Modern biotechnology refers to various scientific techniques used to produce specific desired traits in plants, animals or microorganisms through the use of genetic knowledge. Since its introduction to agriculture and food production in the early-1990’s, biotechnology has been utilized to develop new tools for improving productivity. In 2005, twenty-one countries planted biotech crops covering a total of 222 million acres. These crops include soybeans, corn, cotton, canola, papaya, and squash that are improved versions of the traditional varieties. In addition, rapid-rise yeast and an enzyme used to make cheese are both commonly produced through biotechnology.
Biotechnology is a broad term that applies to the use of living organisms and covers techniques that range from simple to sophisticated. For centuries people have crossbred related plants or animal species to develop useful new varieties or hybrids with advantageous traits, such as better taste or increased productivity. Traditional crossbreeding produces changes in the genetic makeup of a plant or animal. The process can be very time consuming as it is necessary to breed several generations in order to not only obtain the desired trait, but also remove numerous unwanted traits.
In contrast, modern agricultural biotechnology techniques, such as genetic engineering, allow for more precise development of crop and livestock varieties.
The genes that directly express desired traits, such as agronomic performance, are identified more readily. Therefore, the genetic makeup of food-producing crops and livestock can be improved more efficiently. Gene technology not only provides the potential to select the exact characteristics desired, but it also enables us to transfer genes for desired traits more precisely.
Crop Biotechnology
There are three main categories of biotechnology-enhanced crops in use or development.
Enhanced input traits, such as herbicide tolerance, insect and virus protection, and tolerance to environmental stressors such as drought.
Value-added output traits, such as corn with higher amounts of lysine for animal feed, or vegetable oils with increased levels of omega-3 fatty acids.
Crops that produce pharmaceuticals or improve the processing of bio-based fuels.
Today, crops in production are primarily those with enhanced input traits.
Animal Biotechnology
The use of genetic information to improve livestock selection and breeding, referred to as animal genomics, is an important tool in agriculture today. Genomics information can also help in determining optimum nutritional needs for animals. This aids in consistent production of high-quality meat, eggs, or milk.
Cloning is another modern technology that facilitates breeding of the healthiest and most productive livestock. The genetic makeup of the animal is not changed in any way. In fact, this form of assisted reproduction allows livestock breeders to produce an identical twin of the best available animals, which is itself used to breed future generations. As of 2005, foods produced from cloned animals or their offspring were not yet commercially available.
Genetic engineering is another potential tool being explored in breeding programs for food-producing animals. Potential benefits of such advances may include animals that mature more quickly or have enhanced nutritional characteristics, such as pigs that produce pork higher in omega-3 fatty acids. The product that would most likely be ready for commercialization in the near future is a variety of salmon, currently under regulatory review, that grows to maturity more quickly than its non-biotech counterpart.
Growth and Acceptance
According to a 2005 report by the International Society for the Acquisition of Agri-Biotech Applications (ISAAA), crops enhanced through biotechnology were planted extensively in the U.S., Canada, Brazil, Argentina, Uruguay, Paraguay, and Australia. These seven countries planted 208.7 million acres of biotech crops, or about 94 percent of the worldwide biotech crop acreage.
The second leading biotech crop producers were small-scale farms in countries that need to increase production to improve incomes in rural areas and supply growing urban populations. These countries included China, India, South Africa, Mexico, Philippines, Columbia, Honduras, and Iran, with acreage of 13.2 million. Small farms in Spain, Germany, Portugal, France, Czech Republic, and Romania accounted for an additional 350,000 acres of biotech crops in 2005.
Farmers have embraced biotechnology because it provides agronomic (agricultural) benefits. The precise agronomic performance of a given variety depends on the growing location, weather, and other factors. Fortunately, the positive impact of biotechnology on crop performance translates into benefits for the environment.
The National Center for Food and Agricultural Policy (NCFAP) found that in 2004, compared to 2003, the combined impact of the 11 biotech crops used in the U.S. resulted in 62 million fewer pounds of pesticides used. According to a recent, peer-reviewed study by PG Economics, biotech crops have created significant economic and environmental benefits since they were introduced in 1996. Moreover, biotech crops have reduced pesticide applications by 379 million pounds – an amount that could fill a 15-mile train of railcars. NCFAP also found that planting herbicide-tolerant crops allowed farmers to conserve soil by avoiding tilling (plowing) the soil frequently. The study by PG Economics also found that biotech crops allowed farmers to reduce tractor usage for tilling the soil, due to more effective weed control. This change in procedure saved 464 million gallons of diesel fuel and decreased greenhouse gas emissions (carbon dioxide) by 22 billion pounds. The reduction of greenhouse gas emissions is equivalent to taking five million cars off the road for a full year.
