AEC Blueprint 2025 Analysis: Paper 21 | An Analysis of the ASEAN Cooperation in Food, Agriculture and Forestry
As an important sector in the ASEAN economy, the food, agriculture and forestry sector has received attention from the governments for many years, particularly with regard to food safety and food security issues. While the ASEAN region is one of the largest producers of agricultural products (e.g. rice), member states still have to import many other kinds of food products. This has been driven by demographic changes which lead to changes in the food consumption. To address the challenges, the AEC Blueprint 2025 contains strategies that member states need to implement collectively. Harmonisation of standards is one important strategy that may be difficult, but is key to promoting the sector’s development and integration.
The following report is part of a series which attempts to provide a detailed analysis on the ASEAN Economic Community (AEC) Blueprint 2025. Each report will cover a single element of the blueprint, providing a comprehensive look at past achievements, present problems, and the future plans of the AEC. Special attention will be placed upon the strategic measures outlined in the AEC Blueprint 2025. This report aims to provide insight into the viability surrounding regional economic integration under the AEC.
ASEAN Cooperation in Food, Agriculture and Forestry (FAF)
Cooperation in FAF has historically been an important priority in ASEAN, particularly with regard to strengthening food security, empowering the rural communities and developing the business side of FAF products. The cooperation itself in ASEAN dates back as early as 19681 which focused on food production and supply. The scope of cooperation was expanded further in 1977 to include broader agriculture and forestry sectors. The current objectives of ASEAN cooperation in FAF include formulating and implementing regional cooperation activities to enhance international competitiveness of ASEAN’s FAF products, and strengthening the food security arrangement in the region and joint positions in international fora. The specific areas that ASEAN are working on include food security, food handling, crops, livestock, fisheries, agricultural training and extension, agricultural cooperatives, forestry and joint cooperation in agriculture and forest products promotion scheme.
In the previous AEC Blueprint (2009-2015), FAF was under the first pillar of single market and production base. In the new blueprint for 2016-2025, that sector has been housed under pillar three: enhanced connectivity and sectoral cooperation. The envisioned cooperation for the next AEC period has been expanded to also include trade in FAF products and resilience to climate change and natural disasters. This report attempts to review the progress made in this sector, analyze the new strategic plan under the new blueprint, and make some recommendations that could improve the implementation side in the next period of the AEC.
A. Targets under the AEC 2015 Blueprint
As mentioned above, the FAF sector was under the single market and production base pillar in the first period of the AEC implementation. The focus areas for the ASEAN FAF cooperation in 2009-2015 include promotion of trade of FAF products, strengthening of cooperation and technology transfer, and enhancement of agricultural cooperatives to support production and trade. Specifically, the broad strategic measures are as follows:
- Enhancing intra- and extra-ASEAN trade and long-term competitiveness of ASEAN’s FAF products and commodities
- Under this strategic measure, the actions that are expected to be implemented include:
- Monitor the implementation of the ASEAN trade schemes for agricultural and forest products that are outlined in the Common Effective Preferential Area under the ASEAN Free Trade Agreement (CEPT-AFTA)
- Develop and apply quality management systems to ensure fisheries food safety and support competitive position of ASEAN fisheries products on world markets
- Establish good practices for agriculture/aquaculture, animal husbandry, hygiene, and manufacturing; and hazard control point based systems for agricultural and food products with trade realization by 2012
- Harmonise the quarantine and inspection/sampling procedure by 2010 and sanitary/phytosanitary (SPS) measures for FAF products with trade potential or realization by 2015
- Harmonise the maximum residue limits (MRLs) of commonly used pesticides for widely traded crop products in accordance with international standards by 2010
- Harmonise the regulatory framework for agricultural products derived from modern biotechnology in accordance with international standards by 2015
- Harmonise the safety and quality standards for horticultural produce and agricultural products of economic importance in the ASEAN region, in accordance with international standards by 2015
- Harmonise the animal health control for safety of food of animal origin through a common bio-security management standards scheme, in accordance with international standards, by 2015
- Harmonise guidelines for use of chemicals in aquaculture and measure to eliminate use of harmful chemicals, in accordance with international standards, by 2009
- Develop a regional reference framework on phased-approach to forest certification by 2015
- This strategic measure outlines some actions to be implemented, as follows:
- Develop joint strategies on issues related to ASEAN with relevant international organizations, such as the Food and Agriculture Organization (FAO) and the World Organization for Animal Health (OIE)
- Promote collaborative research and technology transfer in FAF products
- Establish alliances and joint approaches with the private sector in promoting food safety, investment and joint venture opportunities, promotion of agricultural products and market access
- Strengthen efforts to combat illegal logging and its associated trade, forest fire and its resultant effects
- Strengthen efforts to combat illegal fishing
- The actions to implement this strategic measure include:
- Strengthen strategic alliance between agricultural cooperatives in ASEAN through bilateral, regional and multilateral cooperation
- Establish business linkages among the potential agricultural cooperatives within ASEAN
- Promote direct investment and strategic partnership with ASEAN agricultural cooperatives producers, consumers and traders
During the ASEAN Summit in November 2004, the ASEAN Leaders endorsed and launched the ASEAN Framework Agreement for the Integration of Priority Sectors. The framework agreement was aimed at accelerating the integration process of 11 sectors that were prioritized for integration under the ASEAN agreements in trade in goods (including rules of origin), trade in services, and investment. In 2006, one more sector was added: logistics. There are four prioritised sectors that are relevant to the FAF sector:
These four types of products are often referred to as natural resource based priority integration sectors (NRB-PIS).
