Special to the OECD Agriculture Ministerial Meeting 7-8 April 2016 www.oecdobserver.org/agriculture
Agriculture: A new policy paradigm for better lives Towards a productive, sustainable and resilient global food system OECD Observer Roundtable on agriculture A rural trip through time Innovating agriculture: Growing small ideas into game-changers Water: It’s all or nothing Agricultural production grows strongly as support trends downwards
Agriculture
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Shaping our future
The OECD Forum, held alongside the main, annual Ministerial Meeting provides a key opportunity to debate global policy issues with heads of government and international organisations, ministers, CEOs, academia, media and civil society leaders. Some of the policy challenges to be discussed in 2016 will be: • Inclusive Growth : migration, youth employment, gender equality and active ageing • Innovation: investment in people, productivity, knowledge and skills • Sustainability : follow up to COP21 and the new Sustainable Development Goals
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EDITORIAL
Agriculture: A new policy paradigm for better lives All countries share a common aim: to feed a growing population while assuring decent livelihoods and safeguarding our planet Angel Gurría Secretary-General of the OECD
Food is a basic requirement of life and fundamental to our well-being. Nevertheless, as humanity becomes more urbanised, agriculture and farming tend to be neglected. This is dangerous. The OECD Agriculture Ministerial meeting taking place on 7-8 April aims precisely at preventing this by helping define a new policy paradigm for a more productive, competitive and sustainable food system for all. It is often said that civilisation sprang from farming. Thus, our future depends on getting it right in agriculture. The global population is expected to reach some 9 billion by 2050. Diets are also likely to change in favour of more animal protein, such as meat and dairy products. Some studies predict that average meat consumption will increase from 32 kg per capita today to 52 kg in 2050. This will have implications for producers and consumers, as well as for land use, transport, health, and more. Meanwhile, undernourishment must be vanquished through improvements in the access, availability and use of food. There are environmental challenges, too. Agriculture already uses 70% of the world’s fresh water, but will have to cope with less in the future because of scarcity and competing demands from urbanisation, the energy sector and industry. Some major farming regions–in Australia and the US, or in China and India, for example– already face severe water stress. Biodiversity is also under threat as farmland and cities expand, while soil degradation is a widespread concern. Then there is climate change, which will force production patterns and farming communities everywhere to adjust as droughts, floods and exceptional temperatures become more frequent, chaotic and disruptive. It also compels agriculture to reduce its greenhouse gas emissions, which account for a quarter of the total when emissions from land use changes are included.
agriculture averaged 1.7% per annum over the decade to 2012. Moreover, the sector’s environmental impact per tonne produced has fallen among OECD countries, with data showing falls in both nitrogen and phosphorus balances and pesticide sales, for example. Moreover, in developing regions, there is wide scope to apply already known technologies and methods, such as precision farming and drip irrigation, while emerging innovations in approaches and equipment hold potential for productivity growth and sustainability in advanced and less advanced economies alike. How can governments harness the strengths of the agricultural sector while addressing its barriers and weaknesses, so that it can fulfil future needs? At their meeting in April, agriculture ministers from around the world will try to find solutions to these challenges and identify emerging opportunities. Governments need to reform policies, particularly subsidies promoting specific products or fertilisers, that induce farmers to produce the wrong crops in the wrong place, with the wrong inputs. These include planting water-intensive crops in dry areas or supplying staple foods to already saturated markets, as well as transforming fragile land, such as forests, into crop production or grazing. The focus should be on strengthening innovation systems and making sure that farmers have the knowledge, training and skills they need to adopt appropriate and sustainable production methods. Policy makers should also step up efforts to make domestic and global markets more effective and accessible, so that produce can be delivered where it is needed and competitive farmers can be properly rewarded. This means investing in transport and communications, as well as in clear and effective legal and administrative frameworks. It means agreeing to safeguards on standards and quality to bolster trust and confidence in markets. It means adopting broad and inclusive rural development strategies that enhance farming as a livelihood, while enabling people to quit the land to take up opportunities in other sectors, should they wish to do so. It means more collaboration with public and private entities, as well as regions and countries, working together towards better outcomes. Change is not easy, particularly in agriculture, where habits and practices are formed over generations, and where small and large farmers defend hard-won interests. Only a concerted, evidencebased dialogue, which highlights the costs and benefits of new approaches and is clear about the impacts on all sides, will convince people to change. With such engagement, policy makers can then set the directions, monitor progress and stay the course.
