Agriculture policy concerns
An example of the breadth and types of agriculture policy concerns can be found in the Australian Bureau of Agricultural and Resource Economics article "Agricultural Economies of Australia and New Zealand" which says that the major challenges and issues faced by their industrial agriculture industry are:
- marketing challenges and consumer tastes
- international trading environment (world market conditions, barriers to trade, quarantine and technical barriers, maintenance of global competitiveness and market image, and management of biosecurity issues affecting imports and the disease status of exports)
- biosecurity (pests and diseases such as bovine spongiform encephalopathy (BSE), avian influenza, foot and mouth disease, citrus canker, and sugarcane smut)
- infrastructure (such as transport, ports, telecommunications, energy and irrigation facilities)
- management skills and labor supply (With increasing requirements for business planning, enhanced market awareness, the use of modern technology such as computers and global positioning systems and better agronomic management, modern farm managers will need to become increasingly skilled. Examples: training of skilled workers, the development of labor hire systems that provide continuity of work in industries with strong seasonal peaks, modern communication tools, investigating market opportunities, researching customer requirements, business planning including financial management, researching the latest farming techniques, risk management skills)
- coordination (a more consistent national strategic agenda for agricultural research and development; more active involvement of research investors in collaboration with research providers developing programs of work; greater coordination of research activities across industries, research organisations and issues; and investment in human capital to ensure a skilled pool of research personnel in the future.)
- technology (research, adoption, productivity, genetically modified (GM) crops, investments)
- water (access rights, water trade, providing water for environmental outcomes, assignment of risk in response to reallocation of water from consumptive to environmental use, accounting for the sourcing and allocation of water)
- resource access issues (management of native vegetation, the protection and enhancement of biodiversity, sustainability of productive agricultural resources, landholder responsibilities)
Poverty reduction
Agriculture
remains the largest single contributor to the livelihoods of the 75% of
the world's poor who live in rural areas. Encouraging agricultural
growth is therefore an important aspect of agricultural policy in the developing world. In addition, a recent Natural Resource Perspective paper by the Overseas Development Institute found that good infrastructure, education
and effective information services in rural areas were necessary to
improve the chances of making agriculture work for the poor.
Biosecurity
The biosecurity concerns facing industrial agriculture can be illustrated by:
- the threat to poultry and humans from H5N1; possibly caused by use of animal vaccines
- the threat to cattle and humans from bovine spongiform encephalopathy (BSE); possibly caused by the unnatural feeding of cattle to cattle to minimize costs
- the threat to industry profits from diseases like foot-and-mouth disease and citrus canker which increasing globalization makes harder to contain
Avian influenza
Use of animal vaccines can create new viruses that kill people and cause flu pandemic threats. H5N1 is an example of where this might have already occurred. According to the CDC article "H5N1 Outbreaks and Enzootic Influenza" by Robert G. Webster
et al.: "Transmission of highly pathogenic H5N1 from domestic poultry
back to migratory waterfowl in western China has increased the
geographic spread. The spread of H5N1 and its likely reintroduction to
domestic poultry increase the need for good agricultural vaccines. In
fact, the root cause of the continuing H5N1 pandemic threat may be the
way the pathogenicity of H5N1 viruses is masked by co-circulating
influenza viruses or bad agricultural vaccines."
Dr. Robert Webster explains: "If you use a good vaccine you can prevent
the transmission within poultry and to humans. But if they have been
using vaccines now [in China] for several years, why is there so much
bird flu? There is bad vaccine that stops the disease in the bird but
the bird goes on pooping out virus and maintaining it and changing it.
And I think this is what is going on in China. It has to be. Either
there is not enough vaccine being used or there is substandard vaccine
being used. Probably both. It's not just China. We can’t blame China for
substandard vaccines. I think there are substandard vaccines for
influenza in poultry all over the world."
In response to the same concerns, Reuters reports Hong Kong
infectious disease expert Lo Wing-lok indicating that vaccines have to
take top priority. Julie Hall, who is in charge of the WHO's outbreak
response in China, claimed that China's vaccinations might be masking
the virus.
