Rice feeds nearly 690 million people across Southeast Asia. For decades, governments across the region built entire policy architectures around producing it — subsidizing inputs, controlling prices, and directing public spending toward the smallholder rice farmer as the foundation of food security. It worked. Production soared from 107 million tons in 1960 to 345 million tons today. These policies helped lift a generation out of poverty.

But here is the uncomfortable truth: the policies that fed the last generation are now working against the next.

Governments across the region spend enormous sums supporting agriculture — yet much of it misses its mark. Globally, agricultural support totals more than US$820 billion annually, but only 35 cents of every dollar reaches farmers in a useful form. In the Philippines and Indonesia, retail rice prices are two to three times higher than world reference prices — a regressive burden on the poor, who spend up to a quarter of their food budget on a single staple. Nearly 230 million people in the region still cannot afford a healthy diet. Meanwhile, productivity growth is slowing, fertilizer prices spiked 81% in early 2026, and climate shocks are compressing yields.

The challenge ahead is not to spend more. The money is already in the system. The challenge is to spend it differently.

From protection to transformation

Some countries in the region are already showing the way.

Vietnam is the most instructive example. By 2023, the country had repurposed 84% of its agricultural public support—shifting away from distorting subsidies toward rural infrastructure, research, and extension. Agrifood export value more than doubled, from US$30 billion in 2015 to US$70 billion in 2025, driven by diversification well beyond rice. Vietnam went from food deficit to export powerhouse not by adding money, but by redirecting it.

In Indonesia, an $8 million grant is supporting a pilot to improve fertilizer use efficiency—moving away from centralized delivery towards soil health cards and cash transfers that put choice in farmers’ hands. In the Philippines, the Rice Tariffication Law in 2019 replaced import restrictions with tariffs, and retail rice prices fell 10–15% within two years. A $24.5 million grant accompanying the country’s recently launched Program for Results is now helping redesign the fertilizer subsidy into a digital voucher system —improving targeting and cutting waste. 

These are not isolated experiments. They are the early signs of a regional shift — from protection to transformation, from volume to value.

Why this moment matters

Three forces have converged to make reform both urgent and achievable. The first is fiscal pressure.  Governments can no longer justify large agricultural budgets that are failing to deliver affordable food, farmer welfare, and resilience. When a country’s own agriculture ministry acknowledges that its subsidies are not working— as officials candidly did at a recent symposium on sustainable agricultural transformation in Singapore — something has genuinely shifted.

The second force is technology. Stress-tolerant seed varieties, precision nutrient management, AI-driven extension, and solar irrigation — whose costs have fallen 87% over the past decade — can now deliver more output per unit of land, water, and public spending than ever before.

The third force is market demand. Vietnam is already treating the EU’s carbon footprint requirements for rice imports not as a barrier but as a route to premium market access —a signal of the opportunity available to the entire region in the US$1.9 trillion global sustainable food market.

A regional platform for shared learning

Better policy in individual countries is necessary, but not sufficient. What makes the difference is a mechanism for countries to learn from each other in real time — at the senior levels where decisions are made. That is the purpose of the Multiphase Programmatic Approach (MPA) for Sustainable Agricultural Transformation, the World Bank’s regional lending and knowledge platform for agricultural transformation in East Asia and the Pacific, which currently includes the Philippines, Indonesia, and Papua New Guinea.

The World Bank Group and its partners recently launched Agriconnect – a global initiative to transform smallholder farming, create jobs, and strengthen global food security.  Agriconnect is helping governments translate reform ambition into concrete investment programs and building the evidence base that others can draw on. In the East Asia and Pacific region, Papua New Guinea and Viet Nam are the first mover countries.

The results emerging from across the region reinforce the case. In China’s Hubei Province, repurposed public spending has converted chemical-intensive farming into a circular, low-carbon system —establishing 50 eco-farms, producing 220,000 tons of organic fertilizer from agricultural waste, and generating verified soil health improvements. The model has clear relevance for the region and beyond. In Vietnam, the World Bank-supported Sustainable Agriculture Transformation Project showed that farmers who adopted sustainable practices cut pesticide use by 48% and increased net profit per hectare by 31.6%. No trade-off between environment and income required.

An invitation

Agricultural transformation is neither optional nor inevitable. It requires deliberate policy choices, political will, and the institutional capacity to turn knowledge into action. The Philippines, Vietnam, Indonesia, and Papua New Guinea are moving — not because reform is easy, but because the alternative is no longer defensible: spending more on policies that deliver less, while food remains unaffordable for hundreds of millions.

We invite governments, researchers, private sector leaders, and development partners to join this agenda. Through Agriconnect and the MPA for Sustainable Agricultural Transformation, we are building regional knowledge platforms, peer networks, and advisory support to help countries navigate reform together.

The policies that fed the last generation served their purpose. The next generation deserves better.

Source : World Bank