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An analysis of consumption and imports of bread grains in several European countries 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 in the Department of AGRICULTURAL ECONOMICS We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA June 1962 In presenting this thesis in p a r t i a l fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall 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 is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of The University of British Columbia, Vancouver 8 , Canada. Date I 1 / r£ ) _ i ABSTRACT The object of this study has been to carry out an analysis of demand for bread grains i n twelve Western European countries, to project the demand to 1966 and to match i t against possible increases in production. The demand for bread grains was separated into two components, that entering directly into human consumption as flour and that consumed indirectly i n a l l other forms. Direct consumption was projected on the basis of anticipated changes in population and income, i t being assumed that tastes and relative prices would exert a negligible influence on quantities consumed. The quantity of bread grain disappearance for purposes other than direct con- sumption in 1966 -was estimated from the trend in the percentage milled into flour to t o t a l bread grain consumption. The level of domestic production in 1966 was obtained by calculating the average annual production during 1955-59, and sup- posing 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 for 1966 were obtained as the difference between the predicted levels of total consumption and domestic production. The results of the study indicated income e l a s t i c i t y co- efficients i n the European Economic Community which ranged from zero in Bexgium-Luxembourg and Western Germany to -0.32 i n the Netherlandsj the coefficient f o r Austria was estimated at -0.20 amd the e l a s t i c i t y i i c o e f f i c i e n t s f o r the other f i v e countries of the study were i n the range of - 0 . 8 5 for Sxdtzerland to -I.8I4. f o r Denmark. Comparison of d i r e c t consumption estimates using 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 with those c a l c u l a t e d by using a United Nations-Food and Ag r i c u l t u r e Organization average c o e f f i c i e n t of —0.ij,2 gave quite s i m i l a r r e s u l t s f o r the nations as a group, but considerable v a r i a - t i o n i n estimates f o r i n d i v i d u a l countries. The study i n d i c a t e d that d i r e c t consumption of bread grains w i l l decline by 1966 f o r the area as a whole. The amount of bread grains used f o r purposes other than human consumption was forecast to increase. However net increases i n consumption appeared to be e a s i l y o f f s e t by possible increases i n production so the most l i k e l y estimates f o r 1966 i n d i c a t e d a de- creased import requirement f o r the study countries 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 sug- gestions which assisted in 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. i i i TABLE OF CONTENTS Page INTRODUCTION 1 CONCEPT OF DEMAND 3 Utility Utility and Preference Indifference Curves Complementarity and Competitiveness rrice Elasticity of Demand Income Elasticity of Demand 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 38 Results for Individual Countries Austria Belgium-Luxembourg Denmark France Western Germany Italy Netherlands Norway Sweden Switzerland United Kingdom Results for Countries as Groups BIBLIOGRAPHY 68 APPENDIX 71 iv LIST OF TABLES Page TABLE 1 : CALCULATED COEFFICIENTS OF INCOME ELASTICITY OF DEMAND FOR BREAD GRAINS •. BY COUNTRIES, WESTERN EUROPE . TABLE 2 : CONSUMPTION OF BREAD GRAINS AS FLUUR: BY COUNTRIES, WESTERN EUROPE, 1959 AND PROJECTED TO 1966 TABLE 3 : AVERAGE ANNUAL GRAIN IMPORTS 1955-59 AND 1966 IMPORT REQUIREMENTS: BY COUNTRIES, WESTERN EUROPE . TABJE I; : PRODUCTION, DISAPPEARANCE DEFICIT AND NET IMPORTS OF WHEAT AND' RYE: BY COUNTRIES, WESTERN EUROPE, 195V58 AND PROJECTION TO 1966 . 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 TABLE 7 : TOTAL WHEAT AND RYE DISAPPEARANCE BY COUNTRIES, WESTERN EUROPE 195U-58 AND PROJECTION TO 1966 . TABLE 8 : POPULATION, 1957 AND PROJECTED TO 1966 BY COUNTRIES, WESTERN EUROPE TABLE 9 : ESTIMATES OF FLOUR CONSUMPTION, TOTAL CONSUMPTION, DOMESTIC PRO- DUCTION AND IMPORT REQUIREMENT IN 1966 . . . . . . 5k . 56 . 58 . 59 . 61 . 63 . 65 . 72 . 76 .AN ANALYSIS OF CONSUMPTION AND IMPORTS OF BREAD GRAINS IN SEVERAL EUROPEAN COUNTRIES INTRODUCTION This study is concerned with analyzing the market for bread grains in 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 in 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 is 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 pro- duce will be in 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 is that a guaranteed domestic price will 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 im- port and domestic prices will become part of a fund, which will be used to assist adjustment in 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 in 1952/53 to 113 in 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, is 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 will have to be f i l l e d by imports in 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 is defined as the various quantities of i t which consumers will take off the market at a i l possible alternative prices, other things being equal. The quantity which consumers will take win be affected by a num- ber 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 is 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 distin- guish i t from the more nebulous "desire'} which need not include the necessary purchasing power. Leftwich thus tells what demand is, and what are the factors responsible for its change in the long run. He does not t e l l -why goods are demanded. Although he indicates the factors which can in- 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 is necessary to introduce two elementary facets of demand theory: First is the concept of a demand schedule, and second is the distinction between changes in quantity demanded and changes In demand. There is 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 Alloca- tion, Revised Edition, New York, Holt, Rinehart and Winston, 19557 27. k price at which i t is offered in 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 in a market during a given time under given conditions.1 A demand schedule is 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 left to right. This assumption is the usual one in 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 fails, peopie who were previously unable to buy will enter the market. If price fails, some peopie wiil 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 expen- sive. Then, too, some peopie, who bought the good before its price f e l l , will buy more of i t now that i t i s relatively cheaper. These common sense observations are guides but are not, however, sufficient- ly inclusive or basic to provide a sound theory of demand. Such a basis can be provided by a consideration of uti l i t y and preference scales. Utility "Utility is 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 is 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 is an endless variety of wants. This generax principle, now known as the law of diminishing marginal utility, may be expressed as follows: The total utility of a good to its possessor increases with increases in quantity. There comes a point, however, beyond which the increments of uti l i t y from each unit of the good will be less than the increment of utility from the previous unit. The law of diminishing marginal utility is the basis for the conventional siope of the demand schedule. It 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 utility of a good in terms of money exceeds that of the money necessary to acquire i t . As price declines, the money price eventually falls below the marginal utility of the good in terms of money, at which point the individual enters the market. This phenomenon, the purchase of a good only when its marginal ut i l i t y in terms of money exceeds its money price, may also be used to explain a shift in consumption toward the good whose price has fallen, and to explain the tendency of those who are in 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 in the size of an individual's stock. When the price of a good falls, other things being equal, there is a rise in the real incomes of persons who have been buying 6 the good. For those persons, the marginal utility of money can be expected to f a i l . The decrease in the marginal u t i l i t y of money tends to affect the consumption of a l l goods1 - the one whose price f e l l included. There are, thus, two effects of a decrease in price. One i s a substitution effect, which tends to increase con- sumption of the good whose price has fallen, and the other is an income effect, the result of which varies with the magnitude and direction of any response of quantity to income change. The com- bined income and substitution effect of a price change is 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 is necessary, at this point, to make reference to Hicksian "strong ordering" and "weak ordering". If a set of items is strongly ordered, i t is such that each item has a place of its own in the order; i t could, in principle, be given a number, and to each number there would be 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 in- capable of being arranged in front of one another. Hicks thinks of weak ordering as dividing goods into groups, which are not ordered within. Each group, however, is strongly ordered with respect to other groups. It is apparent in 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 in the budget before the price f a i l . Neglecting in- divisibility, this is, nevertheless, the conclusion to which one is drawn i f strong ordering i s assumed. Thus, i t is 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 utility. He assumed, however, a constant marginal utility of money, thereby circumventing the income effect of a change in price. Hicks points out that by this, Marshall really meant that the demand fo r such a commodity is in- dependent of income. Marshaxi had "quite good reasons for [generally neglecting the income side, andj..... the constancy of the marginal uti l i t y of money is in fact an ingenious simplification, which is quite harmless for most of the applications Marshall gave i t himself".1 The assumption of constantcy is harmless when the proportion of in- come spent on a commodity is so small that changes in its price exert a negligible effect on total income, and in turn, a negligible effect on the marginal utility of money. Utility and Preference Marshailian demand theory assumes that individuals attempt to maximize total utilit y . Thus, i t also assumes that the consumer is always aware of - and is abxe to evaluate - the pos- sibilities open to him. The concept of uti l i t y and its maximization are void of any sensuous connotation. The assertion that a consumer derives more satisfaction or utility 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 utility is thus equivalent only to a postulate of rationality. Marshall, however, considered utility to be measurable; that is "the consumer.... was assumed to be capable of assigning to every commodity or combination of commodities a number repre- senting the amount or degree of utility associated with i t . " ^ A postulate of rationality assumes omy an ordinal ut 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 is con- sistent (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 utility) is sufficient. The ideal consumer thus has a definite scale of prefer- ences. Since he is 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 al- ways express the same ordering, and must there- fore 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 is 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 in terms of indifference curves, which necessitate only the ordinal as- sumption. Indifference Curves A given level of ut i l i t y can be obtained by using goods in many different combinations. This is shown graphically by Hicks-' in 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 cor- respond to higher levels of satisfaction, the farther one moves upward and to the right. The manner in which one i s able to show the effect on consumption of a change in one of the variables in- fluencing demand is demonstrated in, for example, Stonier and Hague.k However, the effects of such a variable will differ de- pending on the way in which the goods are related to each other. Complementarity and Competitiveness A suitable manner in which to describe complementarity 1. Hicks, A Revision of Demand Theory, l8. 