The BBC reported that Dr Wendy Barclay, a virologist at the University
of Reading, UK said: "The Chinese have made a vaccine based on reverse
genetics made with H5N1 antigens, and they have been using it. There has
been a lot of criticism of what they have done, because they have
protected their chickens against death from this virus but the chickens
still get infected; and then you get drift - the virus mutates in
response to the antibodies - and now we have a situation where we have
five or six 'flavours' of H5N1 out there."
Bovine spongiform encephalopathy
Bovine spongiform encephalopathy (BSE), commonly known as "mad cow disease", is a fatal, neurodegenerative disease of cattle,
which infects by a mechanism that surprised biologists upon its
discovery in the late 20th century. In the UK, the country worst
affected, 179,000 cattle were infected and 4.4 million killed as a
precaution. The disease can be transmitted to human beings who eat or inhale material from infected carcasses. In humans, it is known as new variant Creutzfeldt–Jakob disease (vCJD or nvCJD), and by June 2007, it had killed 165 people in Britain, and six elsewhere
with the number expected to rise because of the disease's long
incubation period. Between 460,000 and 482,000 BSE-infected animals had
entered the human food chain before controls on high-risk offal were introduced in 1989.
A British inquiry into BSE concluded that the epidemic was caused by feeding cattle, who are normally herbivores, the remains of other cattle in the form of meat and bone meal (MBM), which caused the infectious agent to spread. The origin of the disease itself remains unknown. The current scientific view is that infectious proteins called prions developed through spontaneous mutation, probably in the 1970s, and there is a possibility that the use of organophosphorus pesticides increased the susceptibility of cattle to the disease.
The infectious agent is distinctive for the high temperatures it is
able to survive; this contributed to the spread of the disease in
Britain, which had reduced the temperatures used during its rendering process.
Another contributory factor was the feeding of infected protein
supplements to very young calves instead of milk from their mothers.
Foot-and-mouth disease
Foot-and-mouth disease is a highly contagious and sometimes fatal viral disease of cattle and pigs. It can also infect deer, goats, sheep, and other bovids with cloven hooves, as well as elephants, rats, and hedgehogs.
Humans are affected only very rarely. FMD occurs throughout much of the
world, and while some countries have been free of FMD for some time,
its wide host range and rapid spread represent cause for international
concern. In 1996, endemic areas included Asia, Africa, and parts of South America. North America, Australia, New Zealand and Japan have been free of FMD for many years. Most European countries have been recognized as free, and countries belonging to the European Union have stopped FMD vaccination.
Infection with foot-and-mouth disease tends to occur locally,
that is, the virus is passed on to susceptible animals through direct
contact with infected animals or with contaminated pens or vehicles used
to transport livestock. The clothes and skin of animal handlers such as
farmers, standing water, and uncooked food scraps and feed supplements
containing infected animal products can harbor the virus as well. Cows
can also catch FMD from the semen of infected bulls. Control measures
include quarantine and destruction of infected livestock, and export
bans for meat and other animal products to countries not infected with
the disease.
Because FMD rarely infects humans but spreads rapidly among
animals, it is a much greater threat to the agriculture industry than to
human health. Farmers around the world can lose huge amounts of money
during a foot-and-mouth epidemic, when large numbers of animals are
destroyed and revenues from milk and meat production go down. One of the
difficulties in vaccinating against FMD is the huge variation between
and even within serotypes. There is no cross-protection between serotypes (meaning that a vaccine for one serotype won't protect against any others) and in addition, two strains within a given serotype may have nucleotide sequences that differ by as much as 30% for a given gene. This means that FMD vaccines must be highly specific to the strain involved. Vaccination only provides temporary immunity
that lasts from months to years. Therefore, rich countries maintain a
policy of banning import from all countries, not proven FMD-free by US
or EU standards. This is a point of contention.
Although this disease is not dangerous to humans and rarely fatal
to otherwise healthy animals, it reduces milk and meat production.
