Doha is still at an impasse. This was foreseeable: agriculture is too strategic to be a prerequisite to WTO negotiations as only 10% of the world’s agricultural production is subject to international trade. It is, however, a great deal more urgent to establish a worldwide organization of agriculture that deals with real problems of increasing population, of worldwide hunger, of protecting the environment and of the progress of humanity. This is why we went to Washington to give a presentation of WOAgri to the international community at the Carnegie Endowment for International Peace (CEIP) on Monday 25th June…three days after the failure of G4 was announced.
It has now been established that the World Bank and international organizations are incapable of responding to the problems facing agriculture and farmers. Indeed, decisions currently being made are based on ill-adapted economic models that do not take into consideration the specificity of agriculture. They ignore its strategic nature and its issues in terms of satisfying food-related and non food-related needs, fighting poverty and the independence and sovereignty of States.
The WOAgri delegation presented its program and its achievements before a large audience representing the international community as a whole, as well as economists and think tanks. WOAgri described the main characteristics of its economic model (the NAR model – New Agricultural Regulations, which comes into operation at the beginning of 2008) and the missions of the forthcoming international assessment and rating agency (the NAR Agency, which will be created during 2008). These two instruments will, together, form the basis for real governance and new international cooperation in agriculture.
The novelty of the NAR model, which takes the specificities of agriculture into account, has met with a great deal of interest, particularly from all those striving for the development of the poorest countries. A first workshop was held with US economists following the conference to give them information on the NAR model.
It is time to get away from the futile clashes between the notions of the US and those of France with regard to the liberal economy on the one hand, and with regard to State intervention on the other. As we emphasize in our model, we are all in favor of trade, but it is a matter of knowing how to organize this trade so that it benefits the largest possible number of people, without leaving out the poorest countries.
The mechanism linking the rating agency with the model was acclaimed by the meeting as a new basis for international relations in the fields of agriculture, the environment and development. Here, the key role to be played by agriculture alongside energy in the years to come was revealed.
The WOAgri delegation, led by Pierre Pagesse (President of Limagrain), included several founding members: Alain Catala, Vice President, Jacques Carles, General Delegate (President of Carles Consultants); Christian Pèes (President of Groupe Euralis); Jean Bizet, Senator of La Manche; and his chief economist Bertrand Munier (Director of GRID). The delegation was received by Sandra Polaski (Director of the Carnegie Endowment for International Peace).
Extracts of speeches made at the CEIP :1
“The incessant fighting among WTO negotiators merely masks a simple reality: the WTO cannot adequately or effectively deal with agricultural production.
The WTO cannot effectively address agricultural issues because it focuses only on trade and makes no distinction between industries. This ignores a fundamental fact: that agriculture is unique. Markets for agricultural products do not follow the same laws as markets for manufactured goods.
I believe that two distinguishing factors should be stressed. The first relates to demand. Demand increases steadily, but is relatively insensitive to price changes. That is why experts refer to the “rigidity of demand”. The second factor relates to the climate hazards that affect agricultural production. The impacts of weather fluctuations, although somewhat eased by market globalization, remain significant. Furthermore, they are related to the length of the production cycle, which makes forecasts and quick adjustments impossible. This is what economists refer to as “endogenous risks”.
Combined, these factors lead to highly volatile prices on the agricultural markets when there are small supply-demand imbalances: a 1% to 2% change in production can lead to price variations as large as 300% or even 500%”.
Pierre Pagesse, President of WOAgri.
“WOAgri is a new type of international organization: a think tank, a platform of influence and a place for mobilization of those responsible for agriculture, the environment and development aid, in other words for all of those who are striving for a better future for humanity.
By designing instruments for guidance, WOAgri creates conditions enabling international negotiations and choices of strategy to be built on much more solid foundations. By analogy with the new rules decreed in accounting and finance by the Sarbanes-Oxley Act in the United States, we are looking to create new information transparency for the 43% of the world’s population working in agriculture. The least we can do is treat farmers and shareholders as equals”.
Jacques Carles, General Delegate of WOAgri
“This model will allow decision makers to carry out simulations to evaluate the impact of various hypotheses in relation to international trade, climate and market risks, improving living standards, the implementation of innovation… these are strategic elements that none of today’s models takes into account. In addition, this model will be a great deal more flexible and adaptable than existing models, as its modular design gives a better reflection of reality”.
Bertrand Munier, Chief economist, WOAgri
“I would like to clarify that we are well aware of the difficulties at hand… but we – the United States and the European Union alike – have no choice but to succeed! Because peace and security in many of the countries in the world depend on our success. And we all know that peace and security are essential to ensuring the economic and intellectual prosperity of the men and women who have made the conscious choice to join a market economy”.
Jean Bizet, Senator of La Manche
“Time is precious. There will soon be 9 billion of us on Earth and we need all the land that is available to us. However, urban extension and the population drain from the countryside means that we have already gone past the stage of alert. In addition, prices of fertilizers are rocketing. If we do not all take heed of the situation and if we do not make use of suitable regulatory tools, we will be not be in a position to deal with the approaching impacts! This is why I became one of the founding members of WOAgri”.
Christian Pèes, Chairman of Groupe Euralis
1 Speeches can be found in their entirety in the Points of View section