Skip to main content
Knowledge4Policy
KNOWLEDGE FOR POLICY

Supporting policy with scientific evidence

We mobilise people and resources to create, curate, make sense of and use knowledge to inform policymaking across Europe.

Publication | 2 November 2021

Asian Development Outlook (ADO) 2021 Update: Transforming Agriculture in Asia

Transforming agriculture in Asia

Evolving demand even as food insecurity persists

Rising incomes and urbanization are transforming food consumption. Daily energy consumption per capita in the region is expected to increase from 2,612 kilocalories in 2012 to 2,844 by 2030. Meanwhile, demand for food in Asia has shifted away from basic staples toward more resource-intensive animal products. Notably, Asians are the biggest consumers of fish per capita in the world. Agriculture in Asia must be productive enough to meet demand as it expands and evolves.

­Despite the region’s growing prosperity, malnourishment persists. In the past 2 decades, developing Asia has achieved remarkable progress in reducing undernourishment and micronutrient deficiency. Despite these gains, 86.8 million children in Asia under age 5 still suffer stunting. Whereas insufficient agricultural production used to be a primary cause of undernourishment in Asia, today the larger problem is economic access to nutritious food. Even in economies that have achieved high average calorie intake per capita, malnutrition persists as micronutrient deficiency. Another consequence is the incidence of obesity and related non-communicable diseases rising steeply as healthy traditional diets yield to convenient processed food, often imported.

Shifting demographics that challenge agricultural development

Asia’s rural communities are rapidly shrinking, feminizing, and aging. A predictable feature of modern economic development is a population shift away from agriculture. Higher-paying manufacturing and service jobs in cities draw workers out of rural areas, steadily eroding the share of rural population in Asia from 80% in 1970 to 52% in 2020 and a projected 38% by 2050. With many men migrating to cities, agriculture relies increasingly on female workers, who often have less access to finance and other resources. The share of older farmworkers has similarly increased, with farmers aged  50 or older becoming the majority in Sri Lanka and Thailand.

Stiff environmental challenges facing agriculture in Asia

­Climate change poses ever greater challenges to agriculture in Asia. Crop growth and yields are highly sensitive to significant changes in temperature and rainfall. Extreme weather such as storms, floods, and droughts have frequently battered Asian agriculture in the recent past. In 2013, Typhoon Haiyan dealt Philippine agriculture over USD 1.4 billion in losses. With climate change, the frequency and scale of such events is escalating, as is the damage they cause. In South Asia, monsoon rains are likely to increase by 6.4% even as droughts lengthen and occur  5-10 times more frequently.

Agriculture faces environmental challenges of its own making. The green revolution succeeded in part through its heavy use of chemical fertilizers and pesticides. Fertilizer subsidies lowered prices for chemical inputs and encouraged their overuse, causing environmental pollution. At the same time, water scarcity worsened. Asia has developed and expanded irrigation systems such that it has 70% of the world’s irrigated farmland, but farmers’ collective management of irrigation has weakened in recent decades. As aquaculture expands rapidly in Asia, sustainability issues revolve around mangrove destruction, land salinization, groundwater depletion, and health issues concerning residual chemicals in fish cultured for human consumption.

Innovation to boost productivity, and regulation for sustainability

­Smallholder farmers’ access to machines can be improved. Small and fragmented landholding inhibits farm mechanization in much of Asia. Innovative arrangements have emerged that enable some of Asia’s 350 million smallholder farmers to hire machine services to work on fields consolidated by farmer groups. These innovative approaches would better realize their potential if outdated laws and regulations governing land and other agriculture factors were modernized.­ With improved practices, farmers can safeguard the environment. Chemical inputs can be optimized and reduced by promoting such innovative techniques as site-specific nutrient management and environmentally sensitive integrated pest management. When improved modern irrigation systems use volumetric water tariffs, lined canals, and remote water sensing and control facilities, farmers can use water more efficiently. Potential exists for the private sector to play an important role in providing the farm extension and advisory services that are critical to making agriculture more sustainable.

Well-regulated aquaculture can meet Asian consumer demand for seafood. With many marine fisheries around the world already overfished, satisfying Asian consumers’ robust and growing appetite for seafood will depend on increased aquaculture production. Aquaculture currently provides 52% of fishery production worldwide, and Asia dominates global aquaculture with an 88% share. When seafood is more readily available and affordable, consumer nutrition improves.

Better and more comprehensive support systems for Asian farmers

Early warning systems offer efficient protection from weather risks. In 2019, timely information on monsoon floods in northern Bangladesh helped communities and the government prepare and secure necessary supplies, slashing economic losses by two-thirds. Advanced spatial information systems are critically important in developing early warning systems able to mitigate farmers’ exposure to climate risks and protect their livelihoods—as is strengthened national and local capacity to integrate these systems. Farmers can improve their climate resilience by adopting crop varieties that cope well with weather shocks.

­Innovative crop insurance builds resilience in Asian farm communities. Crop insurance schemes exist in over three-fourths of the economies in developing Asia but are fully operational nationally in only four: India, the PRC, the Philippines, and Sri Lanka. Insurance programs use spatial information systems to speed crop damage assessments and expedite claim settlement. Enhanced spatial information systems can expand the coverage of insurance programs.­

Value chains evolve as farmers diversify into high-value crops. With high-value crops providing 32% of agriculture production value, surpassing that of cereal crops at only 26%, contract farming is now widely used to facilitate production and procurement. Although contract disputes often arise because of unclear agreements and weak contract enforcement, contract farming can benefit farmers in Asia with advanced agreement on output prices and the technical assistance they need to compete in high-value food markets.

­Digital technologies can expand inclusive growth to farmers in remote areas. In recent years, digital technology has improved supply chains and helped farmers acquire technical and market information, connecting farmers in remote areas with traders and consumers. Under the COVID-19 pandemic, expanded e-commerce facilitated sales of agricultural products and home delivery of prepared food, which mitigated food service disruption and losses. ­

Agricultural policy should support innovation, markets, and better nutrition. Traditional agricultural policies have directly supported agricultural production to achieve and maintain self-sufficiency. However, such policies can induce overproduction and distort markets. A better approach decouples rural welfare support from agricultural policy, which properly invests in research and development, encourages innovation, and pursues market-oriented development. Finally, food policies should promote a balanced and nutritious diet for all.