Over the past decade, Asia and the Pacific region has dramatically reduced the incidence of poverty (UNESCAP, 2007). By 2004 the average income poverty rate in the region, based on the US$1 a day standard, was reduced by 17 percent. The region as a whole is on track to achieving the Millennium Development Goal (MDG) of halving the prevalence of extreme poverty by 2015. Nevertheless, more than 641 million people, half of the world's extreme poor, live in the region.
Both China and India are well on track to achieving the MDG of halving the prevalence of extreme poverty and hunger, as are 17 other countries. In general terms, accelerating growth in India has put South Asia on track to meet the goal, and East Asia has experienced a sustained period of economic growth, led by China. However, a few countries in the region are continuing to face difficulties in reducing hunger sufficiently to meet the MDG and World Food Summit targets.
According to the World Bank, a decade after the financial crisis which devastated East Asia in mid-1997, the region is much wealthier, has fewer poor people, and plays a more important global role than ever before (World Bank, 2007). But it warns that with this success comes a new wave of challenges for countries trying to avoid the "middle-income trap" the strategies that allow countries to evolve from the status of low-income to middle-income countries are not the same as the strategies needed to propel them into the category of high-income countries. The report also notes that growth in emerging East Asia reached 8.1 percent in 2006 the strongest in the past ten years and it is likely to slow to 7.3 percent in 2007. Per capita incomes in former crisis-affected economies have significantly exceeded their pre-crisis levels and are growing steadily almost everywhere. In China and low-income countries such as Cambodia, Lao People's Democratic Republic and Viet Nam, incomes have grown at "exceptional rates". The past ten years have seen a doubling in the value of regional output levels, a halving in poverty rates, a jump in global and regional integration and accumulation of over US$2 trillion in foreign reserves.
South Asia has the highest level of underweight prevalence in the world, with almost half (46 percent) of all children under-five being underweight. Three countries in this region drive these high levels Bangladesh, India and Pakistan and alone account for half the world's total number of underweight children.1 Large disparities exist for underweight prevalence among urban and rural children. On average, underweight prevalence among children in rural areas is almost double that of children in urban areas in the developing world.
Malaysia has the fastest rate of improvement, with underweight prevalence declining more than one half between 1990 and 2003. Indonesia, Singapore and Viet Nam are also on track. Singapore now has the lowest under-five mortality rate in the world lower than all industrialized countries with the exception of Iceland.
Progress is also being made in the Lao People's Democratic Republic, Myanmar and the Philippines, though still insufficient to meet the target of halving under-five mortality. Timor-Leste has the highest proportion of underweight children in the region and fully half of its children are stunted, although data are insufficient to assess progress since independence.
A survey conducted in early 2005, in Aceh, Indonesia showed an average wasting level of 11 percent among children under-five displaced by the tsunami (GOI, 2005). This was nearly the same as among children not affected by the disaster, thus highlighting the fact that poor nutrition is a chronic problem related to poverty, poor nutritional knowledge and practices, and inadequate sanitation.
Dramatic changes in dietary patterns
Asia and the Pacific region has undergone a dramatic shift in its dietary patterns in recent years (Pingali, 2007). This has been driven by rapid income growth, urbanization, and changes in lifestyles induced by globalization. The trend is towards the consumption of more processed foods with shorter preparation time as more women enter the workforce. Smaller urban families make it affordable to eat out more often. There is also a stronger preference for meat2 or fish, dairy products,3 fruits such as apples4 and highly processed convenience food and drinks, all of which are readily available in emerging super (and hyper) markets and fast food outlets at competitive prices as a result of economies of scale.
Relative to traditional carbohydrate-dominated Asian diets the evolving diets are distinctly higher in fat and protein content. The traditional food supply chain is unable to satisfy the demand for dietary diversity and there is a growing severance of the links between diets and local availability because of trade liberalization and the increasingly reduced costs of transport and communications. Modernization of the food retail sector, as has already occurred in Latin America, through vertical integration of food supply chains, is likely to gain momentum. Although this would bring about significant benefits in terms of efficiency gains and lower prices, it would also entail some costs to certain groups in terms of unemployment and concentration of food supply chains.