2. Hicks, Value and Capital, Chapter I. 3. Hicks, Value and Capital, l5 (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 in 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 in the price of X, and a "compensating variation" in income just sufficient to offset the f a l l . Though he is neither better nor worse off at the new equilibrium, the con- sumer may be purchasing more X, less Z and more Y. If such is the case, Y i s complementary with X against Z. It is impossible, how- ever, 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, is again buying various amounts of X, Y and Z. Assume a f a l l in the price of X, the the prices of Y and Z remaining constant and a compensating variation in income. Because of the substitution effect, the con- sumer then buys more of X. In the normal case, he also buys less of Y and Z. When such a situation occurs, "Y is competitive with X against Z, and Z is competitive with X against Y.""*" Price Elasticity of Demand "The elasticity (or responsiveness) of demand in a mar- ket is 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 com- plementary goods follows closely that of Stonier and Hague, 80-]+. 2. Marshall, 66. 11 demand as the percentage change in quantity divided by the per- centage change in price - the ±ine of causation being from price to quantity. not maintain the same elasticity throughout i t s length. Accord- ingly, 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 is known as a measure of point price elasticity of demand, to con- trast i t with a coefficient of arc price elasticity of demand which is measured over a range on the function. The arc elasticity of demand i s more generally used in 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 in determining the elasticity coefficients.^ This precludes the problem of differing coeffi- cients due to different reference points of price and quantity, which arises when such averages are not used in the calculation of arc elasticities. The coefficient of price elasticity of demand i s negative because any change in price i s associated with a change in quantity 1. These circumstances are {!) a. perfectly inelastic demand function, e = 0 , (ii) a perfectly elastic demand function, e = -infinity, and ( i i i ) a demand function in the form of a hyper- bola with rectangular coordinates, e = - i . Except in special circumstances i, the demand curve does 2. x df coefficient of price elasticity of demand, quantity first and second observations where 12 in the opposite direction. When elasticity is equal to minus one, changes in price and quantity occur at the same rate and total revenue (.price times quantity) is constant along that segment of the function. When the coefficient of price elasticity i s less than minus one, demand is said to be elastic, in which case the relative change in quantity is larger than the relative change in price. Demand i s inelastic when the coefficient of price elasticity is between zero and minus one. Income Elasticity of Demand The coefficient of income elasticity of demand is a measure of the responsiveness of consumer purchases to changes in income, and is defined as the percentage change in purchases of a good divided by the percentage change in income responsible for the change in purchases. It "has the important advantage of being a non-dimensionai number, independent of units of measurement and con- sequently directly comparable between products and between countries The income elasticity coefficient may be either negative or positive. It is 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 is called an inferior good, since purchases of i t decrease with in- creases in income. Within the range of positive elasticity 1. United Nations and Food and Agricultural Organization co- operating, European Agriculture in 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 coeffi- cient 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.... is in 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 income- elasticities greater and less than one are in a general sense luxuries and necessities res- pectively seems a useful one.x In determining the coefficient of income elasticity, pur- chases 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 per- centage change in 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 is 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 in value terms. Wold indicates factors which may make the quantity elasticity smaller than the expenditure elasticity. Particularly relevant i s that when ....a commodity is available in different varieties... an increase of income... will in- duce the consumers to shift toward more expensive qualities, with the resiut that demand variations win be smaller i f measured by quantities than by expend!tures.-1- Schultz also deals with the difference between these coefficients in an analysis designed to reconcile results of quantity and expenditure studies of income elasticity.^ He indi- 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 in processing are usually higher than the coefficient for the raw product. The conclusion is thus similar to that of Wold, nameiy that expendi- ture 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 Agricul- ture, New York, McGraw-Hill, 1953, 55-63. 15 quantity elasticity refers rather to the physical satisfaction of demand ,,J- The former is more suited to applications to the marginal propensity to consume out of income. The latter refers to the physical consumption of a good, and is accordingly appli- cable 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 is indicated, "the two variants answer some- what different questions.''^ 1. Wold and Jureen, 220. 2. Wold and Jureen, 220. 16 PRINCIPLES OF MEASUREMENT An analysis of demand involves first of a i l an exam- ination of the basic relationship between the forces which con- stitute the basis for demand; this aspect of the analysis relies largely on economic theory, and is exemplified in the above dis- cussion of the concept of demand. The second aspect is the deter- mination 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 is 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 is one which expresses the dependent variable as a function of one or several independent variables. When demand is stated as a linear function of one or several variables, the equation is of the form Y = a + bjX^ +....+ ^n^n where Y is the number of units of the dependent variable such as consumption, X̂  is 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 in Xi«J* It is 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 is linear in 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 - in the field of economics as well as in 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 in 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 ob- serve, i t is possible to establish an infinity of relationships, simply by combining two or more of the fundamental relations in various ways. In particular, i t might be possible to write one economic variable as a function of a set of other variables in 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 de- pendent gives a wider spectrum of possible results than those which 1. Trygve Haavelmo, The Probability Approach in Econometrics, Econometrica, XII, Supplement (July, l9Uk)> 38-9. 18 actually exist. In addition, the attempt to approximate such sys- tems of equations by single equation methods results, Haavelmo con- tends, in 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 rela- tions 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 is consistent with Wold1s justification of the single equation technique on the basis of a recursive model of economic re- lationships, in which events are unilaterally and casually deter- mined by prior events. In cases where relationships are of the cause- effect rather than the mutual-dependence type, use of the single equations technique in demand analysis i s entirely satisfactory. "The main statistical method used for the estimation of demand functions is least-squares regression analysis".^ The fact that the single equation technique of demand analysis is so closely bound up with least-squares regression makes i t necessary to discuss both the applicability of least-squares regression and the philoso- phical 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 will under general conditions be unbiased when applied 1. Haavelmo, Econometrica, XII, Supplement, 22. 2. Wold and Jureen, 16. 19 to a single relation." 1 The necessary condition which makes this statement true is that the residuals not be correlated with the independent variables. It is a general property of the residuals of least-squares regression that they are un- correlated with the regressors, but not with the regressand. In recursive systems the assumed noncorreiation between the disturbance .... and the explanatory variables... will therefore assure that least-squares regression is applicable without bias.2 Essentially neglecting the philosophical argument of whether relations are unidirectionaxly or simultaneously deter- mined, Fox^ shows that the results obtained by simultaneous and single equation approaches are very similar. He points out that " there are certain cases, particularly in the analysis of demand for farm and food products, where simultaneity is of limited importance."4 He indicates elsewhere,^ for example, that the extent to which consumer income is affected by changes in price or quantity of a particular agricultural product is negligible. Thus, the in- troduction of such income change in a separate simultaneously determined equation is unnecessary. The fact of the several end-uses for a product is a factor favoring use of the simultaneous equations approach. Again Fox points out, specifically in 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 Political 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 is likely to be one-way from the ex- planatory or independent variables to the dependent variables."2 Only when this condition is not fulfilled, and when such nonful- fillment results in significant bias, is the multiple equations sys- tem 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 is that unbiased linear estimate which is of optimal efficiency; i.e., its 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 final conclusion must be.... that the re- gression analysis as traditionally applied is 