Agriculture, Food, and Food Security - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 140

T Trade liberalization greatly facilitates the widespread
establishment of global supermarket chains that speed
up the diffusion of homogeneous foods and of a global
diet in Asian markets. In Thailand, international retailers
such as 7-Eleven, Royal Ahold, T Tesco, Makro, and Sains-
bury have been establishing supermarkets to serve the
growing domestic market for fresh fruit and vegetables.
Small farmers are being integrated into the fresh food
supply chains via networks of contract farmers and buy-
ers who are preferred suppliers, and via informal farmers'
associations.
Similar cases of agricultural diversification and the
emergence of contracts between farmers and large food
outlets can also be found in India. For example, compa-
nies such as McCain (major supplier to McDonalds) ne-
gotiate with small farmers directly for the provision of
potatoes. In these types of agreements, the large food
outlet undertakes the required investment necessary to
produce the specific product.
Vertically integrated supply chains are also focusing
on the export market. For example, a vertically inte-
grated vegetable export supply system has been formed
in China in response to Japanese demand. However,
since Chinese production standards are low , the Japanese
trading companies typically provide the seeds, spores,
and techniques of production and packing. Also, they
monitor the harvest for the Japanese retailers. The in-
creasing demand for better quality and safe products is
leading to the creation of influential vegetable supply
companies that stress quality and safety . As a result, there
is a growing convergence between export standards and
domestic retail product standards.
Small-holder production systems in Asia are under
pressure to commercialize and diversify out of their tra-
ditional niche in cereal crop production. Rice, and rice-
wheat (rice in summer/wheat in winter) systems account
for about 80 percent of the farming population and
50 percent of the total agricultural area in Asia. These
cropping systems witnessed rapid productivity growth
during the Green Revolution and continue with high
yields in the post-Green Revolution period. Y et, the pres-
sure to diversify is the greatest in these areas because of
low returns in grains relative to higher value alternatives
such as vegetables or flowers. In regions that support two
rice crops a year, such as southern China, many farmers
are switching to one of rice (wet season) and the other of
vegetables (dry season).
Commercialization and diversification demands are
leading to a dramatic transformation of the rice mono-
culture systems of Asia. Some of the resulting changes

income. An individual street food vendor can earn
twice the minimum wage for work in Indonesia and
three times the pay for agricultural labor in
Bangladesh. Further, street food offers sustenance to
many who cannot afford more expensive food, espe-
cially children. Well-fed people have more energy and
perform better whether at school or on a job. Fortu-
nately , governments are encouraging NGOs and other
institutions to support mechanisms for the urban
poor and explore the different roles and expectations
of those men and women involved with street food.

Changing Food-Supply Systems

Asia is experiencing a dramatic transformation in its
food-supply systems in response to rapid urbanization,
diet diversification, and the liberalization of direct invest-
ment in the food sector. Feeding the ever-growing urban
masses is one of the most important food policy chal-
lenges in the region today and in the foreseeable future.
There are three specific dimensions to this challenge:
Growing urban populations require increases in
food supply in addition to the establishment of
large suppliers in order to manage the increased
level of activity in the market.
Asia' s most populous cities and towns tend to be
coastally located. Importing food to these sites from
external sources may be more practical and less
costly than transporting it from rural hinterlands.
Since preference for high quality is growing in im-
portance, non-domestic foods might be more desir-
able. The probability is that both internal and exter-
nal supplies will be in demand.
The rapid diversification (and Westernization) of
the urban diet cannot be met by the traditional food sup-
ply chain. It requires modernization of the food retail
sector and vertical integration of the food supply chain.
Vertical integration exists when one company or con-
glomerate controls all stages of a process from the land
on which to grow the crop; the seeds and required chem-
icals; the necessary equipment such as machinery or irri-
gation systems; the processing and packaging plant along
with its equipment and supplies; the marketing and ad-
vertising media and perhaps even the commercial outlets
that sell the product. Such organizational changes in the
urban food supply drive the process of commercializa-
tion and diversification of domestic production systems.