B. Significant Achievements To Date
The ASEAN cooperation in the FAF sector has shown some significant progress, particularly in the agricultural sub-sector, where more harmonization efforts have taken place. Nonetheless, cooperation in the fisheries and forestry sub-sectors has also progressed well.
C. Current Issues and Challenges
Paul Teng and Margarita Escaler of the NTU have identified several challenges to the development of the agriculture and food sectors in ASEAN12. With regard to the agriculture sector, the first challenge has to do with the declining performance of the agriculture in terms of the yields to provide enough supply. While technology may enable the production to increase, global output has not been very promising. China, India and Indonesia, three of the most prominent agricultural countries, have seen their annual yield growth of rice locked at 0.4-1.0 percent. There is also a large difference between the potential and actual yield for most crops. ASEAN farmers generally are not able to produce more than 70 percent of their potential yields, which means that extra-ASEAN trade becomes very important to ensure security and continuity of supply.
The second challenge faced by ASEAN agriculture is the lower quality and quantity of natural resources that support the production of the necessary crops. Between 1970 and 2011, the land use for agricultural production in ASEAN increased from 20.2 to 29.4 percent, and this has some impacts on the environmental landscape and natural resources in the region. Climate change and increasing use of arable land for other purposes (catering to the increasing population in ASEAN) have also contributed to the decreasing available land for agriculture activities. Another pressure comes from the increasing demand for meat and dairy products, which also has reduced available natural resources for agriculture.
In particular, rice production in ASEAN has been heavily affected by the weather and natural conditions such as rainfall levels and typhoons. According to an analysis by the United States Department of Agriculture, Foreign Agricultural Service (USDA-FAS)13, the total milled rice production in the ASEAN region has been growing at a steady rate. This already takes into account the pattern of historical annual yield growth due to the gradual expansion of land used (under irrigation) and enhanced rice varieties, as well as the rainfall pattern in the region during the main growing and harvesting months (June-October). The charts below describe the progress of millions of hectares of land used, tons of rice production, and annual yield (tons per hectare) from 2005 to 2016.
In terms of food security, there have been some issues related to urbanization, where the number of farmers has been greatly reduced since the younger generation has less interest in working in the agriculture sector. As a result, the use of migrant workers in farms has increased (Malaysia and Thailand). The use of technology could be crucial in the effort to maintain and improve the quantity of food produced, particularly since the demand for food is increasing, driven by the larger size of the middle income group in ASEAN. The change in food consumption pattern must also be observed as the demand for meat and fish products has nearly doubled while that for cereal- and roots-based food has declined, which will have great impacts on how resources must be allocated to maintain production.
Global trade for food products has increased with Asia (and ASEAN) increasingly becoming importers to maintain food security. While this has pushed for greater use of technology in the production in ASEAN, enhancing the role of local producers in the supply chains, the benefits have not been evenly distributed with small farmers remaining at the bottom.
Between 1961 and 2013, the annual average growth rate of the value of trade in timber-based forest products from all member states was around 19.45 percent14. Most countries experienced higher values of exports and imports over that period. The growth of exports exceeded the growth of imports. These trades of timber-based products generally contributed positively to the GDP, both through exports and domestic production utilizing those products.
The rapid economic growth of ASEAN suggests that exploitation of natural resources is done at a speed that may be alarming. That means more deforestation and environmental degradation that would be detrimental to security of food and forestry products in the long run. This has been proven to happen in other parts of the world. Enforcing the environmental and forestry laws will be crucial in ensuring the sustainability of forestry products.
The biggest challenge for the fishery sub-sector would be the illegal, unreported and unregulated (IUU) fishing, which has resulted in the declining of fish stocks in the ASEAN seas region. IUU fishing is actually a global problem that needs to be tackled together. In 2003, global IUU caught fish was 11-19 percent of total reported catch, representing 10-26 million tons of fish, or around USD 10-23 billion15.
