Part I: Introduction
Part II: Dynamics of the Food Market – Challenges and Constraints
Part III: Food, Society and the Economy
Part IV: From Farms to Forks – Structural Constraints Facing the Region
PART I: INTRODUCTION
The introduction will outline the regional context of food security in Asia and the Pacific.
1. Regional context of food security in Asia and the Pacific
- Outline key food security issues that pertain to the Asia and Pacific region, within the context of key global dynamics (production, consumption, access; population, water, climate, land tenure and other drivers). This chapter will focus on identifying challenges to achieving food security in the region. It will then provide policy recommendations to help countries face these challenges. The conceptual framework capturing economic, environmental and social parameters should be outlined.
- Differences between groups of countries (or categories of) and sub-regions should be considered here (e.g., between food exporting countries and net food importing countries; and also between low, medium and high income economies).
- This paper will serve as the basis for both an introduction (and eventual overview) for the papers and it will also serve as the starting point for the Policy Synthesis.
PART II: DYNAMICS OF THE FOOD MARKET – CHALLENGES AND CONSTRAINTS
Part II will identify the challenges posed by the dynamics in the food market, as seen from the prices received by farmers for their products to the prices traded in international commodities markets. The interplay of final demand for food with feed and fuel demand; the causes and impacts of price volatilities; and the effects of trade disruptions on world food markets will be analyzed. Finally, the role of policy in aggravating or ameliorating these challenges will be discussed.
2. Competing Demand – Food, Feed and Fuel
- Review global and regional trends in demand of the food commodities and products amongst the main competing uses. Toward this, the paper will involve a review of the increasing population pressures, changing consumption patterns, and growing demand for biofuels. The paper will also analyze the policies that the countries in and outside the region have adopted in balancing between competing sources of demand.
3. International Price Transmission and Volatility
- In the first quarter of 2011, global food prices on aggregate recently rose by more than 30%, while the domestic prices in developing Asia only rose by about 10%. This raises the question that how well integrated are the markets in the region with the global markets. This paper will analyze the food price transmission between world markets and domestic markets (both net food importing and exporting countries) and identify their determinants and examine their inflationary impacts. Another aspect that the paper will examine is the role that the futures markets in the region can play in reducing price volatility. This paper will also analyze various options for improving price transmission and reducing the price volatility.
4. Food Price Shocks—Role of Policies, World Markets and Trade
- As rice prices skyrocketed, beginning in 2007, major rice exporters imposed export restrictions to control domestic rice prices (large exporters Viet Nam and India, mid-level rice exporters China and Egypt, and low-level exporter Cambodia). Thailand floated the idea of forming a rice cartel while importing countries such as the Philippines went for “distress buying”. The response to the crisis by increasing stocks, possibly fearing more shortages, points to a practical difficulty in price stabilization – that risk averse, anxious countries may not have the discipline to release stocks because they are storing it for an even worse day. This behavior relates to the fundamental issue of the role of agricultural trade and markets in price volatility. This chapter will try to understand the issue and to isolate the role of policy in the international rice market.
5. International Trade in Food Commodities
- Review the international and regional trade patterns in food commodities and document the trade policies within the developing countries. Also examine the impact of protectionist policies on the international trade and food security in the region.
- Discuss policies to promote more open food trade
6. Global and Regional Cooperation for Food Security
- In terms of global and regional cooperation, the paper will examine the need for, possibility of, and benefit of establishing an emergency grain reserve that is jointly controlled by regional governments. This chapter will draw upon experiences from other regions in the world.
PART III: FOOD, SOCIETY AND THE ECONOMY
Part III will shed light on the economic and social impacts of rising food prices. It will not only discuss macroeconomic and fiscal issues related to food security, but also issues on social impacts related to poverty, the role of social safety nets, and access to and equity in food.
7. Nutrition: Global Initiatives Directorate
- The importance of access to adequate nutritious food and safe water is an essential part of food security. This paper can also draw out some of the access and equity challenges.
8. Impact of Food Price Increase on Poverty
- The impact of changes in food prices on the poor is different from that of the rich. If food prices go up at a faster rate than nonfood prices, then the poor will be hit harder than the rich. This is because a higher proportion of the poor’s consumption basket is devoted to necessary goods and services such as food items. It is thus highly relevant for policymakers to identify the impact of changes in relative prices on different segments of the population. This chapter intends to address this issue. It will provide in-depth analysis of the impact on poverty due to rising food prices in developing Asia.
