| || |
| || ||Editorial || |
| || |
« Managing Agriculture as a Global Public Good »
Jacques Carles, Executive director of WOAgri
Agriculture is of undeniable strategic importance for the future of humanity; it is the basis for food security and the foundation for economic development and poverty reduction. The sector presents numerous unique characteristics given, in particular, the unique way in which its markets operate and as a result of the multitude of economic, social, environmental and energy-related issues to which it is tied.
Therefore, agriculture, and international agricultural trade, require regulatory mechanisms that are specific to the sector, mechanisms that today either do not exist or are challenged in the context of globalization and free trade.
At the same time, beginning in the late 1990s, the concept of the “global public good” emerged as a theoretical framework capable of responding to new issues emerging in areas as diverse as the environment, climate, healthcare, justice and peace, and education. Championing this notion calls for a return to public action in a sphere that goes beyond national borders and rises to the challenge of the transnational issues that it must face in a globalized world.
In this interview, Jacques Carles, Executive Director of WOAgri, considers how the concept of global public goods could be applied to the agricultural sector and reflects on the implications in terms of market regulation and international cooperation.
I. What is your definition of a Global Public Good?
The notion of global public goods (GPGs) remains abstract: the international community, having opted for a complicated and less explicit term, has been slow to define it by consensus and translate that into public policy. Nonetheless, many have observed the emergence of new issues related to globalization and free trade. The focus has been on environmental issues and combating climate change, with the understanding that taking ownership of such global public goods requires public action born out of bona fide international cooperation.
a) The notion of the public good was first developed by the economic theory that distinguishes two main characteristics:
> Non-excludable (it is impossible to exclude anyone from the consumption of these goods, an example of which would be air).
> Non-rivaled (one user’s consumption of these goods in no way decreases consumption by other users; in theory, there is no cost to extending consumption to another individual: air, ocean water, solar energy, etc.).
These are “public” goods because their production results from collective choices (the market cannot produce them; therefore, public intervention is needed to stimulate production), and because their externalities These are “public” goods because their production results from collective choices (the market cannot produce them; therefore, public intervention is needed to stimulate production), and because their externalities1 are so far-reaching.
b) However, this theory is too restrictive and was broadened following a free trade-based approach developed by the GTFGPG2 . In 2005, the Task Force counted six global public goods: peace and security, the control of pandemics, natural public goods (the environment, biodiversity, climate, etc.), trade openness, international financial stability and knowledge. This is a pre-Socratic, highly liberal and quasi-symbolist vision of the cooperative efforts managed, with varying levels of success, by the international organizations.
Other typologies have been constructed by great thinkers of conscience, often economists, and popularized by international recognition. Examples include Kofi Annan3, who described a GPG as “peace that is sound, prosperity that is better shared, an environment saved,” and Joseph E. Stiglitz4, who identified “international economic stability, international security (political stability), the global environment, international humanitarian assistance and knowledge”.
c) Another school, focused the global political economy, views GPGs as “historical constructs,”5 which arise, above all else, from political decisions made on economic, technological, cultural, social and geopolitical bases specific to the period in which we live. For example, the concept of biodiversity was not the same during the Middle Ages as it is the 21st century. These “historical constructs,” as Irene Menendez6 points out, are “a referent of public interest, primary need or humanity’s global commons.” GPGs therefore arise from a sort of common denominator, of rights that should be denied to no human… (Examples: UNESCO World Heritage, Human Rights).
These three levels of definition are drawn from:
> Strict economic analysis
> A consideration of the organizational consequences of globalization
> A global political economy approach.
Each one is important, yet too limited to form the wide foundation that defines a Global Public Good.
I will therefore propose a strategic/institutional definition, the only kind capable of creating the conditions for progressing toward a form of global governance that is not impeded by the compartmentalization and multiplication of the institutions born out of the end of World War II. One can easily gauge the difficulty of these institutions today in progressing, and even in fulfilling their initial mission (the case of the FAO, for example).
We therefore must move away from the preceding definitions, without denying their importance, to adopt a truly strategic and institutional vision: what strategy should form the basis for responding to the world’s challenges? How can we create a form of international cooperation that maximizes efficacy?
A global public good is a good that must be managed collectively, at the international level, based on the subsidiarity principle; in other words, any field of activity that can be better managed by global governance than by national or sub-regional governance.
“Management” here refers to collective guidance by defining shared objectives and implementing appropriate decision-making mechanisms in order to foster the development of humanity as harmoniously as possible: in a manner that maximizes the development of the poorest populations without impeding the potential progress of the wealthiest. This requires us to pull away from the “poor versus rich” Manichaeism and establish a level of strategic coordination using instruments that facilitate long-term thinking. I therefore am making the case for a top-down definition, in other words for the need for institutional cooperation rather than a definition that leads to a theoretical (economic or political) approach that we then try to tack onto reality.
