This article appeared originally in Gulf News: link to original article
From a theoretical point of view, there is nothing wrong with a country importing the majority of its food needs.
The fact is that there are countries who will always be referred to as agricultural powerhouses because of their capabilities, while others will be food importers because they fall on the other end of the agricultural production spectrum. What this means is that what sounds okay theoretically can also be okay in practice – if countries manage their diversification process right.
This is similar to the case with hydrocarbons, for instance, whereby certain countries are exporters of energy requirements. Here, energy importers can reduce their dependence, but not eliminate it completely.
A different sort of reliance
This can be done through self-reliance via domestic extraction, subject to hydrocarbons availability, or by the diversification of domestic energy sources and energy imports. Unlike with hydrocarbons, self-reliance in food security, through domestic food production, could be done by almost any country, except at exuberant costs.
Costs go higher the less agricultural capabilities a country possesses, the higher the number of targeted food commodities, and the larger the population size. Now, how can countries that rely on food imports for their food security move from the theoretical part to the practical part?
The following interdependent points answer and clarify that.
First, net food importing countries must be okay being net food importing countries. The word ‘net’ could refer to both food imports being net of food production, or food imported net of food exported, or food imported net of food produced plus food exported.
Not accepting the fact can only translate into self-reliance or self-sufficiency in agricultural programmes that would prove costly to start… and costly to maintain. The higher the targeted Self-Sufficiency Ratio (SSR) is – as measured by the Food and Agriculture Organisation of the United Nations (FAO) – the costlier the self-sufficiency programme is going to be.
Costs will keep rising as additional food commodities are added to the self-reliance or self-sufficiency programmes, as was stated earlier.
Secondly, instead of expending money and other resources on self-sufficiency that will never be achieved, this could be re-directed towards diversifying sources of food imports. The seriousness of such diversification is highly dependent on the first point and the belief that this is the main approach to the food security of a country that does not boast agricultural production capabilities.
Once acknowledged and adopted, diversification must be carried out at the importing as well as processing levels. At the importing level, diversification must divide countries into primary and alternative sources of x food commodity, based on set criteria that is most suitable for the importing country.
The result must ensure that there is no overdependence on a single source for a food commodity, which could run dry because of reasons such as a pandemic that disrupts supply chains, or higher food prices that could induce export bans.
Build up scale
At the processing level, a net food importing country must expand its processing capacity to food commodities that are of strategic and commercial importance. With the former, the goal is to safeguard the country’s position in the trade of that commodity for food security and political stability reasons.
With the latter, the goal is to diversify the economy and to benefit from the overspill of a larger food processing sector. Collateral benefits include agri-tech and research, in addition to economies of scale and attraction of specialists in the field.
The third and final point is to make sure that a net food importing country is able to pay for food imports. While economic diversification and food processing capacity could contribute to that, a net food importing country must be able to balance the books when it comes to its food imports and everything else that it imports and exports.
To do so, a country must focus on two aspects. The first is the overall financial ability to pay for food imports, even when prices are much higher than the normal range. This was the case during the 2008 Global Financial Crisis (GFC); in 2011 and the years that followed; and during the pandemic and the food supply chain calamity that followed in 2020.
The second is for a net food importing country to manage its food importing operation with a commercial emphasis in mind, not only a food security one. Doing so would better drive efforts towards diversification in sources and would ensure this is available at reasonable prices from multiple sources.
Rejig based on needs
With a sizable food processing sector, the trade in food commodities, both in unprocessed and processed forms, would allow for an efficient food importing operation as part of a much larger, commercially driven trade. To summarise, there is nothing wrong with a country that imports most of its food needs. The sooner a country accepts such a reality, the sooner it can plan and execute diversification in food import sources.
Diversification of a country’s food import sources must extend to importing and processing of food, whilst making sure that there is no overreliance on a single source for any strategic food commodity.
Finally, a net food importing country’s aim must be to establish and improve its position in food trade of strategic and commercial food commodities. Being able to pay for its food imports is as important as diversification in food import sources.
The last thought that I want to leave you with: Is it possible to import the same food commodity from every single country that produces it?