9. Role of Social Safety Nets and Food Programs
- Recent volatility in the food prices has underscored the need for strengthening social safety nets and food programs throughout the region, as without these millions can slip back into poverty. This paper will document the experience and effectiveness of social safety nets and food programs in the region, and compare these with the other regions. The paper will identify ways and means of shifting from the un-targeted to targeted safety nets and other forms of transfer programs, and the efficiency gains that these can generate.
10. Macro-Dimension of Food Security: Policy Implications
- This paper aims to discuss the macroeconomic implications of food security policies, tackling the tradeoffs that need to be considered when pursuing various policy options for food security. First, this paper will examine the implications of food price increase on monetary policy. For example; should the monetary policy respond to food price increase? Should the inflation targeting be aimed at the core inflation index or at the consumer price index? The paper will examine the experience of various economies in and outside the region and provide policy advice.
- Second, food subsidies, tax breaks, and other food security policies entail large costs, and financing these costs could have important fiscal implications. If fiscal budgets are not augmented, these policies will result in crowding out of expenditure in other sectors. On the other hand, if the government decides to borrow, then this could have implications on the budget deficit, current account balances, and even on financial sector stability. Likewise, exogenous food price increases can affect fiscal and monetary policy if the government would like to manage its impacts on inflation and economic output.
PART IV: FROM FARMS TO FORKS – STRUCTURAL CONSTRAINTS FACING THE REGION
The final part of the study will address various challenges confronting food production and the global food supply-chain. The logistics of food production, processing, and delivery to markets will be discussed in this part. On the supply side, it will discuss various constraints to agricultural production as well as the opportunities provided by research and extension services in the agricultural sector. On the demand side, it will analyze the growing and competing demand for agricultural products and factors of production such as land and water. Finally, linking the demand and supply side are the logistical issues of getting food to markets. The need to improve market connectivity and rural infrastructure will be discussed, and policies that can help deliver food from farms to forks will be presented.
11. Limited and Diminishing Resources and Climate Change
- Even without considering adverse climate change impacts, current resource stress places serious constraint for agriculture to respond to the demand growth over the long term. Countries in the region face the challenge of how to not only maintain but to improve the agricultural productivities in the light of finite and often declining water and land resources (both in terms of quality and availability) through strategic investments amongst others in integrated land, and watershed management, and irrigation access and efficiency. Toward this the Paper will examine the critical issue of water, food and energy nexus, focusing on managing resource stress and environment degradation. In addition, the paper will examine the challenges of deteriorating quality of available land resources to salanization of land and ground water, and the adverse impacts of climate change on the availability of water for irrigation.
12. Distortions and Other Constraints to Growth in Agricultural Production and Productivity
- The paper will diagnose of the constraints to agricultural production and productivity growth in the region. In particular, it will try to ascertain what are the main causes of gaps between countries with high and low levels of crop productivity, examining the adverse impact of distorted incentives for food commodity production arising from input and output subsidies. It will also analyze the supply response to changes in input and output prices, as this will help ascertain the level of potential benefits that reforms can yield. In this connection, it will examine the adverse impact of distorted incentives for food commodities arising from subsidies to inputs and outputs (the prices being set by non-market mechanisms or influenced by the large scale procurements by the government at below market prices).
- In addition, the paper will examine the issues related to timely, affordable and reliable access to quality production inputs, including improved seeds and planting materials, fertilizers and agro-chemicals, equipment and finance. The paper will compare the experience of the region in terms of market reforms, and propose options to reform the markets.
13. Research and Development and Extension Services
- Examine the role that research and development in agricultural production and processing in the region for boosting the productivity levels, and countering mounting challenges that threaten declines in the existing production and productivity levels. Paper will also try to clarify the roles that the international agricultural research institutions, and public and the private sectors can play in promoting research and development in agriculture-both at basic and adaptive research levels. Also examine the role of advanced market mechanism in engaging the private sector investments, which hardly exist in research and development for agriculture in developing countries, and in securing long-term funding for agriculture research in the context of developing Asia. Also examine the relevance, efficiency and effectiveness of the extension services in the region and what lessons can be learnt from within and outside the region to improve these. Also examine the role that the improved crop management and marketing techniques can play in reducing pre- and post-harvest losses.
14. Market Connectivity and Value Chains
- This paper will examine two basic aspects; namely, physical access to the agricultural input and produce markets, and the current value chains for the food commodities. The paper will examine the impact that improved market connectivity and development of value chains can have on improving production, productivity and quality of food commodities, and food security.