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Economic Growth, Technological Change, and Patterns of Food and Agricultural Trade in Asia

Author

Listed:
  • Hertel, Thomas

    (Center for Global Trade Analysis, Purdue University)

  • Ludena, Carlos E.

    (Economic Commission for Latin America and the Carribean)

  • Golub, Alla

    (Center for Global Trade Analysis, Purdue University)

Abstract

This paper projects global food supply and demand to the year 2025, with a particular emphasis on Asia. Technological change is found to be the critical factor in determining whether or not food prices will preserve their long-run, downward trend, as well as the likely patterns of trade and structural change. Historical and projected rates of total factor productivity (TFP) growth are decomposed into outward movement in the frontier and "catching up" to the world frontier. Overall, the baseline scenario reduces the poverty headcount ratio in People's Republic of China (PRC) by more than 80%. In the Association of Southeast Asian Nations (ASEAN) it falls by about 40%. However, in South Asia, the falling headcount ratio (17%) is insufficient to lower aggregate poverty, due to the relatively strong rise in the region's population. In the baseline projections, crop productivity in the ASEAN region declines by 0.4%/year. This reflects decades of neglect in research expenditures. In an alternative scenario, future ASEAN crop TFP is raised to the Asia-wide rate of 0.95%/year. This alternative scenario boosts production in nearly all sectors of the economy, and lowers the poverty headcount ratio by an additional 14%. This could be expected to lift more than 30 million additional people out of poverty in the ASEAN region.

Suggested Citation

  • Hertel, Thomas & Ludena, Carlos E. & Golub, Alla, 2006. "Economic Growth, Technological Change, and Patterns of Food and Agricultural Trade in Asia," ADB Economics Working Paper Series 86, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0086
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    References listed on IDEAS

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    1. Tim J. Coelli & D. S. Prasada Rao, 2005. "Total factor productivity growth in agriculture: a Malmquist index analysis of 93 countries, 1980–2000," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 115-134, January.
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    4. Channing Arndt & Thomas W. Hertel & Paul V. Preckel, 2003. "Bridging the Gap between Partial and Total Factor Productivity Measures Using Directional Distance Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 928-942.
    5. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
    6. Nin, Alejandro & Hertel, Thomas W. & Foster, Kenneth & Rae, Allan, 2004. "Productivity growth, catching-up and uncertainty in China's meat trade," Agricultural Economics, Blackwell, vol. 31(1), pages 1-16, July.
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    Cited by:

    1. Rose, Steven K. & Golub, Alla & Hertel, Thomas & Sohngen, Brent, 2012. "Relative agricultural productivity and tropical deforestation," Conference papers 332227, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    food supply; demand; technological change; poverty headcount ratio; total factor productivity;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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