Outbreaks can be stopped quickly if farmers and transporters are forced
to abide by existing rules. Therefore, (besides temporary discomfort to
the animals), any outbreak in the rich world should not be much more as a
localized, cyclical economic problem. For countries with free roaming
wildlife it is nearly impossible to prove that they are entirely free of
this disease. If they try they are forced to erect nationwide fences,
which destroys wildlife migration. Because detecting and reporting of
FMD have enormously improved and sped up, almost all poor countries
could now safely create FMD-free export zones. But rich countries refuse
to change the rules. In effect, many poor tropical countries have no
chance to meet current rules, so they are still today banned from
exporting meat, even if many of them are FMD-free.
The result is that if drought hits, the poor try to cope by
selling their few animals. This quickly saturates regional demand. The
export ban then destroys the value of these animals, in effect
destroying the most important coping mechanism of several hundreds of
millions extremely poor households. The rules around meat exports have
been changed many times, always to accommodate changing circumstances in
rich countries, usually further reducing meat export chances for poor
countries. For that reason Kanya and many other countries find the rules
very unjust. They are however discouraged to file a formal complaint
with WTO by diplomats from rich countries.
Citrus canker
Citrus canker is a disease affecting citrus species that is caused by the bacterium Xanthomonas axonopodis. Infection causes lesions on the leaves, stems, and fruit
of citrus trees, including lime, oranges, and grapefruit. While not
harmful to humans, canker significantly affects the vitality of citrus
trees, causing leaves and fruit to drop prematurely; a fruit infected
with canker is safe to eat but too unsightly to be sold. The disease,
which is believed to have originated in South East Asia,
is extremely persistent when it becomes established in an area, making
it necessary for all citrus orchards to be destroyed for successful
eradication of the disease. Australia, Brazil and the United States are currently suffering from canker outbreaks.
The disease can be detected in orchards
and on fruit by the appearance of lesions. Early detection is critical
in quarantine situations. Bacteria are tested for pathogenicity by
inoculating multiple citrus species with the bacterium. Simultaneously,
other diagnostic tests (antibody detection, fatty-acid profiling, and
genetic procedures using PCR)
are conducted to identify the particular canker strain. Citrus canker
outbreaks are prevented and managed in a number of ways. In countries
that do not have canker, the disease is prevented from entering the
country by quarantine measures. In countries with new outbreaks,
eradication programs that are started soon after the disease has been
discovered have been successful; such programs rely on destruction of
affected orchards. When eradication has been unsuccessful and the
disease has become established, management options include replacing
susceptible citrus cultivars with resistant cultivars, applying
preventive sprays of copper-based bactericides, and destroying infected trees and all surrounding trees within an appropriate radius.
The citrus industry is the largest fresh-fruit exporting industry in Australia.
Australia has had three outbreaks of citrus canker; all three were
successfully eradicated. The disease was found twice during the 1900s in
the Northern Territory and was eradicated each time. During the first outbreak in 1912, every citrus tree north of latitude 19° south was destroyed, taking 11 years to eradicate the disease. In 2004, Asiatic citrus canker was detected in an orchard in Emerald, Queensland,
and was thought to have occurred from the illegal import of infected
citrus plants. The state and federal governments have ordered that all
commercial orchards, all non-commercial citrus trees, and all native
lime trees (C. glauca) in the vicinity of Emerald be destroyed rather than trying to isolate infected trees.
Food security
The United Nations Food and Agriculture Organization (FAO) defines food security
as existing when "all people, at all times, have physical and economic
access to sufficient safe and nutritious food that meets their dietary
needs and food preferences for an active and healthy life".
The four qualifications that must be met for a food secure system
include physical availability, economic and physical access, appropriate
utilization, and stability of the prior three elements over time.
Of the 6.7 billion people on the planet, about 2 billion are food insecure.
As the global population grows to 9 billion by 2050, and as diets shift
to emphasize higher energy products and greater overall consumption,
food systems will be subjected to even greater pressure.
Climate change presents additional threats to food security, affecting
crop yields, distribution of pests and diseases, weather patterns, and
growing seasons around the world.