Asian agriculture is becoming increasingly commercialized and diversified in contrast to the former pre-occupation with cereal crop production, especially rice. With burgeoning cities, most of which are located on the coast, food imports can sometimes be cheaper than food supplies from the hinterlands, especially where the national communications and infrastructure links are poor. All these developments are adding to the surge in food imports,5 which is raising the concerns of governments at a time when food prices are finally on an upward swing. Although the process of "supermarketization" in East Asia began between five and seven years after the process began in Latin America, the rate of growth is picking up. A recent study projects that the share of supermarkets in China will double to 23 percent by 2015. But in South Asia the high shares of supermarkets are not expected for some time because of low incomes and the persistence of highly rural economies (Traill, 2006).
Role of agriculture in poverty alleviation
It is now widely acknowledged by most stakeholders that the role of agriculture and the rural economy is fundamental for securing sustainable gains in the fight against poverty. There is much greater appreciation now for the fact that agriculture has strong links with other sectors. A productivity-induced agricultural expansion can "pull" other sectors with it and increase economic activity and employment opportunities in rural areas (Anriquez and Stamoulis, 2007). The recent research results of Davis et al. (2007) show that despite income diversification by rural households, households in the lowest expenditure categories still derive a larger share of their total income from agriculture when compared to households in higher income groups. This suggests the need to accord continued attention and increased resource allocation to the agriculture sector over the long term.
The role of agriculture in the structure of the economy will normally decline in the process of development. However, an analysis of the available data on agricultural transformation clearly indicates that the labour share of agriculture declines much more slowly than the share of agriculture in national GDP. Unless policies and investments are put in place to foster agricultural productivity, there is a danger that the decline of agriculture will be accompanied by increased rural poverty, some of which will find its way into the urban areas. At the same time, policies and programmes which increase the human capital of the rural poor and allow them to enter more remunerative labour markets are powerful tools to ensure a smooth transition of people out of agriculture without increasing poverty.
The international development community is finally beginning to place the necessary emphasis on the role of agriculture and rural development in alleviating hunger and poverty in developing countries. There has been an increase in official development assistance to agriculture and rural development in recent years. The emergence of private donors and foundations (such as the Gates Foundation) demonstrating a heightened interest in transferring resources to agriculture is encouraging. Major multilateral donors (such as the World Bank) are also looking at agriculture as an engine for poverty reduction for most developing countries and regions and as a fundamental component of a growth and poverty reduction strategy for the poorest, agriculture-based economies.6 At the same time, there seems to be increased interest by domestic and foreign firms (including multinational agro-industrial firms) for investments (upstream and downstream) in agriculture. The potential of agriculture as a source of bio-energy has added attractiveness to the sector given its perceived ability to address global food and energy needs simultaneously.
In sum, there can be no doubt about the critical role of agriculture and rural development in the attainment of the MDG goal of halving extreme hunger and poverty by 2015. The most recent session of the Committee on World Food Security called on all parties to "enhance investments in agriculture and rural development and all related institutions".7
World agricultural commodity market trends
In general, prices of agricultural commodities have increased substantially in recent years. After adjusting for inflation, annual world market prices of sugar, rice and palm oil have increased more than 50 percent since 2001. Annual prices of wheat and soybean oil have increased by more than 30 percent during the same time. Between September 2006 and March 2007, corn prices surged more than 40 percent. According to OECD-FAO (2007), the current strength in the world market prices for many agricultural commodities in international trade is, in large measure, a result of temporary factors such as drought-related supply shortfalls, low stocks and high oil prices.
But structural changes such as an increased demand for biofuels production for feedstock and the reduction of surpluses because of past policy reforms may keep prices above historic equilibrium levels during the next ten years. Higher commodity prices are a particular concern for net food importing developing countries as well as the urban poor and the rural landless (who are net buyers of food and are typically the poorest of the poor) and will fuel the ongoing debate on the food versus fuel issue. Furthermore, although higher biofuel feedstock prices support incomes of producers of these products, they imply higher costs and lower incomes for producers that use the same feedstock in the form of animal feed.