Moreover, crop performance and pest management, benefits of biotechnology, translate into economic benefits for farmers, as well as environmental benefits.
According to PG Economics, net income for farmers growing biotech crops increased by more than $27 billion globally over the period 1996-2004. U.S. farmers have planted more acres of biotech crops than any other country and consequently have received the largest additional income benefits, amounting to nearly $11 billion.
Consumer Acceptance
According to IFIC’s quantitative survey of US consumers (2006), overall, awareness of food biotechnology seems to incline consumers to be more, not less, favorably disposed to the technology. Specifically, these consumers are more likely to know these foods are in stores today, state likelihood to purchase the foods, and expect benefits from the technology.
Consumer opinion is split in regard to animal biotechnology. However consumers are more favorable once they understand “why” the technology is being utilized. For example, sixty percent of consumers confirm that the potential benefit of animal biotechnology improving “the quality and safety of food” would positively impact their impression of the technology. Furthermore, favorability may increase slightly with FDA assurances of safety of food produced using animal biotechnology.
An important aspect of the survey is that food safety and labeling concerns are solicited from consumers on an open ended basis, thereby allowing consumers to volunteer unprompted, top-of-mind concerns. On an open-ended basis, only one percent name biotechnology as a labeling issue. A majority of consumers state that there is no information that they would like to see added to food labels. Furthermore, more than half of consumers said they support the FDA’s current labeling policy for foods produced through biotechnology.
Food biotechnology meets with greater concern in some other world regions. Improved access to science-based, consumer-focused information about biotechnology is important in order to ensure that the global community realizes the benefits.
Regulation and Oversight
Three federal agencies share the regulatory oversight of biotechnology in the United States. Regulation is coordinated among the U.S. Department of Agriculture (USDA), Food and Drug Administration (FDA), and Environmental Protection Agency (EPA), according to the intended use of the products. Throughout the regulatory process, each agency provides several opportunities for public comment.
Within USDA, the Biotechnology Regulatory Service (BRS), of the Animal and Plant Health Inspection Service (APHIS), regulates field testing, movement, and importation of biotech crops and seed. BRS assesses agricultural and environmental safety of newly developed varieties during field-testing and prior to commercialization.
The EPA regulates the safe use of pesticides in agriculture, including pest-protection properties of plants developed using biotechnology. Therefore, EPA oversees field testing, as well as sale and distribution, of such crops in order to ensure safety for the environment and human health.
FDA has primary responsibility for ensuring safety and appropriate labeling of plant-derived foods and feed, including those developed using biotechnology. Developers of bioengineered foods consult with FDA on a voluntary basis prior to commercialization. During a consultation, FDA evaluates safety and nutritional information provided by the developer, including information on the food safety of any newly expressed compounds, and any changes in the levels of important nutrients, endogenous allergens, and natural toxicants. FDA considers a consultation complete once all safety and regulatory issues have been addressed.
FDA does not require labeling to indicate whether a food or food ingredient is a bioengineered product, just as it does not require labeling to indicate which conventional breeding techniques were used in developing a food plant. Rather, any significant differences in the food itself have to be disclosed on the label.
Regulation of meat, dairy, and eggs produced through biotechnology is in development. There is strong indication, as of 2005, that regulation will be handled differently for foods derived from cloned versus genetically engineered animals.
Around the world, biotech crops and foods are regulated everywhere they are grown and/or consumed. Additionally, the Organization for Economic Cooperation and Development and the United Nations’World Health Organization have put forth statements of support and guidance for individual governmental bodies that are developing regulations to improve consistency throughout the global community.
Bridging to the Future
Biotechnology is making a significant impact on food production, with great potential for future advancements. A strong regulatory system is in place in the U.S., based on the broad consensus regarding safety among the scientific community. Public debate continues, as with any new technology. Of course, consumers want to know what biotechnology will mean for the food we eat. Therefore, the international scientific community continues to assess and challenge biotechnology’s role in improving the food supply by addressing safety concerns and seeking a variety of solutions to our evolving agricultural, food production, food enjoyment, and human health needs.
