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An analysis of consumption and imports of bread grains in several European countries Lerohl, Milburn Lewis 1962

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AN ANALYSIS OF CONSUMPTION AND IMPORTS OF BREAD GRAINS IN SEVERAL EUROPEAN COUNTRIES  by MILBURN LEWIS LEROHL B.Sc,  ( A g r i c ) , University of Alberta, i960  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN AGRICULTURE i n the Department of AGRICULTURAL ECONOMICS  We accept t h i s thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA June 1962  In presenting this thesis i n p a r t i a l fulfilment of the requirements for an advanced degree at the University of B r i t i s h Columbia, I agree that the Library s h a l l make i t freely available for reference and study.  I further agree that permission  for extensive copying of this thesis for scholarly purposes may  be  granted by the Head of my Department or by his representatives. It i s understood that copying or publication of this thesis for f i n a n c i a l gain shall not be allowed without my written permission.  Department of The University of B r i t i s h Columbia, Vancouver 8 , Canada. Date  I 1  / r£ ) _  i  ABSTRACT  The object of t h i s study has been to carry out an analysis o f demand f o r bread grains i n twelve Western European countries, to project the demand to 1966  and to match i t against possible increases  i n production. The demand f o r bread grains was  separated into two  components, that entering d i r e c t l y into human consumption as f l o u r and that consumed i n d i r e c t l y i n a l l other forms. Direct consumption was projected on the b a s i s of anticipated changes i n population and income, i t being assumed that tastes and r e l a t i v e p r i c e s would exert a n e g l i g i b l e influence on quantities consumed. The quantity of bread grain disappearance f o r purposes other than direct consumption i n 1966  -was estimated from the trend i n the percentage  m i l l e d into f l o u r to t o t a l bread grain consumption. The l e v e l of domestic production i n 1966  was  obtained by  calculating the average annual production during 1955-59, and supposing that production would increase during the period of the study by the same percentage amounts as those by which per capita i n come growth rates were projected. Thus, the import requirement e s t i mates f o r 1966  were obtained as the difference between the predicted  l e v e l s of t o t a l consumption and domestic production. The r e s u l t s of the study indicated income e l a s t i c i t y coe f f i c i e n t s i n the European Economic Community which ranged from zero i n Bexgium-Luxembourg and Western Germany to -0.32  i n the  the c o e f f i c i e n t f o r A u s t r i a was estimated at -0.20  amd  Netherlandsj  the e l a s t i c i t y  ii  c o e f f i c i e n t s f o r the o t h e r f i v e c o u n t r i e s o f the study were i n t h e range o f - 0 . 8 5  f o r S x d t z e r l a n d t o -I.8I4. f o r Denmark. Comparison o f  d i r e c t consumption e s t i m a t e s u s i n g the c o e f f i c i e n t s c a l c u l a t e d i n t h i s study w i t h those c a l c u l a t e d by u s i n g a U n i t e d Nations-Food  and  A g r i c u l t u r e O r g a n i z a t i o n average c o e f f i c i e n t o f —0.ij,2 gave q u i t e s i m i l a r r e s u l t s f o r t h e n a t i o n s as a group, b u t c o n s i d e r a b l e v a r i a t i o n i n e s t i m a t e s f o r i n d i v i d u a l c o u n t r i e s . The study i n d i c a t e d t h a t d i r e c t consumption o f b r e a d  g r a i n s w i l l d e c l i n e b y 1966  f o r the area  as a whole. The amount o f b r e a d g r a i n s used f o r purposes o t h e r  than  human consumption was f o r e c a s t t o i n c r e a s e . However n e t i n c r e a s e s i n consumption appeared t o be e a s i l y o f f s e t b y p o s s i b l e i n c r e a s e s i n p r o d u c t i o n so the most l i k e l y e s t i m a t e s f o r 1966 c r e a s e d import  requirement  i n d i c a t e d a de-  f o r the study c o u n t r i e s as a group.  V  ACKNOWLEDGEMENT  The writer wishes to express his appreciation to Dr. W. J. Anderson of the Department of Agricultural Economics for the many constructive criticisms and suggestions which assisted i n preparation of this thesis. The advice and encouragement of Dr. J . J. Richter, and the assistance of the members of the committee, Dean BJythe Eagles, Dr. C. A. Hornby and frofessor A. M. Moore, and the staff of the University of British Columbia Library, are also gratefully acknowledged.  iii  TABLE OF CONTENTS  Page INTRODUCTION  1  CONCEPT OF DEMAND Utility U t i l i t y and Preference Indifference Curves Complementarity and Competitiveness rrice Elasticity of Demand Income Elasticity of Demand  3  PRINCIPLES OF MEASUREMENT  l6  Simultaneous versus Single Equation Techniques Cross-Sectional versus Time Series Data Cross-Sectional Data Time-Series Data METHODOLOGY  .  .  .  .  .  .  .  . 2 6  Bread Grains Consumed Directly as Flour Population Tastes Relative Prices Incomes Indirectly Consumed Bread Grains Projected Import Requirements RESULTS Results for Individual Countries Austria Belgium-Luxembourg Denmark France Western G rmany Italy Netherlands Norway Sweden Switzerland United Kingdom Results for Countries as Groups  38  BIBLIOGRAPHY  68  APPENDIX  71  e  iv  LIST OF TABLES Page  TABLE 1 : CALCULATED COEFFICIENTS OF INCOME ELASTICITY OF DEMAND FOR BREAD GRAINS •. BY COUNTRIES, WESTERN EUROPE .  . 5k  TABLE 2 : CONSUMPTION OF BREAD GRAINS AS FLUUR: BY COUNTRIES, WESTERN EUROPE, 1959 AND PROJECTED TO 1966  . 56  TABLE 3 : AVERAGE ANNUAL GRAIN IMPORTS 1955-59 AND 1966 IMPORT REQUIREMENTS: BY COUNTRIES, WESTERN EUROPE .  . 58  TABJE I; : PRODUCTION, DISAPPEARANCE DEFICIT AND NET IMPORTS OF WHEAT AND' RYE: BY COUNTRIES, WESTERN EUROPE, 195V58 AND PROJECTION TO 1966 .  . 59  TABLE 5 : WHEAT AND RYE, PRODUCTION BY COUNTRIES, WESTERN EUROPE, 195U"58 TABLE 6 : NET WHEAT IMPORTS BY COUNTRIES, WESTERN EUROPE, 195V58 AND 1955-59  .  . 61  . 63  TABLE 7 : TOTAL WHEAT AND RYE DISAPPEARANCE BY COUNTRIES, WESTERN EUROPE 195U-58 AND PROJECTION TO 1966 .  . 65  TABLE 8 : POPULATION, 1957 AND PROJECTED TO 1966 BY COUNTRIES, WESTERN EUROPE  . 72  TABLE 9 : ESTIMATES OF FLOUR CONSUMPTION, TOTAL CONSUMPTION, DOMESTIC PRODUCTION AND IMPORT REQUIREMENT IN 1966 . . . . .  . 76  .AN ANALYSIS OF CONSUMPTION AND IMPORTS OF BREAD GRAINS IN SEVERAL EUROPEAN COUNTRIES  INTRODUCTION  This study i s concerned with analyzing the market for bread grains i n twelve Western European countries including Austria, Belgium, Denmark, France, Western Germany, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. During the five year period 1955-09, a i l of these nations with the exception of France, Italy and Sweden were net importers of wheat and rye.  1  This group of nations comprises a large part of the Canadian wheat market. Total Canadian wheat and rye exports i n the five year period 1956/57-1960/6l were 1*1,946,500 metric tons; of this amount these nations purchased 2U,262,200 metric tons, or 57.8 per cent of the total. Economic integration i s now taking place within the area with the formation of the European Economic Community.^ New a g r i cultural policies are emerging from this integration. It has recently been decided that a common market for a l l agricultural produce w i l l be i n existence by December 31, 1969 within the Community. 1.  Net exports of the latter two have been small. See Table 3 p. 58 2. These countries, also known as the "Common Market" countries, are Belgium, France, Western Germany, Italy, Luxembourg and the Netherlands.  2  The basic concept of EEC agricultural policy as i t affects grain imports i s that a guaranteed domestic price w i l l be set for each kind of grain and imports to the area may not be sold for less than the domestic price within the Common Market. The difference between import and domestic prices w i l l become part of a fund, which w i l l be used to assist adjustment i n the farm community, to stabilize prices and to subsidize exports. Western Europe - particularly the Common Market area has been experiencing rapid economic growth and development. Income and population have been rising rapidly and the index of gross agricultural production has increased from 93 i n 1952/53 to 113 i n 1959/60.  The index of food production per capita in Western Europe  increased from 95 to 109 in the 1952/53-1959/60 period (1952/53-  1956/57 * 100).  1  This study, which includes wheat and rye together as bread grains, i s designed to evaluate the effects of the most important factors on bread grain consumption and to measure expected European domestic production, with the object of estimating the gap which w i l l have to be f i l l e d by imports i n 1966.  1. Food and Agriculture Organization, The State of Food and Agriculture 196l, Rome, 1961, Ili3-U. The. 1959/60 figures are preliminary.  3  CONCEPT OF DEMAND  Demand for a good i s defined as the various quantities of i t which consumers w i l l take off the market at a i l possible alternative prices, other things being equal. The quantity which consumers w i l l take w i n be affected by a number of circumstances, the most important ones being (l) the price of the good, (2) consumer's tastes and preferences, (3) the number of consumers under consideration, (U) consumer's incomes, [$) the prices of related goods ^ Accordingly, demand i s distinguished from desire for a good. Effective demand may be described as the functional relationship between price and the quantity removed from the market, to distinguish i t from the more nebulous "desire'} which need not include the necessary purchasing power. Leftwich thus t e l l s what demand i s , and what are the factors responsible for i t s change i n the long run. He does not t e l l -why goods are demanded. Although he indicates the factors which can i n fluence demand, he does not indicate in this quotation the basic reasons for changes in quantity demanded from time to time. Before discussing such reasons, i t i s necessary to introduce two elementary facets of demand theory: First i s the concept of a demand schedule, and second i s the distinction between changes in quantity demanded and changes In demand. There i s one general law of demand:-The greater the amount to be sold, the smaller must be the  1. Richard H. Leftwich, The Price System and Resource Allocation, Revised Edition, New York, Holt, Rinehart and Winston,  19557 27.  k  price at which i t i s offered i n order that i t may find purchasers The demand prices on our l i s t are those at which various quantities of a thing can be sold i n a market during a given time under given conditions. 1  A demand schedule i s thus a relationship between a i l possible prices and a l l possible quantities, given the period of time and given the neutral effect on demand of a l l other variables. In a geometrical representation, with price on the vertical axis and quantity on the horizontal axis, such a demand schedule slopes downward from l e f t to right. This assumption i s the usual one i n respect of the shape of demand curves. Several logical reasons are apparent for believing such a slope to be the probable one. When, for example, price f a i l s , peopie who were previously unable to buy w i l l enter the market. I f price f a i l s , some peopie w i i l buy the good in preference to other goods which they previously bought but which, as a result of the price f a i l , have become relatively more expensive. Then, too, some peopie, who bought the good before i t s price f e l l , w i l l buy more of i t now that i t i s relatively cheaper. These common sense observations are guides but are not, however, sufficiently inclusive or basic to provide a sound theory of demand. Such a basis can be provided by a consideration of u t i l i t y and preference scales.  Utility " U t i l i t y i s taken to be correlative to Desire or Want".2 1 . Alfred Marshall, principles of Economics, Eighth Edition, London, Macmillan, 1 9 2 0 , 8 U . 2.  Marshall, 7 b*.  5 It i s thus the capacity of any economic good to satisfy a need or wish. There i s , however, a limit to the want-satisfying capacity of any good, even though there i s an endless variety of wants. This generax principle, now known as the law of diminishing marginal u t i l i t y , may be expressed as follows: The total u t i l i t y of a good to i t s possessor increases with increases i n quantity. There comes a point, however, beyond which the increments of u t i l i t y from each unit of the good w i l l be less than the increment of u t i l i t y from the previous unit. The law of diminishing marginal u t i l i t y i s the basis for the conventional siope of the demand schedule. I t can be used to explain why a price f a i l induces some persons, who had not previously purchased a good, to enter the market. Entry occurs when the marginal u t i l i t y of a good i n terms of money exceeds that of the money necessary to acquire i t . As price declines, the money price eventually falls below the marginal u t i l i t y of the good i n terms of money, at which point the individual enters the market. This phenomenon, the purchase of a good only when i t s marginal u t i l i t y in terms of money exceeds i t s money price, may also be used to explain a shift i n consumption toward the good whose price has fallen, and to explain the tendency of those who are i n the market to purchase more following the price f a i l . The marginal u t i l i t y of money, like that of any other good, tends to diminish with increases i n the size of an individual's stock. When the price of a good f a l l s , other things being equal, there i s a rise i n the r e a l incomes of persons who have been buying  6  the good. For those persons, the marginal u t i l i t y of money can be expected to f a i l . The decrease i n the marginal u t i l i t y of money tends to affect the consumption of a l l goods - the one whose 1  price f e l l included. There are, thus, two effects of a decrease i n price. One i s a substitution effect, which tends to increase consumption of the good whose price has fallen, and the other i s an income effect, the result of which varies with the magnitude and direction of any response of quantity to income change. The combined income and substitution effect of a price change i s known as the price effect. 1 . J.R. Hicks, A Revision of Demand Theory, Oxford, Clarendon Press, 1 9 5 6 , 19-21 and Chapter IV. It i s necessary, at this point, to make reference to Hicksian "strong ordering" and "weak ordering". If a set of items i s strongly ordered, i t i s such that each item has a place of i t s own i n the order; i t could, in principle, be given a number, and to each number there would b e one item, and omy one item, which would correspond Weak ordering, on the other hand, a l lows for the possibility that some items may be i n capable of being arranged i n front of one another. Hicks thinks of weak ordering as dividing goods into groups, which are not ordered within. Each group, however, i s strongly ordered with respect to other groups. It i s apparent i n the real world that the income effect of a price f a l l does not normally increase the quantity consumed of each good which displays a positive income elasticity and which was included i n the budget before the price f a i l . Neglecting i n d i v i s i b i l i t y , this i s , nevertheless, the conclusion to which one i s drawn i f strong ordering i s assumed. Thus, i t i s useful (with Hicks) to assume only a system of weak ordering, for this makes i t possible to explain the situation in which a price f a l l leads to expansion of consumption of one or several goods, with quantities of other goods remaining unchanged.  7  Marshall deduced the downward slope of the demand curve from the law of diminishing marginal u t i l i t y . He assumed, however, a constant marginal u t i l i t y of money, thereby circumventing the income effect of a change i n price. Hicks points out that by this, Marshall really meant that the demand fo r such a commodity i s i n dependent of income. Marshaxi had "quite good reasons for [generally neglecting the income side, andj..... the constancy of the marginal u t i l i t y of money i s i n fact an ingenious simplification, which i s quite harmless for most of the applications Marshall gave i t himself".  1  The assumption of constantcy i s harmless when the proportion of i n come spent on a commodity i s so small that changes i n i t s price exert a negligible effect on total income, and i n turn, a negligible effect on the marginal u t i l i t y of money.  U t i l i t y and Preference Marshailian demand theory assumes that individuals attempt to maximize total u t i l i t y . Thus, i t also assumes that the consumer i s always aware of - and i s abxe to evaluate - the poss i b i l i t i e s open to him. The concept of u t i l i t y and i t s maximization are void of any sensuous connotation. The assertion that a consumer derives more satisfaction or u t i l i t y from an automobile than from a suit of clothes means that i f he were presented with the alternative of  1. J.R. Hicks, Value and Capital, Second Edition, Uxford, Clarendon Press, ±9kb, 27.  