WHERE DEMOGRAPHICS WILL TAKE THE FOOD SYSTEM€¦ · Infrastructure improvements will be critical...

P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 1 – 2 0 0 2 a

P A C I F I C E C O N O M I C C O O P E R A T I O N C O U N C I L

P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 3 - 2 0 0 4

WHEREDEMOGRAPHICSWILL TAKE THE FOOD SYSTEM

P A C I F I C E C O N O M I C C O O P E R A T I O N C O U N C I L

P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 3 - 2 0 0 4

WHEREDEMOGRAPHICSWILL TAKE THE FOOD SYSTEM

ISBN: 0-9714610-0-7

Pacific Food System Outlook 2003-2004S P O N S O R S

The Pacific Food System Outlook extends thanks to its sponsors.For information about the activities of our sponsors see page 28.

P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 3 – 2 0 0 4 1

Foreword 2

Coord inators and Forecast ing Pane l 4

Where Demograph ics Wi l l Take the Food System 6

Rapid Urban Population Growth 6

400 Million More People to Feed 10

A Graying Population: Declining Food Demand and a Tax on the Economy 14

Recommendations 18

References 24

Websites on Demographic Change 25

PECC Members 26

Sponsor Prof i l es 28

Pac i f i c Economic Cooperat ion Counc i l 30

CONTENTS

This report focuses on the role of demographic change in the region’s food system. The

population of the member-countries of the Pacific Economic Cooperation Council (PECC)

is becoming more urban, increasing in number and getting older. The region’s food system

must deliver food to an additional 400 million people by 2020. With the over-65 popula-

tion almost doubling to 370 million in 2020 from 200 million in 2000, food suppliers must adjust to

changing food demand patterns and food service requirements. For example, Japan is the number one net

importer of food and agricultural products in the world. Its rapidly aging population will begin to decline in

2007, resulting in lower total demand for food but increased demand for different kinds of food.

By 2005 more people in the region will live in urban areas than in rural areas, with growth in the urban

population more than double overall population growth. The region will face new challenges in supplying

food over greater distances to more densely populated urban areas, especially in the developing economies.

China is a case in point, with its urban population projected to grow by a staggering 300 million people

between now and 2020. Infrastructure improvements will be critical to providing the needed food.

Participants in the Pacific Food System Outlook Project also addressed the general food outlook for 2003-

04. The region’s food system is confronted by geopolitical uncertainties arising from the war in Iraq and the

Severe Acute Respiratory Syndrome (SARS). While economic growth in the region is expected to be roughly

the same in 2003 as in 2002, expectations at the beginning of the year were more bullish than now. In con-

trast, the outlook for the U.S. economy is quite favorable. Low inflation and interest rates, significant tax

cuts, stepped-up government spending, and high productivity growth are fueling strong consumer confidence

and industry profits. The U.S. economy will act as the engine of growth for the region and its food system.

Agricultural commodity prices are showing some modest upward trend now, due both to greater

imports and weather-induced production shortfalls. In Australia, for example, last season’s grain yields

were off more than 50 percent. Detailed food system outlook profiles for each PECC economy will

2 P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 3 – 2 0 0 4

FOREWORD

appear on the PECC website: http://www.pecc.org/food/.

Thanks are expressed to: Dr. Charles Morrison, President of the East-West Center; Dr. Robert

Retherford, Coordinator of the East-West Center’s Population and Health Studies Program; Penny Higa,

Program Officer at the East-West Center; Dr. Linda J. Cox, Community Economic Development

Specialist with the College of Tropical Agriculture and Human Resources (CTAHR), University of Hawaii

at Manoa; and Dr. Catherine K. Chan-Halbrendt, Associate Dean and Associate Director for Research,

CTAHR, University of Hawaii at Manoa.

We are most grateful to the individual economists representing 13 economies in the region.

Recognition is given to the financial support of this project by Farm Foundation and USDA’s Economic

Research Service (ERS). We appreciate the work of William Coyle of ERS, who developed the meeting pro-

gram and this summary report, along with significant collaboration from Brad Gilmour of Agriculture and

Agrifood Canada. We acknowledge the contributions of Jim Blaylock, Praveen Dixit and Chris Dickens, all

of ERS; Mary Thompson of Farm Foundation; Elizabeth Mook; Joseph Yacinski and Carol Hardy of

Yacinski Design; and Liz Hughes of Beach Brothers Printing.

Thanks to the PECC member committees and the PECC International Secretariat for their continued

help in supporting and guiding this project.

Walter J. Armbruster

President, Farm Foundation

Chairman, Pacific Food System Outlook, PECC

October 2003


P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 1 – 2 0 0 2

PECC COORDINATORS

Walter J. ArmbrusterChairman, Pacific Food System

Outlook and PresidentFarm Foundation [email protected]

William T. CoyleSenior Coordinator, Pacific Food

System OutlookSenior Economist, Market and

Trade Economics DivisionEconomic Research ServiceUS Department of [email protected]

AUSTRALIA

Terry ShealesChief Commodity Analyst Australian Bureau of Agricultural

and Resource Economics(ABARE)

[email protected]

CANADA

Brad Gilmour, Margaret Zafiriouand José Quiroga

Research and Analysis DirectorateAgriculture and Agrifood [email protected]

CHILE

Eugenia MuchnikProfessor, Catholic University

of ChileProgram Head, Agroindustrial

AreaFundación [email protected]

CHINA

Wen TiejunExecutive Secretary GeneralChina Society of Economic and

Structural Reform

HONG KONG, CHINA

Annie Wu Su QingManaging DirectorHong Kong Beijing Air Catering,

Ltd.Hong [email protected]

JAPAN

Keiji OhgaProfessorDepartment of Global

Agricultural SciencesGraduate School of Agricultural

and Life SciencesThe University of [email protected]@ybb.ne.jp

KOREA

Myong-Keun EorResearch FellowCenter for Agricultural PolicyKorea Rural Economic [email protected]

MALAYSIA

Mad Nasir ShamsudinProfessor/HeadDepartment of Agribusiness and

Information SystemsUniversiti Putra [email protected]

Jinap SelamatProfessor/Deputy DeanDepartment of Food ScienceUniversiti Putra [email protected]


COORDINATORS AND FORECASTING PANEL

MEXICO

Juan Manuel GalarzaDirector GeneralServicio de Informacion y

Estadistica Agroalimentaria yPesquera

Secretaria de Agricultura,Ganaderia, Desarrollo Rural,Pesca, y Alimentación(SAGARPA)

[email protected]

NEW ZEALAND

Mark WaltonSenior EconomistNew Zealand Institute of

Economic [email protected]

PERU

Luis JimenezProfessorUniversidad Nacional Agraria,

La MolinaLima [email protected]

THE PHILIPPINES

Salvador P. CateloDeanCollege of Economics and

ManagementUniversity of the Philippines

Los [email protected] or [email protected]

CHINESE TAIPEI

Ching-Cheng ChangResearch Fellow and Division

ChiefThe Institute of EconomicsAcademia [email protected]

THAILAND

Ruangrai TokrisnaAssociate ProfessorDepartment of Agricultural and

Resource EconomicsFaculty of Economics Kasetsart University, Bangkok [email protected]

UNITED STATES

Mark DenbalyChiefFood Markets BranchFood and Rural Economics

DivisionEconomic Research ServiceUS Department of [email protected]


he population inmember economiesof the Pacific Economic Coop-eration Council

(PECC) is projected to increase bymore than 400 million people inthe next two decades, a 16-percentincrease in the number of peopleto feed. This increase is equivalentto the combined populations ofboth Japan and the United States.While economic growth andprices are closely-monitored driv-ers of food demand, demographic

changes — urbanization, growthin populations and changes in theage structure of populations —are subject to less scrutiny, butmay have more profound long-term implications for the region’sfood system.

This report examines demo-graphic changes as projectedthrough 2020, assessing demandand supply implications for theregion’s food system. The infor-mation is based on individualeconomy reports from PECCmembers and discussions at athree-day conference inHonolulu, Hawaii, May 20-22,2003. Population data are drawnfrom the United Nations andfrom agencies responsible fortracking these data in membereconomies.

Demography is the study ofthe size, composition and spatial

distribution of human popula-tions; and the changes that occurin these phenomena through theprocess of fertility, mortality andmigration. Making connectionsbetween demographic change andfood demand and supply go back200 years to the days of Malthuswhen he asserted “the power ofpopulation is infinitely greaterthan the power in the earth toproduce subsistence for man.” Hispessimistic view about the earth’scapacity to produce food wastempered later in the second edi-

tion of “An Essay on the Principleof Populations,” when he recog-nized the important future role of“physical discovery” (Smil, pp.xxvii-xxviii), or technologicalchange in raising food supply.Indeed, human innovation hassteadily increased the “power inthe earth” to produce food. Thus,at least for the intermediate term,population growth and otherdemographic changes are morelikely to define food markets thansupply constraints.