D. Plans under the AEC 2025 Blueprint
The new AEC Blueprint 2025 continues to emphasise the importance of the FAF sector in addressing issues arising from rising population, income growth, and expanding middle class in the ASEAN region. The blueprint states that the new vision for the ASEAN FAF sector for post 2015 is “competitive, inclusive, resilient and sustainable FAF sector integrated with the global economy, based on a single market and production base, contributing to food and nutrition security and prosperity in the ASEAN Community.” This vision has been translated into operational goals of ensuring food security, food safety and better nutrition, gaining from access to global market as well as increasing resilience to climate change.
The Blueprint 2025 also sets out several interventions that are necessary in integrating the ASEAN and the global FAF sector. Those interventions include:
- Enhancing trade facilitation and economic integration
- Strengthening cooperation and capacity for sustainable production
- Enhancing agricultural productivity
- Increasing investment in agricultural science and technology
- Ensuring the involvement of agricultural producers in globalization process
The specific strategic measures to achieve the new vision for the ASEAN FAF sector cover the following:
- Increasing crop, livestock, and fishery/aquaculture production
- Enhancing trade facilitation and removing barriers to trade to promote competitiveness and economic integration
- Enabling sustainable production and equitable distribution
- Increasing resilience to climate change, natural disasters and other shocks
- Improving productivity, technology and product quality to ensure product safety, quality and compliance with global market standards
- Promoting sustainable forest management
- Further enhancing cooperation in production and promotion of halal food and products
- Developing and promoting ASEAN as an organic food production base, including striving to achieve international standards
E. AEC 2025 Blueprint Analysis
The vision to achieve a more robust ASEAN FAF sector which can contribute to food and nutrition security, and eventually to the prosperity of the ASEAN community requires a lot of work given the challenges mentioned above. Implementation of the said measures in the new blueprint must be carried out in a timely manner since the FAF sector is a backbone to the region’s prosperity. Some analyses on the progress on each measure in the blueprint are as follows:
F. Conclusion: Moving Forward with the AEC 2025 Plans
Given that the FAF sector involves many different stakeholders (government, farmers, NGOs, cooperatives, buyers), it is very important then to form multi stakeholder partnership in the efforts to improve and promote production and distribution of FAF products. The private sector can also become an important participant in the strategies to further bring the ASEAN FAF sector to a larger scale of production so that more trade and investment can take place. As described by Teng and Escaler20, private sector can also encourage the small farmers to become more entrepreneurial instead of just producing for subsistence purposes.
The policy makers must continue to promote trade and investment by continuing the negotiations to remove the existing barriers. Since ASEAN is a prominent producer of many FAF products, it is very important that both intra- and extra-ASEAN trade and investment be encouraged further to expand the current production scales. Better infrastructure in the ASEAN region may also support the expansion of the FAF sector through provision of quality transportation, water, electricity and fuel. This will reduce costs and encourage greater investment. This would also address the problem of declining interests to participate in the FAF sector.
The ASEAN region is very familiar with climate change and (particularly) natural disasters that have frequently caused damages. The FAF sector by nature is also exposed to these phenomena and therefore must be able to deal with the in impacts. In dealing with climate change, ASEAN has begun implementing CSA, but with natural disasters, the post-disaster impacts can be tremendously harmful. Some countries have initiated the discussion on agricultural insurance as a means to provide protection to the farmers by mitigating the impacts as the government in many cases are not able to fully cover the damages caused by the disasters. Member states need to intensify the discussions on this matter and set up a mechanism whereby protection to the producers can be implemented.
To guarantee food security that is of the utmost importance in supporting the AEC, similar initiatives such as the Grow Asia by WEF and ASEAN Secretariat should be further explored and established with the ASEAN Dialogue Partners. Grow Asia aims at enhancing agriculture production to promote food security by encouraging greater participation by all stakeholders involved and mobilizing the resources more. This is to ensure that food supply in the ASEAN region is sustainable in the longer term.
The AEC Blueprint 2025 has covered many important many elements and initiatives to further develop and improve cooperation in the FAF sector. The policy makers need to redouble their efforts in implementing the agreed measures and ensure the timeliness of the implementation so that the expected targets and outcomes can be achieved, particularly in harmonizing the elements, standards, controls and guidelines to ensure that member states are at a level playing field in their production and trade. In doing so, ASEAN needs to continue working with the international partners to ensure that their products are of international standards and to learn the best practices from other parts of the world.