Exchange rates, in particular the weakening of the US dollar, have added to the pressure on agricultural commodity prices. Since most commodities are priced in US dollars on international markets, the strength of currencies other than the US dollar makes it easier for these countries to afford more imports at the same time that it puts pressure on farmers by reducing the amount of local currency they receive for their output, thus reducing their incentives to increase supplies. This is similar to the second half of the 1980s, when the falling US dollar also contributed to higher commodity prices.
There has been a dramatic shift in the region from diets that were formerly predominantly vegetable-based to diets based on animal protein. This has resulted in an ongoing transformation of the livestock sector in the region, with subsequent implications for the feed resources and other inputs. These shifts raise a number of new and evolving concerns, particularly regarding environmental issues,8 the provision of marketing opportunities and the need to balance feed production with demand. Total annual meat consumption in the region varies between 5 and more than 50 kg per capita, depending on the particular country's level of development and affluence. Beef is mainly consumed in the most developed countries, such as Australia and Japan, whereas mutton and goat meat are generally less important, with the exception of countries in the Pacific region. Pork is the predominant meat consumed in East Asia 30 kg per capita per annum. Poultry meat is particularly important in the region with China being the largest importer of poultry products in the world and India registering double digit annual growth rates in poultry production.
Two important structural changes are taking place across production systems: i) a general growth in scale; and ii) a trend away from horizontal to vertical integration. Levels of livestock production and processing are increasing in response to technological development, market requirements and insufficient returns to labour in traditional systems. Where alternative employment opportunities exist, such as in the rapidly industrializing countries of the region, traditional subsistence-oriented livestock farming is often abandoned, thereby opening up markets and expanding opportunities for other farmers or commercial entrepreneurs.
Poultry production in particular has developed from a simple farm operation to a complex vertical operation of related industries and enterprises, including grain production for animal feeds, feed mills, slaughterhouses and processing plants, food chain stores and wholesale enterprises. Further structural changes relate to the changing importance of different production systems. The growth potential for extensive grazing and roughage production is limited. In response to increased population pressure, the good pasture land is being converted to cropland, leaving increasingly poorer land for grazing and mixed farming. Industrial production of pigs and poultry is therefore going to increase relative to production from grazing and mixed farming systems. Pork and broiler production will increase relative to ruminant meat production as a direct result of the technological improvements in the sector.
During the 1990s production of pigs and poultry almost doubled in China, Thailand and Viet Nam (FAO, 2006b). By 2001 these three countries alone accounted for more than half the pigs and one-third of the chickens in the entire world. Pig and poultry operations concentrated in the coastal areas of China and Viet Nam are emerging as the major source of nutrient pollution of the South China Sea. The related booms in production and pollution have resulted in the Livestock Waste Management in East Asia Project (LWMEAP), which has been prepared with the governments of China, Thailand and Viet Nam by FAO and the inter-institutional Livestock, Environment and Development (LEAD) initiative under a grant from the Global Environment Facility. The project will address environmental threats by developing policies to balance the location of livestock production operations with land resources and to encourage the use of manure and other nutrients by crop farmers.
Milk production has grown more rapidly in Asia than anywhere else in the world. Two broad types of dairy industries exist. In some countries, such as India and Pakistan, where there has been a strong dairy tradition, markets remain largely insulated from international price variations, although some market opening has started. For these countries, output growth has remained firm, sustained by increases in domestic demand fuelled by economic and demographic growth. In the case of India, rapid domestic income growth, exceeding 6 percent, pushed milk prices higher in 2006 and 2007. Total milk output is expected to grow 3 percent in 2007. The tendency for prices to rise was accentuated by the country's recent entrance onto the world skimmed milk powder market, and high milk powder prices, which led the government to impose a six-month ban on milk powder exports in January 2007. As for Pakistan, the world's fifth largest dairy producing country, the domestic sector is largely disconnected from world markets, but investments in milk processing are occurring at a fast pace, with milk output expected to rise by about 4 percent in 2007.
Although accounting for only 4 percent of world production, Oceania is the largest milk product exporting region, with a market share of over 35 percent. Successive droughts and policy reform (2000) in Australia have contained that country's milk production to levels below those of ten years ago.