This report addresses threemajor areas of concern for theagri-food system in the region:

■ Greater population concen-trations in urban areas;■ Variability in the size andgrowth of populations withinthe region; and■ Influences of aging popula-tions on food demand.

Rapid Urban Population GrowthThe most significant demographicchange in the PECC region in thenext two decades will be the rapidgrowth of urban populations.Some urban areas are already dis-tressingly large and confronted byproblems of poverty, pollution,and congestion. Urban growthwill test the efficiency and capacityof the region’s food system todeliver a continuous flow of safe,reasonably priced, fresh andprocessed foods.

PECC’s urban population isprojected to grow by more than590 million people between 2000and 2020, an increase of about 45percent, compared to the expectedoverall population growth of only16 percent. After 2005, theregion’s urban population will sur-pass the rural population for thefirst time (Figure 1). This rapidgrowth is explained by higherbirth rates, the migration of peo-ple from rural to urban areas, andimmigration.

Urban growth will be uneventhroughout the region (Figure 2).Definitions of “urban” vary acrossthe region; some urbanizationmay result solely from changesover time in the definition ofwhat constitutes an urban area.Urban growth is expected to bethe most rapid in China andSoutheast Asia; at intermediate


WHERE DEMOGRAPHICS WILL TAKE THE FOOD SYSTEM

Urban growth will test the efficiency and capacity of the region’s food

system to deliver a continuous flow of safe, reasonably priced, fresh and

processed foods.

T


F i g u r e 1 PECC’s Urban Population Will Soon Surpass its Rural Population

1950 1960 1970 1980 1990 2000 2010 2020 2030

2

1.5

1

.5

0

BIL

LIO

N P

EO

PL

E

Source: UN

RURAL URBAN

F i g u r e 2 Distribution of Population Growth Uneven in PECC Region

-20 0 20 40 60 80

PERCENT CHANGE, 2020/2000

EAST ASIA

CHINA

LATIN AMERICA

S.E. ASIA

N. AMERICA/OCEANIA

PECC REGION

Source: FAOSTAT

TOTAL RURAL URBAN

rates in Latin America, NorthAmerica, and Oceania; and slow-est in East Asia. The urban popu-lations of Vietnam, Indonesia,Singapore, and the Philippines areprojected to grow more than 70percent. The expected 67%growth of China’s urban popula-tion is slower, but will add 300million people in the next 20years, a staggering number (Box1). The most subdued urbangrowth (less than 30 percent) willbe in the region’s developedeconomies, plus Russia and Chile.

While urban populations areincreasing, rural populations areexpected to shrink in practically allthe region’s economies. The excep-tions are Vietnam, Malaysia,Ecuador, Brunei, Thailand andMexico. South Korea will experi-ence a sizable decline of around 35percent; Japan and Chile will reg-ister declines of more than 15 per-cent. The largest absolute declinein rural population will occur inChina, where about 145 millionpeople are expected to migratefrom rural areas to urban centersbetween 2000 and 2020.

The region’s rapid rate ofurbanization is driven by techno-logical, social, cultural and eco-nomic changes. Improved efficien-cies in rural and farm enterprisesand greater opportunities for gain-ful employment in cities providethe underpinning of this shift.Urban development is aninevitable consequence of agricul-tural surpluses, economic special-ization, more efficient allocationof resources, and higher incomes.

Diets in urban areas are dis-tinct from those in rural areas.Much of this has to do with high-er incomes and the predictablesubstitution of animal products,fruits, and vegetables for more tra-ditional foods, including staple


BOX 1 : RURAL TO URBAN MIGRATIONAND URBANIZATION IN CHINA

China’s urban population is projected to increase from about450 million in 2000 to 750 million in 2020, an increase of300 million people. By 2015, China’s urban population will

surpass its rural population for the first time (Figure 5). Half of thisincrease will be “natural.” The other half will be through rural-to-urban migration. While the challenges posed by this demographicshift are staggering, this movement of people has already partiallybeen accomplished as China’s “floating” migrant population—esti-mated between 60 and 120 million—has one foot in the furrow andone foot in the city.1

China’s urbanization will have profound impacts on the econo-my. Overall agri-food productivity in China will rise as labor exitsagriculture. Furthermore, migrants help to ease credit constraintsin rural areas through remittances and by facilitating the flow ofinformation, technological change, and investment back to com-mercial undertakings in rural areas. A key question is whether suchproductivity gains in China’s agriculture can keep pace with theincreases in food demand associated with greater urbanization. It isclear that migration will lead to greater specialization in theChinese economy, more efficient allocation of resources, andincreased rural-urban trade.

In the past two decades, China has relaxed restrictions designedto control or limit rural-urban migration. The household registration(or hukou) system and the collective approach to rural land tenurehistorically hampered rural to urban migration. These systemsunderwent reform after the Household Responsibility System (HRS)was introduced between 1978 and 1984. China’s government hasbecome progressively more open in allowing individuals with ruralregistrations to reside in urban areas. Some speculate that thehukou system may be abolished within the next decade.

The HRS, along with the introduction of market-type incentives,spurred productivity gains in the agri-food sector in the early tomid-1980s. Initial productivity gains freed rural labor and resourcesfor other economic activities, giving rise to a boom in local townshipand village enterprises (TVEs) in the late 1980s and 1990s. China’sofficial statistics indicate that the number of rural workers with non-farm employment in local rural enterprises doubled from 67 millionin 1985 to 127 million in 1999.

The rural-urban shift has had a dramatic impact on food con-sumption patterns. On a per capita basis, China’s rural citizens con-sume almost three times as much grain per capita as urban resi-dents. However, urban residents consume more of almost everythingelse. This includes livestock, poultry, and fishery products, whichcontribute to an overall increase in grain demand. Greater access torefrigeration also affects consumption choices, allowing for the pur-chase of greater volumes of convenience foods, frozen foods, andperishable goods (Gale).

1 Official statistics still classify 60 to 70 percent of China’s population as “rural” and 30 to40 percent as “urban.” However, this may reflect official definitions rather than accuratelyrepresent China’s current circumstances. Once China’s migrant population and its relativedependency on both urban and rural income sources is considered, the rural-urban popula-tion split is likely to be closer to 50:50.


cereals and roots and tubers(Figure 3). Urban residents in thePhilippines, for example, eat twiceas much “prestige foods” — meat,poultry, eggs, and dairy products— as do their rural counterpartswho eat more rice, corn, rootsand tubers, and vegetables. Dietsin urban areas are more diverse,both in terms of the kinds offoods consumed and their origins.Urban dwellers tend to eat awayfrom home more frequently, andhave a greater preference for con-venience foods. In developing andmiddle-income economies, accessto superior infrastructure and reli-able electricity facilitates the con-sumption of perishable commodi-ties that have sometimes traveledgreat distances.

Work and lifestyles in urbanareas tend to be more sedentarythan those in rural areas, leadingto lower per capita energy expen-diture and lower per capita

caloric requirements. Higherincomes, lower food prices, andthe urban consumer’s propensityto consume more food than justi-fied by one’s energy expendituretend to offset this.

People concentrated in urbanareas are dependent on a vast andcomplex food system, with supplychains spanning great distances,including overseas. This complexsystem provides greater opportu-nities for mishandling andspoilage. In addition to raisingfarm-level productivity, improvingfood system efficiency beyond thefarm gate is necessary to increaseavailable food supplies.

The competing urban claimon water and other resourcesimportant to food production rais-es farm sector costs, encouragingproducers to lower costs andincrease efficiency. Urbanencroachment on prime agricul-tural land may affect an economy’s

agricultural productivity by forc-ing producers onto more marginallands. As in the case of ChineseTaipei, a government may pro-mote greater efficiency by encour-aging farmers to enlarge opera-tions, providing assistance forolder farmers to retire with digni-ty, and providing training for ruralyouth contemplating farming asan occupation.