For that definition to be as effective as possible there must also be strong incentives for going beyond purely government-based models, which have biased and incomplete consequences on “global equilibrium.” It is therefore absolutely essential to involve civil society players in defining the governance principles based on the notion of GPGs.
After all, everyone today accepts that there are areas in which international cooperation is highly preferable to the mere juxtaposition of national policies, as long as regulatory tools channel market forces by harnessing them. Alone, they otherwise create imbalances that exacerbate inequalities and stand in the way of development. This approach applies to agriculture in particular, and is the approach we are following in building a World Organization for Agriculture.
II. How would you apply this concept to the agricultural world?
Agriculture is a good illustration of this institutional definition, whereas designation as a GPG would not be legitimate (in part or in whole) according to the other definitions. I will show how agriculture falls within the area of GPGs on three levels.
> At a primary level, which resembles an economic definition in the broadest sense: its links with the environment and the use of natural resources such as water, air and land mean that agriculture is a global public good because it results from the use of these resources and also because of the scope of agriculture’s externalities. Agriculture must not be excluded on the pretext that a monetary value is attached to traded agricultural goods. Much to the contrary, its unique nature proves that agricultural products are one of a kind.
> At a secondary level : the undeniable connection between agriculture and poverty reduction, healthcare, food security and fulfillment of the basic right to food points to agriculture as a global public good given its humanitarian and social effects. In other words, agriculture impacts first and foremost the human condition.
> At a tertiary level, which I would describe as “the international regulatory service,” agriculture and international agricultural trade call for global cooperation, for in the absence of such regulation, markets left to their own devices produce negative effects on the poorest countries and wealthiest countries alike. This is the major problem with the volatility of agricultural prices, which can only be stabilized via appropriate regulatory instruments.
Finally, considering agriculture as a GPG, according to these three levels of application, forms an element of stability and peace in the world, reflecting well its geopolitical and strategic dimension at the forefront, as underlined in the following statements:
“When we talk about agriculture, we are really talking about national security.” (George W. Bush)
“A country that cannot feed itself is not a great country.” (Charles de Gaulle)
“Agriculture is more strategic for us than defense” (Dan Glickman, former Secretary of State under Bill Clinton)
These three levels that legitimize the definition of agriculture as a Global Public Good in the strategic/institutional sense illustrate the unique nature of agriculture and, at the same time, WOAgri’s innovative approach, providing the International Community with the instruments (the Model, the Agency) it needs.
III. Aren’t the current WTO negotiations supposed to resolve the problems you mention?
The World Trade Organization is a long way off from these considerations. The negotiations are based on the idea that full trade liberalization will ensure the well-being of humanity. This idea has not been proven and the instruments that seek to justify it are inappropriate. I refute the established argument that the absence of a deal concluding the Doha Round will hurt the poor countries. Development is merely a pretext. If a deal is made, it will simply be a smokescreen for maximizing the interests of certain countries.
The WTO is overstepping its bounds: all worldwide agriculture risks regulation through agricultural trade, which accounts for less than 10 percent of production. The WTO, however, is not permanent and, in any case, has no mandate to address the issues specific to agriculture and development.
A World Agriculture Organization, as we envision it at WOAgri, will coordinate the management of agriculture as a global public good. It will bring countries together in large, geopolitical groupings integrated on both an economic and cultural level: not just producing nations, but also consuming nations, to avoid the cartel logic and “free rider” behaviors that doomed previous international stabilization agreements. While leaving the market significant flexibility and allowing for reasonable changes in price based on dynamic equilibrium prices for each product and major region of the world, it should, on the contrary, establish mandatory consultation mechanisms launched in extreme price situations, when the market gets carried away. These mechanisms will draw from the instruments that we are in the process of building: the NAR Model and the future Rating Agency.
In conclusion, let me emphasize that a Global Public Good only truly becomes such once we have created the conditions under which it can be managed through international cooperation using the appropriate instruments. Otherwise, it is mere invocation, theory or ideology, all of which have continued to handicap international negotiations for decades.
|1 The positive or negative effects they have on society as a whole; those effects are not recognized by the price system and do not, therefore, give rise to economic reward or monetary compensation. |
2 The International Task Force on GPGs. Established in 2003 following a bilateral accord between France and Sweden to clarify the notion of GPGs, identify those GPGs essential to poverty reduction and the common good of sustainable development and issue recommendations for leaders and other key players with regard to how to provide and fund them. Former United Nations Secretary-General, 2001 Nobel Peace Prize Laureate.
3 Former United Nations Secretary-General, 2001 Nobel Peace Prize Laureate.
4 2001 Nobel Laureate in Economics for his work on asymmetric information.
5 The term “historical constructs” refers to sets that are born, live, reproduce and disappear – molded by the historical conditions (political, economic, technological, cultural) that render them unique.
6 Expert at the Institute for Research and Debate on Governance.