What can agriculture experts around the world learn from the BRIC countries? Source: Alamy/Legion-Media
While developed economies have many advantages, there are areas where they can learn from the experience of developing countries, particularly the fast-growing BRIC economies.
the world population grows, the global demand for food continues to accelerate,
while food production resources dwindle. The total area of arable land is
decreasing because of urban expansion, active use of fertilizers and
pesticides. Furthermore, global food prices are volatile – Jikun Huang,
director of the Center for Chinese Agricultural Policy, admits that global food
prices tend to have a stronger influence on domestic food prices each year, so
cost-planning becomes harder for producers and consumers.
to estimates from by Ramesh Chand, director of the Indian National Center for
Agricultural Economics and Policy Research, to meet the global demand, food production
must expand at least 3 percent annually for at least the next 20 years. So far,
the world is lagging behind: From 1990 to 2007, world food output grew hardly
more than 2 percent per year. How can a further 50 percent increase be
Economist Intelligence Unit (EIU) has conducted a series of interviews with
experts and market players from Brazil, India, China and Russia within the
scope of its study “Agriculture in high-growth markets.” The document calls
these four countries the locomotives of global agribusiness.
EIU believes the BRIC economies’ successes can provide valuable lessons for
other developing (for example, African) and even developed economies. What can
agriculture experts around the world learn from the BRIC countries?
subsidies. Europe and North
America traditionally spend lavishly on subsidies to agriculture. The BRIC
economies prefer alternative incentives, creating a more competitive
entrepreneurial environment that is open to innovation, including for small
businesses. In China, after the supermarket boom of the 2000s, a state program
was adopted connecting local farmers with bigger retailers. In the early 2000s,
Russia launched a grain intervention system enabling farmers to sell grain to
the state when its price dropped below a fixed minimum. The scheme also works
the other way around – when prices rise above the maximum, the state sells
grain at the maximum price. This makes farmers relatively confident about how
much they will get for their harvest. In Brazil, the state is participating in
a weather-related rural insurance scheme against crop failures and natural
innovation. This includes
achievements in soil management and creation of new crop varieties. Developing
a new variety of any particular vegetable is not enough – you need to have it
efficiently introduced by farmers. In 2009, India launched the Soil Health
Cards program, establishing hundreds of laboratories around the country to
analyze the quality of the soil in each field and provide owners with fertilizer
recommendations to prevent degradation. For its part, Brazil has been
successful in plant breeding. Although the country previously imported apples
from Argentina, the country is now exporting them, because it has developed a
tropical-resistant breed of apples. There is a downside to such innovative
solutions, however, as many European countries reject any genetically modified
these positive developments, emerging economies have plenty of challenges to
address. EIU experts have pointed out the following fundamental problems that
must be overcome for agriculture in developing economies to continue to grow.
- Infrastructure. Rustam Mirgalimov, CEO of the
Razgulay Group, notes that the lack of infrastructure facilities drives up food
prices in Brazil and Russia. The Russian Federation requires considerable
investment in development of its rail transport systems and road network.
- Adoption of
technology. Innovation is not
always adopted in a timely fashion because of a lack of information, or poor
access to technology, or unwillingness on the part of the regulator. In China,
one-third of the labor force works in farming, which is slowing down modernization.
It is a challenge in terms of promoting mechanization and increasing labor
productivity. At the same time, India has the potential to double its
agricultural land providing two crops a year (from 36 percent to 70 percent),
but this practice is not widespread enough.
the devastating 2010 summer fires, Russia has once again built up its grain
industry to become a net exporter of grain to the world market, but the country
faces stiff challenges from countries as diverse as Brazil, the United States
and Kazakstan. In order to remain competitive, Russia must develop institutions
that can manage the sector rather than relying on the government to do so.
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