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Urban-rural relations

Identification of some of the misguided development interventions in the past provides a better understanding of the components for an agri-environmental framework that meets the requirements of a “growing cities/growing food” scenario in the context of sustainable development. Such a framework is needed as the supply and demand conditions for food have undergone significant changes in Asian countries.

On the supply side the interaction of rural and urban labour markets and rural and urban food production and processing need to be addressed. Regarding labour markets and following the Schultz urban-industrial hypothesis (Schultz 1953), the interaction between rural and urban labour markets is marked by a regional disparity in income. The demand for labour in urban (relative to rural) areas grows faster than the supply. The effect is magnified by the more rapid rural natural increase in population. Disproportionality between supply and demand in the short run raises urban relative to rural wages. As stated by Katzmann (1974: p. 687) “potential migrants from rural areas will weigh their lifetime gain in earnings against its economic and psychic costs. The farther a rural area is from the urban opportunities, the higher the costs of migrating and acquiring information about these opportunities. Consequently at economic equilibrium conditions, rural income will increase with distance from urban centres.”

On the other hand, physical distance is no longer a real constraint to information diffusion, and migration may occur on a seasonal or temporal scale only. After planting, farmers move to the cities to work in the construction or tourism industries and return to harvest their crops. The extent of this form of migration became transparent during the Asian financial crisis. A study by the World Bank (Feder 2000) has shown that small farmers, despite a lower degree of agricultural commercialization, were more seriously affected by the crisis because the share of non-farm income on their total household income is higher than that of larger farms. In conclusion, due to the relationship between urban and rural labour markets, economic development in urban agglomerations is affected by migration costs on the one hand but, in turn, can also significantly affect rural livelihood. Furthermore, migration decisions are based on perceived costs and benefits with a strong tendency to overestimate the latter. One successful rural migrant visiting his former village will attract numerous others who have only a slight chance of achieving their desired level of economic success in the city.

On the production side, agriculture in general has become more intensive in terms of external input use and more commercialized on the output side. In response to technological changes on the production side and urban consumer demand for increasing amounts of only a few staple foods on the output side, agriculture has become less diversified relative to the time when the main purpose of farms was to produce food for the household itself. Today, in many Asian countries, the once integrated crop-livestock farm is just a memory. Technology input from the private and public sectors has been mainly concentrated on rice, corn and wheat. Technology and price factors (as mentioned in the previous section) have stimulated monoculture. The use of high yielding varieties, fertilizer and chemical pesticides has created well-known negative side effects on the environment, farmers’ and consumers’ health. Water for irrigation has been practically free of charge for farmers, contributing to its inefficient use. At the same time dwindling water resources have led to increasing competition between rural and urban water users. Consolidation and concentration of agroindustry have accompanied developments in the post-harvest sector over the past decade on the urban fringe. These changes may have increased transaction costs for effectively signalling changes in consumer preferences to producers. Despite obvious interconnection between urban-based factor and product markets and rural food production, there is still a lack of coordination between private and public urban and rural planning and public policy interventions largely due to the sector orientation of governmental policy.

There is also a connection between urban labour markets and agricultural production. As migrants fail to find adequate employment in urban areas, they tend to produce their own food on whatever land they can find. The phenomenon of urban agriculture in many cities of the developing world is a reality although its magnitude in quantitative terms is still undetermined. Some estimates place the number of people who engage in some form of urban agriculture at around 800 million people worldwide (UNDP 1996).

On the demand side changing consumer preferences induce modifications to the food industry. In South East Asia this is especially true for fruits and vegetables (Isvilanonda 1992; Jansen et al. 1996). The driving forces behind these developments are changes in input and output price, development of physical infrastructure, population growth, increase in per capita income, and better informed consumers (Ali 1998). In Thailand, for example, the share of vegetables as a percentage of total crop value increased from some 20 percent in 1985 to 35 percent in 1994 (Titapiwatanakun 1998: p. 1). Likewise the share of fruits and vegetables in total consumption expenditures increased from 19.0 to 24.3 percent whereas the share of rice and cereals decreased (IBID: p. 2). This value change is also accompanied by changes in quantity (Ali 1998: p. 2; Inoue and Titapiwatanakun 1997; IBID: p. 2). The growing demand for vegetables has been accompanied by a rapid transformation of the traditional chain marketing system to a more diversified system of retailing through discount stores, supermarkets and convenience stores. These changes have been accompanied by adjustments in the whole distribution system, e.g. central markets and large-scale trading. This adjustment has stimulated the growth and concentration of the food processing industry. Consumers have become aware of potential health hazards caused by over and misuse of pesticides especially in vegetable production and of the environmental damage caused by indiscriminate use of chemicals. Although some of these perceptions may be the result of wrong or biased information and public hysteria, they nevertheless influence consumer decisions. As a result, city people gradually become interested in agriculture and are a driving force behind the emergence of niche markets especially for “green products”.

In conclusion, rural relations in Asian countries have become more complex. Despite the contraction of the agricultural sector as measured in its share of GDP, food production affects human development in rural as well as in urban areas in a multifaceted way. This rural complexity poses a challenge to both rural and urban planners to effectively coordinate public policy interventions. It becomes clear from exploring only some of the urban-rural relations that agriculture and food is too much of a cross-cutting issue to be left to agricultural experts alone whose paradigm until now has been made up of a rather one-sided rural production philosophy.

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