6

EAST ASIA AND PACIFIC

REGIONAL SETTING

Characteristics of the region

The East Asia and Pacific region1 contains 1836 million2 people (just over one-third of all the inhabitants of developing countries), of which 62 percent (1124 million) are directly involved in agriculture. Considerable variation exists among countries in terms of size and density of population, and the overall proportion living in rural areas. Most people are concentrated in just two countries: China (with 1278 million inhabitants or 68 percent of the region) and Indonesia (with 205 million inhabitants); respectively the first and fourth most populous countries in the world. Very high population densities occur in some rural areas, for example in Eastern China and the islands of Java and Bali in Indonesia.

The total land area of the region is 1639 million ha. Forest cover is estimated at 380 million ha (23 percent of land area), of which 170 million ha are considered as dense forest. Cultivated land is estimated at 232 million ha (15 percent of land area) and the remainder consists of grasslands, wastelands, mountains, urban areas and waterbodies.

Some 278 million people3 (15 percent of the total regional population) are living in extreme poverty, with daily incomes of less than US$1. A quarter of these impoverished people live in China, but significant numbers are found in almost all countries in the region. About 240 million people4 (13 percent of the total population) are undernourished. Poverty in rural areas is approximately twice as high as in urban areas5. The incidence of rural poverty ranges from 4.6 percent in China to 57.2 percent in Vietnam. With the exception of China and the Republic of Korea, the economies of the region are strongly agrarian. Although the average contribution of the agricultural sector to total GDP is 13 percent, this figure is heavily influenced by China (17 percent)6. In the Republic of Korea, the agricultural sector's added value is only 5 percent, while in Laos, Myanmar and Cambodia it is over 50 percent.

Major farming systems in South Asia and Pacific- MAP

Major farming systems in East Asia and Pacific

Eleven broad farming systems have been identified7, based on criteria discussed in Chapter 1. They are listed in Table 6.1 and their geographical location is indicated in the accompanying Map.

Lowland Rice Farming System

This farming system is found in both humid and moist subhumid agro-ecological zones in well-watered mainly flat landscapes8. It covers an estimated 197 million ha and, with an agricultural population of 474 million, it is the most populous system in the region. Cultivated area is 71 million ha, of which about 45 percent are irrigated. Large areas of this system are found in Thailand, Vietnam, Myanmar, South and Central East China, Philippines and Indonesia. Smaller areas are located in Cambodia, Korea DPR, Republic of Korea, Laos DPR and Malaysia. The farming system is dominantly rice-based, with cropping intensity dependent on rainfall distribution, length of growing season and the availability of supplementary irrigation. Important subsidiary crops include oilseeds, maize, root crops, soybeans, sugarcane, cotton, vegetables and fruits in all areas, while wheat is significant in Central East China. Both livestock and off-farm income contribute to household livelihoods. Regional food security depends upon the production from this system. The prevalence of poverty is moderate overall, although it is extensive in Mynamar and Cambodia.

Tree Crop Mixed Farming System

This farming system is found mainly in the humid agro-ecological zone, but also extends into moist subhumid areas, principally on flat to undulating landscapes with poor soils where paddy rice cannot be intensively produced. Total system area is 85 million ha, with an agricultural population of 30 million. Cultivated area is estimated at 18 million ha, of which little more than 12 percent are irrigated. Significant areas of this system are found in Malaysia, Indonesia, Thailand, Cambodia, Philippines, Vietnam, Southern China and Papua New Guinea. Major industrial crops include rubber, oil palm, coconut, coffee, tea and cocoa, with some other associated crops such as pepper and other spices. Tree crops are grown under both large private estate and smallholder management systems. Smallholders also grow food and cash crops, raise a considerable number of large livestock, and supplement their livelihoods with off-farm income. Coconut plantations are widespread throughout most Asia and Pacific countries. The system has been a traditional source of export earnings in Indonesia and Malaysia, and also a target for substantial private and public investment. The prevalence of poverty is moderate.

Root-Tuber Farming System

This farming system is found in humid and moist subhumid agro-ecological zones in both plain and hill landscapes, typically in areas with low population density. Total system area is 25 million ha, with an agricultural population of approximately 1.5 million. Cultivated area is about 1.2 million ha, less than one percent of total area - no irrigated area is recorded. The system is found in Papua New Guinea and the Pacific Islands generally, and often merges into the Coastal Artisanal Fishing System towards the coastline. Although of minor significance on a regional level, it is the dominant farming system in many Pacific countries. It is based on the use of root food crops (yams, taro, sweet potato), vegetables and fruits (particularly banana), coconut and livestock, supplemented by hunting and gathering in the forest. There is relatively limited poverty in this system.

Upland Intensive Mixed Farming System

This farming system is found in upland and hill landscapes of moderate altitude and slope, in humid and subhumid agro-ecological zones. Total system area is 314 million ha, with an agricultural population of 310 million - the second most populous system, after Lowland Rice, in the region. Cultivated area is 75 million ha of which just under one quarter are irrigated. This is the most widespread and most heterogeneous farming system in the region (even including some remnant shifting cultivation), with major areas located in all countries of East and Southeast Asia. The system is characterised by the cultivation of a wide range of mostly permanent crops, but the specific crops preferred depend on geographic area, agro-climatic conditions, slope, terracing and water regime. A significant crop area - mainly rice - is irrigated from local streams and rivers. Livestock production is an important component of most farm livelihoods (there are 52 million large ruminants and 49 million small ruminants in this system) and contributes draught power, meat, cash income and savings. Off-farm work is an important source of income for many poor households. Poverty is extensive, varying in severity from moderate to very severe.

Highland Extensive Mixed Farming System

This farming system is found in hill and mountain landscapes of high altitude and steep slopes, in both humid and moist subhumid agro-ecological zones. It often lies above the Upland Intensive Mixed Farming System, but with poorer resources and lower population density. Total system area is 89 million ha with an agricultural population of only 47 million. Cultivated area is 8 million ha, of which about one fifth is irrigated. Extensive forested areas occur within the system, some of which have little human habitation and are similar to the Sparse (Forest) System delineated below, but provide grazing to some of the 16 million large ruminants. Major areas are located in Laos, Central and North Vietnam, Northern Thailand, Northern and Eastern Myanmar, Southwestern China, the Philippines and parts of Indonesia. The farming system can be subdivided into permanent and shifting cultivation sub-types. Both sub-types produce crops (including perennial crops such as fruit trees), livestock and forest products. This system provides the principal base for a number of tribal (indigenous) groups. Poverty is moderate to severe.

Temperate Mixed Farming System

This farming system is found in moist and dry subhumid agro-ecological zones in Central-Northern China and restricted areas of Mongolia. Total system area is 99 million ha, with an agricultural population of 162 million. Cultivated area is 31 million ha, of which about one-third is irrigated. The transitional boundary between this system and the Lowland Rice Farming System in Central-Eastern China is not easily defined, and the system also blends into the Extensive Cereal-Livestock Farming System of Southern Siberia and parts of Central Asia (in the Eastern Europe and Central Asia region - see Chapter 4). Major crops are wheat and maize, with smaller areas of rice, cotton, soybeans, sweet potato and rape - depending on local temperature and water conditions - as well as citrus and some temperate fruits. Livestock are important, particularly cattle, pigs and poultry. The prevalence of poverty is moderate.

Pastoral Farming System

This farming system is found in semiarid and arid temperate agro-ecological zones (with less than 120 growing days per annum) in both plain and hill landscapes. The system is extensive in Western China and much of Central and Northern Mongolia. Total area is 321 million ha, but with no more than 42 million people classed as agricultural, cultivated area is just over 12 million ha of which some 20 percent is irrigated in dispersed zones. The farming system is dominated by transhumant pastoralism and characterised by mixed herds of camels, cattle, sheep and goats extensively grazing native pasture. Irrigated crops include cotton, barley, wheat, pulses, peas, broad beans, potatoes and grapes, while sericulture is sometimes practised. Severe poverty, often triggered by drought or severe winters - with consequent loss of livestock - is common in both pastoral and irrigated areas.

Sparse (Forest) Farming System

Although vast in area, the sparse agriculture systems (both forest and arid) are of limited economic importance. The Sparse (Forest) System occurs at moderate to high altitudes to the north and west of the main areas of the Highland Extensive Farming System in Western China and Northern Myanmar, in Northern Mongolia - where it comprises part of the extensive Siberian Sparse (Forest) System - and in the major islands of Indonesia, excluding Java, and Papua New Guinea. The system covers an area of 172 million ha with a population of 23 million people, of whom 15 million are classified as agricultural. On the mainland of Asia small, scattered settlements depend on potatoes and buckwheat, plus cattle and yak herds. In the dense tropical forests of Malaysia, Indonesia and Papua New Guinea, small, scattered settlements (mainly tribal) depend on upland rice, root crops and small and large ruminants, supplemented by gathering wild plants and hunting animals. There are nearly 10 million ha of scattered cultivation, while 14 million bovines and 20 million sheep and goats are also supported. The prevalence of poverty is moderate.

