62
“Affordable” Food Panel Oct. 1, 2013
“Affordable” Food Panel
Oct. 1, 2013
“International Food Systems: Affordability” C. Jerry Nelson, Professor Emeritus of Plant Sciences
Office: 109 Curtis HallPhone:(573) 882-2802
email: [email protected]
Affordable food: Food that is available and priced so it is consistent with household income as affected by cultural and social factors. As incomes increase there is greater demand for:
- animal products (meat, milk)- higher quality products (processed, taste)
International dimension: Depends on whether or not the person/family lives on a farm or in an urban area.
Subsistence farmer: Cost is mainly for seed and minimal inputs with little consideration of land and labor costs. Farm size is small. Even though most staple food is grown on the farm, some is purchased or bartered locally to balance diets and have food year round.
Non-farmer (urban): Cost is higher than for the subsistence farmer since price includes labor and other production costs plus middleman, transport and storage costs. So overall, food costs are higher in urban areas than for the subsistence farmer.
Subsistence agriculture is not efficient or sustainable
1. Compare Kenya, Vietnam and North Korea
2. Ratio of rural income to urban incomes 3. What criteria to compare?
- Education level of rural people- Access to technology- Infrastructure (education, loans, markets)- Birth rate- Incentives to increase production
Comparative Analysis Among Countries
Country Kenya Vietnam North Korea
Government/Economy1 Cap/Cap Soc/Cap Soc/SocForeign Investment (jobs) Low Medium Very little Land ownership/expansion Low High Not option
Education level of rural people Low Medium LowAccess to technology Low High LowInfrastructure (loans, markets) Poor Good FixedChildren per family 3-5 1-2 1-2Incentives to increase production Low Good Very Low
Gross National Product (GNP) Low Medium Very LowAccess to food for rural pop Medium High MediumAccess to food for urban pop Medium High Low
1Cap=capitalistic, Soc=socialistic
Summary of Main Points
1. Affordability is different within the population
2. Policies relative to government are strong influence- Policies on land tenure/ownership- Loans for input costs- Market and distribution structure
3. Education is critical for affordability
4. Not universal in what to improve (country specific)- Need to carefully evaluate each situation- Develop specific strategies to achieve solutions
C. Jerry Nelson, Professor Emeritus of Plant SciencesOffice: 109 Curtis HallPhone:(573) 882-2802
email: [email protected]
Dr. Scott BrownDivision of Applied Social Sciences
College of Agriculture, Food and Natural [email protected]
Website: amap.missouri.edu
In the discipline of economics, “affordable” food means . . .
Food affordability measures the ability of consumers to purchase food, their vulnerability to price shocks, and the presence of programs and policies to support consumers
when shocks occur.
The Global Food Security IndexThe Economist Intelligence Unit
Affordability Defined by the Global Food Security Index
1) AFFORDABILITY
1.1) Food consumption as a share of household expenditure 2.75 22.2% |||||||||||
1.2) Proportion of population under global poverty line 2.5 20.2% ||||||||||
1.3) Gross domestic product per capita (PPP) 2.75 22.2% |||||||||||
1.4) Agricultural import tariffs 1.25 10.1% |||||
1.5) Presence of food safety net programs 1.75 14.1% |||||||
1.6) Access to financing for farmers 1.375 11.1% |||||
Global Food Affordability And Percentage of Food Consumption Relative to Household Expenditures - 2013
Source: The Global Food Security Index
Undernourishment is strongly associated with a low food security ranking - 2013
Source: The Global Food Security Index
Wide Range of U.S. Production Alternatives Emerging
Commodity ProductionDriven by large economies of scaleNo direct link between producers and consumersMay have other externalities
Local ProductionA more direct link between producers and consumersUsually smaller so there are fewer economies of scale
How does consumer utility compare between these alternatives?
How do these production alternatives affect global affordable food outcomes?
Do these different production methods coexist?
Comparison of Local Versus Commodity Beef
Comparison of Washington, DC Area Milk Chains
1Mainstream chain revenue allocations are calculated from the Virginia State Milk Commission Presumed Costs reports, Eastern Market, for plastic half-gallon 100+ cases. Estimates are based on 3-month averages from September-November, 2009. These reports do not specifically identify revenue allocations for the Maryland and Virginia Cooperative or its retail customers and are representative of the milk industry in the DC area in general.
2Revenue shares calculated for Trickling Springs milk sold as MOM’s private-label milk. Trickling Springs-labeled glass bottles add $0.30 per half gallon to the retail value, which accrues solely to the retail stores.
3Mainstream: Based on September-November 3-month average class 1 price announcement for Federal Milk Order Number 1, Frederick, MD/New Holland, PA ($14.95/cwt). Direct: the dairy farm also operates as the processor.
4Includes the estimated portion of producer revenue attributed to costs of processing and home delivery. Total per unit revenue for the producer is 1.22+2.03 = 3.25 ($/half gal.).
5Calculated as the difference between raw product costs in the VA Presumed Costs reports and the class 1 price announcement (i.e., producer revenue). Includes revenue that may accrue to the cooperative or third-party milk haulers.
6Mainstream: Calculated as the difference between wholesale delivered costs and raw product costs from the VA Presumed Costs reports. Includes revenues attributable to delivery to the retail stores. Intermediated: Trickling Springs operates as both the processor and distributor to retail stores.
7Mainstream: Median retail price of half-gallons from January to December, 2009. Direct: Half-gallon prices listed on the South Mountain website as of December 2009. Intermediated: Median retail price of half-gallons from January to December, 2009.