In short, agriculture must change, and while the nature and magnitude of that change may vary by location and level of development, all countries share a common aim: to feed a growing population while assuring decent livelihoods and safeguarding our planet.
If we are to continue feeding ourselves sustainably, eradicate undernourishment and mitigate the environmental impact of farming, we need a long term vision for agriculture. The OECD will contribute to that vision and, with facts, expertise and co-operation, help sow the seeds of better agricultural policies for better lives.
Fortunately, the sector shows encouraging potential globally. Agricultural productivity growth is relatively robust compared with other sectors; total factor productivity (TFP) growth in global
www.oecdobserver.org/angelgurria www.oecd.org/about/secretary-general @A_Gurria
OECD Observer Agriculture Special April 2016
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Towards a productive, sustainable and resilient global food system
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Thomas J Vilsack, US Secretary of Agriculture, and Stephane Le Foll, French Minister of Agriculture, Agrifood and Forestry, and Co-Chairs of the 2016 OECD Agriculture Ministerial Meeting
The 2016 OECD Agriculture Ministerial meeting on “Better Policies to Achieve a Productive, Sustainable and Resilient Global Food System”, which we are honoured to serve as co-chairs, comes at an opportune moment. This is the first time in six years that agriculture ministers will come together at the OECD to explore challenges and opportunities facing the global food system. Moreover, our meeting follows closely on the frameworks of the UN Sustainable Development Goals (SDGs) and the Paris Agreement on climate change, two agreements that will require substantial contributions from agriculture. We know that agriculture is the foundation for a promising global future. At this meeting, our task will be to build on progress that is already being made and to consider what policies could help us adequately feed a growing human population, protect our natural resources, and support the world’s farmers and rural citizens, all in the face of new challenges presented by a changing climate. Some of the keys to meeting these common challenges are already clear. Increasing productivity has long been a focus of policy makers, and sustainability has gained increased attention in recent years. In addition, more work remains to be done to improve the farming and food sector’s resilience when confronted by weather- and market-related shocks, to limit disease and sanitary risks, and to enhance agricultural trade. The opportunity is before us now to come together and discuss the strategies and policy packages for agriculture that we agree offer the best chances for moving forward and meeting the challenges of tomorrow. We know that international co-operation will be crucial to the success of our efforts. International co-operation on transparency is vital for supporting policy dialogue that reflects the best available information, especially in times of unusual market conditions. The multinational G20 Agricultural Market Information System, or AMIS, provides a good example of what can be achieved in this area. Agriculture’s contributions to climate change mitigation and adaptation efforts also require increased international co-operation and mutually reinforcing strategies to develop climate-smart management techniques and efforts like the 4 in 1 000 initiative to maintain and enhance soil carbon stocks. The frameworks of the UN SDGs and the Paris Agreement
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on climate change provide operational targets to reach some of those challenges, but we will need a transition forward in several policy areas to integrate those efforts into a robust, resilient and competitive agriculture and food system. We will need to increase support for agricultural innovation in all its forms, including science and technology, education and training, and changes in farm management and structure. To facilitate this, we will need to encourage development of the digital economy and data openness related to agriculture and nutrition; increase investments in research and development and both top-down and bottom-up knowledge sharing and innovation systems; and continue support for the bioeconomy, including renewable biomass energy and materials. Trade based on open markets will be essential to ensure that commodities and food can be effectively distributed when and where they are needed, while promoting high environmental objectives, inclusive development and responsible business conduct. Domestic policies will be needed that do not shield producers from global markets, but provide a safety net during times of unexpected adversity and to adjust to changing demands. Rural economic development policies, tailored to promote growth in specific areas, will be needed to improve rural employment opportunities and revitalise rural areas. As we develop solutions, we will also need to promote the development of agriculture and food systems that are both competitive and responsibly managed. We must ensure that we meet the needs of the most vulnerable populations within each food system, address food loss and waste, and pay attention to the intersections of animal, plant, and human health. Comprehensive and consistent policy packages, developed with the broad support of local food and farm sectors, will be needed to achieve this range of goals. We anticipate that our upcoming discussions will allow us to learn from each other as we draw on our diverse national contexts and experiences. We recognise that the OECD’s robust research programme is already investigating many of these challenges and opportunities. But we expect the new paradigm we will discuss on 7-8 April to identify new areas for the OECD to study in depth. We will need a strong evidence base to design the best policy mixes that can achieve our shared goals, while considering the local context and conditions for successful implementation. We will want to see work that addresses the role of science and innovation in all its forms, the integration of environmental and climate performance, and a greater focus on sector-wide resilience that benefits farms, rural communities, and consumers. Again, we want to express the privilege we feel in co-chairing this important meeting, and we look forward to our discussions. Together we can all lay the foundations for a resilient food and agriculture system for the future. French Ministry of Agriculture, Agrifood and Forestry http://agriculture.gouv.fr US Department of Agriculture www.usda.gov
OECD Observer Roundtable
Roundtable on agriculture Agriculture faces a challenging future. The world’s population is rising and pressures on natural resources are mounting, while environmental issues such as climate change loom large.