Sparse (Arid) Farming System

The total area of the Sparse (Arid) Farming System, located in Western China and Southern Mongolia, is estimated at 322 million ha, supporting an estimated 9 million cattle and 59 million small ruminants. Only a little over one percent (less than 4 million ha) is cultivated, of which about two-thirds are under irrigation. Two types of irrigation are practised - some large-scale irrigation areas concentrated in the west; and scattered small areas of irrigation used by pastoralists to supplement their livelihoods. There is a population of 24 million people, 17 million of whom are classified as pastoral or agricultural. Apart from these arable areas, the dominant arid areas are utilised for opportunistic grazing. Poverty is extensive and, especially after droughts, severe in this system.

Coastal Artisanal Fishing Farming System

Along the narrow coastal strips in many countries of the region and in many islands (an estimated area of 38 million ha), around 28 million people supplement artisanal, inshore fishing with food production - rice from Java to China and root crops in the Pacific countries - and cash-oriented enterprises such as coconuts and livestock. Cultivated area is estimated at three million ha. The location of the system is not separately mapped. There is a moderate incidence of poverty.

Urban Based Farming System

In most large towns and cities throughout the region, the intensive production of perishable, high value commodities, such as milk and fresh vegetables, has expanded and now employs an estimated seven million people. This farming system - which is also not mapped - is generally characterised as a high external input, commercial system with well-functioning links to the surrounding rural areas for livestock, feed and fodder supplies. Because of the availability of other employment, poverty is generally limited.

Region-wide trends in East Asia and Pacific

This section describes the most important region-wide trends in terms of: population, hunger and poverty; natural resources and climate; science and technology; trade liberalisation and market development; policies institutions and public goods; and, information and human capital. At the end of the section, four of the regional farming systems described in the previous section of the Chapter are selected for further description and analysis.

Population, hunger and poverty

The region has been settled for many thousands of years but has experienced rapid population growth in the last century, resulting in high population densities in many areas. In response to overpopulation, many governments have introduced birth control programmes that are contributing to falling population growth rates. This trend will continue, although there will be significant variations in the rate of decline among countries. Overall, the population in the region is projected to grow at 0.9 percent per annum to 2.13 billion by 20159, and thereafter at 0.5 percent per annum to reach 2.31 billion by 2030. The degree of urbanisation is expected to increase from the current 37 percent to 53 percent by 203010. However, in many of the developing countries in the region, a large proportion of the total population, and the majority of rural people, will continue to be employed in the agricultural sector. Nonetheless, the rural population will age gradually as younger people migrate to cities for jobs. This has adverse implications for socio-economic conditions as well as labour quality and availability in rural areas.

The rapid economic growth experienced over much of the region during the last two decades has resulted in major and widespread socio-economic gains in many countries, but these gains have generally been strongly biased in favour of the urban population. Yet, with the exception of China and Republic of Korea, the regional economies remain strongly agrarian. GADP has been steadily decreasing as a proportion of national GDP, but still remains significant. This trend can be expected to continue in all countries, but a majority of the population will still remain dependent on the agricultural sector by 2030. Socio-economic indicators (household income, poverty, health, literacy, infant mortality, morbidity, longevity, etc.) of the rural population, while gradually improving in most countries, are usually significantly lower than for the urban population. Rural incomes have only increased slowly - and perhaps not at all in real terms - and in almost all countries there is a growing disparity between rural and urban incomes.

Average per capita GDP is about US$1000 (US$3500 at parity purchasing power)11, which is low compared to other developing regions. There are 278 million people (15 percent of the total population) who are considered to be living in extreme (or dollar) poverty, with daily incomes of less than US$1 per day - approximately twice as many in rural areas as in urban areas. A quarter of these people live in China, but significant numbers are found in almost all countries in the region. Furthermore, the rural population remains relatively poorly educated, with significant illiteracy and low school attainment levels in a number of countries. This has an adverse effect on the knowledge and learning skills of farmers. Figure 1.3 in Chapter 1 shows the dramatic reduction in poverty in the region during the period 1978-1987. While some improvements in these factors may occur, it is anticipated that rural/urban disparities will increase in many countries by 2030 unless governments undertake active policy initiatives and make specific plans to redress this imbalance.

The current average food intake is estimated at about 2780 kcal per person per day; 6 percent higher than the average for all developing countries. However, cereals (rice and wheat) contribute a very high proportion of total calorie intake. In the last two decades, the diet in the region has improved significantly, with a 30 percent increase in average total calorie intake, resulting in significant reductions in undernourishment in most countries. By 2015 and 2030, the food intake is forecast to increase to 3020 kcal and 3170 kcal, respectively. In China, the proportion of the undernourished population decreased from 30 percent in 1979-1981 to 13 percent in 1995-1997, and in Indonesia from 26 percent to six percent12. Undernourishment increased in only two countries - Mongolia (from 27 percent in 1979-1981 to 48 percent in 1995-1997) and Korea DPR (19 percent to 48 percent) - in the same period. However, a number of other countries still have higher proportions of under-nourished people than the developing world average (18 percent), including Cambodia (33 percent), Lao PDR (33 percent), Thailand (24 percent), and Papua New Guinea (24 percent). Overall, the number of undernourished people in the region has halved in the quarter century leading up to 1995-1997; from 504 million to 240 million (see Figure 1.2 in Chapter 1).

Natural Resources and Climate

Total cultivated land is estimated at 231 million ha, of which 134 million ha are found in China. This is less than 15 percent of the total regional land area. However, only a marginal net increase in cultivated land is expected by 2030, due to the large areas occupied by desert, mountains and other areas unsuitable for cultivation - as well as the loss of productive land to urbanisation. In particular, net cultivated land in China has actually decreased over the last two decades and is forecast to continue to decrease gradually over the period to 2030, as urbanisation reduces cropping area faster than new land can be brought into cultivation. Unfortunately, urbanisation removes some of the most productive land, while the newly cultivated tends to be more fragile, less fertile, steeper, more drought-prone and with less soil depth. In the other countries in the region, however, a gradual net increase in cultivated land area is projected up to 2030.

Agriculture is currently smallholder-based with widespread subsistence production. Average farm size has been declining for many decades in most countries. In only few countries has the absolute number of the rural-based population decreased - so allowing larger average farm sizes - as happened decades ago in industrialised countries. By 2030, therefore, it is anticipated that most farms in the region will remain as traditional smallholdings, although the proportion of semi-commercial and commercial farms will increase. The region's renewable water resources account for 32 percent of the total in the developing world. The current irrigation efficiency is low at 38 percent and is expected to increase only slowly to 42 percent by 2030 - still lower than the projected developing world average of 50 percent in that year. Cultivated land under irrigation is projected to expand from the current 71 million ha (30 percent of the total cultivated land) to 85 million ha (35 percent) in 2030. China alone irrigated 51 million ha in 1995-1997 and is expected to bring another nine million ha under irrigation by 2030.

Forest cover13 is estimated at 380 million ha (23 percent of land area), of which 170 million ha (10 percent of land area) remain dense forest. This area decreased by 0.8 percent per annum (three million ha) between 1990 to 1995, due to unsustainable logging practices, and is expected to diminish further, with little reforestation of natural forests and limited establishment of forest plantations.

With so many low-lying coastal areas on the mainland and the numerous islands, the Asia and Pacific region is particularly vulnerable to floods and maritime storms. The frequency and severity of storms is expected to intensify as a consequence of global warming. In addition, rising sea levels may threaten some islands during the course of the coming century.

Science and technology

Mainly as a result of the adoption of better technologies generated by the CGIAR and national research systems, overall crop production in the region has been increasing at three percent per annum during 1980s - but the rate of increase has been diminishing. Crop yields increased by 3.6 percent per annum during the period 1967-1997, and are projected to grow only at about one-third of this historic rate during the period until 2030. Since little increase is expected in cultivated land area, future growth in crop production will be achieved through higher cropping intensity and higher crop yield per unit area. However, considerable variation can be noted in growth projections for various crops. While production of paddy rice, the main crop in the region, increased at about 2.2 percent per annum from 1970 to 2000 (see Table 6.2) to reach 345 million tons (200 million tons in China), this rate of growth was lower than that for South Asia. Paddy rice production is projected to increase slowly over the period to 2030.

Wheat has been the fastest growing of the cereal crops, with production expanding by over four percent per annum over the last 30 years, almost all of it due to yield increases. Output is expected to continue to increase during the period 2000 to 2015. The region now produces 100 million tons of wheat per annum compared to only 30 million tons in 1970; almost all of it in China. Substantial increases in the production of maize and barley are also expected, but little increase is anticipated for millet, sorghum, cassava, and pulses. The output of oil crops, such as rape, soybean, maize, sesame, sunflower and oil palm, and fruits and vegetables - already one of the fastest growing crop categories in the region, averaging almost six percent production increases per annum since 1970 - is projected to increase substantially by 2030. The production of cotton is expected to grow moderately, while the output of other fibre crops is forecast to stagnate. The production of beverages, tea and coffee, is also expected to increase significantly. Natural rubber output has grown at an annual rate of 2.7 percent in the past, doubling from 1961 to 5.6 million tons by 1999 and is projected to double again during the next 30 years. Vegetables and fruits have shown very strong growth over the last 30 years, and this is expected to continue.

