This document summarizes key points about food market transformation and food security in Asia, with a focus on China and India. It discusses the four "legs" of food security: availability, access, utilization, and stability. It also examines the rapid urbanization, economic growth, and integration occurring in Asian countries through foreign direct investment and trade. Key trends include the rising importance of non-rice foods, food processing, supermarkets, and intra-Asian trade. Data on GDP growth, poverty rates, rice yields, and more are presented to compare food security indicators in China and India. The challenges of feeding the growing populations in these "Dragon and Elephant" economies are also addressed.

1. Food Market Transformation and Food
Security in Asia: Emerging Trade and
Value Chain Linkages with Special
Reference to Dragon and Elephant
Kevin Chen
International Food Policy Research Institute

2. Food Security - a dinner table with 4
inter-dependent legs
a) Leg 1 is “availability” from raising farm
production/productivity
b) Leg 2 is “access” from raising household
incomes to buy food
c) Leg 3 is “access” to food by raising efficiency
of market supply chains to deliver food to
consumers
d) Leg 4 is raising “utility” of food by raising
food safety/quality/nutrition
Source: Reardon and Chen 2011

3. Food Security - a dinner with two
important courses
a) Course 1 – Rice
• About 50% of consumer
calories
• Only about 10% of
consumer spending on
food
• Rice/Agriculture (1980-
2008): East Asia: 19%8%;
South Asia: 20%  15%;
Southeast Asia: 40% 
32%
 Per capita rice
consumption growth
negative or trending
negative
b) Course 2 - Food-beyond-
rice such as vegetables,
meat, and fish
• About 50% of consumer
calories
• About 90% of their protein
& vitamins
• About 92% of agriculture in
East Asia, 85% in South Asia,
and 68% in Southeast Asia.
• About 4 times more
income/ha to farmers than
rice
Source: Reardon and Chen 2011

4. Rapid Transformation on Asian
Agri-Food Sectors: Driving Forces
• Rapid economic growth
• Increasing urbanization
• New Technologies
• Accelerated integration into the
world market

5. Urban Population in ASEAN 2009-2050
Urban population(thousand) Percentage urban
country 2009 2050 2009 2050
Brunei 301 573 75.2 87.2
Cambodia 2,934 10,430 19.8 43.8
Indonesia 101182 190,007 44.0 65.9
Lao PDR. 2,024 7,310 32.0 68.0
Malaysia 19,696 34,846 71.3 87.9
Myanmar 16,495 39,841 33.0 62.9
Philippines 44,784 101,371 48.7 69.4
Singapore 4,737 5,221 100.0 100.0
Thailand 22,761 43, 984 33.6 60.0
Viet Nam 26 ,204 65 ,867 29.8 59.0
China 620,480 1,037,695 46.1 73.2
Japan 84,731 81,403 66.6 80.1
Republic of Korea 39,948 40,037 82.7 90.8
Brazil 166 ,44 204,464 86.1 93.6
Source: WUP 2009

6. Extremely Rapid Urbanization
• 50% in urban areas by 2011, rising fast
• South Korea did in 2 decades (1970-1990)
what US did in 9 decades
• 75% of the ASEAN food economy in urban
areas that market is growing 5-7 times faster
than OECD food markets
 big opportunity for income growth (thus food
security from market access) for farmers

7. Rising Importance of Post-farmgate
Segments of Agrifood Supply Chain
• Post-farmgate have developed to become 50-80% of
the formation of the food price. Yet the debate
focuses mainly on farm productivity.
• In Asia, wholesale/logistics, processing and food
retail have VERY quickly transformed in the past 10-
20 years – the fastest in the world, in history
 increases in efficiency of wholesale/logistics,
processing, and retail would have as much impact
on food security

