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CAUSES OF THE CRISIS 21


Africa’s experience is more relevant, because its population grew rapidly during this period, so Africa’s sluggish growth remains a reasonably strong explanation of the global decline in per capita agricultural production. But if one excludes Africa’s population and cereal production from the global calculations, the –6 percent reduction in global cereal production per capita increases to just –4.75 percent. So Africa’s poor performance only explains around one-quarter of the global decline. And for that one could certainly cite low R&D in Africa as an explanation, but only one of many. Other factors could include land degradation, the increasing exploitation of marginal lands, and some adverse outcomes of economic liberalization, which had negative impacts on both input and output markets (Kherallah et al. 2002). In any event, the remaining three-quarters of the decline in global food production is explained by poor performance in Europe (Figure 2.8), especially the former USSR and several Eastern European countries, which together account for virtually all the decline in European cereal production during 1985–2006 (Figure 2.9). The explanation of this decline does not con- cern yields, which grew fairly quickly.


The real story is instead about inputs: land allocated to cereals in Europe declined by 30 percent during 1985–2006, the population working in agricul- ture fell by 50 percent, farming land equipped for irrigation declined by 26 percent, and fertilizer use declined by 62 percent. In other words, one novel explanation of the food crisis is the fall of the Berlin Wall and the ensuing policy and institutional failures (Liefert and Swinnen 2002; Rozelle and Swin- nen 2004). But international prices are primarily determined by trade, so for the decline in cereal production from East European and former Soviet regions to result in a rise in international prices, we need net exports from these countries to have also declined. However, USDA trade estimates sug- gest that net exports from this region actually increased. Indeed, it is other regions that experienced a decline in net cereal exports over the 1990s and 2000s: North America, South America, Sub-Saharan Africa, and the MENA region. The data also confirm that South Asia and East Asia (including India and China, respectively) are basically self-sufficient in cereals. Thus we find no substantial evidence that links a productivity decline to increased pressure in international cereal markets, except perhaps in Sub-Saharan Africa.


Rising Oil Prices


International fuel and food prices are closely linked historically. Rising oil prices were closely associated with the 1972–74 crisis and indeed were arguably the dominant factor, so there is clearly some precedent here (see Table 2.1 and Figure 2.1). More systematic econometric evidence also con-


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