Facing challenges, harnessing potential
Nikolaus Berlakovich, Federal Minister of Agriculture, Forestry, Environment and Water Management, and co-Chair of the 2010 OECD Agriculture Ministerial Meeting
The agricultural sector has changed in recent years. Agriculture in the 21st century has to produce more food and fibre to feed a growing population with a smaller rural labour force.
Feeding the world population adequately means producing the kinds of food that both ensure nutritional security and are acceptable to consumers. Food security only exists when everybody has access to sufficient, safe and nutritious food to meet not only dietary needs but also preferences.
In this context, regional and locally produced foods play a vital role, while contributing to the livelihood of farmers in the region and enabling them to deliver environmental benefits in keeping with societal demand.
But with rapid urbanisation and other land uses, agriculture will be forced to compete more and more for land and water, and will also be required to adapt to and contribute to the mitigation of climate change. The sector affects and is affected by climate change. No other sector is more climate sensitive. This is one of the new challenges we have to face.
Climate change is predicted to affect agriculture and forestry systems in many ways, through higher temperatures, elevated carbon dioxide concentration, precipitation changes, increased weeds, pests and disease. In the short term, the frequency of extreme events, such as droughts, heat waves, floods and severe storms is expected to increase. We need to work on concepts to help us adapt to these changing circumstances.
Meanwhile, the agricultural sector can contribute to efforts to mitigate against climate change. A potentially large bioenergy market can contribute to overall development and bears huge income potential for farmers. Of course, the production of bioenergy needs to ensure efficient and sustainable production methods, and the precondition is: “first the table, then the tank”.
With the globalisation of markets, our farmers’ endeavours to sustain their businesses and to earn a decent living–including in less-favoured regions–have to be supported. In Europe, for example, we need a strong Common Agriculture Policy (CAP), which has to provide an adequate framework for sustainable production. The CAP needs to enable the agricultural sector to deal with the challenges posed by changing climatic conditions, market instability and price volatility. We need safety nets for our farmers.
The price volatility experienced in recent years has caused serious uncertainty for our farmers. Part of the problem is speculation. We must discuss how to curb financial speculation on basic commodities, such as food. The OECD’s agriculture ministers should address this issue at their February meeting in Paris.
Innovation and political will
(©Government of New Zealand)
David Carter, Minister of Agriculture, Minister of Biosecurity and Minister of Forestry, and co-Chair of the 2010 OECD Agriculture Ministerial Meeting
In the face of a growing global population, we must confront food security with new thinking, new approaches and a strong political will.
Free trade, protecting natural resources and investment in research and development are all fundamental to ensuring we can continue to feed the world.
It is common sense that food be produced in areas best suited for farming by those most efficient at it. But for this to happen, and particularly if the current food security challenge is to be addressed, there must be a commitment to free and open trade.
New Zealand strongly advocates the removal of trade barriers and is continuing to pursue a rapid and successful conclusion to the Doha Round. This is necessary to address the distortions that penalise efficient producers and impair the opportunities for farmers in developing countries to lift themselves out of poverty and contribute towards alleviating hunger.
Protecting the natural resource base of farmers and growers is also critical to the strength of the agricultural sector. New Zealand is placing top priority on sustainable production practices with a particular focus on fresh-water management. We are one of the fortunate countries with an abundance of fresh, clean water, but the problem is, it does not always fall in the right place at the right time. Improving water storage and water allocation is a key goal for the New Zealand government.
Internationally, some of the most significant developments will come from balancing food supply with greenhouse gas emissions reduction. As a nation dependent on agricultural exports, New Zealand knows how important this is.
Solutions to issues such as water management and climate change will come about through collaboration by government and industry, research, analysis and new policy frameworks.
As our country’s economic future relies on new ideas and innovation, investment in research and development is a priority. The New Zealand government and industry have committed significant resources to establishing a domestic centre specialising in agricultural greenhouse gas research.
New Zealand is also leading the development of a Global Research Alliance on agricultural greenhouse gas mitigation research. This alliance will broaden existing research networks internationally and build new ones, increase support and resources for agricultural emissions research, and enhance the development and application of agricultural mitigation technology. The overall aim is to enable the developed and developing world to produce more food with lower greenhouse gas emissions, ensuring food security for the future.