Food security has thus become an increasingly important topic in
agricultural policy as decision makers attempt to reduce poverty and
malnutrition while augmenting adaptive capacity to climate change. The
Commission on Sustainable Agriculture and Climate Change listed
high-priority policy actions to address food security, including
integrating food security and sustainable agriculture into global and
national policies, significantly raising the level of global investment
in food systems, and developing specific programs and policies to
support the most vulnerable populations (namely, those that are already
subject to food insecurity).
Food sovereignty
'Food sovereignty', a term coined by members of Via Campesina in 1996,
is about the right of peoples to define their own food systems.
Advocates of food sovereignty put the people who produce, distribute,
and consume food at the centre of decisions on food systems and
policies, rather than the demands of markets and corporations that they
believe have come to dominate the global food system. This movement is
advocated by a number of farmers, peasants, pastoralists, fisherfolk,
indigenous peoples, women, rural youth, and environmental organizations.
Policy tools
An agricultural subsidy
is a governmental subsidy paid to farmers and agribusinesses to manage
the agricultural industry as one part of the various methods a
government uses in a mixed economy.
The conditions for payment and the reasons for the individual specific
subsidies varies with farm product, size of farm, nature of ownership,
and country among other factors. Enriching peanut farmers for political
purposes, keeping the price of a staple low to keep the poor from
rebelling, stabilizing the production of a crop to avoid famine years,
encouraging diversification and many other purposes have been suggested as the reason for specific subsidies.
Price floors or price ceilings set a minimum or maximum price for a product. Price controls
encourage more production by a price floor or less production by a
price ceiling.
A government can erect trade barriers to limit the quantity of goods
imported (in the case of a Quota Share) or enact tariffs to raise the
domestic price of imported products. These barriers give preference to
domestic producers.
Objectives of market intervention
National security
Some
argue that nations have an interest in assuring there is sufficient
domestic production capability to meet domestic needs in the event of a
global supply disruption. Significant dependence on foreign food
producers makes a country strategically vulnerable in the event of war,
blockade or embargo. Maintaining adequate domestic capability allows for
food self-sufficiency that lessens the risk of supply shocks due to
geopolitical events. Agricultural policies may be used to support
domestic producers as they gain domestic and international market share.
This may be a short term way of encouraging an industry until it is
large enough to thrive without aid. Or it may be an ongoing subsidy
designed to allow a product to compete with or undercut foreign
competition. This may produce a net gain for a government despite the
cost of interventions because it allows a country to build up an export
industry or reduce imports. It also helps to form the nations supply and
demand market.
Environmental protection and land management
Farm
or undeveloped land composes the majority of land in most countries.
Policies may encourage some land uses rather than others in the interest
of protecting the environment. For instance, subsidies may be given for
particular farming methods, forestation, land clearance, or pollution
abatement.
Rural poverty and poverty relief
Subsidising
farming may encourage people to remain on the land and obtain some
income. This might be relevant to a third world country with many
peasant farmers, but it may also be a consideration to more developed
countries such as Poland. It has a very high unemployment rate, much
farmland and retain a large rural population growing food for their own
use.
Price controls may also be used to assist poor citizens. Many
countries have used this method of welfare support as it delivers cheap
food to the poorest in urban areas without the need to assess people to
give them financial aid. This often goes at the cost of the rural poor,
who then earn less from what is often their only realistic or potential
source of income: agriculture. Because in almost all countries the rural
poor are poorer than the urban poor, cheap food policies through price
controls often increase overall poverty.
The same often counts for poverty relief in the form of food aid,
which (unless while during severe drought) drives small producers in
poor countries out of production. It tends to benefit lower middle class
groups (sub-urban and urban poor) at the expense of the poorest 20
percent, who as a result remain deprived of customers.
Organic farming assistance
Welfare economics theory holds that sometimes private activities can impose social costs upon others. Industrial agriculture is widely considered to impose social costs through pesticide pollution and nitrate pollution. Further, agriculture uses large amounts of water, a scarce resource.
Some economists argue that taxes should be levied on agriculture, or
that organic agriculture, which uses little pesticides and experiences
relatively little nitrate runoff, should be encouraged with subsidies.
In the United States, 65% of the approximately $16.5 billion in annual
subsidies went to the top 10% of farmers in 2002 because subsidies are
linked to certain commodities.