Plant it! And let innovative businesses grow
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Alexander Brewster, Farmer and Nuffield Scholar 2016*
The EU’s Common Agricultural Policy (CAP), in its current form, rewards lack of technical innovation, protects the primary producer from the marketplace and, by default, stifles any meaningful land churn or proactive farm succession. This protectionism has to stop in order to allow innovative and sustainable businesses to grow. Farm size will certainly increase, but this added efficiency is needed to keep European food production competitive. What needs to be done in practical terms? Plant it! All upland and other unproductive land should be redirected towards maximising carbon capture through ecological stability. A base level of agricultural support should be provided, with the focus of this reformed payment on water quality, and carbon capture and management. Savings from a reformed CAP budget should be redirected towards agricultural research into genetic progression and efficiency through plant and animal science. At present, most of the large investments in agriculture come from private limited companies in a relentless attempt to capture market share, with a race to the bottom in terms of sustainable agriculture.
The co-operative model as a route to market should be further developed to reduce the primary producer’s exposure to the commodities market; in the past this model of agricultural co-operation has helped lead to a standardisation of production and a higher farm gate value. A new model of co-operation would also aim to add environmental value to the market value. For example, a carbon tax, where a value of carbon exchange per kilo of output per hectare would be added to the cost of production, could favour local production, but with the overarching aim of reducing global food miles. The overall investment priority should be people, whether through investment in education in general or in the development of strategic groups delivering sustainable approaches through food and farming academies. A world population of 11 billion by 2100 is a sobering and challenging prospect. Sustainable innovation has to be encouraged and rewarded. Developments in agriculture are a slow process and achieving sustainable productivity growth has to start now. *Nuffield Farming Scholarships Trust sponsors UK farmers and those working in associated industries and in rural industry, with a view to developing agricultural sector leaders and innovators. Visit www.nuffieldscholar.org
A paradigm shift to a long-term strategy is needed Carmel Cahill, Deputy Director, OECD Trade and Agriculture Directorate The production and input subsidies which governments have put in place over many years may now be exacerbating the problems agriculture faces. Across the 49 countries whose policies are regularly measured and monitored by the OECD, 67% of the support to farmers derives from
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In this OECD Observer Roundtable, we ask a range of experts and stakeholders: What innovations or new policies are needed to enable the farm and food sectors to deliver sustainable productivity growth?
Carmel Cahill direct price support, and production and input subsidies. Only a negligible share is invested in specific measures targeting sustainable productivity growth. A major shift in policies is needed, which will enable farmers to seize the opportunities that are opening up in a context of rising populations and incomes, and to respond to the challenges of scarce resources and climate change. What does this mean in practice? First, we need to carry out in-depth examinations of innovation systems, asking in particular whether the different sectors and actors are sufficiently joined up to be able to deliver on sustainable productivity growth. Second, we need to make sure that all the players along the food supply chain, from farmers to retailers, are aware of, and have the knowledge and training needed, to adopt sustainable production and business practices. Scarce natural resources need to be appropriately priced. Third, in a world where market, climate and resource-related risks abound, we need to devise risk management systems that clearly delineate the respective roles and responsibilities of farmers, markets and governments. We need to be careful not to crowd out private, market-led initiatives, and not to mask the need for adaptation by insuring the uninsurable. Lastly, we need to foster strong and competitive farm and food businesses by allowing necessary structural adjustment and creating an enabling business environment, especially in rural areas. This means ensuring, inter alia, wellfunctioning markets, finance, logistics and regulatory systems.
