||Points of view
Alarming facts on global food security
Momagri’s Editorial Department
On January 13, a very large majority1 of the European Parliament (EP) passed a non-legislative resolution2 on the Common Agricultural Policy (CAP) and Global Food Security, thereby affirming that the CAP should remain the cornerstone of European Union food security policy, even beyond the 2013 horizon.
This resolution was a follow-up to an own-initiative report submitted December 15, 2008, in which its author, MEP Mairead McGuinness (PPE-DE, Ireland), shows that the CAP improved food security in the European Union and throughout the world.
This parliamentary initiative marks a veritable turning point in institutional appreciation of the agricultural issues of recent years, and bodes quite encouragingly well for the future. What now remains to be seen is to what this non-legislative resolution will lead.
A clear-sighted and firmly-engaged assessment
In an alarming assessment of the worldwide food situation, the European Parliament highlighted a series of observations as to the state of agriculture in Europe and worldwide. Four of those observations merit attention here: 3
>Food security is an issue of key importance for the European Union; not just because food security imposes itself as an essential policy consideration for any government, but also because the current food crisis weighs as a serious threat to peace and security worldwide.
>Agriculture contributes significant value-added to the economies of European Union member states.
>Market forces alone cannot provide producers the reliable levels of income they require to continue their activity, given the intense volatility that characterizes commodities prices.
>Heightened and unregulated liberalization of agricultural trade would lead to renewed increases in food prices and even greater price volatility.
These observations, which happen to fall closely in line with what momagri has been advancing since 2005, indicate that the European Parliament has come to truly grasp agricultural and food-related issues and related challenges. In passing this resolution, the European Parliament has acknowledged not just that agriculture constitutes a sector of strategic importance, situated at the heart of challenges related to food, the environment, and socio-economic considerations, but also that the agricultural sector’s unique nature renders unregulated liberalization of trade hazardous.
Drawing on this, the European Parliament regrets that the CAP Health Check did not place greater consideration on the realities that characterize the agricultural sector, and stresses the fact that these realities must be a focus of discussions regarding the post-2013 future of the CAP, the benefits of which have never been so clearly acknowledged.
Toward a comprehensive regulation policy
This approach challenges the traditional neoliberal vision that dominates the European stage, a vision whose limitations can be measured today, given the international financial crisis and the effects the crisis is having on national economies. In emphasizing that increased unregulated trade in agricultural goods will directly affect price volatility, the European Parliament has taken a stance opposite to that in force at the WTO, the latter considering conclusion of the Doha Round to be one prerequisite to solving the current economic crisis. This new stance marks a particularly encouraging break, at a time when so many are talking of a revival of the Doha Round.
Even though this resolution clearly identifies the realities and challenges specific to agriculture in Europe and worldwide, however, the proposals advanced are too limited in scope to promise an effective response. In one such proposal, the European Parliament suggests implementation of “effective insurance policies” to limit the damaging effects of the structural hyper-volatility of agricultural market prices throughout the world. This could be one foreseeable solution, but only if questions over its funding are resolved. Within a context of gradual government disengagement, the inherent risks linked to excessive price volatility cannot be assumed by traditional insurance mechanisms, given the significance and systemic nature of fluctuations.
This is why a new conceptual framework should be built, within which this mechanism would be economically viable. One could specifically consider implementation of a price framework along the lines of the European Union’s “snake in the tunnel” scheme (1970s) for the currency markets. This mechanism, created by momagri as part of its International Food and Agriculture Policy, would offer a solution to funding issues related to traditional insurance policies, for when the price in question falls between the ranges of tolerated variation, the return risk is covered by private insurance contracts; and when the price exceeds those price variation ranges, state-based regulation tools come into play to correct the changes in price. This type of mechanism could be a key element of the regulatory policy the European Parliament has called for with a view to stabilizing the agricultural markets.
This example shows why the economic policy proposals must be placed within a suitable conceptual framework, allowing for the full benefits to be received. The proposals would otherwise be ineffective or, at worst, counterproductive. How effective would the banking recovery plan be, if not rolled out within a new regulatory and conceptual framework? Let’s hope that this non-legislative parliamentary resolution provides initial leadership toward emergence of this political and economic framework required for agriculture to successfully rise above the full challenges it faces.
At a time when the post-2013 period is being increasingly discussed, the parliamentary clear-sightedness of the McGuinness Report, in terms of the realities of food and agriculture, bodes well for the future. While the scope of a resolution of this type remains uncertain, given the limitations of the European Parliament’s legislative authority on agricultural issues (relative to the other EU institutions 4), the unanimity coloring this resolution’s passage nonetheless points toward a change in the political climate, which should open the door to discussions over the future of European agricultural policy taking place under more favorable conditions than during the Health Check. Efforts must now be turned toward the means of reaching the targeted objectives. This is the very purpose of momagri’s work; momagri, in laying out its 10 proposals for an International Food and Agriculture Policy5, is campaigning for implementation of a regulatory policy framework that would enable the agricultural sector to successfully rise to the challenges it faces.
1 482 in favor, 24 against, and 59 abstentions.
2 Contrary to national parliaments, the European Parliament currently has only limited rights of legislative initiative, over which the Commission holds a quasi-monopoly. Instruments enacted by the European Parliament of its own initiative are thus necessarily non-legislative by nature, as opposed to legislative resolutions arising from proposals presented by the Commission. Non-legislative resolutions, once passed by the EP, are submitted to the Commission, with a view to the Commission presenting a notice of proposed rulemaking.
