National Launching of the ESCAP Study on Sustainable Agriculture and Food Security in the Asia and the Pacific

Excellencies, distinguished participants, ladies and gentlemen,

It gives me great pleasure to welcome you to the national launch of the ESCAP study on “Sustainable Agriculture and Food Security” in Nay Pyi Taw, Myanmar. At the outset, I express my sincere appreciation to H.E. Mr. Htay Oo, Minister of Agriculture and Irrigation for inviting me to visit Myanmar and launch the ESCAP study. As you may recall, I presented the study at a Ministerial Roundtable during the sixty-fifth session of the Commission in April 2009 which was attended by 53 members and associate members. I was very pleased that H.E. Mr. Htay Oo was personally able to participate in that ministerial roundtable and exchange views with fellow member States on sustainable agriculture and food security.

We thank you, Excellency, for your inspiring opening statement, containing highly significant and timely proposals to take our partnership forward. I am very pleased to accept your proposal to jointly organize the national seminars on development partnerships in cooperation with the Ministry of Agriculture and Irrigation. In your statement, Excellency, you have also provided a sound analysis of the prospects and challenges faced by the agricultural economy of Myanmar and identified clear options in revitalizing this very important sector of Myanmar’s economy. Through you, I also extend my sincere thanks to your able team who have worked tirelessly in organizing this national launch. May I also take this opportunity to express my sincere appreciation to H.E. Mr. U Soe Thar, Minister of National Planning and Economic Development, Deputy Ministers and other senior officials for their presence in this important event. I also thank Mr. Shin Imai, FAO Representative in Myanmar for his presentation and the cooperation he has extended to ESCAP.

As I mentioned earlier, ESCAP launched the study on “Sustainable Agriculture and Food Security in Asia and the Pacific” in April 2009. This publication was requested by member States due to their concern about the rising price of food in 2008. It was also a follow up to our 2008 Economic and Social Survey which showed that investment in agriculture has been steadily declining and a lack of agricultural credit was driving farmers into increased indebtedness.

The study that we are launching today reminds us that food insecurity is very much a daily reality for millions of our citizens. The study shows that we have systematically under invested in the agricultural sector and in our farmers. It also contains information on the scope and magnitude of the problem and offers policy options to guide our decision makers.

Excellencies, distinguished participants, ladies and gentlemen,

My presentation has three parts. Firstly, I will provide a brief context within which the food crisis emerged. Secondly, I will briefly analyze the magnitude of food security crisis in Asia and the Pacific region and spell out some of the underlying causes of that crisis. Lastly, in light of these, I shall propose a number of key regional and national policy measures, many of which are directly relevant to Myanmar, a country with abundant resources, hard working people and fertile land which can be harnessed to regain its status as the “food basket” of Asia and the Pacific region, thereby becoming an important part of the solution to the regional and global challenge of food security.

The current economic crisis has captured the world’s attention which makes it incumbent on us that we address the issue of food security urgently and decisively. Food security is just not a matter of agricultural production; it is also a matter of income security for millions of people across Asia and the Pacific. While food prices have fallen from last year, they remain high and will possibly go up when the global economic recovery sets in. Meanwhile, incomes of millions of people in the region have fallen and unemployment keeps rising. Already, 24 million people have fallen into deep unemployment. A serious shortage of cash, credit and liquidity has affected many countries of the region. This unfortunate chain of events and consequences is resulting in a crisis of deepening poverty and hunger.

For millions of people who go hungry every day, the food crisis was already there even before the current economic crisis hit the region. As early as April 2008, ESCAP through its annual Economic and Social Survey had warned of the lack of investment in agriculture, which was one of the key factors for the food crisis. However, the economic and financial crises can be converted into an opportunity in making systemic economic and social changes which are critically needed to address food security in Asia and the Pacific region. With the food crisis of 2008, food security was elevated to a new level of importance in the global debate. Many of the world’s leaders discussed food security at the G8 summit this spring; pledging 20 billion dollars in assistance to agriculture in developing countries.

Despite our region’s enormous capacity to produce food, we are home to the largest number of food insecure people in the world. Estimates published by FAO in June of this year show that 642 million people or 63 percent of the world’s undernourished adults and children live in this region. Some 1.9 million children under 5 years of age die every year due to malnutrition. This is equivalent to 10 jumbo jets full of children crashing every day.

Our region’s biggest challenge is improving the access to food for poor people and developing nations. There are many examples of countries which produce sufficient amounts of food at national level – countries that even export food - but where people are still hungry. The ESCAP study identifies 25 countries that are considered hotspots of food insecurity. Unfortunately, Myanmar is one of these countries. The study also shows that the situation is most severe in South and South-West Asia and is of high concern in some parts of South-East Asia. Further, national averages can mask significant sub-national disparities. Evidence from the study indicates that in most countries of the region there is a much higher percent of underweight children in rural areas than in urban areas. This situation is particularly severe in East-Asia and the Pacific where rural children are twice as likely to be underweight than urban children.

