orientation.
Bivariate relationship between production structure and food security tend to show "that households whose production of subsistence crops had gone up in the five years preceding the survey managed to improve their level of consumption more than the rest. They also improved their ability to cope with fluctuations more than the rest." Does it imply that increased production of subsistence crops is an essential prerequisite for increased food security? Not necessarily. Data generated appear to show that ouseholds which had Increased production of cash crops also witnessed improved food security as compared to those whose production of cash crops had either declined or stagnated Thus, increased production of either kind of crop — substance or cash — is friendly to higher degree of food security. This finding is not surprising given the fact that Income is Income no matter what the sources are and income is the basic input to Increased purchases.
But of academic Interest is to know their relative power: Is
income from subsistence production more effective than that from market oriented sources? Among the households whose subsistence income increased the most. 54 per cent were found to have improved their access to food as against 66 per cent, among the households, whose income from other selfemployment increased the most" implying that "higher income from market oriented sources was. if anything, more strongly associated with im-R roved access to food than
Igher subsistence income." Among the households with the highest rise in subsistence Income. a much higher proportion (46 per cent) experienced a decline in access to food over a five-year period compared to those with a rise in other selfemployed activities. "Thus considering both improvement and deterioration in access to food, one must conclude that access was more secure when higher income was derived from market based self-employment rather than from subsistence production."
Why does market income turn out to be more favourable to food security? According to Dr Osmani, one possible reason could be the emergence of diversified livelihood structure that market integration tends to offer. A diversified living source could positively affect food security through two favourable influences on entitlement mappings: i) raising rate of return of family labour, and ii) reducing instability in entitlement mapping through spreading the source of income. Thus it is not market integration per se but a diversified market source that could place a household on the saddle of higher food security. "The moral is that market integration is good for the food security of the poor provided it leads to diversification of livelihood structure. But if It occurs at the expense of the households' subsistence basis, it can have a deleterious consequence for food security."