Market liberalization and globalization have led to significant changes in agriculture and agri-food markets in developing countries including India, Brazil and South Africa. The food basket is changing rapidly, away from staple food grains towards high-value fresh and food commodities with increasing demand for safe and quality food. In response, the agricultural production portfolio too is changing rapidly, with a higher growth in production of high-value processed food products. The changing consumption and production patterns are being accompanied by changes in agricultural marketing systems. The traditional marketing systems dominated by ad hoc transactions are being replaced by coordinated, integrated marketing systems such as supermarkets, retail chains and contract production. Further, with unfolding of globalization a shift is taking place in agricultural exports, with increasing share of high-value and processed food products.
Though expanding market is an opportunity for farmers to switch from subsistence towards commercial/industrialized agriculture, the transition is unlikely to be smooth. Increasing demand for food safety and quality is compelling retailers and exporters to enforce grades and standards right from genetics to end users. Farmers will be exposed to more global competition; access to global technology will be more difficult than in the past because of increasing privatization of agricultural research and stringent intellectual property regime. The population in developing countries continues to grow, though at a decelerating rate. Most of this growth will occur in urban population, implying an increasing demand for land and water for non-agricultural uses.
The changing economic environment driven by both internal and external forces, suggest that the agricultural sector in developing countries is likely to come under significant adjustment pressure. In a fast changing scenario, there is an increasing concern about the likely changes in the livelihoods of farmers especially small-scale farmers who earn their livelihoods by cultivating tiny pieces of land.
In 2008, agriculture in India, Brazil and South Africa was at different stages of development. The agricultural sector contributes about 18 percent to the Gross Domestic Product (GDP) in India, 5.5% percent in Brazil and 3 percent in South Africa. Though consistent with the theory of economic development, share of agriculture in GDP has been declining in these countries, agriculture remains an economic sector from the perspective of employment especially in India. About 52 percent of the total population in India, 14 percent in Brazil and 13 percent in South Africa depends on agriculture for livehood. The per capita arable land per agricultural person is the lowest (0.28ha) in India, followed by Brazil (2.2ha) and South Africa (2.5ha). In Brazil about 50 percent farms are of less than 10ha in size (as against average farm size of 68ha) sharing about 3 percent of the land. On the other hand, in India farms of above 10 ha are rare. Over 86 percent of the farms in India are of less than 2 ha in size, controlling 45 percent of the land. Also, there is considerable difference in per capita income across these countries. Per capita income in South Africa is about three times more and in Brazil about two times more than in India. The head-count poverty is about 22 percent of the population in India and Brazil, and around 40 percent in South Africa.
Despite its declining importance in economy, agricultural sectors performance has been satisfactory in India and Brazil, where it grew at an annual rate of 3 and 4.1 percent respectively during 1991-2004. In South Africa the growth was 2.7 percent. Growth in agricultural sector in Brazil seems to be export-led. Brazils share in global agricultural trade has increased from 2.3 percent in 1991 to 4.8 percent in 2005. India has also consolidated its position by increasing its export share form 0.9 to 1.2 percent during this period, while the share of South Africa has remained almost unchanged at 0.7 percent. As such agricultural exports comprise 32 percent of the merchandise exports in Brazil, 12 percent in India and 8 percent in South Africa.
2. Potential Areas for future Agriculture Cooperation in IBSA
This backdrop highlights the importance of agricultural co-operation to reduce poverty within IBSA. There are significant synergies between these countries for agricultural co-operation as they have developed substantial capabilities in agricultural sector. IBSA countries can reinforce their strength in agricultural sector by synergizing their complementarities. To exactly pinpoint the areas of future co-operation among IBSA countries, a detail empirical study would be required. The study can highlight the synergies, complementarities and comparative advantages of each country. It can also highlight the common concerns for agricultural sector at global level especially trade and food safety aspects. However, the future of agricultural co-operation in some of the important areas has been tentatively indicated in the following areas.
2.1 Food Processing: There is a tremendous potential for cooperation in the food processing sector. Brazil has distinct mileage in the food processing sector and known for its capabilities in the food processing. Brazil developed a wide variety of value added products from root crops like cassava and other horticultural crops. South Africa also has a highly developed agribusiness and food processing experience and expertise in a wide range of sectors. IBSA members need to share these capabilities.