The study cites several underlying causes of food insecurity in our region. The principal cause of food insecurity in Asia and the Pacific region is poverty. Poor people are not only income poor, they are also likely to be undernourished and have limited opportunities, constraining their access to and ability to buy food. This situation has been further aggravated by the global economic and financial crises which have led to a serious loss of income for many families. Lack of access to clean water and sanitation causes infections, which can reduce the body’s ability to absorb nutrients, curtailing their ability to be food secure. Poor people also have limited or no access to land which makes it difficult for them to grow their own food. In many places, rural indebtedness has further led to the loss of land and created a situation in which poverty has become inter-generational. Loss of opportunities for wage employment, both domestically as well as internationally, has aggravated food insecurity for many households. Because of the economic downturn, there are also fewer opportunities for migrants to go abroad in search of employment. Consequently, remittances are going down and migrants are returning home, causing even further strain on rural households in many parts of our region.

The second most crucial factor that led to the food crisis can be traced back to the persistent underinvestment in sustainable agriculture. Over the past several decades, with declining food prices, there has been little government research or investment in sustainable agricultural practices including water and land management. Official development assistance to agriculture has been continuously declining, reaching a critical low. Consequently, several patters can be seen to have resulted in many countries of the region, including continuing lack of investment in sustainable agriculture and insufficient investment in rural infrastructure. Technological inefficiency in agricultural production, post-harvest, milling and storage, and lack of supportive policy environment have made it difficult for farmers, local exporters, traders and businesses to concentrate on agricultural commodities to prosper. Lack of adequate and sustainable agricultural credit from the agricultural banks for farmers, traders and processors, and inadequate institutional capacity of agricultural banks and financial systems to respond to the agricultural and rural economy have further added to their difficulties in ensuring food security and providing employment opportunities.

The third cause of food insecurity is low farm profits. Farmers are being asked to produce more crops at lower prices by the food industry. This requires major investments in machinery that small scale operators can hardly afford. Larger yields also require investments in other inputs, such as fertilizers. The low farm gate prices compared to the cost of the inputs often means that farmers are not earning enough profit. With little incentive to produce, farmers usually take necessary steps to minimize their losses and reduce their cultivation. Lack of a supportive policy environment and exploitative middle men can also lower farm profits as prices offered to the farmers are lower than those that farmers could potentially get if they are able to make direct sales in open markets.

The resulting risk is a loss of farming capacities in the region. It is increasingly difficult to have a livelihood in the agricultural sector. Those farmers that can no longer afford to raise crops join the ranks of the vulnerable whose food security is threatened; often they migrate out of rural communities. The young leave the old behind as farming becomes an economically unviable option. This has serious consequences for the communities. For example, in India, distress caused by chronic indebtedness has led farmers to commit suicide. The economic pressure has led families to take their girls/children out of school.
The fourth cause of food insecurity in our region is the climate change. In combination with environmental degradation from a range of development activities, it has degraded the ecological basis for food production in Asia and the Pacific region. Particularly, environmental degradation and climate change including changing weather patters pose a huge problem to the people and communities living in arid areas. This is now vividly evident from what is happening in the Dry Zone of Myanmar. The frequency of natural disasters has also gone up due to climate change, leading to serious loss of assets including farming equipment, cattle, poultry and land, and reducing the asset base of poor households and their ability to secure food in a predictable manner. Under these circumstances, the promotion of sustainable agriculture will have to take priority in order to offer chances for a decent existence to our farmers.

The fifth cause of food insecurity is protectionist trade policies which reduce the availability of food to those who need it most. The ESCAP study identifies two trends in developing countries. Firstly, countries restrict exports, impose quotas or apply export taxes when food shortages occur. This drives up the price of food. This is exactly what happened to rice prices between 2007 and 2008. Secondly, countries impose import restrictions when trying to promote local production. This policy harms farmers in food exporting countries. Developed countries, on the other hand, tend to protect and subsidize local farmers, leading to over-production. This floods the market with low priced food, hurting farmers in developing countries.

Restrictive policies do not only cause problems in the international market. Although they are meant to protect consumers from high prices, policies that keep farm prices low discourage farm production. This can in the long run have a devastating effect for the development of domestic food markets.

The sixth cause of food insecurity stems from volatile fuel prices and speculation in commodities. High fuel prices adversely affect the agricultural economy in several ways. For instance, any increase in the price of natural gas which is a principal input in the production of fertilizers translates into high input prices for the famers. Similarly, farmers also require fuel for farming, processing, storage and transporting crops to markets. An increase in fuel prices adversely affects all these farming activities. Speculation can further drive up food prices when markets are volatile.

