World Food Policy WFP Volume 4, No. 2, Spring 2018 | Page 37

Facilitating Inclusive Rural Transformation in the Asian Developing Countries
1. Background
in response to food demand and mar-
ket transformation. For example, agri-
cultural production has been gradually
shifting from cereal to non-cereal com-
modities, including high-value crops,
livestock and fishery. 4 With rising agri-
cultural productivity, the off-farm em-
ployment has also been growing rap-
idly (Haggblade et al., 2010; Hoang, et
al., 2014; Wang et al., 2011; Imai et al.,
2015). On the other hand, it has also
observed that the speed of rural trans-
formation differs largely among the
developing countries in Asia (IFAD,
2016).
A
sia has experienced fast eco-
nomic growth and structural
transformation in the past sev-
eral. Average annual growth of Asia’s
gross domestic product (GDP) reached
4.46% in 1980-2015, which was nearly
twice as that in the rest of world (2.35%)
over the period. 3 Asia has also experi-
enced rapid urbanization, the share of
urban population increased from 26%
in 1980 to 47% in 2015.
The rising income and urbaniza-
tion have accompanied with significant
transformation of the food demand and
market. On demand side, consumers
have been demanding more food, more
diversified diets, and more safety food
(or 3Ms) as income increased (Reardon
and Timmer, 2014). On market side,
national and global markets have been
increasingly integrated. Vertical market
integration from upstream to down-
stream and spatial market integration
have also been rising. These marketing
evolutions have resulted in more com-
mercialized, competitive, and consoli-
dated (or 3 Cs) food market in Asia.
Meantime, rural transforma-
tion (RT) has been associated with a
large decline in the incidence of pov-
erty and malnourishment in Asia. The
share of population under poverty in
the developing countries in Asia had
declined from 71% in 1981 to 15% in
2011 (based on the PPP $1/day pov-
erty yardstick), and from 91% in 1981
to 40% in 2011 (based on the PPP $2/
day poverty l yardstick) (World Bank’s
WDI database). The prevalence of mal-
nutrition among the population fell by
more than 0.5% annually, from 25% in
1990 to 12% in 2014 in the region (FAO,
IFAD and WFP, 2015). But it is worth to
note that despite such overall progress
in poverty alleviation and malnutrition
reduction, the region still faces great
rural development challenges because
Asia is home to the largest share of the
world’s poor population and most the
poor live in rural areas (Ravallion et al.,
2007).
However, has Asian agricultural
production responded to the transfor-
mation in food demand and market?
On production side, Asia has been
facing increasing natural resource con-
straints (e.g., per capita land and water)
and challenges in falling farm size and
rising wage (Otsuka et al., 2013). How-
ever, despite of these challenges, agri-
cultural transformation has occurred
3
4
Estimated based on the data from World Development Indicators (WDI), World Bank, 2016.
Based on FAOSTAT, Rome, FAO (available at http://faostat3.fao.org/home/E).
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