Dr Asanka Wijesinghe Shares Insights on South Asia’s Global Value Chain Participation in Agriculture

 9-10 December 2023

IPS Research Fellow Dr Asanka Wijesinghe shed light on the significant impact of trade policies on South Asia’s participation in the Global Value Chains (GVC), particularly in the agriculture sector. These remarks were shared during the South Asia Policy Forum Session focused on Agriculture Value Chains at the conference on “South Asian Integration: Trends and Way Forward”, organised by the Research and Information System for Developing Countries (RIS) in New Delhi, India.

Dr Wijesinghe began by highlighting the growing vertical integration in agriculture and the food industry. This trend involves increased reliance on foreign intermediate inputs for exports (backward participation) and the use of export inputs as intermediates embedded in third-country exports (forward participation). Contrary to expectations, he underscored that developing countries are deeply entrenched in agricultural GVCs, emphasising the significant impact of trade policies on value chain participation.

In the context of South Asia, he stressed that the border tariffs faced by the region contribute to the region’s reduced agricultural GVC participation. He further underscored that trade policies, particularly import tariffs, diminish the value-added embodied in foreign exports, affecting the entire GVC. This effect is more pronounced in the food industry. In conclusion, Dr Wijesinghe also drew attention to the post-COVID-19 trade policy in Sri Lanka and underscored the potential threat of increased protectionism during crises to global value chain participation and highlighted the importance of revisiting complex general regulatory barriers.

The South Asia Policy Forum session on Agriculture Value Chains was chaired by Dr Shahidur Rashid, the Director for South Asia at the International Food Policy Research Institute (IFPRI) in India. The conference brought together representatives from South Asian countries, including international organisations, and academic and research institutes to discuss these critical issues related to South Asian Integration.