Fears of unrest are increasing in developing countries as shortages develop of staple foods or prices increase substantially. Governments have cut import tariffs to cope with the problem, but hoarding to take advantage of future price rises has exacerbated the difficulties being encountered.
Some of the most serious problems have arisen in relation to rice where prices have risen by 50 per cent in two weeks. Leading exporting countries including Vietnam, India, China and Egypt have banned foreign sales.
Another policy response is to resort to export taxes, a strategy being followed in Argentina, although raising revenue appears to be as much of a motive of ensuring domestic supply. Indeed, the strategy has backfired as farmers have gone on strike and mounted road blocks, emptying cattle markets so that Argentinians cannot get their steaks. President Cristina Fernandez has resorted to the classic Peronist trick of trying to rouse the ‘masses’ against an alleged privileged group, in this case the farmers.
Given the importance of Argentina as an agricultural exporter, increasing soyabean taxes from 35 per cent to 40 per cent affects world supplies. Grain exports have also been disrupted.
All this is grist to the mill of those who have been calling for self-sufficiency targets in Europe, backed up by the continuation of blanket subsidies. As we have suggested in earlier postings, this rhetoric has had a substantial influence on decision makers. There is a danger of a reversion to a simple minded productionist paradigm, already being celebrated with an element of triumphalism by some farming spokespersons.
A leading exponent of this position is Norfolk farmer and Farmers Weekly columnist David Richardson who has played his cards on this issue well. His paper on the issue suggests that ‘it would not be much of an exaggeration to suggest that within the forseeable future it will be necessary to deal with the production of food as during the war.’ In the UK it was, of course, the experience of wartime production which led to the 1947 Agriculture Act, creating privileged access to government for the National Farmers’ Union and substantial subsidies for its members. Could these halcyon days return?
You can read David Richardson’s full paper here. It’s a concise statement of an increasingly influential viewpoint.
However, we must avoid a retreat into neo-Malthusian gloom. The gains available from new technology and better agronomic techniques must not be overlooked. Where there has been a policy error is in running down research on improving food production. The privatisation of the state extension service, something that was not done in the United States or, for example, Denmark, was also a mistake which means that there is no neutral body disseminating knowledge to farmers.
The current situation of high food prices is an incentive big enough, you would think, for farmers to expand production or invest in agriculture in Ukraine (as a former agricultural minister of the Netherlands is rumoured to do). I don’t see a need to support that with an extra round of CAP subsidies, politicians can better use their time to rethink (and have re-researched) the biofuels case. Prices are working, and probably speculation in the markets (all those investment funds in commodities) is even driving them too high.
However I do see a need for the author to explain the quick jump in his last paragraph. Agricultural research has probably a large societal benefit, but by installing Intellectual Property Rights (IPR) a more private than public governance structure is now available. And farmers are much more educated and (internet)connected than in the 1950s, so should we really renationalize the British and Dutch extension services?
I don’t think we can go back to the future and renationalise these services. There are other sources of dissemination of knowledge available from consultant agronomists and also the agronomists of crop companies (although they may not be completely dispassionate). Farmers also use the internet extensively as a source of information, although some caution is needed. However, in our recent research on biological control agents as a supplement/alternative to synthetic pesticides, the absence or presence of a state extension service was a factor in disseminating knowledge to growers. To some extent the retailers have sought to fill this gap in the UK, but there are some problems with their role.
Thanks, that makes the point more clear. Certainly the privatisation of extension is not solving everything and can create market failures. In the NL I have the impression (not based on specific research) that biological agents are used, especially in glasshouses but also outdoor onion growing, without much information problems. Farmers generally are profit oriented and obey to demands from retail. Both mechanisms make private solutions quite optimal.
However there can be cases, especially if prevention is socially more attractive and has positive externalities (good effects on other growers) compared to abatement once a disease has been detected, that markets might fail. But even then there is probably more incentive for a cooperative with a large market share to step in, than the government. With high educated farmers that have access to information you might expect that (as Coase’s theories suggest) farmers organise themselves if there is money on the table.
Biologicals are certainly used more extensively for protected crops in the UK as well. Of course, we have a less developed cooperative structure than in the Netherlands. Retail demands are important as is evidenced by the recent conference organised by Sainsbury’s on biologicals for growers at which we presented from our project. We would suggest that the market failure doctrine is deployed more rigidly in the UK in terms of the gap between publicly funded development projects and getting products on the market, i.e., registration costs. The Genoeg scheme fills this gap in the Netherlands as we have discussed in a recent publication.
As a member of the plant science industry I found this blog and the paper it dicsusses extremely interesting, so thanks for the posting.
Although Richardson may be seem to be gloomy about what may happen in the next few yeatrs his long-term forward thinking is commendable. His focus is the UK, but the issues there in terms of scientifically unfounded hostility to biotechnology are found across the EU. In tackling current food shortages as well as preparing for the future, this hostility is one of the key impediments to progress. As Richardson points out, if the UK – and other member states – continue with their negative approach to biotechnology, we will not only be foregoing the opportunity to compete on the world food markets (a point reinforced by Trade Commissioner Peter Mandelson), but also contributing to avoidable food shortages.
New technologies in plant science can allow us to make far more efficient use of water whilst simultaneously increasing yields by up to 25%, as concluded by the World Bank and Consultative Group on International Agricultural Research (CGIAR). These tools have so far been dismissed on the basis of scientifically unfounded hostile, pressure group-led public opinion, to the detriment of consumers who are facing food price hikes, and the future generations who need action to be taken today to ensure their food supply. EU countries now have the perfect excuse to revise thinking on this matter and listen to scientists and their research – not to mention those countries that have successfully grown and consumed GM crops – in contemplating how to meet current and future food production needs. I hope they don’t let the opportunity slip.
I certainly do not believe that we can turn on back on new technology, but the level of political resistance in Northern Europe still seems to be considerable, although there is some evidence of changing attitudes among members of the public. Of course, opinion is often led by pressure groups who have a particular axe to grind and have an interest in their own survival.