Asia and the Pacific region continues to be the world's largest producer of fish. In 2004, this amounted to 87.1 million tonnes 46.7 million tonnes from capture fisheries and 40.4 million tonnes from aquaculture (calculated as total aquaculture production minus aquatic plants). This represents 49 percent and 89 percent of the global production, respectively. When aquatic plants are included in the total aquaculture figures, aquaculture production outstrips that of capture fisheries for the first time (total aquaculture production of 54.3 million tonnes and 91 percent of the world's production) (FAO, 2006c). Of the top ten producers of capture fish, five are from the Asia and the Pacific region (China (1st), Indonesia (5th), Japan (6th), India (7th) and Thailand (9th). For aquaculture, the top ten aquaculture producer states by quantity (excluding aquatic plants) in 2004 were China, India, Viet Nam, Thailand, Indonesia, Bangladesh, Japan, Chile, Norway and USA. Asian states hold the top seven positions. By value, China, Japan, India, Chile, Viet Nam, Indonesia, Norway, Thailand, Bangladesh and Myanmar comprise the top ten producer states. China alone is reported to have produced 70 percent of the world's aquaculture production (about four times the total fisheries production of Peru, the number two fishery producer worldwide).
Both capture fisheries and aquaculture sectors continue to be of fundamental importance to Asia and the Pacific region in terms of food security, revenue generation and employment. In many of the countries, catching or farming aquatic resources forms a vital part of rural people's livelihoods. Fisheries and aquaculture also have a deep cultural significance and are more than just a source of income or food supply; traditional fishery products such as fish sauce and fish-based condiments have always been important ingredients of people's daily diet and are not easily substituted. All sizes and types of fish are utilized in a wide variety of ways and there is very little discarded or wasted. The role that fish play in both the food security and nutritional security of many rural and coastal populations has often been underestimated in the past. It is also now recognized that fisheries and aquaculture are important contributors to the national economies in the region.
Fish products are also the most heavily traded natural food commodity in the world and trade issues involving fish are becoming increasingly important. Estimates of the capture production value indicate that the contribution of capture fisheries to GDP accounts for more than one percent in many states in the region. The fisheries sector plays a critical role in the national economies of small island developing states. The economic contribution of fisheries production tends to be less in Southeast Asian and South Asian states in general, yet fisheries still contribute more than one percent of the GDPs of eight of these states. It is also worth noting that these figures for fisheries value are probably underestimated and do not adequately value the artisanal part of the sector. Aquaculture also makes an important contribution to GDP in the Asian region and it is increasing.
The role of forests in Asia and the Pacific region is being increasingly recognized, especially in the face of emerging important new issues including mitigation of climate change, demand for bio-energy, water issues, natural disasters, the contributions of forests in poverty reduction, and the potential role of coastal forests in mitigating the impacts of tsunami events. In the region as a whole there has been a net increase in forest area of about 633 000 ha annually during the 2000-2005 period, in contrast to the region's net loss of forest cover during the 1990s (FAO, 2007c). The improvement was largely the result of an increase of more than 4 million hectares per year in China as well as efforts of other countries such as Bhutan, India and Viet Nam, which have all been investing in afforestation and forest rehabilitation in recent years.
However, many other countries experienced a net loss. As a subregion, Southeast Asia experienced the largest decline in forest area with an annual net loss of more than 2.8 million hectares per year, about the same rate as occurred during the 1990s. The greatest forest loss occurred in Indonesia, almost 1.9 million hectares per year, followed by Myanmar, Cambodia, the Philippines, Malaysia and the Democratic People's Republic of Korea.
The area designated for protection has been increasing for the region as a whole, resulting mainly from increases exceeding 4 percent per year in East Asia. However, the moist forests of Southeast Asia are increasingly being burned, resulting in huge losses of timber as well as problems such as air pollution and lost opportunities in trade and tourism.
Economic development creates problems as well as opportunities. In order to control and ensure sustainable commercial harvesting, several Asian countries are implementing regional and national codes of forest harvesting practices. Nevertheless, challenges abound as many of these codes were formulated without wide stakeholder consultations, and enforcement and monitoring practices are not sufficiently ensured as many codes are not legally binding.
