RESAKSS-ASIA POLICY NOTES

× The Ukraine War has had major implications for food security and food systems across the world given the important role both Russia and Ukraine play in global food, fertilizer, and energy markets. Russia and Ukraine together supply about 12% of global agricultural exports on a caloric basis and over 30% of global wheat exports.1 Fertilizer and energy markets experienced rising prices and supply disruptions as well. The Russia-Ukraine conflict heavily impacted food security in Sri Lanka which is dependent on imports from the Caspian region. The impact of this shock has been compounded for Sri Lanka which has been suffering from a severe economic crisis due to a lack of foreign reserves, a debt default, high inflation, import restrictions, and shortages of critical goods and services. These compound crises have halted Sri Lanka’s progress on economic development and its achievement of the SDGs. Progress had been significant with the share of undernourished population declining from 16.7% in 2001 to 3.4% in 2020.2 During the same period the prevalence of stunting declined from 20.6% to 16%.3 The prevalence of wasting among children under age five declined from 15.9% in 2000 to 15.1% in 2016. Sri Lanka was ranked 65th out of 116 countries on the Global Hunger Index and 77th out of 113 countries on the Global Food Security Index in 2022 suggesting the need for some improvements in the food system. The latest food security assessment by the World Food Program (WFP) notes that about 30% of the population of 22 million (6.26 Mn people) are food insecure.4 Further, most households are regularly employing food-based coping strategies such as eating less preferred and less nutritious food and reducing the amount of food they eat. Further, an estimated 200,000 households are using emergency livelihood coping strategies that are likely to severely impact their income-generating activities and it is anticipated that more people are turning to these coping strategies as the crisis deepens. Against this backdrop, this policy brief explores the impacts of the evolving crisis in Ukraine on the nexus of poverty, agriculture, and food security in Sri Lanka and the possible avenues for mitigating the negative implica-tions of export restrictions, rising import costs, and inflation.

× In a recent working paper, we examine staple and cash crop production yields in Papua New Guinea (PNG). In doing so, we assess the yield gap (difference between the crop yields farmers commonly obtain and what they might realize with optimal inputs and crop management) for the main staple food crops in PNG. The yield gap for sweet potato is the smallest (1/4 - 1/3 less than attainable yields), while banana shows the largest yield gap at about ¾ less than what might be achieved under intensive cultivation. In addition, we compare PNG agricultural output with areas of similar growing conditions in Indonesia to provide insight into potential investments to further spur agricultural productivity in PNG. Finally, we assess current sector policies in PNG that aim to support agricultural development as an engine for economic growth.

× While a lot of development planning and policy attention has been dedicated to achieving dietary energy (i.e., calorie) adequacy to ensure food security and support greater household wellbeing, nutrition adequacy is also necessary to achieve improved human development indicators (e.g., improved educational attainment, decreased disease prevalence, and decreased child stunting prevalence). This study (explained in detail in the comprehensive working paper) calculates two poverty lines based on the costs that an individual faces in PNG to secure a diet consisting of foods typically consumed by poor households adjusted to align with a calorie threshold and healthy diet thresholds, respectively, together with modest non-food expenditures. Results suggest that over half of the sample households are unable to meet the necessary costs of ensuring an calorie equate modest food basket along with some basic non-food needs (Schmidt et al., 2022). Comparing the healthy diet poverty line to average household income suggests that attaining a nutritious, balanced diet while meeting other basic needs remains out of reach for nearly 4/5 of the rural sample households. Based on the study results, we identify 3 key interventions to improve food and nutrition security in vulnerable areas. First, PNG will continue to face disruptive climate events that quickly increase agricultural vulnerability and food insecurity in remote areas with limited market access and underdeveloped support services. The government of PNG in collaboration with development partners should pilot a series of social safety net programs that can assist vulnerable populations. These programs can be designed to build resiliency during non-shock seasons or years, such as improving livestock holdings, diversifying crop mix, investing in sustainable land management, and building agricultural production and other rural infrastructure for improved marketing and access to agricultural inputs. Second, a concerted effort is needed to promote the importance of nutrition at all levels of society. At the household level, training should aim to instill (for both men and women) the value of a costlier, but more nutritious diet. District and regional government officials, healthcare workers and other key stakeholders should be trained on methodologies to integrate nutrition programming into other development activities. High-level government dialogue and learning should aim to encourage greater coordination between local and federal government officials and across government departments to ensure improved nutrition outcomes for greater agricultural productivity and economic growth. Finally, PNG (both government and development partners) must invest in more timely data collection of key welfare indicators to inform nutrition targets and assistance programming.