8  receiving as a gift either an automobile or a suit of clothes, he would choose the former. 1  Such a concept of u t i l i t y is thus equivalent only to a postulate of rationality. Marshall, however, considered u t i l i t y to be measurable; that i s "the consumer.... was assumed to be capable of assigning to every commodity or combination of commodities a number representing the amount or degree of u t i l i t y associated with i t . " ^ A postulate of rationality assumes omy  an ordinal u t i l i t y measure.  The consumer need only be abie to rank commodities in order of preference. As long as the consumer's order of preference i s consistent (i.e., i f he prefers X to Y and I to Z, he also prefers X to Z), the assumption of ranking of preferences (.ordinal u t i l i t y ) is sufficient. The ideal consumer thus has a definite scale of preferences. Since he i s affected by nothing other than current market conditions, he .....chooses that alternative, out of the various alternatives open to him, which he prefers, or ranks most highly The choices he makes a l ways express the same ordering, and must therefore be consistent with one another... [Anyl apparently inconsistent behaviour must be capable of explanation in terms of the ways in which the actual consumer differs from an ideal consumer; that i s to say, i t must be explicable in terms of changes in other variables than 1. James M. Henderson and Richard E. Quandt, Microeconomic Theory, New York, McGraw-Hill, i 9 ! ? 8 , 6. 2. Henderson and Quandt, 6.  9  current prices (or incomes). p  Hicks  shows how the preference concept can be developed i n terms  of indifference curves, which necessitate only the ordinal assumption. Indifference Curves A given level of u t i l i t y can be obtained by using goods in many different combinations. This i s shown graphically by Hicks-' i n the case of two goods by an indifference curve which is the locus of a l l combinations of the two goods which yield the consumer the same amount of satisfaction. Indifference curves correspond to higher levels of satisfaction, the farther one moves upward and to the right. The manner i n which one i s able to show the effect on consumption of a change i n one of the variables i n fluencing demand i s demonstrated in, f o r example, Stonier and Hague.k However, the effects of such a variable w i l l differ depending on the way in which the goods are related to each other.  Complementarity and Competitiveness A suitable manner i n which to describe complementarity  1. Hicks, A Revision of Demand Theory, l 8 . 2. Hicks, Value and Capital, Chapter I. 3. Hicks, Value and Capital, l 5 (Figures 1 and 2). k» Alfred ¥. Stonier and Douglas C. Hague, A Textbook of Economic Theory, London, Longmans, Green and Company, 1953, WW.  10  is one i n which only three goods, X, Y and Z, are i n i t i a l l y being consumed. Assume a f a l l i n the price of X, and a "compensating variation" i n income just sufficient to offset the f a l l . Though he i s neither better nor worse off at the new equilibrium, the consumer may be purchasing more X, less Z and more Y. If such i s the case, Y i s complementary with X against Z. It i s impossible, however, for both Y and Z - at the same time - to be complementary with X. Whenever there i s a given number of goods, at least one of these goods must be competitive with the one whose price f e l l . A competitive good can be described by discussing a situation in which a consumer, at equilibrium, i s again buying various amounts of X, Y and Z. Assume a f a l l i n the price of X, the the prices of Y and Z remaining constant and a compensating variation i n income. Because of the substitution effect, the consumer then buys more of X. In the normal case, he also buys less of Y and Z. When such a situation occurs, "Y i s competitive with X against Z, and Z i s competitive with X against Y.""*"  Price Elasticity of Demand "The elasticity (or responsiveness) of demand in a market i s great or small according as the amount demanded increases much or l i t t l e for a given f a l l in price, and diminishes much or o  l i t t l e for a given rise in price".  Marshall defined elasticity of  1. Stonier and Hague, 80. The discussion of competitive and complementary goods follows closely that of Stonier and Hague, 80-]+. 2. Marshall, 66.  11  demand as the percentage change i n quantity divided by the percentage change in price - the ±ine of causation being from price to quantity. Except i n special circumstancesi,  the demand curve does  not maintain the same elasticity throughout i t s length. Accordingly, the elasticity coefficient may be determined for a point on a demand function or as an average for a segment of a function. A measure of price elasticity at a point on the demand function i s known as a measure of point price elasticity of demand, to contrast i t with a coefficient of arc price elasticity of demand which i s measured over a range on the function. The arc elasticity of demand i s more generally used i n practical work because i t i s possible to take the averages of the beginning and end quantities and prices and to use these data i n determining the elasticity coefficients.^ This precludes the problem of differing coefficients due to different reference points of price and quantity, which arises when such averages are not used i n the calculation of arc e l a s t i c i t i e s . The coefficient of price elasticity of demand i s negative because any change i n price i s associated with a change i n quantity 1. These circumstances are {!) a. perfectly inelastic demand function, e = 0 , ( i i ) a perfectly elastic demand function, e = -infinity, and ( i i i ) a demand function i n the form of a hyperbola with rectangular coordinates, e = - i . 2.  x where  df  coefficient of price elasticity of demand, quantity f i r s t and second observations  12  in the opposite direction. When elasticity i s equal to minus one, changes in price and quantity occur at the same rate and total revenue (.price times quantity) i s constant along that segment of the function. When the coefficient of price elasticity i s less than minus one, demand i s said to be elastic, i n which case the relative change i n quantity i s larger than the relative change i n price. Demand i s inelastic when the coefficient of price elasticity i s between zero and minus one.  Income Elasticity of Demand The coefficient of income elasticity of demand i s a measure of the responsiveness of consumer purchases to changes i n income, and i s defined as the percentage change i n purchases of a good divided by the percentage change in income responsible for the change i n purchases. It "has the important advantage of being a non-dimensionai number, independent of units of measurement and consequently directly comparable between products and between countries The income elasticity coefficient may be either negative or positive. It i s important, however to stress the significance of several possible values of the coefficient. A coefficient of zero indicates that purchases of tlie good are independent of the income level. A good exhibiting a negative income elasticity coefficient i s called an inferior good, since purchases of i t decrease with i n creases i n income. Within the range of positive elasticity 1. United Nations and Food and Agricultural Organization cooperating, European Agriculture i n iy6£, ST/ECE/AGRl/li, Geneva,  1961, 36.  13  coefficients, which indicate increased purchases with increased income, a coefficient of one means that the proportion  increases  with increasing income when the coefficient i s greater than one and decreases with increasing incomes when the elasticity coefficient i s less than one. It seems reasonable to think that a good with an income-elasticity greater than one is in some sense a luxury; and a good with an income-elasticity of less than one.... i s i n some sense a necessity.... One cannot... give a precise definition of necessities and luxuries in terms of income-elasticities of demand, but the notion that goods with incomeelasticities greater and less than one are in a general sense luxuries and necessities respectively seems a useful one. x  In determining the coefficient of income elasticity, purchases of a good may be defined in either of two ways, .purchases may be expressed in terms of physical quantities, thereby providing an income elasticity of quantity of consumption. Alternatively, an income elasticity of expenditure may be determined, relating percentage change i n expenditure on a good to percentage change in income. The question then arises of the relevant considerations in choosing one or the other of these elasticity coefficients. Moid discusses the two in the light of " (a) the material available for the alternative methods, (b) general relations between the variant elasticities, (c) differences in the interpretation and application of the elasticity variants. 1. Stonier and Hague, 72. 2. Herman Wold with Lars Jureen, Demand Analysis, Hew York, Wiley, 1^53, 2iy.  Ik  To secure quantity data, i t i s necessary that the good be capable of precise definition regarding quality and variety. Different goods, which cannot be aggregated on a physical basis, must be dealt with i n value terms. Wold indicates factors which may make the quantity elasticity smaller than the expenditure elasticity. Particularly relevant i s that when ....a commodity i s available i n different varieties... an increase of income... w i l l i n duce the consumers to shift toward more expensive qualities, with the resiut that demand variations w i n be smaller i f measured by quantities than by expend!tures.- 1  Schultz also deals with the difference between these coefficients i n an analysis designed to reconcile results of quantity and expenditure studies of income elasticity.^ He i n d i cates that a processed good tends to display a higher income elasticity coefficient than the raw product. This arises because the elasticity coefficients for the services added i n processing are usually higher than the coefficient for the raw product. The conclusion i s thus similar to that of Wold, nameiy that expenditure coefficients tend to be higher than quantity coefficients for processed goods. Both the expenditure and quantity elasticities show the relation between demand and income. "The expenditure  elasticity  measures the demand from the standpoint of purchasing power... The 1. Woid and Jureen, 2i°. 2. Theodore W. Schultz, The Economic Organization of Agriculture, New York, McGraw-Hill, 1 9 5 3 , 55-63.  15  quantity elasticity refers rather to the physical satisfaction of demand  - The former i s more suited to applications to the  ,,J  marginal propensity to consume out of income. The latter refers to the physical consumption of a good, and i s accordingly applicable to studies concerned with the standard of living and the claims that may be made on agricultural resources due to changed incomes. Therefore, the use to be made of the coefficients must be considered since, as i s indicated, "the two variants answer somewhat different questions.''^  1. Wold and Jureen, 220. 2. Wold and Jureen, 220.  16  PRINCIPLES OF MEASUREMENT  An analysis of demand involves f i r s t of a i l an examination of the basic relationship between the forces which constitute the basis for demand; this aspect of the analysis relies largely on economic theory, and i s exemplified i n the above discussion of the concept of demand. The second aspect i s the determination of the specific quantitative relationships between the variables; that is,to calculate numerical values of the parameters by which the variables are related. This process involves selecting a quantitative method which i s applicable. In the matter of the selection of a quantitative technique, the important decisions centre around the choices between single and simultaneous equations and between cross-sectional and time-series data. Simultaneous versus Single Equation Techniques The single equation technique of measurement i s one which expresses the dependent variable as a function of one or several independent variables. When demand i s stated as a linear function of one or several variables, the equation i s of the form Y = a + bjX^ + . . . . + ^n^n where Y i s the number of units of the dependent variable such as consumption, X^ i s the number of units of an independent variable such as income or price, a is a constant and b^ indicates the change in Y for a given one unit change i n X « * J  i  It i s possible, however, that a linear demand function 1.  i = 1,2,  n  17  may not describe the functional relationships, which may be more closely approximated by other mathematical functions such as the exponential type, which i s linear i n the logarithms. The multiple equations technique, which assumes the simultaneous determination of a set of economic variables, may also be used. The philosophical basis of such a technique has been summarized as follows: In scientific research - i n the f i e l d of economics as well as i n other fields - our search for "explanations" consists of digging down to more fundamental relations than those that appear before us when we merely "stand and look". Each of these fundamental relations we conceive.of as invariant with respect to a much wider class of variations than those particular ones that are displayed before us i n the natural course of events. How, i f the real phenomena we observe day by day are really ruled by the simultaneous action of a whole set of fundamental laws, we see only very l i t t l e of the whole class of hypothetical variations for which each of the fundamental variations might be assumed to hold For the variations we observe, i t i s possible to establish an infinity of relationships, simply by combining two or more of the fundamental relations i n various ways. In particular, i t might be possible to write one economic variable as a function of a set of other variables i n a great variety of ways. 1  The multiple equations method takes into account the fact that economic variables such as quantity of consumption may be determined jointly and simultaneously by a system of relationships. Single equation analysis of the relationships between economic variables which cannot be clearly defined as independent and dependent gives a wider spectrum of possible results than those which 1. Trygve Haavelmo, The Probability Approach i n Econometrics, Econometrica, XII, Supplement (July, l9Uk)> 38-9.  18  actually exist. In addition, the attempt to approximate such systems of equations by single equation methods results, Haavelmo contends, i n biased parameters: But he also says that .... modern economists have stressed very much the necessity of operating with relations of the mutual-dependence type, rather than relations of the cause-effect type. However, both types of relationships have their place in economic theory; and, moreover, they are not necessarity opposed to each other This quotation i s consistent with Wold s justification of the single 1  equation technique on the basis of a recursive model of economic relationships, i n which events are unilaterally and casually determined by prior events. In cases where relationships are of the causeeffect rather than the mutual-dependence type, use of the single equations technique i n demand analysis i s entirely satisfactory. "The main s t a t i s t i c a l method used for the estimation of demand functions i s least-squares regression analysis".^ The fact that the single equation technique of demand analysis i s so closely bound up with least-squares regression makes i t necessary to discuss both the applicability of least-squares regression and the philosophical basis of the single equation technique. Wold's discussion of least-squares analysis emphasizes the features of efficiency and accuracy inherent in the method. In respect of accuracy, he notes that "  least-squares  regression w i l l under general conditions be unbiased when applied 1. Haavelmo, Econometrica, XII, Supplement, 22. 2. Wold and Jureen, 16.  19  to a single relation." The necessary condition which makes this 1  statement true i s that the residuals not be correlated with the independent variables. It i s a general property of the residuals of least-squares regression that they are uncorrelated with the regressors, but not with the regressand. In recursive systems the assumed noncorreiation between the disturbance .... and the explanatory variables... w i l l therefore assure that least-squares regression is applicable without bias.2 Essentially neglecting the philosophical argument of whether relations are unidirectionaxly or simultaneously determined, Fox^ shows that the results obtained by simultaneous and single equation approaches are very similar. He points out that "  there are certain cases, particularly i n the analysis of  demand for farm and food products, where simultaneity i s of limited importance."4 He indicates elsewhere,^ for example, that the extent to which consumer income i s affected by changes i n price or quantity of a particular agricultural product i s negligible. Thus, the i n troduction of such income change in a separate simultaneously determined equation i s unnecessary. The fact of the several end-uses for a product i s a factor favoring use of the simultaneous equations approach. Again Fox points out, specifically i n relation to price elasticity, that 1. Wold and Jureen, 1*9. 