SHAPING A CLIMATE-RESILIENT AND SUSTAINABLE FOOD SYSTEM IN THE BIMSTEC REGION

In 2020, the International Food Policy Research Institute (IFPRI) launched a four-year project titled ‘Regional Trade and Agricultural Transformation in the Bay of Bengal Countries’ funded by the Bill and Melinda Gates Foundation (BMGF). Its aim has been to foster sustainable agricultural transformation and enhance trade linkages to address food security, poverty and climate change across the BIMSTEC region.

In alignment with these goals, IFPRI South Asia Office collaborated with BIMSTEC Secretariat to contribute towards a sustainable and inclusive agricultural transformation across BIMSTEC member states, including Bangladesh and India. BIMSTEC and IFPRI signed a MoU in March 2023 in Dhaka to strengthen partnership and collaboration in the areas of mutual interest. The MoU focused on facilitating collaboration, drawing upon both organizations’ mandate, competence, and areas of technical expertise. for the work on regional agricultural food trade related issues—including environment and climate change implications of integration, with emphasis on capacity building in India and Bangladesh.

IFPRI’s project on BIMSTEC comprises an integrated approach based on the conceptual framework that was developed for underlying areas of cooperation. The areas of cooperation comprise three main links viz. economic linkage, social linkage, and environment/climate linkage. Drawing from the integrated approach, the project focused on operationalizing and analyzing key research activities.  It accounted for interlinkages of the constituents’ parts—that is, trade and investment, poverty, and food security (inclusiveness), and environment and climate change.

During this project, we engaged with diverse stakeholders, including leading think tanks across the region such as Research and Information System for Developing Countries (RIS) and Indian Council for Research on International Economic Relations (ICRIER) from India, Policy Research Institute (PRI) from Bangladesh, South Asia Watch on Trade, Economics & Environment (SAWTEE) from Nepal, key government agencies, policy makers, BIMSTEC Secretariat Divisions and member states on different areas of research, capacity building and policy engagement.

Given this background, IFPRI is now organizing a project closing and dissemination event in partnership with the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Secretariat and the Research and Information System for Developing Countries (RIS) to present findings from its project focused on regional agri-food trade. Titled ‘Shaping a Climate-Resilient and Sustainable Food System in the BIMSTEC Region’, the in-person event will be held at Gallery 1 & 2 in the Pullman Hotel in Bangkok on 3-4 October from 10 AM onwards and will focus on the knowledge and insights generated from the project, providing a platform for stakeholders to learn from the experiences and achievements over the past four years. The platform will bridge the gap between research and policy, ensuring that data-driven insights contribute to more effective agricultural transformation and policies in BIMSTEC countries.

Among the various findings and project outputs to be showcased at the event, we would like to highlight a few here:

1. Conceptual Framework for Linkages and Partnerships in BIMSTEC: A conceptual framework for understanding the linkages based on possibilities of cooperation across different objectives and work areas that form the core of BIMSTEC partnerships. We condensed the 14 work areas into three bidirectionally linked relationships in the fundamental areas comprising trade and investment (economic linkage), environment and planetary health (climate/environment linkage), and poverty and food security (social linkage). Each of these linkages are conditioned by an enabling environment consisting of individual country, regional, and global factors in terms of policies and institutions that determine the direction and strength of the three linkages and also actuate the outcomes. (Link for full note)

2. BATM + (The BIMSTEC Agriculture Trade Monitor Plus (BATM+) Dashboard: This represents a crucial tool for policymakers and researchers in the field of agri-food trade. It contains two major elements: trade patterns and trade policies. With its dynamic and user-friendly interface, this dashboard offers users access to disaggregated 8-digit trade data, providing high-frequency information at a monthly level and on seasonality. Within the BATM+, users can identify new commodities, new varieties, and new partners margins at a disaggregated level. Moreover, the dashboard offers port-wise data containing all entry and exit points through land, sea, rail, land and special economic zones, facilitating analyses of time-to-trade, cost-to-trade, market access, and port type for export/import of agri-food products including non-perishables as well as perishables. By leveraging BATM+, policymakers and researchers can delve into a range of critical areas, including analysis of global and supra-regional and intra-regional trade composition and patterns, export and import diversification, regional value chain analysis, tariff and non-tariff policy analysis, value chain integration, analysis of major conflicts and events and opportunities for BIMSTEC, and integrated policy analysis. This dashboard provides decision-makers with the necessary insights to make informed and data-driven decisions in the field of agri-food trade which gives the scope for regulatory decision, policy formulation, evaluation, and adjustment process. BATM+ is particularly suitable for looking at the impacts of ECC on commerce in BIMSTEC countries.) (Dashboard Link)

