Agriculture in East Asia

Agricultural Output Growth, 1970-93

Data and Source

Agricultural output and agricultural productivity have grown relatively rapidly in the less developed high performance East Asian economies. Between 1970 and 1993, agricultural output in Indonesia, Thailand, and Malaysia grew around 4% per year. The increase in agricultural output expanded the domestic food supply. In 1988-90 per capita food production was 127 in East Asia compared to a benchmark of 100 for 1979-80. Comparable figures over the same period are 116 for South Asia, 106 for Latin America and 102 for Europe.

Declining Agricultural Share in GDP

Data and Source

Economic growth generally causes a decline in agriculture's share in total output. This decline was particularly pronounced in East Asia. From 1970 to 1991 the share of agriculture output in GDP fell from 35% to 19% in East Asia. For comparison, the agricultural share of GDP declined from 44% to 31% in South Asia, 13% to 9% in Latin America and 34% to 31% in Sub-Saharan Africa. In rapidly growth economies of Indonesia, Thailand, and Malaysia, by 1991 the share of agricultural output in GDP was less than half its 1970 level.

Policy in the high performance East Asian economies has been more favorable to agriculture than policy in many developing economies. Many developing countries have attempted to finance industrial growth via surpluses siphoned off from the agricultural sector. Policies measures that squeeze agriculture include food price controls, export taxes, industrial protection policies, real exchange rate overvaluation, and preferential allocation of public investment to industry. Since the 1970s tariff and tax policy in Korea has actually favored agriculture relative to industry, and by the 1980s tariff and tax policy in Malaysia and Thailand was much more favorable to agriculture than policy in Pakistan, the Phillippines, and Sri Lanka. East Asian governments have also actively supported agricultural research and extension services. They have also undertaken substantial rural public investments in irrigation, roads, bridges, electricity, water, and sanitation.

Economic Growth in East Asia