ࡱ> bdaY K`bjbjWW !z==/\],,,,8dx<, (w y y y y y y $h!\#4  pppp<w ,,w pjp ;w pt,,4< lϲʹ(01)26-1 World Trade Organisation NON GOVERNMENTAL ORGANISATIONS (NGOS): SYMBOSIUM Geneva 6 and 7 July, 2001 Work Session: Agriculture Risto Volanen Secretary General of COPA and COGECA Agriculture is a special case There are some basic questions in the present ϲʹ process: Is agriculture a special case in world trade? Yes it is. Is agriculture multifunctional: economical, ecological and social activity? Yes it is. Trade is good for developing countries, but is neo-liberal approach on it? No, it is not. Is David Ricardo still right? No, he should be revised. What this means in practice? Let us study these questions. How did we come here? Agriculture came about 10 000 years ago somewhere around the Euphrates and Tigris rivers. In those early days a good harvest meant growing population and this meant need for more food. Several civilisations started on the coastal plains or in valleys and then under the pressure of population growth, moved upland to fell forests for new farmland, ships and fuel. At the same time grazing was extended up to these hills. After this, rainstorms on the hills and over use or salinization on fields made environmental degradation inevitable, which finally led to collapse of society. The same development process has been found all over the world from Mediterranean region to old China and to Easter Island. Modern archaeology tells us that the early millennia of agriculture were cycles of ecological - and social - catastrophes. In fact, todayss cultures are those who have survived because at their early stages they have been able to combine the economic, ecological, and social functions of agriculture. To say the least, our survived agricultures have been multifunctional - economic, ecological and social activity - from the very beginning. For instance, in Europe two major developments have been decisive. First, the three field farming system in the 900th century meant that fields did not become degraded and that the speed of cutting forests for agricultural needs slowed down. Secondly, whatever the spiritual and political hierarchy of the feudalistic times, the practical management of natural resources took place at local community level. But even if productivity of land was saved the people have suffered for centuries. Throughout the history all mankind has experienced famines, diseases and bad nutrition. It was only the late 1800th century Enlightenment that taught us that we can - not only protect but also - increase the productivity of land and living nature. Then Adam Smith told us that if farmers were free they would be willing to increase their productivity for their own and common benefit. After this his compatriot David Ricardo advised us about comparative advantage. It took a few revolutions, and agriculture was put on its modern track. For two hundred years societies have demanded more and cheaper food, and these expectations have been met better than expected. In the last century the world population quadrupled, while cropland only doubled saving our forests. Today average food supplies are 24 percent higher per person and real prices 40 percent lower than forty years ago. Per capita food production is now higher than 30 years ago, even if global population doubled since then. Ecological function But after two centuries of extraordinary productivity growth, something new is now happening. David Ricardo promised us constant increase of returns from trade and he also told us that land or nature is "indestructible" production factor. Now we are receiving diminishing returns in many parts of the world and ecological research predicts even collapses of certain ecosystems if present trends are continued. The last year World Bank, UN and World Resources Institute "World Resources 2000-2001" report tells us bluntly: "About two-thirds of agricultural land has been degraded in past 50 years by erosion, salinization, compaction, nutrient depletion, biological degradation or pollution. About 40 percent of agricultural land has been strongly or very strongly degraded". According to the World Resources report, it is true that the European agro-ecosystem is still in relatively satisfying shape. Paradoxically, however, it is EU that today is increasingly active in ecological or environmental problems - starting from its own farmers. The main reasons for this are cultural as well as the recent crisis like BSE, FMD, or dioxin. Just a few weeks ago the EU heads of states and governments Summit in Gothenburg defined sustainability as one of the key strategies of the whole European Union: "The relationship between economic growth, consumption of natural resources and generation of waste must change. Strong economic performance must go hand in hand with sustainable use of natural resources and levels of waste, maintaining biodiversity, preserving ecosystems and avoiding desertification. To meet these changes, the European Council agrees: that the Common Agricultural policy and its future development should, among its objectives, contribute to achieving sustainable development by increasing healthy, high quality products, environmentally sustainable production methods, including organic production, renewable materials and