8. Food Processing and Distribution
• Huge investment by domestic and foreign, following FDI
liberalization in 1990s/2000s.
– Example: Thailand’s CP creates largest shrimp
farm/processing in world in Indonesia
• “Supermarket revolution” in ASEAN & China, also
starting India
– For just top 47 chains in China, 13 billion USD in 2001,
92 billion USD in 2009
• Rapid concentration & multi-nationalization of food
processing and retail
– integration of the Asian food economy

9. FDI Inflows - Asia
Source: UNCTAD
• In 2010, FDI inflows to
South, East and South-East
Asia rose 24 percent, to $300
billion
• In 2010, FDI to East Asia
rose to $188 billion, due to
growing inflows to Hong Kong
(32%) and mainland China
(11%)

10. FDI Outflows - Asia
• FDI outflows from South, East
and South East Asia rose by 20
percent to about $230 billion in
2010, driven by increased outflows
from China, Hong Kong, Malaysia,
etc.
• Hong Kong and China are the
two largest FDI outflows sources -
increased by more than $10 billion
each and reached historic highs of
$76 billion and $68 billion,
respectively.
Source: UNCTAD

11. Regional Distribution of China’s ODI (%)
Year 2003 2004 2005 2006 2007 2008 2009
Asia 53 54.57 35.68 43.46 62.60 77.89 71.48
Africa 3 5.77 3.19 2.95 5.94 9.82 2.55
EU 5 3.11 4.12 3.39 5.81 1.57 5.93
Latin
America
36 32.06 52.74 48.03 18.50 6.58 12.96
North
America
2 2.30 2.62 1.46 4.25 0.65 2.69
Pacific 1 2.19 1.65 0.72 2.91 3.49 4.39
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: MOFCOM 2011

12. Sectoral Distribution of China’s ODI (%)
Sector Year 2003 2004 2005 2006 2007 2008 2009
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Agriculture 2.850 5.250 0.859 0.874 1.025 0.307 0.606
Mining 48.295 32.743 13.663 40.349 15.328 10.416 23.604
Manufacturing 21.860 13.742 18.599 4.284 8.023 3.159 3.964
Energy 0.769 1.428 0.062 0.561 0.571 2.349 0.828

13. FDI in China and India
Data source: World Bank
0
1
2
3
4
5
6
7
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
%
FDI inflow (% of GDP)
China
India
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
%
FDI outflow (% of GDP)
China
India

14. Food Trade
• Only about 5% of the food economy of ASEAN is
traded, similar or less in South Asia and China
• Trade is only 10-20% as important as the
modernizing food market inside ASEAN urban
areas
• But the fastest growth (and the future) is INTRA-
ASIAN trade and competition
Big opportunity, but also competition
i.e. 30% of vegetables and 70% of fruit in Indonesian
supermarkets from Thailand and China

15. TRADE - China and Asia
Agri-food exports in China, 2010 Agri-food imports in China, 2010
Asia
60%
Africa
4%
Europe
18%
South
America
3%
North
America
13%
Australia
2%
Asia
23%
Africa
2%
Europe
9%
South
America
27%
North
America
30%
Australia
9%
other
0%
Source: monthly statistical report
for China's agricultural trade
•Asia is the main agri-food export ing region for China;
the export value amounts to $29 billion in 2010
•Asia is also one of the main agri-food importing sources;
the imports value is $16 billion in 2010.

16. TRADE - China and Asia
China: Top ten agri-food
importing countries in 2009
Rank Partner
Value
[1000 USD]
1
United States of
America
18,490,823
2 Brazil 10,536,133
3 Thailand 4,280,160
4 Malaysia 4,058,506
5 Argentina 3,618,632
6 Australia 3,453,585
7 Indonesia 3,412,152
8 Canada 3,055,984
9 France 1,942,384
10 New Zealand 1,773,926
China: Top ten agri-food
exporting countries in 2009
Rank Partner
Value [1000
USD]
1 Japan 5,366,526
2
United States of
America
2,949,603
3 Viet Nam 1,892,698
4 Republic of Korea 1,822,761
5 Malaysia 1,043,889
6 Germany 1,013,488
7 Indonesia 954,919
8 Russian Federation 826,445
9 Netherlands 780,702
10 Thailand 772,803
Source: FAO

