Pro-trade policies, private capital and the proliferation of novel technologies have the potential to eradicate hunger
By Howard James
Early-February 2020. A deadly virus is rapidly spreading across the region.
A health pandemic quickly metamorphoses into a food crisis. Panic proliferates.
People flock to supermarkets to stock up on food and other essentials. Within hours, shelves lay bare. No meat. No bread. No rice.
Unsurprisingly, to counter the health risks of COVID-19 governments do what is expected of them, announcing strict travel restrictions. Public anxiety heightens further.
Within days, however, the shelves are almost full again. Political leaders urge people to act calmly and buy with restraint, as stockpiles are under pressure. Citizens remain worried.
The acute panic caused by the pandemic underscored the widely held view that food supplies in the region are fragile. Indeed they are, particularly in emerging markets.
Long before the advent of COVID-19, Southeast Asian policy makers acknowledged the vulnerability of local food supplies to black swan events. Just last year, for example, Singapore’s then Minister for the Environment and Water Resources Masagos Zulkifli announced plans to expand the number of countries shipping food to the city-state from 140 to 180.
While Singapore enjoys a constant supply of produce to meet the nation’s needs, the same cannot be said for other nations.
Crisis to catastrophe
Across the Asia-Pacific, about 500 million people currently suffer from hunger and malnutrition. The causes of this crisis are multiple: Poverty, droughts and floods caused by climate change, water insecurity, and a lack of investment in agricultural technology and infrastructure to ensure that food production is optimised and supplies are delivered. These are a mere few of the challenges driving food insecurity regionally.
COVID-19 has since worsened this crisis. In Malaysia, for instance, farmers are currently unable to package or transport fruit and vegetables due to strict lockdown measures. And in the Philippines, unclaimed containers full of food lay idle at ports, as the country’s policies prevent supplies arriving and leaving.
When worldwide food supplies were last strained in 2008, civil unrest raged across 47 nations. Hoping to avoid such turmoil, several governments imposed food export restrictions. Cambodia, Myanmar and Vietnam unnecessarily banned rice exports in March, fearing they will be unable to feed their respective nations. These measures were lifted in May.
Food prices have since soared, making food too expensive for many across the region. Thai white rice, for example, recently recorded a seven-year high of US$570 a tonne, up from about US$350 a year earlier. Rice is the staple diet of more than 60% of the region’s population. In China, food prices are today up to 22% more expensive than this time last year. And further afield in East Africa, agricommodity prices have soared by up to 60% within the same timeframe.
With 10% of the world’s population living in poverty, about 780 million people, today’s hunger crisis could easily become tomorrow’s humanitarian catastrophe, unless robust action is swiftly taken.
Policies and private capital
Maintaining supply chains is critical to ensuring food moves from source to consumers. March saw the launch of an international initiative to keep food trade open via land, air and sea freight. The programme involving Australia, Brunei, Canada, Chile, Myanmar, New Zealand and Singapore somewhat conspicuously doesn’t include major Southeast Asian food producers Thailand and Vietnam — nor the US or China, which are caught up in their own trade war.
Deals of this nature only work if participating countries have the willpower and means to efficiently grow, harvest and distribute food to end-users. Many Southeast Asian nations, unfortunately, are short of one or more of these capabilities.
To build capacity, the Asian Development Bank (ADB) says, countries must prioritise investments in agricultural research and development, infrastructure (including roads, electricity, ICT, processing facilities, irrigation and more), and education among farmers and the general public. They must also undergo legal and regulatory reforms, which encourage greater private sector participation, and remove subsidies on items such as fertilizer and fuel.
Private capital is critical. The ADB claims there is a US$78.6 billion shortfall in infrastructure financing. Hard infrastructure will likely be funded by multilateral banks such as the World Bank or Asia Infrastructure Investment Bank, given the financial risks involved with such projects. However, soft infrastructure and services — including agricultural supplies and industry technology — will likely come from the private sector, particularly from providers based in developed markets.
Southeast Asia’s agribusiness scene is ripe for investment from the West. In the US, for instance, stock-listed agribusinesses are well capitalised, technologically advanced and rapidly expanding globally.
New technologies developed in Japan have the ability to limit the impact of climate change — arguably the biggest threat to food security in future.
Responding to the nation’s increased frequency of extreme weather events, farmers and researchers in Toyama Prefecture have developed a breed of rice that is able to withstand excessive heat and flooding. ‘Fufufu’, as it is known, is a crossbreed of five rice varieties with varying characteristics, including heat resistance, shorter plant length to better resist storm water, and immunity to diseases. With the number of days per year exceeding 35°C having quadrupled in just 30 years, and with the frequency of tsunamis having almost doubled within the past century, Fufufu’s development is timely. Almost 100% of the prefecture’s rice crop is now classified as first-class, versus just half prior to its development.
Southeast Asian rice producers like Thailand could benefit enormously from Toyama’s technology. During 2019, the nation experienced both severe droughts and excessive flooding, lowering Thai rice production by 12%.
In a similar spirit of innovation, Japanese agritech company Mebiol has developed a film-based alternative to soil that uses 90% less water than conventional hydroponics. Its ‘hydrogel’ film allows roots to access critical nutrients and water. The technology is ideal for growing crops in nations with increasing water stress, like Malaysia and the Philippines. About 3,500 tonnes of tomatoes are grown each year using the technology.
Internet-savvy farmers in Southeast Asia can too benefit from today’s wave of technological innovation. Taking inspiration from their Chinese counterparts, they can capitalise on the growing number of online marketplaces like Alibaba.com that connect producers of fresh food with wholesale buyers. An ADB study found that 60% of farming households in the Shandong and Zhejiang regions are benefitting from this new channel. Sales from e-commerce have significantly raised farmer income, as the price of commodities sold online is generally higher than those traded in-person or at wet markets.
Sophisticated agribusinesses can leverage big data analytics, alternative data, artificial intelligence and a raft of other cutting edge technologies to predict future production, maximise yields and minimise risks — tasks BigTech giants like IBM and Oracle have been doing for several years.
The above policies and technologies, with the support of the private sector, demonstrate that food security is a realistic possibility within Southeast Asia — providing all stakeholders are committed to overcoming political and technological challenges, and that robust measures to mitigate future health pandemics and their subsequent impact on food supplies are made.