× Policy simulations utilizing an economy-wide model based on PNG national accounts and survey data highlight the importance of linkages between the agricultural and non-agricultural sectors of the PNG economy.
There are potentially major benefits of increased agricultural productivity for national income and urban households. To reduce rural poverty, however, transport and processing costs must be lowered, as well.
Even if only half of the increase in foreign exchange earnings from the 2022 world energy price shock is absorbed into the PNG economy, the real exchange rate appreciates by 13 percent, reducing incomes from export crops. However, increased domestic demand for non-tradable crops contributes to a 10 percent income gain for the rural poor.
Using a portion of increased oil and natural gas revenues to finance new investments in crop agriculture, processing and transport, provides even greater benefits by spurring real GDP growth and raising real household incomes by an additional 2 to 4 percentage points.
A hypothetical carbon credit arrangement in which PNG reduces deforestation in exchange for funds used to finance cash transfers to the poorest 20 percent of both urban and rural households could raise the incomes of these groups by about 13 percent.

× Maximizing efficiency throughout the entire agri-food value chain is critical to fostering greater economic growth and poverty reduction in Papua New Guinea (PNG). Investments in midstream value chain infrastructure (e.g., improved storage facilities, rural feeder roads, electricity, and cold storage transport) are crucial to strengthen linkages between producers and consumers. These investments should also promote inclusive development that benefits both men and women value chain actors. In this study, we analyzed three key value chains in Papua New Guinea—poultry, sweet potato, and fresh vegetables—aiming to guide policymakers and stakeholders toward ways to improve productivity, increase revenue, and bolster competitiveness and inclusiveness within the agriculture and livestock sectors.

× Though declining in importance as Nepal undergoes structural transformation, agriculture still accounts for 23.9% of GDP and one in five people was employed in the sector with a larger share of women (33 percent) employed in agriculture than men (14.7 percent) (Labor survey of 2017-18). While not directly employed in agriculture, approximately 60 percent of the population has some engagement with the sector.

× Russia’s war on Ukraine shows no signs of subsidence. Its economic and societal adversities have already been felt worldwide but keep evolving, with food and energy being the most affected. Low-income, food-deficit nations importing from these two countries – many of which are in Northern Africa and Western and Central Asia – face critical challenges. The South Asian region, which has grappled with surging commodity prices and supply constraints even before the war, is likely to witness further inflation with rising food and oil prices. India is home to around 18% of the world’s population and accounts for 74% of the South Asian population. It is predicted to be the fastest-growing big economy this year. The country’s central bank (RBI) predicts that GDP will grow by 7.5% in FY 2022-23 (RBI, 2022), while many international organizations forecast growth between 6.4% and 8.2% (ADB, 2022; IMF, 2022; United Nations, 2022; World Bank, 2022). Still, in the wake of the ill effects of COVID-19, the country’s dependence on imports such as oil, fertilizers, and edible oils, and given surging domestic food and nonfood inflation in recent months, raises concerns about economic stability and possible interventions that might curtail fragility. The country consumes around 5 million barrels of crude oil daily but imports over 89% of its requirement from overseas. Crude oil prices have increased by 27% in just four months since the start of the war (February- June 2022). Edible oils have similarly increased, with palm and soybean oil prices rising by around 14% and 18%, respectively. The price of sunflower seed oil has increased by 42%, of which 86% originates from Ukraine and Russia. Fertilizer import dependency from the conflict regions is also sizeable. Russia was the 5th largest supplier of fertilizers to India in 2021-22, and Ukraine and Belarus were the 9th and 10th largest suppliers. The rise in prices of both finished fertilizers and fertilizer inputs has prompted the Government to double the fertilizer subsidy budgeted earlier this year. This policy brief investigates India's susceptibility to the war's disruptions and higher prices for commodities where import dependence is high. It then discusses potential income, food, and nutritional impacts on farmers, the poor, and the vulnerable. It also evaluates the Government’s policy measures such as subsidization, social safety nets, and trade diversification to reduce the impact of the war. Finally, it explores the market opportunities the conflict has created and the required structural reforms that would equip the country to handle such shocks in the future

