SOUTHEAST Asian countries like the Philippines where demand for organic food products spiked in recent months could become hotspots for agricultural investments, according to the Asian Development Bank (ADB).
The ADB report said the pandemic highlighted the importance of healthy food and a healthy lifestyle. The demand for these commodities increased in Indonesia, the Philippines, and the PRC.
However, the theme chapter of the Asian Development Outlook Update 2021 pointed out that obtaining organic certification and meeting regulations remain “complex and expensive” for farmers.
“Organic agriculture was expanding in developing Asia before
the pandemic. [However] the report discusses issues related to certification and regulations. It is [still] unclear how the Covid-19 pandemic will affect the production and
demand for organic products,” Takashi Yamano, principal economist at ADB’s Economic Research and Regional Cooperation Department told BusinessMirror via e-mail.
Yamano said the lockdowns and mobility restrictions disrupted supply chains and markets, prompting farmers to switch from perishable to other storable crops.
He said this has led to an increase in the prices of organic products. However, Yamano said, demand kept rising in places like the United States and Asian cities.
“These developments on both the supply and demand side suggest the
possibility that the pandemic could mark a ‘turning point’ for the industry,” Yamano added, while acknowledging that “the evidence so far is anecdotal, and it warrants further study.”
Organic certification, noted the ADB report, requires annual inspections and monitoring that are often difficult and costly.
Obtaining an international certification is even more expensive, making it uneconomical for small and marginal farmers.
Citing data from the Food and Agriculture Organization (FAO), ADB said only 54 percent of organic agriculture lands in developing Asia have been certified.
Further, other studies estimated that as of 2020, only 72 economies globally had fully implemented organic regulations and only 10 of them were located in Asia.
“Lack of support in terms of organic product distribution and marketing systems makes it even harder for farmers to meet certification requirements and standards,” the report also stated.
ADB said daily energy consumption per capita in the region is expected to increase from 2,612 kilocalories in 2012 to 2,844 by 2030.
Demand for food in Asia has shifted away from basic staples toward more resource-intensive animal-based products. Asians are also the biggest consumers of fish per capita in the world.
With this, ADB said, Asia’s agriculture sector must be productive enough to meet these increases and shifts in demand.