OECD Observer Agriculture Special April 2016
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OECD Observer Roundtable
What innovations or new policies are needed to enable the farm and food sectors to deliver sustainable productivity growth?
www.oecd.org/agriculture
Plug those subsidy leakages
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Ashok Gulati, Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICREIR)
In the last 12 years, the global population has increased by almost a billion people– the largest increase in the shortest time period in human history. Of the 7.35 billion people alive in mid-2015, 60% were living in Asia and within Asia, China and India together accounted for 2.7 billion people, or some 37% of the global population. According to UN population projections from 2015, India’s population is likely to surpass that of China, at 1.4 billion by 2022, and reach 1.7 billion by 2050. As India’s overall GDP growth is likely to hover around 7% per annum for the next decade or so, per capita incomes are likely to rise by 5.5% to 6% per annum. Today, an average Indian household spends about 45% of its expenditure on food, and with rising incomes, the pressure on food will be tremendous. With limited land (2% of global land) and water (less than 4% of global fresh water supplies), and the increasing frequency of extreme weather events resulting from climate change, India will be challenged to find more food,
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feed and fibre for its people in an efficient and sustainable manner. The potential answer to these increasing challenges lies in innovations, in policies, technologies, institutions and products. Accordingly, a major reform agenda is needed for agro-food policies in India. Just take the case of food and fertiliser subsidies in the country’s Union Budget 2016-17. The two together amount to a budget of over US$30 billion, and have in addition generated unpaid bills of more than US$16 billion. Massive inefficiencies plague the public distribution system of highly subsidised food, with leakages amounting to more than 40%. This is the case with fertiliser consumption, where urea is highly overused, and diverted to non-agricultural uses, and even to neighbouring countries. Innovations in policies, switching from price support in food and fertiliser to direct income support (cash transfers) through Aadhaar (Unique Identification Number) has the potential to plug leakages, and save the government at least $7-8 billion per annum. This can be invested in better water management, so as to get more crop for every drop of water, thereby feeding India in a sustainable manner. Visit http://icrier.org
Towards agricultural knowledge systems Handewi Purwati Saliem, Director, Indonesian Center for Agriculture Socio Economic and Policy Studies (ICASEP) The agri-food sector faces several emerging challenges, of which three in particular: first, growing and shifting food demand, which necessitates appropriate responses from the food production system; second, limited natural resources (land, water, energy), which emphasises the need to place priority on productivity growth; and third, uncertainties for agricultural productivity brought about by climate change, which make the efforts needed more complex, with harder constraints. These challenges are more pronounced in developing countries, where agriculture is made up predominantly of smallholder farms. In responding to these challenges, national governments should focus on
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To do this will require a paradigm shift, away from short-term market and income support measures, which often create perverse signals and counter-productive effects, to a long-term strategy that will allow the sector to become more market oriented, more competitive and resilient, and above all more sustainable. Scarce public resources spent in this way will generate much higher returns for all.
Handewi Purwati Saliem the following innovations and policies: (i) increasing investment in rural and agricultural infrastructures to promote a more conducive business environment, more efficiency, and lower logistical costs; (ii) building agricultural knowledge systems that are capable of delivering innovations throughout the supply chain; (iii) promoting a more open trade regime, which benefits smallholder farms and ensures that consumers have reliable access to food; (iv) building resilience, particularly at the farm level to ensure their capacity to respond to shocks, coupled with risk management tools, such as crop insurance; (v) strengthening the capacity of smallholder farms to access new technology and growing market opportunities; (vi) encouraging government spending policy away from subsidy and direct assistance towards spending on general services, such as infrastructure and research and development; and (vii) promoting the transformation of smallholder farms from subsistence to profit-oriented and commercial farms. In addition, there are strategic policy areas which should be pursued at the global and regional levels. These include continuing unfinished business on multilateral trade talks as mandated by the World Trade Organisation ministerial meeting in Nairobi. They include increasing investment and engagement by international donor agencies and philanthropists in international agricultural research and development, particularly that undertaken by CGIAR (a global research partnership, visit
ROUNDTABLE ON AGRICULTURE
www.cgiar.org). Policy coherence and co-ordination across countries should also be promoted to create a predictable policy and regulatory environment for the private sector. Finally, international and regional collaboration should be strengthened across countries and organisations in areas such as knowledge sharing and capacity building .
