Title

Transition Economies and Globalization: Food System Asymmetries on the Path to Free Markets

Document Type

Working Paper

Date of This Version

12-1-2004

Abstract

Per capita food consumption measured in cereal equivalents follows a well-defined path relative to income in market economies; non-market economies, however, exhibited a very different relationship prior to transition. As part of the transition process, these countries must now remove the asymmetry in the income-food consumption relationship, manifested in diets rich in livestock products, in order to fully integrate their food sectors with global markets. Some countries (Czech Republic, Hungary, Estonia) have essentially completed this task and are now poised to once again increase per capita consumption of livestock products as incomes grow. Others (Belarus, Bulgaria, Kyrgyzstan) retain some of the pre-transition consumption asymmetry and have not adjusted consumption fully to market economy levels. Livestock production has fallen commensurately with consumption, to levels significantly below historical averages. For a variety of structural, institutional and policy reasons, production asymmetries will be more difficult to correct, so production may not rebound as rapidly as consumption. Moreover, for those countries entering or soon to enter the European Union, the distortions of the European agricultural policies as well as the production constraints imposed by accession, which reflect current low output levels, hurt the prospects for future agricultural recovery. These production recovery problems raise concerns that the declining consumption asymmetry will be replaced with a growing production asymmetry.

Working Paper Number

0410

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