A COMPARATIVE ANALYSIS OF COSTS AND EFFECTIVENESS OF SIMULATED FOOD SECURITY PROGRAMS FOR THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS (TRADE ADJUSTMENT, FINANCING FACILITY)

The study is an evaluation of the costs and effectiveness of alternative food security programs on stabilizing domestic rice supplies had they been operational in the ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) from 1961 to 1982.; Two alternative food security programs are compared: (1) a buffer stock only scheme; and, (2) combination of buffer stocks and trade adjustment. Under both alternatives, local and regional reserves are analyzed.; Statistical time trends are fitted to the historical per capita rice consumption in each ASEAN country using suitable regression models. Given a target level of rice supply stability for each country, deviations from trend are estimated, and simulations are made for annual transactions with reserve facilities, annual year-end stock balances, and storage capacity requirements. Costs are estimated for implementing reserve programs under each alternative. Total costs of each alternative are compared and cost differences estimated.; With trade adjustment possible, total storage requirements for reserve programs are smaller than for buffer stock only scheme. Average annual year-end balances are also lower and storage capacity utilization generally higher with trade adjustment possible.; Total costs of implementing reserve programs are reduced when trade adjustment is possible compared to the costs of reserve without trade adjustment. Total costs of reserve programs plus trade adjustments for the ASEAN region as a whole are lower compared to the costs of implementing a buffer stock only scheme.; The size of the funds needed for a trade adjustment financing facility is estimated. To be operational the trade adjustment facility needs about forty-eight percent of the estimated total financing required by all countries in the region from 1961 to 1982.; Although the estimated costs of complete reliance on trade is much lower than a buffer stock only scheme or combined trade adjustment and buffer stock scheme, it is too risky for food deficit developing nations to rely solely on trade. The combined trade adjustment and buffer stock scheme though more expensive than a complete reliance on trade scheme, but cheaper than a buffer stock only scheme, could be an alternate that is politically acceptable and economically viable for the ASEAN region.