Over the period 1961-1997, the use of fertiliser increased rapidly at an annual rate of 8.9 percent. As a result, fertiliser application is high, at 147 kg per ha, compared to the developing world average of 90 kg per ha. However, the relatively high level of regional fertiliser consumption is due principally to massive use in China, as the average for the rest of the region is only 93 kg per ha. China consumes 73 percent of all the fertiliser in the region and has twice the application rate of the average in other regional countries. The pace of increase is expected to decline from 2000 to 2030, when average consumption is projected to be 180 kg per ha. Excluding China, the projected annual rate of increase in other countries will be slow, leading to an average consumption will be 106 kg per ha by the year 2030.

Both total and per capita meat and milk consumption have increased rapidly in the last twenty years. Between 1983 and 1993, per capita per annum meat consumption increased from 16 to 33 kg in China and from 11 to 15 kg in Southeast Asia countries, while per capita milk consumption increased from 3 to 7 kg in China and from 10 to 11 kg in Southeast Asia countries.

Most of the strong historical growth in livestock production has been driven by the rapid expansion of the livestock sector in China. Numbers of pigs and poultry in the region increased at high annual rates over the last three decades to reach over 500 and 6000 million head respectively (see Table 6.3). At present, more than 50 percent of the pigs and 36 percent of chickens and fowls of the world are found in the region. During the period 2000 to 2030, the pace of increase in China will slow down. However, this will still create huge increases in demand for animal feed supplies in China. These extra supplies are expected to come from the conversion of substantial areas of rice and wheat to maize production (as well as an acceleration of maize imports). The scope for increased livestock numbers and meat production in other countries in the region is mostly limited to pigs and poultry, as there is little potential for strong growth in the supply of ruminant meats (see below). The increased production of poultry and pigs will entail greater competition between livestock and humans for cereal grains.

Ruminant livestock are an important source of draught power, meat, savings and income in farming systems throughout the region. Total populations of cattle and buffalo, specialised dairy animals, and sheep and goats, are estimated at 190, 3, and 338 million respectively. While the growth in buffalo numbers in recent decades has been slow - largely due to the expansion of mechanisation - cattle and small ruminant populations have shown strong growth, with annual rates of increases of 1.9 and 2.8 percent respectively for the last three decades.

The projected future growth, for the period 2000 to 2030, is moderate for both types of livestock. However, the limited potential for increasing the supply of ruminant feedstuffs is anticipated to be a significant constraint in most countries. Little opportunity exists for improving and expanding native pastures, forages, and sown pastures. Ruminant feed supplies are expected to be mostly dependent on cultivated forages and native pastures rather than grains and concentrates.

Trade liberalisation and market development

The region currently accounts for a major proportion of world trade in a number of agricultural commodities, including, oil palm (Malaysia, Indonesia, China, Papua New Guinea and Solomon Islands), rubber (Thailand, Malaysia and Indonesia) and rice (Thailand, Vietnam and Philippines). Countries with a strong positive balance of trade in agricultural products include Thailand, Malaysia and Vietnam, while China, Republic of Korea, Korea DPR and the Philippines have a strong negative balance of trade. Market liberalisation is expected to encourage farm diversification - production and trade of higher-value products - in all farming systems. Growing urban markets and higher per capita incomes will lead to increased internal trade in most countries, with urban and peri-urban agriculture expected to expand and intensify to meet the increasing demand for vegetables and fruits and meat and dairy products.

Policies, institutions and public goods

Many countries in the region are governed under communist-derived regimes (China, Cambodia, Laos, North Korea and Vietnam) or military leaders (Myanmar). In these countries, the political regime has had a marked effect on government policies, laws and regulations, thereby affecting the environment in which businesses and farming have had to operate. Restrictions on trade and prices, rent-seeking practices and the persistence of inefficient government enterprises, all adversely effect the provision of goods and services to farming and private enterprise businesses. In other countries, restrictive and inefficient government bureaucratic practices, and widespread corruption have also had a negative effect on the growth, productivity and profitability of the agricultural sector. Despite these collective shortcomings, policy reforms have been implemented in recent years to improve market liberalisation, government efficiency and good governance, as well as to diminish corruption in the public service. However, it is proving to be a considerable challenge to implement these policy reforms.

Most countries, usually through donor assisted projects, have introduced changes to strengthen their agricultural extension and research systems. While the knowledge, skills and capacity of these services have been upgraded, there is still a need for further strengthening. Whilst the degree of importance given by governments to the protection and management of natural resources (land, water, flora and fauna) and the environment has increased, there is still a need for further upgrading of government institutions concerned with natural resource policy, planning and management. There also needs to be a closer linkage between government agencies concerned with agricultural production and natural resources management.

Information and human capital

Recent advances in information technology have almost exclusively benefited urban, educated populations. Traditionally, agricultural information dissemination to farmers has been delivered by public extension services. This has been through the usual mechanisms of formal and informal farmer training, radio and television presentations, provision of leaflets, field days, etc. In recent years, some countries have introduced computer-based management information systems (MIS), and geographic information systems (GIS), within agencies focused on rural issues. They have also started to develop some basic information programmes on research and extension themes, and even introduced farm decision programmes. Internet based information delivery has the potential to revolutionise service provision to agriculture. However, these developments are only in their infancy and have not reached the general farming public to any extent.

Selection of farming systems for analysis

Four of the farming systems outlined in the previous section have been selected for analysis, using criteria based upon agricultural population, the incidence of poverty, and apparent potential for agricultural growth and poverty reduction in the coming 30 years:

• Lowland Rice Farming System;
• Tree Crop Mixed Farming System;
• Temperate Mixed Farming System; and
• Upland Intensive Mixed Farming System.

These four farming systems contain most of the agricultural poor in the region and also produce more than three-quarters of the GADP. They are described in more detail in the following sections of the Chapter.

LOWLAND RICE FARMING SYSTEM

Characteristics of the system

The Lowland Rice Farming System is the single most important farming system in East Asia in economic and demographic terms, covering some 197 million ha (12 percent of the land area of the region) and containing 825 million people or over one quarter of the region's agricultural population (474 million) - see Box 6.1. It covers both humid (270 to 365 growing days) and moist subhumid (180 to 269 growing days) tropical environment in mainly flat landscapes. Large areas of this system are found in Thailand, Vietnam, Myanmar, South and Central-Eastern China, Philippines and Indonesia. Smaller areas are located in Cambodia, Korea DPR, Republic of Korea, Laos DPR and Malaysia.

Average household incomes are low and poverty is extensive and severe in many areas. Land ownership is secured under traditional or - less frequently - freehold tenure. Traditional rights are not recognised as legal ownership in many countries, but usually ensure long-term use of land. The system is generally well serviced by roads, communications, community, goods and support services.

About 71 million ha, or almost one third of the total area of the system, are estimated to be cultivated. There is considerable variation in intensity of farm production. More intensive production systems are found in areas with higher population density and smaller farm size, for example in China. While cultivated area per farm household can reach as much as several hectares in central Thailand, in the Red River Delta it is only 0.24 ha (see Box 6.2). Other locations tend to have sizes between 0.5 and 1 ha (e.g. the Mekong River Delta averages 0.79 ha cultivated area, while in Southeast China it is estimated at 0.67 ha). Average farm household size varies from six persons in the Mekong River Delta to four persons in Jiangsu Province, China.

As its name implies, the farming system is predominantly rice-based, with from one to three harvests per annum depending on rainfall distribution, length of growing season and the availability of supplementary irrigation. Total irrigated area is around 33 million ha, or 45 percent of the arable area in the farming system. This constitutes almost half of the entire irrigated area of the region. The total annual area of rice is estimated at 96 million ha. The second most important crop is wheat (21 million ha), which is sown as a winter crop, mainly in the northern part of this farming system in Central-Eastern China. Other crops, in descending order of importance by area, are vegetables, oilseeds, maize, root crops, soybeans, sugarcane, cotton and fruits. Large and small ruminants, pigs and poultry are a minor but important source of income generation.

Rice is mostly grown on puddled lowland soils under both rainfed and irrigated conditions. Soils are heavy and inherently more fertile than other cropped soils, but natural fertility is declining under conditions of continuous cropping with inadequate or unbalanced nutrient inputs. The average yield of paddy is 3.1 t/ha across the region, but it is heavily skewed by the higher yields obtained in China (up to 8.1 t/ha in Jiangsu Province). High-yielding varieties are used in all countries, but some still have significant areas of lower yielding, traditional varieties because of their perceived higher grain quality and acceptability. Fertiliser use is moderate to high, including the use of both inorganic and organic types. High inputs of organic and inorganic fertiliser combined with the universal use of high-yielding varieties are the main determinant of high yields in China. Rice is mostly transplanted, but germinated seed or seedlings are broadcast in some countries (Thailand and some areas of China) where serious labour shortages occur. Triple cropping only occurs where transplanting is used and there is a continuous supply of water during the year.

