A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Point of view

"Setting up an organization for international agricultural exchanges"



Marcel Mazoyer

:

Professor emeritus of comparative agriculture and agricultural development


Marcel Mazoyer

, professor emeritus of comparative agriculture and agricultural development at the Institut national agronomique de Paris Grignon and vice president of the French association for the FAO, has just joined the patronage committee of WOAgri.

His analyses and proposals are completely coherent with the combat that WOAgri is waging.

Marcel Mazoyer

is thus convinced that “the liberalization of agricultural markets” and “the decline of povertyare not compatible and that it is absolutely necessary to set up an organization for international agricultural exchanges.

The following interview includes some excerpts from the book “La fracture agricole et alimentaire mondiale” (The agricultural and food divide) published by Le tour du sujet Universalis in January 2006 and is reproduced here with the kind permission of the editor.


> You have just published, along with some other authors, a book entitled “La fracture agricole et alimentaire mondiale – Nourrir l’humanité aujourd’hui et demain”. What is the message you are trying to get across ?

Reducing by half, for 2015 at the latest, the percentage of the world population that earns less than a dollar a day, as well as the percentage of the population suffering from hunger, are some of the Millennium Development Goals. These have been signed by almost all the heads of state or governments in the world at the Millennium Summit organized by the United Nations in New York in 2000…Moreover the member states of the World Trade Organization (WTO) agreed at Doha to carry out a new round of negotiations taking into account the “needs in terms of development, including food security and rural development”. And in 2005, the leaders of the G8 stated that the fight against poverty in Africa is one of their priorities

This goal in international politics to meet the current and future needs of all mankind, backed by an international public opinion that aspires to eliminate poverty in all its forms, represents a major step forward. But it is also a form of recognition that the development of the world economy and the economic and social policies of the last decades have been incapable of meeting the fundamental needs of humanity.

Indeed, today, according to the World Bank, around half of the world population lives with less than two dollars a day and around one fifth with less than one dollar. One third of mankind suffers from malnutrition and around 850 million people are chronically underfed; in other words, they go hungry every day.

According to the FAO, three quarters of the poor live in rural areas and, paradoxically, the majority of those who suffer from hunger are peasants in developing countries; in other words the producers and sellers of food suffer more than the urban consumers…The agricultural sector provides employment and revenues for 40% of the world population. It provides almost all the food for humanity and deeply shapes its environment. But, in almost all the countries in the world, the average revenue of peasants is far below that of city dwellers and even lower than the average salary of unskilled workers.

The purpose of this book is to discover the deep-rooted causes of this massive peasant poverty, which is at the heart of poverty worldwide and hunger, which is its ultimate manifestation. It also examines the different means used up until now to try and solve the problem, and tries to propose other approaches.

> How did the peasant population become so impoverished in recent years ?

Let us remember, first, that on a worldwide scale, inhabitants of rural areas and farmers are very numerous. The rural population represents 3.3 billion people, or 52% of the world population. The total agricultural population (active and inactive) represents 2.6 billion people, or 41% of the world population. As far as the active agricultural population is concerned it represents 1.34 billion people, or 43% of the active world population (figures from Faostat).

…The contemporary agricultural revolution and the green revolution, as impressive as they seem, must not lead us to forget that hundreds of millions of peasants have never had access to adequate means of production which are efficient but costly. For 1.34 billion people working in agriculture worldwide, there are only 28 million tractors, or enough for only 2% of agricultural workers and 250 million work annimals, or enough for only 19%. That means that four fifths of the world’s farmers, or around one billion peasants, work only with manual tools: machete, spade, hoe, scythe…And around 500 million peasants do not use fertilizer, minerals, pesticides or genetically selected seeds. The inequality in equipment, productivity and revenues between the different agricultures in the world is therefore enormous. At one end of the spectrum there are a few million farmers in the developed countries, and also in the developing countries, who can produce 1000 tons of grain or grain equivalents per worker and per year while, at the other end, hundreds of millions of peasants cannot produce more than one ton of grain per worker per year…The gains in productivity due to these agricultural revolutions have brought about large drops in real agricultural prices in the countries involved and on the international markets. These declines in price have had repercussions in almost all countries due to reduced transport costs and also the liberalization of international trade and agricultural policies. Thus, the decline in prices has blocked development and then impoverished hundreds of millions of peasants who are poorly equipped and not very productive. Currently, each year, tens of millions of them are forced to desert the land and live in shantytowns where high unemployment and low salaries are the norm.

