Facilitating Agricultural Trade is Key to Poverty Reduction and Food Security in Asia and the Pacific

Concerned over the sharp rise in food prices and the impact of export barriers on food safety, participants in a meeting organized by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) stressed the need for facilitating intraregional agricultural trade. This will help ensure accessibility and affordability of food products.

Dr. Ravi Ratnayake, Director of the Trade and Investment Division of ESCAP, said that promoting agricultural trade in the Asia-Pacific region is important for addressing poverty in Asia and the Pacific, where over 70 percent of the poor live in rural areas and have agriculture as their main livelihood.

With rising populations and the emergence of relatively affluent population segments seeking dietary diversity, the demand for food products in general, and high-value processed food in particular, has been rising. He noted there is a great potential for agricultural exports in the region.

Analyzing constraints to agricultural exports, senior policy makers, academics, exporters, logistics providers, and UN and Asian Development Bank (ADB) experts at the High-level Consultation on Facilitating Agricultural Trade in Asia and the Pacific organized in Bangkok by ESCAP this week noted that the rapid emergence of stringent private standards for food products in the West has become a major challenge. There are significant gaps in quality infrastructure and technical know-how that prevent developing countries to meet these standards. They emphasized the need for regional cooperation in building capacity and developing mechanisms for accreditation of testing facilities.

It was noted that trade procedures related to agricultural products were much more complex and cumbersome than those of manufacturing products. In some South Asian countries it could take up to 41 days to prepare paperwork for a single transaction for the export of agricultural products. Inefficient trade procedures could result in loss of the entire consignment due to spoilage. Participants pointed out that simplified transport procedures and adequate border infrastructure facilities are crucial for fast passage of agro-export products.

Exporters highlighted that it is extremely difficult for agro-exporters to obtain trade finance due to price, weather, and collateral risks attached to agricultural products. Participants stressed the need for innovative trade financing for agro-exports. They stressed that international financial institutions need to provide credit enhancement and direct support for trade finance.

A number of good practices and success stories in trade facilitation for agricultural products were showcased at the meeting. Cambodian experience showed the effectiveness of efforts to streamline rice export processes, integrate producers into the sub-regional value chain, diversify into new products, and engage the private sector in these processes. UN and ADB experts shared successful initiatives on trade facilitation for agricultural products in the region. Senior policy makers from Bangladesh, Lao PDR and Nepal presented country status and priorities in this area.

Participants put forward recommendations to directly help promote agricultural exports in the region’s low-income countries. These include regional cooperation mechanisms to develop food safety and quality infrastructure in low-income countries; exploring innovative ways to solve trade finance bottlenecks for agro-exports; and helping countries apply paperless trading in the agro-export sector with the help of the UN Network of Experts on Paperless Trade in Asia and the Pacific (UNNExT). It was noted that the Asia Pacific Trade Agreement (APTA) could be used to initiate pilot projects for trade facilitation capacity building.