Livestock are important for draught power, meat, income and savings purposes. About 29 percent (52 million head) of the total large ruminants (cattle and buffalo) of the region are found in this farming system. Buffalo are very important for draught power in the lower, wetter landscapes with cattle used more commonly in slightly higher parts. Sheep are unimportant, but there are an estimated 36 million goats (12 percent of the regional total). Ruminant livestock graze under extensive conditions and animal health services are generally poorly developed. Pigs and poultry are important for household consumption and sale. In the more extensive areas within the system, animals mostly scavenge during the day with some supplementary feeding. Buffalo will probably decline in importance and numbers in the future, as mechanisation increases. More intensive production systems for pigs and poultry are found in China where a more intensive farming system is generally practised. Animals are usually housed, and productivity levels are higher as a result of better feeding, husbandry and animal health practices.

On-farm fish production is an important source of food and income in this farming system. Fish are cultivated in association with wetland rice fields and in ponds. Rice cultivation has been further diversified in coastal areas in China where rice culture has been combined with other fisheries products, such as crabs, shrimps and pearls. This type of farm diversification has numerous benefits; including improved pest control, nutrient cycling and a higher cash income that can be used to purchase crop production inputs.

The majority of farm households in this system are food secure and sell surplus rice, cash crops, livestock and fish. However, at a national level, most countries are barely able to meet domestic demand; only Thailand and Vietnam are significant exporters of rice. Until the present time, livestock and fish have only been marketed domestically, however small quantities of some other crops are traded internationally.

Trends and issues in Lowland Rice System

The rate of production growth of the Lowland Rice Farming System is expected to decline in the coming years due to the limited capacity for expansion of cultivated area, as well as an expected reduction of the historical rate of crop yield increases. Although production intensification will be important, poverty reduction is expected to derive primarily from increased diversification of cropping, as well as non-crop activities such as intensive livestock production and small-scale on-farm aquaculture (fishponds, rice-fish culture, shrimps, crabs, etc.). Rice production may actually decline in some areas as other activities offering higher returns to land use become popular. An increasing proportion of the agricultural population will also obtain a greater percentage of their income from off-farm activities - whether this involves agro-processing, service provision or seasonal migration to urban areas (e.g. construction work). In addition to increased production and incomes, technology changes will emphasise improved sustainability of the natural resource base. Efficiency of irrigation use is also expected to increase, with some expansion of irrigation area.

Specific issues that will have to be addressed if the Lowland Rice Farming System is to achieve significant progress in reducing poverty include: land fragmentation; unbalanced fertiliser use; inefficient use of water resources; inferior seed quality; poor post-harvest management; limited farm diversification; and, the absence of adequate local capacity for agricultural product processing.

Increasing fragmentation of farmland has resulted from a growing agricultural population and the absence of primogeniture to maintain the integrity of holdings. In many instances farm sizes are now uneconomic, and even with the adoption of best practices would still only be marginal in terms of livelihood. If this trend is not reversed, an increasing proportion of farmers will be unable to rely on agriculture to ensure adequate food security and income levels. As a consequence, on-farm employment, and even complete exit from the system (e.g. permanent migration to urban areas), is likely to occur on a much larger scale.

The adoption of intensive methods of crop production, based on high levels of inorganic fertilisers and pesticides, has in many cases lowered the quality of soil and water resources. Continuous rice cultivation, using unbalanced mineral fertilisers and only low inputs of organic manure, is in some situations seriously deteriorating the physical and chemical properties of the soil with adverse consequences on crop yields. On-farm deterioration in the quality of rice for sale, due to poor post-harvest management practices and inadequate storage conditions, is very significant in many areas and leads to reduced revenues from crop sales. There is limited scope for further expansion of irrigation systems. Only a few countries are in the fortunate position of under-exploiting their water resources. In some areas, serious shortages of irrigation water occur in the dry season. However, water use efficiencies are often low.

In most countries, seed is generally of poor quality and not necessarily of the most recently recommended variety, because most farmers retain their own seed for replanting for many seed generations. While research services and private companies have developed new crop varieties - including hybrids - with higher yield potential and better local adaptability, they are often unavailable to the majority of farmers or are unsuited to their production practices. Production of seed of improved rice varieties is undertaken in many countries by government services, but quantities are generally much less than required by farmers. This situation has a serious adverse effect on crop yield and overall crop production.

Historical trends in farm production patterns have been towards the development of rice monoculture systems in lowland areas. The more recent reversal of this trend, towards a more diversified form of production - introducing field crops, vegetables, small livestock and fish into the farming system - has generated both increased incomes and improved family diets. However, opportunities for farm diversification are often location-specific; depending upon markets, infrastructure and other factors, and hence need to be identified on a zone-by-zone basis. In many areas, the productivity of livestock within the Lowland Rice Farming System is low because of extensive management practices. Opportunities to intensify small animal production enterprises need to be identified in relation to the resource situation and market circumstances.

Off-farm income is already a significant part of total household income in many areas. Further opportunities for increasing the value of products need to be identified. In some countries, government agencies still maintain monopolies on the supply of production inputs and also control the price and sale of crop products. Policies and actions need to be adopted to privatise the supply of production inputs and liberalise the marketing of products.

Priorities for Lowland Rice System

The central strategic priorities for improving the farming system relate to: (i) enterprise diversification; (ii) strengthened linkages to the non-farm economy to boost off-farm income; (iii) improved resource management to maintain and even increase current high levels of productivity; (iv) land consolidation to increase field sizes; and (v) an improved level of farm management concentrated on better control of soil nutrients, weeds and pests.

Demonstration, active learning and formal training programmes can catalyse the diversification of farm production (field crops, annual fruits, vegetables, small livestock and fisheries) in order to increase incomes, minimise and spread risks, enhance natural resources and the environment, and improve the diet of farm families (see Box 6.3). Programmes would aim to promote the cultivation of new, higher value, crops with good market prospects. Intensification of village-based, small livestock-production (chickens, ducks, pigs, etc.) should be promoted through effective animal health services, better feeding, better animal husbandry practices and breed improvement. Local feed processing should be promoted by using crop by-products and the cultivation of specific feed crops. Small pond culture, rice-fish culture, and rice-shrimp and crab systems should also be promoted where local conditions are suitable. Diversification is likely to be accompanied by gradual increases in the productivity of existing crops and livestock.

A further high priority area is the introduction of improved post-harvest management practices, processing and storage conditions to reduce losses of crop products - in terms of both quality and quantity. These measures should be accompanied by government divestment to the private sector of responsibility for the production, distribution and sale of improved seeds and planting materials, so as to replace the generally inefficient and inadequate government seed and seedling production services. Reforms need to be accompanied by improvements in marketing systems, through provision of market information, assistance and market facilities in order to prevent product losses and to increase farmers' share of the consumer price.

Development of financial mechanisms to facilitate the use of local resources and gradually expand financial services, is extremely important. In marginal areas, support to local Self-Help Groups (SHGs), to enable them to mobilise savings and to give small short-term loans, may constitute a good starting point. Linking SHGs with formal financial institutions and the use of micro-lending technologies broadens the outreach as well as the sustainability of financial services.

Improved management of natural resources can be achieved through implementation of programmes of integrated soil nutrient management to promote increased use of organic manures, crop rotations that include leguminous crops; plus balanced fertilisation to improve sustainability of soil fertility and thereby crop yields. These actions should be accompanied by the implementation of training programmes and demonstrations that emphasise improved efficiency of water use, avoidance of pollution of water resources, communal operation and management, and cost recovery of irrigation systems and efficient drainage systems.

Improved resource management will be facilitated by land aggregation and consolidation, leading to a gradual increase in field sizes and, over time, average farm size. These policy initiatives need to include: (i) issuing of land titles; (ii) development of land markets; (iii) land leasing; (iv) establishment of land banks; and (v) the use of land as collateral to finance purchase of additional land and investment in farm production activities. In addition, governments need to undertake initiatives to provide alternative employment to agricultural workers in rural areas through promotion and development of locally-based industries in order to enhance exit opportunities of farmers and farm workers. This would promote land consolidation, as well as providing off-farm income for households that remain in farming.

A more holistic, integrated form of participatory research and extension should be developed and promoted, with less emphasis on single-crop research. This type of work would place greater emphasis on benefiting from synergies between productive activities, and would consider the whole-farm production system - including the sustainability of natural resources and the protection of the environment. Specific support should be given to the development of research resources, both equipment and human resources, to take advantage of new techniques in biotechnology and genetic engineering. At the same time, there is a need to develop the skills of farmers and extension staff in participatory of farming systems and identification of development opportunities, combined with a farmer field school approach to promoting new technologies. These measures should be associated with improvements in the linkages between research and extension to ensure more effective information availability, dissemination and technology development.

TREE CROP MIXED FARMING SYSTEM

Characteristics of the system

This system covers 85 million ha, mainly in Thailand, Malaysia and Indonesia, with smaller areas in Cambodia, Philippines, Vietnam, South-ern China and Papua New Guinea, and contains a total population of 49 million with an agricultural population of 30 million (see Box 6.4). The tropical environment of this zone is mostly humid (270 to 365 growing days), with some extension into moist subhumid (180 to 269 growing days) areas. Tree crops have been established under plantation or estate crop systems for the provision of industrial products, beverages and condiments. They are cultivated principally on flat to undulating landscapes on acid soils of low inherent fertility.

