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UN report urges Asian nations to re-focus on agriculture

The UNDP's ‘Asia-Pacific Human Development Report 2006: Trade on Human Terms’ is an effort to look at trade in the region from a human development angle. Analysing the position of different countries in the region, with regard to food imports and exports, the report finds that the poorest countries in Asia have become the most dependent on agricultural imports for their basic food supply

“Given the fact that many developing countries now face food deficits, and Asia, including India, still have more hungry people than any other region of the world, there is a need for developing countries to promote agricultural development,” recommends the UNDP-commissioned ‘Asia-Pacific Human Development Report 2006: Trade on Human Terms’. “The key to prosperity and poverty reduction in developing countries in the Asian region is in food security, investment in rural development, maintaining tariffs on food imports, and ensuring that global trade negotiations agree on special safeguard mechanisms,” the report continues.

‘Asia-Pacific Human Development Report 2006’, the first in a new annual series, is an effort to look at Asia-Pacific trade from a human development angle. It was released on June 29, 2006, in the Cambodian capital Phnom Penh, by Hafiz A Pasha, United Nations assistant secretary-general and regional director of the United Nations Development Programme (UNDP), who described the report as “by and for the people of the Asia-Pacific”. Hundreds of experts from various occupations were consulted: scholars, government officials, representatives from civil society organisations, civil society and the private sector.

Agriculture accounts for a high proportion of employment in developing countries and is one of the most contentious areas in multilateral trade negotiations. The report looks at the impact of the expansion of international agricultural trade on poverty, and explores policies that could be adopted to ensure that such trade advances the goals of human development.

“Food is not like any other tradable commodity, and most countries prefer something closer to national self-sufficiency,” the report points out. “It is necessary that national security is built on domestic food production,” continues the report, which claims that countries in Asia, including India, still have over 510 million more hungry people than any other region in the world, according to statistics for the year 2002.

An important point brought out in the report is that, in the face of trade barriers, subsidies, price distortions and official neglect, agriculture has stagnated and the Asia-Pacific region has become a net agricultural importer, threatening food security and deepening rural poverty. Food security needs to be the focus of countries in Asia, concludes the report, considering the fact that “cheap imports as a result of the opening up of agricultural trade have led to a sharp decline in domestic production of food staples in the region, which has been a food exporter for many years”.

Analysing the position of different countries in the Asia-Pacific region, with regard to the import and export of food, the report finds that the poorest countries in Asia have become the most dependent on agricultural imports for their basic food supply. In countries such as Afghanistan, Bangladesh and Nepal, food imports were more than double exports, by the end of the 1990s. And this trend is growing, says the report, which visualises food imports by developing countries growing two to three times over, from US$ 18 bn in 2004 to around US$ 50 bn by 2030. The report warns: “Considering the fact that farming supports half of Asia’s workforce, growing reliance on cheap food imports could wipe out rural livelihoods.”

While examining the impact of global trade on development in the region, the report observes that developing countries have opened up their agriculture trade markets far more than have developed countries. While the Asia-Pacific region is at the forefront of globalisation, the world’s fastest rates of growth in international trade specifically is noticed in East Asia and now also in South Asia.

Assessing the impact of trade liberalisation on economic growth, particularly on human development through employment, the report says that Asia’s entry into the global market had propelled record economic growth and reduced income poverty in many parts of the region. At the same time, however, increased trade has exacerbated inequalities not only between countries but also within national borders.

Other important observations in the report are:

  • Some of the region’s most open economies -- in particular East Asia -- are grappling with the challenge of “jobless growth,” with job-creation lagging far behind workforce expansion.
  • The region’s cheap, labour-intensive manufacturing of high-tech goods has made it the “factory of the world”.
  • The benefits of free trade have accrued more to highly paid skilled workers than to unskilled workers.
  • Richer farmers and agri businesses are moving out of food production and into the cultivation of more profitable commercial crops. This has profound implications for over half of the billion people living in the region.
  • Most of the Asia-Pacific region’s population depends on agriculture, but public expenditure on this sector has declined markedly in all sub-regions.

Taking note of some of these adverse effects, the report predicts the future impact when it says: “Global trade expansion can damage poor farmers’ interests by bringing down prices, increasing input costs such as fertilisers, and the withdrawal of state services for irrigation.”

Although it was commonly believed that free trade facilitated the exchange of advanced farm technology to developing countries, the report points out that the transfer of advanced farm technology and research has become difficult because of the patent regime.

Whilst highlighting the positive development effects of trade, the report notes that liberalisation of agricultural markets, as a consequence of the WTO regime, has reduced food prices -- particularly food produced with the backing of subsidies in the US and the EU. Although this benefits consumers, the report says: “These positive effects of trade have not necessarily led to any constant improvement in food security.” The report urges developing countries to promote agricultural development through price supports, affordable loans and other assistance, as well as by strengthening land reform.

In the WTO regime, says the report, “only a few Asia-Pacific countries, among them Thailand and Vietnam, are considered ‘natural exporters’ that can compete with developed countries in the global agricultural market.”

With trade as a focus, other major themes covered in the report include textiles and clothing, fisheries and business outsourcing.

While studying the effects of trade, specifically on India, the report observes that India, like other Asian nations, is on the verge of a net food deficit. Until recently, it was in a food surplus position.

Besides covering the problems related to trade expansion, the report also offers a prescription: “Selective and sequenced opening to trade is crucial to successfully managing globalisation.” It advocates that developing countries in Asia and the Pacific need bold new domestic policies in order to benefit from free trade.

The report stresses that industrialised economies should back fairer trade rules, giving poorer nations the chance to compete in the global marketplace. It also presents an eight-point agenda that developing countries in the Asia-Pacific region could consider in order to use trade integration to achieve human development gains.

For the detailed report see
http://www.undprcc.lk/rdhr2006/rdhr2006_report.asp

InfoChange News and Features, July 2006