Pursuing partnership, not Protectionism
(©Government of Canada)
Gerry Ritz, Minister of Agriculture and Agri-Food
As a global leader in agriculture, Canada believes open and fair trade will drive the prosperity of its farmers and put safe, top-quality food on the dinner tables of the world. The need for fair, science-based trade is all the more urgent in this time of ongoing economic uncertainty in a rapidly changing world. Our government will continue to work through the WTO, bilateral free trade agreements, as well as with our OECD partners, to remove barriers to trade and open up new opportunities for agriculture. Trade is vital to ensure that food gets to the people who need it, while providing farmers with fair returns for their produce.
At home, through Canada’s Economic Action Plan, we continue to build a firm foundation with better roads, water systems and infrastructure. These investments will provide jobs and help farmers grow and transport their products, making sure Canada can weather the current global economic storm. Our government is working with the public and private sectors to develop new technologies and practices that help our farmers increase production and reduce risk from disease, pests and climate, to enable them to meet the increasing world demand.
The government of Canada will continue to work closely with our industry and our provincial and territorial counterparts to develop flexible, proactive, market-oriented policies and programmes that put farmers first. We are working with the agriculture and food industry to meet the needs of a rapidly changing world by supporting “mind-to-market” research, strengthening food safety and environmental practices, and helping our producers better manage business risk.
As we begin to see early signs of recovery, our government knows that agriculture plays a key role in our economy and we’ll continue to work on all fronts: international trade, farmer-led research, and sound programmes to make sure our agriculture industry remains strong and a leading exporter around the world.
Share knowledge to win
Ilse Aigner, Federal Minister for Food, Agriculture and Consumer Protection
Knowledge is our most important raw material for the future. Germany is counting on research and innovation to meet the challenges of the agrifood sector in the 21st century. Climate protection, food security and eco-friendly farming can only be achieved with the latest technology, the best training and the most efficient business management. Generating new knowledge is a permanent challenge: if we stand still we shall lose ground.
Agricultural research in Germany is increasingly focusing on the production of foodstuffs and renewable raw materials. It has to come to terms with society’s growing demands for responsible management of soil, water, air and biological resources.
The results of agricultural research are finding their way into policy decisions in Germany. The economically oriented work of the OECD can make a useful contribution here.
Germany has a wide range of tools at its disposal to promote new discoveries in areas that are important for the future. Our goal here is to make the agrifood industry more competitive, to maintain added value, to improve working conditions and to help conserve our natural resources.
Challenges such as adapting to climate change call for input from both basic and applied research. Biotechnology, for example, can help enhance the potential for food crops to withstand drought, heat and other unfavourable environmental conditions and increase their nutritional content. Conventional varieties and technologies should be further developed on the basis of the many local crops and wild plants available.
Research into renewable raw materials is primarily focused on developing product lines, finding new applications beyond the food sector and making efficient use of biomass as part of tomorrow’s energy mix.
Because the problems we face are global in scope, all those involved will have to accept this rule: those who share knowledge will win. In this connection, Germany welcomes the work of the OECD Co-operative Research Programme on the use of natural resources for sustainable agricultural systems. Strong agricultural research cannot be the exclusive preserve of wealthy countries; it must also serve the interests of developing countries.
Agricultural research must now go hand-in-hand with the training of skilled workers. Germany stands by its responsibility in this regard and is already actively involved in numerous co-operation projects.
We recognise that we can only achieve our agriculture policy goals for the future if we all work together.
Modernising and adapting
(©Government of Chile)
Marigen Hornkohl, Minister of Agriculture
The world is constantly evolving, and we should not be surprised by these sudden daily changes. As populations grow, so do their needs, often accelerated by the expectations of a better quality of life.
Although climate change takes place over long periods of time, it is mankind’s responsibility to anticipate and respond to these changes now, especially as these changes will transform how we produce. Together, we must adapt to these changes, both by reducing the causes and minimising the impacts.
It is necessary to highlight the important role that global governance will play in helping us face these challenges. Today, national and multilateral organisations and agencies are called to work together, to co-ordinate their efforts and demonstrate a solid and integrated institutional performance. We also welcome public-private agreements that could be achieved in this area.
With these challenges in mind, we in Chile have planned to develop our agriculture with the goal of becoming a food and forestry powerhouse. We hope to contribute to world agriculture in a responsible manner that emphasises the use of renewable resources.
We have adopted an open-trade strategy because we assume that greater trade means greater welfare. Certainly such trade needs to be fair and have clear, equitable rules among countries. This is one reason why we support a substantial agreement on agriculture at the WTO, which seeks to reduce subsidies and dismantle trade barriers.
