Behavioral dimensions of food security.

The empirical regularities of behavioral economics, especially loss aversion, time inconsistency, other-regarding preferences, herd behavior, and framing of decisions, present significant challenges to traditional approaches to food security. The formation of price expectations, hoarding behavior, and welfare losses from highly unstable food prices all depends on these behavioral regularities. At least when they are driven by speculative bubbles, market prices for food staples (and especially for rice, the staple food of over 2 billion people) often lose their efficiency properties and the normative implications assigned by trade theory. Theoretical objections to government efforts to stabilize food prices, thus, have reduced saliency, although operational, financing, and implementation problems remain important, even critical. The experience of many Asian governments in stabilizing their rice prices over the past half century is drawn on in this paper to illuminate both the political mandates stemming from behavioral responses of citizens and operational problems facing efforts to stabilize food prices. Despite the theoretical problems with free markets, the institutional role of markets in economic development remains. All policy instruments must operate compatibly with prices in markets. During policy design, especially for policies designed to alter market prices, incentive structures need to be compatible with respect to both government capacity (bureaucratic and budgetary) and empirical behavior on the part of market participants who will respond to planned policy changes. A new theoretical underpinning to political economy analysis is needed that incorporates this behavioral perspective, with psychology, sociology, and anthropology all likely to make significant contributions.

Supermarket revolution in Asia and emerging development strategies to include small farmers.

A "supermarket revolution" has occurred in developing countries in the past 2 decades. We focus on three specific issues that reflect the impact of this revolution, particularly in Asia: continuity in transformation, innovation in transformation, and unique development strategies. First, the record shows that the rapid growth observed in the early 2000s in China, Indonesia, Malaysia, and Thailand has continued, and the "newcomers"--India and Vietnam--have grown even faster. Although foreign direct investment has been important, the roles of domestic conglomerates and even state investment have been significant and unique. Second, Asia's supermarket revolution has exhibited unique pathways of retail diffusion and procurement system change. There has been "precocious" penetration of rural towns by rural supermarkets and rural business hubs, emergence of penetration of fresh produce retail that took much longer to initiate in other regions, and emergence of Asian retail developing-country multinational chains. In procurement, a symbiosis between modern retail and the emerging and consolidating modern food processing and logistics sectors has arisen. Third, several approaches are being tried to link small farmers to supermarkets. Some are unique to Asia, for example assembling into a "hub" or "platform" or "park" the various companies and services that link farmers to modern markets. Other approaches relatively new to Asia are found elsewhere, especially in Latin America, including "bringing modern markets to farmers" by establishing collection centers and multipronged collection cum service provision arrangements, and forming market cooperatives and farmer companies to help small farmers access supermarkets.

Preventing food crises using a food policy approach.

A food crisis occurs when rates of hunger and malnutrition rise sharply at local, national, or global levels. This definition distinguishes a food crisis from chronic hunger, although food crises are far more likely among populations already suffering from prolonged hunger and malnutrition. A food crisis is usually set off by a shock to either supply or demand for food and often involves a sudden spike in food prices. It is important to remember that in a market economy, food prices measure the scarcity of food, not its value in any nutritional sense. Except in rare circumstances, the straightforward way to prevent a food crisis is to have rapidly rising labor productivity through economic growth and keep food prices stable while maintaining access by the poor. The formula is easier to state than to implement, especially on a global scale, but it is good to have both the objective, reducing short-run spikes in hunger, and the deep mechanisms, pro-poor economic growth and stable food prices, clearly in mind. A coherent food policy seeks to use these mechanisms, and others, to achieve a sustained reduction in chronic hunger over the long run while preventing spikes in hunger in the short run.

Macro shocks and micro outcomes: child nutrition during Indonesia's crisis.

A survey of households in rural Java is used to assess the nutritional impact of Indonesia's drought and financial crisis of 1997/1998. A time-age-cohort decomposition reveals significant nutritional impacts. However, child weight-for-age (WAZ) remained constant throughout the crisis, despite rapid increases in food prices and the consequent household consumption shock. The evidence is consistent with the hypothesis that within households, mothers buffered children's caloric intake, resulting in increased maternal wasting. However, reductions in the consumption of high-quality foods further resulted in increased prevalence of anemia for both mothers and children. The combined effects were particularly severe for cohorts conceived and weaned during the crisis.

Biotechnology and food systems in developing countries.

Even in a world with adequate food supplies in global markets, which is the situation today, biotechnology offers important opportunities to developing countries in four domains. First, many agronomically hostile or degraded environments require major scientific breakthroughs to become productive agricultural systems. Few of these breakthroughs are likely to be achieved through traditional breeding approaches. Second, biofortification offers the promise of greater quantities and human availabilities of micronutrients from traditional staple foods, with obvious nutritional gains for poor consumers, especially their children. Third, many high yielding agricultural systems are approaching their agronomic potential. Radically new technologies will be required to sustain productivity growth in these systems, and only modern genetic technology offers this hope. Finally, many cropping systems use large quantities of chemical inputs, such as herbicides, pesticides and fertilizers that can be unhealthy for people and soils alike. Biotechnology offers the potential to reduce the need for these inputs in economically and environmentally sustainable ways. Applying these new technologies to society's basic foods raises obvious concerns for both human and ecological health. For some, these concerns have become outright fear, and this has mobilized a backlash against genetically modified foods in any form. These concerns (and fears) must be addressed carefully and rationally so that the public understands the risks (which are not zero) and benefits (which might be enormous). Only the scientific community has the expertise and credibility to build this public understanding.