× Developments in the agricultural economy of Papua New Guinea have major impacts on household food consumption decisions. A household’s ability to produce and sell food is affected by climate and associated agricultural potential, market opportunities (domestic, import and export) and unexpected shocks. Each of these factors affects the overall food system, thereby influencing production and consumption of all food products and the markets in which they are traded. The COVID-19 pandemic has presented a challenge far more complex than an agricultural production shock, such as those due to El Niño or pests. Rather than directly affecting agricultural output and rural household welfare, the COVID-19 pandemic has affected economies across the globe via trade disruptions (logistic challenges; international trade barriers), social distancing policies (domestic food market and nonessential business closures), and transportation restrictions (road closures; air travel cancellations). The measures aimed to curb the spread of COVID-19 have affected household incomes via urban job losses, reduced market interaction, and dramatic changes in world food prices. While rice prices have increased, luxury food prices, such as for chocolate (i.e. cocoa), have decreased. PNG’s unique and highly varied biophysical landscape has shaped agricultural production patterns, outcomes, and livelihoods for centuries. Understanding how the PNG agrifood economy and resulting household consumption is affected by COVID-19 therefore requires attention to linkages and substitution effects across various products and the markets in which they are traded.

× Vietnam has experienced rapid growth in agricultural mechani-zation lately; particularly in the use of tractors and combine-harvesters. A recent IFPRI study documented the evolution of the growth of mechanization in Vietnam based on an extensive review of the existing literature and several rounds of a nationally repre-sentative household survey. The level of tractor use in Vietnam was relatively high in the 1970s and the early 1980s but declined through the late-1980s before it started taking off again in the 1990s. The relatively high level of tractor uses up to the early-1980s were partly due to political and military reasons, as both the West and the Soviet Union gave substantial support in providing heavy machinery, including tractors. In this note, we focus on the evolution of mechanization from 1990s to 2000s.

× In September 2015, Nepal’s Constituent Assembly passed a new constitution aimed at transforming Nepal from a unitary country into a federal republic with three levels of government: the federation, the province, and the local level. This institutional shift will have wide-ranging social, political, and economic implications for the country. However, this brief focuses specifically on the implications of these federal reforms for the agricultural sector and the Ministry of Agriculture (MoAD). Agriculture is the backbone of the Nepali economy, providing a livelihood for approximately two-thirds of the population, contributing one-third of the country’s GDP, and constituting over half of its exports. With greater authority and autonomy granted to more subnational units of government, ensuring that the agricul-tural sector is guided by coordinated planning, retains sufficient human capacity, and receives adequate fiscal resources will be of para-mount importance during the transition to a federal republic. Consequently, this brief addresses how the sector can be restructured to meet the constitutional provisions while simultaneously ensuring that MoAD delivers on its agricultural objectives, especially those out-lined in its Agricultural Development Strategy (ADS).

