Sustainable Sustainable Agriculture as a Agriculture as a

Producer of Public Producer of Public GoodsGoods

Louise O. FrescoLouise O. Fresco

Threefold Increase in Human Population Threefold Increase in Human Population since 1960 since 1960

25% more Calories per Person25% more Calories per Person Food Prices in steady Decline Food Prices in steady Decline Expansion of Trade in Food/AgricultureExpansion of Trade in Food/Agriculture Proportion of People working in Proportion of People working in

Food/Agriculture in sharp DeclineFood/Agriculture in sharp Decline New biological Technology to fine tune New biological Technology to fine tune

Crop and Animal Characteristics but Crop and Animal Characteristics but unease about technologyunease about technology

Land saving due to yield increases but Land saving due to yield increases but emissions and destruction of habitatsemissions and destruction of habitats

The Rapid Modernization of Agriculture

(after 1945)

Objectives of sustainable Objectives of sustainable agricultural policiesagricultural policies

Increase productivityIncrease productivity Reasonable standard of living for Reasonable standard of living for

farmersfarmers Sufficient supply of foodSufficient supply of food Reasonable prices for consumersReasonable prices for consumers

focus on focus on quantityquantity

New policy objectives: New policy objectives: contributing to sustainability contributing to sustainability

and prosperity and prosperity Not only by producing ‘food’ (incl. Not only by producing ‘food’ (incl.

feed and raw materials)feed and raw materials) But also by delivering ‘green But also by delivering ‘green

services’: nature and landscape services’: nature and landscape managementmanagement

High standards of animal welfare, High standards of animal welfare, food safetyfood safety

Rural developmentRural development

Avoiding past Mistakes: biological Avoiding past Mistakes: biological Control, Code of Conduct PesticidesControl, Code of Conduct Pesticides

Food Safety: a Priority (CODEX + Food Safety: a Priority (CODEX + HACCP)HACCP)

New ecological Services of New ecological Services of AgricultureAgriculture

Quality and niche MarketsQuality and niche Markets Integrated Production Chains (from Integrated Production Chains (from

Farm to Fork)Farm to Fork)

Learning from past mistakes - No Doomsday scenario –

GlobalisationGlobalisation – unprecedented movements of – unprecedented movements of

humans, products and pathogens humans, products and pathogens leading to uniformity - but renewed leading to uniformity - but renewed

interest in ‘locality’interest in ‘locality’

Ignorance and NostalgiaIgnorance and Nostalgia

Sequence of reforms: the Sequence of reforms: the example of the CAP/EUexample of the CAP/EU

Stimulate productivity increases Stimulate productivity increases (since 1962)(since 1962)

Stimulate non-production (since Stimulate non-production (since 1983)1983)

Common rural development policy Common rural development policy (since 2000)(since 2000)

Stimulate production of public Stimulate production of public services for which no market exists services for which no market exists (after 2013, hopefully…)(after 2013, hopefully…)

Requirements for Requirements for new agricultural policies:new agricultural policies:

Basically market-orientedBasically market-oriented Better application of subsidiarity Better application of subsidiarity Allow for diversity within the EU-27Allow for diversity within the EU-27 But keeping the internal market intactBut keeping the internal market intact Target specific incentives for ‘public Target specific incentives for ‘public

services’services’ Include incentives for innovationInclude incentives for innovation WTO-proof while meeting the challenges WTO-proof while meeting the challenges

of globalisationof globalisation fundamental reform towards targeted fundamental reform towards targeted

payments and towards rebalancing roles payments and towards rebalancing roles of EU / member states (subsidiarity)of EU / member states (subsidiarity)

Why financial aid to Why financial aid to agriculture?agriculture?

