Food production in the low-income economies almost doubled between 1980 and 1995
•Commentary
About the data
Definitions
Data sources
Agriculture accounts for about 30 percent of GDP in South Asia, about 20 percent in East Asia and the Pacific and Sub-Saharan Africa, and about 10 percent in Europe and Central Asia and Latin America and the Caribbean. Even more striking regional differences are those in the relative size of the rural population. Rural people make up 70 percent of the total population in East Asia and the Pacific, South Asia, and Sub-Saharan Africa, about 50 percent in the Middle East and North Africa, but only 30 percent in Europe and Central Asia and Latin America and the Caribbean.
Increasing agricultural productivity, particularly for smallholders, can be a powerful factor in achieving poverty reduction, food security, gender equity, and sustainable natural resource management. Nearly three-quarters of the world’s poor live in rural areas, where they work as farmers, farm laborers, or artisans. Boosting agricultural productivity growth is particularly important in improving gender equity in countries with large rural populations, where as much as 80–90 percent of the female labor force works in agriculture.
Stronger agricultural growth is also critical for meeting the food needs of developing countries. In the next 30 years the world’s population will increase by 2.5 billion. Most of this increase will take place in developing countries, doubling the demand for food. With land and water becoming increasingly scarce, growth in food supplies will have to come primarily from growth in yields rather than in cultivated area or irrigation. The challenge to more than double yields is enormous, and it will require major changes in international and domestic agricultural policies, institutional frameworks, and public expenditure patterns to support the development of high-productivity, environmentally sustainable production systems.
The agricultural production indexes here, prepared by the Food and Agriculture Organization (FAO), show the aggregate volume of agricultural production relative to the base period 1989–91. The FAO obtains data from official and semiofficial reports of crop yields, area under production, and livestock numbers. When data are not available, the FAO makes its own estimates. Market data on agricultural commodities are rarely sufficient to measure total production because significant amounts are not marketed. Estimates of crop yields and areas are subject to various sources of error that vary systematically over time across countries and by type of crop. Estimation practices vary from country to country but often involve rather coarse estimates based on outdated surveys applied to large crop districts. Allowances for feed, seed, and waste are generally based on fixed coefficients and may not adequately reflect changes in seed varieties or harvesting practices (see Srinivasan 1994, pp. 6–9). Direct survey techniques, such as taking cutting samples at harvest time, generally yield better estimates. But such surveys are more difficult to administer, and if not carefully executed, the extrapolation of survey data into estimates of total production may be affected by excessive sampling error and nonrandom biases. Similarly, estimates of livestock products are often derived from baseline livestock censuses and then extrapolated using a sequence of assumptions about yields at each stage of processing. In a recent examination of food production data for South Asia, Evenson and Pray (1994) found that there has been some improvement in reliability but that further progress will require more resources and better measurement techniques.
The indexes are calculated using the Laspeyres formula: production quantities of each commodity are weighted by the average international commodity prices in the base period and summed for each year. Because the FAO indexes are based on the concept of agriculture as a single enterprise, estimates of the amounts retained for seed and feed are subtracted from the production data to avoid double counting. The resulting aggregate represents production available for any use except as seed and feed. The FAO indexes may differ from other sources because of differences in coverage, weights, concepts of production, time reference of data, the use of international prices, and methods of calculation.
To ease comparison among countries, the FAO uses international commodity prices to value production. These prices, expressed in international dollars (equivalent in purchasing power to the U.S. dollar), are derived using a Geary-Khamis formula for the agricultural sector (see Inter-Secretariat Working Group on National Accounts 1993, sections 16–93). This method assigns a single price to each commodity so that, for example, one metric ton of wheat has the same price regardless of the country in which it was produced. The FAO uses purchasing power parity (PPP) exchange rates for comparison of GNP or consumption expenditures across countries (see the notes to table 4.14). The use of international prices eliminates fluctuations in the value of output due to transitory movements of nominal exchange rates unrelated to the purchasing power of the domestic currency. Unlike the International Comparison Programme (ICP), the FAO calculates international prices only for agricultural products. Substantial differences may arise between the implicit exchange rate derived by the ICP and that of the FAO. For further discussion of the FAO’s methods see FAO (1986).
Definitions
• Value added in agriculture measures the output of the agricultural sector (ISIC divisions 1–5) less the value of intermediate inputs.
• Agricultural production index shows the agricultural production for each year relative to the base period 1989–91. It includes all crops and livestock products except fodder crops. Regional and income group aggregates for the FAO production indexes are calculated from the underlying values in international dollars, normalized to the base period 1989–91. Missing observations have not been estimated or imputed.
• Food production index covers commodities that are considered edible and that contain nutrients. Coffee and tea are excluded because, although edible, they have no nutritive value.
• Livestock production index includes meat and milk from all sources, dairy products such as cheese, and eggs, honey, raw silk, wool, and hides and skins.
Data for value added in agriculture are from the World Bank’s national accounts files. Agricultural production indexes are prepared by the FAO and published annually in its Production Yearbook. The FAO makes data available to the World Bank in electronic files that may contain more recent information than the published versions.