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Agriculture, Food & Nutrition, People, Prosperity, Planet, Asia Pacific, Peace & Partnership
Martin Lemoine | Jul 08, 2019
This article was originally published by Asian Development Blog and is republished with permission.
There is one sector that contributes up to a third of gross domestic product, and is an important source of foreign currency, in many of Asia’s developing countries. It could be deployed to achieve the Sustainable Development Goals.
Is there a silver bullet to help countries meet all their development challenges? Unfortunately, no. The first Sustainable Development Goal (SDG) to eliminate poverty, for example, is a gigantic task that demands a vast array of interventions on multiple fronts.
But there is one sector which, despite its huge size and importance, struggles for recognition of its potential to make serious inroads into nearly all the SDGs. Agriculture still accounts for more than half the workforce in most developing countries. And yet still there isn’t enough food for everyone. The Asia and Pacific region needs to invest $120 billion every year until 2050 to meet a growing demand for food.
Most of this money must come from the private sector. The only way for that to happen is to develop agribusiness. The agribusiness value chain comprises agriculture, manufacturing, and services companies and starts the moment a seed is produced, ending when the product is bought at a supermarket. Agribusiness boosts agricultural productivity and quality, while helping farmers sell their produce by connecting them with markets and consumers.
Agribusiness contributes up to a third of gross domestic product in most of ADB’s developing member countries. It is also a critical source of foreign currency through exports and foreign direct investments.
Even so, it’s still largely undeveloped and fragmented. Of the world’s 500 million smallholder farmers, 400 million are in Asia. Most lack financing and use low-tech, labor-intensive techniques and equipment. Half of the agricultural land in Asia is degraded mostly due to overuse of chemical fertilizers and outdated farming practices. Moreover, the region’s developing countries are likely to face the biggest reductions in agricultural potential in the world due to climate change.
Tackling problems and achieving SDGs through agribusiness
The good news is that tackling these problems through agribusiness can yield benefits that ripple powerfully through nearly all the SDGs. ADB has seen this first-hand in its agribusiness projects:
Clearly, there is potential for agribusiness to make a massive difference, if scaled up.
But only if it’s done properly. Poet-farmer Wendell Berry has written that “a good solution solves more than one problem, and it does not make new problems”. Interventions can have positive and negative impacts, and in agribusiness these can have a domino effect given the nexus between farming, the environment, water, and energy. Interventions should maximize benefits and minimize the risk of harm.
Scale up agribusiness to deliver on the Sustainable Development Goals
There are three areas where this is particularly important. First is fertilizer. It can be hugely damaging if used improperly, contaminating soil and water. Ecologically-friendly compound fertilizer, which includes the right mix of nitrogen, phosphorus, and potassium and is released slowly into plants, mitigates these risks. Notably, fertilizer companies in India and the PRC are promoting these innovative products.
A second core concern is irrigation. Flood irrigation is common in Asia, but it is inefficient and can have environmental impacts including erosion and salinization. Drip irrigation is more effective and in controlled settings like greenhouses can boost productivity and quality, as we’ve observed in ADB-supported vegetable and flower investments in Armenia, Indonesia, the PRC, and Viet Nam.
A third key aspect is livestock. Farm animals are often a poor household’s main asset. But livestock can severely pollute soil and water if their waste is not handled properly. Livestock also produce methane which is a greenhouse gas, so simply breeding more of them can have harmful climate impacts. These issues can be mitigated by supporting companies that recycle livestock waste into organic fertilizer and biogas to produce clean energy. Livestock health and welfare is also important, and ADB partners with the region’s leading livestock companies to promote higher animal health and welfare standards.
To help achieve SDGs, agribusiness needs sustainable levels of investment. Long-term investment is also an effective way to bring stakeholders together, because it creates trust. When farmers see that an agribusiness has invested millions of dollars in a processing plant near their fields, they know that the investors are there for the long-haul. Farmers will then themselves invest and governments will also be more willing to support. Consumers are also better off when quality food is produced locally.
Development finance organizations like ADB have a critical role to play in unlocking long-term investment in agribusiness. This is how we can scale up agribusiness, so it can help to deliver the SDGs.
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