Smart and digital agriculture holds many promises for a more sustainable, productive, and competitive farm sector. We have seen solutions that have the potential to improve resource efficiency, animal health, carbon footprint, and farmers’ position in the supply chain. But we have yet to witness a wider uptake in the broader farm community. Developing new solutions is not enough in itself; encouraging sufficient uptake is an issue we must address.
Visit http://pse.litbang.pertanian.go.id/eng/
Uptake and collaboration matter
Collaboration is the key to making innovation happen. Collaboration is especially relevant when speaking about opportunities in digital agriculture where technologies need to be adapted to users’ needs. This means giving farmers and agri-business leaders the tools and confidence to reach out to new partners in the digital and information technology industry. We need to establish vehicles to bring together people from the agri-food and IT sectors, as well as researchers and investors. In so doing, common opportunities will be identified, key collaborations will be established and things will start to happen.
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Phil Hogan, European Commissioner for Agriculture and Rural Development
The recent COP21 climate agreement in Paris has highlighted yet again the need for agriculture to become more efficient and climate-friendly. But we also know we need to produce more, and better, food to feed a growing global population. This will be achieved only through a smart policy mix to unleash the power of research, innovation and collaboration in the sector.
Smart, innovative agriculture holds many promises for a more sustainable, productive and competitive farm sector. By working together, we can achieve these vital changes.
The EU is taking a position of global leadership to make this happen. We are prioritising innovation in a big way, because we know that agriculture must become smarter, leaner and cleaner. We have to increase yields while respecting safety standards and ensuring sustainability. As I often say, we have to learn to produce more while using less.
Thomas Kirchberg, Member of the Executive Board, Südzucker AG, and Vice-Chair of the BIAC Food & Agriculture Committee*
For a stable innovation and investment framework
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Our challenge is to assess which policies can make this happen. If we give farmers and agri-businesses the right support, they will succeed. Farmers never stop innovating. Every generation brings new technological and organisational improvements.
Visit ec.europa.eu/agriculture
Unprecedented growth opportunities are foreseen for the agri-food sector because of rising global demand for agricultural products and food. At the same time, meeting this demand in a sustainable way is the biggest challenge the sector has faced to date, given limited availability of new productive land and climate change. If we are to succeed, we need closer co-operation between all stakeholders–states, science, donors, civil society actors and the private sector–for instance, via public-private partnerships in research, joint initiatives for enhancing biodiversity or involvement of agribusiness in development aid. The key to sustainable productivity growth is availability and access to modern production methods and technologies, such as improved crop protection, new high-yielding and stress-resilient varieties, precision farming, big data analytics and advanced irrigation systems. These reduce the need to farm additional land and simultaneously contribute to conservation of natural resources, ensuring security of supply for food companies. The role of agricultural policy is to provide a stable framework for innovation and investment to foster sustainable productivity increases. More specifically, it should support agricultural research, knowledge transfer to farmers and their investments in the adoption of new technologies. At present, new approaches often take too long to arrive on the ground and the needs of practical farming are not communicated sufficiently to the scientific community. Only profitable farming will be attractive for the young generation and ensure supplies of agricultural products in the future. Therefore, when adopting new requirements and standards, policy makers should take into account the competitiveness of domestic producers in the global context. Both farmers and businesses would be helped significantly by cuts to red tape. For times of crisis, effective safety-net programmes are crucial. *BIAC is the Business and Industry Advisory Committee to the OECD, visit www.biac.org
OECD Observer Agriculture Special April 2016
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OTHER STORIES
Financing smallholder farmers: Growth potential
Casting off towards a blue future
Joacquim is a subsistence farmer from Etatara in Mozambique. At 46 years old, he is his family’s sole breadwinner, responsible for supporting his wife and three orphaned grandchildren.