The total cultivated area is estimated at 18 million ha and there are only about 2 million ha of irrigation. During the 19th century, extensive areas of tree crops were developed as large private sector estates, particularly rubber and later oil palm in Malaysia and Indonesia. Today, however, there are also significant areas under smallholder ownership and management. Smallholder plantation crop areas are usually a maximum of 2 or 3 ha in size, depending on crop type. Coconut plantations are more widespread throughout most Southeast Asia and Pacific countries and are now mostly smallholder operations.

Coffee and tea plantations are confined to specific agro-ecological areas with higher elevation. Cocoa is usually grown as an intercrop at low elevations under humid tropical conditions. Condiments, cloves, pepper, etc., are usually smallholder crops. While tree crops are the dominant production system, small farms without tree crops are scattered throughout the system, producing food (rice and maize), cash crops (soybeans) and livestock (see Box 6.5). Although large livestock are not very important in this farming system, considerable numbers of small ruminants co-exist with the tree crop plantations in many areas. Incomes of smallholders are moderate and little poverty exists. Where it does exist, poverty is higher among small farmers and landless farm labourers.

Governments in a number of countries have established specialised commodity research stations or institutes for improvement of tree crops, while government operated research extension services have supported smallholder farmers. Crop yields have been rising through the introduction of improved varieties developed by government research or in some cases by large multi-national companies involved in the plantation industry. New higher-yielding dwarf varieties of oil palm and coconut have been developed in recent years that are significantly increasing yields for these crops. Regular applications of fertilisers combined with effective weed control measures are used in productive, well-managed plantations. All these crops require intensive labour inputs for harvesting and processing and therefore profitability is determined by local labour costs. In some countries, such as Malaysia, rising labour costs are now seriously affecting the profitability of rubber plantations and there has been a strategic shift to oil palm cultivation.

Private companies and governments have established large factories, with high investment requirements, to process crops such as rubber, oil palm, tea and coffee. Smallholders supply raw materials or partly processed products to these factories. Smallholder co-operatives are not usually well developed and individual farmers often have no alternative but to accept whatever prices are offered by middlemen or factories for their raw products. Some intercropping is undertaken to increase and diversify incomes, both in the early years of establishment of new plantations and in mature plantations. In some tree crop systems (rubber and coconut plantations) industrial crop production has been combined with livestock production. In more recent times there has been a move to develop alternative products in order to diversify and add to incomes from some plantation crops, for example wooden products from rubber and coconut trees available when old stands are cut and replanted.

Trends and issues in Tree Crop Mixed System

The major factors influencing the future of the tree crop sector will be concerned with: international demand and prices for industrial crop products; replacement of labour-intensive and costly harvesting and processing practices through mechanisation for some crops such as rubber, oil palm and tea; development and adoption of improved production technologies; planting of much higher yielding clones; and, the extent to which there is any significant change in proportion of private companies and smallholder producers. Although world population growth is expected to decline in the future, there will continue to be a strong demand for industrial crop products (plant oils, rubber, beverages, natural fibres, condiments, etc.). However, the price of those products that compete with oil-based synthetic products will be greatly determined by future petroleum prices.

Given the large reported area of immature trees within the system, the tree crop sector is expected to continue its moderate expansion. Prospective annual production increases to 2030 are estimated at 3.4 percent for oil palm, 2.8 percent for rubber, 3.4 percent for coconut, 1.8 percent for coffee and 3.8 percent for tea. It is anticipated that these production increases will come from both area expansion and increasing yields. The extent to which the major private estates will increase their size will depend on overall profitability, but it is anticipated that the smallholder sector will remain important, at least in the medium term. Some plantation (industrial) crops will continue to be grown mainly by smallholders.

The subsequent discussion of issues facing the Tree Crop Mixed Farming System is confined to the smallholder sector. The key issues that have to be addressed in advancing the productivity and income generation of smallholder plantations include: low yield; lack of alternative enterprises; inadequate farmer skills; enhancement in technologies and crop husbandry; primary product processing; and, marketing mechanisms.

Yield improvement has been dependent on government and private research and extension services developing higher-yielding clones with increased disease and pest resistance. However, this research and extension support has been mainly directed to rubber and oil palm and in general, insufficient support has been given to production improvement of other tree crops. Government policies are aimed at assisting smallholder plantation crop production, but government support for expansion of tree crop area must be based on an in-depth analysis of future product demand in order to avoid oversupply and low prices.

Prices for industrial crop products are subject to the considerable variation that occurs in the international marketplace. Many countries have established commodity boards to stabilise prices; generally with very poor results. At the local level, smallholder farmers generally have to accept prices below those ruling in the market because of their immediate need for cash. Returns to smallholders can be increased through improved on-farm processing and collective marketing of products by smallholders' associations. Governments have tried to establish farmer co-operatives for smallholders engaged in many plantation industries. These generally have been weak or have failed altogether as a result of farmers not receiving any material advantage from their operation. Nonetheless, large financial advantages can be obtained from collective purchase of inputs and joint collection, delivery and marketing of products. Alternative modalities still need to be defined for the operation of co-operatives, or farmers' associations or small business companies.

Development of the skills of farmers involved in industrial crop production is usually weak. In many instances, there is inadequate participatory identification of problems, constraints and opportunities for product development and only limited support from government extension and specialised research services. Linkages between government research and extension in information dissemination and technology development are also generally inadequate. There is usually also very little technology transfer to smallholders from private (multinational) companies, even though they often have their own research and extension services directed towards plantation tree crops.

Priorities for Tree Crop Mixed System

The strategic options for the smallholder sector include increased productivity, diversification of enterprise activities and group organization for business development. Related interventions that would enable significant advancement of the smallholder Tree Crop Farming System include measures to increase production in smallholder plantation systems (rubber, oil palm, coconut, etc.) where considerable scope exists through the introduction of modern clonal materials. As stated above, new clonal materials with very high yield potential have already been developed in some crops, such as oil palm and coconut, and new rubber clones are also being continually developed in commodity institutes. There should be a progressively accelerated replacement of old clonal materials with new, more high-yielding clones.

Regeneration of old plantations must take advantage of intercropping in the early establishment years so as to give an immediate income. Emphasis should be given to local value-adding processing of both product and wood materials. Opportunities also exist for expansion of intercropping in mature plantations to stabilise incomes and reduce risks from price fluctuations; and for households to grow small areas of food crops and keep small stock such as goats, utilising surplus feed and fodder produced around the plantations. Research programmes should be broadened to include more research on the minor tree crops. Research capacity needs to be increased to take advantage of advances in biotechnology and genetic engineering to improve yields and disease and pest resistance.

The establishment of business co-operatives, associations or companies should follow a gradual approach to avoid overloading fragile institutions with multiple functions. Thus it is preferable to start with one main business, e.g. input or output marketing. Once marketing channels and a reliable client base are developed, diversification into other business areas, such as interlocking input supply and credit with output marketing, can be considered. Assistance is required to broaden the outreach of financial services provided by both formal and informal financial institutions to farmers. Business co-operatives, farmers' associations or small companies could gradually expand their activities towards financial intermediation and play an important role in savings mobilisation as a source of funds for credit supply.

In many countries, the government has given insufficient emphasis to extension and research support for industrial crop producers. Consideration needs to be given to the development of private extension support services for smallholder farmers; these could be financed by the smallholder business co-operatives. Skills enhancement of smallholders should not only include training in all aspects of crop production, but also methodologies and practises in post-harvest management and processing of products to maximise quality and price. A farmer field school approach to promoting new technologies should be used, as well as the provision of technical training programmes for farmers.

UPLAND INTENSIVE MIXED FARMING SYSTEM

Characteristics of the system

This system covers some 314 million ha and is the most widespread and diverse farming system in the region with major areas located in all countries of East and Southeast Asia (see Box 6.5). The system contains a total population of 530 million with an agricultural population of 310 million. It is characterised by similar topography, but considerable ecological variation exists. The system is found in humid and subhumid tropical, subtropical, and temperate environments in upland and hill landscapes of moderate altitude and moderate to steep slope. Soils are generally of low fertility, shallow and susceptible to erosion. Some 75 million ha are cultivated within the system, encompassing a wide range of crops, depending on geographic area, landscape slope, terracing and water regime - see Box 6.6 for a description of a typical farm household system.

Some forested areas are scattered throughout the system, but these have generally been depleted as a result of unsustainable logging practices. Deterioration of natural resources, biodiversity and the overall environment has occurred in many areas. This is a result of high population densities, leading to the extensive cultivation of fragile slopes without the adoption of appropriate soil and water management practices. As a consequence, households are vulnerable to natural disasters and crop failures. Local infrastructure is generally poorly developed. Because most of the population lives in remote areas, links to markets and other systems are scarce. Moderate to severe poverty is found in this system, but with potential to further increase production and incomes there is some opportunity to reduce poverty in the future.

