The NAR Agency (New Agricultural Regulations)
The concept of grading originated at the beginning of the 20th century, when American railway companies tried to raise capital throughout the American territory. An independent organization advised investors on the solvability of companies situated thousands of miles away.
Then, this concept evolved to the whole of the financial sector where, since the middle of the last century, major financial grading agencies have become irreplaceable references, whose power, although sometimes contested, is recognized by everyone, from the Sovereign States to simple individuals. A newly published fictional economic novel dates in fact the beginning of the collapse of a major country from the moment its grade falls from AAA to BB+.
In the last ten years or so the grading agencies’ sector of activity has widened even further to include other major issues in world society by penetrating non-financial sectors, whose characteristics must be strategic and central to preoccupations associated with the future of the planet. Several grading agencies have thus been created, intervening in the sectors of the environment, ethics and sustainable development.
In general, the objective of an evaluation and grading agency is to evaluate and grade companies, States and international organizations at regular intervals, using indicators and procedures, in order to allow certain actors (international decision-makers, investors, politicians…) to evaluate the relevance of implemented strategies and/or policies, with their own objectives as a yardstick.
To do this, they supply information, giving grades and opinions, which must be transparent, credible, sustainable and responsible.
A bad grade means that certain rules laid down and recognized by everyone are not being respected. The opposite, a good grade, means that the strategy/policy implemented respects all declared rules and strives to improve the common good. Of course, between the two extremes, we find a variety of graduations.
And because there is a growing interconnection between markets in the world, the information supplied by these agencies plays a fundamental role, and its impact on economic, social and political decisions is increasing.
Why create an international assessment and grading agency for the agricultural sector?
Because there is no tool to guide and advise international decision-makers regularly on the agricultural sector and the stakes it involves.
International decision-makers base their decisions on simulations from standard economic models (particularly the World Bank model) whose results have become the gospel that serves as a guideline for most of the information destined for the general public.
Who has not heard, on the strength of calculations from the World Bank, that the liberalization of agriculture would be beneficial to developing countries?
Who ever doubted this argument before momagri became involved? Nobody.
We have shown therefore, and now it is widely recognized, that these models are so incomplete and simplistic that using them leads to totally false conclusions (Cf appendix entitled “The momagri model”).
But apart from the weakness of economic models, which momagri aims to remedy, we also need to create the conditions necessary to provide improved visibility in order to better evaluate the relative situations of different countries and the effect of national, bilateral and multilateral decisions. Although a more realistic, more flexible and more complete model is necessary, this is not sufficient, and it has therefore become urgent to create a grading agency for agriculture and the stakes that are linked to it.
What is missing today in the agricultural sector: there are in fact no procedures or indicators to supply information that is sufficiently precise, frequent and demonstrative concerning the different markets and policies implemented, contrary to other sectors such as finance, the environment or ethics.
An international assessment and grading agency is therefore essential to implement a regulatory system of agricultural markets by supplying information that is standardized, validated and universally recognized.
It will be a beacon, a barometer and a compass:
> - A beacon because it will give us a “course” to follow and its function will be one of recommendation.
> - A barometer that will be an indicator of pressures and tensions between the different actors of the agricultural sector (Companies, NGOs, International Organizations, States) and that will therefore facilitate the emergence of negotiation and cooperation strategies.
> - A compass that will show the optimal way along the planned “course”, therefore giving to simulations a consistency which is not only economic, but also social, environmental and relative to the targeted objectives.
Because a grading agency plays a part in reaching an economic optimum while respecting free play in the market and competition.
Current WTO negotiations aim to liberalize agricultural exchanges in order to reach an optimal situation from an economic point of view, which would guarantee an improvement in the well being of all populations worldwide.
However, although the benefits of free exchange and the virtues of competition are undeniable, we have no choice but to acknowledge the fact that an international regulatory system is needed so that all regions in the world can benefit from it, because agricultural markets are imperfect.
This is why a grading agency is the optimal choice because:
> - By demonstrating the relevance and the credibility of the strategies and policies implemented, it will regulate the markets by supplying information that will be better understood and more efficient than an assortment of state regulations.
> - By improving the quality of information regarding the formalization of prices, it will help combat the volatility of agricultural prices.
