UN Says New Agricultural “Revolution” in Asia Could Lift Over 200 Million Out of Poverty
Bangkok (UN Information Services) – A “revolution” through improved productivity in the Asia-Pacific agriculture sector, aimed at overcoming decades of policy neglect, could lift over 200 million people – a third of the region’s poor – out of poverty, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) reports in its latest regional survey.
The Economic and Social Survey of Asia and the Pacific 2008 says that fresh attention needs to be paid to agriculture which provides employment for 60 per cent of the region’s working population. The agricultural sector is also home to a majority of poor people in the Asia-Pacific region.
“Of the world’s poor, 641 million still live in Asia-Pacific – nearly two thirds of the global total, mainly in rural areas,” the Survey says. “The rural poor account for around 70 per cent of the poor in the Asia-Pacific region, and agriculture is their main livelihood.”
The Survey says viable steps can be taken in order to substantially reduce poverty in agriculture. “Agriculture needs another revolution,” it says, adding that, “raising average agricultural labour productivity in the region to that in Thailand could take 218 million people out of poverty, a third of the poor.”
The Survey points to serious repercussions unless agriculture’s productivity is increased. These include widening income gaps, with fewer prospects of significant gains in poverty eradication especially in the rural areas.
Policy failures have led to “low and stagnant agricultural productivity” with an absence of rural infrastructure, incomplete land reform, poor basic service delivery and limited alternative income-generating activities. All of this has lead to low incomes for a majority of the rural workforce and a widening in income disparities.
Large gains can also be achieved by way of a comprehensive liberalization of global agricultural trade that could lift up to a further 48 million people out of poverty.
The Survey calls for a broadening of international trade negotiations beyond the Doha Round by embracing a comprehensive round of trade liberalization to impact on rural poverty. “Doha reforms could result in aggregate welfare losses for Bangladesh due to adverse terms of trade effect. In India, of the poorest households could fall while the richest could gain,” the Survey says.
But “under comprehensive agricultural trade reforms, both regional and global welfare gains increase several times. Global welfare gains exceed US$23 billion in the short-run, increasing to US$37 billion in the long run,” the Survey says.
“A market orientation with a focus on quality and standards would be part of this strategy,” it adds, noting that investment in education and health, and technological innovation also have a vital role to play.
Over recent decades, the Asia-Pacific region has been at the forefront in reducing poverty. The number of poor living on less than US$1 a day has fallen from 1.25 billion in 1981 to 641 million in 2004. The decline has been largely attributable to gains in China where poverty levels fell from 63.8 per cent in 1981 to 9.9 per cent in 2004 – “taking more than half a billion people out of poverty.”
But progress has stalled in recent years with poverty reduction largely evident in urban areas, but not in rural areas. “The slowing poverty reduction is a result of the neglect of agriculture, which is the focus of the rural sector. Agriculture’s lethargy has broken agricultural growth’s historically strong contribution to reducing poverty,” the Survey says.
A consequence has been increasing rural debt among the farming communities, leading to a crisis of debt and rising numbers of suicides by farmers – a tragic trend reported in India, as well as China, Sri Lanka and Thailand. “In India, the distress in rural areas is reflected in the high number of suicides by farmers: 86,922 during 2001-2005,” The Survey notes. It says shifts to more commercial agriculture and more liberal farm imports have added to the pressures on farming communities.
The Survey recommends a “two pronged strategy” to revitalize agriculture while facilitating the migration of excess labour from agriculture to industry and services.
“Revitalizing agriculture requires connecting the poor to markets by improving rural infrastructure, improving agricultural technology, increasing the capacity to adapt technologies, and speeding up diversification and commercialization,” it says.
The second strategy lies in the facilitation of migration out of agriculture. Part of this strategy includes the empowering of the poor to enter labour markets, promote the rural non-farm sector, as well as the promotion of regional growth centres.
The “potential gains from higher productivity in agriculture are large” despite evidence of gains achieved over recent decades, especially in China. “India has the most to gain from a productivity drive, with nearly two-thirds of the region’s poor and a large agricultural productivity gap,” the Survey says.
A driving force for gains in productivity would also occur through crop diversification. “Globalization and changing dietary patterns across regions have made diversifying into high value crops and livestock feasible and financially rewarding,” the Survey says.
Research and development, education of the rural population and rural infrastructure, particularly electricity and roads, are major determinants of labour productivity and impact on poverty reduction. The Survey calls for more attention to health and education to raise rural productivity levels, especially among women.
More effort too is needed to support migration out of agriculture by “empowering the poor, particularly women,” with the necessary skills to tap into labour market opportunities and promote rural non-farm activities and regional growth centres.
The concerns over agricultural productivity come against the backdrop of fears over the medium-term impact from climate change. Rising global temperatures will especially affect water and agriculture. “Increased water stress will hit 185 million to 1 billion people in South and South-East Asia,” the Survey notes.
Shrinking glaciers combined with flooding in low lying areas of South, South-East and East Asia are all expected to have serious regional implications. “Floods will affect 13-94 million people in low lying areas of South, South-East and East Asia. Bangladesh, China, India and Vietnam will be among the most affected,” the Survey says.
As the region's most comprehensive annual review of economic and social developments, ESCAP's Economic and Social Survey of Asia and the Pacific provides the only independent source of analysis covering all countries in this vast and diverse region, and considers both the social and economic spheres of development. The 2008 Survey, entitled "“Sustaining Growth and Sharing Prosperity”, looks at the most critical issues, challenges and risks our region faces in the months ahead.
Headquartered in Bangkok, Thailand, ESCAP is the largest of the UN's five Regional Commissions in terms of membership, population served and area covered. The only inter-governmental forum covering the entire Asia-Pacific region, it aims to promote economic and social progress.