Our plan to achieve that competitive advantage involves more and better innovation in animal and vegetable genetics, as well as meeting the highest plant and animal sanitary standards in the world. This modernisation will propel us towards a more interconnected agriculture.
We are particularly interested in planting and exploiting forests of native and exotic species. We are aware that well-managed forests can help mitigate the effects of climate change while generating employment and productivity in the sector.
We understand that people, whether workers or consumers, are at the heart of these initiatives. This is why our efforts emphasise social justice, higher incomes and access to services that guarantee a better quality of life for the people who are directly or indirectly involved in our agricultural sector. In this constant pursuit of equal opportunity, we also place a high priority on how our policies benefit small producers, women, indigenous populations and young people.
Confronting an unacceptable scandal
Tom Arnold, Chief Executive of Concern Worldwide and former Chair of the OECD Committee for Agriculture (1993-1998)
The issues to be considered at the OECD agriculture ministerial meeting provide a good overview of the factors affecting the rapidly changing global food economy–climate change and resource scarcity, changing consumption patterns, evolving market structures and global supply chains.
But with the number of undernourished now reaching more than one billion people, outrage must be expressed at the sheer unacceptability of a statistic which tells us that, in the 21st century, almost one sixth of humanity goes to bed hungry each night. The short and long-term human and economic costs of this statistic must be fully grasped. What are the policy options or priorities to change the situation?
There are no simple answers to resolving this problem. But two major policy changes will be central to making progress.
Firstly, food-insecure countries, particularly in sub-Saharan Africa, need to provide the policy framework for, and increased investment in, agricultural and rural development. For most of these countries, agriculture remains their largest economic sector and unlocking its productive potential provides the basis for economic progress.
Secondly, nutrition policy and programmes should receive greater priority, with a particular focus on ensuring that pregnant women and children under two years are adequately nourished, thereby preventing chronic and acute malnutrition. Inadequate nutrition until the age of two leads to physical and mental stunting–in some African countries, up to 50% of the children are stunted–which cuts off an individual’s, and a nation’s, economic potential.
As it happens, progress is being made in both policy directions. The food-price crisis of 2008 brought home to political leaders in food-insecure countries that it makes political and economic sense to prioritise food security. The UN High Level Task Force on the Global Food Security Crisis is providing effective leadership to both developing countries and OECD donor countries in emphasising food and nutrition security.
The OECD agricultural ministerial meeting provides an opportunity for those responsible for policy to make a clear statement that the scandal of over one billion hungry people is unacceptable, and that OECD countries will take serious and substantive initiatives to change this. I hope they will take the opportunity.
International Federation of Agricultural Producers
Support the farmers’ agenda
Ajay Vashee, President
With the food price crisis of 2007-2008 and the current widespread economic crisis, there has been an awakening that the agricultural sector is of critical importance in creating sustainable economic and political landscapes.
Moreover, last year at the UN Climate Change Conference in Copenhagen, IFAP led an effort with the world agricultural institutions–the CGIAR, the FAO, the Global Donor Platform and others–to put forward the link between food security and the sustainability of agricultural production towards a “shared vision” that explicitly recognises the link between food security and climate change, an issue which will undoubtedly shape the agenda for years to come.
Meanwhile, agricultural producers worldwide face the challenge of increasing world food production by 70% to meet the needs of a global population that will reach 9.1 billion people by 2050 while using less water, producing less greenhouse gasses and conserving agricultural biodiversity, all on essentially the same land mass.
To meet this enormous challenge, farmers need direct support from foundations, governments and intergovernmental agencies to enable them to co-ordinate and intensify their production using knowledge-based farming systems. This means using integrated water-management solutions, closed livestock systems and bio-gas digesters, diversifying and increasing production for local markets, and providing more eco-system services as part of farming operations. Agriculture will have to be redesigned to increase productivity in an environmentally sustainable way.
We lack, however, the financial resources and political will to put these kinds of activities into practice on a scale that will really make a difference. First, in developing countries, more and better investment in agriculture is required. Second, farmers need incentive systems to adopt the most sustainable farming practices. Third, increased investment in research and innovation is needed, specifically to bring research into practice in farmers’ fields. Fourth, farmers need risk-management tools. They need safety-net programmes to keep them out of poverty if things go wrong.
Agricultural investments need to be catered to this very clear agenda, supporting the development of IFAP and strong farmers’ organisations throughout the world. IFAP challenges OECD agricultural ministers to realign their global agricultural agendas to the farmers’ agenda; only then can we be certain of success.