3. BIMSTEC Plan of Action (PoA) on Environment and Climate Change (ECC):  IFPRI supported the BIMSTEC Secretariat’s Second Meeting of the Joint Working Group on ECC by organizing a capacity development program on ECC and assisting the review of the PoA which was presented at the meeting in Paro, Bhutan. For the PoA review, IFPRI constituted a diverse review committee and undertook a rigorous process of providing inputs and feedback to think through the various dimensions of ECC that would facilitate strengthening of cooperation among BIMSTEC members towards taking collective actions related to environment and climate change (ECC).
4. Unlocking Agricultural Trade Potential in the BIMSTEC Region: Policy Challenges and Implications: This policy note seeks to spell out some of the key agricultural trade policy-related challenges in the BIMSTEC region and their implications for economic integration in the area. (Link for full policy note)

4. Data Issues in Analyzing Agri-Food Trade in BIMSTEC: Challenges and Recommendations: Despite the growing availability of granular, disaggregated trade data and enhanced computing power, many studies still rely on highly aggregated analyses. Recent research emphasizes firm heterogeneity and extensive margins in trade, but the data’s complexity can overwhelm researchers when analyzing responses to policy changes. (Link for full note)

5. India’s Rice Export Restrictions and BIMSTEC Countries: Implications and Recommendations: Recent global events, including Russia’s withdrawal from the Black Sea Grain Initiative and India’s restrictions on rice exports, have raised concerns about food security in BIMSTEC countries. This policy note examines the potential impact of India’s export prohibition on non-basmati white rice and its 20% export duty on parboiled rice for BIMSTEC nations. (Link for full policy note)

6. India’s edible oil imports from Nepal: Policy implications of current tariffs and free trade agreements: India’s demand for edible oils has been significant, with imports averaging $11.6 billion annually. In 2021, before the Russia-Ukraine conflict, imports reached $17.1 billion, led by palm oil, soybean oil, and sunflower/safflower oils. Surprisingly, these oils made up 65% of India’s total imports from Nepal, valued at $865 million, about 9% of India’s total edible oil imports. (Link for full blog) 

7. Understanding informal agrifood trade between India and Bangladesh: An analytical framework: This work examines the intricacies of informal agrifood trade, including questions about how formal and informal trade coexist, what factors that drive informal trade, how informal trade is organized, and how quality and prices are managed. (Link for full infographic) 

8. A tale of two borders: Informal agrifood trade along the Bangladesh–India and India–Nepal borders: This essay highlights the observations from the fields and compare how the logistics of informal trade differ between the Bangladesh–India and India–Nepal borders. (Link for full essay)

9. Foreign Direct Investment, Globalized Agri-food Value Chains and Transformation: We examine the determinants of participation and positioning in the Agriculture Globalized Value Chains (AGVC) with focus on role of foreign Direct Investment (FDI) in agriculture. Among the determinants, trade policies that are reflected in cost to trade play a significant role in AGVC engagement. FDI in agriculture affects AGVC structure correlating significantly with forward participation. FDI holds potential for enhancing value addition, technology diffusion, and market access. We then assess the effect of AGVC on production diversification in agriculture i.e., manifested in crop choices. A priori is unclear whether AGVC participation and positioning leads to greater specialization or diversification as there are forces in either direction. Our findings show that AGVC participation is associated with diversified agriculture. Moreover, the effect varies by positioning (backward and forward). The estimates using panel regression, Lewbel instrumental variable method and continuous treatment matching yielding dose response functions show these results to be robust. Results also vary regionally. East and Southeast Asia show the strongest association between AGVC and product diversification. (Link for full paper)

10. Colonization and beyond: Analyzing agri-food exports of Bay of Bengal countries by the level of processing: This work assesses the participation of BIMSTEC member countries in coffee, maize, and edible oils value chains and considers whether BIMSTEC countries are trading above or below their potential at various stages of processing level. We use the Poisson Pseudo-Maximum Likelihood Model (PPML) estimation technique, which not only provides consistent estimates in the presence of heteroscedasticity but also provides a natural way to deal with zero trade values, and multilateral resistance problem. Our findings show that BIMSTEC’s exports are concentrated in unprocessed maize, coffee, and processed edible oils. In addition, under-trading is most common with higher levels of processing in all the BIMSTEC countries and thus has a substantial potential to trade more both in volume and in terms of product variety.  (Link for full paper)

11. Policy Discernment Manual for agriculture food trade policy: The policy discernment manual serves as a comprehensive guide for policymakers, analysts, and stakeholders involved in shaping agri-food trade policies. Recognizing the critical importance of agricultural trade in fostering economic growth, ensuring food security, and promoting sustainable development, the manual provides a structured framework for understanding trade policies in this sector by focusing on the areas of domestic agricultural policies, international trade policies for agriculture, the process for policy formulation and implementation, emerging global challenges, opportunities and future directions. (Link for full document)