× The agricultural sector of Asian middle-income countries is changing rapidly in line with an overall structural transformation of the economy brought about by economic growth. Dr. David Dawe of FAO discussed the changes taking place throughout Asia related to this agricultural transformation in his keynote address at the ReSAKSS-Asia event entitled “Agriculture and Rural Transformation in Asia: Past Experiences and Future Opportunities”. This brief summarizes some of the main points of his presentation while a more detailed discussion can be found in his earlier FAO working paper (Dawe, 2015).

× Mechanization increases the power applied to agricultural operations and is one tool among many for improving farm productivity. It alone cannot drive the transformation of agriculture (Pingali 2007). Farmers will mechanize to lower costs and ensure timeliness of operations, allowing a greater area of land to be cultivated. The demand for mechanization is therefore determined by the stage of agricultural transformation reflecting the use of complementary inputs (improved seeds, fertilizer), the intensity of farming, land hold-ings, and rural labor supply. Countries across developing Asia have mechanized at different rates corresponding to their level of agricul-tural transformation but also strongly influenced by government policies. ReSAKSS-Asia organized a knowledge exchange event entitled “Agriculture and Rural Transformation in Asia: Past Experiences and Fu-ture Opportunities” to discuss, among many topics, insights into how agricultural mechanization has evolved in countries with different agroecological, institutional and political settings, and what common lessons can be learned for those countries at the early stage of mechanization. This brief summarizes some of the key lessons shared by participants.

× This brief evaluates the extent of agricultural mechanization in four townships in Myanmar’s Dry Zone. It provides evidence that rapid mechanization is underway. Mechanical land preparation is now common-place, due to thriving machine rental markets, falling equip-ment prices, and better financing options. The mechanization of harvesting and threshing is also occurring but is concentrated in rice. These findings suggest that Dry Zone agriculture is at a technological crossroads.

× Past agricultural mechanization efforts in Ghana and Nigeria have focused more on the styles of machinery used in western countries or Latin America, where average farm sizes are much larger. While West African countries, particularly Ghana, are still relatively land abundant compared to Bangladesh, seeking the right balance across various models is important for achieving mechanization growth across diverse types of farms. Learning from the experience of agricultural mechanization in Bangladesh offer useful inspirations toward how widespread mechanization growth can happen for smallholders in Ghana and Nigeria.

× This paper reviews the agricultural policy environment in Myanmar up until 2014 with an eye towards identifying policies that can help to accelerate productivity and profitability in the agricultural sector. We draw heavily on the Framework for Economic and Social Reform (FESR) (2012) which provides the policy intents of the government both overall and at a sectoral level. Although limited, in some instances we rely on government data which is publically available only up until 2010. This paper primarily examines the evolution of input policies and their measures of implementation, i.e. those focused on farm inputs (land management; finance; water management; research, education and extension services; rural electrification; seeds; fertilizer and mechanization). We also provide a brief overview of policies which affect farm diversification (including rice productivity and crop diversification) and output policies including policies related to post-farmgate processing; logistics and transport; wholesale markets; and broad macro-economic and trade policy.

× This brief aims to identify the factors contributing to low certified seed use by evaluating the evolution of rice seed varieties, analyzing the trends in seed adoption, and describing the Philippine seed system and its regulatory structure. It concludes with a summary of these issues leading to key recommendations to improve and strengthen the rice seed industry.

× Approximately 70 percent of the population of Myanmar lives in rural areas and 60 percent of the workforce is involved in agriculture. It is estimated that agriculture contributes to 36 percent of the GDP and 20 percent of the foreign exchange earnings for Myanmar. While agriculture is important for growth in Myanmar, it is primarily rain-fed so agricultural growth is erratic. Due to small farm sizes, increasing food production is dependent on improved policies and technologies that can increase output per hectare. One of the main policy objectives of the Government of Myanmar is to increase food security and the quantity, quality, and variety of crops through partnerships and private sector investment. Improving the private sector participation in the trade and distribution of fertilizer has the potential to reduce fertilizer costs and increase their usage and thus improving farm productivity and food security.