Closing the productivity gap
Samuel R. Allen, President and Chief Executive Officer
A crucial element in meeting the future needs of a growing, more affluent global population is accelerated innovation across the entire food system–from farm production through distribution, right to the final consumer. This entails closing the critical gap between the historical trend rate of agricultural productivity growth and the far faster pace required to meet future needs. Closing this gap will enable sustainably feeding a growing world while meeting the environmental, resource and other goals of our global society.
Achieving such a monumental task involves embracing all types of modern production practices, including conventional and organic agriculture, and producers of all sizes and types, from subsistence to commercial. Deere solutions play an important role in enabling such a diverse global customer base to significantly raise productivity and improve livelihoods.
At Deere, our specific efforts are focused on sustained research and development, enhancing our global presence to better serve customers, and establishing collaborative partnerships.
Research and development is a critical component in accelerating innovation. Deere’s R&D budget exceeds some $2 million per day, utilising customer feedback along with market demands to develop machinery and services ideally suited to the many varied conditions around the world, in terms of technical level and affordability.
We continue to make our products and services more readily available worldwide by an expanded presence in new markets. An example is our recent launch of an ambitious initiative for the African continent with an expanded product portfolio, dealer network and parts distribution. The continuing presence of a dealer network–maintaining proximity to the customer–is critical, to provide local technical expertise, service machines in a timely manner and conduct operator and other technical training programmes.
John Deere also values a network of collaborative partnerships around the world. These provide opportunities to share best practices related to crop and livestock production that improve farmer profi tability, support educational and technical in institutions, and assist emerging market countries generally in achieving their rural development goals. While accelerating farm and food chain productivity growth is crucial, Deere also recognises the necessity of other parallel actions in meeting the global food challenge. Supportive national policies that promote political stability, open markets, encourage investment and facilitate trade also are essential ingredients that we support.
World Trade Organization
Trade is key to food security
Pascal Lamy, Director-General
Global food prices have risen signifi cantly in recent years, triggering a debate on food security. Though the main drivers underlying the price increase and their magnitude have varied by commodity, overall, structural imbalances between supply and demand and declining stocks over the past five or ten years set the stage for these changes. Short-term factors, such as higher energy prices, the promotion of biofuel markets, adverse climatic conditions and currency depreciation, further exacerbated by certain policy responses, like the imposition of restrictions on food exports, have served as a catalyst to these abrupt changes in global markets.
The solution involves both national and international actions. Given current trends in population growth and consumption patterns, raising supply is clearly the answer. More food is needed, which in turn requires more agricultural investment and production, mostly in developing countries.
International trade is key because it helps channel food from food-surplus to food-deficit countries. It promotes efficiency by shifting production to countries with the greatest comparative advantage. In doing so, trade promotes investment and employment in those rural areas where the impact of the food crisis has been felt most. Through increased competition, trade also helps lower prices and moderate potential price spikes. It is no surprise that some recent price hikes have occurred in commodities with low trade-to-consumption ratios, such as rice.
Climate change will also have many impacts on today’s agriculture, including potentially greater water scarcity. In 2006, the UNDP’s Human Development Report drew our attention to the water-saving potential of international trade. The “virtual trade in water”–as UNDP called it–could lead to reduced water consumption in importing countries. It gave the powerful example of Egypt, which if it were to seek self-suffi ciency in agriculture, would need more than one Nile. International trade will also help reduce dependence on single sources of production.
More trade means tackling the large distortions that still plague international markets in agriculture. The Doha Round of trade negotiations can help. Its key mandate is to achieve major improvements in the area of market access, reductions in trade-distorting agriculture subsidies and the eventual elimination of all forms of export support. Countries have made great strides in achieving these goals, and a result is within reach through the conclusion of the Doha Round.
©OECD Observer Agriculture special edition No 278, March 2010
Roundtable on agriculture
In the years ahead, the global food and agriculture system will have to provide sustainably for billions more people and meet greater demands on quality, affordability and availability. Farming will be competing with other sectors for land, water and investment, while climate change adds new pressures.
Ministers and stakeholders from OECD member countries and key emerging economies gather in Paris on 25-26 February to discuss how best to respond to the challenges. We asked ministers from five of them–Austria and New Zealand as co-chairs, Canada, Germany and Chile–and leading representatives from Concern Worldwide, the International Federation of Agricultural Producers, John Deere, and the World Trade Organization:
“What actions are you prioritising to prepare the food and agriculture system for the needs of a rapidly changing world?”
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