Agriculture in ASEAN

CEIC Gallery/World Trend+ Database/Sectors - January 21, 2016 Summary Agriculture is one of the key engine of ASEAN countries’ economy growth, seeing that most of the countries strongly depend on this sector. Due to the fact that Southeast Asia has a dynamic geography, ASEAN has a variety range of food and agriculture with a number of ASEAN countries ranking as worldwide top exporters in products such as rice, fruits, vegetables, and coffee. On top of that, ASEAN is also a global leader in industry corps like palm oil, rubber, cashew nuts and pepper. Strong trade links in these products with countries across the globe have been established in many ASEAN member states. Consequently, a development of the agriculture sector remains one of the most important area under ASEAN cooperation. All charts below provide key information of agriculture sector in ASEAN. Chart 1 - 6 Chart 1 - 6 display overall information related to agriculture area in ASEAN and individual countries. Chart 1-3 indicate that almost 25 percent of total land area in ASEAN, ASEAN 6, and CLMV are dedicated to agriculture. In addition, agriculture area in ASEAN has continuously expanded, specifically, in every member states. Compare to all member states, Indonesia has the largest agriculture land area, following by Thailand and Myanmar respectively. However, Thailand has the biggest percent of agriculture land to total land area, following by the Philippines and Vietnam respectively, while the lowest value goes to Singapore (chart 5 - 6). Metadata From 1 July 1996, foreign currency securities sold under repurchase agreements are retained for accounting purposes as foreign currency investments in the Bank's balance sheet, in accordance with standard accounting treatment. For the purpose of reporting foreign exchange reserves, however, securities sold under repurchase agreements are excluded. Chart 7 - 10 Chart 7 - 10 show the trends of employment in agriculture, forestry and fishing sector in ASEAN. From total of employment in ASEAN, employment in agriculture, forestry and fishing accounts for approximately 25 percent, which has slightly dropped in the past decades with continuously downward trend. Specifically, country, proportion of employment in agriculture sector has marginally decreased in most ASEAN, due to urbanization and the movement of employment to services and industry sector. Despite the decrease in a proportion of employment in agriculture sector, in some countries like Vietnam, almost half of total employment is devoted for agriculture sectors. In fact, except for Singapore, agriculture has become the livelihood of the ASEAN population. Chart 11- 14 Chart 11 – 14 illustrate trends of GDP in agriculture, forestry and fishing sector and percent of nominal GDP in ASEAN. GDP in agriculture sector remained constant with a marginal decline in the past few years. The share of agriculture in GDP of CLMV was three times higher than ASEAN 6 in 2014. This can be implied that CLMV countries’ economy relies more heavily on agriculture sector than ASEAN 6. In addition, the share of agriculture in GDP among member states varies, from the lowest in Brunei to essential in Cambodia, Myanmar, and Lao PDR. Chart 15 - 19 Chart 15 – 19 provide trend of three major products of ASEAN’s agriculture production, namely rice, cereal, and rubber. Agriculture production in ASEAN is moderately diversified; however, there is a mutual feature in that the crop area is predominant by rice cultivation in all agriculture-based member states. Among member states, Vietnam ranked as top in rice production in 2014, followed by Thailand and the Philippines respectively. Cereal production in ASEAN remains positive and grows significantly in the past decades. Chart 20 - 25 Chart 20 - 25 shows the Export Value, Export value Vs Volume for Rice and Rubber per the member states of ASEAN and Aggregated ASEAN. The ASEAN region boasts of rice exports that account for about 50% of the import needs of the rest of the world. Rice is a political commodity in the majority of ASEAN countries and its price is an important barometer of government performance. Thus, it becomes imperative for policymakers to control rice trade flow for domestic rice market to be stable. Rice exports value and volume is dominated by Thailand among the member states whereas Rubber exports value and volume is dominated by Thailand, Indonesia and Malaysia, which produce about 70% of world’s natural rubber. CLMV aggregated ASEAN countries have the lowest in terms of exports value and volume for both rice and rubber. Among the aggregated ASEAN, AEC countries ranked the highest in Exports value and Volume in 2012 - 2014. Chart 26 - 27 Chart 26 & 27 display the trends in exports of Agriculture, Forestry and Fisheries for aggregated ASEAN and ASEAN member states. ASEAN countries are established as important world suppliers of commodities. Indonesia, Thailand and Malaysia, for example, cultivate some 3.3 million tons a year of rubber, accounting for around 70% of the world’s production. Also, of the world’s top ten largest fish producers, four are from ASEAN - Indonesia, Thailand, Vietnam, and the Philippines. Exports of Agriculture, Forestry and Fisheries is dominated by Malaysia, Thailand and Vietnam with Philippines having the lowest share. For aggregated ASEAN, ASEAN 5 shows a steady rise within the period of 2005-2008 and again a steady rise from 2009-2011 followed by a steady decline from 2012-2014. Among aggregated ASEAN, AEC countries ranked the highest in Agriculture, Forestry and Fisheries exports in 2013. Chart 28 - 29 Chart 28 & 29 display the trends in FDI Agriculture, Forestry and Fisheries for aggregated ASEAN and ASEAN member states. FDI Agriculture, Forestry and Fisheries for ASEAN 5 countries has been on the rise from 2011. Also, among ASEAN members, those capturing the largest share of inward investment thus far as 2014 are those least exposed to the stagnation of Chinese demand. FDI flows for Laos is marked with fluctuating levels followed by a steep decrease from 2011-2012. Indonesia has managed to top the list, attracting higher FDI flows in ASEAN toward Agriculture, Forestry and Fisheries in 2014.  As grounds for investment in Indonesia are much less speculative than its neighbors, a closer examination of current investment opportunities seems warranted. Among aggregated ASEAN, ASEAN 5 countries had recorded the highest FDI in 2012 - 2014. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). 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1st February 2016 Agriculture in ASEAN

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