Marketing food products inthe Asia-Pacific region willincreasingly focus on densely pop-ulated urban centers, such as theHong Kong-Shenzen-Pearl RiverDelta area, Shanghai, Jakarta,Bangkok, Manila, Santiago-Valparaiso, and Lima-Callao.Many of these urban areas arecoastal and have modern portfacilities, making them moreaccessible to foreign suppliers(Figure 4). In some instances, for-eign suppliers are more competi-tive in these coastal urban markets


F i g u r e 3 Higher Per Capita Consumption of Animal Products Associated With Urbanization

Source: UN, FAO food balance sheets economy profiles; data are for 2000

0 10 20 30 40 50 60 70 80 90 100

35

30

25

20

15

10

5

0

URBAN SHARE OF POPULATION (%)

Thailand Vietnam

China

Indonesia

Malaysia

Philippines Ecuador

Brunei

Peru

Russia

MexicoColombia

United States

Canada

Japan

Korea

New Zealand

Chile

Australia

SH

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F C

AL

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FR

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S (

%)

Chinese Taipei

than inland producers who con-front inadequate supply-chaininfrastructure and cost-raisingpolicies. Here are two examples:

■ High-quality grapes are pro-duced in Xinjiang (China’snorthwest), but shipping themthe 2000 miles to Guangzhou,China’s biggest fruit market, isa difficult challenge. It cantake longer to get Xinjiang’sgrapes to Guangzhou than thetwo weeks it takes forCalifornia grapes to arrivefrom more than three timesthe distance. China suffers adisadvantage because of inade-quate refrigeration and trans-portation services, road tollscharged by local governments

that inflate trucking costs, andthe lack of advanced technolo-gy to grade, clean and wax thefruit (John Pomfret and PhilipP. Pan, The Washington Post,Nov. 11, 2001). ■ In the Philippines, the costof moving corn from thegrowing areas of Mindanao tothe poultry growers locatednear metropolitan Manila isestimated at times to be higherthan the cost of importingcorn from Bangkok, Thailand.

400 Million More People to Feed

While the population in thePECC region will grow from 2.6billion in 2000 to 3.0 billion in2020, about 400 million addition-al people (Table 1), this growthwill be slower than the rest of the

world. The share of global popula-tion in PECC member economieswill decline from 43 percent in2000 to 40 percent in 2020, asregions outside the Pacific, prima-rily Africa and the Middle East,grow faster. Since the 1960s, pop-ulation growth in the world,including the PECC region, hasslowed. This is a shift from thegeometric growth of previousdecades. Now, net additions ofpeople to the global and theregion’s populations are decliningeach year; the global population isprojected to level off at about 9-10billion after 2050, with the PECCregion leveling off at about 3 bil-lion before it starts to decline inthe 2040’s (Figures 6 and 7).

Population growth in theregion will not be evenly distrib-uted (Figure 8). At around 160million people, the largest absoluteincrease in population by 2020will occur in China, followed byIndonesia and the United States atabout 60 million and 50 million,respectively. Starting in 2007,Japan’s population will actuallybegin to decline. The RussianFederation’s population is alreadyin decline.

Despite a declining rate ofgrowth in China, the absoluteincrease in its population relativeto other economies in the regionwill remain large for severaldecades. Around 2030, China’spopulation will begin to shrink aswill its East Asian neighbors —Korea in 2027, Chinese Taipei in2029, and Hong Kong, China, in2025. Surprisingly, the United

States will grow at a similar rate assome developing economiesbecause of immigration and thehigh fertility rate of recent immi-grants. In percentage terms, thelargest population increases willoccur in Singapore, Brunei,Malaysia, the Philippines,Ecuador, Peru, and Colombia,with each of these economies’populations expected to increaseby more than 30 percent between2000 and 2020.

While population growth inthe PECC region is slower thanthe rest of the world, immigrationis relatively more important. In2000, some 760,000 more peopleentered the region than left; anumber that is still small relative

to the annual 24.5 million naturalincrease in the region’s population.Within the region, however, thereis significant transmigration. Themost important destinations formigrants are the economies withhigher per capita income:Singapore, Hong Kong (China),Canada, New Zealand, Australia,Brunei, the United States, andRussia. Net migration to theUnited States alone exceeds onemillion people annually. Japandoesn’t fit into this categorybecause of strict immigration poli-cies that explain its homogeneouspopulation. The middle-incomeEast Asian economies of Koreaand Chinese Taipei follow a simi-lar pattern. As one would expect,emigration is most common inthe lower-income economies ofthe Philippines, Peru, Ecuador,Vietnam, Colombia, China,



The region’s population is projected to increase by more than 400 million

people in the next two decades. This increase is equivalent to the current

population of Japan and the United States.

P A C I F I C F O O D S Y S T E M O U T L O O K 2 0 0 3 – 2 0 0 4 1 1

F i g u r e 4 Largest Urban Agglomerations in PECC

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iF i g u r e 5 China’s Urban Population Will Surpass its

Rural Population by 2015

35

30

25

20

15

10

5

0

1,500

1,200

900

600

300

0

MIL

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Source: FAOSTAT

Source: Th. Brinkhoff: The Principal Agglomerations of the World. http://www.citypopulation.de, 12.11.2002

URBAN RURAL

1950 1960 1970 1980 1990 2000 2010 2020

Agglomerations include a central city and neighboring communities connected by continuous built-up areas and many commuters. Some agglomerations have more thanone central city. Agglomerations here are those with more than 4 million population.

Mexico and Indonesia, with netemigration from the latter threeequaling 200,000 to 300,000annually in recent years.

The Philippines also has sig-nificant emigration, with a totalof 7.4 million overseas workers.Although they are generally bettereducated and trained peoplewhose emigration represents adrain on the economy, theirremittances back to the economyare significant.

Ethnic changes in SoutheastAsia and Latin America result lessfrom migration and more fromthe intermarrying of native groupswithin an economy or region. Forexample, 60 percent of Mexico’spopulation is Mestizo, the result ofa mixing of white and nativeindigenous populations (Table 2).Another important ethnic phe-nomenon in the region is the roleof the Chinese Diaspora: about 30to 40 million Chinese who liveoutside of China, the majority inthe PECC region. The Diaspora’scontribution to population growthin the region is minor, but itsinfluence on business in a numberof economies and its investmentrole in China is disproportionateto its numbers.

Population growth will obvi-ously place demands on thePacific agri-food system; morepeople means increased food con-sumption. But the changing ratesand distribution of growth alsohave implications. Japan’s declin-ing population implies lower lev-els of food demand in this afflu-ent nation, which is a leading netimporter of food and agriculturalproducts. Russia’s declining popu-lation, when combined with itssocial and economic restructuring,could result in major changes inits role in international agri-foodmarkets. More rapid population



T a b l e 1 Demograph ic Ind icators fo r the

NA – not available

* Ratio of young (0-14 years) and elderly (65 or over) to working population (15-64 years)

Source: UN (medium fertility scenario), FAOSTAT, Pacific Food System Outlook economy profiles

Economy 2000 2020 2000 2020Increase/decrease

Total population Urban population

(MILLIONS) (MILLIONS)

AUSTRALIA 19.2 22.4 3.2 17.4 21.4

BRUNEI 0.3 0.5 0.1 0.2 0.4

CANADA 30.8 35.4 4.6 24.2 29.4

CHILE 15.2 18.0 2.9 13.0 16.2

CHINA 1262.5 1424.1 161.6 456.4 764.2

COLOMBIA 39.7 52.2 12.5 29.8 43.2

ECUADOR 12.9 18.0 5.1 8.1 12.8

HONG KONG, CHINA 7.1 8.7 1.5 7.1 8.7

INDONESIA 224.1 287.9 63.8 91.9 168.2

JAPAN 126.9 124.1 -2.8 99.9 102.5

KOREA 47.3 51.5 4.3 38.7 46.0

MALAYSIA 23.3 34.4 11.1 13.4 23.6

MEXICO 99.9 124.7 24.7 74.3 98.8

NEW ZEALAND 3.9 4.5 0.6 3.3 4.0

PERU 27.0 35.6 8.6 19.7 28.2

PHILIPPINES 79.7 111.3 31.6 46.7 79.5

RUSSIA 146.0 139.0 -7.0 106.4 104.3

SINGAPORE 4.2 7.5 3.4 4.2 7.5

CHINESE TAIPEI 22.3 24.3 2.0 18.3 20.8

THAILAND 62.4 71.9 9.5 12.4 19.2

UNITED STATES 282.3 336.0 53.7 218.0 276.3

VIETNAM 78.5 99.9 21.4 18.9 34.7

PECC REGION 2615.5 3031.8 416.2 1322.3 1909.8

WORLD 6078.7 7516.5 1437.8 2872.2 4201.7


PECC Reg ion

Increase/decrease 2000 2020

Urban share2000 2020

Share of pop. 65 or older (%)

(PER 1,000 POP.) (NUMBER)

Net migration, 20002000 2020

Dependency ratio*2000 2020

Median age

(PERCENT) (YEAR) (RATIO) (PERCENT)