2. Wold and Jureen, 51. 3. Karl A. Fox, Econometric Models of the United States, Journal of P o l i t i c a l Economy, LXIV, No. 2 (April, 1956J. ll. Fox, Econometric Analysis for Public Policy, Ames, Iowa State College Press, 195«, 12. 5. Fox, The Analysis of Demand for Farm Products, United States Department or Agriculture, Technxcal bulletin,' lObi, 1953, 2.  20  such various end-uses need not preclude single equation methods: "For major commodities having two or more major end uses.... valid single-equation measurements may sometimes be obtained by deriving a statistical relation for each of the separate outlets".  1  Klein indicates that, in single equation measurement, least-squares bias can be avoided i f cases are selected ".... in which the causation pattern i s l i k e l y to be one-way from the explanatory or independent variables to the dependent variables."2 Only when this condition i s not f u l f i l l e d , and when such nonfulfillment results in significant bias, i s the multiple equations system more suitable than the single equation method. Wold's concept of recursive economic relations, which are causally determined by prior events, permits him to state that the least-squares regression coefficient b i s that unbiased linear estimate which i s of optimal efficiency; i.e., i t s standard error is the smallest possible."3 The least-squares method thus has the advantages of being highly flexible as regards the underlying assumptions and very simple as regards the numerical computations The f i n a l conclusion must be.... that the regression analysis as traditionally applied i s essentially sound. In demand analysis, at least, i t can s t i l l be safely recommended.^ 1.  Fox, The Analysis of Demand for Farm Products, 2.  2 . Lawrence R. Klein, An Introduction to Econometrics, Englewood C l i f f s , New Jersey, Prentice-Hall, 1962, 67-tt. 3.  Wold and Jureen, £lw  U.  Wold and Jureen, $9.  21  Cross-Sectional versus Time-Series Data There are two basic sources of data on which a demand analysis can be built. Une source i s time-series data of market statistics. With such data, the parameters are estimated on the basis of variations in economic quantities overtime. "We  could  equally well base our estimates on a different type of variation, namely, spatial, instead of time, variation arising from interindividual differences at a given point of time.  1,1  The latter  method makes use of cross-sectional or family budget data.  Cross-Sectional Data  Economic time-series analysis assumes that different time periods  are homogenous, except for differences in the  explicit variables of the system we measure...... In the analysis of cross-section data, we assume that different people are homogeneous  "2 Family budget data are dealt with as i f they had come  from a controlled experiment, in which consumer income was  the  independent variable and expenditure on various commodities was the dependent variable. Thus, the information relates to how families at different income levels respond rather than the response of the same family at different income levels. However, this i s no 1.  Klein, 53  2.  Klein, 55  22  more serious an obstacle to interpretation than that of other studies •where the data i s obtained by sampling and the results are interpreted within confidence intervals. "What i s recorded i n family budget data i s usually the expenditures on the specified items of the budget. In some cases, however, supplementary information i s given about the quantities purchased of the various items." Thus with cross-sectional data 1  as with time series - two separate elasticity coefficients can be calculated. One i s the income elasticity coefficient of quantity of consumption, which expresses the percentage change i n quantity of consumption associated with a one percent change i n income. The other i s an income elasticity coefficient of expenditure, which expresses the percentage change i n expenditure on a good associated with a one percent change i n income.2 Choice between the two coefficients rests on considerations of the data available and on the way i n which the coefficients are to be applied. A significant feature of cross-sectional samples for a single time period i s that the price variable i s held constant. Although the choices and the prices paid by individuals may vary as a result of quality differences and product differentiation, a l l consumers are faced with the same set of market alternatives during the period. 1. Wold and Jureen, 219. 2. T.W.Schultz, 69. These terms correspond, respectively, to Schultz' elasticity of physical consumption and elasticity of value of consumption.  23  Two considerations are important i n evaluating budget data for demand analysis. First, the consumer units must be such as to accurately reflect consumer habits within each stratum. It i s important to note, therefore, that we cannot determine with complete exactness the weights that should be attached to the average quantities when summing the various strata, a source of error that might well result i n considerable deviation, since there are large differences i n consumption habits of different social classes.i In spite of these shortcomings, Wold points out that results from budget data have not been notably different from those obtained by the use of market statistics. For this reason, he concludes that either method i s valid i n demand analysis.2  Time-Series Data  Whether calculated from budget or time series data, the income elasticity coefficients which are of primary concern to demand analysis are long term elasticities. The difference between long and short term coefficients arises from the fact that i t normally takes a period of time for consumers to accustom themselves to changes i n income. Consumers tend to have a different pattern of consumption immediately following a change i n income than that which they exhibit once they become accustomed to the new income, level. 1. Wold and Jureen, 2.  2$$.  Wold and Jureen, 257.  2k  Income elasticity coefficients derived from budget data tend to be of the long term type because consumer incomes for a large group are not likely to increase or decrease sharply. Thus, income changes may generally be regarded as small i n relation to existing income differences between families. One can therefore assume that families have largely accustomed themselves to the income level at which they are recorded. In time series analysis, the elasticity coefficient i s closely related to the problem of using trend-free data. Trends may be removed by regression analysis relating the raw data with time, and recalculating the trend-free data as deviations from the line of regression. Wold points out that the use of trend-free 1  data results in short term coefficients, while data including trends provide a compromise between short and long term coefficients, since they include both the trends and short run deviations from the trends. Therefore, removal of trends prior to estimation of long term elasticity coefficients i s not desirable, even though a s t r i c t estimation of such coefficients necessitates disregarding short term fluctuations i n the variable under analysis. I f used in demand analysis, methods such as f i r s t differences and link relatives, which provide coefficients closely comparable to those obtained by trend removal, "... have the character of emergency measures that may be used as a last resort i f the regressand i s affected by trend factors other than those of the regressors."^ 1.  Wold and Jureen, 240-2.  2.  Wold and Jureen, 2ij2.  25  Nominal coefficients of price and income elasticities are, by definition, those calculated from actually observed data of prices and incomes. Real elasticity coefficients are those calculated from nominal values divided by a consumer price index. Although conversion to real values of price and income i s obviated by the nature of the family budget method, i t i s customary i n time-series demand analysis to work with the r e a l values. Deflation i s carried out because the theory of demand assumes that measurement i n monetary units provides a well defined scale and consistent use of real values of price and income serves to eliminate changes i n the vaiue of the monetary unit.  26  METHODOLOGY  The single equation, least-squares method has been used in the analysis. The assurance that simultaneity i s of l i t t l e significance i n demand analysis of farm products was one reason 1  for the choice. Wold's preference of the single equation over the multiple equations technique because of the accuracy and efficiency of the former was an added reason.2 However, bread grains are used for animal feed, seed and industrial purposes as well as for bread: since the demand functions for each of the uses are l i k e l y to be quite different, the two uses were separated for purposes of analysis. A linear trend relationship over the period for the percentage consumed i n each form was established. Having separated out consumption i n forms other than flour, a single equation was used to determine income elasticity coefficients for flour consumption i n each of the various countries. The choice of time series over cross-sectional data was based on the requirement for this study of an income elasticity coefficient of quantity of consumption, the availability of quantitative time series consumption data and the suitability of time series data to demand analysis and projection.  Bread grains Consumed Directly as Flour  Schultz states that the assumptions underlying time 1.  Above, 19.  2.  Above, 1 8 - 2 0 .  27  series analysis of market statistics are the following: .... ( i ) that there exists a routine i n the demand behavior of human beingsj ( 2 ) that the s t a t i s t i c a l data of consumption and prices are such as to reflect this routine of demand^ and ( 3 ) that the unknown theoretical demand function can be approximated by various empirical curve s.-*These assumptions, particularly with respect to regularity in demand behavior, form basic tenets of demand analysis, and provide a basis for the empirical calculations. I t i s important to note that the variables affecting quantity consumed are of two types. One type includes factors which shift the curve as a whole, such as changes in population, tastes and income. The other type i s a change i n the amount purchased when there i s a change i n the price of bread grains relative to the price of a l l other goods available to the consumer. Factors which shift the demand curve are called changes i n demand i n contrast with a change i n relative prices, which leads to a change i n quantity demanded, and consists of a movement along a given demand curve.  Population  Schultz indicates the desirability of limiting the analysis to the effect of two or three variables, then continues with this statement: "Accordingly I have preferred to reduce the number of variables by dividing the total consumption series by the 1 . Henry Schultz, The Theory and Measurement of Demand, Chicago, University of Chicago Press, 1 9 3 8 , 1 3 3 .  28  figures for population.... before submitting them to mathematical treatment." Consequently, this study has used per capita data of 1  bread grains consumed as flour.^ These data were calculated as "net food supplies per person per year - cereals as flour (in terms of flour and milled rice)" in kilograms. The inclusion of grains other than wheat and rye i s not serious since the consumption per capita of milled rice and other cereals in Western Europe i s quite small.3 A demographic study^ of the area has been used to provide an estimate of population i n I°66. For most of the nations of the Organization for European Economic Cooperation (OEEC), the publication presents three population projections corresponding to "average", "pessimistic" and "optimistic" expectations of the rate of population change. In the case of several of the countries (Western Germany, Italy, the Netherlands and the United Kingdom), a fourth estimate, including the effect of projected migration, has also been made . Since the estimates of population growth were published in 1956, i t i s now possible to make an assessment of the accuracy of these projections in the light of actual population changes. The most accurate projection, based on a comparison with actual 1959 1.  H. Schultz, 150.  2. Food and Agriculture'. Organization, Production Yearbook, Annual. 3. See, for example, Organization for European Economic Cooperation, Food Consumption i n the OEEC Countries, Part I, Paris, November I960 (Restricted). ij.. Organization for European Economic Cooperation, Demographic Trends i n Western Europe 1951-1971, Paris, 1956.  29  data projected from 1959 to 1966 at the 1953-59 rate of population growth, has been selected. In a l l countries in which an OEEC estimate of population in 1966 was not used as presented by the i n dicated publication, 1966 population xras calculated as an average of the "most accurate" projection by OEEC and the population level obtained by projecting the 1959 population datum to 1966 at the 1953-59 rate of increase. Such a method has the advantage of giving recognition both to the considerations embodied in the specialized demographic study and to factors which have manifested themselves more recently i n a change i n the rate of growth. The quantity of bread grain consumption was assumed, i n this study, to vary directly with the level of population. Although abstracting from changes in the age, geographical and occupational distribution of the population, the usefulness of the results i s not likely thereby to be impaired within a time period equivalent to that considered i n this study.-4  Tastes  "For staple agricultural commodities .... tastes are not l i k e l y to change rapidly." For this reason, and because there 2  are no satisfactory means of empirically identifying taste changes, they were not taken into account i n this study. 1.  Fox, Econometric Analysis for Public Policy, .136-9  2.  H. Schultz, lii3..  30  Relative Prices  Movement along a demand function, as distinguished from movement of the function, occurs when the price of bread grains changes relative to the prices of competing goods. These price changes are of two kinds; (1) changes i n the price of bread grains relative to the price of other food, and (2) changes i n the price of food relative to nonfood goods and services. In order to deal with the f i r s t of these, bread grains have been defined to include wheat and rye. This grouping avoids the problem of substitutability which results i n consumption shifts between the two cereaes when their relative prices change. Such a grouping also tends to lower the price elasticity of demand for both goods since the ".... price elasticity of demand i s lower for a large group of products than for one component of the group because of the possibilities of substitution within the group."-' The more i n 1  elastic i s the demand for bread grains, the less their consumption w i l l be affected by price changes relative to other foods. Working stated that the ".... elasticity of demand  for wheat  for actual  consumption i s so small that even after years of effort devoted to refining the data, no trustworthy measurement has been obtainable. "2 Henry Schultz derived a price elasticity of demand of -0.08 1 . United Nations and Food and Agriculture. Organization cooperating, European Agriculture in 1 9 6 5 , kk» 2. H. Working, The E l a s t i c i t i e s of Demand for Wheat, read before the meeting of the Econometric Society held i n Chicago, I l l i n o i s , December 28-30, 1936, and summarized i n Econometrica, V, no. 2 (1937), 185.  31  for wheat i n a i l uses. rye,  Demand was shown to be more elastic fox  but the calculated coefficients included demand for uses such  as feed and seed i n addition to human consumption.^ Tn respect of the second relationship, the evidence i s that relative price changes have not occurred during the period. This conclusion has been reached by a comparison of the index of r e t a i l food prices with the price index of a l l consumer goods. The comparison was concerned with differences arising between the indices, rather than an examination of the index of r e t a i l food prices i n i t s e l f , since the price of any good is"only meaningful in relation to the prices of other goods. One of the greatest divergences between these two indices (1953=100) occurred i n Western Germany, where, i n 195U,  the  index of retail food prices rose two index points above the index of a l l consumer goods prices. However, from that point u n t i l  1959  (the last year for which these data are available), the indices exhibited no further net divergence, the food price index being two points above the consumer goods price index i n 1959 as well. Therefore, since relative prices have been nearly constant, the changes in the amount consumed have been assumed to be determined solely by the growth of population and income.  