Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific



He Changchui
Assistant Director-General and
Regional Representative for Asia and the Pacific

Delivered at the

Greater Mekong Subregion Economic Cooperation Program
Technical Meeting on GMS Cross Border Trade and Contract Farming

FAO Regional Office for Asia and the Pacific, Bangkok
6 March 2009

Good Morning Ladies and Gentlemen,

It is my sincere pleasure to welcome you all to this technical meeting on cross-border trade and contract farming on behalf of FAO. This topic is well chosen and timely in view of the many developments that change the environment in which farmers in the subregion operate.

Farmers are being faced with threats, challenges and opportunities that may be unparalleled in recent history, as we are weathered with multiple crises, starting from soaring food and energy prices before mid-2008, followed by global financial melt down and economic recession, the worst situation since the World War II.

However, there are also opportunities presenting themselves in the form of multilateral and bilateral trade arrangements and improved infrastructure in the subregion: road and bridges for their produce to be transported over longer distances to new and farther markets. These agreements promise freer markets and easier-to-cross borders for their produce. Opportunities also present themselves in fresh demand for a variety of new products from well to do urban consumers and tourists visiting the subregion. Prices in these markets are often stable compared to traditional markets, if the right type of produce and contractual arrangement can be found.

Threats come in the form of exclusion from existing and new supply chains and markets, where rich buyers are demanding produce that is both safe and of high quality but where traditional farmers must compete with modern large commercial producers and suppliers from overseas origins. Threats come from deteriorating competitiveness due to lack of economies of scale of the traditional farm, poor access to information and extension, and the lack of finance and effective forms of cooperation among farmers to obtain access to SPS and other forms of certification.

The challenge is how to adjust in such a way that opportunities can be realized and threats avoided. International trade agreements and new bridges do not guarantee smooth or fair treatment of the produce that crosses a border. Perishable agricultural produce is more sensitive to delays at borders than other products. Crossing borders should not become an additional risk for agriculture to the already plentiful production and marketing risks of the sector. Small farmers must be taught that, on his/her own, they have no chance to survive and to prosper. They should be exposed and taught about the benefits of voluntary collaboration in formal or informal groups, to achieve the same economies of scale as large producers in terms of input supply, access to extension, finance, certification, assembly of produce and transport to the market.

Ladies and gentlemen, it is not my role to enter into too many details here as this will be your task for today. I would just like to call your attention to the small farmer who still comprises the main component of the rural masses and who needs to be given a fair chance to participate in the further economic integration of the GMS region.

Finally, I should like to note that the existing cooperation and partnership between ADB, IFAD and many other donors in the GMS has demonstrated how much more we can gain by working together as ONE. Let us continue to work closely by pooling our resources, sharing information, expertise and knowledge, with clearly targeted farmer communities, and driving for more focused result.

I can assure you that FAO is committed to work with you all in this direction.

I wish you a productive meeting.

Thank you.