4.0 91 95 35 40 0.50 0.54 12.4 17.6 4.3 81,830.3

0.1 72 80 25 32 0.51 0.43 2.6 6.8 4.3 1,429.7

5.1 79 83 37 42 0.47 0.52 12.7 18.2 6.2 190,960.0

3.2 86 90 29 35 0.53 0.47 7.2 12.2 -0.7 -10,000.0

307.7 36 54 30 38 0.47 0.45 6.9 11.9 -0.2 -302,993.8

13.4 75 83 25 30 0.58 0.49 4.7 7.8 -0.3 -13,096.4

4.7 63 71 22 28 0.68 0.51 4.4 6.5 -0.6 -7,235.2

1.5 100 100 36 44 0.40 0.45 10.6 16.1 8.1 57,781.9

76.3 41 58 25 31 0.54 0.46 4.5 7.6 -0.2 -49,310.4

2.6 79 83 41 48 0.47 0.67 17.1 27.3 0.0 0.0

7.3 82 89 32 41 0.39 0.42 7.0 13.8 -0.4 -20,000

10.2 57 69 23 28 0.64 0.55 4.1 6.9 0.0 NA

24.4 74 79 23 30 0.63 0.50 5.0 8.3 -4.2 -423,690.5

0.7 86 88 34 40 0.53 0.53 11.8 17.2 -2.5 -9,760.0

8.6 73 79 23 29 0.65 0.49 4.7 7.3 -1.1 -29,714.3

32.8 59 71 21 26 0.69 0.54 3.7 5.7 -1.4 -108,446.4

-2.2 73 75 37 41 0.44 0.49 12.6 15.8 1.0 148,921.0

3.4 100 100 34 39 0.33 0.36 6.8 10.3 26.8 111,273.6

2.5 82 86 32 41 0.42 0.45 8.7 14.5 0.4 10,000

6.9 20 27 29 37 0.45 0.45 6.4 11.7 2.0 124,000

58.3 77 82 36 38 0.51 0.57 12.4 16.3 3.7 1,047,477.7

15.8 24 35 23 31 0.61 0.45 5.5 6.9 -0.5 -40,044.2

587.5 51 63 30 36 0.50 0.48 7.9 12.2 0.3 759,383

1329.5 47 56 27 31 0.58 0.52 6.9 9.5

and economic growth in develop-ing and middle-incomeeconomies will increase theirinfluence in the Pacific food sys-tem, altering production, con-sumption and trade patterns.

Immigration affects fooddemand in two ways. First, itimmediately raises aggregatedemand in the receiving economy.Since immigrants often have ahigher fertility rate than native res-idents, they can boost populationgrowth in subsequent years. In theUnited States, for example, immi-gration plus the higher fertility ofrecent immigrants accounted forabout 60 percent of the popula-tion growth in the 1990s. Second,the rise in the immigrant share ofa population can affect an econo-my’s food preferences. This isobserved in Australia (with a risingAsian share of its population),Canada (Asian), and the United

States (Hispanic and Asian). Thesechanges may be short-term innature, with ethnic dietary differ-ences becoming less pronouncedover time, as immigrant progenyadopt the food preferences of theirnew country, and as the newcountry’s cuisine is, in turn, affect-ed by the influence of successivewaves of new immigrants.

A Graying Population:Declining Food Demand anda Tax on the Economy

Between 2000 and 2020, averagelife expectancy in the PECC regionis expected to rise from 72 to 77years and the median age from 30to 36 years. The over-65 popula-tion will increase from 200 millionin 2000 to 370 million in 2020.Virtually all the economies in theregion have made the transitionfrom high to low birth and death

rates, leading to a projected 8 per-cent decline in the number ofyoung people between 2000 and2020, a modest 17 percent rise inthe share of the working popula-tion, and a very rapid rise ofalmost 80 percent in the numberof elderly. Japan is the most rapidlyaging economy in the region (Box2). This aging phenomenon is notunique to the PECC region, but ishappening more rapidly here andin Western Europe than in the restof the world.

The oldest PECC populationsare in East Asia and in the devel-oped economies of Australia,Canada, New Zealand and theUnited States. In these economiesthe demographic transition — thedecline in the fertility and mortali-ty rates — occurred several decadesago, driven by income growth,medical breakthroughs, healthcareinvestments, and public policy


F i g u r e 6 World and PECC Populations Leveling Off

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

BIL

LIO

N P

EO

PL

E

Source: UN

WORLD PECC

10

8

6

4

2

0



F i g u r e 7 Annual Additions to the PECC Population Declining

40

30

20

10

0

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

MIL

LIO

N P

EO

PL

E

Source: UN

Sin

gap

ore

Bru

ne

i

Mal

aysi

a

Ph

ilip

pin

es

Ecu

ado

r

Pe

ru

Co

lom

bia

Ind

on

esia

Vie

tnam

Mex

ico

Ho

ng

Ko

ng

, Ch

ina

Un

ite

d S

tate

s

Ch

ile

New

Zea

lan

d

Can

ada

Au

stra

lia

Th

aila

nd

Ch

ina

Ch

ines

e T

aip

ei

Ko

rea

Jap

an

Ru

ssia

PE

CC

INC

RE

AS

E/D

EC

RE

AS

E (

MIL

LIO

NS

)

PE

RC

EN

T I

NC

RE

AS

E

F i g u r e 8 Population Growth Uneven, 2020 Compared With 2000

500

400

300

200

100

0

-100

80

70

60

50

40

30

20

10

0

-10

The most rapidly growing populations are pro-jected for low and middle-income economies.High growth rates in high-income Singapore andBrunei are explained by small populations andhigh rates of immigration.

Source: http://www.census.gov/cgi-bin/ipc/idbsprd


T a b l e 2 Ethnic and Rel ig ious Composit ion of PECC Populat ions

AUSTRALIAEthnic GroupsEuropean (92%)Asian (7%)Aboriginal and other (1%)

ReligionsAnglican (26.1%)Roman Catholic (26%)Other Christian (24.3%)Non-Christian (11%)Other (12.6%)

BRUNEIEthnic GroupsMalay (67%)Chinese (15%)Indigenous (6%)Other (12%)

ReligionsMuslim (67%)Buddhism (13%)Christian (10%)Indigenous beliefs and

other (10%)

CANADAEthnic GroupsEuropean (66%)Amerindian (2%)Mixed (26%)Other (mainly Asian, African, and Arab) (6%)

ReligionsRoman Catholic (46%)Protestant (36%)Other (18%)

CHILEEthnic GroupsEuropean (69%)Mapuche (27%)Other (4%)

ReligionsRoman Catholic (89%)Other (11%)

CHINAEthnic GroupsHan (91%)Zhuang (8.1%)Other, including Tibetan

and Mongol (.9%)

ReligionsBuddhistConfucianistTaoistChristianMuslim

MALAYSIAEthnic GroupsMalay (58%)Chinese (24%)Indian (8%)Others (10%)

ReligionsMuslimBuddhistHinduChristian

MEXICOEthnic GroupsMestizo (60%)Amerindian (30%)White (9%)Other (1%)

ReligionsRoman Catholic (89%)Protestant (6%)Other (5%)

NEW ZEALANDEthnic GroupsEuropean and other (72.0%)Maori (15.0%)Asian (6.6%)Pacific Islander (6.4%)

ReligionsChristian (67%)Other or none (33%)

PERUEthnic GroupsAmerindian (45%)Mestizo (37%)White (15%)Other (3%)


PHILIPPINESEthnic GroupsChristian Malay (91.5%)Muslim Malay (4%)Chinese (1.5%)Other (3%)

ReligionsRoman Catholic (83%)Protestant (9%)Muslim (5%)Other (3%)

RUSSIAEthnic GroupsRussian (81.5%)Tatar (3.8%)Ukranian (3.0%)Other (12.7%)

ReligionsRussian OrthodoxMuslim

COLOMBIAEthnic GroupsMestizo (58%)White (20%)Mulatto (14%)Black (4%)Black-Amerindian (3%)Amerindian (1%)


ECUADOREthnic GroupsMestizo (65%)Amerindian (25%)Spanish and other (7%)Black (3%)

ReligionsRoman Catholic (95%)

HONG KONG, CHINAEthnic GroupsChinese (95%)Other (5%)

ReligionsEclectic mix of local

religions (90%)Christian (10%)

INDONESIAEthnic GroupsJavanese (45%)Sundanese (14%)Madurese (7.5%)Coastal Malays (7.5%)Other (26%)

ReligionsMuslim (88%)Christian (8%)Hindu (2%)Other (2%)

