Table 5. Food security in EAP: issues and risk

Table 5. food security in EAP: issues and risk

Increasing availability of food • Increase domestic output • Increase trade • Increase product diversity • Strengthen domestic markets and supply chains (esp in FCV contexts) Increasing access to food • Increasing “entitlements” (incomes, transfers) for nutritionally adequate food basket

Increasing stability • Inventory (public, commercial and private stocks) to ease seasonal variations • Strategic reserves to offset shocks • Risk spreading to cope with shocks: insurance, trade and forward markets • Hoarding • Panic buying • Inadequate capacity to offset shocks (e.g.,

AsEAn+3) • Ineffective (“time-inconsistent”) insurance arrangements • Logistical bottlenecks • Regulatory hurdles

Sources: World Bank elaboration.

• Natural shocks • Trade shocks • Inputs shocks (fuel, fertilizers, seeds) • supply chain shocks (e.g., internal conflicts, logistics) • Income shocks • Transfers shocks (change in remittances, state protection) • Political shocks (e.g., internal conflicts, fCV situations)

In the current EAP context, with its legacy of food security policies and the evolving nature of its food security challenges, there are areas where the government can do more (“consider”) and where it can do less or work differently (“reconsider”). These options and recommendations are presented in table 6. key actions to be taken include: (i) improve nutrition by diversifying domestic production and increasing the quality of nutritious foods – through re-focusing the current predominant support for rice; (ii) lower food prices by increasing productivity and lowering trade barriers; (iii) improve affordability by increase farmer incomes through greater value-addition and improved profitability; and (iv) enhance sustainability through “greening of agriculture” (reducing emissions and promoting low-carbon production, processing and distribution).

In fuel, the temporary crisis measures to keep prices low run counter to the efforts in major EAP countries in the last few years to reduce fuel subsidies. Now fuel subsidies are growing in most countries, including in Indonesia which had significantly reduced them (figure 72). At the same time, production of coal is being revived even in countries that were beginning to shut down coal mines. These actions today could compromise emission reduction commitments as well as perpetuate dependence on imported fossil fuels and hence vulnerability to future energy price shocks.

High global commodity prices have created an economic shock that demands an immediate policy response. However, short-term policy responses can also have long-term impacts and there is a risk that measures taken now could lock countries into high emission pathways or lead to stranded assets. As well as distorting energy markets, subsidies use scarce government resources that could instead support long-term sustainable development.

In achieving the similar energy goals, policy responses must help meet the immediate need for affordable energy without compromising energy security and sustainability. Some governments are expanding existing fossil fuel sources as they are seen as the most economical way to alleviate the current crisis, but encouraging investment in renewables could reduce exposure to fossil fuel price volatility and help meet emission reduction commitments. In addition to the necessary