Lessons and implications for agriculture and food Security in the region

1. Rapid Growth of Selected Asian Economies: Lessons and implications for agriculture and food Security in the region P.K. MUDBHARY FAO-RAP Policy Assistance Branch IFPRI-ADB POLICY FORUM 9-10 August 2007 Manila, Philippines

2. Contents • Introduction • Policy Lessons and Implications • Implications of Growth in Mega Economies • Conclusions and Recommendations

3. Introduction • The Asia-Pacific Region has grown most rapidly in the world. • Rapid growth in India and China has led to the largest reduction in the number of poor and hungry. • Several other countries in the region have grown rapidly with similar results.

4. Introduction (Continued) • Poverty incidence fell. Average daily food intake increased with rise in per capita income and food production and fall in real price of food. • Yet the region has the largest number of the poor and food insecure people in the world. • The agriculture sector has grown but faces new policy challenges.

5. Introduction (Continued) • Eradicating absolute poverty and hunger, i.e. achieving MDG-1, remains a major development challenge. • Five rapidly growing countries – China, India, Korea, Thailand and Viet Nam – studied to • learn from their experiences with economic growth, agricultural development and their impact on poverty reduction and food security, and emerging challenges • draw policy lessons and implications for other countries in the region.

6. Introduction (Continued) • This presentation highlights the major experiences, lessons and implications of rapid growth in selected Asian countries for agriculture and food security in the region.

7. Development Experience and Trends • Since launching of economic reforms, in China in 1979 and in India in 1991, both economies have grown rapidly. • Other selected countries: Republic of Korea, Thailand and Viet Nam also achieved rapid growth and economic transformation. • Agriculture sector played a pivotal role in the early stages of growth and is still important.

8. Development Experience and Trends (Contd.) • The results are generally promising, • wide adoption of improved technology and remarkable increase in food production • growth of non-farm rural enterprises • lowered population growth rate • increased per capita food consumption • reduced number of undernourished • decrease in poverty incidence • higher income and improved living standards.

9. Development Experience and Trends (Contd.) • Structural changes have occurred: • Significant decline in agriculture’s share of GDP • Slow down in agricultural growth rate • Increasing urbanization, growing importance of non-farm income • Food consumption, marketing and trade patterns are rapidly changing • Agricultural production system is diversifying away from cereal crops to livestock and high-value products; and is commercializing.

10. Development Experience and Trends (Contd.) • Major policy challenges • Reversing slowdown in agricultural growth • Addressing environmental issues related to intensification; • Assisting small farmers in adjusting to shocks from trade liberalization and commercialization • Ensuring biosecurity, including food safety.

11. Policy Lessons and Implications • Policy lessons from selected countries • Favorable and stable macroeconomic policy environment – fair and stable exchange rate, low inflation, market price and trade liberalization • Institutional reforms – particularly long-term security of tenure, appropriate regulations • Strong public sector support to agriculture – research and extension, investment in irrigation and infrastructure

12. Implications of Growth in Mega Economies • Growth in the Chinese and Indian economies will create opportunities and challenges for the agriculture sector • It will expand export opportunities for certain agricultural commodities for countries in the region, but they need to be competitive. • They will also face increased competition from China on some agricultural products and textiles • India will also open export opportunities for some commodities.

13. Conclusions and Recommendations • Agriculture continues to be important for economic growth, poverty alleviation and food security • Give due priority and allocate more resources to agriculture and rural development to address growing inequality • Recent deceleration in agricultural growth must be addressed urgently – emphasize R&D, small farmers and sustainable natural resource management

14. Conclusions and Recommendations • Governments must be pro-active to facilitate agricultural restructuring in response to changing market and trade opportunities • While battling for a improved market access globally, there is need to domestic policy and institutional reforms to enhance efficiency and competitiveness, and promote public-partnership

15. Thank you for your attention