3 Cf. selected excerpts appended hereto.
4 Pending entry into force of the Lisbon Treaty and application of the “codecision” procedure, which will place the European Parliament on equal footing with the European Council with regard to agricultural matters in particular, decisions relative to the CAP remain the exclusive jurisdiction of the Commission, which holds the monopoly on legislative initiative, and the Council, which makes final decisions following consideration of the purely-consultative opinions of the European Parliament.
5 Cf. momagri, 10 propositions de momagri pour une Politique Agricole et Alimentaire Internationale [10 momagri Proposals in Furtherance of an International Food and Agriculture Policy], www.momagri.org
Appendix: Resolution’s abstracts
Parts underscored in bold characters are the closest to momagri’s analysis.
« Le Parlement européen,
A. whereas, for the first time since the 1970s, the world is facing an acute food crisis, determined by both structural, long-term factors, as well as by other determinants,
D. (…) whereas, however, dramatic fluctuations in commodity prices may be a more pronounced and regular feature of the global market; whereas higher food prices do not automatically translate into higher farm incomes mainly due to the speed at which farm input costs increase and the increasing divergence developing between producer and consumer prices,
S. (…) whereas present international and regional agreements have proved incapable of normalising market supply and trade; whereas the recent surge in food prices should be a wake-up call for governments throughout the world that agricultural production is not to be taken for granted,
1. Affirms that global food security is a question of the utmost urgency for the European Union and calls for immediate and continual action to ensure food security for EU citizens and at global level; considers it important to recognise the value of all the world’s farming and food cultures; stresses that food should be available at reasonable prices for consumers, while at the same time a fair standard of living for farmers should be ensured;
2. Stresses the importance of the Common Agricultural Policy (CAP) as the means to secure food production in the European Union; believes that the CAP has provided EU citizens with a secure food supply since its inception in 1962, in addition to protection and enhancement of the rural environment and EU food production standards that are the highest in the world; stresses the need for Community agriculture to continue to play that role in the future;
5. (…) is mindful of the fact that only a small percentage of global food production is actually traded on the international markets, increasingly from a small number of exporting countries;
11. Calls for policy instruments aimed at averting such dramatic and damaging price fluctuations, and which are conscious of the need to provide a fair standard of living for producers; believes that the system of Single Farm Payment provides the opportunity for farmers to switch production according to market needs but may be insufficient to cope with dramatic market price fluctuations;
19. Believes that the CAP should remain the cornerstone of EU food-security policy now and beyond 2013; considers that functioning ecosystems, fertile soils, stable water resources and a diverse rural economy are essential in the interests of long-term food security; considers also that it is of fundamental importance that the CAP, together with other Community policies, should play a greater part in the world food balance;
20. Strongly believes, however, that the CAP should be further adapted to meet food-security concerns; is disappointed that, in its Health Check proposals of May 2008, the European Commission has not fully faced up to the challenge; is opposed to the dismantling of market management measures and cuts in farmers’ support payments;
21. (…) recalls that farmers need a stable policy environment in order to plan for the future; stresses that the basic principle of such a policy is an income safety net against risks and crises arising either from adverse natural phenomena or from market distortions and an unusually long and widespread fall in prices; points out, in this respect, the fact that agriculture brings a significant added-value to national and EU economies;
22. Points out that the market alone cannot provide the income security for producers which they need to continue farming because of the high cost of compliance with EU food production, food safety, environmental and animal welfare standards; welcomes, however, the increased market orientation of the CAP; regrets, on the other hand, that the objectives of the 2003 reforms to provide higher market prices and less bureaucracy for farmers have not been fully achieved;
36. Points to research which shows that consumers are for the most part unaware of the vital benefits provided through the CAP by way of food security and reasonably priced food1; calls for citizen information policies and a renewed commitment to simplification, which would result in an increased awareness of the instruments and benefits of the CAP; proposes that the costs of not having a common agricultural policy should be explained to the public;
37. Believes that the CAP should play a significant role in the European Union's foreign affairs and development policies with special regard to the external food security policy; believes that, besides securing the European Union's food production, the CAP can contribute to meeting the increased demand for food globally;
53. Reaffirms that, for countries belonging to the African, Caribbean and Pacific (ACP) Group of States, agriculture is a sector which is more capable than others of generating growth for poor rural people, thereby making a tangible contribution to the attainment of the first Millennium Development Goal on the eradication of extreme poverty and hunger, and underlines how it is therefore crucial to act immediately and to promote greater investment in agriculture and rural development;
63. Believes that further, unregulated liberalisation of agricultural trade would lead to a further increase in food prices and even higher price volatility; stresses that the worst affected would be the most vulnerable, food-importing developing countries; stresses, furthermore, that world trade rules must under no circumstances undermine the right of countries or regions to support their farming sectors with a view to ensuring food security for their population;
64. Believes that market opening policies for agricultural products in the framework of the WTO and bilateral free trade agreements have significantly contributed to a loss of food security in many developing countries and in the context of the current global food supply crisis; calls on the Commission to re-assess its free market approach to agricultural trade accordingly;
67. Notes that the global food crisis is among the great threats to peace and security in the world; welcomes, in that respect, the recent efforts of the Commission to investigate ways of tackling the global food security issue; calls on the Member States to support such initiatives at national and local level. (…)”