Thursday, September 11, 2008
Wednesday, September 10, 2008
Grain Handling and Storage Safety
There are several hazards that should be considered when working with grain. Storage Structures, handling equipment, and the grain itself have all caused serious injuries and deaths. Storage structures (bins, silos, and granaries), like all confined spaces, have significant hazards associated with them. Because they are enclosed, grain storage structures often accumulate a toxic atmosphere, or become oxygen depleted atmospheres. Common gasses such as methane and carbon dioxide are heaver than air and can accumulate over stored grain, displacing oxygen. Reduced oxygen levels cause a condition called anoxia. Anoxia affects judgment and causes rapid fatigue or nausea, and can overcome and kill a worker. Other more toxic “silo gases” that can form in grain storage structures include: nitric oxide, nitrogen dioxide, nitrogen tetroxide, ammonia, and hydrogen sulfide. These gases are poisonous to humans, and can cause symptoms ranging from mild respiratory irritation to death, depending on the concentration of the toxin and the level of exposure. Other respiratory hazards associated with grain storage structures are dusts, molds, fungal toxins (aflatoxin, mycotoxin, endotoxin, etc.), and residual fumigants. Exposures to all of these are both long and short term health risks. Sensitivity to these substances increases with repeated exposure, and their effects may be cumulative.
The importance of ventilating a grain storage structure, and using the correct respirator, before entering, cannot be overstressed. In addition, never enter a confined space alone. Always have at least two other people capable of lending assistance, outside the structure. Safety harnesses are also useful, not only as a safe means of rescuing a worker in a storage structure who has been over come by a toxic atmosphere, but also for arresting falls from the structure. Two people are important because, without adequate help to pull an unconscious or injured worker out, the safety harness is useless.
Never enter a confined space where a worker has collapsed to attempt a rescue, without the proper respirator, because the rescuer can quickly become a second victim. If the proper rescue equipment is not available, then a rescue team should be called immediately.
Falls from grain storage structures are a leading cause of injuries and fatalities for farmers. Falling from as little as 12 feet can be fatal. To reduce the risk of falls, keep all ladders in good repair, and avoid climbing a wet or icy ladder. Safety cages should be installed around permanent ladders of 20 feet or more. Hand rails will also greatly reduce the risk of a fall. Use safety ropes, harnesses and fall arresting devices whenever possible.
When handling grain always remember the potential for a grain dust explosion or fire. Moving grain will put a large amount of highly flammable dust in the air. Be aware of potential ignition sources, such as electric shorts, hot engine or other mechanical parts (bad bearings for example), or open flames. Proper ventilation can help reduce the concentration of flammable dust in the air and lessen the risk of explosion.
Grain handling equipment, like all machinery, has risks. Augers, sweeps, conveyers and elevators, must have exposed moving parts in order to do the job they are intended to do. Workers must be in close proximity to these machines to do their jobs and this creates a risk of serious injuries. The manufacturers of these machines have provided guards, shields and steel mesh covers to improve the safety of the machine. Resist the urge to operate this equipment without these safety devices in place. Quick access or better grain flow are poor trade offs for the increased risk of an amputated hand or foot.
Never enter a storage structure while it is being loaded or unloaded. Electrical and automated equipment can start unintentionally. Ensure your safety by locking out and tagging these controls before clearing a blockage or performing maintenance on this equipment.
Always avoid overhead power lines when moving portable augers and elevators. As with irrigation pipes these objects are electric conductors, if they come into contact with a power line, those in contact with it can be electrocuted.
The grain itself can pose a serious safety threat. Moving or flowing grain cannot support your weight. While one can walk on still grain and sink only a few inches, moving grain can’t develop the support needed to avoid sinking several feet, and becoming trapped. As with moving grain, crusted or bridged grain (grain that has spoiled and then stuck together) will allow hollow spaces or voids to form below, and will not support your weight. Spoiled grain stuck to vertical surfaces such as walls also present a serious hazard. Falling grain can bury and suffocate workers below. This is also true for steeply sloped piles of grain that can avalanche when disturbed.
