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Asian nations need to make supply chains effective: ADB

Though modernisation of food chains has allowed farmers to have more control of their produce, the benefits are not always shared equally

BS Reporter  |  New Delhi 

Major Asian countries which have a large agriculture sector need to make their farm-to-market supply chain more efficient and cost effective to keep food prices in check and ensure long-term food security, a recent study by the Asian Development Bank has said.

The study showed that though modernisation of food chains has allowed farmers to have more control of their produce, the benefits are not always shared equally, with large and medium-sized farmers typically getting the lion’s share of subsidies and marginal farmers largely missing out.

“Rising populations and incomes, resource degradation, and climate change will keep putting upward pressure on food prices, requiring vast improvements to ensure adequate, affordable food supplies,” Bindu Lohani, ADB vice-president for Knowledge Management and Sustainable Development said in a statement. The study analysed the domestic rice and potato supply chains in Bangladesh, India and People’s Republic of China. Titled ‘The Quiet Revolution in Staple Food Value Chains: Enter the Dragon, the Elephant and the Tiger’, the study shows that the rapid modernisation of staple food chains in Asia has allowed farmers to increase control over what they produce, and to whom they sell.

The transformation has been particularly dramatic in the China, with modern rice mills increasingly buying direct from farmers, cutting out middlemen. In India, the spread of modern cold storage facilities is giving consumers year-round access to potatoes, and delivering substantial price advantages to farmers. More isolated rural areas have seen an increase in jobs and incomes from new links with commercial urban centres and better infrastructure, technologies and policies.

The study notes that the cost of energy, labour and farm inputs such as fertiliser and seeds remain substantial, and can quickly translate into higher retail food prices. In Delhi and Dhaka, power accounts for about 75 per cent of cold storage operational costs, leaving potato prices vulnerable to energy price shifts.

Value chain transformation is crucial for ensuring that food prices in Asia’s cities — home to half the region’s people —remain affordable, and the study calls for regional food security to be placed front and centre in the 21st century policy agenda.

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First Published: Tue, December 11 2012. 00:41 IST
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