2.2 Food Safety Measures: IBSA countries need to share their expertise, capabilities and experiences in complying with Sanitary and Phyto-sanitary (SPS) measures applicable to food products particularly in the developed country market. They could from a common strategy for compliance with SPS internationally agreed measures for greater access to global food markets. Joint strategies should be developed to resist the often imposed import restrictions on export from IBSA on the ground of fictitious SPS issues.
2.3 Further, India, Brazil and South Africa have their own import regulatory measures based on standard and conformity assessment procedures including the health and safety. Mutual recognition arrangements for standards and conformity assessment procedures between these countries may facilitate reduction of non-tariff barriers to trade. This calls for assessment of the present situation with respect to the compatibility of each others standards and conformity assessment activities. The export inspection bodies need to work together. A study on the possibility of harmonization and mutual recognition of conformity assessment procedures may be undertaken.
2.4 Promoting Joint Agricultural R&D: India, Brazil and South Africa have developed significant technological capabilities in different fields of agricultural research. Joint research on products of common interest and exchange of their genetic resources could be attempted. IBSA co-operation should facilitate in taking these capabilities to new heights for the benefit of the farming community in these countries. New issues are emerging (for instance climate change, emergence of GMO crops, increasing role of biotechnology and nano-technology), which may have far reaching implications in the agricultural sector. A common strategy for tackling such issues may be developed. An IBSA fund for promoting joint Agricultural R&D could be set up to initiate such activities. For smooth flow of agricultural technology between IBSA, an Agricultural Technology Transfer network could be set up, which can pool information on the availability of agricultural technologies in the region.
2.5 ICTs for agricultural development: ICTs are becoming important for transmission of agricultural technologies to the farmers field. India, Brazil and South Africa witnessed different experiences and developed different capabilities in this area. For harnessing the full potential of ICTs for sustainable agricultural development, a forum of different stakeholders like private sector, civil society organizations and government for sharing experiences/expertise and strengthening capabilities in this area should be created..
2.6 Capacity building and exchange of human resources: The strategies for enhancing human resource capabilities among these countries should also get priority attention. These countries have developed capabilities in different fields of agriculture. The exchange of their expertise and experiences will help in sustainable agricultural development in these countries. In this context specific need- based training programs, organization of seminars/workshops on topical issues would be of great help in strengthening the human resource development for agriculture sector.
The above listed areas for future agricultural cooperation are only indicative and actual areas along with possible mechanisms would emerge from the proposed study. In the light of the importance of the agriculture sector and the potential for agricultural cooperation in different areas among these countries, the study is proposed with the following objectives.
3.1 Examine the status, past trends and the factors underlying growth of agriculture including livestock in IBSA.
3.2 Map possible futures for agriculture in IBSA through scenario analysis in terms of its likely outcomes for poverty, equity, trade and sustainability.
3.3 Draw implications of the possible agricultural futures for agricultural research and development, domestic market and trade policies, institutional developments, etc.
3.4 Identify the areas for mutual cooperation for sustainable agricultural development in IBSA countries.
Strategic intervention for improving efficiency, equity and sustainability in agricultural production systems needs a holistic approach considering agriculture as a portfolio rather than its sub-components or activities independently. This approach coupled with some assessment of the major driving forces and anticipated changes, e.g. increasing energy demand and water scarcity, and underlying uncertainties like climate change and impact of international trade and other agreements will determine the likely shape of agriculture in future. These forces can be captured through scenario planning analysis which will provide broad futures for agriculture over the next 25 years or so. What will be the shape of agriculture and how the developments in the countries like India, Brazil and South Africa may influence each others agriculture and thereby economic development?
The scenarios are not intended to predict future, but to vision the possible shapes of agriculture in the long-run. The scenarios are based on past drivers of agricultural growth, economic and social change and on subjective assessment on the emerging social, economic, institutional and technological trends and uncertain events like climate change. An exploration in the future thus can contribute towards planning for the future at present.
5. Expected Outputs:
5.1 Agricultural sectors in IBSA better understood.
5.2 Agricultural scenarios for 2030 in IBSA countries and implications for R&D.
5.3 Areas for strategic policy interventions for sustainable agricultural development. 5.4 Areas for cooperation among IBSA countries for agricultural development.