Incomes Certain commodities tend to stay f a i r l y constant i n their physical composition 1.  H. Schultz, 390.  2.  H. Schultz, li.95-501.  32  as farm products, but may change substant i a l l y i n value at the point at which consumers buy them, r e f l e c t i n g the amount and kind of nonfarm services added i n processing, handling, d e l i v e r i n g , and serving these products as food." 1  A measure of the income e l a s t i c i t y of quantity rather than value  consumption was c a l c u l a t e d because t h i s study i s con-  cerned with the demand f o r bread grains without the  processing  and other marketing services. The e l a s t i c i t y c o e f f i c i e n t was c a l c u l a t e d by relating per capita f l o u r consumption to per capita r e a l income. The consumption data (dependent v a r i a b l e ) , as "net  food  supplies per person per year - cereals as f l o u r ( i n terms of f l o u r and m i l l e d r i c e ) " were those calculated by the Food and Agriculture Organization: The income s t a t i s t i c s were i n the form of estimated r e a l national income per capita per year i n domestic currencies, derived as follows: From estimates of national income, mid-year population and consumer p r i c e index numbers, the r e a l l e v e l of national income i n each year was  calculated by d i v i d i n g t o t a l national income by the  consumer p r i c e index. The r e a l national income figures were, i n turn, divided by mid-year population data, to give an estimate of r e a l national income per capita per year i n domestic  currency.  Any of a number of functions could have been used to measure the income e l a s t i c i t y c o e f f i c i e n t s . Two  functions frequently  used i n demand analysis2 are the l i n e a r function, Y=a 1. T. ¥. Schultz,  + bX  and  68.  2. United Nations and Food and A g r i c u l t u r e Organization cooperat i n g , European Agriculture i n 1965", Annex I, Table 36. Five funct i o n s and the formulae for deriving e l a s t i c i t y c o e f f i c i e n t s from each are shown. In addition to the above, the indicated functions are the semi-logarithmic, log-inverse and log-log-inverse functions.  33  the logarithmic function, log Y = a + b log X. The former has the advantage that i t i s easy to work with i n an analysis. It was rejected, however, because the linearity assumption i s "... only a convenience and must at times be sacrificed i n favor of r e a l i t y " .  1  The logarithmic function i s better i n several ways. First, i t assumes a constant percentage change i n consumption associated with a given percentage change i n real income, while the linear function assumes a constant absolute change i n consumption associated with a given absolute change i n income; of the two, the former : seems more r e a l i s t i c . Furthermore,  scatter diagrams of consumption  and income showed that, i n several countries, a logarithmic function would describe the data better than a linear function. The logarithmic function was chosen over other nonlinear functions because i t gives a constant elasticity coefficient over the range of available data, which extended over a time period of eleven or twelve years. During this period, per capita real i n comes increased by amounts ranging from 12.0 to 5 6 . 9 percent.  2  Thus, the income range was not great enough to presuppose anything other than constant income elasticity coefficients. The logarithmic function was therefore f u l l y as useful as any other nonlinear function, and more suitable than a linear relationship. 1.  Klein, 2 2 .  2 . The percentage increase in real per capita income during the eleven or twelve year period, based on the level i n the f i n a l year of the period, i s as follows for each country of the study: Austria U5'1J Belgium-Luxembourg 2 6 . 3 ; Denmark 12.8; France 3h»h, Western Germany 5 6 . 9 j Netherlands 28.5; Norway 12.0; Sweden l 6 . 5 ; Switzerland 2k*3> United Kingdom 12.3.  3k  The standard error of estimate of the regression coefficient (s^j was calculated to obtain a measure of the influence of factors other than income, and from the s^ value the confidence intervals about b were calculated. For each country, therefore, three regression coefficients, at b and at 9$ percent confidence intervals above and below b, were determined. A l l three estimates of income 1  elasticity were included i n the calculations of flour consumption. Such a method provided a prediction of direct bread grain consumption over a range which took into account the confidence limits in the income elasticity coefficient.  In addition a fourth estimate  of the income elasticity coefficient, the average for the European area, was used. The coefficient, which i s -0.U2 for a l l countries of the study, .... corresponds to a combination of typical analyses of time 11  series carried out separately for different countries".^ Use of this coefficient, a quantity elasticity, enabled a comparison of consumption and import estimates when coefficients relative to each country were used and when an average elasticity coefficient was used for a l l countries. In addition, for each income elasticity coefficient, three estimates of consumption were calculated corresponding to low, medium and high rates^ f future income growth. Thereby, twelve 0  1. This excepts the two countries whose coefficients did not differ significantly from zero. 2 . United Nations and Food and Agriculture. Organization cooperating, European Agriculture i n 196|?, Ul. 3.  i»3>,  3.0  and U.5 percent per capita per year, respectively.  3$  estimates of the level of flour consumption i n 1°66 were computed for a l l those countries for which three income elasticity coefficients had been calculated. These estimates arose because three rates of growth of income were applied to each of the three calculated elasticity coefficients and to the UN-FAO elasticity coefficient.  Indirectly Consumed Bread grains  Disappearance of wheat and rye i n any form other than as flour was termed indirect consumption and was measured i n percentage terms as follows: The total quantity of cereals consumed 1  as flour, i n each year from which data were obtained, was calculated by applying population estimates to the per capita data of bread grains consumed as flour. Statistics on gross supplies of wheat and rye entering consumption i n a l l forms were also available. From 2  those two quantities the proportion of total bread grain consumption as flour i n each year was calculated. In a l l countries except three3^  a  linear trend line h relating time to the percentage of  1. United Nations. Economic Bulletin for Asia and the Far East, XI, No. 1 (I960), I2-U. The Japanese study reported here calculated the quantities of bread grains required for seed and wastage as a percentage of total requirements, and made no attempt to relate i n direct consumption to any of the demand variables. A coefficient of income elasticity for wheat of -0.1 was used i n the 1969 projections made therein. 2.  Food and Agriculture  Organization, Production Yearbook.  3. The countries were Belgium-Luxembourg, Denmark and Western Germany, i n each of which a trend was not applicable. For these countries, the average nonflour consumption for the most recent five year period was used to project 1966 indirect consumption. IJ,. Y = a + bX, where X = time i n years and Y = percentage of total bread grain consumption as flour.  36  total wheat and rye disappearance as flour was projected to 1 9 6 6 . For the countries for which such a trend was calculated, the percentages at the appropriate t value times the standard error of estimate above and below the projected percentage were determined to give the 95 percent confidence limits, as a basis for judging the accuracy of the calculated figures. Total consumption of wheat and rye was thus calculated by dividing total flour consumption in 1966 by the percentage of bread grain consumption as flour i n 1966. This method furnished a maximum of thirty six estimates of total bread grain disappearance for 1966. The maximum number of estimates were made for those count r i e s for which the study calculated three estimates of indirect consumption, u t i l i z e d four income elasticities, and applied to each of the latter the three projected rates of income growth.  Projected Import Requirements  In order to predict 1966 import requirements of wheat and rye, an estimate of quantities domestically produced was necessary. Such an estimate was made by projecting from 1959 to 1966 the average 1955-59 production i n each country. In accordance with the three assumptions of 1 . 5 , 3 . 0 and I 4 . . 5 percent annual increases i n real per capita incomes, i t was assumed that domestic bread grain production would increase at the same rates over the period 1 9 5 9 - 6 6 . The import requirements were then determined by subtracting from each estimate of total requirement the relevant estimate of domestic production.  37  Import requirements for the individual countries were also aggregated, to obtain the 1 9 6 6 import requirement for the entire area. The table showing 1 9 6 6 import requirements and the several other 1  tables presented i n the thesis provide a means of explaining the results of the study, and of comparing them with the conclusions arrived at by other studies of a similar nature.  1.  See Table 3, page £8.  38  RESULTS  The results are presented in two parts. The f i r s t i s a discussion of the significant features of the variables which were used to determine the 1966 import requirement for each country.  1  The discussion also includes an assessment of the implications of these variables and of the agricultural situation on agricultural imports. Following this, an assessment of the results for the group of countries and a comparison of the results with those of a United Nations-Food and Agriculture Organization study of European agriculture  2  were made.  Results for Individual Countries  Austria^ Direct Consumption Austria has shown, in the period 1953-59, the slowest rate of population growth of any of the twelve countries considered. Nevertheless, the increase which has occurred since 195l has exceeded the highest projection made by the Organization for European Economic Cooperation.^ The growth of population used in this study 1. A detailed description of the method of calculating the 1966 import requirement i s included in the Appendix;see page 76. 2. United Nations and Food and Agriculture cooperating, European Agriculture in 1965. 3.  See Table 9, page 76.  U. Organization for European Economic Cooperation, Demographic Trends in Western Europe, 1951-71.  39  was 0 . 5 percent for the period ± 9 5 9 - 6 6 . The 1966 population figure was an average of the highest Organization for European Economic Cooperation estimate of population growth and the estimate obtained by projecting the 1959 population datum to 1966 at the annual rate of growth, 1953-59, of 0 . 2 percent. The effect of projected changes in per capita income was estimated by using four income elasticity coefficients of demand for bread grains for human consumption in Europe. These coefficients were the one calculated i n this study and at 95 percent confidence intervals above and below that figure, and the United Nations-Food and Agriculture Organization calculated coefficient of -0.2;2. In this study the income elasticity coefficient for Austria was calculated to be - 0 . 2 0 . For a l l of the twelve estimates of direct consumption the negative elasticity coefficients applied to the assumed rates of income growth influenced the forecast of direct consumption more than enough to offset the effect of population growth. The result i s that 1966 direct consumption may be expected to decrease between O.U and l U . 7  percent from 1959 to 1 9 6 6 . 1  Indirect Consumption The projection of trends i n consumption gave an estimate of direct consumption in 1966 as 5U.U percent of total disappearance.' 1. The level of direct consumption in 1959 has been estimated by the average of the 1957-59 period. In later references to 1959 direct consumption levels, the reference i s also to the 1957-59 average. 2 . The standard error of estimate was 3 . 6 percentage points which gave a range of 6 2 . U to I46.H percent at 95 percent confidence limits.  Uo Import Requirements Austria has moved toward greater self-sufficiency i n wheat production as compared to pre-World War I I levels, and selfsufficiency continues to be encouraged by government policy.  1  Attempts to increase further the production of hard wheat have been made, since the Austrian need i s chiefly for high quality bread grains. Assuming the medium import requirement and the 3.0 percent annual rate of income and production growth, the net deficit of wheat and rye i s expected to decrease by  1966.  o  Belgium-Luxembourg Direct Consumption Population estimates for Belgium-Luxembourg i n 1966 were calculated separately for each country, then aggregated. One calculation for Luxembourg was derived from the Organization for European Economic Cooperation estimate which had been made for 1971 only. The 1966 estimate was obtained by interpolating between the 1951 population figure and the highest 197i estimate by assuming a constant percentage rate of growth. The Organization for European Cooperation highest estimate of 1966 population,in Belgium was added to the e stimate for Luxembourg obtained as above to give a projected total for Belgium-Luxembourg i n 1966. 1. Canada Department of Agriculture, Economics Division, Agriculture Abroad, X I V , No. 5 (October, 1959), 6. 2.  See Table 9, page 76.  Another estimate of the 1966 population level was obtained by projecting 1959 levels of population in Belgium and Luxembourg to 1966 by their respective 1953-59 growth rates of 0 . 6 and 1.1  percent annually. The average of the level so obtained  and of the estimate derived from the Organization for European. Economic Cooperation projections was used as the estimate of 1966 population in Belgium-Luxembourg. The result was a calculated increase i n population of 2.U percent from 1959-66. In calculating per capita incomes for the two countries, the national incomes expressed i n the monetary units of each country were added together. The real national income per capita x  was then obtained by dividing the total national income by a consumer price index for Belgium (±953=100) and by the population figure. The correlation between direct consumption and income per capita was not significantly different from zero. Thus, only two income elasticity coefficients were used i n the f i n a l calculation; the zero coefficient of this study and the - 0 . U 2  coefficient  from United Nations-Food and Agriculture Organization. On the basis of these coefficients, direct consumption i n 1966 could range from a high of 2.U percent above to a low of 12.7  percent beiow the 1959  level. Indirect Consumption Use of a trend line to relate time and the percentage of 1 . United Nations, Statistical Yearbook, New York, Annual. The two currencies exchanged at par throughout the period from which data were drawn.  1*2  total wheat and rye consumed as flour was rejected because of the low correlation and high standard error of estimate. Instead, the average levei of indirect consumption^' of 6U9,000 metric tons during the 195U-58 period was calculated, and used as the estimate of 1966 indirect consumption. Import Requirements The consumption of domestic bread grains i s encouraged by the requirement that a minimum of 6$ percent of domestic wheat must be used i n f l o u r .  2  Such rules could reduce the bread grain  deficit i n 1966 even further than the reduction forecast by this study.  Denmark 3 Direct Consumption The average estimate of population of the Organization for European Economic Cooperation study has closely approximated the actual population as shown by annual population estimates. In addition, a population datum obtained by applying the 1953-59 annual rate of growth to the actual 1959 population was very similar to the 1966 projection by the Organization for European Economic Cooperation. The average estimate by the Organization for European 1. Gross food supplies of wheat and rye minus cereals directly consumed as flour. 2 . Canada Department of Agriculture, Economics Division, Agriculture Abroad, XVI, No. 1 (February, i 9 6 i ) , LL. 3. See Table 9, page 76.  U3  Economic Cooperation, which was therefore used as presented, provided an estimate of 1959-66 population growth of I1.8 percent. The calculated income elasticity coefficient of -1.8U was the lowest of any of the study countries. With the assumed rates of income and population growth, the four elasticity coefficients provided estimates of 1966 direct consumption which differed from the 1959 level by +0.2 to -9$.I percent. Indirect Consumption The trend line relating time and percentage of wheat and rye consumed as flour was rejected because of low correlation and high standard error of estimate. The level of indirect consumption of 1|93,000 metric tons annually during 195U-58 was used as the estimate of 1966 indirect consumption. Import Requirements Danish production policy i s designed to "exploit the productive capacity of agriculture to the fullest possible extent...  