On the other hand, organic farming received $5 million for help in
certification and $15 million for research over a 5-year time period.
Fair trade
Some advocate Fair Trade rules to ensure that poor farmers in
developing nations that produce crops primarily for export are not
exploited or negatively impacted by trade policies, practices, tariffs,
and agreements which benefit one competitor at the expense of another -
which advocates consider a dangerous "race to the bottom" in
agricultural labor and safety standards. Opponents point out that most
agriculture in developed nations is produced by industrial corporations
(agribusiness) which are hardly deserving of sympathy, and that the
alternative to exploitation is poverty.
Fair trade steak? Much of what developing countries export to the
rich world, also comes from industrial corporations. The reason for
that is, that rich countries have put up elaborate quality demands, most
of whom make no factual health contribution. Small farmers often in effect meet these demands, but are rarely able to prove that in western standards.
Therefore, the biggest impediment to growth of small farming and
therefore of fare trade in sectors beyond coffee and bananas, is these
quality demands from the rich world.
Arguments against market intervention
Dumping of agricultural surpluses
In
international trade parlance, when a company from country A sells a
commodity below the cost of production into country B, this is called "dumping".
A number of countries that are signatories to multilateral trade
agreements have provisions that prohibit this practice.
When rich countries subsidize domestic production, excess output is
often given to the developing world as foreign aid. This process
eliminates the domestic market for agricultural products in the
developing world, because the products can be obtained for free from
western aid agencies. In developing nations where these effects are most
severe, small farmers could no longer afford basic inputs and were
forced to sell their land.
"Consider a farmer in Ghana
who used to be able to make a living growing rice. Several years ago,
Ghana was able to feed and export their surplus. Now, it imports rice.
From where? Developed countries. Why? Because it's cheaper. Even if it
costs the rice producer in the developed world much more to produce the
rice, he doesn't have to make a profit from his crop. The government
pays him to grow it, so he can sell it more cheaply to Ghana than the
farmer in Ghana can. And that farmer in Ghana? He can't feed his family
anymore." (Lyle Vanclief, former Canadian Minister of Agriculture [1997-2003])
According to the Institute for Agriculture and Trade Policy,
corn, soybeans, cotton, wheat and rice are sold below the cost of
production, or dumped. Dumping rates are approximately forty percent
for wheat, between twenty-five and thirty percent for corn (maize),
approximately thirty percent for soybeans, fifty-seven percent for
cotton, and approximately twenty percent for rice. For example, wheat
is sold for forty percent below cost.
According to Oxfam, "If developed nations eliminated subsidy
programs, the export value of agriculture in lesser developed nations
would increase by 24 %, plus a further 5.5 % from tariff equilibrium.
... exporters can offer US surpluses for sale at prices around half the
cost of production; destroying local agriculture and creating a captive market
in the process." Free trade advocates desire the elimination of all
market distorting mechanisms (subsidies, tariffs, regulations) and argue
that, as with free trade in all areas, this will result in aggregate
benefit for all. This position is particularly popular in competitive
agricultural exporting nations in both the developed and developing
world, some of whom have banded together in the Cairns Group
lobby. Canada's Department of Agriculture estimates that developing
nations would benefit by about $4 billion annually if subsidies in the
developed world were halved.
Agricultural independence
Many developing countries
do not grow enough food to feed their own populations. These nations
must buy food from other countries. Lower prices and free food save the
lives of millions of starving people, despite the drop in food sales of
the local farmers. A developing nation could use new improved farming
methods to grow more food, with the ultimate goal of feeding their
nation without outside help. New greenhouse methods, hydroponics,
fertilizers, R/O water processors, hybrid crops, fast-growing hybrid
trees for quick shade, interior temperature control, greenhouse or tent
insulation, autonomous building gardens, sun lamps, mylar, fans, and other cheap tech can be used to grow crops on previously unarable land,
such as rocky, mountainous, desert, and even Arctic lands. More food
can be grown, reducing dependency on other countries for food.