the protection of biodiversity." The European farmers are now strongly squeezed between the old and new Europe, which now live their hypocritical co-existence. Europe was the early 1900th century initiator of the modernisation of agriculture and since 1992 EU itself has followed radical low price agriculture and trade policy. But now the same EU has simultaneously started to move towards high cost policy of quality and sustainability. As farmers our first wish is of course that that EU is consistent in its policies - also that internal policies and external trade policy would fit to each other. For instance, since 1992 our support prices for cereals have been cut by a total of 45% and beef prices will have been cut next year by 35%. These cuts in support for EU agriculture have resulted in a substantial reduction in export subsidies and tariffs and mean that the European Union has already gone further than the requirements set out in the Uruguay agreement. In addition Europe has made a considerable contribution towards stabilising the worlds agricultural markets through major production limitation programmes. This contrasts in particular with what has happened in the USA where support has risen seven-fold between 1996 and 2000. However, today our trading partners blame us of having done too little and our European consumers say we have done too much in terms of having become more productive - or in the new language too intensive called just a few years ago competitiveness. Any economical actor is supposed to respond to the concerns of consumer-citizens. To do this we have now to comply to continuously reinforced rules concerning the guarantees of food safety, greater traceability, animal welfare, environment, more reliable and informative labelling etc.. However, meeting higher and higher quality, environmental and animal welfare standards leads almost inevitably to reduced productivity growth and to higher costs. Yet over the past decade the EUs trade policy has led to continual cuts in farm price support, together with increasing restrictions on the agriculture budget. As a result the European farmers are now being squeezed between higher and higher costs and decreasing prices. The past low price agriculture and trade policy has in effect been undermining the ability of todays farmers to fulfil the increasing expectations of European society. Farmers wish to respond to the expectations of society but trade policies, as well as market conditions, must make this possible. In the light of the global ecological problems and our domestic development it is fundamental to recognise that in trade policy the agri-food sector should never be treated in the same way as other economic sectors. To sum up, agriculture differs from other economic sectors in several critical ways: farmers work directly with the environment: their production is dependent upon the climate, soil, water and sunlight. It is not possible to treat these elements of production, nor is it possible to treat farm animals and plants, in the same way as industrial components; food is a vital necessity all governments must be able to guarantee their population secure and stable supplies of safe food. This is too important to be left solely to market forces: agricultural commodities are subject to significant fluctuations in supplies and prices due to climate, economic fluctuations and international strategic considerations. In an increasingly global market these fluctuations are becoming more rather than less acute. An effective agricultural policy is therefore essential; farmers and their co-operatives supply services to society which provide a public good over and above the production of commodities. They contribute towards the economic viability and employment in rural regions and the maintenance and enhancement of the countryside. Agriculture also has the capacity to make a significant contribution towards reducing pollution through the production of bio-degradable industrial raw materials and bio-fuel and through the provision of carbon sinks. Globally, the ecological lesson from last fifty years and ten thousand years is obvious. We must have trading system which does not force the poor or lure the greedy to degrade or destruct their agro-ecosystems - and which allows or supports to combine economy and ecology on the farm level in a sustainable way. This means containment of neo-liberal current and it means balancing market and policy - trade and non-trade concerns - in ϲʹ rules and on the levels of trading partners. For instance, it would not be sound to allow some relatively small Cairns group economies to shake the global food system feeding whole mankind of five billion people - just to see them to risk their own ecosystems. In short. Saving global agro-ecosystem demands to recognise agriculture as a special case in ϲʹ, containment of neo-liberalism in agriculture sector, revision of David Ricardos concept of land and nature as a factor of production. Social function Ecology or the safety of biosphere is not the only public good dependent on the agriculture. Also the social function of agriculture in form of rural development is now an important factor in the European discussion. But it is also important to remember that world wide the global food