In an article we highly recommend1
, Thierry Pouch, Head of the Economic Studies Department at the French Permanent Assembly of Chambers of Agriculture (APCA), writes that Brazil’s willingness “to feed the world” also reflects the issues of leadership and power that are closely linked to agriculture. If, in order to feed the world, Brazil comes across as a free-trade activist, we must not forget that the country––far from commonplace views––strongly supports its agriculture through multiple involvement channels: Intervention purchases, subsidized interest rates, direct support to agricultural prices, favorable taxation to exponentially boost biofuel production... In parallel with Brazil’s dazzling boom, the European Union––and France among its members––are losing ground. Well aware of the related risks, François Hollande, while attending the International Livestock Trade Fair (SPACE) in Rennes on September 11, stated that France must “continue to feed the world” and “recapture lost market shares.” Without a strong Common Agricultural Policy that efficiently supports European agriculture, it will be very difficult to meet such challenges.
Momagri Editorial Board
During the Euro crisis, the strategies of market share gains continue to be implemented. We had been somewhat in the know for the past few years, but recent statements by Brazilian leaders at the 19th World Meat Congress are confirming the fact. Brazil’s objective is really to emerge as one of tomorrow’s top agricultural powerhouses, particularly regarding meat. Anticipating an increase in the number of mouths to be fed, Brazil has been preparing to meet the challenge for over twenty years. Which would then be the place of European agriculture, which has been on the defensive since the Marrakech Agreement?
Barring a crisis of major proportions, the world population will continue to growth during the next thirty or forty years, urban development will remain significant, standards of living will rise in the major emerging nations, generating a rise in food needs that must be met. We are dealing here with a very well known issue. In our current economic system, are we to be lulled into dreams of a common world, where pooled agricultural supply between key global producers would be adequate for the global population, into friendly agreements among major agricultural players to set up a coordinated agricultural production and export strategy resulting in a most equitable profit sharing? Conversely, we must take stock of the economic and trade conflict that is gaining power year after year between leading players in the global agricultural arena.
As indicated by French economist François Perroux in the late 1950s, international trade is not a neutral exchange, since goods necessarily fly the flag. In this context, Brazil intends to carry an increasing weight in the global agricultural and food business. As outlined by Brazilian representatives at the 19th World Meat Congress held in Paris this past June 5 and 6, this emerging economy has targeted as a strategic goal––not least among others––to feed the world. To achieve this objective, the country needs more free trade, either through the WTO or through increase bilateral or regional trade agreements. We must not forget that Brazilian agriculture accounts for over 25 percent of employment, 30 percent of its exports, and five percent of global exports, a market share that is similar to that of France in 2010.
Nothing seems to be capable of stopping the Brazilian advances initiated around the 1990s, including pressures on the country regarding environmental issues, as testified by the Rio+20 failure. In addition, the Brazilian position in agriculture is coherent with the country’s pursuit of a standing in the concert of nations that is matching its economic weight. But Brazil is not the only nation waiting in the wings. From the northern to the southern areas of the continent (the U.S., Uruguay and Argentina among others), clearly all countries generating agricultural and food products––meat in particular––are now developing the food leadership of the coming decades. What has been happening in the past few years is indeed a reconfiguration of global agricultural space that favors the American continent—and Brazil in particular. To feed the world––a drive in line with pervasive commercialism––is turning economies into a less and less latent trade war.
Confronted to this Brazilian steamroller, the European Union and France are attempting to preserve their defense lines. The results are not exactly matching expectations, judging by the recent setbacks of the Groupe Doux and by France’s decline in agribusiness market shares since 2000. For several observers, this implies that the French economy is slowly disappearing from world trade control monitors. Are the good results of the 2011 French foreign trade––close to €12 billion––announcing a swan song, or an anticipated revival?
1 The editorial of the July 2012 issue #320 of APCA’s Lettre Economique is available from http://www.chambres-agriculture.fr/