JAPANEthnic GroupsJapanese (99%)Other (1%)

ReligionsObservers of both

Shintoism and Buddhism(84%)

Other (16%)Christian (.7%)

KOREAEthnic GroupsKorean (almost 100%)Chinese (20,000)

ReligionsChristian (49%)Buddhist (47%)Other (4%)

CHINESE TAIPEIEthnic GroupsTaiwanese (84%)Mainland Chinese (14%)Aboriginal (2%)

ReligionsMix of Buddhist,

Confucianist, and Taoist(93%)

Christian (4.5%)Other (2.5%)

SINGAPOREEthnic GroupsChinese (76.7%)Malay (14.0%)Indian (7.9%)Others (1.4%)

ReligionsBuddhistMuslimChristianHindu

THAILANDEthnic GroupsThai (75%)Chinese (14%)Other (11%)

ReligionsBuddhist (95%)Muslim (3.8%)Christian (.5%)Hindu (.1%)Other (.6%)

USEthnic GroupsEuropean (71%)Hispanic (12%)African-American (12%)Asian-Pacific Islander (4%)American Indian (1%)

ReligionsProtestant (56%)Roman Catholic (28%)Jewish (2%)Other (4%)None (10%)

VIETNAMEthnic GroupsVietnamese (90%)Chinese (3%)Other (7%)

ReligionsBuddhistHoa HaoCao DaiChristianIndigenous beliefsMuslim

Sources: Nationmaster: http://www.nationmaster.com/country. Hong Kong and Shanghai Banking Corporate Ltd: http://www.hsbc.com.hkPacfic Food System Outlook profiles



(e.g., in the 1970s, China’s familyplanning policies, including latermarriage, greater spacing betweenchildren and fewer children[Goldstein, p. 7]). Increased femalelabor market participation in theseeconomies has also contributed tolower birthrates. On the otherhand, PECC member economieswith lower per capita income havemore youthful populations; theirtransition took place more recentlyand in some cases is not complete.The advantage of slower popula-tion growth is fewer dependentyoung people and a relatively largerproductive segment of the popula-tion. The declining dependency ofyoung people, however, will even-tually shift to greater dependency

of older people, as the workingsegment ages, becomes less pro-ductive and retires.

The changing age structure ofthe region’s population has directand indirect effects on fooddemand. One direct effect is lowerfood demand. All across theregion populations are gettingolder, with women outliving men.With an aging population, fooddemand declines as activity levelsand caloric needs decline.Women’s caloric needs are lowerthan men’s because of higher bodyfat levels (Figure 9).

A second direct effect ischange in dietary composition andthe nature of food service. Theeffects of population aging onconsumption data are already evi-dent. Consumption of livestockproducts is declining in the devel-oped PECC economies, whileconsumption of fruit and vegeta-

bles is increasing. An aging popu-lation generally prefers “quality” to“quantity” and a more healthydiet. Older people prefer conven-ience, smaller servings, and full-service restaurants.

According to a USDA study,older people consume food pre-pared at home more often than doyounger people, and eat more freshfruit, fish, eggs, lettuce, and non-fried potatoes (Lin et al., p. 23). AJapanese study concludes that thereare three influences on food con-sumption: the period effect inwhich income and price changesaffect all consumers at the sametime; the age effect where changesoccur as a person grows older; andthe cohort effect, reflecting eating

habits common to a particular agegroup. The analysis, limited bydata covering only at-home con-sumption, suggests that per capitameat consumption may decline asthe population ages because of thenegative cohort effect — the ten-dency for older Japanese to eat lessmeat because “eating habits maybe formed generally at a veryyoung age” (Mori, 317). Theopposite may be the case for freshfruit, rice and fish. Older Japaneseare clearly more likely to eat theirmid-day meal at home, which hasimplications for lunchtime foodservice. In Malaysia, consumptionof rice and wheat tends to increaseuntil the mid-40s, and declinesthereafter. The consumption ofmeat, fish and fruits, however,tends to increase until the mid-60s, and declines afterwards. Theaging of Chile’s population is lead-ing to smaller family sizes and

increased demand for ready-to-cook foods, frozen foods andmicrowave cooking.

The indirect effects of demo-graphic change are felt in the gen-eral economy. Changes in the rel-ative proportion of “economicallyactive” and “economicallydependent” components of a pop-ulation influence economicgrowth, which in turn, has directeffects on an economy’s fooddemand and supply.

A number of studies demon-strate the strong role demographyplayed in the economic miracles ofEast Asia and Southeast Asia(Krugman, pp. 62-78). Similaranalysis explains the recent strongeconomic performance of coun-

tries like Chile and Ireland. An indicator of change in the

relative proportions of “economi-cally active” and “economicallydependent” shares of a populationis the “dependency ratio.” This isthe ratio of the young (0 to 14)and elderly (65 and over) to theworking population (15 to 64). Inthe PECC region, the dependencyratios for less than half theeconomies — most high-incomeeconomies — are projected to riseover the next two decades (Figure10). On the other hand, thedependency ratios for the lowerincome economies are projected todecline, providing an opportunityto save and invest resources forother purposes than supportingdependents. This may give theseeconomies a “demographicbonus,” a short-term economicboost. Demographers are quick topoint out, however, that this

The oldest PECC populations are in East Asia and in the developed

economies of Australia, Canada, New Zealand and the United States.


“boost to development is notautomatic…because there is noguarantee that governments, insti-tutions, or individuals will spendthe savings wisely.” (East WestCenter, p. 7) On the other hand,in the richer economies when thedependent component of the pop-ulation is rising, labor shortagesand higher wages may eventuallygive impetus to capital-labor sub-stitution, and more highly produc-

tive workers who are better able tosupport the relatively largerdependent segment of the popula-tion. It may also lead to lessrestrictive immigration policies.

Age and family structure alsoaffects peoples’ propensity to saveand invest, which affects an econ-omy’s productive capacity. Recentacademic work suggests that pop-ulation aging in Australia, Canada,New Zealand and the United

States will reduce savings andinvestment rates over the next 20years, with spillover effects ongrowth and productivity.

Recent research also suggeststhat entrepreneurial and innova-tive behavior is highest before anindividual turns 40 years of age.Lipset and Meltz (1997) observethat the probability an individualwill favor performance over sen-iority declines progressively withage, dropping slowly but steadilybetween 18 and 34 years of age,leveling off between 35 and 54,and declining rapidly after age 55.

Recommendations

Powerful economic forces generat-ed by demographic changesrequire the close attention of foodsystem policymakers. Some demo-graphic changes — such as declin-ing fertility and mortality ratesand the aging of a population —take years to become clearly visi-ble. Others, like urbanization, mayhave more immediate impacts.Given these trends:

Policymakers and the food marketing system must adjust togreater concentrations of people in urban areas.Food system efficiency as well asfarm-level productivity, must be afundamental public policy goal.This is consistent with the AsiaPacific Economic CooperationForum’s (APEC) Open FoodSystem Initiative (Box 3). Publicand private investment in domesticfood system infrastructure andmore liberal food trade policies willbe essential to ensure cost- andoperation-efficient food systems.

Less centralized distributionsystems will play a more signifi-cant role in overcoming the highcost of traffic congestion and other

BOX 2: JAPAN’S POPULATION IS AGINGRAPIDLY AND WILL SOON BEGIN TO SHRINK

Japan’s population will begin to shrink in 2007, when itsdeath rate surpasses its birthrate (Figure 11). As the largestnet importer of food in the world, Japan will serve as a lab-

oratory for understanding the impact of declining population andother demographic changes on the food system. It is expected thatJapan’s aggregate food demand will gradually decline with fewerpeople to feed; per capita food demand will also decline with therapid aging of the population and a growing share of more seden-tary, less active people (Figure 12). Japan’s economic growth will beaffected by a declining savings rate, on the one hand, and risingdemand for capital to offset growing labor shortages, on the other.As a consequence, this historically capital-surplus economy couldsee that surplus diminish.

Demographic pressure affects the future of Japan’s agricultureand its approach to trade policy. Japan’s farm population is agingmore rapidly than the rest of its population and, as in many Westerneconomies, the distribution of farming enterprises is becomingmore polarized. There are fewer farms overall and the numbers ofboth very large farms and very small farms are increasing. This isexplained in part by the rapid aging of the farming population; peo-ple aged 65 or older account for more than 25 percent of the totalfarm household population and almost half of those “primarilyengaged in agricultural production.” As the farm population ages,the number of households raising livestock, growing fruit andengaging in greenhouse farming—all very labor intensive enterpris-es—will decline at a faster rate than other enterprises. For example,some vegetable farmers have stopped growing crops like watermel-ons and pumpkins because of the physical strength required to han-dle these commodities (Campbell).