1  In keeping with this policy the obligatory milling percentage for domestic wheat and rye for human consumption i s 100 percent; thus the results of this study and Danish agricultural policy both point to a decreased import requirement of wheat and rye. France  2  Direct Consumption The 1966 population estimate has been based on the average 1. Organization for European Economic Cooperation, Agricultural policies i n Europe and Worth America, Paris, 1956, 1x32.  See Table 9, page 76.  Ill*  of a projection from 1959 population to 1966 at the 0.9 percent annual growth rate of 1953-59 and the highest population estimate by the Organization for European Economic Cooperation for 1966. The result was a predicted increase i n population from 1959-66 of 3.9 percent. The effect on direct consumption of the income elasticity coefficient of -0.25 and the assumed rates of income growth could be considerably offset by the effect of population growth. The four income elasticity coefficients provided estimates of 1966 direct consumption differing from the level of 1959 by +2.5 to -H.2 per cent. Indirect Consumption The trend indicates that direct consumption w i l l account for I4J4..O percent of total bread grain disappearance i n I966. The 1  resulting estimates of total consumption indicate that i t w i l l i n crease during the 1959-66 period. Import Requirements There i s evidence that French exports of bread grains w i l l o  not be encouraged by domestic agricultural policy.  Nevertheless,  1. The standard error of estimate of 1.3 percentage points i n dicated a confidence interval of U7.0 to I4I.U percent for the trend line relating time and percentage of cereals consumed as flour. 2. 1, Lamartine Yates, Food, Land and Manpower in Western Europe, London, Macmillan, i 9 6 0 , 2JJ,9-50. Lamartine Yates suggests that i t would be excessively expensive to maintain subsidized exports on a large scale, and that no further increases i n wheat production are anticipated. See, however, United Nations and Food and Agriculture Organization Cooperating, European Agriculture i n 1965, 78, which indicates the ease with which France's wheat production can be expanded.  U5  calculations of this study indicate that, at any rate of income and production growth other than the lowest, the export surplus w i l l not be reduced by i°66, and may increase.  Western Germany Direct Consumption The estimate of 1966 population has been calculated as an average of a projection from the 1959 population level to 1966 at the 1953-59 annual rate of population growth of 1.2 percent and the highest estimate by the Organization for European Economic Cooperation for 1966 adjusted for probably migration. The result i s a projected increase i n population from 1959-66 of 2.1; percent. The correlation coefficient between income and flour consumption was not significantly different from zero. Thus, only two elasticity coefficients, zero and -O.Ij.2, from this study and the United Nations-Food and Agriculture Organization study respectively, were used i n calculating 1966 direct consumption. Applying these coefficients to the projected rates of income growth resulted i n 1966 estimates of direct consumption which ranged from an increase over the 1959 level of 2 . h to a decrease of 11.8 percent. Indirect Consumption Since Western Germany's agriculture i s unlikely to require aignificant increases i n feed grain until further market orientation of agricultural production has occurred, the trend line relating 1.  See Table 9, page 76.  h6  t i m e and p e r c e n t a g e o f b r e a d g r a i n s consumed as f l o u r i n W e s t e r n Germany was r e j e c t e d . Furthermore, t h e s t a n d a r d e r r o r o f e s t i m a t e o f LL.2 p e r c e n t a g e p o i n t s f o r t h e t r e n d l i n e was v e r y h i g h . I n d i r e c t consumption  i n 1966 was e s t i m a t e d t o b e e q u a l t o t h e  a n n u a l i n d i r e c t consumption Import  average  o f LL,75U,00O m e t r i c t o n s d u r i n g 195"5-59.  Requirements W e s t e r n Germany r e q u i r e s t h a t a l a r g e amount o f domestic  wheat be u s e d i n f l o u r .  1  T h i s requirement can be r e g a r d e d a s r e s t r i c t -  i n g any p o s s i b i l i t y o f i n c r e a s e s i n demand f o r h i g h e r q u a l i t y f o r e i g a p r o d u c e d b r e a d g r a i n s . The s t u d y i n d i c a t e s t h a t a d e c r e a s e i n t h e import requirement f o r bread grains i s probable.  Italy  2  D i r e c t Consumption The e s t i m a t e o f 1966 p o p u l a t i o n was c a l c u l a t e d b y a v e r a g i n g t h e p o p u l a t i o n l e v e l o b t a i n e d b y p r o j e c t i n g 1959 p o p u l a t i o n t o 1966 a t the 0.5 p e r c e n t a n n u a l r a t e o f growth o f 1953-59 and t h e O r g a n i z a t i o n f o r European Economic C o o p e r a t i o n average e s t i m a t e o f p o p u l a t i o n i n 1966, a d j u s t e d f o r p r o b a b l e m i g r a t i o n . The r e s u l t was a n a n t i c i p a t e d growth o f 3.5 p e r c e n t from 1959-66. An income e l a s t i c i t y c o e f f i c i e n t o f -0.20  was c a l c u l a t e d  1. Canada Department o f A g r i c u l t u r e , Economics D i v i s i o n , A g r i c u l t u r e Abroad, XV, No. 6, l l i . The l e v e l was s e v e n t y f i v e p e r c e n t i n I960, d e s p i t e t h e p o o r q u a l i t y o f t h e c r o p i n t h a t y e a r . 2. See T a b l e 9, page 76.  hi  for Italy. The four elasticity coefficients used i n the calculations provided estimates of change i n direct consumption from ±959 to ±966 i n the ranges +2.± to -±1.7  percent.  Indirect Consumption Trend ±ine regression indicated that 69.5 percent of tota± bread grain disappearance i n ±966 wi±l be i n the form of fiour.  1  Import Requirements The potential for increased wheat production does exist i n Italy.^ The encouragement of production of hard wheat varieties3 further reinforces the conclusions of this study, which indicate an increase i n the export surplus of bread grains during the 1959-66 period.  Netherlands^ Direct Consumption The projected increase i n population of 8.I4 percent i n the 1959-66 period represents the highest percentage increase of any of the study countries. The ±966 popu±ation estimate was caiculated by averaging the estimate obtained by projecting the ±959 population ±. The standard error of estimate for the trend line of 1.6 percentage points provided 95 percent confidence limits i n the range 73.2 to 65.9 percent. 2. United Nations and Food and Agriculture Organization Cooperating, European Agriculture i n 1965, 77. 3. Organization for European Economic Cooperation, Agricultural Policies i n Europe and North America, 1957, ±55*  k.  See Table 9, page 76.  U8  l e v e l to 1966 at the 1.3 percent annual rate of growth of 1953-59 and the Organization for European Economic Cooperation average estimate of 1966 population. The income elasticity of demand for the Netherlands was calculated to be - 0 . 3 2 . This coefficient, together with those at the limits of the 95 percent confidence interval and the United Nations-Food and Agriculture Organization coefficient of - 0 . U 2 , provided estimates of direct consumption i n 1966 ranging from 6 . 7 percent above to 8 . 9 percent below the 1959 level. Indirect Consumption Trend line regression indicated that 1966 direct consumption w i l l constitute 3 5 * U percent of total consumption.  1  Import Requirements Dutch millers are compelled to incorporate domestically grown soft wheat i n their flour; the percentage varies with the size and quality of the crop, but i s usually 35 to UO percent.  2  The possibility of expanding the livestock feeding industry i s evidenced by a policy designed to limit wheat production in favor of feed grain production.3 This study suggests that import requirements w i l l increase by 1966, and that much of the increase w i l l be for purposes other than direct consumption. 1. The standard error of estimate of 2 . U percentage points i n d i cated a 95 percent confidence interval of U0.6 to 3 0 . 2 percent. 2 . Canada Department of Agriculture, Economics Division, Agriculture Abroad, XVI, No. 2 (April, I96l), 2U. 3. Organization for European Economic Cooperation, Trends i n Agricultural .Policies Since 1955, P a r i s , 1959, 231. .  h9  Norway-  1  Direct Consumption The 1966 population level was estimated by averaging the highest Organization for European Economic Cooperation estimate of 1966 population and a projection to 1966 of the 1959 population level at the 1953-59 average annual rate of growth of 0.9 percent. The result was a predicted 6.7 percent increase i n population from 1959-66. The income elasticity coefficient of demand of -1.3U  was  one of four coefficients used to calculate estimates of direct consumption i n 1966. The 1966 direct consumption estimates differed from the 1959 level by amounts varying from +0.7 to - 7 0 . 5 percent. Indirect Consumption The study indicated that 66.0 percent of 1966 total consumption w i l l be i n the form of f l o u r .  2  Import Requirements Although presently providing only a small amount of the bread grains domestically required, Norway i s attempting to "induce an expansion of production toward tommodities which are now imported, such as cereals and feeding-stuff s".3 The policy statement indicates a trend toward decreased wheat and rye imports, such as 1.  See Table 9, page 7 6 .  2 . The standard error of estimate of 2 . 2 percentage points i n d i cated 95 percent confidence limits at 70.8 and 61.2 percent. 3 . Organization for European Economic Cooperation, Agricultural policies i n Europe and North America, 1956, 176.  50  i s borne out by the calculations of this study.  Sweden  x  Direct Consumption The 1966 estimate of population was calculated by averaging the estimate obtained by projecting the 1959 population level to 1966 at the 0.6 percent annual rate of growth of ±9$3-$9  with the  average estimate of population i n 1966 calculated by the Organization for European Economic Cooperation. The result was an anticipated i n crease from 1959 to 1966 of 2.3 percent. An income elasticity coefficient of demand for Sweden of -0.98 was calculated. The four elasticity coefficients used i n the calculation provided estimates of 1966 direct consumption below the 1959 level by amounts ranging from 2.3 to IL6.1 percent. Indirect Consumption Trend line regression indicated that 38.1 percent of 1966 bread grain disappearance w i l l be as f l o u r .  2  Import Requirements The estimated increases i n total requirement of bread grains by 1966 indicate that, assuming the medium import requirement, slight increases i n requirement may be experienced. However, the low- e s t i mates of 1966 import requirement indicate increases i n the surplus 1.  See Table 9, page 76,  2. The standard error of estimate of lj.3 percentage points provided 95 percent confidence limits at 117.5 and 28.7 percent.  51  available for export.  Switzerland  1  Direct Consumption The level of population in 1966 has been estimated by an average of the highest estimate of 1966 population by the Organization for European Economic Cooperation and the population level obtained by projecting 1959 population to 1966 at the 1 . 2  percent annual rate  of growth of l$53-$9» The resulting estimate of increase in the 1959-66 period was l i . 5 percent. An income elasticity of demand of - 0 . 8 5 was calculated f o r Switzerland. The four elasticity coefficients used in the calculation, including the calculated coefficient, indicated that the level of 1966 direct consumption will be below that of 1959 by 0 . 1 to 37.14percent. Indirect Consumption The trend line relating time and percentage of cereals consumed as flour indicated that 1+8.1 percent of 1966 consumption w i l l be as f l o u r .  2  Import Requirements Agricultural policy objectives of ensuring national food supplies from domestic resources and of maintaining a large farm 1.  See Table 9,page 76.  2 . The standard error of estimate of 3 . 8 percentage points i n dicated 95 percent confidence limits at 5 6 . 5 and 3 9 . 7 percent.  52  population indicate an attempt to decrease agricultural imports. Nevertheless, the predicted increases i n indirect consumption, i n cluding animal feeding, could maintain or slightly increase the import requirement during the 1959-66 period.  United Kingdom  2  Direct Consumption The 1966 population level has been estimated as an average of the highest estimate of 1966 population by the Organization for European Economic Cooperation and the estimate obtained by projecting the 1959 population level to 1966 at the O.Ii percent annual rate of growth of 1953-59. The result i s a projected increase i n population of 2 . 5 percent from 1959-66. An income elasticity coefficient of demand of - 1 . 3 2  was  calculated f o r the United Kingdom. The four coefficients and three rates of income growth provided twelve estimates of 1966 direct consumption. These estimates were below the 1959 direct consumption level by 2 . 1 to 5 8 . 8 percent. Indirect Consumption Trend line regression indicated that direct consumption w i l l constitute 3 3 . 1 percent of total 1966 bread grain disappearance.-^ 1 . Organization for European Economic Cooperation, Trends i n Agricultural Policies Since 1955, 3 0 0 . 2 . See Table 9 , page 76.. 3 . The standard error of estimate of 2 . 9 percentage points indicated 95 percent confidence limits at 3 9 . 6 and 2 6 . 6 percent.  53  Import Requirements The medium import requirement indicates the probability of a maintained or increased import requirement during the 1959-66 period. Use of the low estimate of 1966 import requirement, which i s more probable, and the two higher rates of income and produc1  tion growth, gav,e a decreased import requirement.  Results for Countries as Groups  Table 1 l i s t s the income elasticity coefficients determined by this study, along with their standard errors of estimate. Thorbecke estimated the income elasticity coefficient of demand for bread grains in the Common Market countries at -0.25.^ The joint United Nations and Food and Agriculture Organization estimate of -0.1+2 for the elasticity coefficient for cereals i n Europe 3  w a s  introduced into the analysis, and i t s comparability with the coefficients of Table l i s discussed below. For the period 1921-39, Wold has estimated that the income elasticity coefficient of demand for wheat and rye flour in Sweden was -0.55^ 1.  #  That this coefficient i s higher than the one obtained  See page 66 .  2. Eric Thorbecke, The Pattern of World-Trade i n Foodstuffs fast and Present, A paper prepared for the conference on "Optimizing the Use of Food-Producing Resources in Economic Development", sponsored by the Center for Agricultural and Economic Adjustment, Iowa State University, February 19-23, 1962, 11. 3. United Nations and Food and Agriculture Organisation co-operating European Agriculture i n . 1965, Annex I, Table 35* 1+.  Wold and Jureen, 22.  Bh  TABLE 1  CALCULATED COEFFICIENTS OF INCOME ELASTICITY OF DEMAND, FOR BREAD GRAINS : BY COUNTRIES, WESTERN EUROEE a  Country-  Income Elasticity Coefficient  Standard Error Estimate  European Economic Community Belgium-Luxembourg  0  -0.25  France Western Germany  0.06  0  Italy  -0.20  0.03  Netherlands  -0.32  0.07  Austria  -0.20  0.06  Denmark  -l.ttU  O.Li2  Norway  -1.31;  O.36  Sweden  -0.98  0.16  Switzerland  -0.»5  O.ILL  United Kingdom  -1.32  0.17  Six Other Countries  a  Calculated from time series market statistics; post World War II period.  55  f o r Sweden i n the present study may be due to the fact that t h e c o e f f i c i e n t of -O.98  of t h i s study has been calculated from data  of the post war period, when income per capita was higher. Table 2 points out, however, that the United Nations Food and Agriculture Organization e l a s t i c i t y c o e f f i c i e n t of -0.142 and those c o e f f i c i e n t s f o r each country calculated i n t h i s study provided estimates of direct consumption of bread grains i n 1 9 6 6 which were not greatly d i f f e r e n t . However, consumption estimates f o r i n d i v i d u a l countries showed much greater v a r i a b i l i t y than the t o t a l s f o r a l l countries. The United Nations - Food and Agriculture Organization study points out that i t s c o e f f i c i e n t applies to Europe as a whole, and not necessarily to any one country.  