system still employs half of mankind. In Asian Monsoon area alone more than one billion people live on farms with an average size of 0,5-1,5 hectares. It took more than a century for Europeans and Americans to develop from their rural societies to the present urban structures. And even with substantial policy measures these two centuries have been often painful. The last five years have demonstrated that it is impossible even for the modern US to develop a neo-liberal regime in agriculture. While telling others to move towards free trade in the last five years the US has made sevenfold its own farm budget. Yet we still continue to hear also the from different quarters strong neo-liberal messages, which would, if implemented, lead to social upheaval in vast rural areas of the developing world - and to consequences like new flows of immigration. Every nation of course decides its policy. But there has been a long and colourful history of different solutions in development economics. History seems to demonstrate that the model of using in balanced way both market and democratic policy has been the best formula. Therefore the ϲʹ rules and increased development funding by different global institutions should make this possible. Only best business schools can make people to believe that neo-liberal global market without policy would be the best solution for developing countries, even for least developed countries. However, the real farm leaders of real farmers in these countries should be heard before saying what is the best interest of developing agriculture. We must avoid that major multinationals would be the main benefitors from policies made in the name of development. The EU has already given a large range of trade preferences to developing countries which has resulted in the EU being by far the largest market for the exports of agricultural products from developing countries. It is in the mutual interest of all partners that further special and differential treatment for developing countries be decided in the framework of the ϲʹ negotiations to ensure a balanced contribution by all ϲʹ members. Special and differential treatment should be given to the least developed countries in a way that gives priority to the strengthening of their agricultural community and food security in an effective way. Economic function Strangely enough, there is now fashionable current in Europe to forget that food production is the original and basic function of agriculture. These currents seem to forget that we all need our daily food, half of mankind is directly involved in food production and distribution, and the other half outside food sector must also eat every day - therefore everybody needing a well functioning, rule based trading system. Today the daily feeding of 5 billion people costs 4 trillion Dollars a year and the share of agriculture is roughly one third of that. Our food trade is roughly ten percent of our food budget. The fundamental economical challenge of agriculture and trade is the fact, that in 20 years there will be 1,7 billion more people who need nutrition. This adds up to the present estimations of roughly 800 million people having now insufficiently food. Given also the emerging ecological limitations, the response to these challenges means necessary contribution - export - from those agricultural economies that can develop their production in a sustainable way. The obvious conclusions is that, trade, trade rules, and therefore well functioning ϲʹ is needed more than ever. But what kind of trade rules? A good start is to say that we have already now a functioning global trading system. It should be gradually improved and not quickly destructed. We can develop it gradually without making big jumps to neo-liberal risks, that - as said above - even the US agriculture is not able to carry. It is well known that EU is the second largest food exporter in the world, but it is less known that we are also the largest food importer. We all should be ready to gradual and balanced development on the basis of mutual potentials and interests in such a way that we simultaneously combine both trade and non trade concerns world wide. Conclusion Multifunctionality of agriculture is not a policy choice it is an empirical fact. Since David Ricardo classical economics has misunderstood labour and land as production factor and it has given priority to finance and technology. As it is well known labour reacted immediately creating the great social drama of the 20th century. Today human beings cannot be treated in work or in trade policy like machines. Land or living nature was long silent. Now with the recent ecological findings, it turns out that Ricardo was wrong also about land or living nature: land or living nature is vulnerable and not "indestructible" as he said. Modern agriculture belongs both to economy and ecology or living nature. Therefore it must be economically sound and viable but it cannot be treated like production of industrial components. To save the agro-ecosystem demands containing of neo-liberal trade policy. Neither can agriculture remain for a long time a battle field of economy and ecology. Reconciliation must be found. Throughout human history agriculture has earned its justification through combining its