15 November 1996 - 17 November 1996

The Future Global Pattern of Agriculture: Can there be a Truly Free Market?

Chair: The Lord Plumb DL

Jointly organised with the Royal Agricultural Society of England

Our joint conference began by noting widely-accepted estimates that by about the year 2025 world food production would need to reach double its present volume, as population growth continued (even if at a declining rate) and as development and rising living standards raised demand. None of us seemed especially dismayed by this in itself, or suggested that the task was unachievable; but within it we saw complex and awkward issues.

The severest difficulty, so many argued, lay with the massive segment of world population - over a billion, by some reckonings - who were in acute poverty and need, at constant risk of near-starvation or worse, and not in any real sense part of the world food market at all. Did the developed countries truly care about these, beyond the level of rhetoric? We were in no doubt that they should, both for ethical reasons and in the long-term economic and security interest of all; but coherent, effective, resource-backed policies to address the problems seemed in short supply. Help towards general economic development seemed the prime way forward, and direct food aid could have downright damaging results for local agriculture, especially in societies where, too often, politicians imposed harmful cheap-food policies to please urban electorates. External advice and support for agriculture were best directed to the building of more efficient local systems - not necessarily geared to Western-style nutrition patterns - and of better infrastructure such as roads and reservoirs, as well as to the dissemination of relevantly-targeted research findings and productivity techniques. The support contributed in such ways by the governments of developed countries seemed if anything to be declining; but most of us felt that doubts, even if sometimes well-founded, about the quality of governance and political stability in recipient countries did not justify abandoning efforts.

We heard much stress on the massive further dividends that could be drawn, world-wide, from adequate and well-directed research and development (R & D) effort, most dramatically though by no means only in the burgeoning field of biotechnology; but there were qualifying difficulties. Current structures often made it hard for private business to capture fairly the returns of long-term R & D investment, especially for the special settings of “third-world” agriculture; yet public funding - even if total levels were sustained, as currently they were mostly not - raised awkward questions about who was to make the key choices, and by what criteria. Effective dialogue between researcher and end-user was plainly important. So too, at the follow-up stage, was systematic and widespread dissemination of modern knowhow throughout the agricultural industry; new information technology could play a great part in this.

We singled out as a particular theme, both for countries where severe poverty was widespread and among the more developed, the need to stimulate more efficient use of water (and Israel was cited as a model). The widespread presentation of water to consumers as a free good, and perhaps also its undifferentiated availability at high standards of purity for non-drinking uses, distorted its optimisation as an important yet limited resource.

Our key central issue - the long-term desirability of a global free market in agriculture? - found few direct challengers (though some sceptics about real ultimate feasibility). We noted that agriculture was now in principle embraced within the World Trading Organisation concept, and most of us were keen to see the WTO use the opportunity of the planned 1999 meetings to make further breaches in protectionist barriers; we recognised also that, in the European Union, both prospective enlargement and mounting budget burdens must be likely to force some loosening of the Common Agricultural Policy.

But the “buts” were numerous and formidable. To treat agriculture in a separate compartment insulated from wider trade and economic patterns would be distorting (and might well, in particular, do further harm to the less developed). The major problems however related to the management of transition. The ultimate direction of change - towards freer trade - was in principle clearly salutary, as entailing more cost-effective production and distribution and better long-term food security for all; but there were intractable difficulties in the domestic political handling of the gainers-and-losers problem, and in maintaining perceived fairness and realistic reward patterns for farmers amid complex market evolution, even if more sophisticated market mechanisms (such as food futures) could help with price fluctuations. But the core difficulty - and the one which arguably distinguished agriculture from other industries - was how to cope with the effect which thorough-going free-market specialisation stood to have on long-standing communities and land occupation, for example across large rural areas of Europe. Whatever might be found feasible in fostering non-agricultural economic activity in such areas, or in using direct public subvention rather than food-market engineering to sustain communities, some abatement of free-market rigour - some sub-optimisation of land use - seemed politically and socially inevitable for at least a long time to come.

Approaches to land use featured largely in our discussions. We thought we discerned a broad divergence of attitude - no doubt reflecting both geographical and historical differences - as between North America and Europe, with the former disposed to emphasis maximum productivity in the use of agricultural; land so as to leave as much other land as possible free, for example as wilderness, the latter readier to sustain economically-marginal agriculture. There was, we agreed, no uniformly right philosophy; but we noted that, save in some regions of Southern Africa and South America, the amount of land reasonably available worldwide for food production was unlikely to be capable of much expansion, so that productivity had to be the prime route towards higher food volumes. We noted also, in that context, the unwisdom of governmental support; patterns which, by removing natural risks or sharply abating costs, encouraged the production of crops in locations fundamentally unsuitable.

