The Farm Sector: Reflections from Developing Economies’ Experience

Dr BK Mukhopadhyay

(The writer, a noted management economist and an international commentator on business and economic affairs, can be reached at m.bibhas@gmail.com)

What a challenge ahead! Long back Dr Norman Borlaugh, a Noble Peace laureate, called the father of the ‘Green Revolution’, opined that the world would have to increase food production 50 per cent in 30 years, just to feed the world at today’s substandard level and double it to provide everyone with the quality and abundance of food happen. That will be impossible. The world scientist noted that world population stood at 1.6 billion people when he was born in 1914. In 1995, it stood at 5.7 billion. Borlaugh says, “We are adding 100 million (100,000,000) people each year, a billion per decade. That is the population monster…That’s the problem you young people are going to be wrestling with throughout your careers.”

Especially, in today’s world a stronger performing agricultural sector is fundamental to overall economic growth and as such constantly growing agricultural sector is crucial for addressing hunger, poverty and inequality.

Obvious enough, a healthy agriculture sector means more jobs, more income and more food for the poor inasmuch as improving agricultural performance generates income in rural, semi-urban, urban and metropolitan regions. Rising income enables households save / spend more, stimulating growth and investment in other sectors and at the same time addressing hunger and poverty.

Region-wise experience reflect that not only in Myanmar, but in Vietnam also fishermen’s incomes have fallen due to higher production costs in spite of existence of advantages like: favourable weather and new and repaired fishing boats and fishermen netting more fish offshore of central provinces. Incomes fell due to higher production costs, mostly due to fuel costs.

Side by side, it is heartening to note that in developing economies like Vietnam, Bangladesh and India allied agricultural activities are being pepped up. In Vietnam a good number of farmers in Da Lat [city of flowers] have switched to hi-tech floriculture in recent years, heralding a transformation of the agriculture sector in the Central Highlands province of Lam Dong - the province now has a total of around 3,800 hactares dedicated to hi-tech cultivation of flowers, according to the provincial Department of Agriculture and Rural Development.

Indeed - the application of hi-tech farming had been a breakthrough in agricultural production, bringing about far-reaching changes in rural areas as well as the lives of farmers in Lam Dong. The application of advanced technology resulted in higher productivity and value than traditional cultivation. With hi-tech floriculture, farmers grow flowers in greenhouses with automatic irrigation systems. Hi-tech farming brought in recent years, average annual revenues of between VND 800 million (US$38,000) and VND 1 billion ($47,600) per ha, 1.6 times the earnings from traditional cultivation. Previously, a few companies and households were the only ones applying hi-tech floriculture in Lam Dong, but this number has increased exponentially in the last seven to eight years. It is pertinent to note that Lam Dong flowers are exported not only to neighbouring countries and territories but also to the EU and North America.

In the other developing regions, hopefully the poverty numbers are expected to decrease by 330 million. Expectations are similar for the numbers of undernourished - with 6 million more in sub-Saharan Africa and a substantial decrease in undernourished Asia and Latin American region. The regional average food consumption level in Africa is expected to increase only by 7 per cent in the next 15 years to 2360 kcal/person/day compared with 2700 for South Asia, 2980 for Latin America and 3060 for East Asia.

This agricultural growth in Africa requires an increase in agricultural productivity, coupled with a much more dynamic trade sector and adequate incentives to switch to higher value crops, to raise profitability and to improve incomes of those involved – both directly as land owners and agricultural workers, plus indirectly as input suppliers, marketers, processors, retailers and exporters. There is no easy way to counter the challenges looming large!

Heat Is on, But Speed Is Lacking!!

Hopefully, the organic farming sector has been gaining ground. In Sri Lanka much of the agricultural sector has become dependent on agricultural chemicals. It has been a fact that fertilizers, pesticides, and growth regulators are widely used because of the increasing demand for food quantity, rather than quality, from a limited land area. The silver lining is that in the recent past interested individuals have developed organic farming units - accumulated knowledge on the benefits of organic farming, as well as increasing demand for export of organically-grown products playing the role. However, these units, scattered in the wet zone, are considered negligible in the agricultural sector, inasmuch as productivity is somewhat less than the traditional farming units which use agricultural chemicals.

Exports of organically-grown agricultural products to the western world are increasing. Vegetables, fruits, and spices grown without fertilizers and pesticides bring premium prices, thereby enhancing the economic viability of these production units. Nevertheless, the lack of research and extension programs on organic farming is the principal constraint to the development of productive and profitable organic farming in Sri Lanka, as rightly assessed by U. R. Sangakkara and S. Katupitiya, attached to the University of Peradeniya, Sri Lanka.

One very interesting development is the way bilateral cooperation has been expanding in the arena of rural development. Very recently Vietnamese and Cambodian forestry administrations signed a Memorandum of Understanding (MoU) to boost cooperation. Accordingly, the two countries will enhance exchange of information, knowledge and experience in designing and implementing forestry-related strategies and programmes; strengthen cooperation in forest fire management, timber and wildlife transport and trade controlling, forest management and protection over a period of five years.

What is more: the two countries will carry out activities to adapt to the changes of international timber markets to raise public awareness on forest resource protection and to better implement regional and international commitments towards forestry. The two countries would make joint efforts in law enforcement in forest management as well as forest product trade to monitor and prevent cross-border transportation of illegal timber, especially along their shared border areas.

Heavy Tasks Ahead

The emerging fact is, therefore, fundamental changes in priorities and strategies are needed over the next two decades if current trends are to be reversed, especially with a view to: alleviating poverty, by emphasizing the production of basic goods and services and by generating income to meet basic needs; protecting the environment, by conserving and rehabilitating watersheds, arresting land degradation and desertification and conserving biological diversity.

Time is ripe for adopting practical realistic strategies that could ensure food, water and energy security. This involves (i) empowering key actors and enhancing positive action by assigning top priority to the public sector and enabling it to play a leading role in creating conditions for all stakeholders to function effectively; (ii) supporting the development of an effective and transparent market mechanism; (iii) improving the efficiency of the informal sector by providing legal, institutional and other support mechanisms.