Tuesday, September 29, 2009

The value of food security?

Food security, energy security, job security - all political terms that conjure up emotion, deliver electoral support, all the while remaining devoid of meaning.

I have been asked impossible questions in my job. But one comment recently sticks in my mind. It goes:

..there must be some data that they could have used to address the “value” of having future food security.

What value might that be? Do you want a dollar figure that represents the present value of all future value streams from having food security? And do you imply that food security means that Australia remains a net exporter of food?

Wikipedia provides a fairly detailed, but useless, entry on food security. It does not mention national self-sufficiency at all, but merely one’s access to nutrition, and the link with poverty. No surprises there.

I’m all for national pride, but arbitrarily deciding that a country must be self-sufficient in one particular good is a poor philosophical position. If we replaced food security with toilet paper security, or car security, or hat security, we would immediately reveal the absurdity of the argument.

I can hear you saying that food is different. Food is essential to life. Yes, and shelter, clothing and energy are fairly important as well. What if, you say, we were a net importer of food and the countries selling us food products decided not to sell them anymore as an aggressive action for political gain? Well, the response would be simple.

1. We would look to other trading partners for food
2. Price increases would encourage more land to be devoted to farming
3. Diets would change to those foods more easily grown domestically
4. Governments may step in to subsidise farming

This is the beauty and resilience of markets. We do not self-sufficiently produce so many important goods, including energy (another political drama there), but seem happy enough to do so. Indeed, we would never expect to be self-sufficient in other areas.

If we took the argument of the food security mafia seriously, what justification would they have for dividing their food supply geographically by country, rather than say State, or Local Government area, or even individual property? If there are merits to national food security, surely there are merits to State food security as well?

If reliance on other countries for food was a problem, wouldn’t we see evidence that those countries currently importing food are suffering? The graph below shows the proportion of exported agricultural production against agricultural subsidies for selected OECD countries (produced for another purpose with data from here). The net food importers, Japan, Iceland, Norway, Korea, Switzerland, Mexico and the EU seem to be functioning perfectly well. They have food security in the Wikipedia sense, but not food security in the self-sufficiency sense. The food exporters, Canada, US, Turkey, South Africa, Australia, Brazil, and New Zealand, appear to have both forms of food security, although they all still import significant quantities of food, as they specialise in those agricultural commodities that are more suited to their environments. Even they don’t produce the variety of foods to satisfy the dietary desires of their own citizens.
My question is this. When will the public see through the farming lobby's cries for support to ensure food security?


  1. Cam, I think you're looking at this from the wrong angle. These sorts of cost-benefit 'security' issues are more to do with strategic risk management and it is unfortunate that they have become conflated with certain political positions.

    For example, having energy security means that we are not reliant on (potentially) unfriendly governments to supply us with our energy needs. Complicating the issue is that the demand for oil is inelastic and there is no substitute input for oil currently and nor will there be one for a long time.

    It is all very well to assume that we could find alternate sellers on the market if OPEC decides to turn off the tap (like they did in the 70's) but the thing you are forgetting is the temporal aspect.

    Oil production at any one point in time, is, for all intents and purposes, fixed. Sure, non-OPEC sources of oil (e.g. Alberta tar sands, coal liquification) could ramp up production to a point, but they can't do it instantly and there would be substantial costs involved in doing so, plus they are already much more expensive than traditional oil production (otherwise they'd be much more widespread already).

    (Going off on a tangent, this raises the vexed question of determining the economic value of security in general, because the value (or effectiveness) of security measures is not apparent until they fail...)

    Back to the energy security issue, the obvious hedge to the risk involved is to diversify the sources of oil. Perhaps you could use the willingness-to-pay for more expensive sources of oil as a proxy for the demand for energy security?

  2. Are you pretending to ignorant to provoke debate on this subject or just havn't thought your argument through at all? Do yourself a favour and read some amartya sen.

  3. No pretending, and I believe I have thought through my argument.

    Anonymous, you may have to be more specific about which of Sen's ideas is relevant to contemporary Australia. I am talking about national food self-sufficiency, not the type of food security (the avoidance of famine and poverty) that is the focus of much of Sen's work.