Cover
Rapid growth of selected Asian economies
Lessons and implications for agriculture and food security
Republic of Korea, Thailand and Viet Nam

REGIONAL OFFICE FOR ASIA AND THE PACIFIC
FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Bangkok, © FAO 2006


Contents


The views expressed in this publication are those of the authors and do not necessarily reflect the views of the Food and Agriculture Organization of the United Nations (FAO). The designation and presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area of its authorities, or concerning the delimitation of its frontiers and boundaries.
All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for sale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to the Meetings and Publications Officer, FAO Regional Office for Asia and the Pacific, Maliwan Mansion, 39 Phra Atit Road, Bangkok 10200, Thailand or by e-mail to [email protected].

ISBN 92-5-105509-2
ISSN 1819–4591

For copies write to:Purushottam K. Mudbhary
Senior Policy Officer
Policy Assistance Branch
FAO Regional Office for Asia and the Pacific
Maliwan Mansion,
39 Phra Atit Road
Bangkok 10200
THAILAND
Tel: (+66) 2 697 4236
Fax: (+66) 2 697 4445
E-mail: [email protected]

Hyperlinks to non-FAO Internet sites do not imply any official endorsement of or responsibility for the opinions, ideas, data or products presented at these locations, or guarantee the validity of the information provided. The sole purpose of links to non-FAO sites is to indicate further information available on related topics.

This electronic document has been scanned using optical character recognition (OCR) software. FAO declines all responsibility for any discrepancies that may exist between the present document and its original printed version.


Contents

Foreword

Acknowledgements

PART I
Perspectives on agricultural development in the Republic of Korea: lessons and challenges

Abbreviations and acronyms

Executive summary

1.    Introduction

2.    Agricultural situation and policy changes in Korea

2.1    Economic growth and structural transformation

2.2    The role of agriculture in industrial growth

2.3    The agricultural situation in Korea

2.3.1    Share of agriculture in the GDP

2.3.2    Changes in production share by commodity

2.3.3    Changes in agricultural population

2.3.4    Changes in farmland size

2.3.5    Rice-dominant farming system

2.3.6    Agricultural imports and exports

2.4    The impacts of the UR on Korean agriculture

3.    Policy directions, achievements and emerging issues

3.1    Recent policy directions

3.1.1    Increased government budget on agriculture

3.1.2    Reforming agricultural structure to enhance competitiveness.

3.1.3    Promotion of environmentally friendly farming

3.1.4    Maintaining rural vitality and establishing a social safety net.

3.2    Policy achievements

3.2.1    Productivity improvement in agriculture

3.2.2    Addressing food security

3.2.3    Increasing large-scale full-time farms

3.3    Emerging issues to be resolved.

3.3.1    Contradiction between growth and farm income

3.3.2    Rapid restructuring of agriculture

3.3.3    Rising farm income instability due to policy change

3.3.4    Rural population decline

3.3.5    Surfacing environmental issues

4.    Challenges for Korean agriculture

4.1    Soft landing on the WTO/FTA plateau

4.2    Maintaining an adequate level of farm income

4.3    Sustainable agriculture

5.    Conclusions

Bibliography

Tables

1.      Korean agricultural policy regime changes

2.      Share of agriculture in the GDP

3.      Commodity share in total agricultural production, 1991–2004

4.      Share of the agricultural population in total population

5.      Share of the agricultural population over the age of 60 in the total agricultural population

6.      Change in agricultural farm size

7.      Labour hours required for the cultivation of major crops

8.      Rice farming as a major income source

9.      Value of total and agricultural imports and exports

10.    A summary of the WTO notifications for domestic support

11.    Trends in the total national budget and agricultural budget by year

12.    Allocation of agricultural and forestry budget by project

13.    Self-sufficiency rates for major grains (%)

14.    Full-time farm status by livestock type (June 1995 to June 2005).

15.    Ratio of farm household income over urban household income

16.    Share of off-farm income in farm household income

17.    The time lapses between 40 and 7 percent GDP for selected countries.

18.    Time lapses in decline of employment in agriculture from 40 and 16 percent for selected countries.

19.    Farm household income and debt

20.    Rice share of total AMS notified to the WTO

21.    Trends of urban and rural populations

Figures

1.    Ratio of farm household income to all household income in selected high-income countries

2.    Rice income assurance direct payment.

PART II
The decline and recovery of Thai agriculture: causes, responses, prospects and challenges

