international fertilizer correspondent
Feed the soil to feed the people,
the IPI jubilee
Session 1: Policy issues related to food supply
and the environment
Session 1: Policy issues related to food supply and the environment
What should be the priorities for the agricultural policies that form the framework within which farmers around the world produce our food? Three representatives, one each from the International Food Policy Research Institute (IFPRI), from the OECD and from the Food and Agriculture Organization of the United Nations (FAO) reported on this subject.
When discussing the progress that has been made in food production, Marc Cohen from IFPRI emphasized that we should not forget that there are still some 700 million food insecure people worldwide, amongst them 170 million malnourished children. Although the expected rise in food production should reduce the number of hungry people, hunger will nevertheless remain a fact of life for many. Poverty, powerlessness, civil conflicts, discrimination, demographic factors and last, but not least, environmental degradation, are the main causes of hunger. The great majority of poor people in developing countries are in the rural sector. Poor farmers, especially women, need access to resources, better infrastructure, markets and extension. And it should not be forgotten that whereas women produce much of the food, take care of the household and manage natural resources, control of money remains largely with men.
Agricultural growth, for example by achieving higher productivity per unit of land, should help to reduce poverty and, at the same time, protect natural resources. But, if this is to be achieved says Marc Cohen, public investment in appropriate research and technology is essential. Despite being heavily dependent on agriculture, developing countries devote only 5% or less of government expenditure to this sector. Public agricultural research represents only 0.6% of the value of agricultural production in contrast to developed countries where expenditure is nearer to 2.6%. In Sub-Saharan Africa, the situation has been deteriorating rather than improving with expenditure on public agricultural research actually in decline between 1991-96.
What are the trends in developed countries' agricultural and environmental policies? Gerald Viatte, formerly with the Organization for Economic Cooperation and Development (OECD), pointed out that environmental concerns have become the driving force for reform. This pressure dates back to the early '80s, when it became apparent that post war policies, which were looking mainly for higher production through price support, market intervention and structural change, were no longer appropriate. Rapid technological progress, trade barriers and support for domestic production had led to farm surpluses. Falling world prices, trade wars, the huge cost of subsidies, and market distortions were some of the most negative consequences of these earlier policies.
Reforms to agricultural policy in developed countries have been intended to reduce the distorting effect on production and trade that support and protection of agriculture encouraged. At the international level, the Uruguay Round's Agreement on Agriculture included three commitments: to improve market access through reduction of tariffs; to reduce export subsidies, and to reduce domestic support. It is domestic support that has most relevance to the environment.
The actual impact of these commitments has been, generally, very limited. Agricultural tariffs remain much higher than for industrial goods. Export subsidies are still effective. For domestic support, most countries had no difficulty in complying with reduction commitments because the base year for the reduction calculation was 1986, an all-time record for agricultural support.
The Doha Development Agenda, 2001 led to a new round of negotiations. Non-trade concerns (matters of environment, rural development, food security, food quality, etc.), as well as the interests of developing countries now play a much greater role. Furthermore, the cross cutting character of a number of issues, for example food safety, competition policies and environmental concerns, is given greater recognition. The reform processes implemented in all OECD countries have led to greater market orientation and lower support and protection but wide differences remain across countries and commodities. In 2001, for the OECD as a whole, total support to agriculture amounted to $311 billion which corresponds to 1.3% of total GNP. Differences between countries, as can be seen in the graph, range from 1% of the value of production in New Zealand to more than 60% in Japan, Korea and Switzerland. What has also changed is that price support is being replaced by direct payments to farmers, a measure that is not based on output.
In July 2002, the EU Commission proposed further reforms to the Common Agricultural Policy (CAP) to achieve a more marketoriented agriculture while at the same time meeting the expectations of a society generally now much more concerned about countryside conservation and the environment. This has meant linking financial support to environmental and rural policies. The relationship between agricultural policy and the environment is complex but two principles are likely to apply in future. One is that farmers should be liable for the cost of environmental damage resulting from bad farming practices, i.e. a polluter pays. Secondly, there is now a recognition that agriculture goes beyond commodity production and includes the provision of other services such as environmental benefits, although how such services can be costed and paid for is another question.
Speaking about agricultural policies in developing countries, Jan Poulisse from FAO pointed out that agriculture is changing. As the expansion of arable land slows, sources of growth in crop production will depend upon intensifying agriculture and increasing yields from a given area of land. For this, fertilizer use efficiency must be improved as must efficiency in the use of water because irrigation will also increase. Measures to increase fertilizer use efficiency include improved management of plant nutrient sources, precision farming and nutrient budgeting, better formulas from the industry, fiscal measures to reduce environmental impact, and environmental protection regulations. Corresponding measures to improve water use efficiency could include full water pricing for consumers, the operation and management of irrigation systems by user groups, efficient controlled application techniques and dry seeded rice.
Organic agriculture is expected to expand with the market for organic produce likely to increase between 5-10% per annum. There is also likely to be a wider adoption of conservation tillage as a means of reducing losses in soil fertility through erosion. Other trends include a growth in livestock production. This has implications for nutrient management and fertilizer use efficiency with increased production and use of feed grains and oilseeds. Animal waste like farmyard manure and slurry will be recognized as an important source of plant nutrients although, if mismanaged, it can harm the environment.
Climate change is also a matter for concern. Whereas greenhouse gas emission might have a positive effect on crop production and water use efficiency, extreme climatic events reduce fertilizer use efficiency. Appropriate nutrient management could help not only to lower greenhouse gas emissions but, by increasing productivity, also increase carbon sequestration. Improved crop and pasture management also helps to reduce the pressure for deforestation.