Thursday, August 28, 2008
The role of storage in the economy
The role of storage in the economy
In most countries grains are among the most important staple foods. However they are produced on a seasonal basis, and in many places there is only one harvest a year, which itself may be subject to failure. This means that in order to feed the world's population, most of the global production of maize, wheat, rice, sorghum and millet must be held in storage for periods varying from one month up to more than a year. Grain storage therefore occupies a vital place in the economies of developed and developing countries alike.
The market for food grains is characterized by fairly stable demand throughout the year, and widely fluctuating supply. Generally speaking people's consumption of basic foods such as grains does not vary greatly from one season to another or from year to year. The demand for grain is 'inelastic', which means that large changes in the market price lead to relatively small changes in the amount of grains which people purchase.
Market supply, on the other hand, depends on the harvest of grains which is concentrated within a few months of the year in any one area, and can fluctuate widely from one year to the next depending on climatic conditions. New varieties that have shorter growing periods, and variation in climatic conditions and farming systems in different regions of a country, can help to even out the fluctuations in market supply. But even in a country such as Indonesia, which has diverse climatic and farming conditions and where 90 per cent of rice land is under short duration high yielding varieties, about 60 per cent of production is harvested within a three month period (Ellis et al. 1992).
The main function of storage in the economy is to even out fluctuations in market supply, both from one season to the next and from one year to the next, by taking produce off the market in surplus seasons, and releasing it back onto the market in lean seasons. This in turn smooths out out fluctuations in market prices. The desire to stabilise prices of basic foods is one of the major reasons why governments try to influence the amount of storage occurring, and often undertake storage themselves.
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storage
Who stores and why?
Farmers, traders and governments all have reasons for storage other than the profitability of the storage enterprise itself. Storage is a component within a farming system, a trading enterprise, or a government policy, and may be undertaken because of its contribution to other activities or objectives within these broader contexts.
Farmers, traders and governments all have reasons for storage other than the profitability of the storage enterprise itself. Storage is a component within a farming system, a trading enterprise, or a government policy, and may be undertaken because of its contribution to other activities or objectives within these broader contexts.
Farm Storage
For small farmers the main purpose in storing grains is to ensure household food supplies.Farm storage also provides a form of saving, to cover future cash need through sale, or for barter exchange or gift-giving. Grain is also stored for seed and as inputs into household enterprises such as beer brewing, or the preparation of cooked food. When there are significant inter-seasonal price variations, small farmers often store for speculative gain, that is to say they 'play the market'. This is most common in more prosperous areas, such as the Southern Highlands of Tanzania and southern Mali, which produce a mixture of cash and food crops, and where farmers' financial circumstance make it easier for them to sell when the price is best. Speculative considerations are even more important in the storage decisions of large-scale commercial farmers.
Despite the desire to store grain in order to cover food requirements and future cash needs, farmers often sell a large proportion of their produce at harvest, when prices are low। This is frequently the case with deficit producers, who must satisfy cash needs immediately after the harvest, only to buy in food later in the season. There is an ongoing debate about whether farmers are forced to sell because of debt and economic dependence on others, or whether they sell because they regard storage as too costly (in terms of time), or too risky (given the risk of losses and unpredictability of future prices), or unprofitable in relation to other investments such as cattle. There is no single answer to the debate, since there is much variation in the circumstances under which individual farmers operate, both within and between nations. The 'forced sales' situation has been documented by some authors in South Asia (e.g. Crow, 1987), while the 'wise farmer' been found to apply in South-East Asia by Mears (1980) and Ellis et al.
(1992). In the Sahelian countries of Africa, conflicting findings have been reported. Carefully documented work by Dione (1989) has shown head taxes in Mali to have resulted in forced sales, but Berg and Kent (1991) report several authors who have reached opposite conclusions.
Another reason for not storing is the unpredictability of future prices, which
often makes storage a risky business। This is particularly the case in countries such as Mali where prices vary widely from year to year, and do not follow a steady monthly trend. From Figure 1.1 (see Figure 1.1. Retail Prices of Millet in Mali, 1986 - 1991 Annual Monthly Averages compared with Monthly Averages combined over 5 years), it can be seen that Malian prices normally rise between harvest time and the lean season, but farmers who engaged in speculative storage in 1989 suffered significant losses. Storage was particularly risky as Mali was passing from a period of scarcity, when prices levels were related to the cost of imports, to a period of surplus, when they were related to the price at which Mali could export. Movement between surplus and deficit in the Sahelian countries probably explains the wide variation in Mali's prices from year to year.