The forestry sector in the region is witnessing a trend towards a more participatory approach to forest stewardship involving rural communities. The political commitment to sustainable forest management has never been stronger, and most countries have a relatively sound policy and legislative foundation for implementing it. However, central and local government capacity in policy analysis and enforcement is a challenge for most countries in the region. There are broad trends towards private sector participation in forest management, increased clarity of forest resources tenure, and decentralized management, departing from the traditional technocratic and hierarchical approaches of providing forest concessions under national forestry agencies.
Since the establishment of the World Trade Organization and the occurrence of the Asian financial crisis in 1997, the region has experienced substantial growth in agricultural trade. However, intraregional agricultural trade has not grown as expected and net imports have increased only slightly. The countries in the region have rapidly embraced bilateral and other trade arrangements that very quickly produced a situation of entangled and overlapping preferential rules that informally have been named "Asian noodles".9 Total trade of Economic and Social Commission for Asia and the Pacific (ESCAP) members has increased in absolute terms and today accounts for almost 30 percent of world exports and imports. Most of the agreements, however, focus on reducing or eliminating tariffs and other barriers to industrial goods or manufactures. In contrast, agriculture does not feature prominently on the agenda for full and/or quick liberalization through Preferential Trade Agreements. This is mainly because many countries consider the sector to be special, sensitive and risky to liberalize.
Because of the sheer size of China and India, the region's trade performance is often dominated by these two countries. Both countries are projected to be close to self-sufficient in cereal grains in the medium term and therefore do not pose a serious threat to global food security.10 Although India will continue to be a net exporter of rice, it is projected that both China and India will be major importers of oilseeds, plant-based fibre and forestry products. China is moving out of land-intensive crops such as food, feedgrains and sugar and towards the export of labour-intensive, high value horticultural, livestock and aquaculture products. Significant increases are predicted for agriculture and food trade between the two Asian giants.
Asian agricultural imports exceeded $165 billion in 2005, more than double that of 1990. Asian agricultural imports now account for 26 percent of global trade, with developed countries accounting for more than three-quarters of that amount. Cereals dominate imports, but growth has been driven by increased imports of oilcrops, fruits, vegetables and meats. On the whole, there is still significant potential for harnessing welfare gains for all from improving intraregional trade.
Long-term income and population dynamics
The recent increases in world agricultural prices come against a background of prices that are quite low in historical terms. During the past fifty years, growth in food production has outpaced population growth, thus lowering food prices. Coupled with the effects of rising incomes, millions of the poor have been lifted out of poverty and have vastly expanded access to food.
Among the group of 17 major rice producers in Asia, paddy production per person was less than 120 kilograms in 1951. By 1999, it had reached a peak of 166 kilograms per person, despite the fact that population more than doubled during this period. This represents a 40 percent increase in less than fifty years. Because of the rapid growth in food production, rice prices on the world market, after adjusting for inflation, declined by about 80 percent in US dollar terms between 1980 and 2000. This remarkable achievement was made possible by good policies and investments in research, technology, and infrastructure. At the same time, higher yields cushioned farmers against the effects of falling prices.
However, the challenges ahead are even greater. In 1950, there were only 1.4 billion people in Asia. Today there are about 4 billion, and these people have much higher incomes than before. More people with higher incomes mean substantially more pressure on the natural resource base. At the same time, there are still more than half a billion people in Asia who are undernourished. Furthermore, population is still growing. Despite the slowdown in population growth rates in percentage terms, the Asian population is growing more rapidly today (46 million more people per year) than it was in the early 1960s in absolute terms. This annual increase is only slightly less than the peak of 57 million people that were being added every year in the region during the second half of the 1980s. The UN medium variant projection is that the Asian population will continue to increase until at least 2050, when it will exceed 5.25 billion people.
