The agriculture and fisheries sector provides food and vital raw materials for the rest of the economy. It is itself a significant market for the products and services of the nonagricultural economy. As the sector grows and modernizes, it releases surplus labor to the industry and services sectors. Rising productivity and efficiency in the sector are critical in maintaining the affordability of food and purchasing power, especially among the poor. The sector’s development is therefore vital in achieving inclusive growth and poverty reduction as well as attaining the targets under the MDGs.
The country, however, exhibits a slower structural transformation than other East Asian countries. The shares of agriculture in GDP and total employment have continued to decline, but the transfer of the labor released from this sector to higher-productivity jobs in industry and services has lagged owing to low skill levels among agricultural workers and distortions in other economic sectors.
Increasing demands on the sector’s output have also put pressure on its natural resource base. Unsustainable practices employed to improve yields have resulted in land degradation and problems of water availability. Climate change has exarcebated the inherent vulnerabilities of the sector. Development efforts need to focus on transforming the sector into one that is not only highly productive but also climateresilient, environment-friendly, and sustainable.