× The Philippines is an island nation, comprised of 7,107 islands that are split into 3 geographical divisions: Luzon, Visayas, and Mindanao. In 2013, agriculture contributed 10.45 percent to GDP (PSA-NSCB, 2014) and 31 percent to employment (PSA-BLES, 2014). More im-portantly, its contribution to national and household food security is significant. Cereal production increased from 7.6 million tons in 1970 to 22.1 million tons in 2010. During the same period, fertilizer use increased from 201,000 nutrient tons to 771,000 nutrient tons (FAOSTAT). In promoting cereal production, especially rice production, increased fertilizer use, along with improved seeds and other agronomic practices, played a key role.

× The Republic of Kyrgyzstan is a landlocked country where nearly 65 percent of the population lives in rural areas. Wheat is the staple crop in Kyrgyzstan; however, average wheat yields were just 2.4 metric tons (MT)/ha as of 2013, which is well below potential yield estimates of 5.5 MT/ ha. The country is classified by the UN FAO as a low-income, food-deficit country that relies on wheat imports from Kazakhstan and Russia to cover 25 percent of its consumption requirements. Agriculture contributes 20.8 percent of GDP and more than 1 million smallholder households are involved in the agriculture sector. Agriculture in the northern region of the country is more industrialized, with farm activities fully mechanized compared to the southern region. The south is highly populated, but the availability of arable land is limited.

× Indonesia is an archipelago consisting of 13,466 islands, which are divided into 33 provinces. Java, Bali, and Nusa Tenggara are the inner islands and contain 62 percent of the total population of 246 million, but only accounts for 8 percent of the total land area. The inner islands are naturally more fertile than the outer islands that have nutrient-poor, acidic soils. In theory, fertilizer use should be higher on the outer islands, but in reality outer island fertilizer use is generally lower, making crop yields lower, especially when compared to Java. There are approximately 15 million farmer households in Indonesia cultivating rice and 6.7 million cultivating maize. Approxi-mately 68 percent of rice farmers and 37 percent of maize farmers use chemical fertilizers, according to the 2009 Agriculture Census.

× Although agriculture only contributes 20 percent to GDP in Vietnam, over 70 percent of the population relies on the sector. Rice is the most important crop in Vietnam accounting for 90 percent of total grain output. The agricultural sector has faced recent challenges due to urbanization and industrialization, as well as few opportunities for increasing cultivated land area. Increased crop yields through the use of chemical fertilizer is one of the few methods available for increasing agricultural output.

× Nepal is a landlocked country with wide diversity of climatic conditions, ranging from temperate to tropical. Agriculture is the largest economic sector, contributing 35 percent to GDP and employing two thirds of the total population. Rice is the major staple crop, fol-lowed by maize, wheat, and pulses. These crops are spread across three ecological belts: Hills (42 percent of land area), Mountain (33 percent), and Terai (23 percent). Nepal, once self-sufficient in food, has become a net importer in recent years. Farm size has declined from 1.1 hectares in 1995/1996 to 0.7 hectares in 2010/2011, and 53 percent of households have less than 0.5 hectares. Although the agriculture sector is the most important for the sustainable development of Nepal, its growth rate is low, mainly because of low govern-ment investment. Despite the efforts to disseminate improved seeds, national yields of the three main cereal crops remain low: (rice 3.3 t/ha, wheat 2.4 t/ha, and maize 2.5 t/ha).

× Seed provision in Pakistan is experiencing tension as private entrepreneurs have been challenging the boundaries of the country’s ar-chaic regulatory structure. All key aspects of the system – licensing of seed producers, variety release procedures, access to public germplasm, quality control, intellectual property rights, and import and export –are governed by laws and regulations framed decades ago for a system then dominated by public sector enterprises. Since the early 1980s, the private seed business has grown but govern-ance has failed to keep pace. The failure of regulatory frameworks to evolve has constrained business activity, at least through official channels. Most actors, including some public sector enterprises, have on occasion found answers in the informal sector, which now mediates a substantial portion of the trade.