The OECD-FAO's Agricultural Outlook 2007-2016 projects that prices will rise only slightly during the next ten years, at a rate that is less than the rate of inflation. On the other hand, there are many factors that suggest food prices could increase at rates faster than inflation. First, grain yields are still increasing, but the rate of increase has slowed to a trickle. For example, rice yield growth is now slower than population growth, despite the fact that population growth is declining, suggesting that technological progress may be slowing down. Growth in adoption of modern rice varieties, for example, has inevitably slowed as adoption rates reach plateaus of 75 to 90 percent in many countries. Unfortunately, continued expansion of area planted is not a solution either, as more land is needed for housing, roads and other crops that are being demanded by consumers. The Asian population is still increasing by more than 100 000 persons every day, and a way must be found to feed them.
The problem of slower yield growth is exacerbated by the changing composition of Asian diets, as increasingly wealthy consumers demand more meat and dairy products. Since it takes several kilograms of grain to produce one kilogram of meat, this will make it even more difficult for farmers to keep pace with food demand.
Besides increasing population, higher incomes, slower yield growth and the changing composition of diets, water scarcity is another source of concern for agricultural commodity markets. Water demand from the industrial and household sectors is increasing rapidly whereas groundwater tables are falling in many parts of China and India, putting pressure on farm production costs. Some of the water scarcity is caused by economic growth, but sometimes it is caused by government policies. For example, widespread electricity subsidies in India encourage excessive and wasteful use of water, harming the environment and thus reducing future production prospects. Given increased water scarcity in the future, the implications for food prices are potentially severe if water management is not improved.
Climate change adds another layer of uncertainty. A recent study on Indonesia by Naylor, Battisti et al. (2007a) found that the increased variability of the El Niño Southern Oscillation phenomenon in the future will lead to an increased probability of delayed monsoon onset and reduced rainfall that will lead to more variable production with important effects on food security. Furthermore, the region is prone to a high frequency of meteorological disasters such as droughts, floods, and cyclones that often have severe impacts on food production.
Challenges for the future
The growing importance of biofuels is a major challenge and an opportunity for the sector. Biofuels production has grown from 1 million hectares seven years ago to 25 million hectares today. FAO recently reviewed the situation of biofuel strategies for the Mekong delta region to assess their likely impact on poverty reduction.11 If petroleum prices remain high and more ethanol plants are built, demand for sugar and maize will increase, leading to higher prices of these crops unless technology can lower crop production costs per tonne. Even if petroleum prices fall, the demand for corn from ethanol plants may remain high, as these plants have already incurred the fixed costs of construction and will continue to operate as long as they can cover their marginal costs of production. The problem is exacerbated by large subsidies and tax credits in the United States and other developed countries. If this additional demand for corn and sugar is met by farmers shifting land from other crops, then prices of other foods will also increase.
Even if most of the biofuels are produced outside of Asia, the impact on Asia will be profound because of the globalized and integrated nature of world commodity markets. For example, farmers in northern Bangladesh are now shifting out of wheat into corn as world corn prices soar, making imports more expensive and making corn production more profitable. Thus, factory construction in the American Midwest is affecting the decisions of farmers in one of the world's poorest countries.
Higher prices will of course help farmers, but there are other effects to consider. One study by Senauer and Sur (2001) estimated that a 20 percent increase in food prices would increase the number of undernourished in Asia by 158 million people; thus, the impact of biofuels demand is worrisome indeed. And this does not even take into account the environmental destruction that will occur if more forests are cleared for oilseed production in Asia and Brazil.
Given these developments and trends, there exist enormous challenges in achieving a sound environment and ensuring that affordable food reaches the poor. More investment is needed in agriculture, especially agricultural research, which has been shown to be one of the most cost-efficient ways for governments to reduce poverty. And governments must focus the scarce resources that they have on increasing productivity, and not on subsidies that are often biased against the poor and encourage wasteful use of natural resources. But the challenges are so large that the public sector will be unable to do it alone; active participation by the private sector will be essential. The world desperately needs the research capacities and extension skills that are available in the private sector.