Review of Main Points• Food affordability definition differs around the world• Economies of scale important drivers to large commodity
production systems• Local or hybrid systems provide food alternatives• Feeding a growing global population requires technology• Identifying externalities may give a “true” picture of food
affordability
Dr. Scott BrownDivision of Applied Social Sciences
College of Agriculture, Food and Natural [email protected]
Website: amap.missouri.edu
Charlie Hopper, Marketing SpecialistMissouri Department of Agriculture1616 Missouri BoulevardJefferson City, Missouri 65109Phone: (573) 522-4170Fax: (573) 751-2868
Ecology
Resources Community
Economy (the whole)
Economics(the transactions)
Total Economy
$
The Conservation of Energy -cannot be created or destroyed -changes in form (kinetic, potential) -can be removed from life cycle The Conservation of Matter -cannot be created or destroyed -changes in form (solid, liquid, gas) -can be removed from the life cycle
The Necessity of Agents of Change -form cannot change on its own
The Law of Action and Reaction -for every action there is an equal and opposite reaction
The Laws of Economy and Nature
Carbon Cycle
Photosynthesis
Plant WasteDecay / Mycorrhizee
AnimalRespiration
PlantRespiration
Excess organic carbon is banked as fossil fuel
RootRespiration
Fossil fuel emissions
Animal waste
Organic Carbon
“The Earth’s Economy”
Fossil is mined whenproduction exceeds
consumption
Energy
Agriculture is the stewardship
of the earth’s economy.
Energy
Cost(What you give up)
Price(What you pay)
• Money• Time• Resources• Ecological• Community
Cost vs. Price
Both are Absolute.(Cost > Price = Deficit Spending)
What is value?Values are the personal principles that
determine what cost you will incur for the price you pay.
Extrinsic IntrinsicSupply DemandWant NeedPersonal Social
Values are Subjective.(what you will)
Food is Energy
10 Calories In 1 Calorie Out
Fossil Fuel
Human Fuel
Peak Energy
Energy Stored in Matter
Annual Cost of ErosionLosing 10X faster than it is replaced
37,000 square miles of cropland
37.6 billion dollars in production
Kansas loses 2” of topsoil per winter
When matter is lost Energy is lost: E = MC2
Percentage of All Jobs, Service 50%Production Expenses 80%Farm Debt 70%Household Debt 100%
Percentage of Income Spent on Food 50%Percentage of Retail Dollar to Farmer 50%Percentage of On-Farm Income 75%Total Farm Employment 95%Total Farm Population 90%Total Rural Population 50%Percentage of All Jobs, Manufacturing 75%
Agriculture Economic Trends Since 1960
Wendell Berry
“Eating is an Agricultural
Act”
Agents of Change
What makes you different?
With Reason Comes UnderstandingWith Understanding, Responsibility
Be the change you wish to see in the world.
Charlie Hopper, Marketing SpecialistMissouri Department of Agriculture1616 Missouri BoulevardJefferson City, Missouri 65109Phone: (573) 522-4170Fax: (573) 751-2868
Food AffordabilitySandy Rikoon
[email protected] Center for Food Security
http://foodsecurity.missouri.edu
FOOD AFFORDABILITY (FA):THE ABILITY OF A HOUSEHOLD TO PURCHASE THE FOOD NECESSARY TO MAINTAIN FOOD SECURITY.
5-MINUTE AGENDA:• How we measure FA• Why should we care?• FA and food security• Objective measure, subjective
impacts
FA MEASURE (2013 HUNGER ATLAS):
The percent of household income necessary to purchase 21 meals per household member--meal costs per person--median household income per person
Is food affordability a sufficient predictor of food security?
Other factors often influence the ability of households to make required purchases
Current research from Michelle Kaiser (Ohio State University) and Annie Cafer (University of Missouri) using Missouri Huger Atlas data and other measures
How much food does the household need to purchase with its funds ?
For households, the amount of SNAP benefits is critical
Can the household devote sufficient resources to food purchases?
Many households face tradeoffs between food and rent, utilities, health care costs, and transportation
Is the cost of food the only component of the food budget?
Available transportationLocation of food sources
Take home Message
Food affordability is complicated by the household context
It is not simply the cost of food, but the ability of households to devote resources to food and the diversity of food sources
used by the household
Food AffordabilitySandy Rikoon
[email protected] Center for Food Security
http://foodsecurity.missouri.edu
Debi KellyExtension Associate and MO SARE Co-coordinator234 Agriculture Engineering BuildingColumbia MO [email protected]
In the discipline of Sustainable Agriculture, “affordable” food means . . .
the farmer who grows/raises food receives a fair salary for the work they do; that they are able to live on the land comfortably.
Work Perspective:• How food is grown/raised
– Economically viable– Environmentally safe– Socially acceptable
Personal Perspective:• How I prefer to feed my family
– Fits my pocketbook– Knowledge of food systems– “Real” food– Healthy and taste good– Local
Review of Main Points
• Food needs to be grown/raised with the environment and social responsibility in mind
• Farmers are paid an acceptable salary• Consumers pay an adequate price
Debi KellyExtension Associate and MO SARE Co-coordinator234 Agriculture Engineering BuildingColumbia MO [email protected]
Contact
Donna Mehrle, MPH, RD, LDMU Food Systems Network Co-coordinator
Mary Hendrickson, PhDMU Food Systems Network Co-coordinator
