Reaching Turning Points in Economic Transition: Adjustments to Distortions in Resource-based Consumption of Food
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Reaching Turning Points in Economic Transition: Adjustments to Distortions in Resource-based Consumption of Food KOLLEEN RASK1 & NORMAN RASK2 1 College of the Holy Cross, Worcester, MA 01610-2395, USA. E-mail: [email protected]; 2 The Ohio State University, Columbus, OH 43220, USA
Food consumption changes during transition are analysed using a resource-based cereal equivalent measure to identify three defining turning points: (1) the initial drop in food consumption (experienced by all countries except Romania); (2) stabilisation of food consumption at the new, lower level (reached by CEECs and the Baltic States but not by the former USSR as a whole); (3) achievement of market consumption levels consistent with levels of real income (reached by Hungary and the former Czechoslovakia). Country agricultural self-sufficiency measures are calculated yielding policy implications as accession to the European Union is contemplated by many transitional countries. Comparative Economic Studies (2004) 46, 542–569. doi:10.1057/palgrave.ces.8100050
Keywords: transition economies, food consumption, agricultural policy
INTRODUCTION The transition economies of Central and Eastern Europe (CEECs)1 and the former Soviet Republics have compiled a decidedly mixed record of economic success since embarking on the transition to market-based systems in the final decade of the 20th century. This is particularly evident in their changes in per capita consumption of food. Despite country differences and the sometimes chaotic nature of the transition process, we explore the proposition that there are identifiable stages of transition through which 1
CEEC refers to Central and Eastern European Countries. The acronyms CEE (Central and Eastern Europe) and CIS (Commonwealth of Independent States, or the former Soviet Republics minus the Baltic States) are also used.
K Rask & N Rask Turning Points in Economic Transition
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each country passes in terms of its underlying food resource consumption, which when quantified can help inform food and agricultural policy decisions. This region has a strong agricultural base and has historically been an important producer of agricultural products for both domestic food consumption and export. During the centrally planned years, however, a number of price and structural distortions were introduced into the food production and consumption sectors, resulting in a decidedly atypical food consumption pattern when compared to free market economies. In short, low- and medium-income populations in these pre-transition economies were eating high-income diets, composed of significant quantities of livestock products. Price distortions (low food prices) and production subsidies and quotas were introduced to bring production and consumption into balance. The transition to market systems has resulted in substantial adjustments in both the food production and consumption sectors. On the consumption side, higher food prices and initially lower incomes have sharply reduced demand for l
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