> - By assessing, grading and recommending policies and strategies, unlike a watchdog, which reports and supplies statistics, it will have the power, accepted by a majority, to make recommendations.
> - It will develop an information and assessment network, extending over the entire planet. It should in fact attract numerous experts who will draw on, in keeping with assessment agency methods, the extensive information and data that already exist.
Finally a grading agency is the only tool that can convey the strategic importance of agriculture on an international scale, taking into account the indicators that are directly linked to it, thus adopting a symbolic dimension and a practical function of international cooperation.
> A symbolic dimension: The agency will depend, for advice and recommendations of a public nature, on a Collège des Sages, which will symbolize “world governance” by the public figures – people from very varied backgrounds and countries - who will be its members. The Collège des Sages will validate analyses, opinions, recommendations and alerts issued by the agency and these will become strong recommendations influencing governmental policies and international institutions.
> A practical function: The agency will manage a network of international experts, from the agricultural sector as well as from outside, and will be the foundation on which the Collège des Sages will be based. It will thus have a new function, which is lacking today, that of international cooperation, to develop permanent tools for assistance in decision-making to be used by the future World Organization for Agriculture.
The NAR agency’s missions
The NAR agency is the second mainstay of the future world governance for agriculture; an objective momagri has set as its priority. It will be created in 2007 and will increase the awareness of public powers and opinion of the dangers and pitfalls of agricultural markets.
It will therefore be a supplement to the NAR model (leading mainstay of world governance for agriculture, Cf. the appendix entitled “The NAR model”) and the principles of governance (third mainstay, Cf. the appendix entitled “Proposal for the principles of governance for a future World Organization for Agriculture”).
In the same way as financial, environmental and ethical grading agencies, the NAR agency will have the following missions:
> - To develop an assessment and grading methodology, to increase the awareness of public powers and the actors involved in the decisions taken or to be taken concerning the state and the evolution of agriculture, as well as the consequences for society that could result.
> - To publish opinions and recommendations to influence political decisions and international choices.
> - To make sure that the NAR model is used rationally by the States and international organizations to improve their decision-making.
> - To analyse and grade the choices made by different countries concerning agricultural policies and the impact on their development and / or on that of other States.
> - To maintain and develop a network of experts on an international scale which, on one hand will play an important role in the improvement of the quality and the utility of the NAR model and on the other hand will reinforce the notoriety of the Agency.
> - To set up intervention procedures for dealing with potential customers (States, international organizations, companies…) designed to be the basis for offers of specific services and advice.
> - To develop the means and the teams necessary to satisfy the demand for grading, assessment and advice.
The objectives of the NAR Agency
How the NAR Agency will function
In an aim to make public powers and opinion aware of the dangers and the pitfalls in agricultural markets, the NAR agency will develop a methodology based on the NAR model, and will supply key indicators of the different agricultural markets, which will be used to achieve the three objectives it has set for itself: simulate, assess and grade, and advise.
And to overcome the difficulties of transparency, credibility, sustainability and responsibility, the NAR agency will use various indicators: economic, political, social, climate and environmental, energy, monetary and banking…
They will play an important role in achieving price stability, but also in grading different countries in terms of agricultural and environmental policies in the same way as certain major private international institutions.
To achieve this objective, the NAR agency will be made up of a board of international experts, grouping together committees of regional experts. It will be backed by a totally independent Collège des Sages composed of high-profile international public figures (former heads of State, moral leaders…).
The committee of experts will meet regularly to define the level of these indicators, advise and grade the different actors involved (regions, countries, companies) in terms of agricultural, environmental and development policies, etc … in a declarative and solicited manner.
The Collège des Sages, based on the proposals made by the NAR agency, will give opinions, which will be in the form of recommendations on an international scale, and will give political legitimacy to high-level technical work.
Thus, for example, if competition in a region is detrimental to the environment, regulatory action will be recommended, and the cost for the community of the deterioration of the environment will be provided. In this way, with tools developed by the NAR agency, the World Organization for Agriculture and national and international institutions will be able to take the necessary measures in the future to restore market balance.
Of course, freedom to trade will be total but if problems and their collective costs are revealed, there will be a powerful incentive to reduce commercial exchanges with regions in which corrective measures have not been introduced.
This assessment and grading will make the NAR agency a real regulatory tool and a continual source of information to provide an improved framework for international negotiations.