Several Asian nations, including the world’s two most populous countries, China and India, have each independently decided their agricultural sectors need renewal and investment.
The success of these reforms will help determine the future direction of world agricultural trade.
Earlier this month, India’s left leaning coalition government introduced a budget that promised to double agricultural credit in three years and gave priority to investment in rural infrastructure including irrigation, vital if India is to reduce its reliance on the vagaries of the annual monsoon.
The government promised a new deal for rural India where two thirds of the country’s more than one billion people live.
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A key goal is to diversify production toward oilseeds and away from grains where it is self-sufficient. India vies with China for the title of leading importer of edible oil, much of it coming from palm plantations of Malaysia and Indonesia and the soy fields of South America.
Meanwhile, China decided earlier this year that it also had to reform its agricultural policy to avoid the cost of mounting imports of food, particularly soybeans.
Beijing brought in measures to lower agricultural taxes, give subsidies directly to grain growers, subsidize the cost of buying superior crop varieties, set minimum purchase prices for staple grain products and measures to stop urban encroachment on farmland.
Production wise, China’s goal is to halt the multi year decline in cultivated area and production, which led to a steep rise in food prices last winter and spring.
There is also a renewed government focus on agriculture in Indonesia, Malaysia and Thailand.
And while food security is part of the reason in all these countries, another major driver is concern about the growing rural-urban income divide that is causing political friction.
While the region’s cities have boomed through manufacturing electronics and other high tech gear, the countryside has been largely left behind, mired in poverty.
But rural people in Asia still account for large percentages of the overall population and can be strong political forces, recently helping to change governments in India and Thailand.
In China, there are reports of growing unrest and public protests, largely about the burdens of locally imposed fees, corrupt local bureaucrats and inadequate farm income forcing millions to become migrant labourers.
If this newfound government interest in the countryside is sincere and long term, it would be a welcome development for Asia’s rural poor.
As for the implications for Canadian and other first world farmers, it might mean that Asia’s growth as a market for raw grains might slow as the region’s farmers are able to better supply domestic needs.
If these measures also improve the economic well-being of Asia’s farmers, that will inevitably cause them to improve their diet, increasing the demand, particularly for meat, and that could be good news for Canada’s livestock producers in the long term.