Replacement crops can also make nations agriculturally independent. Sugar, for example, comes from sugar cane imported from Polynesia. Instead of buying the sugar from Polynesia, a nation can make sugar from sugar beets, maple sap, or sweetener from stevia
plant, keeping the profits circulating within the nation's economy.
Paper and clothes can be made of hemp instead of trees and cotton.
Tropical foods won't grow in many places in Europe, but they will grow
in insulated greenhouses or tents in Europe. Soybean plant cellulose can
replace plastic (made from oil). Ethanol
from farm waste or hempseed oil can replace gasoline. Rainforest
medicine plants grown locally can replace many imported medicines.
Alternates of cash crops, like sugar and oil replacements, can reduce
farmers' dependency on subsidies in both developed and developing
nations.
Market interventions may increase the cost to consumers for
agricultural products, either via hidden wealth-transfers via the
government, or increased prices at the consumer level, such as for sugar
and peanuts in the US. This has led to market distortions, such as food processors using high fructose corn syrup
as a replacement for sugar. High fructose corn syrup may be an
unhealthy food additive, and, were sugar prices not inflated by
government fiat, sugar might be preferred over high fructose corn syrup
in the marketplace.
Developed world cases
Overview: Europe and America
The farmer population is approximately five percent of the total population in the E.U. and 1.7% in the U.S.
The total value of agricultural production in the E.U. amounted to 128
billion euros (1998). About forty-nine percent of this amount was
accounted for by political measures: 37 billion euros due to direct
payments and 43 billion euros from consumers due to the artificially
high price. Eighty percent of European farmers receive a direct payment
of 5,000 euros or less, while 2.2% receive a direct payment above
50,000 euros, totaling forty percent of all direct subsidies.
The average U.S. farmer receives $16,000 in annual subsidies.
Two-thirds of farmers receive no direct payments. Of those that do, the
average amount amongst the lowest paid eighty percent was $7000 from
1995-2003. Subsidies are a mix of tax reductions, direct cash payments
and below-market prices on water and other inputs. Some claim that these
aggregate figures are misleading because large agribusinesses, rather than individual farmers, receive a significant share of total subsidy spending. The Federal Agriculture Improvement and Reform Act of 1996 reduced farm subsidies, providing fixed payments over a period and replacing price supports and subsidies. The Farm Security and Rural Investment Act of 2002 contains direct and countercyclical payments designed to limit the effects of low prices and yields.
In the EU, €54 billion of subsidies are paid every year. An
increasing share of the subsidies is being decoupled from production and
lumped into the Single Farm Payment. While this has diminished the
distortions created by the Common Agricultural Policy, many critics
argue that a greater focus on the provision of public goods, such as
biodiversity and clean water, is needed. The next major reform is expected for 2014, when a new long-term EU budget is coming into effect.
Environmental programs
The
U.S. Conservation Reserve Program leases land from producers that take
marginal land out of production and convert it back to a near-natural
state by planting native grasses and other plants. The U.S. Environmental Quality Incentives Program subsidizes improvements which promote water conservation
and other measures. This program is conducted under a bidding process
using a formula where farmers request a certain percentage of cost share
for an improvement such as drip irrigation. Producers that offer the
most environmental improvement based on a point system for the least
cost are funded first. The process continues until that year's
allocated funds are expended.
World Trade Organization actions
In April 2004 the World Trade Organization
(WTO) ruled that 3 billion dollars in US cotton subsidies violate trade
agreements and that almost 50% of EU sugar exports are illegal. In
1997-2003, US cotton exports were subsidized by an average of 48%. The WTO has extracted commitments from the Philippines
government, making it lower import barriers to half their present
levels over a span of six years, and allowing in drastically increased
competition from the industrialised and heavily subsidised farming
systems of North America and Europe. A recent Oxfam report estimated that average household incomes of maize
farmers will be reduced by as much as 30% over the six years as cheap
imports from the US drive down prices in the local markets. The report
estimates that in the absence of trade restrictions, US subsidised maize
could be marketed at less than half the price of maize grown on the
Philippine island of Mindanao;
and that the livelihoods of up to half a million Filipino maize farmers
(out of the total 1.2 million) are under immediate threat.
