Rural transformation in South Asia

The 2019 Global Food Policy Report (GFPR), released by the International Food Policy Research Institute (IFPRI), asserts that 2018 was an unpredictable and dismal year of food and nutrition, due to events and trends impacting global political stability and international development. One of its areas of analysis is the South Asian region.
 
The South Asian region continued to have the fastest economic growth in 2018, albeit with disparities across countries. Thus, economic growth exceeded 7% in in Bangladesh, India, the Maldivesand Nepal, reached 5.8% in Pakistan and only 2.6% in Afghanistan. The primary factors of growth included domestic consumption and limited exports or investments.
 
Structure of South Asian economies
 
Showing dramatic change, these have been marked by a sharp decline in the share of the agricultural sector, which, on an average, now accounts for less than 16% of the regional GDP in South Asia. This has not been accompanied by a commensurate decline in the labour force involved in agriculture. The share of agriculture in employment in South Asia is about 43%. Growth of the rural non-farm sector is also accelerating, as it now provides a sizeable share of rural employment and income, primarily in the form of services. It generates about 60% of rural income in India and Nepal.
 
Demographic transition
 
The demographic transition in South Asia has been slow, despite an acceleration in urbanisation. The region remains predominantly rural, with 67% of the population living in rural areas. In these areas, literacy rates remain low, despite a decline in rural poverty. Only one-fifth of the South Asian rural population remains poor.
 
Malnutrition scenario
 
The issue of malnutrition is an emerging problem demanding multi-sectoral action. Even though countries like Nepal and Bangladesh have made significant progress in reducing malnutrition, South Asia remains the largest contributor to malnutrition globally. The region is subject to multiple burdens that are increasing rapidly. These include inadequate dietary energy and protein, micronutrient deficiencies, and, more recently obesity. These can exist within the same household or the same individual as well.

• In South Asia, more than one-third children under five years of age i.e. about 60 million are stunted, accounting for 35% of global stunting rates, which are also higher in rural areas
• Over 5 million children are overweight, accounting for 14% of the world’s obese and overweight children

Impact of migration and remittances
 
According to the report, this has led to increase in employment, economic growth and development in the countries involved. This is because in 2018, the region accounted for 17% of the international migration (over 39 million people) and received US$132 billion in remittances, making it the second highest worldwide, after East Asia and the Pacific.
 
The welfare benefits are sizable for the countries of origin as remittances reduce poverty and stimulate economic activity. For example, in Nepal, this has led to a reduction in poverty between 33-50%. India receives the largest remittances (US $80 billion in 2018), accounting for 2.8% of the GDP.
 
Challenges posed by changing consumption patterns
 
The staple crops in South Asia are rice and wheat, as they account for about two-thirds of total dietary consumption. But, dietary changes in the past few decades have been drastic and these are most evident across rural areas. The consumption of cereals is being outstripped by that of animal-sourced foods, vegetables, fruits and processed foods. Moreover, the pressures to expand food production to meet increasing demand are weighing down on natural resources (land, water etc.).
 
This has resulted in agricultural expansion and intensification, causing land degradation, deterioration in the soil quality, biodiversity loss and damage to the region’s capacity to meet demands related to food in the future. Also, while rural people in the region have benefitted from the growing use of groundwater, the fact remains that South Asia has the world’s lowest per capita renewable freshwater resources. Particularly in India, the aquifers are depleting, the water table is subsiding and the water quality is deteriorating.
 
Within this context, the changing dynamics of the consumption patterns is being driven by urbanisation, demographic transitions, increasing incomes and growing integration of food supply chains and systems. According to the report, these offer new opportunities for entrepreneurship and employment in rural areas. The concerns related to climate change and sustainability also offer opportunities for the rural communities to generate benefits through the improved management of natural resources.
 
In conclusion
 
The state of rural transformation in South Asia is at a crossroads. Many governments have bolstered their commit towards the provision of basic services in rural areas and revitalizing the rural economies. While the rural sector has been transforming gradually, more than 43% of the employment is still provided by agricultural livelihoods in the informal sector. Moreover, in 2019, the lack of integration in the region and leveraging of cultural affinities and geographical proximity, amidst escalating trade tensions and tighter global liquidity will possibly impede the prospects for growth in South Asia.
 
However, the predominance of smallholder farming communities, their increasing political voice, and national commitments to the Sustainable Development Goals are prompting governments in the region to emphasize inclusive rural development strategies. Thus, the prospects for rural development are encouraging in 2019.
 
The report outlines the possibility of the 2019 General Elections in India leading to a boost in the focus of action across rural areas. The Indian policy decisions often have significant spillover effects on the policy developments of neighbouring countries. For rural transformation in South Asia to be inclusive, it is essential to ensure continued growth in agricultural productivity and strengthening of the agriculture-based rural nonfarm economy.
 
India Outbound
May 1, 2019

 
 

source https://indiaoutbound.org/rural-transformation-in-south-asia/