Therefore the pursuit of the liberalization of international trade and agricultural policies, which increases competition between farmers who do not have the same equipment and level of productivity, can only reinforce the mechanisms responsible for the impoverishment of the majority of the world’s peasants, rural depopulation and urban poverty. Therefore this cannot be a way to reach the Millennium Development Goals and to correctly feed mankind by the year 2050.

> Differences in the ability of countries to compete exist in every sector and agriculture is no exception.
Doesn’t the situation you describe clearly reveal the strategic specificity of agriculture for humanity ?

Basic agricultural and food products are particular in that most of production is consumed inside each producing country and does not cross borders. International agricultural markets only concern a small part of production and world consumption (from 10 to 30% according to the type of product). These are limited markets where supply is amplified by the poverty and under-consumption which prevail in the developing countries that export, while the demand is reduced by the poverty and under-consumption that prevail in the importing countries with low revenues.

For grain the volume of international exchange is around 15% of production and consumption. The international price is not established according to the lowest cost of production of exportable surpluses (80 euros a ton is the cost of production in Argentina or Ukraine) but according to the production cost of the 15th percentile of volumes produced in the world (100 euros a ton which is the cost of production in Australia or Canada). Thus the international price of grain is inferior to the cost of production of 85% of the volumes produced in the world. It is inferior to the production costs of a large majority of farmers in the world: inferior to production costs for American farmers (around 130 euros a ton) who can no longer continue to massively export, and far inferior to costs for European farmers (150 euros a ton) who can no longer continue to supply their own market without large subsidies that allow them to compensate for the difference between the cost of production and the international price, a process which, moreover, contributes to keeping this price rather low. But anyway the international price is greatly inferior to the production costs of hundreds of millions of peasants who produce less that 1 ton of grain a year, a cost of production that can be estimated at 400 euros a ton if they were to earn 1 euro a day.

In the developed countries the drop in real agricultural prices has caused an important decline in revenues for small and medium sized farms that do not have the means to invest and to improve enough to compensate for these effects. Many farms are therefore incapable of earning a socially acceptable income for a family. They become unprofitable and are not taken up when the farmer retires…This is why three quarters of the farms that existed at the beginning of the 20th century in the developing countries have disappeared. But if in these countries the children of farmers that left the land have, in general, found work in industry or services, it is a different story for the hundreds of millions of poor peasants forced to leave the land in the developing countries.

Indeed, in these countries, when faced with decreasing prices, the poorly equipped and less productive peasants working on poorly located farms first saw their buying power decline…Their development was therefore blocked.

In order to fully understand the process, let us consider the cereal farmer in Sudan, the Andes or the Himalayas, who uses hand tools to produce 1 000 kg of net grain (after deduction of seeds kept over) without fertilizer or pesticides. Forty years ago our farmer received the equivalent 40 euros today for 100 kg of grain. He therefore had to sell 200 kg to renew his tools, clothes, etc…He had 800 kg left to modestly feed 4 people. It he was careful he could sell 100 kg more to buy a new, more efficient tool. Twenty years ago he no longer earned more than the equivalent of 20 euros in 2005 for 100 kg. He therefore had to sell 400 kg to renew his tools and buy other necessities and he had 600 kg left to feed (but not satisfactorily) 4 people…Finally, today if he only receives 10 euros for 100 kg of grain he would have to sell more than 800 kg to renew his equipment and buy necessities which is, of course, impossible because he cannot feed 4 people with 200 kg of grain. In fact, at that price he cannot renew his tools, as pathetic as they may be, or eat enough to gain the strength to work. He is therefore doomed to indebtedness and eventually to leave the land for the shantytowns with no infrastructure or industry, high unemployment and miserable wages…

Because of the effects of transport costs, the prices paid to farmers in countries that do not really protect their vital agriculture tend to be close to international prices. When these prices, that drop dramatically, become lower than the production costs for small and medium sized farmers they reduce and then abandon the production of these foods. In the long run, the deficit of importing countries grows. The surpluses of the exporting countries, limited by the drop in prices, do not rise proportionally. The international stocks at the end of the campaign are reduced. There comes a time when buyers, who fear scarce supplies, rush to buy and cause prices to literally explode. In a few weeks they can triple or quadruple and rise to the same level as the production costs of the least competitive peasants, reaching the same high level they had at the previous price rise.

When prices are very high,, food aid is scarcer and the poor countries don’t have enough money and have to borrow to meet their needs. The poor consumer-buyers cannot provide for their needs and the undernourished in the cities become more numerous than those in the country. The poor peasants who have succeeded in surviving so far take advantage of the higher prices to balance their accounts, while the more competitive producers invest massively and gain market share that had been lost by the previously ruined peasants. In a few years time, the prices fall back to their former level before declining further under the influence of investments and cost reductions of the more competitive producers.