1 ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF)
2 “Efficient Agriculture, Stronger Economies in ASEAN”, a collaborative paper by BCSD Singapore, IBCSD, PBE, and VBCSD
3 Taken from a report for a project titled “ASEAN Good Animal Husbandry Practices For Layers and Broilers” prepared by Dr Robert Premier of Global F.S. Pty Ltd and funded by ASEAN-Australia Development Cooperation Program Phase II
4 Standard Operating Procedures for Responsible Movement of Live Aquatic Animals for ASEAN (March 2015), by Department of Fisheries of Thailand, ANAAHC, and NACA
5 ASEAN Maximum Residue Levels: Enhancing Competitiveness of ASEAN Agricultural Products, taken from www.asean.org
6 The information is taken from a report by the US Department of Agriculture, Foreign Agricultural Services (USDA-FAS), titled “Philippine Agricultural Biotechnology Situation and Outlook.”
7 Bt stands for Bacillus thuringiensis, a soil bacterium that contains a gene which produces a protein harmful to bugs and pests, but not to humans.
8 Diseases that can spread between animals and humans
9 Sustainable Forest Management: Ensuring the Sustainability of Forests in ASEAN, taken from www.asean.org
10 Issues and Challenges in Agricultural Statistics in the Region and FAO’s interventions, by Mukesh K. Srivastava, presented at the 8th Meeting of Directors-General of Agricultural Statistics and Information in ASEAN Plus Three Countries, June 2015
11 ASEAN Learning Route on Agricultural Cooperatives (ALRAC), Asia Pacific Learning Forum
12“Efficient Agriculture, Stronger Economies in ASEAN”, a collaborative paper by BCSD Singapore, IBCSD, PBE, and VBCSD
13 Southeast Asia: 2015/16 Rice Production Outlook at Record Levels, United States Department of Agriculture
14Razal, Firmalino and Guerrero, “Implication of the ASEAN Economic Community Integration on Philippine Forestry and the Forestry Profession”
15SEAFDEC, “Regional Cooperation for Combating IUU Fishing and Enhancing the Competitiveness of ASEAN Fish and Fishery Products,” presented at the High-level Consultation on Regional Cooperation in Sustainable Fisheries Development Towards the ASEAN Economic Community, Bangkok, Thailand, August 2016
16 “Non-Tariff Measures: A Challenge to Achieving the ASEAN Economic Community” in “The ASEAN Economic Community: A Work in Progress,” edited by Basu Das, Menon, Severino, and Lal Shresta
17About ASEAN Climate Resilience Network (ASEAN-CRN)
18 Defined by the FAO as “agriculture that sustainably increases productivity, enhances resilience (adaptation), reduces/removes GHGs (mitigation) where possible, and enhances achievement of national food security and development goals”
19 “Enhancing Agricultural Productivity of CLMV Countries: Challenges and Agenda for Reforms,” ADB Working Paper Series, August 2015
20 “Efficient Agriculture, Stronger Economies in ASEAN: Private Sector Perspectives for Policy Makers”
ASEAN Secretariat (2008). ASEAN Economic Community Blueprint
ASEAN Secretariat (2015). ASEAN 2025: Forging Ahead Together
ASEAN Secretariat (2015). A Blueprint for Growth ASEAN Economic Community 2015: Progress and Key Achievements
BCSD Singapore, IBCSD, PBE, and VBCSD, Efficient Agriculture, Stronger Economies in ASEAN: Private Sector Perspectives for Policy Makers
SEAFDEC, Regional Cooperation for Combating IUU Fishing and Enhancing the Competitiveness of ASEAN Fish and Fishery Products, presented at the High-level Consultation on Regional Cooperation in Sustainable Fisheries Development towards the ASEAN Economic Community, Bangkok, Thailand, August 2016
Sustainable Forest Management: Ensuring the Sustainability of Forests in ASEAN, (www.asean.org)
Standard Operating Procedures for Responsible Movement of Live Aquatic Animals for ASEAN, by Department of Fisheries of Thailand, ANAAHC, and NACA, March 2015
ASEAN Maximum Residue Levels: Enhancing Competitiveness of ASEAN Agricultural Products, taken from www.asean.org
Aladdin Rillo and Mercedita Sombilla, Enhancing Agricultural Productivity of CLMV Countries: Challenges and Agenda for Reforms, ADB Working Paper Series, August 2015
Mukesh K. Srivastava, Issues and Challenges in Agricultural Statistics in the Region and FAO’s Interventions, presented at the 8th Meeting of Directors-General of Agricultural Statistics and Information in ASEAN Plus Three Countries, June 2015
Myrna Austria, Non-Tariff Measures: A Challenge to Achieving the ASEAN Economic Community in The ASEAN Economic Community: A Work in Progress, edited by Basu Das, Menon, Severino, and Lal Shresta
Ramon A. Razal, Anna Floresca F. Firmalino, and Maria Cristina S. Guerrero, Implication of the ASEAN Economic Community Integration on Philippine Forestry and the Forestry Profession
Robert Premier, ASEAN Good Animal Husbandry Practices for Layers and Broilers, ASEAN-Australia Development Cooperation Program Phase II