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, Engle- wood Cliffs, 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 inter- individual 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 homo- geneous "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 is no 1. Klein, 53 2. Klein, 55 22 more serious an obstacle to interpretation than that of other studies •where the data is obtained by sampling and the results are interpreted within confidence intervals. "What is recorded in family budget data is usually the ex- penditures on the specified items of the budget. In some cases, however, supplementary information is given about the quantities purchased of the various items."1 Thus with cross-sectional data - as with time series - two separate elasticity coefficients can be cal- culated. One is the income elasticity coefficient of quantity of con- sumption, which expresses the percentage change in quantity of con- sumption associated with a one percent change in income. The other is an income elasticity coefficient of expenditure, which expresses the percentage change in expenditure on a good associated with a one per- cent change in income.2 Choice between the two coefficients rests on considerations of the data available and on the way in which the co- efficients are to be applied. A significant feature of cross-sectional samples for a single time period is that the price variable is 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 in evaluating budget data for demand analysis. First, the consumer units must be such as to accurately reflect consumer habits within each stratum. It is important to note, therefore, that we cannot determine with complete exact- ness the weights that should be attached to the average quantities when summing the various strata, a source of error that might well result in considerable deviation, since there are large differences in consumption habits of different social classes.i In spite of these shortcomings, Wold points out that re- sults from budget data have not been notably different from those obtained by the use of market statistics. For this reason, he con- cludes that either method is valid in 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 them- selves to changes in income. Consumers tend to have a different pattern of consumption immediately following a change in 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 in 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 is 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. Wold1 points out that the use of trend-free 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 is not desirable, even though a strict estimation of such coefficients necessitates disregarding short term fluctuations in the variable under analysis. If used in demand analysis, methods such as first 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 is affected by trend factors other than those of the regressors."^ 1. 2. Wold and Jureen, 240-2. 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 calcula- ted from nominal values divided by a consumer price index. Although conversion to real values of price and income is obviated by the nature of the family budget method, i t i s customary in time-series demand analysis to work with the real values. Deflation is carried out because the theory of demand assumes that measurement in monetary units provides a well defined scale and consistent use of real values of price and income serves to eliminate changes in the vaiue of the monetary unit. 26 METHODOLOGY The single equation, least-squares method has been used in the analysis. The assurance that simultaneity is of l i t t l e significance in demand analysis of farm products1 was one reason 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 likely to be quite different, the two uses were separated for pur- poses of analysis. A linear trend relationship over the period for the percentage consumed in each form was established. Having separated out consumption in forms other than flour, a single equation was used to determine income elasticity coefficients for flour consumption in 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 con- sumption 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, 18-20. 27 series analysis of market statistics are the following: .... ( i ) that there exists a routine in the demand behavior of human beingsj ( 2 ) that the statistical data of consumption and prices are such as to reflect this routine of demand̂  and ( 3 ) that the unknown theoretical demand function can be approxi- mated by various empirical curve s.-*- These assumptions, particularly with respect to regularity in demand behavior, form basic tenets of demand analysis, and pro- vide a basis for the empirical calculations. It is 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 is a change in the amount purchased when there is a change in 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 in demand in contrast with a change in relative prices, which leads to a change in quantity demanded, and consists of a move- ment 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."1 Consequently, this study has used per capita data of 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 is not serious since the consumption per capita of milled rice and other cereals in Western Europe is quite small.3 A demographic study^ of the area has been used to provide an estimate of population in I °66. For most of the nations of the Organization for European Economic Cooperation (OEEC), the publi- cation 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 is 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 in the OEEC Countries, Part I, Paris, November I960 (Restricted). ij.. Organization for European Economic Cooperation, Demographic Trends in 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 es- timate of population in 1966 was not used as presented by the in- 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 in a change in the rate of growth. The quantity of bread grain consumption was assumed, in 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 is not likely thereby to be impaired within a time period equivalent to that considered in this study.-4- Tastes "For staple agricultural commodities .... tastes are not likely to change rapidly." 2 For this reason, and because there are no satisfactory means of empirically identifying taste changes, they were not taken into account in this study. 1. Fox, Econometric Analysis for Public Policy, .136-9 2. H. Schultz, l i i3.. 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 in the price of bread grains relative to the price of other food, and (2) changes in the price of food relative to nonfood goods and services. In order to deal with the first of these, bread grains have been defined to include wheat and rye. This grouping avoids the problem of substitutability which results in 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 is lower for a large group of products than for one component of the group because of the possibilities of substitution within the group."-1' The more in- elastic is the demand for bread grains, the less their consumption will be affected by price changes relative to other foods. Working stated that the ".... elasticity of demand for wheat for actual consumption is so small that even after years of effort devoted to refining the data, no trustworthy measurement has been obtain- able. " 2 Henry Schultz derived a price elasticity of demand of -0.08 1 . United Nations and Food and Agriculture. Organization co- operating, European Agriculture in 1 9 6 5 , kk» 2. H. Working, The Elasticities of Demand for Wheat, read before the meeting of the Econometric Society held in Chicago, Illinois, December 28-30, 1936, and summarized in Econometrica, V, no. 2 ( 1 9 3 7 ) , 1 8 5 . 31 for wheat in a i l uses. Demand was shown to be more elastic fox rye, but the calculated coefficients included demand for uses such as feed and seed in addition to human consumption.^ Tn respect of the second relationship, the evidence is that relative price changes have not occurred during the period. This conclusion has been reached by a comparison of the index of retail 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 retail food prices in itself, 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 in Western Germany, where, in 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 until 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 in 1959 as well. There- fore, 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 fairly constant in their physical composition 1. H. Schultz, 390. 2. H. Schultz, li.95-501. 32 as farm products, but may change substan- t i a l l y i n value at the point at which con- sumers buy them, reflecting the amount and kind of nonfarm services added in process- ing, handling, delivering, 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 calculated because this study is con- cerned with the demand for bread grains without the processing and other marketing services. The e l a s t i c i t y coefficient was calcu- lated by relating per capita flour consumption to per capita real income. The consumption data (dependent variable), as "net food supplies per person per year - cereals as flour (in terms of flour and milled rice)" were those calculated by the Food and Agriculture Organization: The income stati s t i c s were in the form of estimated real national income per capita per year in domestic currencies, derived as follows: From estimates of national income, mid-year population and consumer price index numbers, the real level of national income i n each year was calculated by dividing total national income by the consumer price index. The real national income figures were, in turn, divided by mid-year population data, to give an estimate of real national income per capita per year in domestic currency. Any of a number of functions could have been used to measure the income el a s t i c i t y coefficients. Two functions frequently used in demand analysis2 are the linear function, Y=a + bX and 1. T. ¥. Schultz, 68. 2. United Nations and Food and Agriculture Organization coopera- ting, European Agriculture i n 1965", Annex I, Table 36. Five func- tions and the formulae for deriving e l a s t i c i t y coefficients 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 is easy to work with in an analysis. It was re- jected, however, because the linearity assumption is "... only a convenience and must at times be sacrificed in favor of reality". 1 The logarithmic function is better in several ways. First, i t assumes a constant percentage change in consumption associated with a given percentage change in real income, while the linear function assumes a constant absolute change in consumption associa- ted with a given absolute change in income; of the two, the former : seems more realistic. Furthermore, scatter diagrams of consumption and income showed that, in several countries, a logarithmic func- tion would describe the data better than a linear function. The logarithmic function was chosen over other non- linear 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 in- comes increased by amounts ranging from 12.0 to 56 .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 fully as useful as any other nonlinear function, and more suitable than a linear relationship. 1. Klein, 22 . 2 . The percentage increase in real per capita income during the eleven or twelve year period, based on the level in the final year of the period, is as follows for each country of the study: Austria U5'1J Belgium-Luxembourg 2 6 . 3 ; Denmark 12.8; France 3h»h, Western Germany 56 .