Future food security in ASEAN may be constrained by weaknesses in key aspects ... and a lack of policies to protect the
Enhancing Agricultural and Fisheries Productivity Growth for Food Security in ASEAN Policy Note for Session 3
The promotion of sustainable productivity growth in agriculture and fisheries is essential for the long-term food security of the Association of Southeast Asian Nations (ASEAN) region.
Future food security in ASEAN may be constrained by weaknesses in key aspects of the enabling environment for sustainable productivity growth: low investment in sectoral capacities – agricultural innovation systems, in particular – and a lack of policies to protect the natural resource base for agricultural and fisheries production.
To maximise the payoff from research and development, governments in ASEAN should strengthen the enabling environment, including by improving environmental governance, investing in infrastructure, and improving land market rights and access, as well as producers’ access to finance.
Lessons from the Indonesian fisheries sector underline the importance of protecting the natural resource base and suggest that policies that promote the sustainable exploitation of resources and ecosystems can both reduce food security risks and increase incomes for fishers and aqua-farmers.
What’s the issue? In some Association of Southeast Asian Nations (ASEAN) countries, the current depth and prevalence of undernourishment calls for additional efforts across all dimensions of food security. In addition to improving access to and the accessibility of food in the short to medium term through targeted transfers and the removal of barriers to regional integration (see Policy Notes for Sessions 1 and 2), investments will be needed to ensure the sustainable supply of food over the longer term. Maintaining and increasing agricultural productivity growth is critical for ASEAN members to meet future rises in demand for food and to achieve food security. However, while agricultural output in the region has significantly increased in recent decades, spurred by productivity improvements in most countries, past growth levels may not be sustainable, due to the heavy reliance on natural resource exploitation and land expansion. This has resulted in the degradation of land and water resources – marine ecosystems included – upon which agricultural and fisheries production rely.
There is scope to improve the enabling environment for sustainable agricultural productivity growth Agricultural Growth Enabling Index (AGEI) normalised scores for each country relative to average for the 32 countries included within the AGEI
Environmental regulation
Land rights and access
Farm finance
Infrastructure
Malaysia
Malaysia
Thailand
Thailand
Indonesia
Indonesia
Philippines
Philippines
Lao PDR
Lao PDR
Viet Nam
Viet Nam
Cambodia
Cambodia
Myanmar
Myanmar -3
-2
-1
0
1
2
3
-3
Source: OECD (2017), Building Food Security and Managing Risk in Southeast Asia.
Agricultural infrastructure
-2
-1
0
Agricultural R&D
1
2
3
Public investment in agricultural research and development (R&D) and, more broadly, improved agricultural innovation systems (AIS) – networks of farmers and other actors that contribute to the development, diffusion and use of new agricultural technologies and institutional innovations – are vital for agricultural productivity growth, providing farmers with new technologies and practices that can increase efficiency and sustainability. Yet recent findings from the OECD Agricultural Growth Enabling Index (AGEI), which assesses the conditions for agricultural growth, suggest that ASEAN countries have scope to improve agricultural innovation systems to enhance productivity growth and better manage future food security risks. For example, most governments in ASEAN underinvest in agricultural R&D and extension services. As a result, some countries do not have the necessary domestic research capacity to respond to the challenges facing their agricultural sectors, and not all farmers are reached by extension services. Stronger governance of innovation systems is also needed, including mechanisms to increase farmer engagement in priority setting. Beyond R&D, a similar picture emerges for trends in ASEAN countries’ performance on the AGEI with respect to other agriculture-related aspects, which also tend – with some exceptions – to be relatively weak compared with non-ASEAN countries. These aspects include the quality and presence of agricultural infrastructure, farmer access to finance, and secure land market rights and access. ASEAN performance in sustainability aspects is also relatively poor, in general: agricultural land is scarce, and environmental regulations are weak and/or poorly enforced. In contrast, in certain economy-wide policy aspects of the AGEI, such as the macroeconomic environment, ASEAN countries are in general relatively strong performers. Sustainable management of the natural resources on which agro-food production relies is critical for the future of the sector. The Indonesian fisheries sector is a case in point: continued seafood production growth under a business as usual scenario in Indonesia is not an option – the majority of fish stocks cannot absorb further increases in catch effort, and the expansion of aquaculture production will only be sustainable if it consumes less land and water resources, and if externalities are better controlled to avoid the degradation of ecosystems. Lessons from Indonesia suggest that policies that provide for the sustainable exploitation of resources and ecosystems are a first and essential step to not only achieve sustainable improvements in producer incomes, but to also increase the availability of fisheries products and reduce consumer prices, thereby improving food security.
What should policy makers do? Sustainable agricultural productivity growth for food security will require substantial investments in, and reforms to, the enabling environment in the ASEAN region. Key actions include, in no particular order:
Increase public investment in agricultural R&D, by, for example, reallocating funding to R&D from other, more distorting forms of sectoral support, such as input subsidies, and by exploring strategies – such as the strengthening of intellectual property rights – to encourage increased private investment in agricultural innovation; and enhance government efforts to improve agricultural innovation systems more broadly via, for example, governance arrangements that support efficient and effective AIS which are both demand-driven and responsive to the needs of farmers. The involvement of producer and industry organisations is also important.
Greater public investment in infrastructure, and agricultural infrastructure in particular. Investments in infrastructure, such as transport networks in rural areas, can help to connect farms to market opportunities, knowledge and other services, thereby helping to improve productivity, reduce operational costs and stimulate value creation. Improved communications networks are also vital.
Reforms to land and fishing rights, such as the acceleration of land registration and the recognition and protection of customary land tenure, or the establishment of good governance processes to allocate fishing rights or access to fisheries, for example. Reforms such as these can increase incentives for long-term investments and technology adoption by farmers.
Facilitating access by investors to long-term financing and enabling small-scale producers to access credit, which increases investment and thus productivity. Opportunities to increase financing options available to farmers include allowing greater involvement by the commercial banking sector or the adoption of microfinancing models.
More robust environmental governance by, for example, strengthening regulations on access to and use of natural resources, together with better enforcement of existing regulations. Strengthened environmental governance is necessary to preserve natural resources and provide incentives for environmentally-sustainable production.
Improve sustainable fisheries resource management through, for example, the adoption of inclusively-defined, science-based and measurable long-term fisheries management targets. Direct support to individual fishers and aquafarmers should not bias production incentives nor increase pressure on resources.
Further reading
»
OECD (2017), Building Food Security and Managing Risk in Southeast Asia, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264272392-en.