Farmers may sell their grain at any time from maturity (sale of the standing crop) onwards। Sale at or before harvest has the advantage that the farmer is saved the cost and time involved in preparing the crop for storage. Transport, threshing, winnowing and drying are all passed on to other levels in the marketing chain, leaving the farmer free to attend to the next crop, or to other farm or off-farm activities. It has been estimated that post-harvest activities account for one quarter of the total cost of production even for small farmers in poor countries (Greeley, 1991 p.5). Early sale also reduces the risks of losses in postharvest activities, and this is particularly advantageous in cases where the harvest occurs in the wet season.
(1992). In the Sahelian countries of Africa, conflicting findings have been reported. Carefully documented work by Dione (1989) has shown head taxes in Mali to have resulted in forced sales, but Berg and Kent (1991) report several authors who have reached opposite conclusions.
Another reason for not storing is the unpredictability of future prices, which
often makes storage a risky business। This is particularly the case in countries such as Mali where prices vary widely from year to year, and do not follow a steady monthly trend. From Figure 1.1 (see Figure 1.1. Retail Prices of Millet in Mali, 1986 - 1991 Annual Monthly Averages compared with Monthly Averages combined over 5 years), it can be seen that Malian prices normally rise between harvest time and the lean season, but farmers who engaged in speculative storage in 1989 suffered significant losses. Storage was particularly risky as Mali was passing from a period of scarcity, when prices levels were related to the cost of imports, to a period of surplus, when they were related to the price at which Mali could export. Movement between surplus and deficit in the Sahelian countries probably explains the wide variation in Mali's prices from year to year.
Farmers may sell their grain at any time from maturity (sale of the standing crop) onwards। Sale at or before harvest has the advantage that the farmer is saved the cost and time involved in preparing the crop for storage. Transport, threshing, winnowing and drying are all passed on to other levels in the marketing chain, leaving the farmer free to attend to the next crop, or to other farm or off-farm activities. It has been estimated that post-harvest activities account for one quarter of the total cost of production even for small farmers in poor countries (Greeley, 1991 p.5). Early sale also reduces the risks of losses in postharvest activities, and this is particularly advantageous in cases where the harvest occurs in the wet season.
Trader Storage
थेरोle of traders in cereal storage varies enormously between parts of the world and between different crops। In most African countries traders carry out very little interseasonal storage of coarse grains, but buy and sell quickly, earning a moderate profit on each transaction. Most storage is carried out by farmers, and to a lesser degree by Government marketing boards and consumers who buy in anticipation of future household needs. Given a general situation of capital shortage, long-term storage of staple grains is insufficiently profitable to attract the interest of traders, who can earn more money by investing in fast moving consumer goods. However the opposite is often true with rice in Africa. This crop is generally produced as a cash crop for the urban markets, but does not have a major demand for use as a staple in rural areas। Often much of the rice is imported and this has encouraged the emergence of large traders able to obtain finance major shipments and to negotiate advantageously with the authorities. Even when sourcing supplies from local producers, traders and millers must hold stocks to cover the needs of their urban clientele, and cannot rely on steady supplies arriving from rural areas.
In Asian countries, traders have a much larger role in interseasonal storage. The two major cereals are rice and wheat and both of these must be milled before reaching the consumer. This is unlike the situation in most of Africa where coarse grains such as maize, millet and sorghum are the main staples. Typically African consumers buy these grains whole, and either grind them at home or take them to be ground at small custom-mills. Large millers who become involved in the marketing chain tend to have good banking connections and can obtain capital at reasonable cost. Studies by the Natural Resources Institute (NRI) in Indonesia and Pakistan indicate, that wherever Government policy is conducive, millers enter the storage business on a large scale. In Indonesia, traders and millers store about 50% of that part of the rice crop which is carried over from the first harvest (Ellis et al., 1992). Indeed it is common for them to store beyond the point when storage is profitable in its own right. This is because storage is only part of a business
activity which involves milling and distribution of milled rice; millers must store in order to keep the mills running out of season, and to maintain supplies to regular customers. Losses on storage are more than compensated for by the gains on other operations.
