AJAD Volume 3 Issue No. 1&2 December 2006

This paper conducts an empirical investigation of the rural credit market in Myanmar to help guide policy formulation on the microfinance operations in the country. Specifically, it looks into the determinants of credit demand and of rationing loans at the household level, and identifies the similarities, differences and relationships among the various segments of the rural credit market. Data are primarily gathered through a survey covering a total of 301 households among 7 villages in the Dry Zone. The results reveal the characteristics distinguishing the different types of credit sources, implying that the formal and semiformal credit are targeted towards different sets of clientele. The findings also suggest that promoting the semiformal credit sources likewise strengthens the development of formal credit sources.

Microfinance has become an important tool for poverty reduction in many parts of the world, including Asia and the Pacific region. Microfinance institutions (MFIs) target the poor through innovative approaches which include group lending, progressive lending, regular repayment schedules, and collateral substitutes. This paper reviews the experiences of microfinance institutions in different parts of the world in the areas of sustainability and governance, and draws lessons for Southeast Asian countries.

In microfinance, sustainability can relate to organisational, managerial and financial aspects but the issue of financial sustainability of MFIs has attracted more attention in mainstream analysis. In the region, the South East Asian MFIs fare well in terms of financial sustainability as they earn positive returns on assets and equity, covering much higher cost levels by earning more from their loan portfolios. In contrast, South Asian MFIs have negative returns on assets and equity, despite having one of the lowest expense structures in the world.

MFIs face an apparent tension between achieving financial sustainability and contributing to poverty reduction. Exclusion of the poorest from microfinance schemes is a well-known challenge. While some of the poorest fail to participate in such schemes either because of their lack of awareness or inability to overcome their social exclusion, many more are excluded because of arbitrariness in the selection of beneficiaries and inadequate flexibility in the design of the scheme.

If MFIs have to serve the poor in remote rural areas, it may be difficult for them to achieve financial self-sufficiency. In such a case, some level of subsidy may be justified if they can be shown to be more effective than alternative strategies to reduce poverty. Nonetheless, these MFIs should strive to achieve financial sustainability by reducing operational costs and charging market rates of interest. The higher the degree of self-sufficiency, the greater the extent to which an MFI can leverage donor and government funds to expand outreach.

This paper presents the findings of a firm-level case study examining the role of multinational enterprises (MNEs) in processed food exports from Thailand. The discussion covers both FDI (foreign direct investment) and non-FDI channels of MNE involvement in the export of four major items, namely, canned pineapple, canned tuna, processed chicken, and processed shrimp. The findings suggest that MNEs play a vital role in the expansion of processed food exports from Thailand. MNE involvement begins with the establishment of joint ventures with Thai firms (FDI channel). Then, other local firms engage in export-oriented production and enhance their competitiveness through technology spillover. As the industry gains maturity, links with MNE buyers begin to play a far more important role than the FDI channel. The highly liberal trade and investment policy regime of Thailand, as well as the absorptive capability of local firms and the presence of the Thai MNE, CP group, are important elements of the enabling environment that allows these Thai exporting firms to gain maximum benefits from MNE involvement. The Thai experience demonstrates that the conventional approach of focusing on FDI as the sole link between MNEs and domestic manufacturing tends to overlook the significant role of MNEs in the export performance of the host countries' diffused-technology industries such as food processing.

Current perceptions about agriculture-based systems are rooted in an assessment of their negative and positive externalities, as well as their tremendous influence in the cultural and religious values of communities. Among the emerging concerns is how to integrate this view of the multi-faceted nature and function of agroecosystems, not only in incentive systems but also in national, regional, and global policy guidelines. This paper documents available evidence which shows that the concept of multifunctionality can be used as the basis of agricultural policymaking.

The concept of multifunctionality is differentiated and at the same time associated with the popular concept of sustainability. It is pointed out that sustainability finds expression in a multifunctional agroecosystem; that is, multifunctionality is a sufficient condition for sustainable agricultural system but not a necessary condition. Various examples presented in this paper indicate the need to look at the multifunctionality of agricultural systems in a landscape vis-à-vis its historical, spatial and time dimensions of its biodiversity element.

The review of field studies provides evidence that ecological processes drive the relationships between the various roles of agroecosystems. The cases cited consist of: a paddy rice agricultural system in Yunnan province in China which has resulted from the interspecific enhancement of agrobiodiversity; a sustainable rice production system among the Bontocs in Northern Luzon, Philippines, where the interaction between the household and the rice agroecosystem has led to improved nutrient recycling; and the Phu Wiang watershed in Northeast Thailand where the lowland agroecosystem productivity is maintained at the expense of the uplands and upper forest areas.