1  Table 2 i s also relevant to a consideration of prospect i v e import needs of higher quality bread grains. Such bread grains are imported f o r the purpose of improving the q u a l i t y of domestic f l o u r . Since the data i n the table indicate that t o t a l f l o u r consumption w i l l decline, larger imports of higher q u a l i t y bread grains can only be expected i f there i s an upward trend i n f l o u r q u a l i t y or a downward trend i n the q u a l i t y of domestic supp l i e s . Compulsory incorporation rates and import quotas make the former trend u n l i k e l y . Although year to year variations i n the q u a l i t y of domestic production can be expected, a downward trend i n q u a l i t y i s also improbable. Further support f o r the comparability of the United 1. United Nations and Food and Agriculture Organization, European Agriculture i n 1965, U l *  56  TABLE 2 CONSUMPTION OF BREAD GRAINS AS FLOUR: BY COUNTRIES, WESTERN EUROPE, 1959 AND PROJECTED TO 1966 1959 projected 1966 Flour Consumption Flour b c ti e Consumption a  Country  OOO tons  d  000  000  000  000  tons  tons  tons  tons  Austria  808  79U  775  775  732*  BelgiumLuxembourg  875  896  856  896  812  Denmark  362  306  363  226  31*5  France  U903  U96l  1*870  l*8ll*  1*622  Western Germany  U818  k93k  1*711  k93h  Italy  6891  6981  6815  6815  61*67  Netherlands  969  1017  1006  979  957  Norway  301  277  307  228  292  Sweden  551  501+  538  1*39  510  Switzerland  u78  1*55  1*77  1*06  1*53  1*365  381*3  U27U  3151  1*051*  25321  21*968  2li992  23663  237il*  United Kingdom Totals a  1957-59 average. Calculated from: Food and Agriculture Organization, Production Yearbook.  b  Using income elasticity coefficients calculated i n this study.  c  Using income elasticity coefficients of -0.1|2 f o r a l l countries.  d  Metric tons.  57 Nations-Food and fi.gricuitu.re Organization coefficient and the several coefficients of this study i s presented i n Table 3- For each country, this table presents two import estimates derived from the calculated income elasticity coefficients and two e s t i mates from the United Nations-Food and Agriculture Organization coefficient of income elasticity for cereals i n Europe. For each of the elasticity coefficients, the estimates of import requirement corresponding to 1.5 and 3.0 percent annual increases i n income and bread grain production are shown. Where applicable, the estimate of import requirement i s the one determined from the middle estimated value of total consumption. Although the United Nations-Food and Agriculture Organization elasticity coefficient provided a 1°66 import requirement estimated at l.h  million tons above that for the calculated co-  efficients at the 3.0 percent rate of growth of income and production, the estimates differed by less than 0.8 million tons at the 1.5 percent rate. Table 2 provides evidence, however, that the variability i n import requirement was not due to the elasticity coefficients, but was a result of differing quantities entering i n direct consumption. At the 3.0 percent rate of growth, however, Tables 2 and 3 indicate, respectively, decreased flour consumption and decreased import requirements. Table U i s presented i n a manner similar to one of the tables of the United Nations-Food and Agriculture Organization study. fast production, disappearance, deficit and net import data 1  1. United Nations and Food and Agriculture Organization cooperating, European Agriculture i n 1965, 78.  58  TABLE 3 AVERAGE ANNUAL BREAD GRAIN IMPORTS 1955-59 AND 1966 IMPORT REQUIREMENTS : BY COUNTRIES, WESTERN EUROPE. Average Annual Imports, 1955-59 a  Country  OOO tons ^  Projected 1 9 6 6 Import Requirement 1.5 percent growth rate b c e  3 . 0 percent growth rate b c e  000  000  000  000  tons  tons  tons  tons  Austria  282*  373  338  220  12*5  Belgium-Luxembourg  501*  500  1*60  386  302  Denmark  322  173  230  France  -993  i*o  -166  Western Germany  2062  1356  1133  25 -1507  2*52*  12*2* -192*3 -12  -32  -55  -291*  1061  191*8  1917  Norway  381*  381*  1*29  Sweden  -7  21*3  332  385  561*  •610  2*21  United Kingdom  5091*  8515  9817  6089  8817  Total  906Ii  12*806  6893  8310  Italy Netherlands  Switzerland  11*01*1  -1386  182*1 306  2*2*  -i860 I678  2*03 11*3  519  a  Calculated from: Food and Agriculture Organization, Trade Yearbook, Rome, Annual  b  Using income elasticity coefficients calculated i n this study,  c  Using income elasticity coefficient of  d  Metric tons.  e  Refers to rate of growth of domestic production and per capita income.  -0.2*2  for a i l countries,  59  TABLE U PRODUCTION, DISAPPEARANCE, DEFICIT AND NET IMPORTS OF WHEAT AND RYE : BY COUNTRIES, WESTERN EUROPE, 195V58 AND PROJECTION TO 1966 (million metric tons) 1  9  ^  Q  1  Produc- Disap- ^ DefiNet tion pearance c i t Imports e  c  Common Market  a  Six other Countries  28.8  31.0  2.2  12.3  6.6  6.2  3U.5  U3.3  8.8  9.1  6  ,r  6  ^  Produc- Disap- Detion pear- f i c i t ance 35.0  2.8  5.7  9  3U.8  -0.2  7.0  I4.0  7.1*  U2.0  1+8.8  6.9  inconsistency due to "rounding off", a Excluding 1956 data f or France. b The 1966 projections are based on the 3 . 0 percent annual rate of income and production growth, the calculated income e l a s t i city coefficients and, where applicable, the middle value of total consumption. c Calculated from: Food and Agriculture Organization, Production Yearbook, Rome, Annual d Calculated from:United Nations, Statistical Yearbook, New ?ork, Annual. e Calculated from:Food and Agriculture Organization, Trade Yearbook, Rome, Annual..  60  relate to the 19514.-58 period, thereby assuring comparability between the respective series i n the two tables. The production and disappearance data of Table U are quantitiveiy larger than those of the corresponding United NationsFood and Agriculture Organization table. Table 5 shows that the difference i n production between Table I4 and the similar United Nations-Food and Agriculture Organization table i s explainable because both rye and wheat are included i n the latter. Average 195U-58 wheat production of 2 3 . 7 million tons i n the Common Market countries, as indicated by Table S» i s the same as that stated by the United Nations-Food and Agriculture Organization. The United Nations-Food and Agriculture Organization study indicates $.k  million metric tons as the average wheat produc-  tion i n eight north western European nations which are not within the European Economic Community. Table 5 points out that 5 . 1 million tons per year of wheat were produced annually during 195U-58 i n six of these eight countries. The figure of 5 . 7 million tons for average wheat and 1  rye production in these six countries i s compatible with the 5.U million tons production datum presented by the United Nations-Food and Agriculture Organization for eight nations for wheat alone. The 195U-58 disappearance data of Table \± are less readily compared with similar United Nations-Food and Agriculture Organization data. The data of Table k refer to wheat and rye consumption together. Although Food and Agriculture Organization publications 1. The two countries in question, which have not been included i n this study, are Ireland and Finland.  61  TABLE 5 WHEAT AND RYE, PRODUCTION BY COUNTRIES, WESTERN EUROPE, 1S$1L-58  Wheat Production Average a  I95U-58  OOO tons  c  Wheat and Rye Production Average 195U-58 000 tons a  European Economic Community Countries 71*1  96l  io,Uol*  10,872  Western Germany  3,U59  7,233  Italy  8,753  8,861  Belgium-Luxembourg France ^  Netherlands  370  81i±  23,727  28,768  Austria  539  9U2  Denmark  697  5U7  Norway  35  37  Sweden  799  1,027  Switzerland  303  31*1  2,768  2,791*  5,iUl  5,688  Total Six Other Countries  United Kingdom Total a  Calculated from editions of: Food and Agriculture Organization, P r o d u c t i o n Yearbook, Rome, Annual.  b  Excluding 1956.  c  Metric tons.  62  present production, import and export data f o r wheat and rye separately,  1  these data do not include stock changes, and may not  provide a close approximation to actual disappearance i n any year or short period of years. The disappearance data of Table k have been based on a United Nations p u b l i c a t i o n ,  2  which does take account o f  inventory change, but shows disappearance data only f o r wheat and rye together. However, because the disappearance data of Table h exceed those of the s i m i l a r United Nations-Food and Agriculture Organization table by approximately the same amount as the production data of Table LL exceed the United Nations-Food and A g r i c u l t u r e Organization production data, evidence i s provided that the l a r g e r d i s appearance data of Table h are due to the i n c l u s i o n of rye. The data of Table 6 point out that net wheat imports t o Common Market countries during  195U-58 and 1955-59 were 2.5  million  tons and 2.1 m i l l i o n tons, respectively. The net import data of Table k are on a  195U-58 b a s i s .  The s i m i l a r United Nations-Food and  A g r i c u l t u r e Organization table provides information i n terms of  195U/55-1958/59 data.  Since the United Nations-Food and A g r i c u l t u r e  Organization wheat import datum i s more c l o s e l y approximated by i-9$$S9 than  195U-58 data,  the difference between the 2.8 m i l l i o n  tons net imports of Table k and the 2.1 m i l l i o n tons of the United Nations-Food and A g r i c u l t u r e Organization table can be ascribed t o 1. Food and Agriculture Organization, P r o d u c t i o n Yearbook, Rome, Annual; and Food and Agriculture Organization, Trade YearEook, Rome, Annual. 2.  United Nations, S t a t i s t i c a l Yearbook, New York, Annual.  63  TABLE 6 NET WHEAT IMPORTS BY COUNTRIES, WESTERN EUROPE,  ±95U-f>8  AND 1955-59 Average 000 tons  1955.59a 0  Average 000 tons  0  European Economic Community  523  k3k  -1,464  -1,287  2,437  2,120  Italy  105  -101  Netherlands  895  952  2,1*96  2,118  Austria  270  231  Denmark  358  235  Norway  388  331+  Sweden  -133  -U5  kOh  378  4,921  5,089  6,208  6,222  Belgium-Luxembourg France  0  Western Germany  Totals Six Other Countries  Switzerland United Kingdom Totals a  Calculated from: Food and Agriculture Organization, Trade Yearbook, Rome, Annual.  b  Excluding 1956.  c  Metric tons.  6k  two causes; f i r s t , the different period of time dealt with, and second, the fact that the data i n Table 1+ include both wheat and rye rather than wheat alone. Table 6 indicates that average annual wheat imports to the s i x other study countries were 6.2 m i l l i o n tons during either the i 5u-f>8 or 1955-59 periods. This amount i s consistent with the Q  195U/55-1958/59 net import of wheat of 6.8 m i l l i o n tons t o eight countries, of which these s i x are a part. The wheat production increases calculated by the United Nations-Food and Agriculture Organization from 195U-58 to 1965 are 3.7 m i l l i o n tons f o r the Common Market countries and 0.5 miixion tons f o r the second group of nations, which amount to l 5 . 6 and 9.2 percent, respectively. The 3 . 0 percent annual rate of growth of production and income, assumed i n Table U, provided estimates o f a 23.0 percent r i s e i n production between 1959 and 1966. A x  s  indicated  above, the rates of growth of income and production i n this study were chosen a r b i t r a r i l y . The United Nations-Food and Agriculture Organization table indicates an increase i n annual wheat u t i l i z a t i o n i n the Common Market countries of 2.9 m i l l i o n tons, or 11.5 percent.2 This e s t i mate includes an increased amount of 1.5 m i l l i o n tons for livestock 1. Production l e v e l s shown i n Table 1+ are f o r the 195U-58 period. The production l e v e l s used as a base f o r c a l c u l a t i n g the ±966 production estimates were, however, determined from the average  of 1955-59.  2. The increase represents the difference between the 195U-58 annual disappearance of 25.3 m i l l i o n tons and the projected disappearance of 28.2 m i l l i o n tons i n 1965.  65  TABLE 7  TOTAL WHEAT AND HIE DISAPPEARANCE BY COUNTRIES, WESTERN EUROPE 195V58 AND PROJECTED TO 1966  _  __  Average OOP tonsc a  Projection ^ Q Q  t Q n s  European Economic Community Belgium-Luxembourg  1,566  France  9,01*2  10,933  Western Germany  9,I*6l  9,688  Italy  9,105  9,800  Nethe rian ds  1,82 8  2,86 8  31,002  3U,83l*  Austria  1,25U  1,1*21*  Denmark  880  719  Norway  1*26  3U5  Sweden  1,016  l,l5l  b  Totals  1,51*5  Six Other Countries  Switzerland United Kingdom Totals  760  8I4I1  7,965  9,519  12,301  11*, 002  a  Calculated from: United Nations, Statistical Yearbook, New York, Annual.  b  Excluding 1956.  c  Metric tons.  66  feeding. This study predicted an increased disappearance for these countries of 3.8 million tons of wheat and rye or 12.3 percent. In this study the rate used to project growth i n production was somewhat greater than that used by the Food and Agriculture Organization; the result i s a net surplus i n 1966 of 0.2 million tons as compared to the deficit of 0.8 million tons i n 1965 predicted by the United Nations-Food and Agriculture Organization. For the six other countries of -the study, Table U predicts an increased disappearance of 1.7 million tons of wheat and rye, or 13.8 percent. The United Nations-Food and Agriculture Organization study calculated a decrease of 0.2 million tons i n i960 wheat disappearance, or 1.7 percent. However, i t i s important to note the significance of the United Kingdom i n the prediction of increased total consumption. Examination of the tabular calculations for the United Kingdom indicates the following. At the 1  3.0 percent annual rate of growth of income, the calculated elasticity coefficient indicated a 1966 direct consumption estimate of bread grain consumption of 3,151,000 metric tons. The trend line relating time and percentage of bread grains consumed as flour indicated a total consumption level of 9,519,000 metric tons corresponding to this direct consumption estimate, with 95 percent confidence limits at 7,966,000 and ii,823,000 metric tons. In view of British agricultural policy developments, which are currently attempting to emphasize increased use of fodder as a 1.  See Table 9, page 76.  67  substitute for high grain feeding, the smallest of the three 1  estimates of total consumption is the most likely one. The estimate of 1966 United Kingdom disappearance of 7.97 million metric tons reduces the estimate of 1966 disappearance for the six countries from 1I4..O million tons to 12.4 million tons. ' The lower estimate 2  of United Kingdom disappearance then indicates a decreased wheat and rye deficit of one million tons for these six countries, whereas the United Nations-Food and Agriculture Organization study points to a decreased deficit of 0.7 million tons of wheat for the eight countries.  I. Canada Departnent of Agriculture, Economics Division, Agriculture Abroad, XIV, No. 2 (April, 1 9 5 9 ) , 33. 3. These 1966 disappearance and net import estimates, like those of Table 4, are correct to one decimal place.  68  BIBLIOGRAPHY  BOOKS Fox, Karl A., and Ezekiel Mordecai, Methods of Correlation and Regression Analysis, 3rd ed., New York, Wiley, 195°. Fox, Karl A., Econometric Analysis FJor Public Policy, Ames, Iowa State College Press, 1958. Henderson, James M., and Richard E. Quandt, Theory, New York, McGraw-Hill, i 9 5 8 .  Microeconomic  Hicks, J. R., A Revision of Demand Theory, Oxford, Clarendon Press, 1956. Hicks, J . R., Value and Capital, 2nd Edition, Oxford, Clarendon Press, 191+6. Klein, Lawrence R., An Introduction to Econometrics, Englewood C l i f f s , N.J., prentice-Hall, 1962. Leftwich, Richard H., The Price System and Resource Allocation, Revised Edition, New York, Holt, Rinehart and Winston, 1955. Marshall, Alfred, Principles of Economics, Eighth Edition, London Macmillan, 1920. Schultz, Henry, The Theory and Measurement of Demand, Chicago, University of Chicago Press, 1938. Schultz, Theodore W., The Economic Organization of Agriculture, New York, McGraw-Hill, 1953. Stonier, Alfred W., and Douglas C. Hague, A Textbook of Economic Theory, London, Longmans, Green and Company, 1953. Wold, Herman and Lars Jureen,  Demand Analysis, New York, Wiley,  1953.  Working, Elmer J., Demand for Meat, Chicago, University of Chicago Press, 1951+. Yates, Lamartine P., Food, Land and Man Power i n Western Europe, London, Macmillan, i960.  69  ARTICLES  Caves, Richard E., "Europe's Unification and Canada's Trade", Canadian Journal of Economics and Political Science, XXV, No. 3, (August, 1959J, 21*9-258. Fischer, Lewis A., "Implications of European Integration for Canadian Agricultural Imports", Canadian Journal of Agricultural. Economics, Volume IX, Number 1 (1961), 1-12. Foote, Richard J., Statistical Analyses Relating to the FeedLivestock Economy, United States Department Agriculture Technical Bulletin, 1070, 1953. Fox, Karl, A., Analysis of Demand for Farm Products, United States Department Agriculture Technical Bulletin, 1081, 1953. Fox, Karl, A., Econometric Models of the United States, Journal of P o l i t i c a l Economy, LXIV, No. 2 (April, 1956). Haavelmo, Trygve, The Probability Approach i n Econometrics, Econometrica, Volume 12, (July, 19Uh), Supplement. Hughes, William, Canada and the European Common Market, Occasional Paper No. 1, Faculty of Commerce and Business Administration, University of British Columbia, Vancouver, 1962. Meinken, Kenneth W., The Demand and Price Structure for Wheat, United States Department Agriculture Technical Bulletin, 1136, November 1955. Kreinin, Mordechai E.j "The 'Outer-Seven' and European Integration", American Economic Review, L ( une,-i960), 370-86. J  Working, H., "The Elasticities of Demand for Wheat", read before the meeting of the Econometric Society held in Chicago, I l l i n o i s , December 28-30, 1936, and summarized i n Econometrica, V, No. 2, (1937), 185-6. PUBLICATIONS BY CORPORATE BODIES Canada Department of Agriculture, Economics Division, Agriculture Abroad, Volumes XIV-XvT, Ottawa, Canada. Food and Agriculture Organization, Food Supply Time Series, Rome, I960. ;  70  Food and Agriculture Organization, Rome, 1959, I960, 1961.  