Open any atlas, look at any globe, and Ireland appears as a small green island on Europe’s Atlantic rim. In fact, Ireland’s territory is almost the size of Germany, and mostly blue.
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TOP STORIES
Water: It’s all or nothing Major floods and droughts have prevailed in many countries throughout 2015. South Africa saw the emergence of its worst drought in 30 years, Ethiopia is threatened with a major food crisis, and California suffered its fourth consecutive year of drought. Floods caused over 2 000 deaths in India last summer, while England, Paraguay and South Carolina reported unprecedented flood damage. The trouble is, climate change is expected to increase the frequency and severity of such extreme weather events in the coming years.
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Governments can do a lot better in improving the mitigation and management of drought and flood risks, argues Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches. Part of broader OECD work on risk management in agriculture, this report builds on recent trends, experiences and research in OECD countries, particularly Australia, Canada, France, Spain and the UK, in the sustainable management of floods and droughts in agriculture, and sets out recommendations for policy approaches. The report provides a general policy framework to enable countries to analyse their own drought and flood policies and identify potential strategies. The study argues that comprehensive and coherent government policies at local and national levels are necessary, particularly
if agriculture is to meet the growing food needs of a larger urban population. It examines policy approaches to water rights and water allocation, weather and hydrological information, innovation and education, and insurance and compensation against drought and flood risks, and explores how they might be combined in more consistent ways to improve risk management. The reduction of subsidies, for example, such as guaranteed prices or insurance subsidies, that distort incentives, would enable farmers to base production and investment decisions on the real costs and benefits of risk taking. OECD (2016), Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches, OECD Studies on Water, OECD Publishing, http://dx.doi.org/10.1787/9789264246744-en See also http://wp.me/p2v6oD-2oR
REVIEWS OECD iLibrary
A rural trip through time Imagine travelling through time, not as Stephen Hawking would, through wormholes into a new dimension, but rather just to see how farming might look several decades from now. How policy makers and farmers might appreciate such foresight. Alternative Futures for Global Food and Agriculture proposes to do just that, by exploring three potential “futures” which our food and agricultural systems may face in the lead up to 2050. Will global food systems be able to feed nine billion people without destroying sensitive ecosystems or social coherence? Can agricultural productivity keep up with rapidly increasing demand while facing significant and unpredictable challenges
such as climate change, livestock diseases and other factors which escalate production costs? Will farming be a profitable business in the coming decades, and help rural areas to develop? These are just some of the key questions the study helps to address. The many uncertain and ever-changing factors surrounding these questions can pose immense challenges for the development of long-term policy and industry strategies to address them. Rather than present forecasts or projections, Alternative Futures for Global Food and Agriculture sets out different possible scenarios that take political, economic, technological and other “known unknowns” into account, opening the way for the development of appropriate strategies for both governments and businesses. The three potential “futures” explored are: “individual, fossil fuel-driven growth”, which portrays a world driven by the strong
focus of individual countries and regions on their own economic growth, and relatively minimal emphasis by governments or their citizens on environmental or social challenges; “citizen-driven, sustainable growth”, in which consumers and citizens drive their governments to emphasise environmental and social protection above all, and in which global co-operation is relatively limited; and, lastly, “fast, globally-driven growth”, characterised by a strong focus on international co-operation to achieve economic growth, and in which environmental issues receive less attention. Though each of these alternatives suggests very different outcomes, they all point to the need for policies that are sufficiently robust, comprehensive and versatile to respond to the challenges ahead. OECD (2016), Alternative Futures for Global Food and Agriculture, OECD Publishing, http://dx.doi.org/10.1787/9789264247826-en
Innovating agriculture: Growing small ideas into game-changers “Necessity is the mother of invention” is an oft-repeated phrase that is highly relevant to agricultural systems today. Growing global demand for food, fuel and fibre will have to be met by improving agricultural productivity growth, which will be a tall order, given increasing pressures on natural resources, resulting from climate change and competition for land, for instance. Any growth in agriculture will therefore have to be achieved sustainably through more efficient resource use. Effective agricultural knowledge and innovation systems can go a long way towards addressing these challenges. A new OECD book series, Innovation, Agricultural Productivity and Sustainability, explores the relationships between innovation, productivity and sustainability