production-economic, ecological and social functions on practical farm level. Justified model of agriculture is vital also in future and fair trade rules must make this possible. It is essential that the we follow a trade policy in the current ϲʹ negotiations which takes account of the wider role of agriculture compared with other sectors and ensures societys expectations of agriculture are met. This concern is not restricted to the European Union. Fewer and fewer societies, throughout both the developed and developing world, are willing to move towards freer trade without taking into account its impact on other issues of equal or greater concern. This was illustrated very vividly in Seattle and is now presenting ϲʹ members with their most important challenge. The forthcoming negotiations must achieve a balance between trade and non-trade concerns and enable agriculture to fulfil its multifunctional role. If not the credibility of the ϲʹ will be seriously eroded. We must examine together the least trade distorting way in which both the trade and non-trade concerns of society can be met in such a way that agriculture develops world wide both economically viable and ecologically sustainable. What does this mean in practice? In practical terms you can draw the following conclusions. Price and market support must remain an essential element of the policy accompanied by adequate measures so that producers and their co-operatives are able to provide the high quality standards and environmentally friendly production demanded by society while maintaining a reasonable income. Account must be taken of the specific situation, characteristics and requirements of each production sector through the possibility of a differentiation in treatment by sector. In view of the substantial increase in support in the USA, a new examination of domestic support must be made to see to what extent it respects the GATT agreement and to assess the effect of aids on market prices and the competitive position of commodities. Aid which varies according to market prices and which is paid on products to be exported is particularly trade distortive and should be treated to discipline at least equivalent to that applied to export subsidies. In the EU case, any change in the our aggregate measure of support fixed in Uruguay for the year 2000 must ensure that it does not go below decisions taken by the European Council in Berlin and is only possible under certain conditions: that the concept and content of the blue box are maintained so that it, together with green box, contains adequate measures to enable EU farmers to fulfil their multi-functional role. Domestic programmes which contribute to stability in as least distorting a way possible should be treated positively under ϲʹ rules. Direct payments which are linked to production limiting programmes (blue box) or other limits (quotas, guarantee thresholds) should therefore not be subject to cuts . The Special Safeguard Clause should be continued and be reinforced to offset the effects of monetary fluctuations. The rules concerning market access must ensure that the concerns of European consumers are met and that there is fair competition between EU and imported products. This means the application of equivalent standards and the same rules on labelling. These must include provisions to guarantee effective protection against usurpation of names for agricultural products and foodstuffs and the right to use geographical indications or designations of origin so that consumers have assurances of quality. This issue is of major concern to agriculture and therefore should be included in the agricultural negotiations but, in addition, must be treated under the TRIPS agreement. There must be equivalent discipline for all instruments of export support, including export credits, single desk export trading as well as other forms of support which lead to an increase in the volume of exports (e.g. marketing loans, loan deficiency payments). In order to avoid the abuse of food aid and to improve its effectiveness, a body should be set up to co-ordinate the provision of supplies of food aid, to ensure the application of a common code of conduct and to ensure that food aid does not damage local food production and marketing capacities. Farmers are being increasingly squeezed by global concentration in the agri-food industry. The ϲʹ outcome must support a competition policy which guards against the global concentration of supply and trade industries and ensures a level playing field between co-operatives and the rest of the agri-food industry so that co-operatives can improve their marketing position on behalf of farmers. Specific non-trade concerns EU farmers and co-operatives are determined to meet EU regulations concerning food safety, quality and environmental protection, sustainable production methods and animal welfare but it must be ensured that this is compensated either via the market or through the budget so that they do not lose markets to competitors. In this respect: food safety rules applied to domestic production must also be applied to imports. Developing countries should be given the necessary technical assistance to ensure that this does not constitute a barrier to their trade; it must be possible to