National Grain Policies,  ,  The State of Food and Agriculture, Rome,i960.  ,  World Food Survey, Washington, 19U6.  ,  Second World Food Survey, Rome, 1952.  , Wheat, Commodity Series, Nos. 1 and 2, Washington, 19U7, 19U8. Organization for European Economic Cooperation, Food Statistics, Paris, 1959.  Agricultural and  , Agricultural Policies i n Europe and North America, Paris, U956, 57, 58, 60), k Vols. , Agriculture Production and Consumption Figures, Paris, 1961. , Paris, 1956.  Demographic Trends in Western Europe I95l-I97l,  , Food Consumption i n the OEEC Countries, Parts 1 and 2, Paris, November i960 (Restricted). , Paris, 1961.  Trends i n Agricultural Policies Since 1955,  United Nations and Food and Agriculture Organization cooperating, European Agriculture i n 1965, 9oc. ST/ECE/AORI/U (mimea), Geneva, 1961. ' United Nations, Economic Bulletin for Asia and the Far East, Bankok, Thailand, Xl, No.l (i960), 12-Ik. United Nations,  Statistical Yearbook, New York, Vol. I-XII. UNPUBLISHED MATERIAL  Thorbecke, Eric, The Pattern of World-Trade i n Foodstuffs Past and Present, A paper prepared for the conference on "Optimizing the Use of Food-Producing Resources in Economic Development," sponsored by the Center for Agricultural and Economic Adjustment, Iowa State University, February 19-23, 1962.  71  APPENDIX  Population Estimates for 1966 Table 8 presents a comparison between the population levels assumed by this study and by the United Nations-Food and Agriculture study. The population growth indices presented i n Table 8 span the period 1957 to 1966, thereby facilitating comparison with the United Nations-Food and Agriculture Organization assumptions of population growth from 1956 to 1 9 6 5 .  x  The table reveals that  the population growth assumptions are similar. The two countries which are least similar are Western Germany, i n which the United Nations-Food and Agriculture Organization index exceeds that of this study by $.0 index points, and the Netherlands, in which the index of this study exceeds that of the United Nations-Food and Agriculture Organization by 3.7 index points. That the index of population growth in Western Germany is lower in this study than in that of the United Nations-E'ood and Agriculture Organization is to an extent a reflection of using a single year rather than a triennial average as a basis for the index. Use of the triennial average population 1956-58 as a base would yield a 1966 index of 1O6.J4., a rise of 1 . 5 index points above the level indicated by using 1957 alone as the base period. However, recent p o l i t i c a l and economic developments, which are likely to have the effect of 1 . Organization for European Economic Cooperation, Demographic Trends i n Western Europe, 1951-71.  72  TABLE 8 POPULATION, 1957 AND PROJECTED TO 1966 BI COUNTRIES, WESTERN EUROPE 1957 Population a OOO  1966 Population 000  Index UN-FAO 1966 Index 196LL-66 1957=100 1955-57=100  Austria  6,997  7,085  101.3  103.6  Bex gium-Luxemb ougg  9,305  9,658  103.8  103.5  Denmark  U,5oo  U,767  105.9  106.5  France  UU,071  U6,869  106.3  105.8  Western Germany  53,692  56,316  10U.9  109.9  Itaiy  U8,U83  50,770  10U.7  10U.9  Netherlands  ii,02i  12,303  111.6  107.9  Norway  3,U9U  3,19k  108.6  107.8  Sweden  7,367  7,625  103.5  102.6  Switzerland  5,ii7  5,U7u  107.0  108.8  5i,U55  53,U77  103.9  10k. 0  United Kingdom  b  a  Source: Food and Agriculture Organization Yearbook, XII, Rome, 1 9 5 8 , 1 3 .  b  Source: United Nations and Food and Agriculture Organization cooperating, European Agriculture i n 1 9 6 5 , Geneva, l 9 6 l , Annex I, Table 3 3 . These indices indicate population growth assumed i n the United NationsFood and Agriculture Organization study.  lowering the rate of immigration to Western Germany, support the lower rate. The population predictions presented by the Organization  73  for European Economic Cooperation f o r the Netherlands, to the extent that subsequent data have become available, have been shown to be very accurate. The fact that the population l e v e l obtained by projecting the actual 195*9 l e v e l to 1966 at the  annual  rate of growth c l o s e l y approximates the 1966 prediction of the Organization f o r European Economic Cooperation suggests no reason f o r downward r e v i s i o n of the estimate. Therefore, the population estimates have not been a l t e r e d to correspond more c l o s e l y with the United Nations-Food and Agriculture Organization estimates.  Calculation of 1966 Import Requirement The calculations necessary to achieve the 1966 import requirement  of cereaxs have been done i n the foixowing manner. Each  successive step i n the c a l c u l a t i o n i s numbered, the numbers corresponding to successive columns i n the tabular presentations f o r each country. 1.  1  The income e l a s t i c i t y c o e f f i c i e n t was calculated by f i t t i n g  the function log I = a+b log X, with Y representing f l o u r consumpt i o n per capita, and X representing r e a l national income per capita i n domestic currency deflated to 1953. 2. at 1.5,  1.  Three rates of income growth were a r b i t r a r i l y selected 3.0 and h.5 percent per annum. For the seven year period  See Table 9, page 76.  74  1959-66, these rates amounted to increases of 11.0, 23.0 and 36.1 percent, respectively, i n real per capita incomes. 3.  The effect on consumption of population growth was as-  sumed to be one. Therefore, a (say) one percent growth i n population was assumed to increase consumption by one percent. U.  The effect of income change on consumption was calculated  by multiplying the relevant percent increase i n income f o r the period (coiumn two) by the income elasticity coefficient of column one. 5.  The combined effect of income and population change was ob-  tained by summing the percentage values of columns three and four. 6.  Flour consumption i n 1959 was calculated as the product  of "net food supplies per person - cereais as f l o u r " and the mid1  year estimate of population. Flour consumption i n 1957, 1958 and 1959 was calculated, and the ayerage used as the estimate of 1959 flour consumption. 7.  The coiumn labexied "change" was used to express, i n ab-  soxute terms, the effect of the percentage change on 1959 direct consumption. 8.  Direct consumption i n 1966 was obtained by summing direct  (fxour.) consumption in 1959 and the anticipated change. 9.  Three columns are presented for the estimates of total  consumption. Each column represents a different assumption regarding the levex of direct consumption as a percentage of total consumption. The medium value of total consumption was estimated from 1. This, the Food and Agriculture Organization terminology, i s the equivalent of direct consumption of cereaxs per capita  75  a percentage vaiue calculated by trend l i n e regression. The low and high estimates of totax consumption were calculated from a percentage value at a 95 percent confidence i n t e r v a l above and below, resp e c t i v e l y , the percentage value estimated from the trend l i n e . Thus, three estimates of t o t a l consumption were presented f o r each of the three income e l a s t i c i t y c o e f f i c i e n t s and f o r each of the three income growth rates. In the countries i n which a trend l i n e was not used, an estimate of i n d i r e c t consumption i n the most recent f i v e year period was obtained and used as the estimate of 1966  direct consumption.  Total consumption was estimated by summing d i r e c t and i n d i r e c t consumption. 10.  Domestic production was estimated from the average  annual  production of wheat and rye i n the l 9 5 5 ~ 5 9 period. Production l e v e l s i n 1966 were obtained by assuming that bread grain production would increase at the same rate as per capita incomes i n the economies of those countries. The method therefore provided three estimates of domestic production f o r each country. 11.  Import requirements i n 1966 were calculated by subtract-  i n g domestic production from the estimate of t o t a l consumption.  76  TABLE 9  Income Elasticity Coefficient  ESTIMATES OF FLOUR CONSUMPTION, TOTAL CONSUMPTION, DOMESTIC PRODUCTION AND IMPORT REQUIREMENT IN 1966 . AUSTRIA Effect on Consumption of Total 1966 Consumption 1966 1959 Flour 1966 Flour Combined Income Consumption Domestic population Income Change Consumption Effect Growth Low Medium High Production Change Change (Av. 1957/59) % 1000 m.t.  1966 Import Requirement Low  Medium  High  0+2.20 sb  >, D  -0.08 -0.08 -u.u8  10.98 22.99 36.09  -0.20 -0.20 -0.20  +0.50l$  -0.878$ -1.839-2.887  -0.371*$ -1.335 -2.383  -3 -11 -19  805 797 789  1291 1278 1265  11*80 11*65 11*50  1733 1716 1699  1086 I2ULL 1332  205 71* -67  391* 261 118  6k7 512 367  10.98 22.99 36.09  -2.196$ -U.598 . -7.218  -1.692 -U.09U -6.711*  -11* -33 -51*  791* 775 751*  1273 121*3 1209  11*59 11*21* 1386  1709 1669 1623  1086 120k 1332  187 39 -123  373 220 51*  623 k65 291  10.98 22;99 36.09  -3.623$ -7.587 -11.909  -3.119 -7.083 -11.1*05  -25 -57 -92  783 751 716  1256 120k 111*8  11*39 1380 1316  1686 1617 151*2  1086 120k 1332  170 -181;  353 176 -16  600 1*13 210  10.98 22.99 36.09  -L.6il -9.656 -15.158  -U.107 -9.152 -1U.65U  -33 -7U -118  775 731* 690  121*3 1177 1106  1L*2L* 131*9 1268  1669 1580 11*86  1086 120k 1332  157 -27 226  338 11*5 -6k  583 376 I5k  +123 + k6 - 37  5026 k9k9 k866  IO690 10527 10350  llklk 11239 11051  122k3 12056 11851*  11226 12l*kO 13766  -536 -1913 -3kl6  188 -1201 -2715  1017 -38k -1912  808  b - 2 . 2 0 sb -0.33 -0.33 -0.33 UN-FAO -0.1*2 -0.1*2 -0.1*2  FRANCE b+ 2 . 2 0 sb  0  -0.13 -0.13 -0.13  10.98 22.99 36.09  -0.25 -0.25 -0.25  -1.1*27* -2.989 -k.692  +2.502$ +0.9ko -0.763  10.98 22.99 36.uy  -2.7k5 -5.7k8 -9.022  +1.181* -1.819 -5.093  + 58 - 89 -250  k96i l*8lk k653  10552 10239 . y897  11266 10933 10567  12085 11727 11335  11226 12l*kO 13766  -671* -2201 -3869  ko -1507 -3199  859 -713 -21*31  10.98 22.99 36.09  -U.172 -8.736 -I3.7ik  -0.2k3 -k.807 -9.785  -12 -236 -k80  U89I k667 kl*23  10U03 9927 9k08  11107 10599 iook5  11911* 11369 1077k  11226 12kk0 13766  -823 -2513 -k358  -119 -l8ki -3721  688 -1017 -2992  10.98 22.99 36.09  -k.6ll -9.656 -15.158  -0.682 -5.727 -11.229  -33 -281 -55i  k870 k622 U352  10358 9831 9257  11060 I0k97 9883  11863 11259 10601  11226 12kl*0 13766  -868 -2609 -U509  -166 -191*3 -3383  637 -1I81 -3165  +3.929$  k903  b- 2 . 2 0 sb -0.36 -0.36 -0.38 UN-FAO -0.1*2 -0.1*2 -0.1*2  77  ITALY Income Elasticity Coefficient  Income Growth  Effect on Consumption of population Change  Income Change  Combined Effect  19$9 Flour Consumption (Av.1957/59) 1 0 0 0 m.t.  _ 0  h  a  n  8  e  1966 Fiour  Total 1 9 6 6 Consumption  Consumption  Low  Medium  High  1966 Domestic Production  1966 Import Requirement Low  Medium  High  b + 2 . 2 0 sb -0.13 -0.13 -0.13  10.^8 22.99 36.09  -0.20 -0.20 -0.20  10.98 22.99 36.09  b  +3.502$  -l.k27$ -2.989 -I4.672  +2.075$ +0.513 • -I.170  -2.196 -U.598 -7.218  +1.3)6 -1.096 -3.716  6891  b - 2 . 2 0 sb  +ik3 + 35 - 81  703k 6926 681O  9608 9k6l  + 90 - 76 —256  6981 6815 6635  10115 9960  9793  10678 105ik 10338  1009k 11186 12377  -k86 -1725 -3075  -1226 -258k  58k -672 -2039  9536 9309 9063  10039 9800 95Ui  10597 i03k5 10072  1009k 11186 12377  -558 -1877 -33ik  -55 -1386 -2836  .503 -81+1 -2305  10517 10178 ..9808  1009k 11186 12377  -630 -2027 -355i  -132 -I5l4k -3086  k23 -1008 -2569  1009k i l l 86 12377  -785 -2352 -IP 6 1  -29k -1886 -3622  251 -1369 -3L35  927  1622 lk75 1317  1996 I8k2 1677  2509 2336 2160  1580 1386 1179  191*8 i8ki i5i9  2kk2 2216 1975  927  1538 1300 10k6  1900 I6k2 1366  2386 2100 1796  927  1553  1917 1678 Ik20  2k06 21kk 1659  9302  +21  -  -0.27 -0.27 -0.27  .10.98 22.99 36.09  -2.965 -6.207 -9.7iiU  +0.537 -2.705 -6.21+2  + 37 -186 -U30  6928 6705 6k6l  9k6k  9159  8826  9962 96k2 9291  UN-FAO -0.U2 -0.142-0.U2  1O.98 22.99 36.09  -I4.0II -9.656 -15.158  -1.109 -6.15U -ii.656  - 76 -U2k  6815 6k67 6088 '  9309 883k 8316  9800 9300 8755  I03k5  + 65 + k6 + 26  103k 1015 995  2923  3k26  2502 2U53  2869 2813  -803  9817 92k2  NETHERLANDS b + 2 . 2 0 sb -0.16 -0.l6 -0.16  1O.98 22.99 36.09  -0.32 -0.32 -0.32  -1.1$?% -3.678 -5.75ft  +6.678$ +U.757 +2.66I  10.98 22.99 36.09  -3.51U -7.357 -H.5U9  +U.92I +1.078 -3.ilk  + k8 + 10 - 30  1017 979  2507 2kl3 2315  2875 2868 2655  IO.98 22.99 36.09  -5.270 -11.035 -17.323  3.i65 -2.600 -8.888  + 31 - 25  2k65  2827 2669 2502  33313 3127  - 86  1000 9kk 885  10.98 22.99 3 6 . U9  -u.611 -9.656 -15.158  3.82k -1.221 -6.723  + 37 - 12 - 65  1006 957 90k  28kk 2705 2556  .-,3333 3171  +8.k35$  969  25149  3363  3296  1027  Ii36  b  939  3369 32 k3  3lU  927 1027 1136  b - 2 . 2 0 sb -o.iuB -o.k8 -o.U8  2327  2182  2932  1027 1136  UN-FAO -0.k2 -0.U2 -0.1)2  2k80  2359 2228  2995  1027 1136  1332 1092  78  NORWAY Income ElasticityCoefficient  E f f e c t on Consumption o f Income Growth  Population Change  Income Change  Combined Effect  +6.693$  -6.039$ -12.6UU -19.850  +o.65k$ -5.951 -13.157  *lk.7l3 -30.807 -U8.361  -8.020 -2k.nl; -41.668  1959 F l o u r Conaimption (A v. 1957/59) 1000 m.t.  Change  1966 F l o u r Consumption  T o t a l 1966 Consumption ' Low  Medium  High  1966 Domestic Production  I 9 6 6 Import Requirement Low  Medium  High  b+2.20 sb -0.55 -0.55 -0.55  10.98 22.99 36.09  -I.3U  10.98 22.99 36.09  301  k28  - ko  303 283 26l  Uoo  - 2k - 73 -125  277 228 176  391 322 2k9  + 2 - 18  369  U59 U29 395  U95 k62 U26  36 39  392 361 325  U23 390 351  U59 U23 382  U20 3U5 267  U52 372 287  36 39  355 283 205  38U 306 223  333  UU  b  -I.3U  -1.3k  -2.il;  •  2U3  c •  b-2.20 sb -2.il;  kk  kl6  10.98 22.99 36.09  -23.U97/ -U9.199 -77.233  -16.80k -k2.506 -70.5UO  - 51 -128 -212  250 173 89  353 2kU 126  378 262 135  k08 283 1U5  36 39 .  kk  317 205 82  3U2 223 91.  372 2kk 101  10.98 22.99 36.09  -k.6il -9.656 -15.158  +2.082 -2.963 -8.k65  6 -9 -25  307 292 276  U3U U13 390  465 UU2 kl8  501 U77 U5i  36 39 kU  398 37U 3U6  U29 k03 39U  465 k38 k07  526  28  UN-FAO -0.U2 -0.U2 -0.U2  SWEDEN b + 2 . 2 0 sb  v, u  -0.62 -0.62 -0.62  10.98  -0.98 -0.98 -0.98  - 25 - 66 -111  U85  kko  1107 1020 926  1380 1272 H5U  1831 1688 1532  1079 1195 1323  -175 -397  301 77 169  752 k93 209  -8.k66 -20.236 -33.07k  - k7 -112 -182  50U k39 369  urn, 92U 776  1322 ii5i 968  175U 1528 12 8U  1079 1195 1323  -19 -271 -5U7  2U3 kU -355  333  -lk.713 -30.507 -48.361  -I2.ki9 -28.513 -46.067  - 68 -157 -251;  k83 39k 297  1016 829 625  1267 1033 779  1681 1372 103U  1079 1195 1323  -63 -366 -698  188 -162 -5UU  602 177 -289  -k.6ll -9.656 -15.158  -2.317 -7.362 -12.86k  - 13 - Ul -YX1  538 510 k80  1132 1073 1010  "lliU 1338 1259  1873 1775 1671  1079 1195 1323  53 -122 -313  22.99 36.09  -: .6.808$ -ik.25k -22.376  -k.$ik% -ii.960 . -20.082  10.98 22.99 36.09  -10.760 -22.530 -35.368  10.98 22.99 36.09  10.98 22.99 36.09  +2.29k$  :  55i  675 -39  b-2.20 sb -1.31; -1.3U -1.3k UN-FAO -0.U2 -o.k2 -0.U2  332 IU3 -6k  79k 580 3U8  79  SWITZERLAND Income iasticity oefficient  income Effect on Consumption of Growth Population TnromP Combined Population income Effect Change Change  Annual Flour Consumption  66 Flour Change Consumption bonsumption iU  Total 1966 Consumption ^ Medium High & 1  1966 Domestic rroduction  1966 Import Requirement Medium High L  64  b+2.20 sb -0.53 -0.53 -0.53  10.98 22. 99 36.09  -0.85  +4.1.66$  -5.819$ -12.185 • -19.128  -i.353$ -7.719 -IU.662  10.98 22.99 36.09  -9.333 -19.51*2 -30.676  -4.867 -15.076  10.98 22.99 36.09  -12.737 -26.668  -4I.86U  -8.27J-22.202 -37.398  10.98  -k.6il -9.656 ii5n'58  -0.1U5 -5.190 -10.692  1*78  -'6 -37 -70  * U72 m*i U08  835 780 722  981 917  -23 -72 -125  1*55 H06 353  805 718  -39  1221 lll;0 1055  382 1*23  468  1*53 357 251;  599 h9h 380  $39 717 587  1177 1050 913  382 1*23 1*68  U23 295 156  561; 1*21 266  795  624  9U6 8UU 73U  -179  1*39 372 299  777 658 529  913 773 622  1135 962 773  382 1*23 1*68  395 235 61  531 350 i5U  753 539 305  - 1 -25 -51  hi 7 U53 1*27  84U 801 755  992 9U2 888  1231; 1171 IIOl;  382 423  U62  610 5i9  852 7U8 636  10163 1211*1* 515083 8901* 1.064P- 13215 9000 7531 11177  3095 31*30 3796  51*71* 3735  901*9 11988 9765 7210 5201* 7381  b  -Oj85 -o.b5  -26.210  848  627 i*l*5  b-2.20 sb  -1.16  -1.16 -1.16  -1O6  UN-FAO -0.1*2 -0.1*2 -0.1*2  22.99 36.09  468  378 287  420  UNITED KINGDOM b+0.30 sb -0.95 -0.95 -0.95  10.98 22.99 36.09  -1.32 -1.32 -1.32  -10.1*31$ -21.81*0. -3U.286  -7.900$ -19.309 -31.755  10.98 22.99 36.09  -11*. 1*91* -30.347 -1*7.639  b - 2 . 2 0 sb -1.70 -1.70 -1.70  10.98 22.99 36.09  UN-FAO -0.1*2 -0.1*2 -0.1*2  10.96 22.99 36.09  b  +2.531$ '  -3U5 -81*3 -1386  1*020 3522 2979  -11.963 -27.816 -1*5.108  -522 -12 l l * -1969  381*3.. 