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23 September 1992
Doc. 6676
O P I N I O N
on the activities of OECD in 1991
in the field of agriculture 1
(Rapporteur: Mr SCHEER, Germany, SPD)
PROBLEM:
Access to food should be a basic human right and yet millions of people are starving while others have surpluses. The pressure on the environment, caused by an increasing world population as well as by intensive farming practices and other wasteful and polluting uses of natural resources threatens life on earth in the long term. In many countries of the world, farmers leave the countryside for urban areas without finding work, leaving farmland and forests idle. The analysis of policy reforms affecting the agro-food sector and their consequences becomes increasingly complex and multidisciplinary.
SOLUTION:
Increased trade in agricultural commodities, coupled with agricultural development, would improve people's access to food. The adoption of policies aimed at increasing the use of agricultural production for energy-production and industrial purposes, would reduce environmental degradation, help improve farmers' situation and stimulate rural economic development. OECD and its member governments should actively pursue such policy reforms and carefully analyze their multiple consequences before their implementation.
I. INTRODUCTION
The imbalance in world food production and distribution, the increasing negative impacts on the environment caused by human activity and the difficult employment situation in rural regions are major concerns in the current international discussions on the need for agricultural policy reforms and trade liberalisation (including the forestry and fisheries sectors). The present report reflects and comments on some of the new and traditional areas which are affected by agricultural policy reform. It puts forward a few priority areas where OECD and its member governments could strengthen international co-operation.
II. GLOBAL CHALLENGES
The major crises and challenges facing the world at the end of this millennium are linked to its high and increasing population, and to the wasteful and polluting use of natural resources. The social conflicts arising from the often unfair distribution of resources has led to costly civil unrest and conflicts. People in certain regions and "pockets" of society starve while others have to much to choose from. Access to food should be a basic human right for every person.
The preservation of life on earth and the need for nature conservation impose the adoption of sustainable resources management policies. Similarly, trade rules should also encourage sustainable management practices and should not discourage or adversely affect agricultural developments in regions with few other economic possibilities or where food needs can not be satisfied through trade, be it due to lack of local purchasing power or for other reasons.
These global challenges and their consequences for resource management policies, including agriculture, fisheries and forestry, clearly illustrate the increasing interdependence of the world community of states and regions. It also shows that policy reforms must be undertaken, using an interdisciplinary approach. Agricultural policies can no longer be designed without a due regard to environmental policies. Trade rules must also take account of their environmental and social impacts. Such global approaches to policy reforms need sophisticated analytical instruments and models for the handling of data as well as for the evaluation of model scenarios and of the possible consequences of reforms.
OECD should therefore continue its work on the monitoring of agricultural policies, markets and trade and develop this comprehensive review to increasingly include non-monetary factors of importance to agriculture, as well as factors related to the multifunctionality of the sector. More emphasis should be given to the building of similar analytical tools for the fisheries sectors. Work must be intensified for the formulation of sustainable resources management policies.
III. THE KEY TO A REVITALISATION OF THE RURAL WORLD
Agriculture and the agro-food sector play an important role for employment in the countryside and for the health of rural economies. The continued pressure in OECD countries to reduce food production in line with market demands, and the increased efficiency of farming have resulted in more and more farmers leaving their profession. Structural adjustments to increase efficiency of the sector have been a key issue for agricultural policy reforms during decades. Many less favoured regions have suffered considerably from these reforms and some have been completely abandoned. The employment problems of urban centres have increased while land and forests are left idle without necessary maintenance. A part of our cultural heritage has been lost.
This degradation of the rural world is taking place at a time when technological progress has made it possible to drastically increase the use of agricultural land for the production of energy (wind farms, etc.) and renewable raw materials for industry and the energy sector (biomass). Such alternative developments can contribute to increase rural employment, give farmers a new production task and improve their income situation, as well as eliminating present pollution and other nuisances resulting from the use of fossil fuels. The Parliamentary Assembly of the Council of Europe in its Resolution 979 (1992) on agriculture's contribution to enhancing energy security and saving the global environment, therefore calls on the governments of member states "to favour biomass cultivation and its use for energy production through policy reforms affecting all relevant sectors".
The Assembly has also recommended to member governments to favour the production and commercialisation of quality food products from certified regions or countries of origin [Recommendation 1142 (1991)]. This initiative was taken with a view to stimulating the economies of rural regions where high quality food is a major source of income and to preserve our culinary heritage. It is important in this context that governments take measures to inform the public of all aspects of food quality and the relations between nutrition, diet and health.
In its future work programme, OECD should place greater emphasis on formulating and analysing policy reforms to favour agricultural non-food production for industry and the energy sector. The commercialisation of regional food specialities in order to strengthen rural economies and improve farmers income should also receive greater attention in agricultural policy reform analyses.
IV. THE NEED FOR INTERDISCIPLINARY POLICY REFORM
A multifunctioning agriculture which provides a variety of services to society requires an interdisciplinary approach to policy reforms affecting the agricultural sector. Tourism, recreation, crafts and other industrial activities could increasingly take place in the countryside if policies were designed to this end. Your Rapporteur therefore welcomes the increased emphasis which OECD has given to more comprehensive studies and policy analyses. This was notably the case at the latest meeting of the OECD agricultural ministers on 26 and 27 March 1992.
