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Threats and Opportunities in Agricultural Trade Under the Free Trade Agreements in the Asian Region

Background

Over the past decades, there has been a remarkable growth in agriculture trade in Asia. According to the FAO statistics from1990 over2009, the export of agricultural products in Asia increased from USD 46 billion to USD164 billion, and agricultural import grew from USD85 billion to USD 278 billion. The increase in import and export during these 20 years showed USD118 billion and USD 193 billion respectively, showing much more increase in import than export .

The remarkable increase in Asian agricultural imports were mainly attributable to rapid increase in the import of staple crops such as wheat, corn and soybeans, which were brought about by population burst, changes in people’s dietary patterns, namely from cereals to dairy and livestock products in populated emerging economies. M any Asian countries , therefore, have to depend much on food import to meet the increased domestic food consumption. Under such circumstances, FAO and OECD forecast that the rise in global food price will continue due to such factors as the instability of world grain production caused by climate change, increased demand for staple food due to population growth, and bio-fuel production.

Recently, a num be r of free trade agreements(FTAs) and/ or economic partnership agreements have been concluded bilaterally or multi-laterally in many Asia n countries. However, t he FTAs conclusion greatly affects nation’s agricultural sector in various aspects . T he elimination of trade barriers such as tariff, regulations and so forth , for instance, may result in making already vulnerable Asian agricultural sector more vulnerable to the severe competition with worldwide dominant counterparts of agricultural produce as well as promoting the restructuring of the nations’ agricultural sector.

The increase in FTAs inclusion in the Asian region may be a big challenge to the agricultural sector in major food importing countries due to concerns on food security and the cost burden of increased food imports, while it could be a good opportunity to the farmers in the food exporting countries, as they can broaden the international markets for their products. Therefore, ‘how to cope with the increasing burden of agricultural import’ and ‘how to modernize agriculture industry and enhance agricultural production and export under the FTAs’ pressure become an important issue for researchers, experts and policy makers in the Asian region.

Objectives

This seminar is to review the current status and future p erspectives of agricultural trade in the Asian region and provide the participants with a venue for deliberation and exchange of information over the impacts of free trade agreements on farm economy and the entire agricultural sector . It also aims at working out the possible solutions to mitigate the FTAs ' impact on small scale farmers in th is region.

Major findings/recommendations:

  1. Encourage the education of producers and consumers to have a deeper appreciation of agriculture especially its forward and backward linkages in the whole food chain;
  2. Study ways and means to improve the structure and operationalization of marketing systems in Asian developing countries and learn from the lessons of developed nations;
  3. Encourage governments to invest in infrastructure and postharvest facilities to boost the marketing systems of agricultural goods;
  4. Focus on value-added activities in the production and marketing of agri-produce, including marketing services;
  5. Encourage more sharing of experiences in FTAs between and among developed and developing Asian countries in order to foster cooperation, help in crafting institutional reforms and policy recommendations;
  6. Develop activities to enhance intra-regional agricultural trade and stimulate entrepreneurship in the region;
  7. Strengthen capacity building endeavors to develop production and marketing skills of farmers.
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