Abstract
Two trends on yields have been observed for rice, wheat, and even edible oils in Asia. The deceleration of yield growth is one of these trends. The other relates to the differential yield increases across countries in the region. This study provides explanations for both trends and relates these to the exhaustion of the yield potential of current technology, emerging threats posed by climate change and other disturbances, varying levels of development across countries and hence the development of infrastructure, among others. Total factor productivity (TFP) estimates for these commodities indicate the potential to overcome these constraints, however. Key determinants of TFP growth were identified and discussed. While the influence of these determinants on the TFP estimates was not tested empirically in this study because of data limitations, evidence of the relationship was clear and strong in numerous TFP studies done for the agriculture sector as a whole, and for rice and wheat in various countries including Asian countries. Long-term growth will have to come from great advances in interventions being undertaken, three of which include (i) major breakthroughs in new varieties and farming systems in both fertile and unfertile lands; (ii) the restructuring of small farms into more efficient, mechanized large-scale operations, especially in production areas with good infrastructure for market access and irrigation; and (iii) the development of market mechanisms to enhance the comparative advantage of domestic production and explore the value-adding potential of commodities, particularly edible oil. Three policy recommendations are also forwarded to achieve these great advances: (i) sustained investment in agriculture; (ii) getting the mix of institutions right; and (iii) gearing up for globalization. The role of development partners as well as the private sector in effecting sustainable growth is briefly discussed as a concluding section.
Highlights
Despite significant changes in their demand structure, cereals continue to be overwhelmingly the most important source of dietary energy for people in the Asia and Pacific region.1 Among the cereals, the consumption of rice still utterly dominates, accounting for about 24% of per capita calorie intake of the region
This leads to apprehension that the emerging pattern has caused cereal stocks dipping to low levels especially in the past decade, thereby further endangering the attainment of food security (Food and Agriculture Organization of the United Nations Statistical Database [FAOSTAT])
The policy-driven price increase that peaked in 2008 was due to major producers and exporters holding on to their domestic production as speculation of a food crisis mounted. This was the combined effect of several abnormal events, including the financial crisis in the United States (US) and other developed countries, the rise of oil prices that affected the use of fertilizer and farm machineries, Thailand’s pledging policy (Sombilla et al 2011), and the production shortfalls in key grain-producing countries, which were alleged to be severe
Summary
Despite significant changes in their demand structure, cereals continue to be overwhelmingly the most important source of dietary energy for people in the Asia and Pacific region. Among the cereals, the consumption of rice still utterly dominates, accounting for about 24% of per capita calorie intake of the region. The consumption of rice still utterly dominates, accounting for about 24% of per capita calorie intake of the region This share increases to an average of 34% for East, Southeast, and South Asian countries. One trend is that total cereal utilization outpaces production in the region as a whole, primarily in East Asia and the Pacific island countries, where production growth has significantly slowed down. The other trend relates to production fluctuations that indicate periods of shortfall occurring more than those when production exceeds utilization This leads to apprehension that the emerging pattern has caused cereal stocks dipping to low levels especially in the past decade, thereby further endangering the attainment of food security (Food and Agriculture Organization of the United Nations Statistical Database [FAOSTAT])
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