3l5i 2396  9715 7966 6057  1I610  9519 7238  11*10.9 11823 8990  3095 31*30 3796  6620 U536 2261  8515 11321* 8393 6089 310*2 5191*  -18.666 -39.083 -61.353  -16.135 -36.552 -58.822  -7ol* -1595 -2568  3661 2770 1797  9255 7003  11060 8368 51*29  13736 10393 67U2  3095 31*30 3796  6l60 3573 71*7  7965 1061*1 1*938 6963 291*6 1633  -l*.6ll -9.656 -15.156  -2.080 -7.125 -12.627  - 91 -311 -551  1*271* 4051* 3811*  10805 12912 1021*9 1221*7 961*2 11522  16036 15210 11*310  3095 31*30 3796  7710 6819 - 581*6  9817 1291*1 8817 11780 7726 105II*  1*365  1*51*3  7068  80  WESTERN GERMANY Income Elasticity Coefficient  Income Growth  Effect on Consumption of Population Income Change Change  Combined Effect  Annual Fiour ponsumption Av.1257/59  Change  1966 Flour Consumption  +1I6 +116 +116  1*931* 1*931* 1*931*  -107 -350 -566  1966 Indirect Consumption  1966 Total Consumption  1966 Domestic Production  1966 Import Requirement  b=o 0 0 0  10.96 22.99 36.09  +2.401$  10.98 22.99 36.09  +2.4OI  +2.1.01$ *2.1*01 +2.1*01 .  l*8l8  1+751*  9688  8332 9231* .10218  1356 1*51* -530  1*711 4468 U252  ' 1*751*  91*65 9222 9006  8332 9231* 10218  1133 -12 -1212  UN-FAO -O.i+2 -0.U2 -0.1+2  -4.611$ -9.6^6 . -15.158  - 2 . 210 -7.255 -11.757  BELGIUM - LUXEMBOURG b=o 0 0 0  10.98 22.99 36.09  +2.1(40$  10.98 22.99 36.09.  +2.1*1*0  +2.440$ +2.1*1*0 +2.1*1*0  875  + 21 + 21 + 21  896 896 896  61*9  151*5 I5U5 151*5  101*5 1159 1282  500 386 263  875  - 19 - 63 —111  856 812 761;  61*9  1505 ll*6l 11*13  10U5 1159 1282  1*60 302 131  - 19 - 58 -101  31*3 30U 26l  1*93  836 797 751;  626 691* 766  210 103 -11;  UN-FAO -0.1*2 -0.1i2 -0.U2  -Iw 61155 -9.656 -10.158  -2.171 -7.216 -12.718  BENMARK b+2.23 sb -o.yi -0.91 -0.91  10.98 22.99 36.09  -9.992$ -20.921 -32.81*2  -5.158$ -16.087. -28.00a  10.98  -20 . 2 0 3 -U2.302 •^66.1*06  -15.369 -37.468 -61.572  - 56 -136 -223  306 226 139  799 719 632  626 69I* 768  173 25 -136  10.98 22.99 36.09  -30.U15 -63.682 -99.969  -25.581 -58.8L8 -95.135  - 93 -213 -3l*l*  269 11+9 18  762 61*2 511  626 691* 768  136 -52 -257  10.98  -4.61I-9.656 -15.158  +0.223 -4.882 -IO.324  + 1 - 17 - 37  363 3U5 325  856 838 818  626 691* 768  +4.831).$  362  V, u  -x.61* -i.6a -i.8U  22.99 36.09  b - 2 . 2 3 sb -2.77 -2.77 -2.77 UN-FAO -0.1*2 -0.42 -0.42  22.99 36.09  230 11*1* 50  81 SAMPLE CALCULATIONS OF :INCOME ELASTICITY COEFFICIENT OF DEMAND BY COUNTRIES, WESTERN EUROPE  ( l o g Y = a + b l o g X)  ' AUSTRIA Consumption I Logarithms of data  DENMARK  Income • -., Logarithms or data x  x2 Logarithms of data  Logarithms .of data  XY Logarithms . of data  Consumption Y Logarithms . of data  Income . X Logarithms .of data  2 Y Logarithms . of data  2 X Logarithms of data  XY Logarithms of data  ±9hd  2.1303  3.8619  U.538I8  1U.9IU27  8.22701  I9U8  2.0331*  3-6662  4.13U72  12.1*5569  7.1*5892  ±9k9  2.1038  3.9007  U.U2597  15.215U6  8.20629  191*9  2.0291*  3.6819  1*.1181*6  13.55639  7.47205  1950  2.1038  3.9368  U.U2597  15.49839  8.28221*  1950  1.9912  3.6958  3.96U88  13.6589U  7.35908  1951  2.0569  3.9602  U. 23081*  15.68318  8.IU57U  1951  1.9912  3.6815  3.961*88  13.55314*  7.33060  1952  2.0719  3.9588  U.29277  15.67210  8.202 21*  1952  1.9777  3.6838  13.57038  7.285U5  1953  2.0682  3.9585  U.277U5  15.66972  8.18697  1953  1.9685  3.7072  3.87U99  13.7U333  7.29762  195U  2.0719  3.9956  U.29277  15.96U82  8.278U8  195U  1.9685  3.7122  3.871*99  13.7801*2  7.307U7  1955  2.0755  U.029U  U.30770  16.23606  8.36302  1955  1.9638  3.6966  3.85651  13.66485  7.25938  1956  2.0719  u.0750  U.29277  16.60562  8.1*U299  1956  1.9395  3.7019  3.76166  I3.70U06  7.17981*  1957  2.06U5  U.0992  U.26216  I6.803I1U  8.U6280  1957  1.9191  , 3.7151  3.6829U  13.80197  7.12965  1958  2.061*5  U.10U9  U.26216  16.85020  8.1*71*57  1958  1.8921  3.7277  3.5800L*  13.89575  7.05316  1959  2.0531  U.1227  U.21522  16.99666  8.1*61*32  Slims  2U.9363  1*8.0037  51.82396  Sums  21.671*1*  U0.6719  U2.72537  150.38522  80.1332U  2.07802  Means r sb  =  -0.75 0.058  U. 00031  192.10992  99.73667  1.9701*0  Means r  =  sb  =  -0.81 0.1*18  3.6971*1*  3.91130  82 NET FOOD SUPPLIES PER PERSON - CEREALS AS FLOUR (IN TERMS OF FLOUR AND MILLED RICE)  Austria iyh8 19h9  b  1950 1951 1952 1953 195U 1955 1956 1957 1958 1959  BelgiumLuxembourg  10U 106  135 127 127  108  107  106  98 98  105 10k 10k 10k  Ilk 118 117 118 119 118  95 .93 93  ioU  92 87 83 78 79  101 9k 93 91  116  116  113  Denmark  France  127 120  118 119  120  109  115 109  112 110 113  107  Western Germany  12U  113 101 99 98 96 97 96  95  91 90  85  (Kilograms per year)  a  Italy  Netherlands  Norway  Sweden  155 15U 153 15U 155 155 1U8 1U7  100  117  86  11*6  1U2 IkO  11*2  9li 101 96  95  92 92 92 90 87 87 86  116  Switzerland  United Kingdom  112 120  112  87 92 88  116 108 99 98 98  79 78  101 101 101 99  77 75 7U  103  89 88 79  100 100 98 92 91 88  11U 108 105  83  IOU  103  118  87 85  95  7U  75  8U  8U  83  Food and Agriculture Organization, Production Yearbook, Rome, Vols. 1 - XIV.  a  Source:  b  Data presented i n terms of s p l i t years. For example, 19U8 i n d i c a t e s 19U8/U9 data.  ESTIMATED REAL NATIONAL INCOME PER PERSON PER YEAR IN DOMESTIC CURRENCY,  a  Austria Schillings  19U8 I9U9  1950 1951 1952 1953 195U 1955 1956 1957 1958 1959  Belgium-Luxembourg Belgium Francs  7277 7955 86U5 912U 9095 9088 9901 11070 11886 12563 12733 1326U  3156U 35072 36727 37167 3795U 39123 U1266 U2302 U3063 U2622 U2830 a  Calculated from:  Denmark France Kroner New Francs U658 U8O8 U963 U803 U829 5096 5155 U972 503U 5189 53U2  2181 2268  2361  2386  2U79 255U 2767 2956 3187 3UI7  3339  332U  Wgstern Germany "D.M.  1339 1681 1877 2079 2257 2U17 2696 2853 2913 2963 3107  Italy lire  Norway Kroner  Netherlands guilders  Sweden Kroner  Switzerland Swiss Fraacs  United Kingdom .  15118k  152236 173237 180673 ' 18220U 196038 193735  2I399I  2179U2 230988 23927U 251019  1687  1708 163U 1653 1709 1825 1957 2156 225U 2292 2291 2360  •  U7 99 5027 U960 516U 5109 5009 5129 5326 5731 58U9 53U7 5U52  United Nations, S t a t i s t i c a l learbook, New York, Vols. 1  U977 5288  U827  50U5 5128  50.03  5320 5505 5636 5806 5693 5963  - XII.  3988 393U 3889 U037 U096 U261 UU99 U663 U879 5007 5051 5266  fa  265 275 261 260 258 268 280  28U  290 295  298  302  83  MID YEAR ESTIMATES OF TOTAL POPULATION (Thousands).  3,  Austria i9l*8 19U9 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959  6953 7090 6906 6916 6949 6954 6969 6974 6983 6997 7021 7049  Belgium-Luxembourg 8848 8909 8936 8977 9008 9082 9125 9177 9236 9305 9373 9428  a  Source:  Denmark  France  4190 4230 4271 4304 4334 4369 4406 4439 4466 U500 U515 4547  41500 41180 41934 42239 42600 42860 1+3000 43274 436U6 44071 44556 45097  Western Germany 46724 47585 47662 48117 48478 48994 49516 U999S 50786 53692 54374 54996  Italy 45706 46OOI 46272 46598 U6865 47756 L7665 : 48016 1*8279 48483 U8735 U9052  Netherlands 9794 9955 10114 10261* 10377 10493 10615 10751 10888 11021 11186 11346  Norway  Sweden  Switzerland  3181 3233 3265 3294 3327 33$9 3392 3425  6883 6956 7017 7073 7126 7171 7214 7262 7361 7367 7415 7454  4609 4645 U694 4749 4815 4877 4923 4977 5039 5117  3)462 31*9,1* 3526 3556  5I«5  5240  United Kingdom 50033 50363 50616 50556 50772 50857 51059 51221 51430 51455 51680 52157  Food and A g r i c u l t u r e Organization, production Yearbook, Rome,, V o l s . 1 - XIV.  FLOUR CONSUMPTION 3  (Thousand M e t r i c tons) Austria 1946 1949  1950 1951 1952 1953  1954  1955 1956 1957 1958 1959  1957/59 average  939  900 877 788 820 814 822 830 821*  Belgium-Luxembourg  920 91*3  412  937  91*5  91*9  95U  797 808  875  811*  1*53 453 419 1*22  91*4 91*7  933 875 872 877  812  Denmark  5270  1*91*2  i*9l|.8 5026 5112  Western Germany 5794 5377 1*811* 1*761*  1*06 1*10 1*08 389  1*672  352 359  5035 1*825  1*751 1*703 ' I1803 1*800 1*825 1*886 1*894 1*675  362  1*903  1*818  37U  a  France  C a l c u l a t e d from:  491*5  1*717 1*889  1*81*8  Italy  7081* 7081*  Netherlands  7261*  6885 6823 6965  979 936 1022 985 986 965 977 989 980 959 973 976  6891  969  7080 7176  71*02  7051* 7058  701*9  Norway  Sweden  372 375 379 356 31*6 333 332 336 357 311 310 281  592 605  516 557  622 591 567 563 559  51*1  559  1*97 503 509 507 1*93 1*35  301  551  1*78  61*6  51*9  5U5  51*9  Switzerland  551* 520 512  Food and A g r i c u l t u r e Organization, Production Yearbook, Rome, V o l s . l-XIV.  United Kingdom 5601* 5187 5062 5056 1*976 1*679 1*61*6 1*507 4474  1*374  1*341  1*381  4365  FLOUR CONSUMPTION AS PERCENT OF TOTAL WHEAT AND RYE DISAPPEAR! NCE a  Austria 79.7  1 9 4 8  19U9 1950 1951 1952 1953 I95U 1955 1956 1957 1958 1959  74.5  6U.5 71.0 72.3 67.6 67.2 63.I 65.7 65.166.3  Belgium-Luxembourg  Denmark  France  67.8 58.2 5U.8 59.9 60.3 52.1  72.0 5U.5 56.7 69.6 59.8 53.5 37.3 U5.2 U2.5  62.6  58.U  60.9 58. h 58.0 57.i  48.6  U5.7  Western Germany 73.3 62.3  6±S  61.2  55.x  57.6 53.8 52.3 50.8 51.2 51.2  61.9  60.7 56.8 56.1 53.2 54.0 53.5  5i.o  5i.7  54.4  Italy 82.6 80.9 79.8 80. k 81.6 82.9 78.2 78.2 77.9 76.0 72.9 .  46.8  a  Netherlands  Norway  71.9 61.6 65.9 62.1 60. k 57. k 5U.3 56.1 5U.7 52.0 .-• 5 o . i  87.3 8 4 . 5 8 4 . 4  83.8 78.5 77.3 74.9  77.8 79.0 76.6 77.9 72.2  48.1  Calculated from: Food and A g r i c u l t u r e Organization, production Yearbook,  Sweden 68.1 69.7 60.3 69.O 65.7 56.2 52.1 58.2 60.0 55.6 U8.x 50.8  Switzerland 85.1 79.5 75.1 7U.2 72.0 68.7 62.9 70.2 6lu5 70.6 62.5  Austria 1948  I9U9 1950 1951 1952 1953 195U 1955 1956 1957 1956 1959  d  1178 1208 1359 1110 H3U 1205  122I4  1315 125U 1247  1228  Belgium-Luxembourg 1356 1622 1727 157U 1555 1815 1626 1567 1597 1510 1528  Denmark 629 831 739 606 689 759 1096 •; 903 916 770 711  France 84I8  8038 8084  8120 8U19 8224 8808 8871 9059b 92lil 9246  a  74.7  75.7 72.6 69.9 71.0 66.4 55.6  58.0 55.6 55.6 55.3  Rome, Vols. I - XIV. •  GROSS FOOD SUPPLIES OF WHEAT AND RYE  United Kingdom  *  TOTAL SUPPLY IN THOUSANDS OF METRIC TONS. Western Germany 7906 8625 87UG 8269 8838  8992 9U52 9378 9U29 9581 9U66 999U  Italy  Netherlands  8580 8755 887U 8929 8902 892IL 902k 9029  1361 1519 1551 1585 1631 1681 1799  90I48  1793 18U3 19Ui 2029  9063 9361  Norway 426  hhh 449  i|25  uui  U31  443 432  1764  U52 406  398 ;.389.  a  Source:  United Nations, S t a t i s t i c a l Yearbook, New York, Vols. I - X I I .  b  Estimated from production, import and export data; 1956 and 1957.  c  Estimated from available 1957/59 data of Gross Food Supplies of Wheat and Rye:See United Nations, S t a t i s t i c a l Yearbook, XII, 308.  d  Data presented i n terms of s p l i t years: For example, 19U8 i n d i c a t e s  I948/U9  data.  Sweden 869 868 1071 902 899 1009 1080 960 916 980 11U2 C liOl  Switzerland 606 701 738 729 722 7U5 790 717 789 717  789  United Kingdom ' 7498  685U 6977 7233 7007 7050 8331 77614 8o u 7 7831 7852  85  WHEAT AND RYE PRODUCTION, IMPORTS, EXPORTS AND AVAILABLE FOR CONSUMPTION: BY COUNTRIES, WESTERN EUROPE, 19l*7 - 5 ° • NORWAY SWEDEN Wheat Production OOO t o n s  Rye production 000 tons  0  1947 1948 191+9 J-950 1 9 5 1 1 9 5 2 1 9 5 3 1 9 5 U  1.955  1950  1 9 5 7 1 9 5 $  1950  2 3 2 2 1 1 1 2 1 2 1 1 2  46 76 67 66 40 39 39 41 32 56 30 17 20  Wheat Imports  0  196'i2 321+.4 258.2 283.li. 375.0 299.0 325.1 331+.2 376.1 371.7 281.7 322.U 320.6  Rye Imports 83.9 82.6 96.0 134.4 87.5 43.5 92.4 50.5 38.1 55.5 55.9 59.li 45.8  Wheat Exports  Rye Exports  0.1  Wheat & Rye Available 1+86 423 1+85 501+ 383 1*56 425 445 484 .368 399 389  0.6 1.8 1.7 1.6 0.9 0.2 0.1  1 9 5 9  Wheat Porduction 000 t o n s b  19l*7 19U8 191+9 1950 1951 1952 1953 1951+ 1955 1956 1957 1958 1959  399 702 698 739 1*77 771+ 996 1021 716 951 711 598 836  Rye Production 000 tons  187 195 251+ 226 234 279 2U5 3U6 321 207 305 337 366  25 27 30 38 37 39 37 45 1+1 35 30 1+0 38  288.4 425.2 443.0 360.5 383.8 360.5 350.9 383.7 311+.I 1+65.3 1+36.8 407.1 277.9  0  1947 191*8 191*9 1 9 5 0 1 9 5 1 ±952 1 9 5 3 1 9 5 U 1 9 5 5 ±956 1 9 5 7 1 9 5 8 1 9 5 9  " Belgium Rye Production 000 tons 162 181* 258 21*0 201* 221 213 21*5 220 196 190 200 195  0  Rye Imports  Wheat Exports  1+.6 34.9 8.8 0.2 19.9 50..6  16.8 13.5 3.5 168.6 19.9 62.1 263.3 380.4 161.5 11+6.7 200.9 li+5.3 86.2  -  1+.1+ 36.6 1+5.9 1+6.2 76.0 67.9  Wheat & Rye Exports Rye Avaiiat 3.6 0.2 0.1 66.4 17.7  -  12,6 113.8 15.4 4.4 1+7.2 14.7 2.2  1181 962 824 81+1+ 1375 1061+ 839 788 11159 61+9 839 1192  UNITED KINGDOM 20.1+ ±6.1 2.8 5.6 0.2 0.5 1.8 .7.0 0.8 10.2 a.l 1.6 17.7  0.3 0.1 _ 9.0 o.± 0.3  _ -  -  663 730 633 655 678 635 782 677 7±7 761+ 786 700  1694 2399 2239 261+8 2353 2344 2707 2828 261+1 2891 2726 2755 2630  ±947 1948 1949 1950 1951 1952 1953 1951+ 1955 1956 1957 1958 1959  Luxembourg Wheat Production 000 tons 8 25 29 35 35 37 38 41 1*1 36 1*8 53 50  22 1+8 55 58 1+8 51 67 l+o 19 25 21+ 21 13  5U72.0 5397.2 5659.0 3895.6 48H+.8 1+681.1 1+761+.8 1+027.6 501+9.4 5366.8 5080.1 5114.3 1+878.3  2.6 6.7  2.0 1.5 1.6 0.8  -  6.8 5.6 1+.5 7.9  13.6 13.1 12.6 13.3 11+.8 15.0 13.5 15.6 16.7 5.3 6.3 6.8 7.3  BELGIUM - LUXEMBOURG  BELGIUM -'LUXEMBOURG Belgium Wheat Production 000 t o n s 122 31*1* 596 51*7 511* 579 571* 589 731 603 766 797 813  Wheat Imports 93.1 135.8 1.7 76.0 209.5 331.9 59.0 5.0 1+1.5 U5.5 110.2 15U.6 161+.9  11+3 322 277 21+1+ 175 277 305 301 170 267 230 170 211  SWITZERLAND 1947 191+8 191+9 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959  a  Belgium - Luxembourg Luxembourg Rye production Wheat Imports Rye Imports 000 tons 797.2 7 73.7 13 133.0 802.5 13 118.8 61*1*. 6 12 636.6 100.5 11 96o.± 1*3.2 9 10.0 807.7 10 618.5 113.3 11 778.8 197.6 8 1*86.2 107.7 9 87.2 565.5 9 413.9 69.5 10 43.2 507.1* 9 1*58.1* 1*2.6 0  Belgium - Luxembourg Wheat Exports Rye Exports 21.6 9.8 l*.l* 10.7 26.5 21.6 ±4.0 20.2 9.8 20.3 10.2 77.6 141.8  2.1 82.2 0.5 3.0 12.1« 1*.2 3.1* 12.3 0.7 0.8 0.3 0.1 0.1  Wheat & Rye Avai±ab±e 11*09 1656 1557 1729 1638 151*9 1831 1583 11*76 ±1*57 1532 ±1*26  7831 7943 6589 7203 7063 7527 6881 7692 8285 7830 7887 7722  WHEAT AND RYE PRODUCTION, IMPORTS, EXPORTS AND AVAILABLE FOR CONSUMPTION: BY COUNTRIES, WESTERN EUROPE, I 9 k 7 ~ 5 9 a AUSTRIA DENMARK Wheat Pro- Rye ProWheat & Rye proWheat ProRye Rye Wheat Wheat Rye Wheat duction duction Rye duction duction Imports Exports Exports Imports Imports Imports 000 tons 000 tons 000 tons 000 t o n s Available 0  0  b  b  206 261 350 38U 342 1*01 U99 U52 5**9 570 574 51*9 589  19U7 I9k6 I9U9 1950 1951 1952 1953 195U 1955 1956 1957 J.958 1959  260 289 365 388 33U 3iiO 421 370 1*16 l*3k kOO 397 kl7  n.a. 332.6 509.5 377.9 U62.2 32U.O 310.2 177.2 331.5 206.9 176.7 177.6 259.1  0.3 109.5 1.3 130.7 159.7 23.3 62.3 66.2 51.1 U5.9 53.9 63.9  -  -  0.1 0.2 .  -  0.1  —  0.1 -  -  2.8  883 1335 H5i 1269 1225 1253 1061 1363 1262 1199 1178 1326  19U7 19k6 191*9 1950 1951 1952 ±.9$3 1954 1955 1956 1957 1958 1959  5U 252 299 298 273 301 283 ' 292 25k 266 273 27k 36k  179 koo 1*69 330 270 358 331 276 191 291 313 306 289  FRANCE 19k7 19k6 19k9 1950 1951 1952 1953 195k 1955 1956 1957 1958 1959  3266 763k 8082 7701 7116 8k2I 8981 10566 10365 5683 11082 9601 H5kk  38k 638 650 606 k90 1*82 k67 511* kko 1*71 1*81 kko k70  690.2 1151*. 8 61*1.0 223.k 279.3 77k. 8 255.5 1*03.1 375.1 1650.k 828.0 k38.0 6k3.2  k679 6136 7072 7773 690k 7876 9052 7283 950k 868k 8k78 98i5 8k66 a c  97 112 125 131 122 127 130 115 123 105 92 105 105  1706.k -2371.5 20k0.2 111*7.1* 1636.1 1355.0 1171.k 265.7 762.9 6k5.2 536.2 :.171*.7. 59.2  53.0 58.2 13.5 95.6 50.3 26.5 0.5 162.7 168.3 136.6 7k.7 32.9 27.2  3.1* k.9 7.7 5.1 k.3 k.o 77.1 3.2 7.k 12.2 9.0 2.0 2.9  Rye . Exports k.9 56.3 69.k  Wheat S: Rye Available  ik.6 29.5 10.6 6.1 0.3 1.7 1.0 0.1 0.2  7k3 765 756 632 7k6 571 101k 96k 953 863 733 918  1.1* 12.k 0.3 0.5 0.3 13.1 196.3 269.0 k5.2 3k.3 170.6  8639 92k2 7567 9126 878k 839k 10k6k 9090 9550 10151 9i.il* 99k5  13.3 12.7 26.1 0.6 1.1 12.9 k6.3 22.2 28.6 29.3 10.6 7.2 7.6  1536 ili32 ll*U9 1665 166k 1569 1815 171k 1700 1920 1972 2102  -  WESTERN GERMANY kl*.3 1*3.1 61.8 1*.3 .  -  -  16.8 2.7  1*.9  19.1  123.2 98.5 362.9 88k. 2 819. k 396. k 511.7 1706.7 2961.7 ik32.2 1378.3 1855.0 1235.9  55.2 10.2 0.5  -  0.2 1.2  -  31.$  18.6 2.0  9372 9072 7631 7056 9282 9362 9779 8219 6391 . 10975 86o5 111*21*  19k7 I9k6 I9k9 1950 1951 1952 1953 1951* 1955 1956 1957 1958 ±959  1225 1951* 2k7I 26lk 29k9 3291 3i80 2893 3379 3U87 38k3 3693 kk95  2009 2726 3310 3021 303k 3119 3280 k098 31*95 3735 3816 3728 3867  ITALY I9k7 19k8 i9k9 1950 1951 1952 1953 195k 1955 1956 1957 1958 1959  -  3U.0 93.8 61.3 36.7 57.9 9k.6 1*5.3 291.7 357.5 272.9 212.5 122.k 2k0.9  Wheat Exports  33k7.3 3723.5 2761.9 1733.5 2972.2 2159.1 1852.2 3359.1 2k35.2 2970.k 2902.2 2275.6 2k86.3  23k.9 769.5 210.2 239.2 329.k 11*7.2 173.3 132.6 51.6 •ll*3.1* 72.9 25.2  2.9 0.3 69.5 0.5 68.2 ilk.5 6k.7 1*5.9 156. k 1*25.1* 507.9 621.9 756.9  NETHERLANDS 79.k 122.1 0.2 19.6 1.2 2.1 39.0 195.8 100.1 51.9 66.0 56.k 65.7  3.0 1.7 6.k 23.8 k0.9 21.5 2.9 •9.1* 15.6 161.8 9x1. k 762.9 829.1  87kO 9231 90k7 8622 9338 10389 7850 10k7k 932k 8261 9388 7867  19k7 19k8 I9k9 1950 1951 1952 1953 195U 1955 1956 1957 1958 1959  19k 306 k25 295 270 327 2k9 397 350 309 393 k02 k9k  318 382 517 1*21 1*58 k97 1*31 512 1*65 k92 1*58 1*27 386  71*1.3 808.9 531.1 725.1 866. k 859.0 97k.9 8o5. k 81*1.2 936. k 9k9.7 I059.6 "1122.3  _  56.6 19.1 12.7 9k. k 22.6 51.7 202.3 153.2' 115.6 11*0.1* 97.k 120.3  Source: Food and A g r i c u l t u r e Organization, production Yearbook, Rome, Voxs I - XIV. b. Metric tons Import. of -wheat fxour i s incxuded and expressed i n terms of weight of an equivalent amounts of wheat p r i o r to mixling.  9.k k.8 31*. 1 3.7 k.l 28.6 71.5 79.1 66.5 53.5 10.3 6.6 11.5  .  

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