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Population growth and increasing incomes, which have in turn led to changes in diet, have given rise to one of the world’s greatest challenges – and biggest opportunities – feeding Asia.
These three factors – a fast-growing, urbanising and richer population – are combining to increase demand for food. In turn this is putting pressures on the supply of agricultural commodities: a challenge for governments, but equally an opportunity for those in a position to meet this demand.
Source: Euromonitor International from national statistics/UN
Overall spending has increased – in 1990 for example, spending on food in Asia-Pacific was broadly on a par with that of Western Europe, but today it is 84% higher in Asia-Pacific than in Western Europe.
As consumers are moving away from basic staples, this increased demand is being felt in specific areas more than others. Demand for meat, dairy and fruit for instance has been particularly strong. Consumer expenditure on meat has increased by 131% in real terms since 1990 and spending on milk, cheese and eggs by 159%. Whereas spending on bread and cereals has lagged overall increases in food spending. This has led to pressure on supplies, leading to large increases in imports in some cases.
Source: Euromonitor International from United Nations (UN), International Merchandise Trade Statistics
Note: Growth index is calculated from data in current US$
These factors, combined with the implications of industrialisation, climate change and competing demands for resources, have led to food security becoming a key issue for governments in Asia.
Governments are attempting to improve food security by increasing agricultural productivity to produce more food with fewer land, labour and water resources. Also controversially, by buying up farm land overseas. For instance the Chinese government has purchased land in Sub-Saharan Africa and also in Ukraine, but this approach is fraught with risk – as the current situation in Ukraine exemplifies. Yet these measures are not enough alone to meet demand – food imports have an important role to play.
Opportunities are persuasive for countries who are able to position themselves as stable suppliers of high-quality, traceable agricultural products. Australia is one country that has recognised this, but the government’s stated aim of becoming “Asia’s food bowl” is not without difficulties to say the least – a lack of investment in agriculture and drought being chief amongst them. Rather than feeding all of Asia’s 4.0 billion consumers, a plan to target high-income earners with niche and premium products would seem a better strategy for the region’s trade partners.