In time, Japan’s agri-food system will face the options of (a) rely-ing more heavily on migrant and tenant workers from overseas; (b)increasing the rate of consolidation in land holdings and the substitu-tion of capital for labor; (c) altering the mix of production agricultureto reflect the capabilities of its farming workforce, thus remainingself reliant but with fewer food choices and nutritional options; and(d) becoming more open to trade liberalization.



F i g u r e 9 Caloric Requirements* Decline With Age and Are Lower for Women

RA

TIO

OF

YO

UN

G A

ND

EL

DE

RLY

TO

WO

RK

ING

20 30 40 50 60 70 80

Ph

ilip

pin

es

Ecu

ado

r

Pe

ru

Mal

aysi

a

Mex

ico

Vie

tnam

Co

lom

bia

Ind

on

esia

Ch

ile

Bru

ne

i

New

Zea

lan

d

Ch

ina

Th

aila

nd

Un

ite

d S

tate

s

Au

stra

lia

Can

ada

Jap

an

Ru

ssia

Ch

ines

e T

aip

ei

Ho

ng

Ko

ng

Ko

rea

Sin

gap

ore

PE

CC

Re

gio

n

F i g u r e 1 0 PECC Dependency Ratios, 2000 and 2020

3,000

2,500

2,000

1,500

1,000

500

0

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0

CA

LO

RIE

S P

ER

DA

Y

Source: Table 1

Source: http://www.hononline.com/howtocalyour.html. #TOTALCALORICREQUIREMENTS

2000 2020

(FOR PERSON 5’ 10,” 190 LBS; OR 1.77 M, 86.2 KGS)

A dependency ratio tells us the number of dependent members ofthe population per working member. The ratio .5 indicates thatthere is .5 dependent per worker or 1 dependent per 2 workers.

MALE

FEMALE

AGE

*Basal energy requirements — calories needed to maintain basic bodily functions but not daily physical activity

costs of doing business in denselypopulated cities.

The higher incomes andgreater food demand from urban-ization must be balanced againstmore sedentary lifestyles and lowerper capita caloric needs. Moreaffluent and health-conscious con-sumers will demand greater quali-ty, variety and convenience fromthe food system. Policymakersneed to anticipate the needs fortrained professionals to implementand monitor quality control sys-tems, like agri-food HACCP tech-nicians, crop and animal healthscientists, and other professionals.

The variability in the growth andcharacteristics of populations over thenext two decades has importantimplications for public policy, as wellas the food marketing and invest-ment strategies of the private sector.The most rapid growth—occur-ring in the developing markets ofSoutheast Asia and LatinAmerica—requires policies thatsupport domestic food productionor importation. The biggestabsolute growth—occurring in thethree most populous economies ofChina, Indonesia and the UnitedStates—requires policies to miti-gate rural-urban conflicts; to sup-port production, marketing andtrade; and to assure sustainabilityof the food system. Decliningpopulations—such as in Japan andRussia—will require changes inthe foods supplied, supported bychanges in domestic agriculturalpolicies and more flexibility intrade policies.

For the private sector, foodmarketing and investment strate-gies will, more than ever, requirecustomization for each country.Japan is currently the largest netimporter of food in the world, butits population is aging rapidly and


BOX 3 : APEC’S OPEN FOOD SYSTEM

APEC’s Open Food System (OFS) focuses on the impor-tance of both trade liberalization and rural developmentto agricultural economies throughout the region.

Endorsed by APEC in 1999, OFS was initially proposed in 1998 byAPEC’s business advisory council to tailor the economic preceptsof open regionalism to the specific dynamics of agriculture andthe food supply.

Central to OFS is the view that trade liberalization will provideconsumers with a lower cost, more secure food supply. OFS aspiresto optimize the gains from trade liberalization by developing ruralsectors throughout the region with government/private sector coop-eration. Key OFS objectives are:

TRADE LIBERALIZATION. OFS accepts APEC’s Bogor schedule forliberalization of tariffs and non-tariff measures — 2010 for devel-oped and 2020 for developing economies. It assumes that tradeimpediments in food products distort the allocation of land, water,labor, and capital resources in an era when efficient resource alloca-tion is urgently needed. For example, it makes little sense for aneconomy with scarce land and water resources to export land- andwater-intensive food products.

FOOD SECURITY. OFS requires assurances that restrictions onfood exports are not imposed except in dire circumstances. Ifmarkets are to be open, exporters must expect greater access toimport markets and, equally, importers must expect free accessto export supplies.

RURAL DEVELOPMENT. While trade liberalization tends to increaseagricultural productivity, thus stimulating output growth, it alsoreduces labor input required per unit of production. Economicopportunities must be created in rural areas to stem outmigrationto already densely populated cities in the region. More than halfof the world’s cities with populations greater than 10 million arelocated in APEC economies.

Creating economic opportunities in rural areas requires:

■ investment in infrastructure;

■ rural education and health care comparable to urban areas;

■ partnerships between government and private-sector agentsto attract investments into rural areas and thus create greateroff-farm employment opportunities;

■ realistic rural development plans that can be funded and exe-cuted by the private sector in conjunction with the WorldBank, Asian Development Bank and Inter-AmericanDevelopment Bank.

TECHNOLOGY DIFFUSION: OFS aims to cultivate a “food technologyculture,” facilitating the diffusion of useful recent developments infood production, storage, shipping, packaging and processing.Improved access to technology is expected to accelerate gains inproductivity through information technology and biotechnology,spurring growth in economies that are less developed and thus con-tributing to faster and more balanced economic growth across all ofthe region’s economies.



F i g u r e 1 1 Japan’s Population Begins to Decline in 2007

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

30

25

20

15

10

5

0

-5

-10

Source: UN

BIRTHS DEATHS ANNUAL CHANGE

F i g u r e 1 2 U.S. and Japan: Comparing Population Age Structures

20000000

40000000

1950 1975 2000 2025 2050 1950 1975 2000 2025 2050

300

250

200

150

100

50

0

100

80

60

40

20

0

MIL

LIO

N P

EO

PL

EN

UM

BE

R P

ER

10

00

PO

PU

LA

TIO

N

Source: UN

YOUNG WORKING AGE ELDERLY

UNITED STATES JAPAN

will soon decline. Investment andmarketing strategies must addressan overall reduction in food con-sumption and changes in the typesof foods consumers demand. TheUnited States, where immigrationis expected to result in rapid pop-ulation growth, strategies musttarget many more consumers, aswell as changes in the population’sethnic mix. The largest absolutegrowth in population across theregion will be in China. This,combined with rapid urbaniza-tion, requires a focus on marketlogistics in a densely-populatedarea and the changing preferencesof higher income consumers.

Aging populations will generatechanges in food demand that have significant implications for the food system.The aging of the region’s popula-tion will slowly lead to lower percapita food consumption and ashift in the composition of fooddemand. Changes in the composi-tion of food demand are likely toinclude more fresh fruits and veg-etables, less meat and less eatingout. This has important implica-tions for producers, processors,retailers and food service estab-lishments. Policy adjustmentsmust encourage and facilitateneeded changes.

Policymakers must work to mitigatethe adverse impacts that aging populations will have on economicgrowth, a leading driver of food demand.Responses may include: extendingthe working lives of people; raisingworker productivity so fewer peo-ple can support more retirees;reducing public obligations forpensions and health care services;relaxing controls on immigration;and adopting policies to encouragehigher fertility rates.



Region’s Largest Cities


GLOSSARY OF TERMS

BASAL METABOLIC RATE (or BMR) is the number of calories a human being needs to maintain basic bodilyfunctions, such as heart beat, respiration and normal body temperature. The BMR does not account for the caloricrequirements for daily physical activity. (http://www.hononline.com/howtocalyour.html#TOTALCALORICREQUIRE-MENTS)

DEMOGRAPHIC BONUS is the potential economic boost from relatively faster growth in the productive/workingsegment of the population relative to the dependent segments.

DEMOGRAPHIC TRANSITION is a decline in the fertility and mortality rates of a population that occurs as aneconomy gets richer.

DEMOGRAPHY is the scientific study of the size, composition and spatial distribution of human populations; andthe changes that occur in these phenomena through the processes of fertility, mortality, and migration.

DEPENDENCY RATIO is the number of young and elderly relative to the number of working people in the population.

EMIGRATION is the process of leaving one country to take up permanent or semipermanent residence in another.

ETHNIC refers to a religious, racial, national, or cultural group.

FERTILITY RATE is calculated as the number of births per 1,000 people in a population.

