The recent stability of food prices in Asia and the Pacific presents policymakers a window for addressing several crucial issues that, if ignored, risk reigniting the food price crisis of 2007–2012 and undermining the region’s rise out of poverty.
Recall that prices began rising in earnest in 2006, and over a 1-year period to mid-2008 tripled for rice and doubled for corn and wheat. By some estimates the overall rise in prices for these staples kept millions of people from escaping poverty. Prices have indeed stabilized since, with the last major episode an upturn in rice prices in mid-2012. But they have settled at a considerably higher level than before the crisis, a situation the World Bank calls the “new normal.”
Yet, what is perhaps most interesting about the surge in prices, which took place over several years in a number of interlinked episodes, is that major food scarcity did not trigger it. Rather, a series of complex developments affecting the world food, energy, and financial markets did, according to Food Security Challenges in Asia, a working paper completed by Independent Evaluation at the Asian Development Bank. Just a few of these included the demands of urbanization and rising prosperity, a tighter link between food and energy prices, bad weather, and ill-advised policy reactions among major food exporting and importing countries.
Together, these issues revealed several major vulnerabilities and challenges for the region’s food production systems. In aggregate, they have grown relatively unproductive, they are highly vulnerable to climate change, and, in many countries have failed to significantly relieve malnutrition among millions of preschool children despite decades of economic growth.
These three issues require urgent solutions if food security is to be protected, according to the Topical Report Food Security in Asia: No Time for Complacency, which neatly summarizes the working paper.
To prosper, Asia’s 350 million farmers working plots of less than 2 hectares each need to be brought more effectively into modern food value chains. Agriculture is commercializing rapidly in Asia. The challenge is to involve small, resource-poor farmers in this highly competitive process. Although small farms occupy only about 40% of the total farm area, they produce a much larger share of the region’s staple crops.Malnutrition in preschool children, with its long-run impacts on society’s human capital, also needs addressing in a sustainable, financially efficient manner. This could include relatively simple, cost-effective interventions, such as community-managed water supply and sanitation, micronutrient supplementation, and biofortification of staple crops. Low-cost interventions based on simple technologies are often relatively inexpensive to add to rural investment projects such as irrigation and roads.
Perhaps the biggest challenge, however, is revitalizing agricultural productivity to feed Asia’s ever more urban and prosperous population, while simultaneously adapting to climate change and creating more carbon-neutral agriculture. Climate change is often thought of as a longer-run threat, but accumulating empirical evidence suggests that rising average temperatures, extreme heat events, rising atmospheric ozone levels, and other climate-related phenomena are already hurting agricultural productivity. To some degree, it will be possible to adapt to climate change through the application of existing technologies for conservation agriculture. More efficient use of irrigation water will also be critical, particularly in South and Central Asia.
During the coming decades, the scientific challenges of adapting agriculture to these challenges will be formidable. Evaluation shows that investment in agricultural research has an enormous economic payoff. A good starting point, therefore, is for government and development agencies to increase spending in this area. The time is now.