Sustainable Agriculture as a Producer of Public Goods

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Sustainable Agriculture as a Producer of Public
Goods

• Louise O. Fresco

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The Rapid Modernization of Agriculture (after
1945)

• Threefold Increase in Human Population since 1960
  
• 25 more Calories per Person
• Food Prices in steady Decline
• Expansion of Trade in Food/Agriculture
• Proportion of People working in Food/Agriculture
  in sharp Decline
• New biological Technology to fine tune Crop and
  Animal Characteristics but unease about
  technology
• Land saving due to yield increases but emissions
  and destruction of habitats

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Objectives of sustainable agricultural policies

• Increase productivity
• Reasonable standard of living for farmers
• Sufficient supply of food
• Reasonable prices for consumers

focus on quantity
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New policy objectives contributing to
sustainability and prosperity

• Not only by producing food (incl. feed and raw
  materials)
• But also by delivering green services nature
  and landscape management
• High standards of animal welfare, food safety
• Rural development

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Learning from past mistakes - No Doomsday
scenario

• Avoiding past Mistakes biological Control, Code
  of Conduct Pesticides
• Food Safety a Priority (CODEX HACCP)
• New ecological Services of Agriculture
• Quality and niche Markets
• Integrated Production Chains (from Farm to Fork)

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Globalisation unprecedented movements of
humans, products and pathogens leading to
uniformity - but renewed interest in locality
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Ignorance and Nostalgia
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Sequence of reforms the example of the CAP/EU

• Stimulate productivity increases (since 1962)
• Stimulate non-production (since 1983)
• Common rural development policy (since 2000)
• Stimulate production of public services for which
  no market exists (after 2013, hopefully)

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Requirements for new agricultural policies

• Basically market-oriented
• Better application of subsidiarity
• Allow for diversity within the EU-27
• But keeping the internal market intact
• Target specific incentives for public services
• Include incentives for innovation
• WTO-proof while meeting the challenges of
  globalisation
• fundamental reform towards targeted payments and
  towards rebalancing roles of EU / member states
  (subsidiarity)

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Why financial aid to agriculture?

• To compensate for substantial natural handicaps,
  if society prefers continuation of agricultural
  production in a certain region
• To compensate for restrictions due to higher
  standards than in other countries
• To pay for specific public services supplied by
  agriculture
• To stimulate innovation towards sustainability
  (as in other sectors of the economy)

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Public services

• Not all social values require public services
• Often regulating markets will suffice
• Public services in case of complex externalities
  public or semi-public goods
• Not a joint product of agricultural production
  additional efforts needed
• Products for which no market exist rewards are
  dependent on collective action

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From social value to public service
Social Values
waarden
Public guarantee needed?
No, private value
Yes, private value
Nee, private waarde
Active role of government needed?
Actieve overheidszorg
gewenst?
Yes, public interest
No, guarantee will suffice
Voldoende levering zon
Sufficient supply without collective action
Ja, marktordening volsta
Nee,public levering
Yes, market regulation
No, public service

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Public value, but public service too?

• Not a public service (market regulation will
  suffice)
• food safety (international standards),
• animal welfare (no international standards)
• Public service supply requiring collective
  action
• landscape management
• nature and biodiversity management

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Nine Dimensions of Agriculture

• Production, employment, land use
• Food security
• Food safety, human and animal health
• Animal welfare
• Biodiversity and nature conservation
• Landscape and non agricultural land use
• Environment and climate management
• Water management (blue services)
• Rural development

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Complex externalities in agriculture negative
and positive

• Negative (harm to the natural environment, to
  public health etc.)
• the polluter pays principle
• Positive (benefits to others) how to reward
  these in order to optimize the supply of e.g.
  attractive landscapes, breeding grounds for birds
  and water storage?

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Large scale commercial farms or
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... marginal areas and local values
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Farm typology for public support
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New agricultural policies the role of the state

• Co-financing compensations and rewards
• Ensuring competition and an effective internal
  market
• External trade policies
• Common rules and standards for food quality,
  animal welfare, the environment etc.
• Basic market stabilisation (in case of
  emergencies)

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New Roles for Agriculture

• High potential areas as food baskets
• New forms industrial agriculture and
  aquaculture, integrated with urban areas
• Low potential areas for landscape, water
  management, tourism, biological agriculture and
  local products

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Long-term issues for reforming agriculture

• Climate change or variability, CO2 storage and
  trade
• Biobased economy and biofuels
• Effects of high food prices
• Growth in demand for food and feed
• Animal welfare, fair trade and ethical issues
• Biological agriculture

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Ultimately, we need to restore the linkage
between urban and rural areas, between farmers
and consumers