IMMIGRATION is the process of entering one country from another to take up permanent or semipermanent residence

MORTALITY RATE is calculated as the number of deaths per 1,000 people in a population.

NET MIGRATION is the net effect of immigration and emigration on an area’s population in a given time period,expressed as an increase or decrease.

POPULATION MOMENTUM is the tendency of a population to continue to grow despite reaching a replacementfertility rate because of the growing number of child-bearing females.

RACE refers to a local geographic or global human population distinguished as a more or less distinct group bygenetically transmitted physical characteristics.

RATE OF NATURAL INCREASE is the rate at which a population is increasing (or decreasing) in a given year dueto a surplus (or deficit) of births over deaths, expressed as a percentage of the population.

URBANIZATION is the increase in the density of settlement and/or business and other activities of an area overtime. The process occurs as an expansion of the existing population, incoming migration, or a mixture of both.

A city population is dependent upon its “hinterlands” or foreign sources to supply it with food. Not until agri-culture developed could hinterlands provide food for their own populations and enough surplus to feed a city pop-ulation. And in agricultural societies the surplus was so small that only a tiny proportion of an entire populationcould live in cities. Up until very recently — about 200 years ago — that proportion was limited to about 5 percentof an entire population. (www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/population/urbanization.htm)

ZERO POPULATION GROWTH is when a population is in equilibrium, with a growth rate of zero, achieved whenbirths plus immigration equal deaths plus emigration.

Sources: Most definitions are taken from Population Reference Bureau (www.prb.org)

APEC—Asia Pacific Economic Cooperation Forum

BMR—Basal Metabolic Rate

FAO—Food and Agricultural Organization

HAACP—Hazard Analysis and Critical Control Points

HRS—Household Responsibility System

OFS—Open Food System

PECC—Pacific Economic Cooperation Council

TVE—Township and Village Enterprises

UN—United Nations

USDA—United States Department of Agriculture

ABBREVIATIONS USED IN THE PACIF IC FOOD SYSTEM OUTLOOK


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Kousnetzoff, N. (2002) “TheOutlook for World DemographicChange and Growth to the Year2030.” La Lettre Du CEPII.Centre d’Etudes Prospectives etd’Informations Internationales.No 208, January.

REFERENCES


Miles, D. (1996) “Demographicsand Saving: Can We Reconcile theEvidence?” Working Paper No.W97/6. Institute for FiscalStudies. London, UK.

Mori, Hiroshi, ed. (2001) Cohort Analysis of Japanese FoodConsumption—New and OldGenerations. Senshu UniversityPress.

Population Reference Bureau(2001) “Human Population:Fundamentals of Growth,Population Growth, andDistribution.” [http://prb.org]

WEBSITES ON DEMOGRAPHIC CHANGE

■ Center for Strategic and International Studies (CSIS), Global Aging Initiative:http://www.csis.org/gai/pubs.htm

■ Country data; source of information on ethnic and religious composition of populations:http://www.nationmaster.com/countries.php

■ Global Aging Initiative Program, Center for Strategic and International Studies:http://www.csis.org/gai/pubs.htm

■ Japanese National Institute of Population and Social Security Research: http://www.ipss.go.jp/index-e.html

■ The Nutrition Transition Program, University of North Carolina, Chapel Hill; analysis of changes in dietaryand physical activity patterns and nutritional status, and exploring their relationships with economic, social,demographic, and health factors. http://www.nutrans.org/index.html

■ Population Reference Bureau (www.prb.org)

■ Rand Corp.; Population and Aging Research Area: http://www.rand.org/pop_area/

■ U.S. Census: http://www.census.gov/ipc/www/world.html World population information

■ The World Gazetteer: provides information about current population of countries, their administrative divi-sions, cities and towns as well as images of the current national flags: http://www.world-gazetteer.com/home.htm

Sachs, Jeffrey (1997) “Nature,Nurture, and Growth,” TheEconomist. June 12.

Smil, Vaclav (2001) Feeding theWorld: A Challenge for the Twenty-First Century. Cambridge,Massachussetts: The MIT Press.

United Nations (2001) WorldPopulation Prospects. CD-ROM.

United States Bureau of theCensus (2003) International Data Base.

Williamson, J. and M. Higgins(1996) “Asian Savings, Investmentand Foreign Capital Dependence:The Role of Demography.”National Bureau of EconomicResearch (NBER) Working PaperNo. 5560. Harvard University.August.

Zhao, Yaohui (1998) “Leaving theCountryside: Rural to UrbanMigration Decisions.” WorkingPaper. China Center for EconomicResearch. Beijing University.December.


PACIFIC ECONOMIC COOPERATION COUNCILPacific Economic Cooperation

Council InternationalSecretariat

4 Nassim RoadSingapore 258372Tel: 65-6737 9822Fax: 65-6737 9824http://www.pecc.net

AUSTRALIAAustralian Pacific Economic

Cooperation Committee(AUSPECC)JG Crawford BuildingAustralian National UniversityCanberra ACT 0200AustraliaTel: 61-2-6125 0567Fax: 61-2-6125 0169http://sunsite.anu.edu.au/

auspecc/aust.html

BRUNEI DARUSSALAMBrunei Darussalam National

Committee for PacificEconomic Cooperation(BDCPEC)

Department of MultilateralEconomics

Ministry of Foreign AffairsBandar Seri Begawan BD 2710Brunei DarussalamTel: 673-2-261 177Fax: 673-2-261 620

CANADACanadian National Committee for

Pacific Economic Cooperation(CANCPEC)

Asia Pacific Foundation of Canada666-999 Canada PlaceVancouver, BC, V6C 3E1CanadaTel: 1-604-684-5986Fax: 1-604-681-1370http://www.asiapacific.ca/

CHILEChilean National Committee for

Pacific Economic Cooperation(CHILPEC)

Chile Pacific FoundationAv. Los Leones 382, Of. 701ProvidenciaSantiago, ChileTel: 56-2-334 3200Fax: 56-2-334 3201http://www.funpacifico.cl/ingles/

index.html

CHINAChina National Committee for

Pacific Economic Cooperation(CNCPEC)

China Institute of InternationalStudies

3 Toutiao TaijichangBeijingChina 100005Tel: 86-10- 8511 9648Fax: 86-10- 8511 9647http://www.pecc.net.cn/

COLOMBIAColombia National Committee

for Pacific EconomicCooperation (COLPECC)

Ministry of Foreign AffairsCalle 10 No. 5-51Santafe de BogotaColombiaTel: 57-1- 5667 140Fax: 57-1- 5667 145

ECUADOREcuadorian Committee for the

Pacific Economic CooperationCouncil (ECPECC)

Avenida 10 de Agosto y Carrion, Ministry of Foreign Affairs, QuitoEcuadorTel: 593-2-2501-197/2561-215

(ext. 253) Fax: 593-2-2566-176/2563-201

HONG KONG, CHINAHonk Kong Committee for

Pacific Economic Cooperation(HKCPEC)

Trade & Industry Department 17/F, Trade & Industry

Department Tower700 Nathan RoadKowloonHong Kong, ChinaTel: 852-2398-5305Fax: 852-2787-7799http://www.hkcpec.org/

INDONESIAIndonesia National Committee for

Pacific Economic Cooperation(INCPEC)

Centre for Strategic andInternational Studies (CSIS)

Jalan Tanah Abang III/23-27 Jakarta 10160IndonesiaFax: 62-21-386 5532Tel: 62-21-384 7517

JAPANJapan National Committee for

Pacific Economic Cooperation(JANCPEC)

The Japan Institute ofInternational Affairs (JIIA)

11F Kasumigaseki Building3-2-5 Kasumigaseki, ChiyodakuTokyo 100JapanTel: 81-3-3503 7744Fax: 81-3-3503 6707 http://www.jiia.or.jp/

KOREAKorea National Committee for

Pacific Economic Cooperation(KOPEC)

Korea Institute for InternationalEconomic Policy (KIEP)

300-4, Yeorngok-Dong, Seocho-Gu

Seoul 137-747KoreaTel: 82-2-3460 1242Fax: 82-3-3460 1244

PECC MEMBERS

MALAYSIAMalaysia National Committee for

PacificEconomic Cooperation

(MANCPEC)Institute of Strategic and

InternationalStudies (ISIS)No. 1 Pesiaran Sultan SalahuddinP.O. Box 12424 50778 Kuala

LumpurMalaysia Tel: 60-3-2693 9366Fax: 60-3-2693 9430

MEXICOMexico National Committee for

Pacific Economic Cooperation(MXCPEC)