Biotechnology is one particularly promising way to improve agricultural productivity, and the private sector has played a major role in this area. Genetically modified organisms, or GMO crops, have received quite a large amount of publicity, and farmer adoption of GMO crops has grown extremely rapidly over the past decade in some countries. Most of this growth has occurred outside Asia, but Bt cotton has proved to be a favourite with farmers in China and India, and adoption has been exceedingly rapid. Insecticide use on cotton has traditionally been very high, so this innovation has reduced insecticide levels substantially, contributed to improved human health and a cleaner environment, and raised farmers' profits. This is truly a major achievement, although it will be a challenge to manage the development of insect resistance.
We need more success stories like this in the future. Some promising possibilities include golden rice, which could reduce vitamin A deficiency among the poor, and C4 rice, which holds out the promise of higher yields, lower production costs per tonne, increased water use efficiency, and reduced nitrogen loads into the environment. But these innovations are still not ready to be tried by farmers. Bt maize will hopefully make a big impact in the Philippines and elsewhere. Bt rice has also made progress, but it has still not been approved for commercial release in China. This points to the need for a comprehensive biosecurity framework that supports the introduction of safe new varieties with the potential for increasing the productivity of farmers and the well-being of consumers.
In addition, there are also many possibilities for using the tools of biotechnology that do not involve GMOs. For example, the development of submergence tolerant rice will help many poor farmers who are forced to make a living in harsh environments. This has been developed with modern technology, but without introducing genes from foreign organisms.
Crop production and livestock production have a profound effect on the wider environment. They are the main source of water pollution by nitrates, phosphates and pesticides. They are also the major anthropogenic source of the greenhouse gases methane and nitrous oxide, and contribute on a massive scale to other types of air and water pollution. Agriculture can also lead to land degradation, salinization, the overextraction of water and the reduction of genetic diversity in crops and livestock, problems which jeapordize its own future. However, the long-term consequences of these problems are difficult to quantify.
More sustainable production methods must be devised so that the negative impacts of agriculture on the environment can be attenuated. Agriculture can in fact play an important role in reversing the trends, for example by storing carbon in soils, enhancing the infiltration of water and preserving rural landscapes and biodiversity.
Ultimately, it is in the agricultural sector that problems such as non-sustainable production, poor fuel use, natural resource depletion and habitat exploitation must be addressed. Governments will need to seek agreements and plan adjustments to policies that correctly value the services provided by the sector, in order to face the challenge of climate change to food security. The true value of the role of agriculture and rural development in poverty alleviation and the provision of environmental services needs to be duly recognized.
Much of the discussion regarding biodiversity, climate change and bio-energy is currently taking place without the effective and full participation of the agricultural sector and ministries. This suggests that the window of opportunity in which the sector can still act as a driver of change, and thus integrate these various objectives successfully, is limited. To be an effective partner to the environment and trade sectors, agriculture planning needs to draw on its current competitive advantages, which result from the centrality of the agricultural nexus in the debate, and put forward coherent policy options for governments to debate.
Integrated policy and planning, between line ministries and the private sector, and within and beyond national jurisdictions, requires first of all that the agricultural sector becomes aware of its own environmental externalities as well as of the impact of environmental change on its economic and societal performance. This will allow the definition of appropriate policy objectives within the agricultural sector, based on negotiated strategic actions, including legal structures and resource allocation.
1 These three countries are home to just 29 percent of the developing world's under-five population.
2 Meat consumption more than doubled in the last 20 years.
3 Milk consumption increased by 50 percent in India in the last 20 years.
4 There has been a fourfold increase in the consumption of apples in China in the last 20 years and Thailand has experienced a tenfold increase in potato consumption in the same period.
5 According to FAO (2006a), self-sufficiency ratio (production/total demand) is projected to decline from 97 percent to about 90 to 95 percent in East Asia and South Asia respectively.
6 In this context, it is instructive to see that the World Bank's World Development Report 2008 is titled Agriculture for development.
7 FAO (2007a, para 13).
8 For a summary of the main issues related to the environment, see FAO (2007b).
9 Mikic (2007).
10 FAO (2006d).
11 Planning Workshop on Strategies and Options for Integrating Biofuels and Rural Renewable Energy for Poverty Reduction, 11-12 June 2007, FAO Regional Office for Asia and the Pacific, Bangkok.