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

Contents n Introduction n Policy Lessons and Implications n Implications of Growth in Mega Economies n Conclusions and Recommendations

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

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

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

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

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

Development Experience and Trends (Contd.) n 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.

Development Experience and Trends (Contd.) n 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.

Development Experience and Trends (Contd.) n 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.

Policy Lessons and Implications Policy lessons from selected countries 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

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

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

Conclusions and Recommendations n Governments must be pro-active to facilitate agricultural restructuring in response to changing market and trade opportunities n 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

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