« World agriculture in search of a strategy – How to combine liberalism and development?»
Paris, Palais du Luxembourg, 19.10.2006
Messrs Ministers (Farba SENGHOR and Mamadou DIOP)
Mr Senator (Jean BIZET),
Mr President (Pierre PAGESSE),
Ladies and Gentlemen Presidents and Directors,
It was with great pleasure that I accepted your invitation to open this conference on the future of world agriculture organized today at the Senate.
Since the creation of the World Organization for Agriculture, I have been particularly interested in the work, discussions and missions you are undertaking.
Why hide it from you any longer, I share the same vision of agriculture and in particular I agree that agriculture is a strategic sector, with essential stakes such as the sovereignty of States, food security and the protection of the environment. For this reason, agriculture deserves special attention.
I would therefore straight away like to applaud your actions, the result of critical, global and long-term thinking, and the voluntarist approach that seems to be the solution we need.
The question you ask: “How to combine liberalism and development” is today one of the important issues discussed by major international organizations. France has responded, by affirming its position and undertaking missions within these organizations.
In view of the extent of the human, economic and social challenges facing developing countries, a certain form of liberalism has demonstrated its limits. We also know that market forces alone will not be sufficient to achieve the common objectives that the international community has established. I’m referring in particular to the Millennium Development Goals (MDGs) and the necessity for sustainable development, declared at the Rio Conference in June 1992.
However, I am still convinced that the liberal model has incomparable virtues, and if used well makes an efficient contribution to development and economic and social progress. Economic history over the last two centuries has clearly shown this. Finally, liberalism is vastly superior to other economic models, because it recognizes the individual freedom of man and rewards his industry.
Because of this apparent contradiction, today’s questions are extremely relevant. To illustrate this important issue, I would like to refer to the latest report of the United Nations Conference on Trade and Development (UNCTAD) published in August. This report clearly states that development cannot be founded on the unrestrained liberalization of commercial exchanges. On the contrary, this report re-establishes the necessity for national public policies to be set up in consultation with other countries, so that the Sovereign States can have sufficient leeway to ensure their own development, without compromising the development of the others. In this context, I would like to share some of my thoughts and convictions
1. My first conviction is that there can be no development without an agricultural policy, that is without a strong public policy that fully mobilizes the States.
As I said, I believe that agriculture is an entirely specific sector, at the heart of the stakes that are essential for the future of humanity. It is in fact this specificity, at the crossroads of so many fields of activity, essential for our future, which justifies for me the necessary intervention of public powers, in statutory, financial and social matters.
The main purpose of agriculture is to feed people. However, more than 850 human beings in the world today suffer from malnutrition. Out of 1.3 billion active farmers in the world, 600 million of them do not have enough to eat. Thus, ¾ of the people who have less than two dollars a day, who suffer from food shortage and die of starvation, live in rural areas. They do not buy food, they produce it. And this situation is not improving, because sub-Saharan Africa, which twenty years ago was self-sufficient, is now a net importer of food products. A voluntarist agricultural policy is essential.
In some developing countries, the agricultural sector can offer a basic solution to the challenges that must be met, because of rapid demographic growth. Agriculture is also a powerful means of occupying and reviving territories. Without taking into account agricultural issues we will not be able to find solutions for the many hazards that threaten our planet, such as climate and energy problems.
Finally, it is now recognized that the development of agriculture leads to a virtuous circle, as progress in agriculture contributes to investment and employment in non-agricultural activities. Most of the major lenders and credit institutions, including the World Bank, had forgotten this for a long time, but now recognize that the modernization of agriculture frees the resources necessary for development.
For all these reasons, we must act on several fronts, particularly in order to stabilize incomes for farmers. This stake is obvious in Southern countries, where world price volatility ruins any development strategy in the medium or long term before it even starts. Neitheris it absent in Northern countries, although it is less intense. In this respect you are aware that France’s resolute action has provided our Common Agricultural Policy with relevant and efficient systems for risk and crisis management.
2. My second conviction is that Northern countries just like Southern countries have a legitimate right to demand and ensure food security.
In my opinion, this is a supreme right. It means that the States must reign supreme to define their internal policies, as long as these policies do not create major disruption for competitors, which means that they do not cause serious harm to other economies.
In fact, agricultural policies, in particular those in developed countries, cannot be set up without a certain number of rules, the first of course being that these policies must be equitable. It is in fact for this reason that the European Union has reformed the Common Agricultural Policy (CAP) in order to eliminate support measures, which could harm developing countries, and that it has committed itself to abolish these export restitutions provided that its main competitors make a parallel commitment.
