ISLAMABAD, Oct 26: The Asian Development Bank has stressed the need for ensuring that Asia’s 350 million small farmers, with less than two hectares holding, have the opportunity to compete and thrive in modern food value chains.

They produce a large share of region’s staple crops although small farms occupy only 40pc of the total farm area.

In a report on ‘food security challenges in Asia’, ADB observed that agriculture is commercialising rapidly in Asia, ‘led by the private sector.

The challenge is to involve small, resource-poor farmers in this highly competitive process. The productivity growth of small farms over the past 35 years has been critical to Asia’s food security and its success in poverty reduction’.

In Asia, a successful structural transformation would see agriculture evolve from small-scale, subsistence-oriented production to small-scale, commercially-oriented farming driven by the market forces of a dynamic, urbanizing economy.

Without such a transition, there is a risk that a large share of Asia’s poor will remain mired in a rural poverty trap. If small farmers are to prosper, they must diversify and commercialise, stresses the report.

The report called for an urgent need to revitalise growth in agricultural productivity and simultaneously to address the increasing tangible impacts of climate change on agriculture. There is accumulating empirical evidence that rising average temperature, extreme heat events, rising atmospheric ozone levels, and other climate-related phenomena are already adversely affecting agricultural productivity.

To some degree, it will be possible to adapt to climate change through application of existing technologies for conservation agriculture.

More efficient use of irrigation water will also be critical, particularly in South and Central Asia.

During coming decades, the scientific challenges of adapting agriculture to climate change will be formidable, ADB report says.

Evaluation shows that investment in agricultural research has an enormous economic payoff, but it is a long-run process requiring sustained commitment from international and national research centres as well as the private sector.

At the same time, if modern marketing systems are to bear the transaction costs of dealing with small farmers, these farmers must be able to compete on the basis of quality, reliability, and efficiency.

This warrants special attention to ensure that Asia’s resource-poor farmers are not bypassed.

The public sector can facilitate but cannot lead the process, since modern agricultural value chains are almost completely driven by the private sector. However, efforts by the public sector will be required to build the necessary skills of small farmers and the supporting institutions and organisations and to reduce the transaction costs for smallholder engagement in value chains.

The ADB report says that the food price crisis has revealed the need to give greater attention to the political dimensions of food security when providing economic policy advice to Asian governments.

The challenge for policy makers is to find a reasonably efficient and politically acceptable balance between supply and price management, subsidies, safety nets, and other programmes to protect the poor without simultaneously suppressing the price incentives to farmers that encourage their supply response.

According to the report, the agricultural land base is stressed by soil erosion, growing water scarcity, and urban encroachment, and by 2030, 40pc of developing Asia is projected to face a severe water shortage.