Asian governments can put more food on citizens' tables
Critical Steps That Will Help To Limit Rising Prices And Reduce Poverty
A pandemic, climate change, urban migration, supply chain disruption and now a war in Ukraine. What next? With war-fueled food inflation still surging, Asia's hunger and malnutrition crisis is predicted to worsen in the coming decades.
According to the Food and Agriculture Organization of the United Nations, global food demand is expected to rise 60% by 2050 due to growing populations and rising incomes. As food prices increase, the most impacted are the countries in Asia.
Extreme poverty remains a challenge, especially in South Asia, where just under 20% of the population lives on less than $1.90 a day. Over one-quarter of children under 5 are stunted in urban Bangladesh, Bhutan, India, Laos, Nepal and Pakistan.
The World Bank recently announced its response to the ongoing food security crisis, with up to $30 billion allocated for existing and new projects in areas such as agriculture, nutrition, social protection, water and irrigation.
Not only has the number of food-insecure people in the world been rising annually since the start of the COVID pandemic, but the war in Ukraine has exacerbated the situation: The number of people experiencing hunger will likely rise toward 1 billion, and the number of people at risk of malnutrition will likely rise to half the world's population.
Ukraine and Russia account for 29% of global wheat exports. Countries like Indonesia, Bangladesh and Vietnam, which depend on those nations for a significant portion of their wheat imports, are rightfully worried.
However, even before the Ukraine war, producer and consumer inflation was rising across Asia, driven largely by rising commodity prices. Inflation recently hit an eight-year high of 7.8% in India and smaller economies are facing even faster price growth. Against this backdrop, what would be the best way to ensure Asia has food on its plate?
A concerted effort toward stabilizing markets and increasing the supply of working capital and trade financing would help maintain the free flow of staple food commodities, something that IFC is focusing on as part of our response to the current crisis. Similarly, the uninterrupted availability of energy, as well as fertilizers, would help farmers increase crop yields.
Key policies enabling seamless exports and imports and avoiding food waste caused by inefficient storage and logistics are vital. In the short term, countries should avoid trade restrictions on food while supporting farmers and vulnerable households to increase food and nutrition security.
Still, conventional production practices are likely to fall short with increased stress on the ecosystem, especially on water and land resources, while contributing to climate change. Consider Vietnam, which loses and wastes 25% of total food production each year.
In order to do more with limited arable land, producers need additional investment in infrastructure, research and development, training and technology as well as better access to financing.
Up-to-the-minute weather data, agronomic support and real-time price information can help farmers make informed decisions, as well as increase productivity and incomes. Most farmers in Asia have little or no access to larger, more efficient machinery for seeding and harvesting. Here, better techniques and technologies, and localized best practices, can boost productivity.
Cost-effective financing solutions can further help farmers to better manage their working capital, while governments can play a critical role by encouraging and supporting financial mechanisms that allow producers to use their crops as security for formal loans.
Improving and investing in agricultural infrastructure and logistics such as silos, warehouses, cold storage and rolling stock will be critical and have an accelerated impact on food security and climate change. Agritech applications and innovations, including data analytics, supply chain management and credit scoring, will also play a role in enabling this vital access to financing.
Other ways governments could help are by investing in research to promote seeds that are better suited to the local climate. Reviewing policies related to genetically modified organisms may also make sense as they could address food insecurity through large increases in productivity.
Furthermore, government safety nets for the most vulnerable populations can combat food insecurity. Governments should also reconsider policies such as tariffs, subsidized fertilizer and water, and export bans that impact consumer preferences, lessen access to food and reduce small farmers' ability to ship crops to lucrative overseas markets.
Over the years, IFC has unlocked a range of solutions to promote food security in Asia. In India, IFC worked with small sugar growers to reduce their water consumption by billions of liters. In Cambodia and Vietnam, we worked with millers and exporters to obtain Sustainable Rice Platform verification, leading to exports to premium markets around the world by small farmers.
Moving forward, the World Bank is working with countries on the preparation of $12 billion of new projects over the next 15 months to respond to the food security crisis. As the world faces overlapping crises threatening to push millions deeper into food insecurity, we are optimistic that realigning agricultural production practices can help a resilient Asia put food on the table.
It is essential that we not only address the immediate crisis before us but implement some of these necessary forward-looking measures to strengthen the resilience of Asia's agriculture sector and better prepare it for future disruptions.
Rana Karadsheh-Haddad is regional industry director of manufacturing, agribusiness and services for Asia Pacific at International Finance Corp., a member of the World Bank Group.