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Aspen at Expo - Agribusiness and trade: friends or foes?

Food Security, Nutrition and Global Health
Milan, 09/07/2015, International Workshop
Press clippings

Kicking off proceedings at this international workshop was the observation that agricultural market growth is once again the focus of world attention. Consumer prices for food products are rising, and sudden fluctuations in the cost of agricultural commodities are set to become more frequent in the short term. After a period of abundance, the world risks an era of food shortages, due to factors such as demographic shifts, climate change, growing global health problems, and an inadequate distribution of wealth.

It was suggested that efficiency and profit should be the primary objectives for a modern and competitive agricultural sector, which will have to contend with an expected large increase in demand. New business opportunities could bolster growth, increase production, ensure higher quality for consumers, and create new job opportunities.

Cross-border agro-food chains were characterized as decisive today for development, cooperation between countries, and trade in the sector. The opportunities may abound, but at the same time it was acknowledged that there are many problems to be resolved. For instance, it is essential to protect farmers’ incomes, encourage small producers to scale up, and ensure safe products for consumers, through efficient coordination and alignment between European regulations and those of the rest of the world, in the interests of food security and global health.

All this was viewed as forming part of a new “geopolitics of food”, which sees Western countries debating rules, while the rest of the world races ahead, even in terms of research and innovation. The Russians, Brazilians, and Indians, for example, have secured strong market positions vis-à-vis the West, as confirmed by figures which show that the EU imports around 37 million tons of soybeans a year, on which it relies to meet 90% of its needs. The Chinese are entering into long-term trade agreements, and major competition is also coming from new countries entering the world market, with land and natural resource grabs potentially putting Europe in a various precarious position in the future.

Global food politics and food wastage – especially in developing countries – were highlighted as calling for a new strategy. It was felt that, precisely for these reasons, trade and agriculture should go hand-in-hand, since they contribute to growth and development. For this “partnership” to work, however, it must also involve developing countries. Agribusiness and related trade were seen as crucial because they create added value, reduce hunger and malnutrition, transfer technology, and foster female independence. Indeed, it was estimated that 43% of women work in agriculture, but do not have access to capital and technology. They are responsible for 80% of the output of the agricultural value chain, but are not facilitated in the performance of their work.

It was remarked that, in sub-Saharan Africa, productivity is much higher than in Europe, Asia, or Latin America, suggesting that there are greater opportunities. Trade rules must therefore adapt to a more open world by reducing obstacles not strictly related to tariffs but to other factors that lead to the exclusion of developing countries, such as regulatory and health issues. Also deemed essential were agricultural subsidies that do not distort trade, development aid that has a direct beneficial effect on trade, and aid for packaging in compliance with international quality standards, such as for marketing and branding. The participants further pointed to the desirability of greater private-sector involvement to increase investment, thereby transforming the lives of producers in countries of the global South. Other measures singled out as potentially valuable contributions were the facilitation of credit by the financial sector, and improved regulations on land access.

Those in attendance emphasized that all these factors need to pull in the same direction, towards a “win-win” situation where everyone benefits from better and equitable regulation. The coffee cluster was cited as a good example in this regard, since it has created jobs in producer countries, and the global recognition of the health benefits of coffee has led to market growth, generating positive change. Social development has improved, and increasingly greater efforts will be needed in future to enhance the added value and quality of the product.

By way of conclusion, it was observed that differentiating products will be one of the major challenges for the future of this sector, as will engaging more with the impact of climate change, expected to result in producing areas having to contend with various difficulties, including higher temperatures, less cultivable land, and, hence, the need to adopt more efficient farming practices to safeguard both the environment and communities.