The fluctuations of the real price of wheat on the Chicago market perfectly illustrate the way the international markets for basic food commodities function: long periods of low prices (1952-1972 and 1982) alternating with short periods of high prices (1945-1951 and 1972- 1979).

Therefore when prices are low, hundreds of millions of small, impoverished producer-sellers deprive themselves of food, and when prices are high, hundreds of millions of consumer-buyers do the same. The market, that does balance supply with solvent demand, never balances supply with the insolvent needs of the poor. And moreover it cannot do this because it is the market itself that is the primary cause of poverty and undernourishment in rural and urban areas. Long periods of low prices starve the poor peasants. And as they amplify rural depopulation, they also produce millions of poor consumer-buyers that will go hungry the next time prices rise.

In addition to these wide fluctuations, agricultural prices are also influenced by strong annual and seasonal variations. For climatic or other reasons, agricultural supply is highly variable whereas the solvent demand of consumers that have the means to eat enough is not really elastic. Consequently, the variations in short term prices that effect alternatively poor producer-sellers and consumer-buyers are even more important.

The decline and instability of agricultural prices have other consequences. By excluding millions of peasants every year from the production process and discouraging the production of those that are left, they limit overall production and increase the food deficit of the poor countries.

By increasing rural depopulation, they contribute to maintaining a high level of unemployment and low salaries in urban areas…

> Then, in your opinion, what should be done ?

The quantity of food needed to meet the unsatisfied nutritional needs of humanity today represents more than 30% of the current production and consumption worldwide. That is to say, more than 100 times the food aid, more than half of what the 1.5 billion human beings who have enough to eat consume and more than the total volume of international agricultural and food exchanges. This means that neither aid, nor sharing, nor exchanges, as necessary as they may be, can put an end to this immense underconsumption.

To put an end to poverty and undernourishment, there is no other way except to put an end to the process of impoverishment and exclusion that prevents the poor from increasing their resources and feeding themselves.

In 2050, the Earth will be inhabited by around 9 billion human beings. To feed a population that size correctly, without undernourishment or deficiencies, agricultural and vegetal production would have to more than double worldwide (Collomb, 1999). To achieve such an enormous increase in production agricultural activity would have to be extended and intensified in every region of the world wherever it could be sustained. However, the land cultivated on the planet today represents not quite half of the land that could support sustainable cultivation and the techniques available today are not sufficiently used. The problem is therefore is to create conditions that allow all the peasants in the world, and not just a minority, to build, extend and exploit cultivated ecosystems capable of producing, without harming the environment, a maximum amount of quality food. And to achieve this we must, above all, guarantee for all these peasants prices that are sufficiently high and stable so that they can make a living, invest and progress.

To this end it is desirable to set up an organization for international agricultural exchanges that is fairer and more efficient than the one we have today. The principles of this new organization would be:

- To establish large common agricultural markets on a regional level that would group together countries with the same level of productivity (Western Africa, Southern Asia, Eastern Asia, Western Europe, North America) ;

-To protect these regional markets from the import of low cost agricultural surpluses by using variable customs duties, thus guaranteeing prices that are sufficiently high and stable to allow poor peasants in underprivileged regions to make a living and develop;

- To negotiate, product by product, international agreements setting the market price and the quantity for export in a fair manner accepted by each country ;

- To control production of each product according to the domestic consumption and the quantity for export accepted by each country.

Ce relèvement des prix agricoles devra être suffisamment progressif pour limiter ses effets négatifs sur les consommateurs – acheteurs pauvres. Malgré cela, il sera sans doute nécessaire d’instaurer des politiques alimentaires. …

The rise in agricultural prices must be progressive in order to limit the negative effects for poor consumer-buyers. In spite of this, it will no doubt be necessary to implement food policies…

Moreover, since the rise in agricultural prices alone will not be sufficient to raise production to the level of needs and promote balanced agricultural development in the different regions of the world, agricultural development policies will also be necessary…

If free agricultural exchanges should prevail,, the downward trend in real agricultural prices and their fluctuations would lead inevitably to stagnation, impoverishment, depopulation, unemployment, low salaries and undernourishment for the majority of farmers in the world, in developed countries but also, to a certain extent, in developed countries. To reduce poverty and undernourishment significantly, it is therefore necessary to protect all the peasant farmers from having to vie against more competitive farmers.


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Paris, 10 December 2018