By Dr. Gyan Pathak
If business as usual path continues, the world cannot achieve zero hunger target (SDG2) by 2030, and South and Southeast Asia is likely to suffer the most, with 2.7 billion population in the region. It is 34 per cent of the global population, and almost half live in India.
The latest OECD-FAO Agricultural Outlook 2022-2031 says that India was hardest hit by COVID-19 with a decline of over 8% in 2020 but will recover above pre-pandemic levels in 2022.
The share of primary agriculture, fish and forestry of the region is anticipated to continue its longer-term decline from a share of about 14%, in the base period to around 10% by 2031.
The average share of food in household expenditures in the region has fallen to below 17%. However, for least developed countries this share is 30% and consequently the rise in food prices will have considerable impact on the food security of many in these countries in the early years of the Outlook period.
With some 580 Mil ha of agricultural land, resources are relatively stretched with just 0.2ha/person compared to the world average of around 0.6ha/person, resource pressures will intensify as population growth remains near 1% p.a. Domestic demand for agricultural commodities is mounting. Urbanisation is rising across the region, the share of population residing in urban areas is expected to surpass 45% by 2031, from an average of 40% from 2019-21.
The main challenges facing the region relate to its ability to increase productivity and innovation, particularly in the face of climate change risks and the need to address food insecurity, which remains high, with the region accounting for about one-third of the world’s undernourished population.
Achieving continued economic growth in a time of global uncertainty with respect to international markets is critical. Significant pressure has been exerted on its natural resource base which requires innovative solutions. Key policy challenges concern the nature and extent of market intervention schemes and how they affect interactions with global markets.
Crop production in the region accounts for the largest share, but livestock production is growing faster. An expansion of 25% in agricultural production is projected. Relative to 2019-21, crop production is expected to expand by 22%, accounting for 62% of total agricultural and fish output by 2031. Productivity gains are key to this expansion, as land used for crop production is only expected to increase by 1.3% over the ten-year period.
Cereal production is concentrated in India, Indonesia, Pakistan and LDC’s such as Bangladesh, Cambodia and Myanmar. India alone accounts for around 70% of wheat and 40% of rice production and is expected to contribute 48% of additional rice production by 2031. Growth in rice production stems from productivity gains, with area expansion of around 2.5% in India and Least Developed Asia by 2031, compared to yield gains of 16.5%.
The region is the leading contributor to vegetable oil production globally. However, despite some recovery in 2022, the slowdown is likely to remain in Palm oil production growth in both Indonesia and Malaysia in the coming decade, but will still retain a combined share of 33% in global vegetable oil production.
Livestock products currently account for 22% of the value of agriculture and fish output and growth of 2.9% p.a. will lead to an expansion of this share to 25% by 2031. India and Pakistan are the biggest contributors to this growth, which emanates mainly from dairy products. Milk production growth of 41% by 2031 stems from a 21% expansion in the cow herd, despite a minor contraction in pastureland use, and a 17% improvement in milk yield per cow.
Meat production is dominated by poultry, which will also account for more than 60% of additional meat production by 2031. Pork production in the region is limited and concentrated mainly in Viet Nam and Thailand.
Fish production is an important contributor to agricultural production in the region at 15% of total value. However, growth of 15% by 2031 is the slowest amongst the three subsectors, eroding its contribution over time.
Total direct GHG emissions from agriculture are set to rise by 8.8% by 2031 relative to 2019-21, driven predominantly by the livestock sector. By 2031, 29% of agriculture related GHG emissions globally will be attributable to the region.
Years of positive progress in reducing food insecurity and undernourishment in the region halted in 2020, largely due to the impact of the COVID-19 pandemic on income and food affordability. Particularly in Southern Asia, the prevalence of undernourishment rose above 15% for the first time in a decade and the number of undernourished people exceeded 300 million in 2020. The current spike in commodity prices may forestall much improvement.
By 2031, average calorie availability in the region is projected to increase by almost 200 kcal/person/day to average just over 2 850 kcal, just 6.5% below the world average. Cereals, particularly rice, remain the major source of calorie availability in the region. By 2031, 53% of total calories will come from cereals (of which almost 30% from rice). This compares to 55% from cereals and 31% from rice in 2019-21 and follows a modest expansion of 3.5% in per capita consumption of rice over the 10-year period, mainly in India.
Average protein intake remains well below the global average but will rise by 7 g/person/day to 75 g/person/day by 2031. Meat consumption will grow from a small base to reach 15.5kg per capita by 2031 – still more than 20kg below the global average, reflecting limited meat consumption in India in particular.
Dairy product consumption is already well above the world level and growth of almost 30% in per capita consumption by 2031 will see it rise to 32% above the world average level. Fresh dairy consumption is expected to grow fastest, reflecting considerable growth in both India and Pakistan.
Increasing mandates, mainly in India, sees the region almost double its share in global ethanol use from 6.5% in 2019-21 to 11% by 2031. The region’s share in global biodiesel use is currently much larger at 21% but is also expected to rise to 30% by 2031.
The region is currently still a small net exporter of agricultural commodities but is expected to record a minor deficit by 2031. Both India and Southeast Asia are expected to remain net exporters, although India’s trade surplus is expected to decline.
Rice exports are expected to grow substantially, by an annual average of 3%, thereby increasing the region’s share in global exports to 86% by 2031. This largely arises from India, accounting for 51% of additional exports.
The region’s share in global exports will continue to decline. This is mainly the result of declining market share in Malaysia, whose palm oil exports are projected to rise by merely 0.6% p.a.
Fish exports from the region are expected to decline over the next ten years, as consumption growth in the region outpaces production. The region’s dependence on imports of wheat, maize, oilseeds, protein meal and sugar are all set to rise by 2031. (IPA Service)