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Building Sustainable Agriculture and Food Systems in Europe and globally –
A critical review of the Common Agriculture Policy
and proposals for change
Alexandra Strickner, [email protected]
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Overview
• Importance of Agriculture and challenges today
• Role of the CAP and trade liberalization policy in today’s situation
• Food Sovereignty as an alternative
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Why is agriculture an important issue?
• Food (and water) are basis for human survival
• Social dimension: – approx. 3 billion people live of farming – large part
in developing countries– 850 million people are undernourished– 30 million people each year die of hunger
• Ecological dimension: without sustainable agriculture – basis for food production erodes
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Today’s reality in agriculture• Industrialization of agricultural production
– less family farmers, larger farms, aweful labor conditions
– Negative impact on natural resources (water, biodiversity, soil erosion etc.) and food quality
– today 15 mio hectar of farmed land for production of soy beans as feed for animals (= 50% of all farmed land)
• Corporate concentration along the whole food chain
• Trade liberalization: many developing countries today net food importers
• Price Volatility and Instability for farmers and consumers
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Ag markets as an hourglass
Farmers
Processors / retailers
consumers
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Market concentration: Facts and figures
• 50% of the world’s commercial seeds sales are controlled by 10 multinationals
• 3 leading agrochemical companies (Bayer, Syngenta, BASF) control 50% of the market
• 75% of cereals trade is controlled by 2 companies (Cargill and ADM) (Vorley)
• 40% of coffee trade is controlled by 4 companies (Vorley)
• 69% of the retail market in Europe is controlled by the 30 top retail firms
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OECD – FAO Outlook for world crop prices by 2015
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Today’s challenges agriculture
• Increased demand for food– Growing world population– Changing diets in emerging economies
• Climate Change – impacts on resources
• Energy Security – New demand on agriculture –
agrofuels!
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The role of the Common Agriculture Policy and Trade Liberalization
• CAP than and today• The role of trade liberalization
– EU’s External Trade Agenda– WTO
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European Common Agriculture Policy - History
• Aims and Principles (introduced in 1957)– Achieving Food Security – Single market, unified price policy, communitarian
preference, parity aim– Structural policy to reduce regional inequalities– Common funding
• Common market organizations for grains, sugar, dairy and beef– These would indirectly support the prices of other products– Intervention, tariffs, export subsidies, and sugar quotas– Supplementary CMOs for some products
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European Common Agriculture Policy – developments
• Industrialization of farming in EU – productivist model– negative environmental impacts– decrease of number of farmers
• Lack of control of production
overproduction (diary, grains, beef, sugar)
• EU strategy to get rid of overproduction– Dumping into developing countries markets by using
export subsidies (grains, dairy, beef)– Violaton of GATT rules (protection of farmers allowed if
production and export controls applied)
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European Common Agriculture Policy – Solution of these problems
• Farmer solution: production controls – 1984 : milk quotas
• Agribusiness solution:
– reduction of internal price support to make dumping cheaper
– Introduction of direct payments to compensate farmers income loss
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The direct payments game(MacSharry reform 1992 Agenda 2000 Mid-term review)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
millio
n E
uro
s
export
direct payments
oils stor
ot
Evolution of EU expenses for arable agriculture, 1980-2002
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The direct payments game(MacSharry reform Agenda 2000 Mid-term review)
World market World marketInternal EU market
World price World price
EU price
Intervention price
Import tariff Export subsidy
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The direct payments game(MacSharry reform Agenda 2000 Mid-term review)
Direct payments
World market World marketInternal EU market
World price
World price
EU price
Intervention price
Import tariffExport subsidy
World price
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ROLE OF INTERNATIONAL TRADE AGREEMENTS
• WTO Agreement on Agriculture• Bilateral/Biregional Free Trade Agreements
in 2000 - 86 , 159 in 2007 (UNCTAD)
• EU: Global Europe – Competing in the World– Economic Partnership Agreements with ACP countries– Negotiations for FTAs started with Central America,
Andean Pact, India, ASEAN etc. – Objectives: Global competitiveness of EU corporations– Demands: abolishment of tariffs, quotas etc.
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Trade and Development?• More trade does not equal with development
– see expierences of most developing countries• Peasant and Family Farming cannot
compete with highly industrialized agriculture
• Carnegie Endowment study on WTO/Doha: all developing countries but few would be losers
• All developed nations used high protection to build domestic markets and « competitive comapnies
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Winners and losers of this CAP and free trade agreements?
Winners• Agriculture & Food Industry – cheaper input prices• Larger Farmers in EU – continuous concentration
Losers• Family farmers in EU – diminishing in number• Peasents and Family Farmers in the Global South• Environment and natural resources – North and
South• Consumers – less healthy and safe food
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CONCLUSIONS
Context today:• Agricultural model in crisis - CAP reform starting• Free Trade Model in crisis – WTO Doha Deadlock
Challenges:• Need and opportunity to develop alternative
proposals• Debate on sustainable model of agriculture more
than ever important!• Need to address market power issue