Economic Growth, Technological Change, and the Patterns of Food and Agricultural Trade in Asia

As growth in Asia continues to outpace that in the rest of the world, attention has once again focused on primary commodity markets. Rapidly growing demand, coupled with relatively inelastic supply, have been boosting prices for agricultural, energy, and mineral products. This chapter projects potential outcomes in this footrace between supply and demand for the year 2025, with a particular emphasis on food markets. It begins with an in-depth analysis of the fundamental drivers of change, including per capita consumer demand, population growth, accumulation of capital and labor, endowments of land by agro-ecological zone, as well as technological change. The last is found to be the critical factor in determining whether or not food prices will reverse their long-run downward trend, as well as determining the likely patterns of trade and structural change. Yet this aspect of economic growth is still not well understood.