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.1 A l l three estimates of income elasticity were included in the calculations of flour consumption. Such a method provided a prediction of direct bread grain con- sumption 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 is -0.U2 for a l l countries of the study, 11.... corresponds to a combination of typical analyses of time series carried out separately for different countries".^ Use of this coefficient, a quantity elasticity, enabled a comparison of con- sumption 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^ 0 f future income growth. Thereby, twelve 1. This excepts the two countries whose coefficients did not differ significantly from zero. 2. United Nations and Food and Agriculture. Organization co- operating, European Agriculture in 196|?, Ul. 3. i»3>, 3.0 and U.5 percent per capita per year, respectively. 3$ estimates of the level of flour consumption in 1°66 were computed for a l l those countries for which three income elasticity co- efficients 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 in any form other than as flour was termed indirect consumption and was measured in per- centage terms as follows: 1 The total quantity of cereals consumed as flour, in each year from which data were obtained, was calcula- ted 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 in a l l forms were also available. 2 From those two quantities the proportion of total bread grain consump- tion as flour in 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 per- centage of total requirements, and made no attempt to relate in- direct consumption to any of the demand variables. A coefficient of income elasticity for wheat of -0.1 was used in the 1969 projections made therein. 2. Food and Agriculture Organization, Production Yearbook. 3. The countries were Belgium-Luxembourg, Denmark and Western Germany, in 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 in 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 per- centages 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 in 1966. This method furnished a maximum of thirty six estimates of total bread grain disappearance for 1 9 6 6 . The maximum number of estimates were made for those coun- tries for which the study calculated three estimates of indirect consumption, utilized 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 1 9 5 5 - 5 9 production in each country. In accordance with the three assumptions of 1 . 5 , 3 . 0 and I 4 . . 5 percent annual increases in 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 aggre- gated, to obtain the 1 9 6 6 import requirement for the entire area. The table showing 1 9 6 6 import requirements1 and the several other tables presented in 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 first is 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 agricul- ture 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 ex- ceeded 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 is 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, 1 9 5 3 - 5 9 , 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 in 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 calcula- ted to be - 0 . 2 0 . For a l l of the twelve estimates of direct consump- tion 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 is 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 in 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 is 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 in wheat production as compared to pre-World War I I levels, and self- sufficiency continues to be encouraged by government policy. 1 Attempts to increase further the production of hard wheat have been made, since the Austrian need is 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 is expected to decrease by 1966. o Belgium-Luxembourg Direct Consumption Population estimates for Belgium-Luxembourg in 1966 were calculated separately for each country, then aggregated. One calcu- lation 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 in 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 ob- tained 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 in population of 2.U percent from 1 9 5 9 - 6 6 . In calculating per capita incomes for the two countries, the national incomes expressed in the monetary units of each country were added together.x The real national income per capita was then obtained by dividing the total national income by a con- sumer 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 in the final calcula- tion; 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 in 1966 could range from a high of 2.U percent above to a low of 1 2 . 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 is encouraged by the requirement that a minimum of 6$ percent of domestic wheat must be used in flour. 2 Such rules could reduce the bread grain deficit in 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, pro- vided 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 is 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 is 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 in Europe and Worth America, Paris, 1956, 1x3- 2. 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 in 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 will account for I4J4..O percent of total bread grain disappearance in I966.1 The resulting estimates of total consumption indicate that i t will in- crease during the 1959-66 period. Import Requirements There is evidence that French exports of bread grains will o not be encouraged by domestic agricultural policy. Nevertheless, 1. The standard error of estimate of 1.3 percentage points in- 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 expen- sive to maintain subsidized exports on a large scale, and that no further increases in wheat production are anticipated. See, however, United Nations and Food and Agriculture Organization Cooperating, European Agriculture in 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 will 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 Coopera- tion for 1966 adjusted for probably migration. The result is a pro- jected increase in 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 in calculating 1966 direct consumption. Applying these co- efficients to the projected rates of income growth resulted in 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 in feed grain until further market orientation of agricultural production has occurred, the trend line relating 1. See Table 9, page 76. h6 time and percentage of bread grains consumed as f l o u r i n Western Germany was r e j e c t e d . Furthermore, the standard e r r o r of estimate of LL.2 percentage p o i n t s f o r the t r e n d l i n e was very h i g h . I n - d i r e c t consumption i n 1966 was estimated to be equal t o the average annual i n d i r e c t consumption of LL,75U,00O m e t r i c tons d u r i n g 195"5-59. Import Requirements Western Germany req u i r e s t h a t a l a r g e amount of domestic wheat be used i n f l o u r . 1 T h i s requirement can be regarded as r e s t r i c t - i n g any p o s s i b i l i t y of in 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 produced bread g r a i n s . The study i n d i c a t e s t h a t a decrease i n the import requirement f o r bread grains i s probable. I t a l y 2 D i r e c t Consumption The estimate o f 1966 p o p u l a t i o n was c a l c u l a t e d by averaging the p o p u l a t i o n l e v e l obtained by p r o j e c t i n g 1959 p o p u l a t i o n to 1966 a t the 0.5 percent annual r a t e of growth of 1953-59 and the Organiza- t i o n f o r European Economic Cooperation average estimate of p o p u l a t i o n i n 1966, adjusted f o r probable m i g r a t i o n . The r e s u l t was an a n t i c i - p ated growth o f 3.5 percent 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 of -0.20 was c a l c u l a t e d 1. Canada Department of 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 seventy f i v e percent i n I960, despite the poor q u a l i t y of the crop i n t h a t y e a r . 2. See Table 9, page 76. hi for Italy. The four elasticity coefficients used in the calcula- tions provided estimates of change in direct consumption from ±959 to ±966 in the ranges +2.± to -±1.7 percent. Indirect Consumption Trend ±ine regression indicated that 69.5 percent of tota± bread grain disappearance in ±966 wi±l be in the form of fiour. 1 Import Requirements The potential for increased wheat production does exist in Italy.^ The encouragement of production of hard wheat varieties3 further reinforces the conclusions of this study, which indicate an increase in the export surplus of bread grains during the 1959-66 period. Netherlands^ Direct Consumption The projected increase in population of 8 .I4 percent in 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 per- centage points provided 95 percent confidence limits in the range 73.2 to 65.9 percent. 2. United Nations and Food and Agriculture Organization Co- operating, European Agriculture in 1965, 77. 3. Organization for European Economic Cooperation, Agricultural Policies in Europe and North America, 1957, ±55* k. See Table 9, page 76. U8 level to 1966 at the 1.3 percent annual rate of growth of 1953-59 and the Organization for European Economic Cooperation average es- timate 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 , pro- vided estimates of direct consumption in 1966 ranging from 6 . 7 per- cent above to 8 . 9 percent below the 1959 level. Indirect Consumption Trend line regression indicated that 1966 direct consump- tion will constitute 3 5 * U percent of total consumption.1 Import Requirements Dutch millers are compelled to incorporate domestically grown soft wheat in their flour; the percentage varies with the size and quality of the crop, but is usually 35 to UO percent.2 The possibility of expanding the livestock feeding industry is evidenced by a policy designed to limit wheat production in favor of feed grain production.3 This study suggests that import require- ments will increase by 1 9 6 6 , and that much of the increase wil l be for purposes other than direct consumption. 1 . The standard error of estimate of 2 . U percentage points indi- cated a 95 percent confidence interval of U 0 . 6 to 3 0 . 2 percent. 2 . Canada Department of Agriculture, Economics Division, Agri- culture Abroad, XVI, No. 2 (April, I96l), 2 U . 3. Organization for European Economic Cooperation, Trends in Agricultural .Policies Since 1 9 5 5 , P a r i s , 1 9 5 9 , 2 3 1 . . 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 in 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 in 1 9 6 6 . 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 con- sumption will be in the form of flour. 2 Import Requirements Although presently providing only a small amount of the bread grains domestically required, Norway is attempting to "induce an expansion of production toward tommodities which are now im- ported, 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 indi- cated 95 percent confidence limits at 70.8 and 61.2 percent. 3 . Organization for European Economic Cooperation, Agricultural policies in Europe and North America, 1 9 5 6 , 176. 50 is borne out by the calculations of this study. Sweden x Direct Consumption The 1966 estimate of population was calculated by averag- ing 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 in 1966 calculated by the Organization for European Economic Cooperation. The result was an anticipated in- 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 in 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 will be as flour. 