Most agricultural production occurs under rainfed conditions, but about a quarter of cultivated area (18 million ha), much of it terraced, is irrigated from local streams and rivers. In some areas, for example in the Philippines and Indonesia, substantial terraces have been constructed for rice cultivation, but in most cases only simple terracing has been developed (e.g. bunding for rice cultivation) and soil and water conservation structures are completely absent. Crops include paddy and some upland rice, wheat, maize, sugarcane, cotton, leguminous pulses, oilseeds, fruits and vegetables. Rice is the staple crop in tropical and sub-tropical areas, being replaced by wheat in more northern latitudes. Both tropical and temperate fruits and vegetables are grown, depending on climatic location. While there are some more extensive areas of commercial fruit and vegetable production, home gardens are widely used for vegetable and fruit production for household consumption and sale of products.

Livestock production is an important component of the system. Livestock are used for draught power, meat production, cash income and as movable assets. Some 52 million cattle and buffalo (28 percent of the regional total), and 49 million goats and sheep (14 percent of the regional total) are found in this system. Pig and poultry production is also very important for meat and cash income. Livestock growth rates and production are generally low, however, because in many countries animals are raised under extensive conditions using poor animal husbandry and animal health practices. More intensive production systems are found in China, particularly for pig and poultry. Where water resources are available, aquaculture is practised, usually combined with rice production. On-farm forestry is limited.

Considerable variation exists in the intensity of crop and farm production within this system, with highest production intensities found in Southern China. In areas of more extensive crop production, many farms operate semi-subsistence production systems with only limited sales of products to meet livelihood needs. Thus, average incomes are low, creating significant poverty and food insecurity. Rural credit is rarely available. Households are vulnerable to the consequences of natural disasters, crop failures and ill health. Rural infrastructure is often poorly developed, particularly in more remote areas, and access to goods and services is poor.

Shifting cultivation is practised in some hill and mountain areas, especially in Southeast Asia, but is mainly confined to the Highland Extensive Mixed Farming System, a subsistence agriculture system characterised by widespread poverty and food insecurity.

Trends and issues in Upland Intensive Mixed System

The major factors influencing future changes in the Upland Intensive Mixed Farming System are expected to be concerned with: (i) preservation of the natural resource base; (ii) improvement of technologies for both crop production and watershed management; (iii) diversification into higher-value products; (iv) expansion and intensification of livestock production; (v) development of the rural financial system; (vi) increasing opportunities for improved marketing and off-farm income; and (vii) more responsive agricultural support services.

Major changes in agricultural production are expected to come from intensification and diversification of crop production with little expansion of overall cropped area, and from improved productivity of livestock and tree crops. The trend will be towards agricultural products with higher value, as this system is generally not competitive for the production of cereals for market. Increasing diversification would include an expansion of perennial crops and annual cash crops - as opposed to food crops - and intensification of livestock production. The particular higher-value crops selected for cultivation will depend on local agro-climatic conditions and access to markets; crops which are bulky and perishable will be grown close to larger markets while those with less bulk and longer shelf-life would be cultivated at more remote locations.

Livestock numbers are increasing under very extensive and low input production systems, but productivity and off-take remain low. If present patterns continue, only small increases in livestock numbers can be anticipated because of shortages of feed supplies. However, some intensification of livestock production is expected as a result of an improvement in general incomes and consequent increased demand for livestock products. These changes would increase household incomes and reduce poverty.

A key issue facing the future development of the Upland Intensive Mixed Farming system is the increasing population in hill and mountain areas that is exerting growing pressure on natural resources (soil, water, flora and fauna). Widespread, severe natural resource degradation in many areas has given rise to substantial local costs in the form of lowered yields, mudslides and scarcity of water in the dry season. There are also large downstream costs from siltation of rivers and flooding. The highest priority of farmers is to produce annual food crops to sustain their families. Increasing population pressure has also caused annual crop cultivation to increase on more fragile landscapes and has resulted in a decreased length of the fallow period in shifting cultivation systems. Furthermore, because farmers are poor they are extremely reluctant to invest in field structures to control soil erosion. Collectively, these factors have an adverse effect on farm production and on natural resources. If the majority of families remain in semi-subsistence farming there will be an increasing pressure on natural resources stability in the future, unless considerable new opportunities can be opened up for off-farm employment or exit from the system.

A further critical development issue in highland areas in many countries is lack of security of land tenure. Many governments, because of their political system, are reluctant to give farmers legal ownership of these lands, yet farmers are generally unwilling to invest resources in development without secure land tenure or ownership. Land tenure, land leasing and land markets are policy issues that have to be reviewed in order to promote development in upland and mountain areas.

Government agencies and large timber companies have been responsible for widespread and unsustainable logging of natural forests throughout the system. The area of natural forest has decreased enormously in all East Asia countries in the last two to three decades. Little has been done to replant logged areas or to develop systems of sustainable natural forest management, and the establishment of tree plantations has been limited. The management of village forest resources by communities and the promotion of on-farm agro-forestry systems are important development issues. However, governments have generally been very reluctant to accord responsibility to local communities for managing local forest resources.

Technology development in the past has tended to be focused on specific commodities, rather than on integrated development of a system that is productive, economically attractive, not too complex to manage and that provides a range of land use options in varying agro-ecological circumstances. Because of this single commodity focus, very few technologies have been developed that are economically viable and attractive to farmers while at the same time contributing to environmental and resource regeneration.

Livestock products are a very important source of household cash income in the system and there is considerable potential for expansion of livestock production. However, as in the case of crops, little emphasis has been given to the development of improved integrated livestock production systems - where improvements in feeds, genetic material and husbandry practices are related to other farm activities - and the provision of effective animal health services.

The generally poor development of rural infrastructure in upland areas has seriously affected marketing of products because of very bad communication and transport networks. With a few exceptions, the Upland Intensive Mixed Farming System has received a low priority in government policymaking, and this has aggravated the natural constraints to development that are inherent in these upland areas.

Priorities for Upland Intensive Mixed System

Whilst increasing off-farm income represents the most important household strategy for the reduction of poverty, closely followed by exit from the farming system, there are also prospects for intensification and diversification. Other improvements to the system centre on sustainable natural resource management and more effective agricultural services. Future programmes of assistance should emphasise improved watershed management, conservation farming, water harvesting and introduction of appropriate technologies (see Box 6.7). A holistic approach is essential in micro-watershed management. Experience shows that such programmes must be strongly community-based, with full participation and involvement in management and use of the natural resources. Soil and water management practices and techniques should be promoted as an important means of stabilising yields, ensuring maintenance of soil productivity and increasing crop production. Water-harvesting technology should be promoted where natural circumstances permit interception of surface water flows. Technologies that are introduced and promoted must be holistic, and must provide short-term, medium-term and long-term economic benefits.

The forested areas that are scattered throughout this system mainly occur at higher elevations. Where relevant, future development programmes should strongly promote community management of forests as this has positive effects on environmental management, as well as providing important sources of building materials, income and food for local communities. Furthermore, on steeper lands, agro-forestry systems should be promoted, with contour planting of suitable tree species - for production of fruits, timber, fuelwood and non-timber forest products - to act as conservation barriers and provide additional income generation.

Future programmes of assistance must address the policy issues of land tenure, land leasing and land markets, which are fundamental in promoting development of upland areas. Key priorities would include the establishment of functioning land markets through the establishment or acceleration of cadastral and land titling procedures, and establishment or strengthening financial markets to support purchase and sale of land.

Development and introduction of improved technologies should include: (i) improved cropping patterns using crops that contribute to food and cash income; (ii) soil and water conservation and fertility building; (iii) contour planting of trees and shrubs (for timber, forage, fruits and food grains); (iv) mulching and other soil conservation techniques; (v) higher-value agricultural products; and (vi) feeds for livestock. Livestock development is a priority for this system. Advantage should be taken of any opportunities for intensification of village-based, small livestock (chickens, ducks, pigs, etc.) production, as well as large ruminant production. Technologies introduced should provide improved animal health, better animal feeding, improved animal husbandry practices and breed improvement. Effective extension and support services will be needed as well as an established animal health service. In some situations technologies can be introduced to improve forage and pasture production for cattle feeding.

General lack of capital is constraining investment in productive activities and rural development in general. Donor assistance should be focused on the improvement of rural financial services and the improvement of farmer access to these services; setting-up community-managed funds etc., with a view to introducing the agricultural community to the use of commercial financial services.

Because of the remoteness of much of this farming system from markets, plus the poor communication and transport networks, the emphasis in agricultural production has to be on low weight and high value products that are easily transported, have a long shelf-life and can be processed locally to add market value. In addition, the development of good rural infrastructure must be actively promoted, not only as a pre-requisite to agricultural development in these areas, but also as a means of creating opportunities for increased off-farm employment, particularly in eco-tourism. Although external assistance may help in building the infrastructure, this will not be sustainable unless the beneficiaries and local institutions participate in planning and construction, as well as contributing to the cost and management of their operation and maintenance.