In Pakistan, the millers' role in wheat storage has been limited by Government subsidies to public sector institutions, which procure about 60% of the marketed portion of the wheat crop। Rather than procuring wheat themselves, millers found it cheaper to procure from these Government institutions which carried out most of the long-term storage. However, when the Government raised their selling price in 1989 and thereby improved the incentives for millers to store, these responded promptly by buying up more stock. In the future, storage behaviour in African countries will probably evolve towards the Asian pattern. The liberalisation of cereal markets will encourage the development of the private trade, the reform of banking systems should gradually increase traders' access to capital markets, and increased urbanisation and sophistication of tastes will favour the emergence of large milling enterprises.
In Asian countries, traders have a much larger role in interseasonal storage. The two major cereals are rice and wheat and both of these must be milled before reaching the consumer. This is unlike the situation in most of Africa where coarse grains such as maize, millet and sorghum are the main staples. Typically African consumers buy these grains whole, and either grind them at home or take them to be ground at small custom-mills. Large millers who become involved in the marketing chain tend to have good banking connections and can obtain capital at reasonable cost. Studies by the Natural Resources Institute (NRI) in Indonesia and Pakistan indicate, that wherever Government policy is conducive, millers enter the storage business on a large scale. In Indonesia, traders and millers store about 50% of that part of the rice crop which is carried over from the first harvest (Ellis et al., 1992). Indeed it is common for them to store beyond the point when storage is profitable in its own right. This is because storage is only part of a business
activity which involves milling and distribution of milled rice; millers must store in order to keep the mills running out of season, and to maintain supplies to regular customers. Losses on storage are more than compensated for by the gains on other operations.
In Pakistan, the millers' role in wheat storage has been limited by Government subsidies to public sector institutions, which procure about 60% of the marketed portion of the wheat crop। Rather than procuring wheat themselves, millers found it cheaper to procure from these Government institutions which carried out most of the long-term storage. However, when the Government raised their selling price in 1989 and thereby improved the incentives for millers to store, these responded promptly by buying up more stock. In the future, storage behaviour in African countries will probably evolve towards the Asian pattern. The liberalisation of cereal markets will encourage the development of the private trade, the reform of banking systems should gradually increase traders' access to capital markets, and increased urbanisation and sophistication of tastes will favour the emergence of large milling enterprises.
Government Storage
As already mentioned, Government may become involved in storage for the purpose of stabilising prices and revenues to farmers. Related to this is Governments' overriding concern for national food security, which is fundamental to political stability. Governments therefore use storage to balance national supply and demand over time, and to minimise the risk of politically embarrassing shortages. They are thus attempting to supplement, and in some cases to replace, market mechanisms, on the assumption that the market can only achieve the balance with an unacceptable degree of supply and price fluctuation. Governments do not involve themselves in the grain market only for reasons of national interest: they are often concerned with rewarding or placating particular lobbies or sectional interests. In developed countries farmers' interests often receive a high priority in Government decisions, out of proportion to their numbers. High 'support prices' encourage production in excess of demand, and surpluses have to be stockpiled at the taxpayers' expense. In many developing countries, the interests of the civil service and ruling party often take priority. Large national food reserves tend to be supported by the civil servants whose job it is to manage them, and by politicians who sometimes use their procurement and distribution as a means of dispensing patronage. Governments may keep different types of storage reserve, depending on how much they wish to intervene in the grain market. Some of the options are: a food security reserve to be sold or distributed for free at times of extraordinary shortage or famine. Such reserves can be found in Sahelian countries like Mali and Chad. They are of limited size (e.g. 10% of the normal volume of grain marketed crop), and are usually limited to the amount thought necessary to tide the country over until the arrival of food aid or imports. They are not designed for the purpose of stabilising prices to producers and consumers. This is reflected in Figure 1.1 which shows that, since a reserve was created in Mali, monthly average retail prices have fluctuated by up to 260% of the lowest figure. a price stabilisation stock, as in the case of Indonesia. Here the Government has no monopoly role in grain procurement and distribution but buys and sells grains in competition with private operators. Average interseasonal retail price increases in Java are only 11% of the lowest monthly figure (Ellis et al, 1992). How much this extraordinary low figure is due to Government stockholding and how much to the stockholding activities of millers is a matter of debate. national storage reserves designed to supply most or all consumer needs in