2 Import Requirements The estimated increases in total requirement of bread grains by 1966 indicate that, assuming the medium import requirement, slight increases in requirement may be experienced. However, the low- esti- mates of 1966 import requirement indicate increases in the surplus 1. See Table 9, page 76, 2. The standard error of estimate of lj.3 percentage points pro- vided 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 1 9 5 9 - 6 6 period was li . 5 percent. An income elasticity of demand of - 0 . 8 5 was calculated for Switzerland. The four elasticity coefficients used in the calcula- tion, including the calculated coefficient, indicated that the level of 1966 direct consumption will be below that of 1959 by 0 . 1 to 37.14- percent. Indirect Consumption The trend line relating time and percentage of cereals consumed as flour indicated that 1+8.1 percent of 1966 consumption will be as flour. 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 7 6 . 2 . The standard error of estimate of 3 . 8 percentage points in- 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 in indirect consumption, in- 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 project- ing the 1959 population level to 1966 at the O.Ii percent annual rate of growth of 1 9 5 3 - 5 9 . The result is a projected increase in popula- tion of 2 . 5 percent from 1 9 5 9 - 6 6 . An income elasticity coefficient of demand of - 1 . 3 2 was calculated for 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 will constitute 3 3 . 1 percent of total 1966 bread grain disappearance.-^ 1 . Organization for European Economic Cooperation, Trends in Agri- cultural Policies Since 1 9 5 5 , 3 0 0 . 2 . See Table 9 , page 76.. 3 . The standard error of estimate of 2 . 9 percentage points indi- cated 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 is more probable,1 and the two higher rates of income and produc- tion growth, gav,e a decreased import requirement. Results for Countries as Groups Table 1 lists the income elasticity coefficients deter- mined 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 in Europe 3 w a s introduced into the analysis, and its comparability with the co- efficients of Table l is 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^ # That this coefficient is higher than the one obtained 1. See page 66 . 2. Eric Thorbecke, The Pattern of World-Trade in 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 in. 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 France Western Germany Italy Netherlands Six Other Countries Austria Denmark Norway Sweden Switzerland United Kingdom 0 -0.25 0 -0 .20 -0.32 -0 .20 -l.ttU -1.31; -0 .98 - 0 . » 5 -1.32 0.06 0.03 0.07 0.06 O.Li2 O.36 0.16 O.ILL 0.17 a Calculated from time series market statistics; post World War II period. 55 for Sweden i n the present study may be due to the fact that the coefficient of -O.98 of this 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 ela s t i c i t y coefficient of -0.142 and those coefficients for each country calculated i n this study provided estimates of direct consumption of bread grains i n 1966 which were not greatly different. However, consumption estimates for individual countries showed much greater v a r i a b i l i t y than the totals for a l l countries. The United Nations - Food and Agriculture Organization study points out that i t s coefficient applies to Europe as a whole, and not necessarily to any one country. 1 Table 2 i s also relevant to a consideration of prospec- tive import needs of higher quality bread grains. Such bread grains are imported for the purpose of improving the quality of domestic flour. Since the data i n the table indicate that t o t a l flour consumption w i l l decline, larger imports of higher quality bread grains can only be expected i f there i s an upward trend in flour quality or a downward trend i n the quality of domestic sup- plies. Compulsory incorporation rates and import quotas make the former trend unlikely. Although year to year variations i n the quality of domestic production can be expected, a downward trend i n quality i s also improbable. Further support for the comparability of the United - 1. United Nations and Food and Agriculture Organization, European Agriculture i n 1 9 6 5 , Ul* 56 TABLE 2 CONSUMPTION OF BREAD GRAINS AS FLOUR: BY COUNTRIES, WESTERN EUROPE, 1959 AND PROJECTED TO 1966 1959 a projected 1966 Flour Consumption Country Flour b c ti e Consumption OOO tons d 000 tons 000 tons 000 tons 000 tons Austria 808 79U 775 775 732* Belgium- Luxembourg 875 896 856 896 812 Denmark 362 306 363 226 31*5 France U903 U96 l 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 United Kingdom 1*365 381*3 U27U 3151 1*051* Totals 25321 21*968 2li992 23663 237 i l * a 1957-59 average. Calculated from: Food and Agriculture Organization, Production Yearbook. b Using income elasticity coefficients calculated in this study. c Using income elasticity coefficients of -0.1|2 for a l l countries. d Metric tons. 57 Nations-Food and fi.gricuitu.re Organization coefficient and the several coefficients of this study is presented in Table 3- For each country, this table presents two import estimates derived from the calculated income elasticity coefficients and two esti- mates from the United Nations-Food and Agriculture Organization co- efficient of income elasticity for cereals in Europe. For each of the elasticity coefficients, the estimates of import requirement corresponding to 1.5 and 3.0 percent annual increases in 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 Organiza- tion 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 produc- tion, the estimates differed by less than 0.8 million tons at the 1.5 percent rate. Table 2 provides evidence, however, that the variability in import requirement was not due to the elasticity co- efficients, but was a result of differing quantities entering in- 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 is presented in a manner similar to one of the tables of the United Nations-Food and Agriculture Organization study.1 fast production, disappearance, deficit and net import data 1. United Nations and Food and Agriculture Organization co- operating, European Agriculture in 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 Projected 1 9 6 6 Import Requirement Country 1.5 percent growth rate e b c 3.0 percent growth rate e b c OOO tons ̂ 0 0 0 tons 0 0 0 tons 0 0 0 tons 0 0 0 tons Austria 282* 3 7 3 3 3 8 2 2 0 12*5 Belgium-Luxembourg 501* 500 1*60 3 8 6 302 Denmark 322 1 7 3 230 25 12*2* France - 9 9 3 i*o - 1 6 6 -1507 -192*3 Western Germany 2062 1356 1 1 3 3 2*52* -12 Italy -32 -55 -291* - 1 3 8 6 -i860 Netherlands 1 0 6 1 191*8 1 9 1 7 182*1 I 6 7 8 Norway 381* 381* 1*29 3 0 6 2*03 Sweden -7 21*3 332 2*2* 11*3 Switzerland 385 561* •610 2*21 519 United Kingdom 5091* 8515 9 8 1 7 6 0 8 9 8817 Total 906Ii 11*01*1 12*806 6 8 9 3 8 3 1 0 a Calculated from: Food and Agriculture Organization, Trade Yearbook, Rome, Annual b Using income elasticity coefficients calculated in this study, c Using income elasticity coefficient of -0.2*2 for a i l countries, d Metric tons. e Refers to rate of growth of domestic production and per capita income. 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 9 6 6 ^ Produc- Disap- ̂  Defi- Net e Produc- Disap- De-tion c pearance c i t Imports tion pear- f i c i t ance Common Market a 28.8 31.0 2.2 2.8 35.0 3U.8 -0 .2 Six other Countries 5.7 12.3 6.6 6.2 7.0 I4.0 7.1* 3U.5 U3.3 8.8 9.1 , r 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 elasti- 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 Year- book, Rome, Annual.. 60 relate to the 19514.-58 period, thereby assuring comparability between the respective series in the two tables. The production and disappearance data of Table U are quantitiveiy larger than those of the corresponding United Nations- Food and Agriculture Organization table. Table 5 shows that the difference in production between Table I4 and the similar United Nations-Food and Agriculture Organization table is explainable be- cause both rye and wheat are included in the latter. Average 195U-58 wheat production of 23 . 7 million tons in the Common Market countries, as indicated by Table S» is 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 in 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 in six of these eight countries. 1 The figure of 5 . 7 million tons for average wheat and rye production in these six countries is 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 consump- tion together. Although Food and Agriculture Organization publications 1. The two countries in question, which have not been included in this study, are Ireland and Finland. 61 TABLE 5 WHEAT AND RYE, PRODUCTION BY COUNTRIES, WESTERN EUROPE, 1S$1L-58 Wheat Produc- tion a Average I95U-58 OOO tons c Wheat and Rye Production a Average 195U-58 000 tons European Economic Community Countries Belgium-Luxembourg France ̂ Western Germany Italy Netherlands Total 71*1 io,Uol* 3,U59 8,753 370 23,727 96l 10,872 7,233 8,861 81i± 28,768 Six Other Countries Austria 539 Denmark 697 Norway 35 Sweden 799 Switzerland 303 United Kingdom 2,768 Total 5,iUl 9U2 5U7 37 1,027 31*1 2,791* 5,688 a Calculated from editions of: Food and Agriculture Or- ganization, Production Yearbook, Rome, Annual. b Excluding 1 9 5 6 . c Metric tons. 62 present production, import and export data for 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 publication, 2 which does take account of inventory change, but shows disappearance data only for wheat and rye together. However, because the disappearance data of Table h exceed those of the similar 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 Agriculture Or- ganization production data, evidence is provided that the larger dis- appearance data of Table h are due to the inclusion of rye. The data of Table 6 point out that net wheat imports to Common Market countries during 195U-58 and 1955-59 were 2.5 million tons and 2.1 million tons, respectively. The net import data of Table k are on a 195U-58 basis. The similar United Nations-Food and Agriculture Organization table provides information i n terms of 195U/55-1958/59 data. Since the United Nations-Food and Agriculture Organization wheat import datum is more closely approximated by i-9$$S9 than 195U-58 data, the difference between the 2.8 million tons net imports of Table k and the 2.1 million tons of the United Nations-Food and Agriculture Organization table can be ascribed to 1. Food and Agriculture Organization, Production 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 0 1955.59a Average 000 tons 0 European Economic Community Belgium-Luxembourg 523 k3k France0 -1,464 -1,287 Western Germany 2,437 2,120 Italy 105 -101 Netherlands 895 952 Totals 2,1*96 2,118 Six Other Countries Austria 270 231 Denmark 358 235 Norway 388 331+ Sweden -133 -U5 Switzerland kOh 378 United Kingdom 4,921 5,089 Totals 6,208 6,222 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 in Table 1+ include both wheat and rye rather than wheat alone. Table 6 indicates that average annual wheat imports to the six other study countries were 6.2 million tons during either the iQ5u-f>8 or 1955-59 periods. This amount i s consistent with the 195U/55-1958/59 net import of wheat of 6.8 million tons to eight countries, of which these six are a part. The wheat production increases calculated by the United Nations-Food and Agriculture Organization from 195U-58 to 1965 are 3.7 million tons for the Common Market countries and 0.5 miixion tons for the second group of nations, which amount to l5 .