Abbreviations and acronyms

Executive summary

1.    Introduction

2.    Growth and performance of Thai agriculture

2.1    Overview of the performance of Thai agriculture

2.2    Sources of growth

2.3    Causes of the decline and recovery of agriculture: the Dutch disease

2.4    Natural decline of Thai agriculture or a long-term problem?

3.    Structural change and changing comparative advantage of Thai agriculture .

3.1    Structural change at the national level

3.2    Structural change in agriculture at the regional level

3.3    Effects on exports

3.4    Impact of agricultural growth on poverty

4.    The responses of Thai agriculture

4.1    The restructuring of agricultural production

4.2    Emergence of specialized agents.

5.    Government policies affecting agricultural development

5.1    The policy framework prior to the mid-1980s

5.2    Producer-oriented policies

5.3    Bilateral free trade agreements

5.4    Public good provision policies

6.    Future prospects for Thai agriculture: challenges and constraints

6.1    Future prospects and challenges.

6.2    Policy implications and constraints

7.    Lessons

7.1    The dynamism of Thai agriculture and the role of prices

7.2    Lessons from agricultural trade and macroeconomic policies..

7.3    Infrastructure and public goods

7.4    Market failure

7.5    Pro-poor growth strategy

Appendix 1.    Total factor productivity growth in Thai agriculture

1.      Measurement of output and inputs

1.1    Output

1.2    Factor inputs

2.    Estimates of factor income shares.

3.    TFP growth of the Thai economy

Appendix 2.    Growth-accounting framework

Bibliography

Tables

1.      Growth rates of Thai agriculture and other sectors.

2.      Growth accounting for GDP growth

3.      Growth in value added of major crops, livestock and fishery products

4.      Real income of agricultural households by landholding status

5.      Unemployment rates by area (percent)

6.      Number of holdings by type and number of crops cultivated (percent)

7.      Ratio of farm and wage income of farm households

8.      Poverty incidence regressions, 1986–2004

9.      Price differentials between safe and regular vegetables

10.    Profitability of contract farming crops and alternative crops grown by independent farmers in Chiangmai Province

11.    Characteristics of two types of agricultural households

12.    Number and area of holdings by type of contract farming with agribusiness company/middleman and size of total area of holding and region 2003

13.    Loans overdue

14.    Value of trade between Thailand, Australia and China

15.    MOAC annual budget for research and extension, 1982–2003.

16.    Major exporters of selected agricultural products in 2003

Appendix tables

1.      Growth rate and share of GDP at 1988 prices by major sector.

2.      Total employment with at least 15 years of age by major sector

3.      Average weekly working hours by major sector

4.      Land used in agriculture

5.      Net capital stock of Thailand at 1988 prices by major sector

6.      Number of agricultural equipment

7.      Number of fishing units

8.      Contribution of inputs and TFP to growth by major sector

9.      Comparison of TFP growth in Thailand, 1981–1995

10.    Growth accounting (whole economy)

11.    Growth accounting (agriculture)

12.    Growth accounting (crops)

13.    Growth accounting (livestock)

14.    Growth accounting (fishery)

15.    Growth accounting (freshwater fishery)

16.    Growth accounting (marine fishery)

Boxes

1.    How a supermarket chain recruited suppliers of safe fruit and vegetables.

2.    SWIFT Co. - a leading vegetable contractor

Figures

1.      Relative size of agriculture

2.      World prices of sugar, maize, rice and rubber from 1950 to 2005

3.      Farm prices of major commodities, 1985–2002.

4.      Real wage rates of private employees in the agriculture sector and all sectors

5.      Number of agricultural machines, by type

6.      Planted area and area per worker

7.      Share of five agricultural subsectors in agricultural value added, 1960–2004 ..

8.      Percentage share of crop and livestock value added by product, 1970–2004

9.      Share of GRP by sector and regions

10.    Poverty incidence (head count) by area and Gini coefficient

11.    Poverty incidence by size of landholding

12.    Farm household sources of income

13.    Farm household sources of income by income group.

14.    Household real income by sources and type of farm household

PART III
Policy reform and the transformation of Vietnamese agriculture

Abbreviations and acronyms

Executive summary

1.     Introduction

2.     The policy reform process - Doi Moi

2.1     The initial stage: dismantling central planning (1986–1989)

2.2     Phase two - building market institutions (1990 to present)

2.3    Reforms specifically related to agriculture

3.    The impact of institutional change

3.1    The household sector.

3.2    Commercial farms

3.3    Cooperatives

3.4    Private enterprises

4.    Impacts of policy reforms on economic performance

4.1    Economic growth and structural change

4.2    Rice productivity growth

4.3    Structural change in agriculture, forestry and fisheries

4.4    Structural transformation within agriculture

4.5    Agricultural exports

4.6    Competitiveness of the main agricultural commodities

4.7    Food security

4.8    Household income and poverty alleviation

5.    Conclusions and lessons learned

5.1    Challenges in the new stage of development

5.2    Nine lessons from Viet Nam's reform experience

Appendix

A.1    Summary of major policies and events

Bibliography

Tables

1.      Five-year averages of key economic indicators

2.      Poverty and food poverty rates, 1993–2003

3.      Relative agricultural tax burden in Viet Nam

4.      Rural income diversification by regions in 1993, 1998 and 2002.

5.      Land sources of commercial farms

6.      Annual growth rates in employment by sector, 1999–2004

7.      Total factor productivity and its contribution to rice production growth in Viet Nam, 1985–2000

8.      Change in TFP growth of the agricultural sector by region

9.      Average annual growth rates of agriculture, forestry and fisheries

10.    Volumes of major agricultural exports

11.    Value of major agricultural exports

12.    Nitrogen (from urea)/paddy price ratio

13.    Domestic resource cost of some agricultural commodities in Viet Nam in 1997 .

14.    Export potential of key agricultural commodities

15.    Food poverty rate by region

16.    Changes in per capita incomes for rural households

17.    Poverty rates of regions

18.    Number of off-farm households and ratio of off-farm households to total rural households

Figures

1.     Growth in registered enterprises, 1992–2004.

2      Inflation rate, 1991–2002

3.      Real and nominal exchange rates.

4.      Main income sources of rural households

5.      Income sources of households in 2001.

6.      Labour structure of commercial farms

7.      Growth in the main sectors, 1986–2003

8.      Sectoral shares in the economy, 1985–2003

9.      Real agricultural GDP growth rate

10.    Agricultural land and labour

11.    Fertilizer use in Viet Nam and selected Asian countries, 1985–2002.

12.    Ratio of food and foodstuff export to raw material import price indices

13.    Rice prices, 1990–2003

14.    Coffee prices, 1990–2003

15.    Export markets for Viet Nam's agricultural exports in 2003

16.    Food output per capita, 1985–2002

17.    Rice export and import, 1976–2002.

18.    Urban and rural expenditure and income, 1993–2002