Regional Learning Session on Sustainable and Inclusive Marketing Arrangements Towards

Increasing Farmers’ Market Power

9-11 May 2013Manila

Vedini HarishchandraSoutheast Asia DepartmentAsian Development Bank

Importance of Agriculture Sector Growth in ASEAN

Source: Asian Development Bank Key Indicators 2011, Asian Development Outlook 2012, ADB, FAO

ASEAN Countries

Population Growth Rate

GDP per capita

Agriculture GDP per capita growth

rateAgriculture

Employment

(%) (US$) (%) (%)(2010) (2010) (2010) (2010)

Cambodia 1.5 797 3.3 80Lao PDR 1.7 1,048 1.0 70Myanmar 1.1 876 - -Vietnam 1.1 1,183 4.0 70Brunei Darussalam 2.0 32,648 - -Indonesia 1.2 2,949 3.0 38Malaysia 1.3 8,373 5.6 14Philippines 1.9 2,140 2.6 40Singapore 1.8 43,783 3.0 -Thailand 0.6 4,613 3.8 42

Smallholder Access to Markets: Challenges

• Lack of policy, regulatory support and institutional framework

• Poor provision of access to credit• Inadequate provision of rural infrastructure that reduces

postharvest losses and transport costs, and shortens transit time, while increasing overall rural mobility

• Lack of access to value-responsive markets• Lack of access to agricultural information and market

data• High transaction costs • Lack of inclusion of smallholder farmer groups into value

chains• Lack of opportunities for increased private sector

engagement

Agriculture Sector Performance Enhancing Priorities

Dde

Sustainable Agriculture and Food Security

Productivity

Connectivity Resilience

Declining land and water resources, stagnating crop yield

Climate change impacts, price fluctuations

Lack of access to markets, services, resources and nonfarm income

Source: ADB-RSDD

Productivity - Increase production and productivity of food commodities in a sustainable way

Connectivity - Improve linkages between food producers and consumers; input and output markets

Resilience - Enhance the resilience of social and ecological systems against the effects of climate change

ADB’s overall Agriculture and Natural Resources Priorities

Pro-poor investments focused on rural infrastructure, sustainability, climate resilience, and inclusive economic growth, to achieve the objective of poverty reduction.Some of ADB’s SE Asia investments are in:

• Rural infrastructure and connectivity• Environment and natural resources management• Irrigation efficiency and water resources management• Public-private partnership• Regional cooperation and integration

Example…Infrastructure for Rural Productivity Enhancement Sector

Project (INFRES) – Philippines INFRES Project aimed to increase agriculture productivity by

improving rural infrastructure such as farm to market roads, communal irrigation systems and potable water systems.

Household Income: Average household income grew by 49%, on-farm income grew by 60% and non-farm income by 35%.

Agriculture Productivity: The rice yield increased from 3.28mt/ha to 3.53mt/ha and corn from 1.96mt/ha to 2.42mt/ha.

Distribution of Gains: INFRES contributed to reduction in poverty by 24.44 percentage points; exceeding the target by 11 percentage points.

Source: Benefit and Impact Assessment of the Infrastructure for Rural Productivity Enhancement Sector (INFRES) Project

Sector Investments

Loans and Grants as of 2012Agriculture and natural resources sector: Sovereign Projects - 21,453 millionGrant Projects – 1,081 millionTechnical Assistance -776 millionRegional technical assistance – 247 million

Some examplesAGRARIAN REFORM COMMUNITIES PROJECT II PhilippinesQUALITY & SAFETY ENHANCEMENT OF AGRI PROD & BIOGAS DEVT PROJECT VietnamTONLE SAP POVERTY REDUCTION AND SMALLHOLDER DEVT PROJECT CambodiaNORTHERN RURAL INFRASTRUCTURE DEVELOPMENT SECTOR PROJECT LaoSUSTAINABLE AQUACULTURE DEVT FOR FOOD SECURITY & POVERTY REDUCTIO IndonesiaPARTICIPATORY IRRIGATION SECTOR PROJECT IndonesiaCAPACITY BUILDING AND LIVELIHOOD ENHANCEMENT OF POOR WATER USERS Indonesia

AGRIBUSINESS DEVELOPMENT PROJECT BangladeshCOMMERCIAL Agriculture NepalAGRICULTURE MARKET INFRASTRUCTURE PROJECTSECOND CROP DIVERSIFICATION PROJECT BangladeshIMPROVING SMALL FARMERS' ACCESS TO MARKET IN BIHAR AND MAHARASHTRA IndiaAGRIBUSINESS INFRASTRUCTURE DEV'T. INVESTMENT PROG-TRANCHE1 & II IndiaRAISING INCOMES OF SMALL AND MEDIUM FARMERS PROJECT NepalHIGH MOUNTAIN AGRIBUSINESS AND LIVELIHOOD IMPROVEMENT PROJECT NepalDecentralized Rural Infrastructure and Livelihood Project NepalSECOND RURAL INFRASTRUCTURE IMPROVEMENT BangladeshFARM ROADS TO SUPPORT POOR FARMERS' LIVELIHOODS BhutanPARTICIPATORY SMALL SCALE WATER RESOURCES SECTOR PROJECT Bangladesh

Agribusiness Development Assistance for Smallholders in Mindanao

Objective: The Project’s long-term objective is an improvement of the income of smallholders in Mindanao.

Funding: 8.8millionPrimary Beneficiaries : The project will benefit about 2,000 smallholders

(at least 50% will be women) by improving their access to capacity building, technical training, finance, infrastructure and other support

Project Components:1 Support for start-up agribusinesses for smallholders:This component will provide management, technical and financial support for smallholders in three provinces of Mindanao.

2 Establish an apex institution for smallholders:The grant implementation unit (GIU), will study viable options to establish an apex institution to support smallholders during and after the project.

3 Prepare feasibility studies for increasing agribusiness development for smallholders: This component will explore ways to increase the number of smallholders with access to technical, management, and financial services to improve their livelihoods from agribusinesses.

ConclusionsFocus:• Inclusiveness• Sustainability• Green agriculture infrastructureKey Constraints:• Lack of enabling environment to attract needed investments in

agriculture• Poor policy, legal, regulatory and institutional framework to

support samllholder farmers • Poor delivery and absorption capacity • Inadequate support for agribusiness development • Insufficient extension support and infrastructureResponse:• Policy/program support• Productive Infrastructure/enhanced connectivity• Climate change resilience

Thank you