The Upland Intensive Mixed Farming System has received less attention and benefits from government research and extension services than lowland farming systems for many reasons - remoteness, complexity of system, lack of water resources, a lack of perception of their importance, etc. However, the system represents an important part of the agriculture sector in most countries of the region. The strategic priorities for the future must be to strengthen the capacity of governments to undertake participatory identification of problems, constraints and opportunities for farm development and to provide the necessary support by government or privatised extension and research services in these areas. The complexity and diversity of the system demands that the future priority is for a more holistic, integrated form of research and extension. This should be strongly linked to farmers and be based upon their active participation and should take greater advantage of synergies, consider the whole farm situation and emphasise the conservation of natural resources and protection of the environment.

Skills, knowledge and educational development of farmers are crucial to agricultural development. Programmes of assistance must emphasise participatory analysis of farming systems and opportunity identification, combined with a farmers' field school approach to promoting new technologies that have been shown to result in greater agricultural production and family incomes. Skills and knowledge building must be promoted as an essential component of future development assistance. This must be combined with much improved systems for information dissemination to and access by farmers, particularly because of the remoteness of this system from sources of information.

TEMPERATE MIXED FARMING SYSTEM

Characteristics of the system

The Temperate Mixed Farming System covers some 99 million ha in Central-Eastern and Northeastern China, with smaller areas in Korea DPR and Mongolia (see Box 6.9). It contains a total population of 247 million, of which 162 million are classified as agricultural. The climate of the zone is mainly dry subhumid (120 to 179 growing days). The transitional boundary between this system and lowland rice-based system is not easily defined in Central China. Throughout the system, average incomes are low with modest poverty levels. Some 31 million ha are under cultivation, with wheat being the dominant crop. Other major crops include rice, maize, soybeans, sweet potato and rape, as well as citrus and some temperate fruits. Irrigation covers about 12 million ha within the system. The preferred food staple throughout the region is wheat noodles.

There are two main sub-systems: the Loess Plateau Sub-System, involving mixed farming of both summer and winter crops; and the Northern Sub-System, in Northeast China, Korea DPR and restricted parts of Mongolia where the climate only permits cropping during the summer. Both are characterised by rainfall being concentrated in the summer months and by severe frosts in winter, particularly in the northern areas. Average farm size ranges from as little as 0.3 ha in the Loess Plateau of China to several hectares further north, where it gradually blends into the Pastoral Farming System. Average household size is approximately four to five persons.

In the Loess Plateau of China, wheat and rape are the main winter crops; while maize with rice, cotton, soybeans and sweet potato and the main summer crops. Cropping intensity is about 150 percent. Crops are grown under both irrigated and rainfed conditions. Wheat yields averaged about four t/ha in 1999. Yields have risen dramatically since 1970 and even in the last decade have achieved 2.7 percent annual growth.

In the Northern Sub-System (Northeastern China, Korea DPR and Mongolia), because cropping is possible only during the summer, wheat (0.5 m ha in Korea DPR and Mongolia) and other cereals are grown concurrently and compete for cultivated land. Yields are lower in these zones due to adverse climatic conditions, and cereals may be supplemented by cold-resistant crops such as potatoes and cabbage. The higher yields in China are due to crops being grown with high organic and inorganic fertiliser inputs and intensive pest control practices. In this system, overall cropping intensity is high and scope for expansion of land area is limited.

Livestock are also an important component of the system: particularly cattle for draught power, and pigs, small ruminants and poultry for meat. Some 11 million cattle and 35 million sheep and goats are located in this system and pigs and poultry are widespread. Livestock are reared and managed under extensive conditions in most countries. More intensive production systems are found in China, however, especially for pigs and poultry. In this country, pigs are mostly housed and fed supplementary grain and concentrates.

Trends and issues in Temperate Mixed System

Wheat areas have been declining for the last decade in all countries and this decline is expected to continue in the future. In contrast, wheat yields have been increasing rapidly and overall wheat production is expected to increase, more than offsetting the declining crop area. Areas of maize, however, have been expanding and are projected to increase substantially in the future, provided that production can maintain competitiveness with imported supplies. In the southern part of the system any increase in maize will likely be at the expense of rice production. Overall, maize production is expected to double by 2030 as a result of both increased area and yields. This increase will be a direct consequence of a greater demand for animal feeds. Fattening of store cattle for local markets, using treated cereal straw, is becoming more common, especially in the southern part of the system.

Several specific issues have to be addressed to reduce poverty levels in the Temperate Mixed Farming System. The high crop yields obtained in the intensive production system in China have resulted from very high applications of nitrogen and phosphorus. Further yield increases from increased use of inorganic fertiliser will require a more balanced use of nutrients. Potassium is now a significant limiting factor, but potash fertiliser is fully imported and much more expensive than the locally produced nitrogenous and phosphatic fertilisers. About 40 percent of the crop area in this system is currently irrigated. Some scope exists to expand the existing irrigation systems by increasing the use of surface water and extraction of groundwater from shallow aquifers. However, in some areas over-exploitation of shallow aquifers is already evident from recorded increases in pumping depth.

The system is strongly crop-based and market demand for meat, vegetables and fruits is increasing as urban incomes rise. Farms are expected to diversify to meet this shift in food demand, and this change may be accelerated if world prices for cereals continue to decline. Some conflict is expected in choice of crops based on the competing demands human food and the rising demand for animal feed.

Low population growth rates and migration to cities in China has created labour shortages at crucial times in the farming calendar. This trend is expected to continue. The need for small-scale farm mechanisation is becoming a more important issue. Because of small farm size, family income is low. Farmers will need to grow higher-value crops and increase farm size to increase disposable farm incomes significantly, as well as to expand off-farm income sources.

Priorities for Temperate Mixed System

Increasing off-farm income represents the most important household strategy for the reduction of rural poverty; with substantial development of agro-processing and other off-farm employment sources. This particular household strategy would be closely followed by diversification and exit from the farming system. There are, however, some prospects for the expansion and intensification of maize production for animal feed. While an 18 percent expansion of irrigated area by 2030 is anticipated in China, the more important future priority, both there and in other countries, is to institute programmes to improve the effectiveness of existing irrigation systems and the efficiency of water use at field level.

Further intensification of crop production will occur as a result of promotion of higher-yielding varieties - particularly hybrid varieties - better balanced use of fertilisers, increased water availability and more efficient water use. It is uncertain to what extent the supply of future production inputs will come from the private or the public sector. Future assistance should promote farm mechanisation and the development of the private sector for provision of goods and services.

Greater emphasis should be given to small-scale intensive livestock production - mainly pigs - and to growing vegetables and fruits, as market demand for these higher-value products will increase with rising urban incomes. Cattle have already been successfully fattened on a diet based on treated cereal straw, but government research and extension services will need to provide the appropriate technical advice and support for this changes in the production system.

STRATEGIC PRIORITIES FOR EAST ASIA AND PACIFIC

The strong economic growth and steady reduction in poverty in China and other regional countries during recent decades is noteworthy. Nevertheless, poor socio-economic indicators in many countries continue to reflect the results of: (i) lack of opportunities for intensification and diversification of farm production; (ii) lack of opportunity for off-farm employment and income for many farm households; (iii) lack of access to financial resources; and (iv) small farm size. This situation is dictated by underlying factors that include: (i) overpopulation; (ii) land fragmentation; (iii) absence of secure land ownership; (iv) deterioration of natural resources; (v) unavailability of information and lack of knowledge; (vi) lack of credit and inadequate supplies of production inputs; and (vii) poor marketing prospects (remote distance, poor infrastructure, small local market demand). Further substantial reduction of poverty can be anticipated if the enabling factors, needed to catalyse rural communities and households to invest their labour, capital and physical resources in agricultural development, are created.

Table 6.4 reflects expert judgement as to the relative importance of each of the five household strategies to reduce poverty within individual farming systems in East Asia and Pacific during the coming decades. As can be seen, the importance of different pathways varies significantly from system to system. In broad terms, lower potential systems are expected to derive a greater proportion of poverty reduction from migration to cities or other areas than do higher potential systems, which are believed to benefit more from diversification and increased productivity. Increased off-farm income is an important pathway for poverty reduction in all systems.

The widespread possibility of gaining access to off-farm income makes this the most important pathway for escape from poverty overall within the region. Approximately 40 percent of poverty reduction expected to derive from this strategy. Diversification of agricultural activities on-farm is the second most important strategy and, together with off-farm income, probably accounts for 70 percent of all development potential on a regional basis.

The specific strategic priorities required to create the enabling environment for strong agricultural growth and further poverty reduction in the region include:

Policies, institutions and public goods

The economies of many countries in the region (China, Vietnam, Laos, Cambodia and Myanmar) are still, to a significant degree, under state-managed control. These countries in particular still have many policies, regulations and practices that constitute disincentives to the growth of particular commodities, to investment in soil and water resource enhancement, or to higher agricultural input use in general. Future emphasis in assistance will have to be more strongly directed to the adjustment of policies that still cause serious distortions in the macro-economy in general and the agricultural sector in particular, and create disincentives for farmers considering whether to invest in agricultural development. Infrastructure is an important driving force for farming systems development, especially when related to water resources management, soil management, transport and markets. An enabling environment for the development of vigorous decentralised government and effective support service industries (such as seed, machinery and agro-processing) needs to be created.