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 of a 23.0 percent rise in production between 1959 and 1966.x A s indicated above, the rates of growth of income and production in 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 million tons, or 11.5 percent.2 This e s t i - mate includes an increased amount of 1.5 million tons for livestock 1. Production levels shown i n Table 1+ are for the 195U-58 period. The production levels used as a base f o r calculating 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 million tons and the projected disappearance of 28.2 million tons in 1965. 65 TABLE 7 TOTAL WHEAT AND HIE DISAPPEARANCE BY COUNTRIES, WESTERN EUROPE 195V58 AND PROJECTED TO 1966 __ _ Averagea Projection OOP tonsc Q Q ^ t Q n s European Economic Community Belgium-Luxembourg 1,566 1,51*5 Franceb 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 Totals 31,002 3U,83l* Six Other Countries Austria 1,25U 1,1*21* Denmark 880 719 Norway 1*26 3U5 Sweden 1,016 l , l 5 l Switzerland 760 8I4I1 United Kingdom 7,965 9,519 Totals 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 in production was some- what greater than that used by the Food and Agriculture Organiza- tion; the result is a net surplus in 1966 of 0.2 million tons as compared to the deficit of 0.8 million tons in 1965 predicted by the United Nations-Food and Agriculture Organization. For the six other countries of -the study, Table U pre- dicts 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 in i960 wheat disappearance, or 1.7 percent. However, i t is important to note the significance of the United Kingdom in the prediction of increased total consumption. Examination of the tabular calcu- lations for the United Kingdom1 indicates the following. At the 3.0 percent annual rate of growth of income, the calculated elasticity coefficient indicated a 1966 direct consumption esti- mate 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,1 the smallest of the three 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.2' The lower estimate 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, 1959), 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, Microeconomic Theory, New York, McGraw-Hill, i 9 5 8 . 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 Cliffs, 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 in 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 Feed- Livestock 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 Political Economy, LXIV, No. 2 (April, 1956). Haavelmo, Trygve, The Probability Approach in 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 (June,-i960), 370-86. Working, H., "The Elasticities of Demand for Wheat", read before the meeting of the Econometric Society held in Chicago, Illinois, December 28-30, 1936, and summarized in 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, National Grain Policies, Rome, 1959, I960, 1961. , 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, Agricultural and Food Statistics, Paris, 1959. , Agricultural Policies in Europe and North America, Paris, U956, 57, 58, 60), k Vols. , Agriculture Production and Consumption Figures, Paris, 1961. , Demographic Trends in Western Europe I95l-I97l, Paris, 1956. , Food Consumption in the OEEC Countries, Parts 1 and 2, Paris, November i960 (Restricted). , Trends in Agricultural Policies Since 1955, Paris, 1961. United Nations and Food and Agriculture Organization cooperating, European Agriculture in 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 in 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 Agricul- ture study. The population growth indices presented in Table 8 span the period 1957 to 1 9 6 6 , 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, in 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 political and economic developments, which are likely to have the effect of 1 . Organization for European Economic Cooperation, Demographic Trends in Western Europe, 1951-71 . 72 TABLE 8 POPULATION, 1957 AND PROJECTED TO 1966 BI COUNTRIES, WESTERN EUROPE 1957 Popula- tion a OOO 1966 Popula- tion 000 Index UN-FAO 1966 Index 196LL-66 b 1957=100 1955-57=100 Austria 6 , 9 9 7 7 , 0 8 5 1 0 1 . 3 1 0 3 . 6 Bex gium-Luxemb ougg 9 , 3 0 5 9 , 6 5 8 1 0 3 . 8 1 0 3 . 5 Denmark U ,5oo U,767 105.9 1 0 6 . 5 France UU,071 U 6 , 8 6 9 1 0 6 . 3 105.8 Western Germany 5 3 , 6 9 2 5 6 , 3 1 6 1 0 U . 9 1 0 9 . 9 Itaiy U8,U83 5 0 , 7 7 0 10U.7 10U.9 Netherlands i i , 0 2 i 1 2 , 3 0 3 111.6 1 0 7 . 9 Norway 3,U9U 3,19k 1 0 8 . 6 1 0 7 . 8 Sweden 7 , 3 6 7 7 , 6 2 5 1 0 3 . 5 1 0 2 . 6 Switzerland 5 , i i 7 5 , U 7 u 1 0 7 . 0 108.8 United Kingdom 5 i , U 5 5 53,U77 1 0 3 . 9 10k. 0 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 in 1 9 6 5 , Geneva, l 9 6 l , Annex I, Table 3 3 . These indices indicate population growth assumed in the United Nations- Food 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 for the Netherlands, to the ex- tent that subsequent data have become available, have been shown to be very accurate. The fact that the population level obtained by projecting the actual 195*9 level to 1966 at the annual rate of growth closely approximates the 1966 prediction of the Organization for European Economic Cooperation suggests no reason for downward revision of the estimate. Therefore, the population estimates have not been altered to correspond more closely with the United Nations-Food and Agriculture Organization estimates. Calculation of 1966 Import Requirement The calculations necessary to achieve the 1966 import re- quirement of cereaxs have been done i n the foixowing manner. Each successive step i n the calculation i s numbered, the numbers corres- ponding to successive columns in the tabular presentations for each country. 1 1. The income el a s t i c i t y coefficient was calculated by f i t t i n g the function log I = a+b log X, with Y representing flour consump- tion per capita, and X representing real national income per capita i n domestic currency deflated to 1953. 2. Three rates of income growth were a r b i t r a r i l y selected at 1.5, 3.0 and h.5 percent per annum. For the seven year period 1. See Table 9, page 76. 74 1959-66, these rates amounted to increases of 11.0, 23.0 and 36.1 percent, respectively, in real per capita incomes. 3. The effect on consumption of population growth was as- sumed to be one. Therefore, a (say) one percent growth in 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 in income for 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 in 1959 was calculated as the product of "net food supplies per person - cereais as flour" 1 and the mid- year estimate of population. Flour consumption in 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, in ab- soxute terms, the effect of the percentage change on 1959 direct consumption. 8. Direct consumption in 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 regard- ing the levex of direct consumption as a percentage of total con- sumption. The medium value of total consumption was estimated from 1. This, the Food and Agriculture Organization terminology, is the equivalent of direct consumption of cereaxs per capita 75 a percentage vaiue calculated by trend line regression. The low and high estimates of totax consumption were calculated from a percent- age value at a 95 percent confidence interval above and below, res- pectively, the percentage value estimated from the trend line . Thus, three estimates of total consumption were presented for each of the three income e l a s t i c i t y coefficients and for each of the three income growth rates. In the countries i n which a trend line was not used, an estimate of indirect consumption i n the most recent five year period was obtained and used as the estimate of 1966 direct consumption. Total consumption was estimated by summing direct and indirect consumption. 10. Domestic production was estimated from the average annual production of wheat and rye i n the l955~59 period. Production levels i n 1966 were obtained by assuming that bread grain production would increase at the same rate as per capita incomes in the economies of those countries. The method therefore provided three estimates of domestic production for each country. 11. Import requirements i n 1966 were calculated by subtract- ing domestic production from the estimate of total consumption. 76 TABLE 9 ESTIMATES OF FLOUR CONSUMPTION, TOTAL CONSUMPTION, DOMESTIC PRODUCTION AND IMPORT REQUIREMENT IN 1966 . AUSTRIA Income Elasticity Coefficient Income Growth % Effect on Consumption of population Income Change Change Combined Effect 1959 Flour Consumption (Av. 1957/59) 1000 m.t. Change 1966 Flour Consumption Total 1966 Consumption 1966 Domestic Low Medium High P r o d u c t i o n 1966 Import Requirement Low Medium High 0+2.20 sb - 0 . 0 8 - 0 . 0 8 -u . u 8 >, 1 0 . 9 8 + 0 . 5 0 l $ 2 2 . 9 9 3 6 . 0 9 - 0 . 8 7 8 $ - 1 . 8 3 9 - - 2 . 8 8 7 -0.371*$ - 1 . 3 3 5 - 2 . 3 8 3 808 -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 D - 0 . 2 0 - 0 . 2 0 - 0 . 2 0 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 -2 . 1 9 6 $ -U.598 . - 7 . 2 1 8 - 1 . 6 9 2 -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 b - 2 . 2 0 sb - 0 . 3 3 - 0 . 3 3 - 0 . 3 3 1 0 . 9 8 2 2 ; 9 9 3 6 . 0 9 -3.623$ - 7 . 5 8 7 - 1 1 . 9 0 9 -3.119 - 7 . 0 8 3 -11.1*05 - 2 5 - 5 7 -92 783 751 716 1256 120k 111*8 11*39 1380 1316 1686 1617 151*2 1086 120k 1332 170 -181; 353 176 - 1 6 600 1*13 210 UN-FAO -0.1*2 -0.1*2 -0.1*2 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 - L . 6 i l -9 . 6 5 6 - 1 5 . 1 5 8 -U.107 -9 .152 - 1 U . 6 5 U -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 - 6 k 583 376 I 5 k FRANCE b+ 2 . 2 0 sb - 0 . 1 3 - 0 . 1 3 - 0 . 1 3 10.98 2 2 .99 3 6 . 09 + 3 .929$ - 1.1 * 2 7 * - 2 . 9 8 9 -k . 6 9 2 +2.502$ + 0.9ko - 0 . 7 6 3 k 9 0 3 +123 + k6 - 37 5026 k9k9 k866 IO690 10527 10350 l l k l k 11239 11051 122k3 12056 11851* 11226 12l*kO 13766 - 5 3 6 -1913 - 3 k l 6 188 -1201 -2715 1017 - 3 8 k -1912 0 - 0 . 2 5 - 0 . 2 5 - 0 . 2 5 1 0 .98 2 2 .99 36.uy - 2 . 7 k 5 - 5 . 7 k 8 - 9 . 0 2 2 +1.181* - 1 .819 - 5 . 0 9 3 + 58 - 89 - 2 5 0 k 9 6 i l * 8 l k k653 10552 10239 . y897 11266 10933 10567 12085 11727 11335 11226 12l*kO 13766 -671* - 2 2 0 1 -3869 ko -1507 -3199 859 -713 -21*31 b- 2 . 2 0 sb - 0 . 3 6 - 0 . 3 6 - 0 . 3 8 1 0 .98 2 2 .99 3 6 . 0 9 -U.172 -8 . 7 3 6 - I 3 . 7 i k - 0 . 2 k 3 -k.807 -9 . 7 8 5 -12 - 2 3 6 - k 8 0 U89 I k667 kl*23 10U03 9927 9k08 11107 10599 i o o k 5 11911* 11369 1077k 11226 12kk0 13766 -823 - 2 5 1 3 - k 3 5 8 -119 - l 8 k i -3721 688 -1017 -2992 UN-FAO - 0 .1 * 2 -0.1*2 -0.1*2 1 0 .98 2 2 .99 3 6 .09 - k . 6 l l - 9 . 6 5 6 - 1 5 . 1 5 8 - 0 .682 - 5 . 7 2 7 -11.229 - 3 3 -281 - 5 5 i k870 k622 U352 10358 9831 9257 11060 I0k97 9883 11863 11259 10601 11226 12kl*0 13766 -868 -2609 -U509 - 1 6 6 -191*3 - 3 3 8 3 637 -1 I81 - 3 1 6 5 77 ITALY Income Elasticity Coefficient Income Growth Effect on Consumption of population Income Change Change Combined Effect 19$9 Flour Consumption _ (Av .1957/59) 0 h a n 8 e 1 0 0 0 m.t. 1966 Fiour Consumption Total 1966 Consumption Low Medium High 1966 Domestic Production 1966 Import Requirement Low Medium High b + 2 . 2 0 sb -0.13 - 0 . 1 3 -0.13 10.^8 2 2 . 9 9 36.09 +3.502$ -l . k 2 7 $ -2.989 -I4 .672 +2 .075$ +0 . 5 1 3 • -I.170 6891 +ik3 + 35 - 81 7 0 3 k 6926 681O 9 6 0 8 9 k 6 l 9302 10115 9960 9793 1 0 6 7 8 1 0 5 i k 1 0 3 3 8 1 0 0 9 k 11186 12377 - k 8 6 - 1 7 2 5 - 3 0 7 5 +21 -1226 - 2 5 8 k 58k -672 - 2 0 3 9 b - 0 . 2 0 - 0 . 2 0 - 0 . 2 0 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 - 2 . 1 9 6 -U .598 -7.218 +1.3)6 -1.096 -3.716 + 90 - 76 —256 6 9 8 1 6815 6635 9536 9309 9063 10039 9 8 0 0 9 5 U i 10597 i 0 3 k 5 10072 1 0 0 9 k 11186 12377 - 5 5 8 -1877 - 3 3 i k - 5 5 -1386 - 2 8 3 6 .503 -81+1 - 2 3 0 5 b - 2 . 2 0 sb .10.98 2 2 . 