Co-existence of various forms of agriculture

By Kari Redse Håskjold, Vice-president of the Norwegian Farmers`Union

NGO Symposium, Geneva May 26, 2004 

Agriculture plays a key role in all societies. It is an important tool to secure a countrys food supply, contribute to cultural landscape and a viability of rural areas, agro-biological diversity and land conservation. Each country emphasis these roles of the agriculture differently. For many countries agriculture plays a vital role of the countrys employment and national income, while in other countries guarding of the cultural landscape and securing viable communities in the countryside is stronger emphasised.

Various forms

1. As you all know, the conditions for agricultural production various greatly around the world: Climate, topography, and general cost levels are examples of conditions that puts constraints and opens up possibilities for different kinds of production. For instance, in a the northern parts of Norway, the growing season is 140 days in a year, while they are 280 around Paris in France. The amount of arable land in Norway is 3% of the total area, while 50-60% of Denmarks area is arable land. The production costs of one kilo of milk in Norway are between 5 and 8 Norwegian kroner, while the costs of producing a kilo of milk in Australia are only 1,34 Norwegian kroner. But at the same time we must not forget that there are costs connected to the transportation of milk from one country to another, also for the environment.  

Agriculture is forcefully bound to the soil and conditions at place, and you cannot just outsource the production when times get tough. The different conditions also opens up for a variety of products and flavours, adjusted to the local history and cultural heritage in the area. These disparities in conditions make it impossible to construct a system and rules that can fit all countries and regions. We need flexibility within the system of rules to adjust to the local variations. 

2. Closely linked to these variations in conditions, but also politically decided, are variations in farm size. Topography makes barriers or opens up possibilities for farm size, but the structure is also politically and economically decided. The general trend leads towards more large-scale production; bigger farms that can be run more efficiently. Lowering in tariffs and subsidies and an exposure to tougher competition forces smaller family holdings out of business, and encourages large-scale production. I believe it will be a great loss to let these smaller holdings disappear. The smaller family farms are often essential to settlement of the countryside and food security, especially in third world countries. In many areas these farms also play a key role in preserving cultural landscape and biological diversity, factors that are important also to attract tourists. Small-scale production in general puts less pressure on the nature and has advantages to animal welfare compared to larger farm entities. 

3. A third form of variation I want to mention here is the distinction between export oriented agriculture and agricultural production for the home market. You will find this variation both between countries and between farmers within a country. This is also one of the most important distinctions regarding the WTO rules. We need both kinds of agriculture. A country like Norway can never produce all the ingredients we need in our diet. We are depending on farmers in other parts of the world who can export their products to us. But at the same time we must not forget that an overwhelming majority of the worlds farmers produce for the home market. This is still the basis of agricultural production worldwide, and it has the advantages of less polluting transport, less risk of transferable diseases and better control over the quality of the products and fewer joints to share the surplus. 

The Derbez-text

The new WTO agreement on agriculture must enable all these different models of agriculture to co-exist. The last proposal from WTOs ministerial meeting in Cancun last September, the so-called Derbez text, does not contribute to this co-existence.  

For instance, the suggestion to put a maximum cap on the tariffs is both unfair and unacceptable for many importing countries. The tariff rate does not necessarily reflect the degree of protection for a country´s agricultural production. It only reflects the difference between the prices inside the country and the price on the world market. The tariff structure of a country reflects the different production and political conditions. A tariff rate at 50% might therefore be as prohibitive for one country as 200% in another country. Many farmers will lose protection and have to leave agricultural production as a consequence of a capping, and what have we achieved by that? With a capping at, say 100 to 150% most of the big players on the world food market will be untouched, while a small portion of importing countries will suffer greatly.  

The same is true for the suggestion in the Derbez-text to cut the blue box to a maximum of 5 per cent of the production value. For a country like Norway this means that we have to cut our blue box support by almost 90 per cent, while a country like the US will probably be able to rise their support level in the blue box. At the same time, the text does not deal properly with the most trade distorting support of all, namely the export subsidies and other forms of indirect support for export.  