apply the precautionary principle in the case of legitimate concerns about food and environmental safety when scientific assessment is inconclusive or incomplete. While this is at present possible under the SPS agreement, the implementation of the precautionary principle should be clarified so that it is not misused as a protectionist market measure; measures to address additional costs incurred to meet environmental and animal welfare standards should not be subject to discipline. Farmers' and co-operatives' positive contribution to the environment, rural development as well as the maintenance, of a countryside and landscape must be recognised as a public good which can be remunerated under ϲʹ green box. Enlargement The European Union is now facing the biggest challenge since its creation enlargement to include thirteen new member countries, most from eastern Europe. This is a development of world-wide importance and it is in the interests of all ϲʹ members that the process of enlargement is carried out successfully. This will require solidarity not only between the applicant countries and the EU and between the different economic sectors but also between the EU and its trading partners. This solidarity between trading partners must be reflected in the outcome of the current ϲʹ negotiations. Peace Clause (due restraint under Art. 13 of GATT Agreement on Agriculture) The Peace Clause should be extended until the negotiations have been completed. Developing countries The EU has already given a large range of trade preferences to developing countries which has resulted in the EU being by far the largest market for the exports of agricultural products from developing countries. It is in the mutual interest of all partners that further special and differential treatment for developing countries be decided in the framework of the ϲʹ negotiations to ensure a balanced contribution by all ϲʹ members. Special and differential treatment should be given to the least developed countries in a way that gives priority to the strengthening of their agricultural community and food security in an effective way. Agriculture must not be bargained There can be no question of trading concessions in agriculture in exchange for gains for other economic sectors. _____________________ PAGE 3 PAGE 9 q{ k m ?Ahc"d"H#((7,G,H,Y//45666==,?.?BfFgFFG[GGYHӿ嫡šōCJKHOJQJ56CJH*OJQJ56CJOJQJ CJOJQJ6CJOJQJCJmH  5CJKH5CJOJQJ 6CJKH56CJKHCJH* 56CJCJ 56>*CJ 5>*CJ5CJ6CJCJ4  &EWqV?z{  $ & F1$  &EWqV?z{  ^_dhi7!8!c"d"##$$&&((q*r*J+K+{+++7,8,H,-- 3   3  3  .   .  .  0 /  1   1   1   1  1 J ^_dhi7!8!c" $ & F  h$ & F0 $ & F/ h$c"d"##$$&&((q*r*J+K+{+++7,8,H,--..00G2H2$ & F3$ & F.$-..00G2H2445666K8L8 99m;n;===?qAABBDFEFGZG[GHH2I3I KKMMVNWNPPRR1S2STTTT-V WXY, 2  2  2  2  2  2  2  }2  ~ 2 8H2445666K8L8 99m;n;===?qAABBDFEFGZG[G$[GHH2I3I KKMMVNWNPPRR1S2STTTT-V WX$ & F, h $ & F, $$ & F2$ S $ & F2 SYHHH1I3ImIIKKMMOPP%Q(QHQSSTTTYYYN\[\\\]^____`/`0`6`7`8`9`:`<`=`C`D`E`F`G`J`K`0JmH0J j0JUCJKHOJQJCJKHCJ5CJOJQJ CJOJQJ56CJOJQJ6CJOJQJ56CJKH 6CJKH 56>*CJ6CJ 56CJ6CJhnH 3XY YYYYZM\N\\\\]^__``/`:`;`h&`#$$ $$1$$$ 9r $ & F, hnY YYYYZM\N\\\\]^__``/`:`<`G`H`I`J`K` ;`<`G`H`I`J`K`$h&`#$ 0/ =!"#$% [$@$NormalmH H@H Heading 1$<@&5CJKHOJQJD@D Heading 2$$0@&6CJDD Heading 4$<@&5CJOJQJDABD Heading 5$$0@&CJKH<A@<Default Paragraph Font,@,Header  !&)@& Page NumberB @BFooter$x 9r CJKHOJQJ0" List Bulletr$$ & FWx>TCJKHOJQJ:B@2: Body Text $x CJOJQJDP@BD Body Text 2 $x56CJOJQJPS@RPBody Text Indent 3 $Vx CJOJQJVC@bVBody Text Indent$$VxCJKHOJQJK\z YHK`19 c"H2[GX;`K`24578:<-YK`36; !T!T jvMY;?CGO%S%c'g'''Y++++++p7t79:2=6=HHyO}OYP]P.\/\9\<\F\I\L\ n7q7r7s7==>>>>????AACWWWWWWWWWWWWWW[[./9<\F\H\H\I\L\ Volanen Risto'C:\TEMP\AutoRecovery save of GENEVE.asd Volanen Risto'C:\TEMP\AutoRecovery save of GENEVE.asd Volanen Risto'C:\TEMP\AutoRecovery save of GENEVE.asd Volanen Risto,C:\WINNT\Profiles\volanen\Desktop\GENEVE.doc Volanen Risto,C:\WINNT\Profiles\volanen\Desktop\GENEVE.doc Volanen Risto'C:\TEMP\AutoRecovery save of GENEVE.asd Volanen Risto,C:\WINNT\Profiles\volanen\Desktop\GENEVE.doc Volanen Risto,C:\WINNT\Profiles\volanen\Desktop\GENEVE.doc Volanen Risto,C:\WINNT\Profiles\volanen\Desktop\GENEVE.docHilde Kindermans!\\LH3\files\2001\Dis\DIS26-1E.doc3NYZh>Zc ^6-dzE2Z1 a}zE  ~b  M3Z  xzEXzEh1"Zc ^Q$Z+)Z{~)zE*+Z`-Zc ^? 3 ;3 FF:JM: h,<Z;>zE)WC ~GzE!IGzEoHZ;.JZc ^OQMZl]MZEOZiXR6ra RZSzEZ}TFF: iXRJM:NY2~b 6-d4_{~)a}S[U~GOQMXx!IG? 3;>a R;.J;3iswo)WCM3EON3ZDK~|zx=uh]*+`-Z}Ttnl]MoH@EU"7 q+)h,<1:pmQ$|`@ mOJQJo(3@ "U K\@@GTimes New Roman5Symbol3& Arial"1h.2W.2W,WU L&!0dW]PnTwo weeks ago World Bank and two united Nations organisations published their report on the Earth's ecosystemsVolanenHilde KindermansOh+'0,8H dp    oTwo weeks ago World Bank and two united Nations organisations published their report on the Earth's ecosystemswo VolanenolaNormalHilde Kindermansld 3ldMicrosoft Word 8.0 @@sr@D$Q@D$QU L՜.+,D՜.+,\ hp  ;COPAk&W]j oTwo weeks ago World Bank and two united Nations organisations published their report on the Earth's ecosystems Title 6> _PID_GUIDAN{17124974-8D74-11D4-8456-0050DA35A04C}  !"#$%&'()*+,-./0123456789:;<=?@ABCDEFGHIJKLMNOPRSTUVWXZ[\]^_`cRoot Entry FWjte1Table>$WordDocument!zSummaryInformation(QDocumentSummaryInformation8 \\LH3\filesYCompObjjObjectPooltt  FMicrosoft Word Document MSWordDocWord.Document.89q