urban areas, and in rural deficit areas. In this case the Government has either a statutory trading monopoly, or a monopoly of all interregional shipments, and is the only party allowed to store significant quantities of grain. Between the 1960s and the early 1980s, such systems were the norm in many African countries, before the onset of liberalisation. Even now, the grain marketing systems in some countries, including Zimbabwe and Kenya, are still partially structured in this way. Such Government operations usually benefit from public subsidy (intended or defacto) and capital investments are largely financed by overseas aid. Indeed subsidies are necessary if the public sector is to carry out functions which would not be profitable to the private sector. However, in some countries subsidies have allowed the State to 'crowd out' private sector competition. In the case of Pakistan for example, this phenomenon has resulted in the State handling about 60% of the marketable surplus. In many countries, such competitive advantages are outweighed by the high cost of fulfilling Government requirements (e.g. to buy and sell at fixed politically-determined prices, and to supply civil servants' consumption needs), overstaffing and slow decision-making processes. In such countries e.g. Tanzania in the 1980s, the official marketing agency may become insolvent and be gradually displaced be private sector competition. Even relatively efficient Government trading operations face the problem that the more grain they buy, and the more they succeed in stabilising prices throughout the year, the less the incentive for private sector storage'. The responsibility for storage then falls very heavily on Government, and the private traders and millers concentrate on buying and selling quickly. Consequently, the Government finds that it has very high storage costs which it cannot recover through sale prices which have been politically determined. In the end the Treasury or Government banks must bale out the Government enterprise, thereby increasing the budgetary deficit. Since 1981, there has been a major move to liberalise grain marketing systems in developing countries, and this has been stimulated by both donor pressure and the massive budgetary deficits stemming from the operation of Government marketing boards. Many African Governments are opting for the first of the above options i.e. a limited food security reserve. Some countries do not appear to need any reserve stocks but can rely on international trade to assure food security and to stabilise prices. This is particularly the case with some deficit countries in Africa, such as Swaziland and Namibia, who have good communications with the world market and are close to major grain suppliers.
Lastly there are some countries where it would seem most appropriate for Government to maintain some sort of price stabilisation role. Such is the case in landlocked countries like Zimbabwe and Malawi, whose production fluctuates between surplus and deficit. If the Governments of these countries totally withdraw from price stabilisation, prices are likely to be subject to very wide interannual fluctuations, with adverse effects on production incentives and consumer welfare (Pinkney, 1993). Nevertheless these countries still have major scope for liberalisation. By improving port facilities and communications with the outside world, and by developing intra-regional trade, they can greatly reduce the required level of stockholding. The move towards liberalisation in developing countries contrasts with the situation of the developed countries, where Governments are still heavily involved in the grain trade. Developing country officials often ask why they should be asked to liberalise while rich countries fail to do so. The answer is simply that these countries have the wealth to support their farmers at the expense of their non-farming majorities. Farmers, traders and governments all have reasons to store grain, but they also have reasons for limiting the amount of storage. The unit costs of storage tend to be constant (or to decrease slowly) as larger quantities are stored, but the benefits fall off as more is stored. In deciding how much to store, the benefits must be balanced with the costs involved .
Lastly there are some countries where it would seem most appropriate for Government to maintain some sort of price stabilisation role. Such is the case in landlocked countries like Zimbabwe and Malawi, whose production fluctuates between surplus and deficit. If the Governments of these countries totally withdraw from price stabilisation, prices are likely to be subject to very wide interannual fluctuations, with adverse effects on production incentives and consumer welfare (Pinkney, 1993). Nevertheless these countries still have major scope for liberalisation. By improving port facilities and communications with the outside world, and by developing intra-regional trade, they can greatly reduce the required level of stockholding. The move towards liberalisation in developing countries contrasts with the situation of the developed countries, where Governments are still heavily involved in the grain trade. Developing country officials often ask why they should be asked to liberalise while rich countries fail to do so. The answer is simply that these countries have the wealth to support their farmers at the expense of their non-farming majorities. Farmers, traders and governments all have reasons to store grain, but they also have reasons for limiting the amount of storage. The unit costs of storage tend to be constant (or to decrease slowly) as larger quantities are stored, but the benefits fall off as more is stored. In deciding how much to store, the benefits must be balanced with the costs involved .
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