On the other hand, the SA countries are poor and have long been leaning on protection to promote economic progress. But with growing globalisation, the countries are rightly on their toes to face the chiming challenges thrown by globalisation. Since the late 1980s, they have been pursuing a process of economic reforms. The hitherto closed doors began to open up. Most of them have laudably liberalised economy to become more open than ever. But despite the euphemism enshrined in the so-called openness, concerns also loom large with unfolding globalisation of agriculture. The changes threw both challenges and opened up new opportunities before them. There are two contrasting possibilities that SA economies are faced with liberalization of agricultural sector. First, apprehensions that influx of "heavily" subsidised cheap imports from the developed countries might swell the market to cripple domestic production and employment. And second, there is a glimmer of hope hovering around the prospects of raising agricultural exports, especially of high value and labour intensive commodities.

In a recent research conducted by the International Food Policy Research Institute (IFPRI), the issue of liberalisation and agricultural diversification in SA countries came to the forefront. Reputed researchers such as P.K. Joshi, Ashok Gulati, Pratap Birthal and Laxmi Tewari delved deep into the dynamics of development of agriculture under a regime of liberalisation. Allow me to present some of the interesting insights from that research

Defining diversification

Diversification denotes different meaning to different people at different levels but based on various definitions, the authors arrived at the nature of diversification. For example, diversification could mean (a) a shift of resources from farm to non-farm activities; (b) use of resources in a large mix of diverse complementary activities within agriculture and (c) a movement of resources from low value agriculture to high value agriculture.

Determinants of diversification

When and why do farmers decide to diversify production? Seemingly, a panoply of factors tend to influence the decisions but we submit few from the findings. Better markets and road network are reported to have induced diversification in favour of horticulture crops. Better market and road network means low marketing costs and easy and quick disposal of commodities. It also reduces the risk of post harvest losses from spoilage. The observations of the authors seem to be in consort with micro level findings of the present writer. With the completion of the Bongabandhu Bridge (Jamuna bridge) and establishment of feeder roads connecting the highways, production and marketing of perishable products in the northern regions of Bangladesh increased. The price spread of horticultural and vegetable products also came down. The scenario is quite different from that of a decade ago.

Another important determinant is irrigation -- a proxy for technology adoption. The authors found that the coefficient was negative implying that production of horticultural commodities tend to decline with the rise in the ratio of irrigated to total areas. Rainfed areas -- deprived of technological advancement and hence bypassed by the green revolution -- showed more inclination towards horticultural crops.

Relative profitability emerged as an important element in decision making. The regression coefficient is positive and significant. Fruits and vegetables are highly profitable compared to cereals and other crops. For example, relative profitability of fruits was more than eight times higher than cereals. The corresponding figure for vegetable was 4.8 times. In a recent dialogue with farmers at Bangladesh Rice Research Institute (BRRI) sponsored by PETRRA Project, I noticed some farmers expressing eagerness to produce onion -- relatively more profitable than rice. But the lack of proper storage facilities, allegedly, stood on their ways. The problems pertaining to horticulture or other non-rice crops are reported to be storage, price volatility and uncertainty. It could be attributed to poor vertical linkage between production, marketing and processing. Development of appropriate institutions, could, however stem the rot to an extent. Contract farming is growing but with weak contractual arrangements and informal transactions discourage diversification.

There is observed to be a positive correlation between growth of horticulture crops and the proportion of small holders. Such a move on the part of small holders to horticulture would enhance income and employment: first since it is highly profitable crop and generates regular flow of income and second, because its is labour intensive in production. But again, the absence of appropriate marketing facilities could impinge upon initiatives.

Crop diversification is also related to rainfall. The variable was found to be negative and highly significant implying that farmers in medium and low rainfall areas go for diversification with a view to raising income and reducing risks. But the farmers in high rainfall areas cling to rice. This observation also appears in tune with Bangladesh experience. Scattered information collected at micro level tend to show that drought prone areas have become more diversified with the advent of irrigation technology.

Besides the above mentioned supply side factors, there are demand side factors also inducing diversification. Of utmost importance are the two: growing urbanisation and rising per capita income with perceptible impact on crop diversification.

Policy implications

The determinants of diversification drive home some important implications. First, food security is not likely to be having a bad deal from diversification. Instead of being a threat surprisingly -- diversification is reported to be friendly to food security. That means non-rice growers are no less secure than rice growers when faced with food. This sounds sensible since diversification means putting eggs in different baskets and thus minimises the risk of losing all in crisis.

Scope for employment generation is higher with diversification. The non-cereal crops absorb higher amount of labour than cereal crops. Drawing upon Indian experience, the authors of the research apprised us that while production of rice needs 105 man days/ha, that of potato requires 200, tomato 195, onion 125, cauliflower 120 man days/ha. Rough estimates suggest that 1 ha shift in area from rice to potato would generate 95 man-days of additional labour. By and large, excepting eggplant, all other vegetables are more labour absorbing than cereal or non-cereal crops. The additional employment generation, needless to mention perhaps, has welfare and equity considerations in rural areas.

Tasks ahead

SA countries need to respond to the realities by reforming institutional arrangements, which can appropriately integrate production and markets. Appropriate infrastrucutral development and private sector participation in value addition and processing could be important areas of thoughts. "The most intricate puzzle is how to ensure greater participation of small and marginal landholders in the process of agricultural diversification for sharing benefits of globalisation. They are moving in favour of high value commodities but this group of farmers has high transaction cost due to tiny marketable surplus, which negate their higher production efficiency. It is expected that contract farming, cooperative's and group actions may lead to better opportunities for small holders to augment their income..."

Let innovative initiatives and institutions move hand in hand to reap home rewards from growing globalisation. Globalisation is a wave where you can ride or be swept away. The fate seems to be a function of institutional strengths and weaknesses.

Abdul Bayes is Professor of Economics at Jahangirnagar University