In addition to this, the Derbez text suggests an undefined reduction in tariff rates all over, a lowering of the tariffs within the TRQs, and a cut in amber box support.  

All in all this puts an enormous pressure in particular on the small-scale farmer in importing countries and less favourable areas, in other words, the less competitive ones. Some of you will probably say that, well that is bad luck, if you cannot compete, you`d better do something else. Countries that are not competitive in agricultural production should move to different sectors and leave the agricultural production to someone who can do the production more efficiently. But than you forget that agriculture is not just like any other business. It is a biological production with all the constraints that implies regarding animal welfare, spreading of diseases, environmental degradation etc, and as I started this speech by saying: Agriculture plays a key role in every country, that goes beyond producing a commodity for a world market. And where do we find the non-trade concerns in the Derbez-text? The article 20 in the current agreement on agriculture instructs us to take into account these non-trade concerns.  

Let us for a moment lift our eyes above the WTO language of lowering tariff rates and cuts in amber and blue boxes, and try to imagine what the long term consequences of a liberalisation of the world trade in agricultural will be. Will it be a multitude of different models of agriculture, residing side by side? Will it be a healthy and widely spread production, benefiting the most needy between and within the countries and improving food security? And will cultural landscapes blossom and young people choose to settle down on the countryside? I do not think so.  

I believe that the long term consequences of a liberalisation in agricultural trade will be a concentration of food production to a few of today`s favourable areas of the world and for the most part produced by large scale and efficient farmers, leaving a larger part of the cake to the multinational companies. I believe this in turn will give us a more vulnerable production; more vulnerable to transferable diseases, and natural catastrophies. When we all depend on a few areas of the world to feed us, what happens if there is a bad harvest, or if a disease breaks out. The vulnerability already showed this winter, as one quarter of the meat production in the world was restricted because of different kinds of diseases. The pressure on water supplies will increase in these areas, erosion will increase and the emission on CO2 and other polluting gases will rise because of the rise in transportation. We will depend on a few countries to supply us with the food we need in the world, and that makes food a powerful weapon. Maybe a rich country like Norway could afford to by food wherever, but what about the poorer nations, and what about the poor farmers in the poor countries who at least was able to feed his own family before? 

I believe that we would end up with a poorer world, all together. That is why we need a new direction in the WTO negotiations. We need an emphasis on every countries right to produce food for its own consumption, and we need a distinction between production for the home market and production for the export market.  

When you export and want to compete in the global market, you have to play by the rules, and adjust your production. But if you want to have a production for the home market, you should be allowed to do so, without having to open up your markets and lower the support to the farmers to such an extent that it destroys the local production.     

To preserve the co-existence of various forms of agriculture we need to follow these guiding principles: 

1. All countries should have the right to produce and process food for its own consumption in order to maintain a certain level of self-sufficiency. From this follows that:

• An overall capping of tariffs in not acceptable
• Tariffs should be at a level that enables a country to produce food for national consumption
• Minimum access quotas should not be extended
• Different rules should apply for support for products consumed in the producing country and support for products that are exported

2. The international trade on agriculture should be fair to all countries. This implies that:

• It should be sufficiently considered during the negotiations that every country, developed and developing, has specific products that are essential to its society
• Special safeguards (SSG) should be ensured for both developed and developing countries
• All forms of export subsidies on products exported to developing countries should be substantially reduced for a fair and equitable manner??
• Special and differentiated treatment should be strengthened for real developing countries that are not competitive in agriculture and have sensitivities in agricultural imports. These countries should have a legitimate right to take measures in order to protect productions for their domestic markets
• Developing countries must gain access to developed countries markets through preferential schemes
• Developed countries must increase their share on the import of agricultural products from developing countries, instead of importing from other developed countries

With these principles as guidelines, I believe we can preserve a multitude of big and small farms, intensive and extensive production in all corners of the world. 

Thank you.