An emerging agricultural problem in high-performing Asian economies

Many high-performing economies in Asia advanced recently from the low-income to the middle-income stage through successful industrialisation. However, due to rapid shifts in comparative advantage from agriculture to manufacturing, these countries are confronted with some problems. This paper seeks to identify the nature and the roots of the new agricultural problems emerging in high-performing economies in Asia. The paper also investigates policies might be appropriate and effective in solving these problems.

The paper defines three major problems related to agriculture:

• the food problem, which is policies to depress food prices and farm incomes
• the protection problem, which is policies to support farm incomes
• the disparity problem, which is the problem of income disparity between the farm and the non-farm sectors

Nevertheless, while right approaches to the food and the protection problems have already been established, the right design to cope with the disparity problem has not yet been identified. The paper deems that the disparity problem is looming large and will continue to become more serious among high-performing economies in Asia as they advance to the middle-income stage. Indeed, the difficulty is how to compromise the conflicting goals under the still weak capacity of the government to raise sufficient revenue from non-agricultural sectors.

The paper finds that almost inevitably, agricultural policies tend to become ineffective exercises combining various, often mutually conflicting policy instruments in ad hoc manners. Therefore, greater research inputs in this area are called for in order to prevent the growth momentum of high-performing Asian economies from being disrupted.