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Is Europe beginning to change its attitude towards Agriculture?
By Jean Bizet,
Senator of la Manche, Founder member of WOAgri
There has recently been a change in the attitude of major French and European political leaders regarding Agriculture. I am in fact pleased to note that, during different meetings I have recently attended, the “strategic” component of agriculture has manifestly “become the flavour of the month”!
Thus at the Conference held by the Agricultural Committees of National Parliaments and the European Union on October 12th and 13th 2006 in Helsinki it was revealed that the different member States of the European Union have accepted France’s proposals for the strategic orientations for Agriculture.
Could the conflict between the Anglo-Saxon conception of the gradual abolition of European agriculture and the French conception of a CAP reform that respects certain major principles, such as food sovereignty, be dying out?
Although the objective of simplifying certain CAP procedures is praiseworthy, it is necessary to restore agriculture’s strategic role.
This is why it is essential to make good use of the time given to us by the suspension of WTO negotiations, to reflect on a CAP reform that does not jeopardize food security in Europe.
According to the majority of experts, this break in negotiations could continue “until 2009”. In fact, at the moment, Doha Round negotiations will only be restarted if America modifies its standpoint, which could itself remain stationary until the American elections at the end of 2008, when incidentally France will hold the Presidency of the European Union.
We have two years therefore in which to create a system that not only rises to the challenges of the expansion of Europe, but also to the development of the poorest countries.
Therefore, as Jacques Diouf, the Director General of the FAO, often reminds us, the reduction of famine is one of the preconditions of the Millennium Development Goals (MDGs) and is the reason why investment in agriculture for food security will benefit the whole world.
During a recent speech1 , Jacques Diouf stated that the Earth will have to feed more than two billion more people by 2050, which requires a proportional increase in food production so as not to aggravate the current situation of famine that is affecting 800 million people.
The challenges for Agriculture for the future of humanity are such that all directions of thought must be examined before irreversible decisions are taken.
I would like to pay tribute to the initiative of Dominique Bussereau, Minister for Agriculture and Fishing, who has entrusted to one of my colleague senators, Dominique Mortemousque, a mission involving the prospects of developing crop insurance, given that the United States is considering allocating a large part of aid payments to a system of income insurance.
To those who remain sceptical of this kind of insurance system, I advise them to read a very interesting report published at the beginning of 2006, by the American Farm Bureau Federation (AFBF), entitled “Making American Agriculture Productive and Profitable”.
The philosophy of this report could be resumed in this sentence: “Agriculture remains vital to the nation’s security plan, meeting the country’s strategic needs for food, fiber and fuel”.
The AFBF, an American organization for farmers, has published an analysis of what agriculture could be in 2019. According to this report, and I resume:
> the volatility of agricultural markets justifies government support, according to standards laid down by the WTO;
> The 2002 FARM BILL could be replaced by an “agricultural safety net”, defined on the basis of agreements made at the Uruguay Round (appendix 2, paragraphs 7 and 8 – transcript below).
I must also remind you that the Uruguay Round agreement remains valid, until the Doha Round reaches a new general agreement.
But beyond its contents, this report also reveals the superiority of the United States in strategic matters. On the world chessboard, the United States lead and will continue to lead the game, as long as they alone are “several steps ahead”, as the agricultural dossier, for example, shows… and also as long as Congress, through the TPA, holds the President under its authority.
As marketing loans and counter-cyclical payments have still not been officially and totally challenged within WTO negotiations, the Americans have one or more alternative systems up their sleeve, which are similar to the WTO’s “coloured boxes”.
However, Europe has not yet received an “equivalent” to its offer made in October 2005, even though it has already openly declared its objectives to renounce coupled aid and protection systems in the 2013 CAP reform.
On one side, Europe “has been putting its cards on the table” from the beginning, and on the other, the United States has been watching and waiting.
So, yes, it is time to be alert to the real stakes of WTO agricultural negotiations, just as it is urgent to create systems that do not place Europe in an inferior position!
France will also be obliged to face the fact, as Northern European parliaments often remind us, that the future of agriculture will be high-tech, involving biotechnologies in particular.