The final section concludes with a list of questions that need to be addressed before an effective agri-environmental policy can be implemented within the context of developing countries. These questions hark back to the basic premise that implementing agri-environmental policies rooted within the concepts of multifunctionality involves technology or science, ecology, economics, and institutions. The multifunctional role of agroecosystems, which is just beginning to be slowly unraveled, will become an important area of research, and should prove valuable toward achieving national development as well as fulfilling certain Millennium Development Goals.

In the last two decades, Asia has become the world's fastest economically growing area. Countries in Southeast Asia are growing at an increasing rate. For instance, the average annual income is increasing from 4% to 8%, population from 2% to 3%, urbanization from 4% to 6%, and meat consumption from 4% to 8%. In this region, pork is the most important source of meat, accounting for approximately 58% of total meat output. However, pig production in the region is small in scale with more than 70% being smallholders. Regional and national goals to reach the international market threaten traditional pig production due to its perceived low standard of output. Alongside, natural resources are under high pressure from heavy pollution emanating from pig production. Industrialization has caused the migration of the pig population from rural areas to the outskirts of big cities like Manila, Ho Chi Minh, and Siemriep, or Phnom Penh. Industrialization has also resulted in air, soil, and water pollution in these cities. In addition, the region shares a huge area of the South China Sea and by intensive pig keeping, surplus nutrients and minerals flow into that sea.

This paper aims to: 1) provide an overview of the current pig production situation in certain selected ASEAN countries, namely Cambodia, Laos, Philippines, and Vietnam; 2) analyze how these changes may occur over the coming years and how it will affect the livelihoods of different types of pig farmers (large, medium, small); 3) identify some of the constraints that will need to be overcome (e.g., environmental impact, disease challenge, breed loss, effect of globalization, marginalization of small farmers, climate change issues); and 4) to pinpoint certain guidelines for drawing up a regional strategy on pig production.

Significant developments in the scientific front and international policy arena have affected the use and exchange of genetic resources, and the management of intellectual property. These developments are now reshaping public agricultural research and development (R&D) in developing countries, especially in the access, generation, and dissemination of research outputs. Three of the most important international treaties and conventions that are important in this context are the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO-TRIPS), the Convention on Biological Diversity (CBD), and the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA). Already, majority of the developing countries are signatories to these treaties and could be expected to exploit them for their own advantage. On the other hand, non-member countries, despite their non-participation, must find alternative scenarios to be able to effectively address issues concerning IPR, agricultural biotechnology, and plant genetic resources.

As the main source of innovation in public agricultural research, national agricultural research extension systems (NARES) need to be enlightened on the various aspects of these treaties and agreements and the impact on their respective research and extension activities. It may be necessary, for example, to tailor capacity-building initiatives on the IPR, agbiotech, and PGR aspects of international treaties to specific countries or regions since policy and enforcement mechanisms among NARES vary according to the availability of human and logistical resources, research priorities, and technology transfer objectives.

This paper takes a look at the critical aspects of TRIPS, CBD, ITPGRFA, and other agreements, and studies their implications on public agbiotech R&D among NARS; compares initiatives by several Asian developing countries to comply with the provisions of these treaties and agreements; highlights PhilRice's initiatives to help its national government comply with its obligations under these treaties; and assesses and recommends a plan of action on the capacity-building of NARES institutions on IPR, agbiotech, and PGR management.

Many consider non-tariff measures (NTMs) as another protectionist stratagem to prevent exports, especially of agriculture, from developing countries. Philippine exporters seem to be taking things in stride, however. The estimated cost of less than 3% of sales borne by a Philippine food exporter due to compliance with certification requirements is less than three percent of sales—relatively insignificant. However, the increased cost from NTMs can adversely affect small-scale industries and exporters that sell products to low-margin foreign markets. The paper also traces the Philippine export products affected by non-tariff measures imposed by East Asian markets. In all, the NTMs of Japan, Korea, and China affect a total of US million of Philippine agriculture exports to these markets, or 2% to 22% of Philippine agricultural exports in these three countries.

This paper studies the integration of rice markets in the mid-west and far-west districts of Nepal. The data were drawn mainly from the World Food Programme (WFP) database on Nepal. Results indicate that the rice markets of the hinterland are poorly integrated with the regional market of Nepalgunj. In contrast, price fluctuations are transmitted, both in the short and medium run, across the Indian-Nepali border between Nepalgunj and the Indian border districts of Rupedia and Jogbani. Large price differentials relative to transport costs indicate market inefficiencies in the mid-west and far-west districts of Nepal. Moreover, the poor road infrastructure determines the price differentials. Poor infrastructure impedes price correlation and convergence between these districts. Given its opendoor policy with India and the ongoing efforts to further align trade policies with the World Trade Organization, the findings suggest that Nepal would maintain its partnership with India and build an effective market surveillance system that covers the Indian border markets as well, to ensure food security in the short run. However, substantial investment in transport infrastructure is required to improve market integration and accessibility in the long run, especially in the hilly and mountainous areas.