17. TRADE - India & Asia
2
4
6
8
10
12
14
16
18
20
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
%
India's Merchandise trade to developing economies in East Asia & Pacific (%
of total merchandise exports/imports)
export
import
Data source: World Bank

18. TRADE - India & Asia
India: Top ten agri-food importing
countries in 2009
Partner
Value [1000
USD]
1 Indonesia 3,752,373
2 Brazil 1,208,171
3 Malaysia 907,158
4 Myanmar 864,335
5
United States
of America
756,124
6 Canada 582,098
7 Argentina 573,649
8 China 491,071
9 Ukraine 425,897
10 Australia 395,366
India: Top ten agri-food exporting
countries in 2009
Partner
Value [1000
USD]
1 China 1,684,585
2
United Arab
Emirates
1,401,087
3 Saudi Arabia 1,044,091
4 Viet Nam 1,002,577
5
United States of
America
953,821
6 Bangladesh 862,814
7 Malaysia 644,004
8
Iran (Islamic
Republic of)
578,978
9 Pakistan 473,014
10 Indonesia 402,229

19. China and India: Some Facts on Food Security
Source: Gulati, Chen, and Shreedhar (2010)
Indicator Year China India
Economic Statistics
Ag, value added as % of GDP 2008 11.3 17.4
Real GDP Growth (%) 2004-08 10.8 8.5
Real GDPA Growth (%) 2004-08 5.2 3.4
Merchandise Trade as a % of GDP 2008 59.2 40.6
For-Ex Reserves (USD billion, current) 2009 2,416 265
Agricultural & Resource Statistics
% Share of Arable Land to world 2007 10 11.2
Average Holding Size (ha) 2002/03 0.5 1.06
Annual Freshwater Withdrawals for Ag. (% of total) 2007 67.7 86.5
% Share of Renewable Internal Freshwater
Resources flow to world 2007 6.5 2.9
Fertilizer Consumption (kg/ha of arable land) 2007 331.1 142.3
Demographic & Social
Population (billions) 2008 (2030) 1.3 (1.5) 1.1 (1.6)
% Share of world population 2008 19.9 17.5
International Poverty rate (<1.25 USD/day, PPP) 2004/05 15.9 41.6
% Share of World's Poor (Int.) 2004/05 15.1 33.1
National Poverty Rate 2004/05 2.8 27.5
Rural Poverty Rate (National) 2004/05 2.5 28.3
% of Stunted Children under 5 years C: 2002, I: 2006 21.8 47.9

20. GDP Growth Rates in China and India
-4
-2
0
2
4
6
8
10
12
14
16
%
GDP growth rate (annual %)
China
India
World

21. Rice Yields in China & India & Share of Hybrid rice in
China’s rice area
Source: Gulati, Chen, and Shreedhar 2010 & Li, Xin & Yuan (2009)

22. Proportion and Number of People Living below $1.25
a day in Emerging Economies
0
20
40
60
80
100
%
China India Brazil
835 million
420 million
21 million
456 million
15 million
208 million
Source: Fan (2010)

23. Issue and Challenge
• The future of China, India, Asia and the World
economy: Fierce Competition or shared
growth?
• Accelerated growth in China and India may
create opportunities for some and threaten
others and the outcomes may differ
depending on the reform on the way
• Opportunity for mutual learning

24. Who will Feed the D&E in the
Future?
• Will the D&E able to feed themselves in
2030 or 2050 in the face of rising
population, rapid urbanization and
limited land and water resources? In the
face of Climate change?
• Will Brazil be in a position to feed the
D&E? Will Africa be?

25. The approach of Indian and China is as
inexorable as ever – they are
intertwining with the West quietly and
quickly. The rest of the world cannot
avoid the changes they will bring. The
only thing to do is face them, and
adjust.
- Robyn Meredith in 2007