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Food Security in South Asia

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Food Security in South Asia UNITED NATIONS Food Security in South Asia Developing Regional Supply Chains for the Food Processing Industry This report identifies potential regional supply chains in agriculture in South Asia with a focus on intraregional trade in processed food products taking into consideration food security concerns of the countries. Examining the South Asian Free Trade Agreement (SAFTA), it analyses the implications of tariff liberalization, concluding that full SAFTA is the key to ensuring food security in the region. Developing Regional Supply Chains for the Food Processing Indus FOOD SE About UNCTAD UNCTAD, which is governed by its 194 member States, is the United CURITY IN SOUTH ASIA Nations body responsible for dealing with development issues, particularly FOOD SECURITY IN international trade – the main driver of development. Reflection on development is at the heart of UNCTAD's work. It produces often-innovative analyses that form the basis for recommendations to economic policy SOUTH ASIA makers. The aim is to help them make informed decisions and promote the macroeconomic policies best suited to ending global economic inequalities and to generating people-centred sustainable development. In addition, UNCTAD offers direct technical assistance to help countries to build the capacities and become equitably integrated into the global economy and Developing Regional improve the well-being of their populations. Supply Chains for the About the Asian Development Bank ADB's vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the Food Processing Industry quality of life of their people. Despite the region's many successes, it remains home to the majority of the world's poor. ADB is committed to try reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ISBN 978-92-9257-008-8 United Nations Conference on Trade and Development ASIAN DEVELOPMENT BANK 6 ADB Avenue, Mandaluyong City Asian Development Bank 1550 Metro Manila, Philippines UNITED NATIONS www.adb.org Printed in India Publication Stock No.: BKK157464-2 81,7('1$7,216 (11&5'%74+6;+0 5176*#5+# 'HYHORSLQJ5HJLRQDO 6XSSO\&KDLQVIRUWKH )RRG3URFHVVLQJ,QGXVWU\ 8QLWHG1DWLRQV&RQIHUHQFHRQ7UDGHDQG'HYHORSPHQW $VLDQ'HYHORSPHQW%DQN Creative Commons Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO license (CC BY-NC-ND 3.0 IGO) © 2015 United Nations and Asian Development Bank Asian Development Bank United Nations 6 ADB Avenue, Mandaluyong City UNCTAD 1550 Metro Manila, Philippines Palais des Nations Tel +63 2 632 4444; Fax +63 2 636 2444 CH-1211 Geneva 10 Switzerland www.adb.org; openaccess.adb.org All rights reserved worldwide. Published in 2015. Printed in the Philippines. ISBN 978-92-9257-008-8 (Print), 978-92-9257-009-5 (e-ISBN) Publication Stock No. BKK157464-2 Cataloging-In-Publication Data United Nations and Asian Development Bank. Food Security in South Asia: Developing Regional Supply Chains for the Food Processing Industry Delhi, India: Asian Development Bank, 2015. 1. Food Security 2. Supply Chain 3. South Asia I. Asian Development Bank. Copublication of the Asian Development Bank (ADB) and the United Nations (UNCTAD). The views expressed in this publication are those of the authors and do not necessarily refl ect the views and policies of the United Nations and ADB or its Board of Governors or the governments they represent. When reporting or citing this paper, the authors’ names should always be stated explicitly. ADB and the United Nations do not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specifi c companies or products of manufacturers does not imply that they are endorsed or recommended by ADB and the United Nations in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB and the United Nations do not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO license (CC BY-NC-ND 3.0 IGO) http://creativecommons.org/licenses/by-nc-nd/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of said license as well as the Terms of Use of the ADB Open Access Repository at openaccess.adb.org/termsofuse This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims arising as a result of your use of the material. Attribution—In acknowledging ADB and the United Nations as the source, please be sure to include all of the following information: Author. Year of publication. Title of the material. © United Nations and Asian Development Bank. https://openaccess.adb.org. Available under a CC BY-NC-ND 3.0 IGO license. Please contact [email protected] or [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. Note: In this publication, “$” refers to US dollars. Printed on recycled paper Copy editing and Typesetting by Bloomsbury India, www.bloomsbury.com Editorial alignment, quality assurance, and publishing support from Lucid Solutions, www.lucidsolutionsonline.com 8=*F8=) Agriculture provides employment to about 50% of the population in South Asia but contributes only around 20% to the region’s GDP. Global as well as regional trade in agriculture has remained much lower than its potential due to constraints such as food security, low technology, and high protection. Keeping food security as one of the primary concerns of the region, this study focuses on the opportunities that agriculture can provide for intraregional trade and overall growth in the region. The steady and high growth of South Asia in the past 2 decades which has recorded an average annual growth of 12% in real GDP during 1990–2013, has increased the demand for food and other agricultural products in the region. Almost all countries have experienced rising decadal growth rates and increasing demand for agricultural products. While there has been a substantial rise in global imports of agricultural products to the region, the region itself has not been able to take advantage of this growth bonanza. Intraregional trade and investments in agricultural products remain low with high tariff and nontariff barriers. This has also contributed to the slowing down of agricultural growth in many countries of the region. This study is an important and timely initiative as it focuses on intraregional trade in processed food products taking into consideration food security concerns of the countries and suggests useful ways forward. iv Foreword By identifying potential regional supply chains that can be formed for the food processing sector, using a disaggregated product level approach, it provides directions for each country to gainfully initiate or link into the regional supply chains. This will not only boost intraregional trade but also provide employment opportunities for the poor in the region raising the much-needed regional investments in agriculture. The role of India in providing opportunities to least developed countries in the region has been explored through various scenarios. The study takes an innovative approach to identifying potential regional supply chains for South Asia. The institutional collaboration between UNCTAD and ADB for jointly producing this study and engaging different regional stakeholders in the process is commendable. The work will be of immense value to policy makers of countries in the region. Rajeev Kher Commerce Secretary Ministry of Commerce and Industry Government of India (268F3*)-5*6@? This study was prepared through ADB’s regional technical assistance “TA 6472-REG: Strategic Partnerships for Policy Development and Action to Foster Regional Cooperation in South Asia” and under UNCTAD’s project “Development Oriented Integration in South Asia.” Kavita Iyengar was the ADB project offi cer. Rashmi Banga, project coordinator for UNCTAD, led the study team, which also comprised Dinesh Kumar, Consultant, UNCTAD, Danish Hashim, Consultant, UNCTAD, Selim Raihan, University of Dhaka, and M.A. Razzaque, Commonwealth Secretariat. South Asian Network on Economic Modeling (SANEM) hosted a regional consultation on 28 May 2012 at Dhaka, Bangladesh, where the initial draft of the study was presented. Rajeev Kher, then Additional Secretary, Ministry of Commerce, Government of India; Atiur Rahman, Governor of Bangladesh Bank, Bangladesh; Safdar Sohail, Director General, Foreign Trade Policy, Pakistan; Saman Kelegama, Executive Director, Institute of Policy Studies of Sri Lanka and Ratnakar Adhikari, Chief Executive Director, South Asia Watch on Trade Economics and Environment, Nepal provided valuable contributions through presentations, comments, and suggestions. Abid Khan,
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