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| [PHOTO: Dag Endresen/Flickr/CC BY 2.0] |
Manila: Asia’s ability to keep food prices in check and ensure
long-term regional food security will require the region’s farm to market
supply chains to become more efficient and cost effective, says a new Asian Development
Bank (ADB) study.
The Quiet Revolution in Staple Food Value Chains: Enter the
Dragon, the Elephant and the Tiger, produced by ADB and the International food
Policy Research Institute in response to the 2008 spike in food prices,
analyzes domestic rice and potato supply chains in Bangladesh, India and
People’s Republic of China (PRC).
It finds that the
rapid modernisation of staple food chains in Asia has allowed farmers to
increase control over what they produce, and to whom they sell. The
transformation has been particularly dramatic in the PRC, with modern rice
mills increasingly buying direct from farmers, cutting out middlemen. In India
the spread of modern cool storage facilities is giving consumers year-round
access to potatoes, and delivering substantial price advantages to farmers.
More isolated rural
areas have seen an increase in jobs and incomes from new links with commercial
urban centers, and better infrastructure, technologies and policies. At present
the benefits are not always shared equally, however, with large and
medium-sized farmers typically getting the lion’s share of subsidies and
marginal farmers largely missing out.
The study notes that
the cost of energy, labor and farm inputs like fertilizer and seeds remain
substantial, and can quickly translate into higher retail food prices. In Delhi
and Dhaka, power accounts for about 75% of cold storage operational costs,
leaving potato prices vulnerable to energy price shifts.
“The changes in food
demand, driven by urbanization and increasing incomes of consumers, are
creating important opportunities for agricultural development and rural poverty
reduction in Asia,” said Bart Minten, one of the authors of the study and
Senior Research Fellow at IFPRI.
There is no “silver
bullet” to address the challenges facing staples value changes, meaning a
variety of policy and program measures will be required to stimulate the efficiency
of staples markets. Given Asia’s widely different zones, no “one size fits all”
approach will work, requiring tailored solutions. Improving post-harvest
productivity in areas such as processing, storage and distribution, and
directing government subsidies and support to the neediest farmers and regions
are central to more efficient supply chains, which ultimately affect prices,
the study says.