OECD-FAO Agricultural Outlook 2017-2026 by OECD/FAO

Author:OECD/FAO
Language: eng
Format: epub
Tags: Agriculture and Food/Environment/Governance/Development/Urban, Rural and Regional Development/Trade
ISBN: 9789264275508
Publisher: OECD Publishing
Published: 2017-06-30T16:00:00+00:00

Box 2.1. Improvement of regional agricultural innovation systems is key to future productivity growth

Public investment in agricultural R&D is essential for sustainable agricultural productivity growth. By ensuring that farmers have access to innovations that meet their diverse and complex needs, public spending on agricultural R&D is proven to be more effective at raising sustainable agricultural productivity than other public expenditures in agriculture, such as irrigation and fertiliser subsidies. Recent findings suggest that countries in Southeast Asia have scope to improve R&D and innovation systems more broadly to enhance productivity growth and to better manage future production and food security risks (OECD, 2017b). The Agricultural Growth Enabling Index (AGEI) compares the performance of selected countries – Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam, together with a wider set of countries at a similar level of development – across the various components of the enabling environment (Figure 2.10). As such, it provides an overview of government measures and activities that potentially aid or hinder agricultural growth.

Although the performance of the ASEAN countries analysed varies significantly across the AGEI, the results reveal some common relative strengths and weaknesses. Relative strengths of the region as a whole include aspects of economy-wide policy settings – such as the broader macroeconomic environment and its structure (related to governance macro fiscal and monetary policy settings), labour market functioning and levels of human capital – and relatively abundant water resources (not shown in Figure 2.10), while common areas of relative weakness include agricultural and sustainability aspects of the enabling environment. With the exception of Malaysia, Southeast Asian countries tend to score relatively poorly with regard to public investments in agricultural R&D, land rights and access, farmer access to finance, the existence and quality of agricultural infrastructure – although Thailand also scores above average in this respect – and for the stringency and enforcement of environmental regulations (Figure 2.10). Indeed, the results suggest that, compared with other sectors, agriculture in Southeast Asian countries may actually be underprovided with public goods and other economic services.

Recent analysis by the OECD has recommended that Southeast Asian governments direct policy efforts towards additional investments and reforms in the enabling environment to enhance future sustainable productivity growth to help address food security and manage future risks facing the sector. These include the improvement of environmental governance; regulations on land, water and biodiversity resources; and investments in infrastructure and agricultural R&D. Governments should also persevere with reforms to improve regulatory and institutional frameworks that govern rural land market rights and access, and should consider opportunities to increase farmer access to credit, including for small-scale farmers.

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