Donor institutions have generally been reluctant to deal with the issue of poor access to credit for individual farmers. Rural banking services and credit institutions are badly in need of restructuring and refinancing. Assistance is critically needed from donors to create greater access by farmers to formal financial services, to improve the functioning of rural financial markets, to stimulate rural savings and community-managed funds, as well as preparing farmers to use commercial financial mechanisms.

Trade liberalisation and market development

Agricultural development must exploit local and international comparative advantages in a more globalised future economy. The region is already a major exporter of oil palm, rubber and rice, as well as of industrial products. As infrastructure improves, many producers are being exposed to international prices for a wider range of commodities and may well face declining prices for cereals such as wheat and maize as imports become more accessible. Governments must identify and promote production systems that benefit local farmers through exploitation of agro-ecological, and locational, resource advantages. Furthermore, improving per capita incomes are likely to accelerate changes in diet and to increase demand for higher value products (milk, meat, fruits, vegetables, etc.). Diversification into higher value products and adding value to farm produce would increase the overall level and stability of household income. Training and demonstrations of new technologies are required to improve production, post-harvest management, packaging and marketing of these products.

It is generally recognised that agro-industrialisation of rural areas in Asia is an important factor in growth and poverty alleviation. The majority of smallholder agricultural produce is sold through domestic markets, to consumers in rural or urban areas. Opportunities for local level agro-processing should also be promoted to add value to agricultural products, and to create off-farm employment. Thus, in most areas, policies that encourage the development of local entrepreneurs in processing and trade will improve farmers' incomes. This linkage will be particularly important for the Highland Extensive Mixed and Upland Intensive Farming Systems. In these systems, where transport infrastructure is often poor, comparative advantage is likely to be associated with commodities that have a high value to weight ratio.

Information and human capital

Skills, knowledge and educational development of farmers are a key to agricultural development. Farmers are typically poorly educated, with significant levels of illiteracy in some countries. Most governments do not have strong educational programmes for farmers and access to information is difficult and limited. Skills and knowledge building must be promoted as an essential component of future development assistance, combined with improved systems for dissemination and access of farmers to information. Modern information technology development (computerised networks, local accessing of computer based information, etc.) will become a key component of agricultural development in the future.

The challenge for the future is for government agencies to develop, in participation with the private sector and target communities, computer-based systems for information transfer. This necessarily involves focusing on three major aspects: (i) information generation; (ii) information transfer systems; and (iii) local information access systems. Some interesting initiatives have already been taken in the region to develop information transfer to remote communities without the benefits of basic infrastructure like electricity and telecommunications. Lack of education and literacy amongst villagers in remote locations also provides some impediment to information exchange, but is not insurmountable.

Given the importance of off-farm income as a probable pathway from poverty within the region, and as an engine for rural economic growth, the education of young people should stress the acquisition of vocational skills of value in agro-processing, light manufacture and services such as tourism.

Science and technology

Diversification into higher-value products and adding value by processing, increases overall household incomes and improves income stability. Training and demonstrations of new technologies are required to improve production, post-harvest management, packaging and marketing of these products. Opportunities for local agro-processing should also be promoted in order to add value to agricultural products.

Public-private partnerships could provide the foundation much agricultural research in the future. While the private sector is expected to increase its provision of goods and services to farmers, it is anticipated that governments will still have to provide certain essential support and services to poor small farmers. The strategic priorities for the future should be to strengthen the capacity of governments to undertake participatory identification of problems, constraints and opportunities for farm development. Based on this knowledge, governments should provide the necessary enabling framework for effective extension and research services in partnership with the private sector.

Government research that must keep abreast of private research developments in terms of quality and relevance. The applications of biotechnology in its broadest sense, and genetic engineering specifically, must be evaluated and used where appropriate. Several Asian countries, particularly China, are already important sources of research and knowledge in this area, and this strength should be built upon - albeit with adequate attention to associated risks (see the accompanying case study on biotechnology). Future research must also be more integrated with extension; take greater advantage of synergies; consider the whole farm situation and integrated technologies; and, emphasise efficient and sustainable use of natural resources. The latent potential of farmers for experimentation, adaptation of technologies and farmer-to-farmer extension needs to be more fully exploited. The strategic priorities for agricultural research in the region include better use of water, improved management of soil structure and fertility, and restoring productivity growth in cereals.

Natural resources and climate

The basic problem of low incomes rural household in the region is that too many people have only limited access to resources for agricultural production. Technology advances that offer increased efficiency can barely keep pace with diminishing resources as population increases and land fragmentation continue. In this scenario, the socio-economic situation of individual rural households stagnates although overall agricultural output increases. The majority of farmers are quasi-subsistence producers on farms with uneconomically low-volume, low-value production oriented farm units.

Furthermore, in those countries under state-managed control, lack of secure land tenure or ownership is an additional obstacle to agricultural growth. With the land being owned by the state, or allocated on some form of short-term lease, farmers are reluctant to invest in land development. Moreover, without land title, farmers are unable to use land as collateral to access credit and it is not possible to develop an effective land market - a necessary ingredient in land aggregation. Future support is required to assist governments in developing programmes to provide land title and ownership of rural lands to individuals; establish functioning land markets; remove obstacles to land aggregation for fragmented and extremely small holdings; and create local part-time and full-time off-farm employment for farmers on sub-marginal units and for those displaced from the land.

A considerable proportion of the significantly degraded agricultural resource base of the region can be recovered through better management - improved soil management, better utilisation of scarce water resources, and sustainable forest management represent three major thrusts. Along with improved resource management, existing agricultural production needs to be intensified in a sustainable fashion in order to maintain and increase household incomes in the face of declining terms of trade for cereals.

Conclusions

The East Asia and Pacific region is the most populous of the six developing regions. Despite strong economic growth accompanied by a steady reduction in poverty in some countries, considerable hunger and poverty persist. The foregoing analysis has shown that rural development in the region should concentrate on the basic determinants of economic performance, particularly farm and off-farm rural economic growth. While many policies that emphasise social issues are extremely important, the resolution of these issues in rural areas depends critically on agricultural growth. Strong agricultural and off-farm economic growth, as well as improved household food security, are dependent on a set of enabling factors that create commercial farming systems where surpluses of agricultural products are produced for sale.

Poor members of rural communities require opportunities to increase their labour productivity in farming and to utilise surplus labour in the off-farm sector. Agricultural growth, if equitable, will create beneficial opportunities for all - including opportunities for disadvantaged rural households to become involved in off-farm income generation as suppliers of goods and services, or as primary processors of raw products. Within this overall framework, specific actions directed at poverty-stricken, food insecure and disadvantaged families are necessary.

Although it is impossible, based on the foregoing regional analysis, to prescribe specific national actions, the overall challenge of reducing hunger and poverty in the region demands four inter-linked strategic initiatives:

Increased small farm competitiveness. Increasing the competitiveness of small and poor farmers provides a basis for successful diversification into new higher-value agricultural activities. Components include: improved marketing; better processing; strengthened product standards; expanded access to finance; and integrated technologies for sustainable productivity increases in high value enterprises, as well as traditional staple crops (especially rice, wheat and commodity tree crops).

Improved resource access. Smallholder land consolidation creates larger fields that are better suited to improved technologies and mechanisation to support intensification and diversification. Components include: improved land policies; land titling; land leasing arrangements; and rural credit.

Enabling environment for off-farm employment. Non-farm employment opportunities provide the most important potential for escape from rural poverty in the region. Components include the creation of a favourable environment for off-farm employment in rural areas, the enactment of appropriate policies - with particular emphasis on processing, assembly and tourism - and attention to infrastructure improvement in many systems.

Enhanced human resources. If gains in recent decades are to be carried forward into the future, it is vital that members of small farm households increase their knowledge base and capacity to respond to both changing agricultural requirements and off-farm income generating and employment opportunities. Components include: information and knowledge networks; farmer capacity building; support to entrepreneurship; and training for the younger segments of the population in vocational skills.

1 See Annex 3 for a list of East Asian and Pacific Island countries included in the region.

Note that Hong Kong, Australia, Japan, New Zealand, Singapore and Taiwan are excluded.

2 FAOSTAT.

3 World Bank 2000a.

4 FAO 2000a.

5 See World Bank (2000a), DPR of Korea, Republic of Korea, Myanmar and Papua New Guinea are excluded due to a lack of the poverty data in the report.

6 World Bank 2000f.

7 See Chapter 1 for an explanation of the approach followed for delineation of the farming systems.

8 See Annex 5 for an explanation of agro-ecological zones and length of growing period.

9 Except where indicated, these data are drawn from FAO (2000a).

10 For the whole of Asia. Separate data for East Asia are not available.

11 World Bank 2000f.

12 FAO 1999a.

13 World Bank 1998.

14 Wang 2001.

15 Ishihara and Bachmann 2001.