× For the last three decades, Vietnam’s agricultural sector has undergone continuous and impressive change. Having recently transi-tioned from a planned economy, the private seed industry has only recently begun to emerge and the legislation which governs it is new. Policy reform, which began in 1981, culminated in 1988 with the liberalization of input and output marketing. These changes en-gendered institutional transformation and resulted in significant development of the agricultural sector, especially rice production. Paddy output increased from 12 million tons in 1980 to 44 million tons in 2012. Since 1989, Vietnam has been a rice exporter and in 1997 the country became the second largest rice exporter in the world. Current exports average 6-7 million tons per year.

× Agriculture, including fisheries and forestry, accounted for 36.4 percent of Myanmar’s GDP in 2010-2011. Approximately 69 percent of the total population of 59.78 million (2010-2011) lives in rural areas and 61.2 percent of the total labor force is employed by the agricul-ture sector (MOAI 2012). The government has designated the agriculture sector as a main pillar of the economy and is dedicating vari-ous efforts and investments to achieve greater progress in the sector. Rice is the primary crop, followed by maize, pulses, and oil seeds. Over 90 percent of the total rice sown in Myanmar1 is done so by farmers’ reusing their seeds. Hybrid varieties of maize are grown more widely in part due to domestic hybrid production and imports. In recent years, there has also been an increase in the production of fruits and vegetables due to demand from China as well as the emergence of supermarkets in the country which has also increased the utilization of quality seeds and seedlings.

× Fertilizer use in Thailand has become an integral part of agriculture due to the declining availability of arable land and the increasing role of rice and other agricultural exports in the economy. Approximately 47 percent fertilizer is used on rice, production of which has increased from 13.4 million MT to 36 million MT from 1970 to 2010 coinciding with a rise in fertilizer consumption from .2 million MT to 2.6 million MT. However, Thailand has a limited supply of raw materials for fertilizer and therefore imports both raw materials and pre-compounded grades for domestic production and distribution. This brief reviews the Thai fertilizer sector and the changes in policy which have led to its growth.

× This policy brief will provide an analysis of the maize seed industry’s current state and future prospects, prefacing that with a review of the historical context under which it emerged. Lessons learned from this sector could have implications for the development of the seed industry in other developing countries.

× The agricultural sector plays a crucial role in Cambodia’s economy, and accounts for approximately 27.3 percent of GDP. Crop cultiva-tion on Cambodia’s 4 million ha of agricultural land has become more challenging with each passing year due to low soil fertility (White et al., 1997). Fertilizer application is crucial for nutrient replenishment, increased crop yield and elevated crop biomass which is necessary for moisture retention and nutrient efficiency (Bumb, 1996). Cambodia expects a large proportion of improved crop produc-tion to derive from increasing crop yields, and fertilizer is expected to play a major part in meeting future demands for crop intensifica-tion and greater food security (RGC 2010).

× Due to internal conflicts and civil war, the green revolution largely passed by Cambodia without having a significant effect on rice production. With an estimated population of 14.7 million, 80 percent of which are rural and most dependent on agriculture as their main source of income, rice productivity is of critical importance in a country where more than 30 percent of the population still lives below the national poverty line. The lift of the economic embargo on Cambodia in 1993 opened the country up to greater integration with the sub-regional, regional and global cooperation networks and has led to significant agricultural and economic progress. In addition, peace allowed for an expansion of cultivation area from 1.9 million hectares in 1990 to 3 million hectares today.