Excellencies, distinguished participants, ladies and gentlemen,

In the last part of my presentation, I will present to you some of the solutions to the challenges that I just analyzed.
As you are aware, many countries, in response to the current financial crisis, have already budgeted or designed fiscal stimulus packages which include increased investment in agriculture and rural development. For example, in India’s most recent budget, allocations for its rural employment guarantee scheme, agricultural credit, debt relief to farmers and rural infrastructure development including roads and irrigation have significantly been increased. China’s fiscal stimulus package invests significantly in rural infrastructure as well. Not only can countries choose to invest more in agriculture when designing their fiscal stimulus packages but the international community also has a responsibility to see that increased development assistance goes to agriculture. In that context, the announcement by the G8 in their spring meeting in re-affirming the global commitment to improving food security and allocation of $20 billion in support of agriculture is a welcome development. This gives us a chance to establish a pro-poor food security system based upon the principles of sustainable agriculture.

At the country level, ESCAP study recommends a number of urgent steps that should be considered for implementation. These include:
Increase agricultural income and profitability by allowing higher prices for agricultural products and by reducing costs of production.
Develop and strengthen the foundations for social protection including removal of the rural debt burden, cash for work and work guarantee schemes and investing in rural health and education.
Improve policy environment by taking measures to improve the marketing of agricultural produce by reducing taxes, tariffs and non-tariff barriers as well as the exploitative role of middlemen.
Improve technology through increased government investment in research and development for production, post-harvest and storage of food. This will be especially important for arid areas where competition for resources is high and farming practices highly specialized.
Improvements of rural infrastructure and rural investment, like the construction of new roads, will help open up markets.
Enhance the purchasing power of the poor by undertaking pro-poor public expenditures, cash for work, and rural infrastructure programmes.
Financially, farmers will benefit from increased access to credit for their operations, and improved opportunity for wage employment in rural areas such as building of village infrastructure and irrigation.
Facilitate trade in agricultural produce so that farmers get better prices.

These are some solutions that can be immediately pursued by the countries of the region. Once again I would like to emphasize that countries have the opportunity now to incorporate these solutions in their fiscal stimulus packages so that food security and the livelihoods of the poor are improved. This can go in tandem with my earlier recommendation that rural debt relief should form a critical component in any programme to revitalize the agricultural economy.

In addition to these urgent steps, over the longer term, the promotion of sustainable agriculture must take priority. In that context, governments need to invest in agricultural research that increases food production while protecting the environment. Similarly, promotion of rain fed agriculture and sustainable irrigation systems will encourage better use of water resources.

The success of these measures is contingent upon building capacities at the local level, particularly that of small scale farms. This can be facilitated through the use of information and communication technology networks connecting village knowledge centers. Measures to mitigate and adapt to climate change are also important. Here, governments should strengthen their own capacities in conducting scientific assessment, forecasting, information sharing and risk management.

At the community level, resilience can be promoted through five codes of practice. These include:
taking advantage of good weather for planting,
adapting crops to new rainfall patterns,
using flood resistant seeds,
adopting soil erosion measures,
preparing for disasters, and
providing incentives to adapt to climate change.

Excellencies, distinguished participants, ladies and gentlemen,

I am very pleased that we are launching the ESCAP regional study here in Nay Pyi Taw. It is the beginning of our development partnership with a focus on revitalizing the agricultural economy of Myanmar which is the most important sector of Myanmar economy, contributing 42 per cent to its GDP and employing 70 per cent of its labour force.
ESCAP is in a good position to engage with Myanmar. As the regional arm of the United Nations in Asia and the Pacific, ESCAP provides a forum that allows groups of diverse countries to share experiences and coordinate their development activities for greater development impact through regional cooperation. Time has come to have a more coordinated, comprehensive and supportive approach to investing in the region’s agricultural and rural economy to ensure food security and sustainable agriculture for our people.

ESCAP facilitates cooperation among member States to develop common regional positions and solutions to global problems. By taking ownership of reviving their economies, regional members can ensure that the recovery is built on a new development paradigm that is both inclusive and sustainable.

ESCAP has already been requested by the Government of Myanmar to provide technical assistance in several areas. They include supporting the achievement of the Millennium Development Goals through institutional capacity building. Under that initiative, technical advice and support will be provided for relevant data analysis and statistics as well as for enhancing capacity for dealing with a range of development challenges. ESCAP can provide a platform for exchange of regional experiences and good practices among Asian countries and will work with the Government of Myanmar so that we have a sustained partnership for development.

In closing, let me once again state that our goal is to prevent hunger and reduce poverty, to improve nutrition and livelihood of our people, to build the resilience of our community, to achieve the Millennium Development Goals, and to put the region, our countries and our people on the path of shared prosperity, social progress and ecological sustainability. Let us work in partnership.

Thank you.