We acknowledged the inescapable importance of environmental considerations in the structuring and management of agriculture, though we were minded to lament the frequency with which single-issue pressure groups - for all that they were not always wrong, and could valuably heighten legitimate public concerns - could skew governmental research and decision-making and raise farming costs, sometimes on the basis of questionable scientific analysis. But it was clear also that the agriculture industry had to be continuously sensitive and responsive to public opinion in respect both of the environment and, still more, of food safety. A few high-profile episodes had scarred public confidence already uneasy about poorly-understood issues like the exploitation of biotechnology in food production. Transparent and trusted regulatory systems had a key part to play, but there remained a constant task of public education, for example about real risk, and some participants judged that the industry itself needed to do considerably more in this regard.

Within the tight compass of a single weekend there were, as always, important aspects little addressed. For example, we noted only very briefly the stressful impact which China might have on world agricultural markets if it became, as seemed possible, a massive importer of food; and we reached no solid view on the significance of climate change, where some effects seemed certain but their scale, nature and rapidity were still much contested, given the imprecision of forecasting models.

In the round, we were ready to conclude that, in aggregate terms, the world could undoubtedly feed itself successfully in the long term. That was not however an outcome to be guaranteed without sensible and flexible policies, still less was it easily achievable in ways that would ensure fair distribution. But we were generally agreed that movement towards greater market freedom should be a central strategic presumption.

 

This report reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.


Chairman: The Lord Plumb DL
European Parliament Member (Conservative), The Cotswolds; formerly Chairman, Agriculture Committee and Leader, European Democratic Group

PARTICIPANTS

AUSTRALIA
Dr Philip McMichael
Professor and Director of Graduate Studies, Department of Rural Sociology, Cornell University, Ithaca NY

CANADA
Mr Kerry Hawkins
President, Cargill Limited
Dr E K (Ted) Turner CM SDM
Chancellor Emeritus, University of Saskatchewan

FRANCE
Monsieur Bernard Auxenfans
Group Vice President and General Manager, International Division, Monsanto Europe SA
Monsieur Francis Capelle
Exploitation Agricole
Monsieur Emmanuel Jolivet
Directeur Scientifique, Institut National de Recherches Agricoles
Monsieur Dominique Mathieu
Vice President, Société des Agriculteurs de France

GERMANY
Ministerialrat Erhard Schwinne
Deputy Director General for General European Agricultural Policy, International Agricultural Policy and Fishery, Ministry of Food, Agriculture and Forestry
Professor Stefan Tangermann
Institute of Agricultural Economics, University of Göttingen
Professor Dr Max Zurek
Head of Division for General Economics, Agricultural Policy and Development Policy, German Farmers’ Association

UK
Mr Denis Chamberlain
Managing Director, The Chamberlain Partnership (strategic policy consultancy for agriculture and related industries)
Mr John Corrie MEP
Member (Conservative) Worcestershire and South Warwickshire, European Parliament
Dr David Fisk
Chief Scientist, Department of the Environment
Mr Peter Houghton Brown
Houghton Brown and Partners
Mr David Hunter
Head of the European Union and Livestock Group, Ministry of Agriculture, Fisheries and Food
The Lord Iliffe
Vice-President and Chairman of the Council, The Royal Agricultural Society of England
Professor John S Marsh CBE
Director, Centre for Agricultural Strategy, Reading University
Dr Ben Miflin
Director, Institute of Arable Crops Research
Professor Norman Myers
Consultant in Environment and Development
Mr John North
Associate, Department of Land Economy, University of Cambridge
Mr Charles Runge
Chief Executive, Royal Agricultural Society of England
Mr David L U Scott
Vice President (former Chairman of Council), Royal Agricultural Society of England
Mr Alan Spedding
Communications Development Manager, Royal Agricultural Society of England
Mr Mark Thomasin-Foster CBE DL
Chairman, Country Landowners Association Essex Branch
Sir Crispin Tickell GCMG KCVO
Warden, Green College, Oxford and Director, Green College Centre for Environmental Policy and Understanding

USA
Dr David T Galligan
Associate Professor of Animal Health Economics, School of Veterinary Medicine, University of Pennsylvania
Dr Stuart Hardy
Manager, Food, Agriculture, Energy and Natural Resources Policy Section, US Chamber of Commerce
Professor Neil E Harl

Charles E Curtiss Distinguished Professor and Director, Center for International Agricultural Finance, Iowa State University
Mr Nicholas E Hollis
President, The Agribusiness Council Inc 
Dr Robert R Marshak
Emeritus Professor of Medicine, School of Veterinary Medicine, University of Pennsylvania
Mr Robert L Thompson
President and CEO, Winrock International Institute for Agricultural Development
Ms M Ann Tutwiler
Director, Government Relations, Central Soya Company