Using food security paradigm to forecast wheat demand

BR Research July 24, 2019

In a series of columns published in this space, several key conclusions about Pakistan’s current food security paradigm have been established. First, one-fifth of total population is undernourished, and the share of poorly fed has remained stubbornly unchanged over past two decades.

Second, daily per capita caloric supply exceeds various benchmarks of local minimum- and average-; and global recommended- daily caloric requirements. This is particularly true for wheat-based calories – primary source of carbohydrates & dietary fibre – as these constitute 36 percent of dietary energy supply compared to a maximum recommended 26 percent out of total consumed.

Third, while share of wheat-based products in domestic diet may be on the higher side, per capita wheat supply has been trending downwards in recent years. Wheat availability has declined to 122kg per capita as of FY19, from over 150kg at the turn of the century. This is because population increase has vastly outpaced growth in domestic output, led by slow increase in productivity at the same time as acreage stagnated.

However, two crucial caveats need to be emphasised. One, neither supply nor requirement equal actual consumption/intake. This is because no solid estimates of wastage exist; therefore, annual domestic agricultural output in effect serves as a proxy for domestic food availability. Thus, what percentage of farm-produced calories successfully make it to dinner tables or whether consumption is less or greater than requirement is unknown.

Two, aggregates of food production mask inequity in its distribution. Over the years, coefficient of variation (CV) in per capita caloric intake has not only remained very high but also unchanged, quite like the persistent share of undernourished in total population. Regional comparison may help put things in perspective.

In 1990, UN-FAO first began to collect data on extent of variation in dietary intakes for developing countries. At that time, Pakistan started off with same level of variation as Afghanistan and Bangladesh of 0.33, with 0.30 or above defined as very high level of inequality in caloric intake across population. By 2014, while Pakistan barely managed to improve its position to 0.31, the other two countries had reduced their CV to 0.25, defined as moderate level of dietary inequality.

Put together, what lessons can be drawn for future of Pakistan’s cereal-based food security from these disparate facts?

First, estimating absolute availability – for example based on crop output – is a poor indicator as it fails to control for variables such as wastage and inequitable distribution.

Second, it appears intuitive that countries where undernourishment is lowest (or absent) should boast caloric supply level adequate to fulfill national energy requirements, accounting for variables such as wastage, over consumption, and inequitable distribution.

As of 2013, prevalence of undernourishment in 47 countries (including 36 OECD members) stood at 2.5 percent or lower (of total population). Except for Japan, per capita daily caloric supply in each of these countries exceeded 3,000kcal, with an average of 3,367kcal.

Given average daily energy requirement of 2,510kcal for citizens of global north, caloric supply in rich world exceeded requirement by more than one-third.

By the same token, in countries where undernourishment is lowest, wheat availability also exceeds requirement. According to a 2015 OECD document, annual per capita wheat availability for member countries stands at 174kg. This translates into 1,262kcal per capita daily, 37 percent of average daily caloric supply for rich world calculated above – or almost twice the level of average daily energy recommended from all grains.

What does this mean for domestic wheat requirement? Unless Pakistan can somehow manage to be the exception to global rule, decrease in both undernourishment and inequitable distribution (CV) will only follow from absolute increase in gross caloric supply. While this will require a holistic approach to increase availability of crop and livestock sources from all food groups, a large part of this increase will depend on improving wheat availability, as it constitutes more than one-third of target caloric supply.

Assuming population growth rate and land under wheat cultivation constant at current levels, closing the gap between domestic and rich world per capita wheat supply will require annual three percent increase in yield for next two and a half decades. If that happens, caloric supply from wheat will finally touch fifty percent of daily energy requirement, in line with rich world ratio. Even then Pakistan will only barely overrun its peak per capita wheat supply from twenty years ago.

Copyright Business Recorder, 2019

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