By Andrew Guthrie
The Food and Agriculture Organization (FAO) of the United Nation reports food prices have eased in recent months, but cautions that prices will remain volatile.
No one is predicting a return to the consistently lower prices observed before 2007. In fact, the FAO’s recent Food Outlook report says food price volatility will continue for some time. We can expect upward pressure on food prices may soon push them above the levels of 2008 and the latter part of 2010.
In many parts of Asia, populations spend a large percentage of household income on food. That makes them acutely vulnerable to swings in the world food price. The problem is compounded by the low agricultural productivity of smallholder farmers in these countries.
In South Asia, for example, cereal yields average just 2.5 tons per hectare compared to a potential yield of almost 6 tons per hectare. In Southeast Asia, the gap is not so wide, but the average yields of 3.7 tons per hectare are still more than one tone below the potential yield.
The yield gap is not caused by climate or soil. Rather, developing countries need to work toward enabling more of their farmers to access new technology and provide them with knowledge to use technology effectively and access markets to sell what they produce.
In developed parts of Asia, farmers are very productive and the yield gap is small, but challenges remain. Farmers from the regions are some of the oldest in the world — the average age is more than 64 years. Combined with very small farms, which may be getting even smaller as a result of outdated succession planning, sustaining productivity in the developed parts of Asia is also likely to become more challenging.
To address these issues, we must ensure farmers have access to the best technology, making it attractive for young people to get involved. They should be supported by regulation based on predictable science and be able to aggregate farms into larger, more productive farming units.
For 2012, developing new markets and ensuring market access will be very important. As the economies of Asia develop, consumers are demanding more food that is safe, nutritious and high in quality.
This is a great opportunity for Korean farmers, but we must ensure that products are consistent in quality and that markets are accessible. In other words, it is crucial that smallholder farmers are integrated into world markets while it may also be necessary to support farmers through periods of transition.
Syngenta has set up model programs around the world that use technology and know-how to open smallholders to worldwide opportunities. For instance, the program connects Brazilian coffee growers to coffeehouses in Europe and the U.S. while working to double rice productivity and cut labor costs in Asia at the same time. We are also committed to providing farmers with integrated solutions which allow farmers to capture a much greater share of value from products they produce.
Investing in agriculture is an imperative none of us should ignore in 2012.
Andrew Guthrie is a regional director of Syngenta Asia Pacific.