stocks, `at least from one crop year to another'.
foodstuffs for a number of reasons. Many of them were more liable than most
developed countries to severe crop shortages owing to natural disasters, such as
drought, floods, violent storms and earthquakes. Many relied very largely on
their own crops rather than imports for their food. Local crop failure could cause
severe shortage until emergency imports arrived. In many developing countries, a
considerable proportion of agricultural output was retained by cultivators for their
own consumption or use. Shortages were therefore likely to be accentuated in
urban and other deficit areas. Markets were imperfect owing to poor transport and
communications, and local shortages aggravated by hoarding and speculation.
The effects of a crop shortage were much more serious in developing countries
because consumption levels were so low. A reduction of 2030 per cent might
result in severe undernourishment, even starvation, in countries consuming little
more than was needed for subsistence. And as population and incomes grew,
demand for food could outpace the growth in domestic food production. The
report acknowledged that no reserve, whatever its size, could meet a continuing
drain on resources. At the same time, however, in periods of strain, it was a
great advantage to have adequate stocks that enabled the increased demand
to be met without a sharp rise in prices, which might slow down the pace of
development.
what they produced, storing what was left after paying their dues and debts for
their own needs until the next harvest. This was in marked contrast to farming in
developed countries where most of the crop was sold to the market. Stocks held by
subsistence farmers were of little use for stabilizing commercial supplies. Instead,
subsistence farming tended to accentuate fluctuations in the volume reaching
the market. Moreover, the reactions of subsistence farmers to price changes were
difficult to predict. In times of poor crops, farmers, anticipating higher prices and
wishing to make sure of sufficient food for their own needs, might offer less for
sale than usual, thus accentuating the shortage. Instability was also heightened
when the main crop was one for which there were cheaper substitutes. When
prices were low, they might have to sell more of their crop of, say rice, and
consume more cassava or millet and other cheaper foods. Other stocks may be held
anywhere in the supply line from grower to final consumer, by traders, millers,
shopkeepers, importers and exporters, or, especially if shortages are feared, by
the final consumer. But it was not likely to be sufficient incentive for stocks to
be held on a scale required for cushioning unforeseen major shortages. Storage
costs were high and alternative returns to capital attractive, particularly where
capital was scarce. Therefore, traders tended to aim at reducing their end-of-season
stockholdings to a minimum required for tiding over until the new crop came
in, unless there was good reason to anticipate rising prices. If a poor crop was