It is important that a close co-operation between the different bodies responsible for the various sectors of OECD's work is maintained and strengthened. OECD's approach to rural development may serve as a good example in this respect.
V. ON THE WAY TO FREE TRADE IN AGRICULTURAL COMMODITIES
The Assembly has on several occasions given its support to letting market signals increasingly influence agricultural production. It believes that such development will greatly favour world trade and thereby economic development. It hopes that - in spite of the protracted negotiations - the Uruguay Round negotiations of the General Agreement on Tariffs and Trade (GATT) will be successfully ended and that the resulting trade regime will have a beneficial effect on agricultural and rural development worldwide. OECD should be congratulated in this context for having succeeded in convening the above mentioned meeting of agricultural ministers during a critical face in the Uruguay Round. This meeting, the first since 1987, helped in approaching a breakthrough in the difficult agricultural trade discussions.
Nevertheless, the Assembly is of the opinion that far more attention should be given to the environmental and social repercussions of different trade regimes. It believes that work in the OECD in order to increase the transparency of different subsidy schemes or other support measures affecting agriculture will help governments substantially in dealing with these complex matters which can not be separated from general economic policies. A up to date analysis of the impact of a successful Uruguay Round on the farming community and the agro-food sector would be most helpful to governments in adapting their policies to the conditions arising from a new international trade situation.
VI. RELATIONS TO NON-MEMBER STATES
Increased trade in agricultural commodities will make it most important to carefully follow developments in non-OECD member countries and to analyse the consequences of these developments for OECD members. The dramatic changes taking place in Central and Eastern Europe demand particular attention. OECD's response to this challenge, by setting up a Centre for Co-operation with European Economies in Transition (CCEET) and a new "partners-in-transition programme involving in its first stage Hungary, Poland and the Czech and Slovak Federal Republic, is therefore a most judicious initiative.
The expertise which has been built up over the years in the OECD for the monitoring of agricultural policy reforms, markets and trade, and the know-how in analyzing the various consequences of policy reforms as applied to agriculture, rural economic development and farmers income situation, could be most valuable when assisting Central and Eastern European countries in their reform process. Such policy advise could also be offered to other newly democratic countries.
A problem of particular importance and urgency for Eastern Europe is to educate, train and provide advisory services to new private farmers. It would therefore be most helpful if OECD could invite representatives of these countries to participate in its activities in these fields. The setting-up of co-operation schemes in bilateral and multilateral assistance programmes, e.g. exchange schemes for farmers, teachers and students, could be promoted. The OECD could also promote and help coordinate agricultural research, and extend this activity to include non-member states where relevant.
VII. POSSIBLE TEXT TO BE INCLUDED IN THE DRAFT RESOLUTION
to be adopted by the Enlarged Parliamentary Assembly
"The Assembly emphasises that increased trade in agricultural commodities should have positive effects for sustainable rural and agricultural development and contribute to guaranteeing all persons access to food.
The Assembly believes that all policy reforms affecting the agricultural sector and rural society must be subjected to a careful and interdisciplinary analysis in order to evaluate the effects on producers, consumers, markets, trade, the environment and the economy.
Consequently, the Assembly calls on the governments of the member countries of the OECD, and whenever relevant, on the Organisation itself:
i) to conclude the Uruguay Round of Trade Negotiations by agreeing on a greater degree of liberalisation of trade in agricultural products under fair conditions of competition while safeguarding the sustainable development of their respective rural regions and promoting food security in all countries;
ii) to continue, intensify and broaden their work on decision support and policy simulation models for the monitoring of agricultural policy reforms (including fisheries and forestry) and accompanying structural changes and their effects on markets, trade, producers and consumers as well as rural economies and the environment;
iii) to increasingly include in this work and other parts of OECD's activities programme, the policy principle of sustainability;
iv) to give more attention to the use of agricultural land for the production of electricity (wind generated electricity, etc.) and renewable raw materials for industry and the energy sector (biomass), thus reducing the nuisance stemming from the use of fossil fuels and offering new perspectives for agricultural activity and rural development;
v) to favour policy reforms which will contribute to preserve regional specialities and encourage quality food production and assure that consumers be better informed of the quality of such products through appropriate labelling;
vi) to let market signals increasingly influence agricultural production and help such development by making support measures affecting agricultural, fisheries and forestry more transparent;
vii) to assist the countries of Central and Eastern Europe but also other non-member countries in their reforms of the agro-food sector and to favour exchange programmes involving private farmers, teachers and students;
viii) to promote and help coordinate agricultural research among member states and extend such activities to non-member states where relevant.
Reporting committee: Committee on Economic Affairs and Development (Doc. 6651).
Committee for opinion: Committee on Agriculture (and competent committees).
Reference to committee: Doc. 6624 and Reference No. 1792 of 30 June 1992.
Opinion: Approved by the committee on 17 September 1992.