9 9 36 .09 - - 0 . 2 7 - 0 . 2 7 -0.27 -2.965 - 6 . 2 0 7 - 9 . 7 i i U +0 . 5 3 7 - 2 . 7 0 5 -6.21+2 + 37 - 1 8 6 -U30 6 9 2 8 6705 6 k 6 l 9 k 6 k 9159 8826 9962 96k2 9291 10517 10178 . .9808 1 0 0 9 k 11186 12377 - 6 3 0 -2027 - 3 5 5 i -132 - I5 l4k - 3 0 8 6 k23 - 1 0 0 8 - 2 5 6 9 UN-FAO - 0 . U 2 -0.142- - 0 . U 2 1 O . 9 8 2 2 . 9 9 3 6 . 0 9 -I4.0II - 9 . 6 5 6 - 1 5 . 1 5 8 - 1 . 1 0 9 - 6 . 1 5 U - i i . 6 5 6 - 76 -U2k -803 6815 6k67 6088 ' 9309 8 8 3 k 8316 9800 9300 8755 I03k5 9817 92k2 1009k i l l 86 12377 - 7 8 5 -2352 -IP 6 1 - 2 9 k -1886 -3622 251 -1369 -3L35 NETHERLANDS b + 2 . 2 0 sb - 0 . 1 6 - 0.l6 - 0 . 1 6 b 1 O . 9 8 2 2 . 9 9 36.09 +8 . k 3 5 $ -1.1$?% -3 .678 - 5 . 7 5 f t +6.678$ +U.757 + 2 . 6 6 I 969 + 65 + k6 + 26 103k 1015 995 25149 2502 2U53 2923 2869 2813 3 k 2 6 3363 3296 927 1027 Ii36 1622 l k 7 5 1317 1996 I8k2 1677 2509 2336 2160 -0.32 -0.32 -0.32 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 -3.51U -7.357 - H . 5 U 9 +U.92I +1.078 -3.ilk + k 8 + 10 - 30 1017 979 939 2507 2kl3 2315 2875 2 8 6 8 2655 3369 32 k3 3lU 927 1027 1136 1 5 8 0 1386 1179 191*8 i 8 k i i 5 i 9 2kk2 2216 1975 b - 2 . 2 0 sb -o.iuB -o .k8 -o.U8 IO.98 2 2 . 9 9 3 6 . 0 9 - 5 . 2 7 0 - 1 1 . 0 3 5 -17.323 3 . i 6 5 - 2 . 6 0 0 - 8 . 8 8 8 + 31 - 25 - 86 1 0 0 0 9 k k 885 2k65 2327 2182 2827 2669 2502 33313 3127 2932 927 1027 1136 1538 1300 10k6 1900 I 6 k 2 1366 2386 2100 1796 UN-FAO - 0 . k 2 - 0 . U 2 -0.1)2 1 0 . 9 8 2 2 . 9 9 3 6 . U9 -u.611 -9 .656 - 1 5 . 1 5 8 3 .82k - 1 . 2 2 1 -6.723 + 37 - 12 - 65 1006 957 90k 2 k 8 0 2359 2228 28kk 2 7 0 5 2556 .-,3333 3171 2995 927 1027 1136 1553 1332 1092 1917 1678 Ik20 2k06 2 1 k k 1659 78 NORWAY Income E l a s t i c i t y - C o e f f i c i e n t Income Growth E f f e c t on Consumption of Population Income Change Change Combined E f f e c t 1959 F l o u r Conaimption (A v. 1957/59) 1000 m.t. Change 1966 Flo 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 . 5 5 -0.55 -0 . 5 5 10.98 22.99 36.09 +6 .693$ -6 . 0 3 9 $ -12 .6UU -19 . 8 5 0 +o.65k$ -5 . 9 5 1 -13 .157 301 + 2 - 18 - ko 303 283 2 6 l k28 Uoo 369 U59 U29 395 U95 k62 U26 36 39 UU 392 361 325 U23 390 351 U59 U23 382 b -I.3U -I.3U -1.3k 10.98 22.99 36.09 * l k . 7 l 3 -30.807 -U8 .361 -8.020 -2k.nl; -41.668 - 2k - 73 - 1 2 5 277 228 176 391 322 2k9 U20 3U5 267 U52 372 287 36 39 kk 355 283 205 38U • 306 223 kl6 333 2U3 b-2.20 sb c • - 2 . i l ; - 2 . i l ; 10.98 22.99 36.09 -23.U97/ -U9.199 -77.233 - 1 6 . 8 0 k -k2 . 5 0 6 -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 UN-FAO -0.U2 -0.U2 -0.U2 10.98 22.99 3 6 . 0 9 - k . 6 i l -9.656 - 1 5 . 1 5 8 +2.082 - 2 . 9 6 3 - 8 . k 6 5 6 -9 - 2 5 307 292 276 U3U U13 390 4 6 5 UU2 kl8 501 U77 U5i 36 39 kU 398 37U 3U6 U29 k03 39U 465 k38 k07 SWEDEN b+2 . 2 0 sb -0.62 -0 . 6 2 -0 . 6 2 v, 10.98 22.99 36.09 +2.29k$ -::.6.808$ -ik . 2 5 k -22.376 -k.$ik% - i i . 9 6 0 . -20.082 5 5 i - 25 - 66 -111 526 U85 kko 1107 1020 926 1380 1272 H 5 U 1831 1688 1532 1079 1195 1323 28 -175 -397 301 77 169 752 k93 209 u -0.98 -0.98 -0.98 10.98 22.99 36.09 - 1 0 . 7 6 0 -22 . 5 3 0 -35 . 3 6 8 -8.k66 -20.236 -33 .07k - k7 -112 -182 50U k39 369 urn, 92U 776 1322 i i 5 i 968 175U 1528 12 8U 1079 1195 1323 -19 -271 -5U7 2U3 kU - 3 5 5 675 333 -39 b-2.20 sb -1.31; -1.3U -1.3k 10.98 22.99 36.09 -lk.713 - 3 0 . 5 0 7 -48.361 -I2.ki9 -28 .513 - 4 6 . 0 6 7 - 68 -157 -251; k83 39k 297 1016 829 625 1267 1033 779 1681 1372 103U 1079 1195 1323 - 6 3 - 3 6 6 - 6 9 8 188 -162 -5UU 602 177 -289 UN-FAO -0.U2 -o.k2 -0.U2 10.98 22.99 36.09 - k . 6 l l -9.656 - 1 5 . 1 5 8 -2.317 -7.362 -12.86k - 13 - Ul -YX1 538 510 k80 1132 1073 1010 "l l i U 1338 1259 1873 1775 1671 1079 1195 1323 53 -122 -313 332 IU3 -6k 79k 580 3U8 79 SWITZERLAND Income income Effect on Consumption of Annual i U66 Flour Total 1966 Consumption 1966 1966 Import Requirement iasticity Growth Population TnromP Combined Flour Change Consumption ^ Medium High Domestic L Medium High oefficient Population income Effect Consumption bonsumption &1 rroduction 6 4 Change Change b+2.20 sb -0.53 -0.53 -0.53 b -0 .85 -Oj85 -o.b5 10 . 9 8 22. 99 36.09 +4.1.66$ -5.819$ -12.185 • -19.128 -i .353$ - 7 . 7 1 9 -IU.662 1*78 - ' 6 -37 - 7 0 * U72 m*i U08 835 780 722 981 917 848 1221 l l l ; 0 1055 382 1*23 468 1*53 357 251; 599 h9h 380 $39 717 587 10.98 22.99 36.09 -9.333 -19.51*2 -30 . 6 7 6 -4.867 -15.076 -26.210 -23 -72 -125 1*55 H06 353 805 718 624 9U6 8UU 73U 1177 1050 913 382 1*23 1*68 U23 295 156 561; 1*21 266 795 627 i*l*5 b-2.20 sb -1.16 -1.16 -1 . 1 6 10.98 22.99 36 . 0 9 -12.737 -26.668 -4I.86U -8.27J- -22.202 -37.398 -39 -1O6 -179 1*39 372 299 777 658 529 913 773 622 1135 962 773 382 1*23 1*68 395 235 61 531 350 i5U 753 539 305 UN-FAO -0.1*2 -0.1*2 -0.1*2 10.98 22.99 36.09 - k . 6 i l -9.656 i i 5 n ' 5 8 -0.1U5 -5 . 1 9 0 - 1 0 . 6 9 2 - 1 -25 -51 hi 7 U53 1*27 84U 801 755 992 9U2 888 1231; 1171 IIOl; 382 423 468 U62 378 287 610 5i9 420 852 7U8 636 UNITED KINGDOM b+0.30 sb - 0 . 9 5 - 0 . 9 5 - 0 . 9 5 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 +2.531$ -10.1*31$ ' -21.81*0. - 3 U . 2 8 6 - 7 . 9 0 0 $ 1*365 - 1 9 . 3 0 9 - -31.755 -3U5 -81*3 -1386 1*020 3522 2979 10163 8901* 7531 1211*1* 1.064P- 9000 515083 13215 11177 3095 31*30 3796 7068 51*71* 3735 901*9 7210 5201* 11988 9765 7381 b - 1 . 3 2 -1.32 - 1 . 3 2 10.98 22.99 3 6 . 0 9 -11*. 1*91* - 3 0 . 3 4 7 -1*7.639 - 1 1 . 9 6 3 - 2 7 . 8 1 6 -1*5.108 - 5 2 2 -12 l l * - 1 9 6 9 381*3.. 3l5i 2396 9715 7966 6057 1 I 6 1 0 9519 7238 11*10.9 11823 8990 3095 31*30 3796 6620 U536 2261 8515 6089 310*2 11321* 8393 5191* b - 2 . 2 0 sb -1.70 - 1 . 7 0 - 1 . 7 0 10.98 22 .99 3 6 . 0 9 -18.666 - 3 9 . 0 8 3 - 6 1 . 3 5 3 - 1 6 . 1 3 5 - 3 6 . 5 5 2 -58.822 -7ol* -1595 -2568 3661 2770 1797 9255 7003 1*51*3 11060 8368 51*29 13736 10393 67U2 3095 31*30 3796 6 l 6 0 3573 71*7 7965 1*938 1633 1061*1 6963 291*6 UN-FAO -0.1*2 -0.1*2 -0.1*2 10 .96 22.99 3 6 . 0 9 -l*.6ll -9.656 - 1 5 . 1 5 6 - 2 . 0 8 0 - 7 . 1 2 5 - 1 2 . 6 2 7 - 91 - 3 1 1 - 5 5 1 1*271* 4051* 3811* 10805 1021*9 961*2 12912 1221*7 11522 16036 15210 11*310 3095 31*30 3796 7710 6819 - 581*6 9817 8817 7726 1291*1 11780 105II* 80 WESTERN GERMANY Income Elas- t i c i t y Coefficient Income Growth Effect on Consumption of Population Income Change Change Combined Effect Annual Fiour ponsumption Change Av.1257/59 1966 Flour Consumption 1966 Indirect Consumption 1966 Total Consumption 1966 Domestic Production 1966 Import Require- ment b=o 0 0 0 1 0 . 9 6 22 .99 36.09 +2.401$ +2.1.01$ *2.1*01 +2.1*01 . l * 8 l 8 +1I6 +116 +116 1*931* 1*931* 1*931* 1+751* 9688 8332 9231* .10218 1356 1*51* - 5 3 0 UN-FAO -O.i+2 -0.U2 -0.1+2 1 0 . 9 8 22 .99 3 6 . 0 9 +2.4OI -4 .611$ - 9 . 6 ^ 6 . - 1 5 . 1 5 8 - 2 . 210 - 7 . 2 5 5 - 1 1 . 7 5 7 -107 - 3 5 0 - 5 6 6 1*711 4468 U252 ' 1*751* 91*65 9222 9006 8332 9231* 10218 1133 -12 -1212 BELGIUM - LUXEMBOURG b=o 0 0 0 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 +2.1(40$ +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 UN-FAO -0.1*2 -0.1i2 - 0 . U 2 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 . +2.1*1*0 -Iw 61155 - 9 . 6 5 6 -10 .158 - 2 . 1 7 1 - 7 . 2 1 6 - 1 2 . 7 1 8 875 - 19 - 63 —111 856 812 761; 61*9 1505 l l * 6 l 11*13 10U5 1159 1282 1*60 302 131 BENMARK b+2.23 sb -o.yi - 0 . 9 1 -0.91 V, 1 0 . 9 8 22.99 36 .09 +4.831).$ -9.992$ -20.921 -32.81*2 - 5 . 1 5 8 $ - 1 6 . 0 8 7 . - 2 8 . 0 0 a 362 - 19 - 58 - 1 0 1 31*3 30U 2 6 l 1*93 836 797 751; 626 691* 766 210 103 -11; u -x.61* - i . 6 a - i . 8 U 1 0 . 98 2 2 . 9 9 3 6 . 0 9 -20 . 2 0 3 - U 2 . 3 0 2 •̂ 66.1*06 - 1 5 . 3 6 9 - 3 7 . 4 6 8 - 6 1 . 5 7 2 - 56 - 1 3 6 - 2 2 3 306 226 139 799 719 632 626 69I* 768 173 25 - 1 3 6 b - 2 . 2 3 sb - 2 . 7 7 - 2 . 7 7 - 2 . 7 7 1 0 . 9 8 2 2 . 9 9 3 6 . 0 9 - 3 0 . U 1 5 -63.682 -99.969 - 2 5 . 5 8 1 - 5 8 . 8 L 8 - 9 5 . 1 3 5 - 93 -213 -3l*l* 269 11+9 18 762 61*2 511 626 691* 768 136 - 5 2 -257 UN-FAO -0.1*2 -0.42 -0.42 1 0 . 98 22 .99 3 6 . 0 9 -4 . 6 1 I - - 9 . 6 5 6 - 1 5 . 1 5 8 +0.223 -4.882 -IO.324 + 1 - 17 - 37 363 3U5 325 856 838 818 626 691* 768 230 11*1* 50 81 SAMPLE CALCULATIONS OF : INCOME ELASTICITY COEFFICIENT OF DEMAND BY COUNTRIES, WESTERN EUROPE (log Y = a + b log X) ' AUSTRIA DENMARK Consumption I Logarithms of data Income - • x-., Logarithms or data Logarithms of data x2 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 . 8 6 1 9 U . 5 3 8 I 8 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 . 2 0 6 2 9 191*9 2.0291* 3 . 6 8 1 9 1*.1181*6 1 3 . 5 5 6 3 9 7 .47205 1950 2.1038 3 . 9 3 6 8 U.U2597 15.49839 8.28221* 1950 1 . 9 9 1 2 3 . 6 9 5 8 3.96U88 1 3 . 6 5 8 9 U 7 . 3 5 9 0 8 1951 2 . 0 5 6 9 3 . 9 6 0 2 U. 23081* 1 5 . 6 8 3 1 8 8.IU57U 1951 1 . 9 9 1 2 3 . 6 8 1 5 3.961*88 13.55314* 7 . 3 3 0 6 0 1952 2.0719 3 . 9 5 8 8 U.29277 1 5 . 6 7 2 1 0 8.202 21* 1952 1.9777 3 . 6 8 3 8 3 . 9 1 1 3 0 1 3 . 5 7 0 3 8 7.285U5 1953 2.0682 3 . 9 5 8 5 U.277U5 15.66972 8.18697 1953 1 . 9 6 8 5 3 . 7 0 7 2 3.87U99 13.7U333 7.29762 195U 2.0719 3 . 9 9 5 6 U.29277 15.96U82 8.278U8 195U 1 . 9 6 8 5 3.7122 3.871*99 13.7801*2 7.307U7 1955 2.0755 U.029U U.30770 1 6 . 2 3 6 0 6 8 . 3 6 3 0 2 1955 1 . 9 6 3 8 3 . 6 9 6 6 3 . 8 5 6 5 1 1 3 . 6 6 4 8 5 7 .25938 1956 2.0719 u.0750 U.29277 1 6 . 6 0 5 6 2 8.1*U299 1956 1 . 9 3 9 5 3 . 7 0 1 9 3.76166 I 3 . 7 0 U 0 6 7.17981* 1957 2.06U5 U.0992 U.26216 I6.803I1U 8.U6280 1957 1 . 9 1 9 1 , 3 .7151 3 . 6 8 2 9 U 13.80197 7 .12965 1958 2.061*5 U.10U9 U.26216 1 6 . 8 5 0 2 0 8.1*71*57 1958 1 . 8 9 2 1 3.7277 3.5800L* 1 3 . 8 9 5 7 5 7 .05316 1959 2 . 0 5 3 1 U.1227 U.21522 1 6 . 9 9 6 6 6 8.1*61*32 Slims 2U.9363 1*8.0037 51.82396 192.10992 99.73667 Sums 21.671*1* U0.6719 U2.72537 150.38522 80 .1332U Means 2.07802 U. 00031 Means 1.9701*0 3.6971*1* r = - 0 . 7 5 r = - 0 . 8 1 sb 0 . 0 5 8 sb = 0.1*18 82 NET FOOD SUPPLIES PER PERSON - CEREALS AS FLOUR (IN TERMS OF FLOUR AND MILLED RICE) a (Kilograms per year) Austria Belgium- Denmark Western Luxembourg France Germany Italy Netherlands Norway Sweden Switzerland United Kingdom iyh8 b 135 10U 108 127 12U 155 100 117 86 112 112 19h9 127 106 107 120 113 15U 9li 116 87 120 103 1950 127 106 98 118 101 153 101 116 92 118 100 1951 Ilk 105 98 119 99 15U 96 108 88 11U 100 1952 118 10k 95 120 98 155 95 IOU 83 108 98 1953 117 10k .93 109 96 155 92 99 79 105 92 195U 118 10k 93 115 97 1U8 92 98 78 101 91 1955 119 ioU 92 109 96 1U7 92 98 77 101 88 1956 118 101 87 112 95 11*6 90 103 75 101 87 1957 116 9k 83 110 91 1U2 87 89 7U 99 85 1958 116 93 78 113 90 IkO 87 88 7U 95 8U 1959 113 91 79 107 85 11*2 86 79 75 83 8U a Source: Food and Agriculture Organization, Production Yearbook, Rome, Vols. 1 - XIV. b Data presented in terms of s p l i t years. For example, 19U8 indicates 19U8/U9 data. ESTIMATED REAL NATIONAL INCOME PER PERSON PER YEAR IN DOMESTIC CURRENCY,a Austria Belgium-Luxembourg Denmark France Wgstern Italy Netherlands Norway Sweden Switzerland United Schillings Belgium Francs Kroner New Francs Germany l i r e guilders Kroner Kroner Swiss Fraacs Kingdom "D.M. . fa 19U8 7277 U658 2181 15118k 1687 U7 99 U977 3988 265 I9U9 7955 3156U U8O8 2268 1339 152236 1708 5027 5288 393U 275 1950 86U5 35072 U963 2361 1681 173237 163U U960 U827 3889 261 1951 912U 36727 U803 2386 1877 180673 1653 516U 50U5 U037 260 1952 9095 37167 U829 2U79 2079 ' 18220U 1709 5109 5128 U096 258 1953 9088 3795U 5096 255U 2257 196038 1825 5009 50.03 U261 268 195U 9901 39123 5155 2767 2U17 193735 1957 5129 5320 UU99 280 1955 11070 U1266 U972 2956 2696 2I399I 2156 5326 5505 U663 28U 1956 11886 U2302 503U 3187 2853 2179U2 225U 5731 5636 U879 290 1957 12563 U3063 5189 3UI7 2913 230988 2292 • 58U9 5806 5007 295 1958 12733 U2622 53U2 3339 2963 23927U 2291 53U7 5693 5051 298 1959 1326U U2830 332U 3107 251019 2360 