× The contribution of chemical fertilizers towards increased agricultural production is well established. Indian agricultural policy focused on increasing productivity and modern inputs such as improved seeds (HYVs), irrigation, chemical fertilizers, etc. have played an important role in increasing crop production and productivity. Increased fertilizer use will continue to play an important role in increasing agricultural productivity given the diminishing land available for cultivation. Therefore, it is important to understand fertilizer use patterns and efficiency over time, the changing structure of fertilizer markets, the current policy environment and the role of various factors influencing fertilizer consumption. This brief is an attempt to address some of these issues

× Nepal is a landlocked country, surrounded by India and China with long borders. All merchandise trade, including fertilize trade, is transited through India. Because of its geopolitical location and agroecological conditions, Nepal faces unique challenges in developing a well-functioning fertilizer market. The main objective of this policy brief is to highlight the difficulties a landlocked country faces in procuring fertilizers and the externalities it encounters from neighboring countries fertilizer polices in promoting efficient fertilizer use and supply.

× Our ability to select desirable biological characteristics of plants through applications of modern science creates remarkable abundance in agriculture and is also the uncomplicated reason why many governments in industrialized and developing countries have historically invested in improving cultivated crop varieties (“cultivars”) through applications of modern science. When combined with other modern inputs and good crop management practices, improved cultivars can enhance crop yields significantly and subsequently drive agricultural productivity growth (Evenson and Gollin 2003; Rosegrant and Hazell 2000; Rosegrant and Evenson 1992).

× Indonesian agriculture has experienced a significant structural transformation in the past four decades. The growth performance of the agricultural sector remains a moderate 4.0 percent per year in 2012, a significant increase from a 2.9 percent growth right after the global financial crisis in 2010. The performance of agricultural growth is the second lowest after the mining sector’s growth of 1.5 per-cent. Agricultural performance is obviously lower than that of the manufacturing and service sectors, achieving 5.7 percent and 8.1 percent growth, respectively. The estate crops, fisheries, and food crops sectors have contributed to agricultural growth performance, mostly because the world price of such important commodities remains high, contributing significantly to the added value of agricul-tural sectors. However, in view of the quality of growth argument, a 4.0 percent growth is simply not adequate to generate more em-ployment and alleviate poverty.

× This paper provides the history of development; an analysis of the current industry’s structure, conduct, and performance; and a review of related regulations of the maize seed industry in Thailand. The lessons learned from the success of the maize seed industry in Thailand could provide implications for the development of the seed industry in other developing countries

× Fertilizer policy in the country has evolved from pervasive interventionism in the 1970s to today's market-oriented regime. Government has abandoned price policies and subsidies, focusing rather on standard-setting, quality regulation, and train-ing. Over the same period domestic demand for fertilizer has continually been increasing, though recently resurgent fertilizer prices has reduced total utilization. Evidence suggests that farmers are under-applying fertilizer, thereby forfeiting efficiency gains at the margin. On the supply side, imports have in the past few decades emerged as the main source of fertilizer, as domestic production has dwindled. With deregulation, numerous private sector players have taken over the distribution of fertilizers; analysis of the supply chain points to low marketing margins. Integration analysis fails to find systematic arbitrage opportunities between the domestic and world markets. Within the domestic market however, there remain large disparities in prices across regions. Priorities for research and policy are therefore understanding the behavior of farmers in terms of fertilizer application, and addressing internal price disparities, perhaps by improved transport infrastructure and logistics.

× The role of chemical fertilizers for increased agricultural production, particularly in developing countries such as India, is well estab-lished. Some argue that fertilizer was as important as seed in the Green Revolution (Tomich et. al. 1995), contributing as much as 50 percent to the yield growth in Asia (Hopper 1993, FAO 1998). Others have found that one-third of worldwide cereal production is due to the use of fertilizer and related factors of production (Bumb 1995).

× A central policy question for Asia and other food-insecure regions of the world is how to respond to the threat posed by food inse-curity. In particular, is it more effective to promote improvements in agricultural productivity or to pursue price interventions aimed at promoting food self-sufficiency at a national level? In this paper I want to present some recent evidence on undernourishment and some other dimensions of food security in Asia and elsewhere that are relevant for this question. The key underlying research questions are: what drives changes in food security; and what does this imply for agricultural and food policy?