in individual countries, and examines the respective roles of the government and private sector in strengthening agricultural innovation systems and facilitating their adoption at farm and agri-food firm levels. The series explores the conditions in which food and agriculture businesses in Australia, Brazil, Canada and the Netherlands innovate in order to become more productive and environmentally sustainable. Factors influencing innovation are examined: economic stability, governance and trust in institutions; a favourable and predictable environment for investment; capacities and public services enabling business development; as well as an effective agricultural policy and the operation of agricultural innovation systems. The studies find strengths and weaknesses in the four countries examined. While the policy environment in the Netherlands is one of the most favourable to innovation investment, there is room for improvement, including in
access to capital for small and mediumsized enterprises, and levels of public funding for research and education institutions. The agriculture and agroprocessing sectors in Brazil, meanwhile, have demonstrated impressive growth thanks to productivity improvements and new technologies, but a number of obstacles remain, including framework conditions for innovation. Although the overall policy framework in Australia is supportive of innovation, agribusiness currently underinvests in rural R&D, perhaps due to public overinvestment in applied research. And finally, while the general policy environment in Canada is conducive to the investment necessary for productivity growth, the enabling environment for productivity- and sustainability-oriented innovation could be improved, the report finds. Three more titles in this series are expected in 2016, covering China, Turkey and the US. See www.oecd-ilibrary.org/fr/agriculture-and-food/ oecd-food-and-agricultural-reviews_24114278
OECD Observer Agriculture Special April 2016
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DATABANK
Agricultural production grows strongly–
However, the composition of support is at least as important as the total level, as this impacts agricultural production, trade, incomes and markets. Market price support and payments based on output, for example, are burdensome for taxpayers and markedly distort production and
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1970-79
1980-89
1990-99
2000-09
2000-12
Regional growth 2000-12 4 3 2 1
pe ro Eu
nia
rt Am hern er ica Ca rib be an
ea
No
Oc
Ce n Am tra er l ica W es te rn As ia
he rn As ia
So
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er n As ia
st Ea
nr al As ia
Ce
a
So
ut
Af
he
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as As t ia
-1
So Am uth er ica
0
Source: OECD (2015), Issues in Agricultural Trade Policy: Proceedings of the 2014 OECD Global Forum on Agriculture, OECD Publishing
Asia also experienced relatively strong growth. However, production growth in Europe was significantly lower, and even fell in per capita terms in North America, indicating the reduced importance of these regions in global agricultural output
growth. Meanwhile, overall production growth in Africa ran at more than 3% per year, but growth in per capita terms was significantly slower than in other developing regions. See www.oecd.org/agriculture
Composition of producer support estimate by country, 2012-14 % of gross farm receipts % 60 Support based on commodity output
Payments based on input use
Payments not requiring commodity production
Other payments
50 40 30 20 10
Source: OECD (2015), Agricultural Policy Monitoring and Evaluation 2015, OECD Publishing
trade. Moreover, the subsidised use of inputs, such as fossil energy or fertilisers, can potentially lead to environmentallydamaging production practices. China, Colombia, Iceland, Indonesia, Israel, Japan, Kazakhstan, Korea and Turkey are among those countries that provide most of their support in the form of influencing
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pa n Ko re a Ic e la nd Tu rk e In do y Eu ne ro s pe ia an Un io n 1 Ch i Co n a lo K a mb z a ia kh st an Ru ss ian Me x ic Fe de o ra tio n Ca na da Is ra el
0
er
Over the past 20 years, support provided to agricultural producers in 49 countries analysed by the OECD has been following a downward trend. The percentage Producer Support Estimate (%PSE) fell from 21% of gross farm receipts in 199597 to 17% in 2012-14 globally, edging up slightly at the end of the period to reach US$601 billion (€450 billion) in value terms. Average support in OECD countries has been declining in developed economies, from around 30% of gross farm receipts in 2000 to around 20% today. But it has risen in emerging economies by 10-15 percentage points to about 20% over the same period, driven mostly by increasing support in Indonesia and China, but also in Kazakhstan.