5U52 5963 5266 302 a Calculated from: United Nations, S t a t i s t i c a l learbook, New York, Vols. 1 - XII. 83 MID YEAR ESTIMATES OF TOTAL POPULATION3, (Thousands). Austria Belgium-Luxembourg Denmark France Western Germany I t a l y Netherlands Norway Sweden Switzerland United Kingdom i 9 l * 8 6953 8848 4190 41500 46724 45706 9794 3181 6883 4609 50033 19U9 7090 8909 4230 41180 47585 46OOI 9955 3233 6956 4645 50363 1950 6906 8936 4271 41934 47662 46272 10114 3265 7017 U694 50616 1951 6916 8977 4304 42239 48117 46598 10261* 3294 7073 4749 50556 1952 6949 9008 4334 42600 48478 U6865 10377 3327 7126 4815 50772 1953 6954 9082 4369 42860 48994 47756 10493 33$9 7171 4877 50857 1954 6969 9125 4406 1+3000 49516 L7665 10615 3392 7214 4923 51059 1955 6974 9177 4439 43274 U999S : 48016 10751 3425 7262 4977 51221 1956 6983 9236 4466 436U6 50786 1*8279 10888 3)462 7361 5039 51430 1957 6997 9305 U500 44071 53692 48483 11021 31*9,1* 7367 5117 51455 1958 7021 9373 U515 44556 54374 U8735 11186 3526 7415 5I«5 51680 1959 7049 9428 4547 45097 54996 U9052 11346 3556 7454 5240 52157 a Source: Food and Agriculture Organization, production Yearbook, Rome, , Vols. 1 - XIV. FLOUR CONSUMPTION3- (Thousand Metric tons) Austria Belgium-Luxembourg Denmark France Western Germany I t a l y Netherlands Norway Sweden Switzerland United Kingdom 1946 939 920 1*53 5270 5794 7081* 979 372 592 516 5601* 1949 900 91*4 453 1*91*2 5377 7081* 936 375 605 557 5187 1950 877 91*7 419 i*9l|.8 1*811* 7080 1022 379 61*6 551* 5062 1951 788 91*3 1*22 5026 1*761* 7176 985 356 622 51*1 5056 1952 820 937 412 5112 1*751 7261* 986 31*6 591 520 1*976 1953 814 91*5 1*06 1*672 1*703 ' 71*02 965 333 567 512 1*679 1954 822 91*9 1*10 491*5 I1803 7051* 977 332 563 1*97 1*61*6 1955 830 95U 1*08 1*717 1*800 7058 989 336 559 503 1*507 1956 821* 933 389 1*889 1*825 701*9 980 357 51*9 509 4474 1957 812 875 37U 1*81*8 1*886 6885 959 311 5U5 507 1*374 1958 811* 872 352 5035 1*894 6823 973 310 51*9 1*93 1*341 1959 797 877 359 1*825 1*675 6965 976 281 559 1*35 1*381 1957/59 average 808 875 362 1*903 1*818 6891 969 301 551 1*78 4365 a Calculated from: Food and Agriculture Organization, Production Yearbook, Rome, Vols. l-XIV. FLOUR CONSUMPTION AS PERCENT OF TOTAL WHEAT AND RYE DISAP- PEAR! NCEa Austria Belgium-Luxembourg Denmark France Western Germany Italy Netherlands Norway Sweden Switzerland United Kingdom 1 9 4 8 7 9 . 7 6 7 . 8 7 2 . 0 6 2 . 6 7 3 . 3 8 2 . 6 7 1 . 9 8 7 . 3 6 8 . 1 8 5 . 1 7 4 . 7 19U9 7 4 . 5 5 8 . 2 5 U . 5 6±S 6 2 . 3 8 0 . 9 6 1 . 6 8 4 . 5 6 9 . 7 7 9 . 5 75.7 1950 6 U . 5 5 U . 8 5 6 . 7 6 1 . 2 55.x 7 9 . 8 6 5 . 9 8 4 . 4 6 0 . 3 7 5 . 1 7 2 . 6 1951 7 1 . 0 5 9 . 9 6 9 . 6 6 1 . 9 5 7 . 6 8 0 . k 6 2 . 1 8 3 . 8 69.O 7U.2 6 9 . 9 1952 7 2 . 3 6 0 . 3 5 9 . 8 6 0 . 7 5 3 . 8 8 1 . 6 6 0 . k 7 8 . 5 6 5 . 7 7 2 . 0 7 1 . 0 1953 6 7 . 6 5 2 . 1 5 3 . 5 5 6 . 8 5 2 . 3 8 2 . 9 5 7 . k 7 7 . 3 5 6 . 2 6 8 . 7 6 6 . 4 I 9 5 U 6 7 . 2 58.U 3 7 . 3 5 6 . 1 5 0 . 8 7 8 . 2 5 U . 3 7 4 . 9 5 2 . 1 6 2 . 9 5 5 . 6 1955 63.I 6 0 . 9 U5.2 5 3 . 2 5 1 . 2 7 8 . 2 5 6 . 1 7 7 . 8 5 8 . 2 7 0 . 2 5 8 . 0 1956 6 5 . 7 5 8 . h U 2 . 5 5 4 . 0 5 1 . 2 7 7 . 9 5U.7 7 9 . 0 6 0 . 0 6 l u 5 5 5 . 6 1957 6 5 . 1 - 5 8 . 0 4 8 . 6 5 3 . 5 5 i . o 7 6 . 0 5 2 . 0 7 6 . 6 5 5 . 6 7 0 . 6 5 5 . 6 1958 6 6 . 3 5 7.i U5.7 5 4 . 4 5 i . 7 7 2 . 9 .. .-• 5 o.i 7 7 . 9 U8.x 6 2 . 5 5 5 . 3 1959 4 6 . 8 4 8 . 1 7 2 . 2 5 0 . 8 a Calculated from: Food and Agriculture Organization, production Yearbook, Rome, Vols. I - XIV. • * GROSS FOOD SUPPLIES OF WHEAT AND RYEa TOTAL SUPPLY IN THOUSANDS OF METRIC TONS. Austria Belgium-Luxembourg Denmark France Western Germany Italy Netherlands Norway Sweden Switzerland United Kingdom 1 9 4 8 d 1178 1356 629 8 4 I 8 7906 8580 1361 426 869 606 ' 7 4 9 8 I9U9 1208 1622 831 8038 8625 8755 1519 hhh 868 701 685U 1950 1359 1727 739 8 0 8 4 87UG 887U 1551 4 4 9 1071 738 6977 1951 1110 157U 606 8120 8269 8929 1585 i|25 902 729 7233 1952 H 3 U 1555 689 8U19 8 8 3 8 8902 1631 uui 899 722 7007 1953 1205 1815 759 8224 8992 892IL 1681 U31 1009 7U5 7050 195U 122I4 1626 1096 •; 8808 9U52 902k 1799 4 4 3 1080 790 8331 1955 1315 1567 - 903 8871 9378 9029 1 7 6 4 4 3 2 960 717 77614 1956 125U 1597 916 9 0 5 9 b 9U29 90I48 1793 U52 916 789 8 o u 7 1957 1 2 4 7 1510 770 92lil 9581 9063 18U3 4 0 6 980 7 1 7 7831 1956 1228 1528 711 9 2 4 6 9U66 9361 1 9 U i 398 11U2 C 789 7852 1959 999U 2029 ;.389. l i O l a Source: United Nations, S t a t i s t i c a l Yearbook, New York, Vols. I - XII. b Estimated from production, import and export data; 1956 and 1 9 5 7 . 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 indicates I 9 4 8 / U 9 data. 85 WHEAT AND RYE PRODUCTION, IMPORTS, EXPORTS AND AVAILABLE FOR CONSUMPTION: • NORWAY BY COUNTRIES, WESTERN EUROPE, 19l*7 - 5° a SWEDEN Wheat Pro- duction OOO tons 0 Rye pro- duction 000 tons Wheat Imports 0 Rye Imports Wheat Exports Rye Exports Wheat & Rye Available Wheat Por- Rye Pro- Wheat Rye Wheat Rye Wheat & duction 000 tons b duction 000 tons Imports0 Imports Exports Exports Rye Avaiiat 19l*7 399 11+3 93.1 1+.6 16 .8 3.6 19U8 702 322 135.8 34 .9 13.5 0.2 1181 191+9 698 277 1.7 8.8 3.5 0.1 962 1950 739 21+1+ 76.0 0.2 168.6 66.4 824 1951 1*77 175 209.5 19.9 19.9 17.7 81+1+ 1952 771+ 277 331.9 50..6 62.1 - 1375 1953 996 305 59.0 - 263.3 12,6 1061+ 1951+ 1021 301 5.0 1+.1+ 380.4 113.8 839 1955 716 170 1+1.5 36.6 161.5 15.4 788 1956 951 267 U5.5 1+5.9 11+6.7 4 . 4 11159 1957 711 230 110.2 1+6.2 200.9 1+7.2 61+9 1958 598 170 15U.6 76.0 li+5.3 14.7 839 1959 836 211 161+.9 67.9 86.2 2.2 1192 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 1 9 5 9 46 76 67 66 40 39 39 41 32 56 30 17 20 2 3 2 2 1 1 1 2 1 2 1 1 2 196'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 83.9 82.6 96.0 134 .4 87.5 43 .5 92 .4 50.5 3 8 . 1 55 .5 55 .9 5 9 . l i 45 .8 0.1 0.6 1 .8 1.7 1.6 0.9 0.2 0.1 1+86 423 1+85 501+ 383 1*56 425 445 484 .368 399 389 SWITZERLAND UNITED KINGDOM 1947 187 25 2 8 8 . 4 20.1+ 0.3 191+8 195 27 425.2 ±6.1 0.1 663 191+9 251+ 30 443.0 2.8 - - 730 1950 226 38 360.5 5.6 - 633 1951 234 37 383.8 0.2 _ 655 1952 279 39 360.5 0.5 _ - 678 1953 2U5 37 350.9 1.8 - - 635 1954 3U6 45 383.7 .7.0 - 782 1955 321 1+1 311+.I 0.8 - 677 1956 207 35 1+65.3 10.2 - - 7±7 1957 305 30 1+36.8 a . l 9.0 761+ 1958 337 1+0 407.1 1.6 o . ± 786 1959 366 38 277.9 17.7 0.3 700 ±947 1694 22 5U72.0 6.7 13.6 1948 2399 1+8 5397.2 - 13.1 7831 1949 2239 55 5659.0 2.6 12.6 7943 1950 261+8 58 3895.6 - 13.3 6589 1951 2353 1+8 48H+.8 2.0 11+.8 7203 1952 2344 51 1+681.1 1.5 15.0 7063 1953 2707 67 1+761+.8 1.6 13.5 7527 1951+ 2828 l+o 1+027.6 0.8 15.6 6881 1955 261+1 19 501+9.4 - 16.7 7692 1956 2891 25 5366.8 6.8 5.3 8285 1957 2726 21+ 5080.1 5.6 6.3 7830 1958 2755 21 5114.3 1+.5 6.8 7887 1959 2630 13 1+878.3 7.9 7.3 7722 BELGIUM -'LUXEMBOURG BELGIUM - LUXEMBOURG Belgium " Belgium Luxembourg Wheat Production Rye Production Wheat Production 000 tons 0 000 tons 000 tons Luxembourg Rye production 000 tons Belgium - Luxembourg Wheat Imports0 Rye Imports Belgium - Luxembourg Wheat Exports Rye Exports Wheat & Rye Avai±ab±e 1947 191*8 191*9 1 9 5 0 1 9 5 1 ± 9 5 2 1 9 5 3 1 9 5 U 1 9 5 5 ± 9 5 6 1 9 5 7 1 9 5 8 1 9 5 9 122 31*1* 596 51*7 511* 579 571* 589 731 603 766 797 813 162 181* 258 21*0 201* 221 213 21*5 220 196 190 200 195 8 25 29 35 35 37 38 41 1*1 36 1*8 53 50 7 797.2 73.7 21.6 2.1 13 802.5 133.0 9.8 82.2 11*09 13 61*1*. 6 118.8 l * . l * 0.5 1656 12 636.6 100.5 10.7 3.0 1557 11 96o.± 1*3.2 26.5 12.1« 1729 9 807.7 10.0 21.6 1*.2 1638 10 618.5 113.3 ±4.0 3.1* 151*9 11 778.8 197.6 20.2 12.3 1831 8 1*86.2 107.7 9.8 0.7 1583 9 565.5 87.2 20.3 0.8 11*76 9 413.9 69.5 10.2 0.3 ±1*57 10 507.1* 43.2 77.6 0.1 1532 9 1*58.1* 1*2.6 141.8 0.1 ±1*26 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- duction 000 tons b Rye Pro- duction 000 tons Wheat Imports 0 Rye Imports Wheat Exports Rye Exports Wheat & Rye Available Wheat Pro- duction 000 tons b Rye pro- duction 000 tons Wheat Imports 0 Rye Imports Wheat Exports Rye . Exports Wheat S: Rye Available 19U7 206 260 n.a. 0 . 3 - — 19U7 5U 179 3 U . 0 5 3 . 0 3 .1* k . 9 I9k6 261 289 332 .6 - - 883 19k6 252 koo 93 .8 58 .2 k . 9 5 6 . 3 7k3 I9U9 350 365 5 0 9 .5 1 0 9 . 5 - - 1335 191*9 299 1*69 6 1 . 3 1 3 . 5 7.7 6 9 . k 765 1950 38U 388 377.9 1 . 3 - - H 5 i 1950 298 330 36.7 9 5 .6 5 . 1 - 756 1951 342 33U U62.2 130 .7 - - 1269 1951 273 270 5 7 .9 5 0 . 3 k . 3 i k . 6 632 1952 1*01 3iiO 32U.O 1 5 9 .7 - - 1225 1952 301 358 - 9k .6 2 6 . 5 k . o 29 .5 7k6 1953 U99 421 3 1 0 . 2 23 .3 - 0 . 1 1253 ±.9$3 283 ' 331 1*5.3 0 . 5 77 . 1 1 0 .6 571 195U U52 370 177 . 2 6 2 .3 - - 1061 1954 292 276 2 9 1 . 7 1 6 2 . 7 3 . 2 6 . 1 101k 1955 5**9 1*16 3 3 1 .5 66.2 - - 1363 1955 25k 191 3 5 7 .5 1 6 8 . 3 7 . k 0 . 3 96k 1956 570 l*3k 2 0 6 . 9 5 1 . 1 0 . 1 - 1262 1956 266 291 272.9 1 3 6 . 6 1 2 . 2 1 .7 953 1957 574 kOO 176 .7 U5.9 0 . 2 . - 1199 1957 273 313 212 .5 7k .7 9 . 0 1 . 0 8 6 3 J.958 51*9 397 177.6 5 3 . 9 - - 1178 1958 27k 306 1 2 2 . k 32.9 2 . 0 0 . 1 733 1959 589 k l 7 2 5 9 . 1 63.9 0 . 1 2 . 8 1326 1959 36k 289 2 k 0 . 9 27.2 2.9 0 . 2 918 FRANCE WESTERN GERMANY 19k7 3266 38k 6 9 0 . 2 k l * . 3 123.2 19k7 1225 2009 3 3 k 7 . 3 2.9 19k6 763k 638 1151*. 8 1*3.1 98 . 5 - 9372 I9k6 1951* 2726 3 7 2 3 . 5 23k.9 0 . 3 8639 19k9 8082 650 61*1.0 6 1.8 362.9 - 9072 I9k9 2k7I 3310 2761.9 7 6 9 . 5 69 . 5 1.1* 92k2 1950 7701 606 223.k 1*.3 88k. 2 55.2 7631 1950 26lk 3021 1733.5 210.2 0 . 5 12.k 7567 . 1951 7116 k90 279 .3 . - 819. k 1 0 . 2 7056 1951 29k9 303k 2972.2 239.2 68.2 0 . 3 9126 1952 8k2I 1*82 77k. 8 - 3 9 6 . k 0 . 5 9282 1952 3291 3119 2 1 5 9 . 1 329.k i l k . 5 0 . 5 878k 1953 8981 k67 2 5 5 . 5 1 6.8 5 1 1 . 7 - 9362 1953 3i80 3280 1852.2 11*7.2 6 k . 7 0 . 3 839k 195k 10566 511* 1*03.1 2 .7 1706.7 0 . 2 9779 1951* 2893 k098 3 3 5 9 . 1 1 7 3 . 3 1*5.9 1 3 . 1 10k6k 1955 10365 kko 3 7 5 . 1 - 2961.7 1 . 2 8219 1955 3379 31*95 2k35.2 1 3 2 . 6 1 5 6 . k 196 .3 9090 1956 5683 1*71 1 6 5 0 .k 19.1 ik32.2 - 6391 . 1956 3U87 3735 2 9 7 0 . k 5 1 . 6 1*25.1* 2 6 9 . 0 9550 1957 11082 1*81 8 2 8 . 0 - 1378.3 31.$ 10975 1957 38k3 3816 2902.2 •ll *3 .1 * 5 0 7 . 9 k5.2 10151 1958 9601 kko k 3 8 . 0 - 1 8 5 5 . 0 18.6 86o5 1958 3693 3728 2275.6 72 .9 621.9 3 k . 3 9i.il* 1959 H 5 k k k70 6k3.2 1*.9 1235.9 2 . 0 111*21* ±959 kk95 3867 2k86.3 2 5 . 2 7 5 6 . 9 170.6 99k5 ITALY NETHERLANDS I9k7 k679 97 1 7 0 6 .k 79.k 3.0 19k7 19k 318 71*1.3 _ 9.k 13.3 19k8 6136 112 -2371.5 122.1 1.7 87kO 19k8 306 382 808.9 5 6 . 6 k . 8 12 .7 1536 i 9 k 9 7072 125 20k0.2 0.2 6.k 9231 I9k9 k25 517 5 3 1 .1 19.1 31*. 1 26.1 ili32 1950 7773 131 111*7.1* 1 9 . 6 23.8 90k7 1950 1951 295 1*21 725.1 12 .7 3 . 7 0 . 6 l l *U9 1951 690k 122 1 6 3 6 . 1 1.2 k0 .9 8622 270 1*58 866. k 9 k . k k.l 1.1 1665 1952 7876 127 1 3 5 5 . 0 2 .1 21 .5 9338 1952 327 k97 859.0 22 . 6 28 . 6 12 .9 166k 1953 9052 130 1 1 7 1 .k 39.0 2 .9 10389 1953 2k9 1*31 9 7 k .9 51 .7 71.5 k 6 . 3 1569 195k 7283 115 2 6 5 . 7 195.8 •9.1* 7850 195U 397 512 8 o 5 . k 202.3 79.1 22.2 1815 1955 950k 123 762 .9 100.1 1 5 . 6 10k7k 1955 350 1*65 81*1.2 1 5 3 . 2 ' 6 6 . 5 28 . 6 171k 1956 868k 105 6k5.2 5 1 .9 1 6 1 . 8 932k 1956 309 k92 936. k 1 1 5 . 6 5 3 .5 29.3 1700 1957 8k78 92 536.2 66.0 9x1. k 8261 1957 393 1*58 9 k 9 .7 11*0.1* 1 0 . 3 10 . 6 1920 1958 9 8 i 5 105 :.171*.7. 56.k 762.9 9388 1958 k02 1*27 I 0 5 9 . 6 9 7 .k 6 . 6 7.2 1972 1959 8k66 105 59.2 6 5 .7 829.1 7867 1959 k9k 386 "1122.3 120.3 11 .5 7 . 6 2102 a Source: Food and Agriculture Organization, production Yearbook, Rome, Voxs I - XIV. b. Metric tons c Import. of -wheat fxour is incxuded and expressed i n terms of weight of an equivalent amounts of wheat prior to mixling.

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