Paseo de la Reforma No. 175 Piso 10, Col. Cuauhtemoc06500 Mexico, DFTel: 52-55- 5327 3001Fax: 52-55- 5327 3134

NEW ZEALANDNew Zealand National

Committee for PacificEconomic Cooperation(NZPECC)

c/o Statistics New ZealandPrivate Bag 92003AucklandNew ZealandTel: 64-9- 9209 132Fax: 64-9- 9209 055

PERUPeruvian National Committee for

Pacific Economic Cooperation(PERUPEC)

Ministry of Foreign AffairsJr. Lampa 545, 4th FloorLimaPeru Tel: 51-1-311 2570Fax: 51-1-311 2564

THE PHILIPPINESPhilippine Pacific Economic

CooperationCommittee (PPECC)c/o Philippine Foundation for

GlobalConcerns43/F, Philamlife Tower 8767 Paseo de RoxasMakati City, PhilippinesTel: 632-885 0924Fax: 632-845 4832

RUSSIARussia National Committee for

Pacific Economic Cooperation(RNCPEC)

19 Novy Arbat St., Office 2035103025 MoscowRussiaTel: 7-095- 244 9033Fax: 7-095- 244 3917

SINGAPORESingapore National Committee

for Pacific EconomicCooperation (SINCPEC)

School of Accountancy #07-12469 Bukit Timah Road

Singapore 259756Tel: 65-6822-0160Fax: 65-6822-0400

CHINESE TAIPEIChinese Taipei Pacific Economic

Cooperation Committee(CTPECC)

Taiwan Institute of EconomicResearch (TIER)

5F, 16-8, Tehwei Street TaipeiChinese TaipeiTel: 886-2-2586 5000Fax: 886-2-2594 6528 http://www.tier.org.tw/pecc/

ctpecc/index.htm

THAILANDThailand National Committee for

Pacific Economic Cooperation(TNCPEC)

Department of Economic AffairsMinistry of Foreign AffairsSri Ayudhya RoadBangkok 10400ThailandTel: 662-643-5248 Fax: 662-643-5247

UNITED STATESUnited States National

Committee forPacific Economic Cooperation

(USNCPEC)1819 L Street, Second FloorWashington, DC 20036USATel: 1-202-293-3995Fax: 1-202-293-1402http://www.pecc.org



Economic Research Servicehttp://www.ers.usda.govThe Economic Research Service(ERS) is the main source of eco-nomic information and research inthe US Department ofAgriculture. ERS economists andsocial scientists develop and dis-tribute a broad range of economicand other social science informa-tion and analysis to inform publicand private decision making onagriculture, food, environmental,and rural issues.

The ERS’s timely reports aredistributed to public and privatedecision makers to assist them inconducting business, formulatingpolicy, and learning about thefarm, rural, and food sectors. ERSpublications are available to thepublic and the news media inboth print and electronic form.

The agency ’s three divi-sions—Food and RuralEconomics, Market and Trade

Economics, and ResourceEconomics—conduct research,perform commodity market andpolicy analysis, and develop eco-nomic and statistical indicators.The executive and legislativebranches of the US federal govern-ment use ERS information to helpdevelop, administer, and evaluatefarm, food, rural, and resourcepolicies and programs.

In addition to research reportsand commodity analyses, ERSpublishes Amber Waves, a newmagazine covering the full rangeof the agency’s research and analy-sis, including the economics ofagriculture, food, rural America,trade and the environment.

Farm Foundationhttp://www.farmfoundation.orgFarm Foundation is a publiclysupported nonprofit organizationworking to improve the economicand social well-being of U.S. agri-culture, the food system and ruralpeople by helping private andpublic sector decision makersidentify and understand forcesthat will shape the future. Servingas a catalyst, Farm Foundation

partners with private and publicsector stakeholders, sponsoringconferences and workshops toexplore factors shaping the com-petitiveness of agriculture and thefood system; encouraging applica-tion of research results to increasehuman capital; promotinginformed dialogue on public issuesand policies; and building knowl-edge-based networks for U.S. agri-culture and rural people. FarmFoundation does not lobby, noradvocate positions. Its 70-year rep-utation for objectivity allows it tobring together diverse stakeholdersfor quality discussions on issuesand policies, providing a solidbasis for informed private andpublic-sector decisions.

SPONSOR PROFILES

The East-West Center http://www.EastWestCenter.org/The East-West Center is an inter-nationally recognized educationand research organization estab-lished by the U.S. Congress in1960 to strengthen understandingand relations between the UnitedStates and the countries of the AsiaPacific region. The Center carriesout its mission through programsof cooperative study, training andresearch. As a national and region-al resource, the Center offers aninterdisciplinary research program,dialogue and professional enrich-ment programs, and educationalprograms. Funding for the East-West Center comes from the U.S.government, international organi-zations, corporations, foundationsand Asia Pacific governments.

The College of TropicalAgriculture and HumanResources (CTAHR),University of Hawaiiwww.ctahr.hawaii.edu/ctahr2001The College of TropicalAgriculture and Human Resources(CTAHR) was established in1907, as the College of Agricultureand Mechanical Arts and became

the first college of the newlyfounded University of Hawaii in1920. As a land-grant college,CTAHR is charged with threebroad responsibilities: extensionprograms that provide outreachand non-formal education toHawaii’s industries and communi-ties; formal instruction of studentsthrough degree programs; andresearch that generates new knowl-edge about tropical crops, prod-ucts, environments and communi-ties. The vision of CTAHR is toactively help Hawaii diversify itseconomy, ensure a sustainableenvironment and strengthen itscommunities, with the aim ofbeing the premier resource fortropical agricultural systems andresource management in the Asia-Pacific region.



The Pacific Economic Cooperation Council (PECC) is an independent, policy-oriented organizationdevoted to promoting economic cooperation in the Pacific Rim. PECC brings together senior gov-ernment, academic, and business representatives from 22 economies to share perspectives and expert-ise in search of broad-based answers to economic problems in the Asia Pacific region.

Founded in 1980, PECC now comprises member committees from the economies of Australia; Brunei;Canada; Chile; China; Colombia; Ecuador; Hong Kong, China; Indonesia; Japan; Korea; Malaysia; Mexico;New Zealand; Peru; the Philippines; Russia; Singapore; Chinese Taipei; Thailand; the United States; andVietnam as well as the Pacific Island Nations. France (Pacific Territories) and Mongolia were admitted as asso-ciate members in April 1997 and April 2000, respectively. The Pacific Basin Economic Council (PBEC) andPacific Trade and Development Conference (PAFTAD) are institutional members of PECC.

PECC’s governing body is the Standing Committee, which meets twice a year and consists of the chairs ofPECC committees in each member economy. The day-to-day administrative and coordinating functions are car-ried out by an International Secretariat based in Singapore. Each member committee sends a high-level tripartitedelegation from government, business, and academia to the PECC General Meeting held every two years.

In addition, PECC establishes forums, task forces, projects and networks to concentrate on particular poli-cy areas. These groups meet periodically, organize seminars and workshops, conduct studies, and publish theirconclusions and recommendations for the benefit of the Pacific community. In 2001, PECC initiated forumson trade, finance, and community building. Task force topics include capital and financial markets, humanresource development, Pacific Island Nations IT, and sustainable cities. PECC also supports projects on food,minerals, energy, telecommunications, air transport and transportation and publishes annual editions of PacificEconomic Outlook and Pacific Food System Outlook.

At the regional level, PECC’s most important link with government is through APEC. PECC is the onlynongovernmental organization among the three official APEC observers. PECC representatives attend APECministerial meetings, senior officials meetings, and working group meetings. PECC also works with otherinternational organizations such as the World Trade Organization, the Organization for Economic Cooperationand Development, the Asian Development Bank, the World Bank, and United Nations’ agencies.

For more information, contact the PECC International Secretariat, 4 Nassim Road, Singapore 258372, Tel:65-6737 9823, Fax: 65-6737 9824, email: [email protected]

PACIFIC ECONOMIC COOPERATION COUNCIL

COVER PHOTO OF STREET TRAFFIC, YOGYAKARTA, JAVA, INDONESIA, COURTESY OF PHOTODISCINSIDE FRONT COVER PHOTO, COURTESY OF PHOTODISCINSIDE BACK PHOTO, COURTESY OF ROGER FOLEY ©2003

The Pacific Food System Outlook represents the first regionwide coordinated effort toprovide the outlook for the Pacific food system. The food system includes not just pro-duction agriculture, but also the whole complex of economic relationships and link-ages that tie the region’s food consumers to producers. The goal of the Pacific FoodSystem Outlook is to help increase knowledge about the diverse components of thisvital segment of the global economy.

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