Rethinking agriculture and food

Renate Künaste, Germany's minister for consumer protection, food and agriculture, explains why the world's agri-food sector has to change some of its habits.

"Trust is a delicate plant; once destroyed, it doesn’t grow back quickly." When Otto von Bismarck made this observation in the late 19th century, he probably did not mean to include consumer trust in food safety. At that time and until well into the second half of the 20th century this aspect played at most a minor role in food production. The central task of the agri-food sector was to produce sufficient food at the lowest possible price. These times are now over. Most people in industrial countries have secure quantities of food, so consumers increasingly focus on food safety and food quality, including subjective and ethical issues like animal welfare and environmental protection.

The arrival of "mad cow" disease (BSE), outbreaks of foot-and-mouth disease and various food scandals have deeply shaken consumer confidence in the safety of the food they buy and eat. Such problems have also led consumers to question previous agri-food policies, including the comprehensive payments granted to farmers. The time was ripe for a fundamental reorientation of farm and food policies, since it was perfectly obvious that the path taken previously would lead to a dead end.

Today's new agri-food policies are first and foremost geared to the interests of consumers. Consumer protection, full information about production methods and improved product quality are now the priorities. These new policies encourage sustainable food production and promote consumer choices that support sustainable production methods. The reorientation of agri-food policies also means becoming more market-oriented in our approach. This means phasing out production subsidies and helping farmers to hold their own in competitive markets by improved quality and additional services, like farm-based leisure activities. This way, farmers can achieve added value and income in secure rural jobs.

But food safety must be the overriding imperative. There cannot be any compromise in this area, since safeguarding health takes priority over economic interests. Placing safe food on the market must simply be a matter of course. All operators in the food chain, from farmers to retailers via distributors, are responsible for food safety. Policymakers, meanwhile, are responsible for providing the legal provisions and efficient controls people need. The consumer is prepared to reward their efforts, as has been seen in the beef industry, where demand for beef, which had fallen sharply, has recovered thanks to rigorous BSE controls.

The question of how food is produced, handled and processed is gaining importance. Ultimately, it is the consumer who determines the desired quality of food and how much he is willing to pay for it. But to make such a choice, the consumer must also be able to assess the safety and quality of the foods on offer. This is where policymakers come in: to establish the legal framework and information requirements that will enable consumers to make informed decisions. Only then will consumers feel more confident in selecting or rejecting certain products and will better quality be rewarded by the market.

Comprehensive food labelling is particularly important. Uniform labels help the consumer to discern quality. In Germany, the eco-labelling system offers a simple, uniform way for consumers to distinguish organic products from other foods quickly and easily, to the benefit of consumers, retailers, farmers and the processing industry. Products from third countries or other EU member states can also qualify for the German eco-label as long as they comply with the EU standard on which the label is based.

Our model is sustainable agriculture and food production. The social costs of "ever more at ever lower prices" must be reduced. Natural resources must be preserved for both current and future generations. As organic farming is already clearly geared to sustainability, support for organic farming and for sales of organic produce is an essential building block in reorienting agri-food policies. Germany aims to increase the organic sector’s share to 20% of the land being farmed within 10 years.

Yet this is not all there is to reorienting agri-food policies. The goal is to gear farming to sustainability by supporting environmentally benign and welfare-friendly production methods. In the past few months, many measures have been adopted to this effect in Germany, ensuring that public money for farming is targeted to sustainable methods such as improving animal welfare or preserving biodiversity. An additional priority is to strengthen rural areas as business locations. We must not forget that economic efficiency and the competitiveness of enterprises are the basic prerequisites to achieve this.

But a new direction is needed beyond national level if we are to attain our objectives. European agricultural policy must take the social demands on agriculture fully into account. For this reason it is in our interest to use the forthcoming mid-term review of Agenda 2000 to initiate a fundamental reorientation of EU agricultural policy. The cornerstones of our reform policies at European level were laid out in Agenda 2000, covering the period 2000-2006. The key elements are reinforced market orientation and quality competition, reduction of production support instruments and more support for rural development. There are a number of other reasons for reorienting agricultural policy, such as EU enlargement (more farmers in the Union), and the World Trade Organisation (WTO) negotiations on agriculture. Not forgetting implementation of the Agenda 21 agreements on sustainable development adopted by the Earth Summit in Rio de Janeiro in 1992 and no doubt up for discussion at the World Summit on Sustainable Development in Johannesburg.

As well as producing safe food, agriculture renders many important social services. Changing demands from society open up opportunities to develop new sources of income. Instead of indiscriminately handing out subsidies more or less evenly based on the amount produced, socially desired services of agriculture such as keeping the land viable for future generations, providing a habitat for rare wild animals and plants, or providing tourist activities, must be rewarded in a targeted way. This is all the more true if they cannot be remunerated through the market or if they are linked to requirements the farmers have to meet such as reducing pesticide use. This is also the only way to convince the consumer that supporting agriculture is in the interest of society.

This way the circle starting and ending with the consumer is complete. Good agri-food policies can help strengthen Bismarck’s delicate plant of trust I mentioned at the start and return to agriculture the social credit it deserves. Trust through change must be our motto.

©OECD Observer No 233, August 2002

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