Agriculture Reference
In-Depth Information
ized supply shortages were challenges to policymakers in the region. Major
food security threats, including famines, have been localized phenomena and
were not directly linked with food availability in a nation as a whole.
6
These
unfortunate events resulted from the unavailability or inadequacy of the provi-
sion of public goods, such as roads, and from the failure of price signals to be
transmitted from deficit to surplus regions. Therefore, price stabilization was
argued to be a justified intervention, as it addresses two sources of market fail-
ure: public goods and information asymmetry in the market.
Is such stabilization still a valid justification? We have examined data on
the key indicators of infrastructure and reviewed studies on food market inte-
gration. The data show that all indicators of infrastructure and access to infor-
mation have improved significantly over the past three decades (Table 2.1). Be-
tween 1970 and 2000, the networks of paved roads have increased more than
three times in Pakistan and Bangladesh, more than four times in India, and an
amazing nine times in Indonesia. Growth of the paved-road network has been
somewhat slower in the Philippines, where it registered only a 27 percent in-
crease in the three decades.
Indicators of access to information—represented by telephone, radio, and
television densities—have improved as well. The ratios of telephone ownership
to population in 1970 were 1 to 1,500 in Bangladesh; 1 to 841 in Indonesia; 1 to
566 in India; 1 to 469 in Pakistan; and 1 to 212 in the Philippines. In 2001 every
fifth household in the Philippines; every sixth household in India, Indonesia, and
Vietnam; every tenth household in Pakistan; and every fifty-fifth household in
Bangladesh had access to a telephone.
7
The most remarkable of all improve-
ments is the spread of mobile phone networks to remote areas. Although densi-
ties are still low, the culture of sharing (or using for a fee) has revolutionized in-
formation flow in most of these countries. In India, the number of mobile phones
already exceeds the number of line phones and is growing at a rate of six mil-
lion a month during 2006 (Srivastava 2006). It is now common for grain traders,
even the smaller ones, to carry a mobile phone and stay in touch with traders in
distant locations. Therefore, price information gets transmitted in minutes, and
traders in various locations are better linked than ever.
The ownership of televisions and radios has also improved dramatically
during the past three decades. In 1970, 1 in 20,000 people (or about 1 in 4,000
households) in India, 1 in 8,000 people in Bangladesh, 1 in 1,333 people in In-
donesia, and 1 in 663 people in Pakistan had a television set. In the Philippines
and Vietnam, the numbers were 1 in 93 and 1 in 43, respectively. By the year
2000, again assuming a household size of five, almost every household in Viet-
6. This phenomenon of localization was tragically demonstrated during the Madras Famine
of 1876, Bengal Famine of 1943, as well as the more recent Bangladesh famine of 1974.
7. All household-level calculations are based on the assumption that an average household
consists of five members.