To quote Jacques Diouf, Director General of the FAO, again “it is necessary to intensify and to optimize food production, because natural resources exploited by agriculture are becoming limited and subject to a growing process of erosion”. And, “the possibilities of increasing the expansion of arable land and the use of hydraulic resources are extremely slim”.
I would like, in this matter, to question European political leaders on what the “arm” of holding patents in plant genomics will represent in the long term. I remind you that already today, for any new seed launched on the market, a 25% royalty is paid to non-European multinationals that hold intellectual property rights.
Thus, budgetary aspects must not hide the real issues that could jeopardize food security in Europe.
And whatever agricultural policy reforms the different industrialized countries undertake, only a real world organization for agriculture will enable us to examine the question of distortions in competition, with development and food security worldwide in mind.
WOAgri is currently working on defining the functioning of the principles of agricultural governance based on the regulated liberalization of the exchange of agricultural products.
Interview by Dominique Lasserre
WOAgri would like to pay tribute to the work of Jean Bizet, senator of La Manche, who is playing an important role in renewing thought and political action, particularly in agricultural and economic issues.
Although the stakes for Agriculture for the future of humanity are effectively strategic, the proposals that we are drawing up within the framework of WOAgri, aim to make globalization sustainable by regulating the international exchange of agricultural products.
In fact, the current system is no longer viable for developing countries, for which the continuation of subsistence farming is vital, or for industrialized countries in which the budget assigned to their agriculture is becoming less and less justifiable.
This is why it is urgent to invent new systems that can rise to the many challenges of the 21st century, drawing on different successful experiences in development procedures.
We believe that regulation will be achieved particularly by the definition of an equilibrium price for each of the few major agricultural products that are the object of international trade (10% of total world production). This equilibrium price, which would cover farmers’ production costs, would then be implemented according to parameters linked to the degree of development of the geographical areas concerned. A system of contributions and refunds at the borders of these major regions, agreed in common within a World Organization for Agriculture, would ensure the application of equilibrium prices for producers and at the same time take into account a price level that would be acceptable to consumers.
It is logical in this type of system to associate agricultural issues with development issues, both closely linked, but also to find a solution to the social contention of globalization, which could become, if we are not careful, a factor of instability on a world scale.
Thus any reform of national or regional systems of aid to farmers that does not take into account the above matters, would not resolve the problem of farmers’ bankruptcy in the poorest countries, or the problem of the unacceptability in the broad sense of globalization.
Finally, we would like to remind you that a system such as this would not exclude of course other major international institutions from agricultural issues but that, on the contrary, this World Organization for Agriculture, through upstream regulation, would facilitate their work and would give them better understanding of the realities of agriculture.
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ANNEX: Extract from the Uruguay Round Agreements Act (annex 2, paragraphs 7 and 8)
7. Government financial participation in income insurance and income safety-net programmes.
a) Eligibility for such payments shall be determined by an income loss, taking into account only income derived from agriculture, which exceeds 30 per cent of the reference income, which is average gross income or the equivalent in net income terms (excluding any payments from the same or similar schemes) in the preceding five-year period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry. Any producer meeting this condition shall be eligible to receive the payments from the government.
b) The amount of these payments will cover less than 70% of the producer’s income loss during the year in which he acquires the right to benefit from this aid.
c) The amount of any payment of this kind will be based solely on income: it will not relate to the volume or type of production (including heads of cattle) undertaken by the producer, or prices (domestic or international), which apply to this production, or the factors of production employed.
d) In the event of a producer benefiting in the same year from payments by virtue of the present paragraph or by virtue of paragraph 8 (aid for natural disasters), the total of these payments will be less than 100% of the total loss incurred.
8. Payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters.
a) Eligibility for such payments shall arise only following a formal recognition by government authorities that a natural disaster or like disaster (including disease outbreaks, pest infestations, nuclear accidents, and war on territory of the Member concerned) has occurred or is occurring; and shall be determined by a production loss which exceeds 30 percent of the average of production in the preceding three-year period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry.
b) Payments made following a disaster shall be applied only in respect of losses of income, crop, livestock (including payments in connection with the veterinary treatment of animals), land or other production factors due to the natural disaster or other disaster in question.
1 “Preserving the food-store of humanity”, 12th and 16th June 2006