Monday, March 19, 2007

Green Revolution and Int'l Trade

Many rich countries of Asia are less concerned with "food self-sufficiency" now.
The trend is:

The poorer an economy is, the more urgent the issue of food self-sufficiency.
The richer an economy, the less urgent is food self-sufficiency.
Their wealth assures them of "food security".

You can see it in HK, Singapore, Brunei, middle-east countries, to a certain extent Korea and Japan. Their wealth plus easier trade among Asian countries assure these countries of sufficient food supply from abroad that can supplement their domestic production.

Middle-income countries like Thailand and China, even Vietnam, are now in the business of food exports. They supply the food needs of their richer neighbors in the continent, as well as other countries outside Asia. Thus, there is continuing, non-stop research and innovation in agriculture, from improved seeds to post-harvest and packaging technologies. Agri is becoming more and more knowledge-intensive, more science-based.

There are institutional and public policies that are supposed to help farmers and agriculture, but they tend to work against farming and agricultural development when you look deeper. One such policy, in the Philippines for instance, is "land reform".

The law on "comprehensive agrarian reform law" was made in 1988. The law stipulated a 10-year time-table. After 10 years, they extended it to another 10 years. Now, there is no more timetable, it will be a "continuing land reform". And this creates disincentives to some businessmen who want to put their money, expertise and technology in agriculture. Once you're done developing vast tracts of land for commercial agri plantation, there is a danger that the government's "Department of Land Reform" will come to you to get your land, subdivide it to the workers, and pay you a pittance, a small amount. This kind of uncertainty is one of the big reasons why commercial agricultural plantation in the Phils. is not well-developed.

More government investment in agriculture is not necessary. Maybe in infrastructure, like rural roads and bridges. But in technology (planting, marketing, packaging, etc.), it should be more private sector -- the network of producers (farmers) and buyers (traders, consumers, restaurants, importers, etc.) to determine the pricing, quality, quantity, and timing of agri production and marketing.

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