1961-69
Net per capita production
Net production
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No
–as support trends downwards
Decadal growth rates
3 2.5 2 1.5 1 0.5 0
it z
Global agricultural production has in fact grown strongly for a number of years. During the 2000s, global annual compound production growth rates surpassed 1990s levels, returning to rates of around 2.5% per year recorded for previous decades. The 2000s also saw the fastest per capita agricultural production growth rates, close to twice those seen in previous decades. This suggests strong productivity in a period when agricultural production growth outstripped population growth at a faster pace than at any time over the previous 40 years. The balance of global production growth appears now to be shifting to emerging markets. The 2000s saw strong production growth in South America and Southeast Asia, continuing trends from the 1990s. Other regions in
Period compound annual growth rates, %
Sw
As agriculture has proven itself able to respond to shifts in demand in the past, it could be argued that food security is less an issue of food supply and more one of affordable access.
Net agricultural production
1. EU27 for 2012-13; and EU28 from 2014 when available. 2. The OECD total does not include the non-OECD EU member states. http://dx.doi.org/10.1787/888933234359
market prices and through output-linked payments, accounting for over 70% of the total PSE in 2012-14. These transfers are also important in the composition of support in Canada, Norway, the Russian Federation and Switzerland, where they account for between a third and twothirds of all the producer support.
OECD iLibrary
Special Focus: Agriculture Farm Management Practices to Foster Green Growth This report looks at farm management practices with green growth potential, from farmer-led innovations, such as those directly linked to soil and water, Integrated Pest Management, organic farming, to science-led technologies, such as biotechnology and precision agriculture. ISBN 978-92-64-23864-0 March 2016, 160 pages €35 $42 £28 ¥4 500
Alternative Futures for Global Food and Agriculture This book develops three contrasting scenarios to illustrate alternative futures, based on several global economic models and extensive discussions with relevant stakeholders, and outlines policy considerations to help ensure that future needs are met in an economically, environmentally and socially sustainable manner. ISBN 978-92-64-24775-8 March 2016, 108 pages €24 $29 £20 ¥3 100
OECD Review of Fisheries: Country Statistics 2015 This publication contains statistics on fisheries from 2007 to 2014. Data provided concern fishing fleet capacity, employment in fisheries, fish landings, aquaculture production, recreational fisheries, government financial transfers, and imports and exports of fish. ISBN 978-92-64-25125-0 March 2016, 524 pages €95 $133 £86 ¥12 300
All publications are available to read and share at www.oecd-ilibrary.org International Standards for Fruit and Vegetables: Cherries
This brochure is published within the framework of the Scheme for the Application of International Standards for Fruit and Vegetables established by OECD in 1962. It comprises explanatory notes and illustrations to facilitate the uniform interpretation of the Cherries Standard. ISBN 978-92-64-24861-8 March 2016, 55 pages €40 $48 £32 ¥5 200
Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches Climate change is expected to increase the frequency and magnitude of extreme weather events, notably of droughts and floods to which the agriculture sector is particularly exposed. This book reviews and analyses policy approaches that foster efficient, resilient and sustainable management of droughts and floods in agriculture. ISBN 978-92-64-24673-7 February 2016, 72 pages €24 $29 £20 ¥3 100
Innovation, Agricultural Productivity and Sustainability in the Netherlands The review examines the conditions in which businesses in the Netherlands undertake innovation in the food and agriculture sector to become more productive and environmentally sustainable. ISBN 978-92-64-23845-9 December 2015, 184 pages €45 $54 £36 ¥5 800
Drying Wells, Rising Stakes: Towards Sustainable Agricultural Groundwater Use The report provides a characterisation of the diversity of groundwater systems, reviews policies in OECD countries, and proposes a package of recommendations to ensure that groundwater can sustain its services to agriculture and contribute to climate change adaptation. ISBN 978-92-64-23869-5 November 2015, 176 pages €45 $54 £36 ¥5 800
Agricultural Policy Monitoring and Evaluation 2015 This annual publication provides information on policy developments and related support to agriculture in OECD countries and selected partner economies, measured with the OECD Producer Support Estimate methodology. ISBN 978-92-64-23452-9 September 2015, 296 pages €65 $78 £52 ¥8 400
OECD-FAO Agricultural Outlook 2015 This edition of the Agricultural Outlook provides projections to 2024 for major agricultural commodities, biofuels and fish. ISBN 978-92-64-23190-0 July 2015, 144 pages €65 $78 £52 ¥8 400
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