To compensate for substantial To compensate for substantial natural handicaps, if society prefers natural handicaps, if society prefers continuation of agricultural continuation of agricultural production in a certain regionproduction in a certain region

To compensate for restrictions due to To compensate for restrictions due to higher standards than in other higher standards than in other countriescountries

To pay for specific public services To pay for specific public services supplied by agriculturesupplied by agriculture

To stimulate innovation towards To stimulate innovation towards sustainability (as in other sectors of sustainability (as in other sectors of the economy) the economy)

Public servicesPublic services

Not all social values require public Not all social values require public services services

Often regulating markets will sufficeOften regulating markets will suffice Public services in case of complex Public services in case of complex

externalities: public or semi-public goodsexternalities: public or semi-public goods Not a ‘joint product’ of agricultural Not a ‘joint product’ of agricultural

production: additional efforts neededproduction: additional efforts needed Products for which no market exist: Products for which no market exist:

rewards are dependent on collective rewards are dependent on collective actionaction

From social value to public From social value to public serviceservice

waarden

Actieve overheidszorggewenst?

Nee, private waarde

Voldoende levering zon

Ja, marktordening volsta Nee,public levering

Social Values

Public guarantee needed?

Active role of government

needed?

No, private value

Yes, public interest

No, guarantee will suffice

Sufficient supply without

collective action

Yes, market regulation

No, public service

Yes, private value

Public value, but public Public value, but public service too?service too?

Not a public service (market regulation Not a public service (market regulation will suffice):will suffice):food safety (international standards), food safety (international standards),

animal welfare (no international animal welfare (no international standards)standards)

Public service: supply requiring Public service: supply requiring collective action:collective action:landscape managementlandscape managementnature and biodiversity managementnature and biodiversity management

Nine Dimensions of Nine Dimensions of Agriculture Agriculture

Production, employment, land useProduction, employment, land use Food securityFood security Food safety, human and animal healthFood safety, human and animal health Animal welfareAnimal welfare Biodiversity and nature conservationBiodiversity and nature conservation Landscape and non agricultural land Landscape and non agricultural land

useuse Environment and climate Environment and climate

‘management’‘management’ Water management (blue services)Water management (blue services) Rural developmentRural development

Complex externalities in Complex externalities in agriculture: negative and agriculture: negative and

positivepositive NegativeNegative (harm to the natural (harm to the natural

environment, to public health etc.): environment, to public health etc.):

the polluter pays principlethe polluter pays principle

PositivePositive (benefits to others): how to (benefits to others): how to reward these in order to optimize reward these in order to optimize the supply of e.g. attractive the supply of e.g. attractive landscapes, breeding grounds for landscapes, breeding grounds for birds and water storage?birds and water storage?

Large scale Large scale commercial farms… commercial farms…

or…or…

... marginal areas and local ... marginal areas and local valuesvalues

Farm typology for public supportFarm typology for public support

Farms that …Farms that … … … produce in produce in ‘normal’ regions‘normal’ regions

… … produce in produce in handicapped handicapped regionsregions

… … produce only produce only ‘food’ (feed ‘food’ (feed etc.)etc.)

1.1. After After transition: only transition: only support for support for innovationinnovation

2. 2. flat rate plus flat rate plus sharpened cross-sharpened cross-compliancecompliance

… … also supply also supply ‘green services’ ‘green services’

3.3. targeted targeted rewardreward

4. 4. combination combination of 2. and 3.of 2. and 3.

New agricultural policies: the New agricultural policies: the role of the staterole of the state

Co-financing compensations and rewardsCo-financing compensations and rewards Ensuring competition and an effective Ensuring competition and an effective

internal marketinternal market External trade policiesExternal trade policies Common rules and standards for food Common rules and standards for food

quality, animal welfare, the environment quality, animal welfare, the environment etc.etc.

Basic market stabilisation (in case of Basic market stabilisation (in case of emergencies)emergencies)

New Roles for New Roles for AgricultureAgriculture

High potential areas High potential areas as food basketsas food baskets

New forms: industrial New forms: industrial agriculture and agriculture and aquaculture, aquaculture, integrated with integrated with urban areasurban areas

Low potential areas Low potential areas for landscape, water for landscape, water management, management, tourism, biological tourism, biological agriculture and local agriculture and local productsproducts

Long-term issues for Long-term issues for reforming agriculturereforming agriculture

Climate change or variability, CO2 Climate change or variability, CO2 storage and tradestorage and trade

Biobased economy and biofuelsBiobased economy and biofuels Effects of high food pricesEffects of high food prices Growth in demand for food and Growth in demand for food and

feedfeed Animal welfare, fair trade and Animal welfare, fair trade and

ethical issuesethical issues Biological agricultureBiological agriculture

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