A supreme agricultural policy therefore does not mean a selfish and indifferent agricultural policy, but a policy that reaches legitimate goals. The interest and legitimacy of an agricultural policy cannot be judged solely on its commercial or purely legal criteria. The powers attributed to the World Trade Organization when it was created and the limits of its power must be understood in this context. Although this Organization is perfectly justified in defining the rules and disciplines for international trade, it must be careful not to encroach on subjects that are beyond its competence, for example policies that aim at food security, or those that aim to encourage the development of agricultural production chains in poor countries.
3. My third conviction is that on the one hand the development of the productive ability of developing countries is a prerequisite for the liberalization of agricultural exchanges, and on the other that this liberalization must first be encouraged within a limited context, as a first step.
It is obvious that the liberalization of commercial exchanges without safety measures will create considerable damage to the most fragile economies. In the agricultural sector, we should question the consequences of full competition between countries where the average differences in productivity now range from 1 to 1000.
In conditions such as these, can we really speak of equitable competition between countries? What we see, more exactly, is unbridled competition between the weak and the strong. More and more economic studies show that it is the poorest countries that will be the losers. It would therefore be totally unjust if the Doha Round, the Development Round led us, if we are not careful, to a situation in which the poor became even poorer.
To avoid such pitfalls, the international community has made efforts to find answers, including the principle of “special and differential treatment”. However, this “special and differential treatment” must be perfectly defined and regulated. The European Union with its “everything but arms” initiative, has made a concrete commitment to less developed countries (LDCs). The EU did a great deal to continue this initiative in the Hong Kong agreement last December. Despite the suspension of WTO negotiations, I hope that this progress will not be challenged and that all developed countries, and a good number of developing countries, will continue this initiative.
Although these policies and measures re-establish a certain balance in commercial exchanges for the benefit of the poorest countries, they do not provide sufficient answers to our problems. Other paths must be explored.
In this respect, we must strongly encourage regional integration. Experience shows us that commercial exchanges develop more equitably within the framework of regional economies, where members have comparable economies in terms of size and levels of development. Dynamic regional commercial exchange also reinforces interdependence between countries, and thus contributes to political stability and peace between nations. This was in fact the historic choice made by Europe more than 60 years ago and which all Europeans today can take pride in.
Of course, we must rejoice in the fact that the number of exchanges in agricultural products between developing countries has risen dramatically in the last ten years. There still remains considerable scope for progress. In order to accelerate this development, we must aim to lift certain restrictions, which slow down this regional integration. First, there are difficulties in setting up and applying a “common external tariff” in areas that have committed themselves to integration. But the development of exchange also depends on the improvement of transport infrastructures in Southern countries. Developed countries could aim to assist them in this.
Regional integration is not of course the ultimate answer. It is only an initial intermediary step, which enables the poorest countries to prepare to take part in global competition at a later date.
4. My fourth conviction is that in order to reconcile the WTO’s objectives for the liberalization of exchanges, the objectives of the Millennium Round and those of the Rio Conference in the agricultural sector, we must take the time to think things through and to make sure our policies are coherent.
The content of the WTO discussions before they were suspended did not seem to be of a nature to ensure the coherence of the different objectives I have mentioned. One of the main reasons for this is that during the negotiations, the field of discussion was narrowed dramatically, to the point where essential questions were excluded, making it difficult for an agreement that would satisfy 150 members of the Organization to be reached. The Doha ministerial declaration of 2001 opened up ambitious prospects for the Round, but negotiations were focussed excessively on the question of the lowering of agricultural customs duties for certain developed countries – for the sole benefit of a very limited number of countries, most of them developed countries.
All this is superficial and is in no way equal in importance to the initial stakes. As negotiations in the Doha Round are suspended for the moment, we should take advantage of this situation to continue our discussions in order to give a coherent framework to the negotiations if they resume.
For France, multilateral institutions remain the preferred forum to think, confer and decide.
But it is not forbidden to reflect, as you are going to do, on world management for agriculture, which, within a multilateral framework, would take into account the specificity of the agricultural sector.
For world agriculture, the stakes you define are high. We will have to satisfy the food needs of 8 billion people in 2020, in a context marked by the restriction of available natural resources – arable land, water, energy. Will we be able to rise to this challenge by liberalizing exchanges, particularly with poor countries? From the themes chosen for the round tables and the excellence of the speakers who are with us today, I am sure that this debate will help us define the most appropriate solutions.
19 October 2006