ISLAMABAD: The food consumption pattern in the Asia-Pacific region has been changing, driven mainly by rising income and urbanisation. It is shifting from starchy staples and rice to fruit and vegetables, livestock and dairy products, fish, sugar and oils, according to the ‘Rural Development Report’ 2016 released on Wednesday.
The report released by the International Fund for Agricultural Development (IFAD) says that in the region where growth was rapid and poverty reduction significant, the rural sector has been gradually transforming, moving from largely cereal or grain-based production to higher-value production such as livestock and fisheries.
The reduction in import barriers in developed countries has encouraged trade in these commodities. Moreover, the growing demand for livestock products and the rising costs of fossil fuels, combined with concerns about the environment and energy self-sufficiency, have spurred production of crops for animal feed and bio-fuels. Off-farm employment in the region has also expanded significantly.
According to the report, processes of rural transformation in the region have coincided with the deepest and fastest structural transformation in developing countries. The region displays the usual pattern of structural transformation in which labour productivity in agriculture is lower than it is in other sectors of the economy, rendering the declining share of agriculture in GDP lower than the labour share.
There is a strong positive relationship between agriculture and structural transformation, points out the report. It states that countries with higher agricultural productivity or production growth also have higher overall economic growth and structural transformation than those with lower agricultural growth, reflecting the linkages and multiplier effects from agricultural productivity and agricultural growth with structural transformation.
Analysis of data from nine countries in the region confirms that no country has reduced rural poverty slowly in the presence of both fast structural transformation and fast rural transformation. Countries that have gone through both fast structural transformation and fast rural transformation have also reduced rural poverty quickly.
It says that countries that have not gone through both fast structural transformation and rural transformation have not reduced rural poverty quickly. Countries that have gone through either significant structural transformation or rural transformation have mixed outcomes, reducing rural poverty either quickly or slowly.
Countries with fast inclusive and sustainable rural transformation face the challenge of sustaining speed and outcomes. While labour-intensive manufacturing will remain an important source of inclusive growth for this type of country, strengthening inclusive institutions, policies and investments is a priority, as is adapting them to new circumstances. Enhancing sustainable agricultural development is essential, with a particular emphasis on overcoming growing stresses from water and land degradation.
Recent transformations of economies and rural societies in the region have coincided with the deepest and fastest structural transformation in developing countries, cutting sharply into rural poverty.
The data do not reveal any country that transformed quite quickly that did not also cut poverty relatively fast. It confirms that countries that transformed relatively slowly made significant progress against poverty, but did so more slowly than the regional average.
The report says that in countries registering fairly high rates of transformation and poverty reduction, productivity growth on small holder farms and rapid growth of the rural non-farm economy were decisive.
While labour-intensive manufacturing is a source of inclusive employment growth in the region, agricultural productivity growth and the agriculture-based rural non-farm economy remain central to structural and rural transformation that draws the rural poor into the mainstream, the report says.
It says that labour-intensive manufacturing will remain an important source of inclusive employment growth in many countries in the region.
Published in Dawn, September 16th, 2016